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<SEC-DOCUMENT>0000950129-08-001662.txt : 20080313
<SEC-HEADER>0000950129-08-001662.hdr.sgml : 20080313
<ACCEPTANCE-DATETIME>20080313105715
ACCESSION NUMBER:		0000950129-08-001662
CONFORMED SUBMISSION TYPE:	10-K/A
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20071231
FILED AS OF DATE:		20080313
DATE AS OF CHANGE:		20080313

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NATIONAL OILWELL VARCO INC
		CENTRAL INDEX KEY:			0001021860
		STANDARD INDUSTRIAL CLASSIFICATION:	OIL & GAS FILED MACHINERY & EQUIPMENT [3533]
		IRS NUMBER:				760475815
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-12317
		FILM NUMBER:		08685231

	BUSINESS ADDRESS:	
		STREET 1:		10000 RICHMOND AVENUE
		STREET 2:		6TH FLOOR
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77042-4200
		BUSINESS PHONE:		7133467500

	MAIL ADDRESS:	
		STREET 1:		10000 RICHMOND AVENUE
		STREET 2:		6TH FLOOR
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77042-4200

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NATIONAL OILWELL INC
		DATE OF NAME CHANGE:	19960829
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K/A
<SEQUENCE>1
<FILENAME>h54883a1e10vkza.htm
<DESCRIPTION>AMENDMENT TO FORM 10-K
<TEXT>
<HTML>
<HEAD>
<TITLE>e10vkza</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 10-K/A</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Amendment No.&nbsp;1</B></DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>(Mark one)</B>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#254;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 12%"><B><B>FOR THE YEAR ENDED DECEMBER 31, 2007</B>
</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>OR</B></DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Commission file number 1-12317</B></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>NATIONAL OILWELL VARCO, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt"><I>(Exact name of registrant as specified in its charter)</I></DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Delaware</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>76-0475815</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><I>(State or other jurisdiction</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><I>(IRS Employer</I></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><I>of incorporation or organization)</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><I>Identification No.)</I></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><U><B>7909 Parkwood Circle Drive, Houston, Texas 77036-6565</B></U><BR>
<I>(Address of principal executive offices)</I></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><U><B>(713)&nbsp;346-7500</B></U><BR>
<I>(Registrant&#146;s telephone number, including area code)</I></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">Securities registered pursuant to Section&nbsp;12(b) of the Act:</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Common Stock, par value $.01</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>New York Stock Exchange</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><I>(Title of Class)</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><I>(Exchange on which registered)</I></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">Securities registered pursuant to Section&nbsp;12(g) of the Act: <B>None</B></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule&nbsp;405 of
the Securities Act.
</DIV>

<DIV align="center" style="font-size: 10pt">Yes <FONT face="Wingdings">&#254;</FONT> No <FONT face="Wingdings">&#111;</FONT></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark if the registrant is not required to file reports pursuant to Section&nbsp;13 or
Section&nbsp;15 (d)&nbsp;of the Act.
</DIV>

<DIV align="center" style="font-size: 10pt">Yes <FONT face="Wingdings">&#111;</FONT> No <FONT face="Wingdings">&#254;</FONT></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant (1)&nbsp;has filed all reports required to be filed by
Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12&nbsp;months (or for
such shorter period that the registrant was required to file such reports), and (2)&nbsp;has been
subject to such filing requirements for the past 90&nbsp;days.
</DIV>

<DIV align="center" style="font-size: 10pt">Yes <FONT face="Wingdings">&#254;</FONT> No <FONT face="Wingdings">&#111;</FONT></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark if disclosure of delinquent filers pursuant to Item&nbsp;405 of Regulation&nbsp;S-K is
not contained herein, and will not be contained, to the best of registrant&#146;s knowledge, in
definitive proxy or information statements incorporated by reference in Part&nbsp;III of this Form 10-K
or any amendment to this Form 10-K. <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of &#147;large accelerated
filer,&#148; &#147;accelerated filer&#148; and &#147;smaller reporting company&#148; in Rule&nbsp;12b-2 of the Exchange Act.
(Check one):
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="34%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Large accelerated filer <FONT face="Wingdings">&#254;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Accelerated filer <FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Non-accelerated filer <FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Smaller Reporting Company <FONT face="Wingdings">&#111;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Do not check if a smaller reporting company)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant is a shell company (as defined in Rule&nbsp;12b-2 of the
Exchange Act). Yes <FONT face="Wingdings">&#111;</FONT> No <FONT face="Wingdings">&#254;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The aggregate market value of voting and non-voting common stock held by non-affiliates of the
registrant as of June&nbsp;30, 2007 was $18.5&nbsp;billion. As of February&nbsp;20, 2008, there were 356,988,724
shares of the Company&#146;s common stock ($0.01 par value) outstanding.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Documents Incorporated by Reference</B><BR>
None.
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPLANATORY NOTE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The purpose of this Amendment No.&nbsp;1 on Form 10-K/A (the &#147;Amendment&#148;) is to amend and restate Part
III, Items 10 through 14 of our previously filed Annual Report on Form 10-K for the year ended
December&nbsp;31, 2007, filed with the Securities Exchange Commission on February&nbsp;29, 2008 (the
&#147;Original Form 10-K&#148;), to include information previously omitted in reliance on General Instruction
G to Form 10-K, which provides that registrants may incorporate by reference certain information
from a definitive proxy statement prepared in connection with the election of directors. National
Oilwell Varco, Inc. (the &#147;Company&#148;) has determined to include such Part&nbsp;III information by
amendment of the Original Form 10-K rather than by incorporation by reference to the proxy
statement. Accordingly, Part&nbsp;III of the Original Form 10-K is hereby amended and restated as set
forth below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Also included in this Amendment are the certifications required by Rule&nbsp;12b-15 of the Securities
Exchange Act of 1934, as amended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There are no other changes to the Original Form 10-K other than those outlined above. This
Amendment does not reflect events occurring after the filing of the Original Form 10-K, nor does it
modify or update disclosures therein in any way other than as required to reflect the amendment set
forth below. Among other things, forward-looking statements made in the Original Form 10-K have
not been revised to reflect events that occurred or facts that became known to us after the filing
of the Original Form 10-K, and such forward looking statements should be read in their historical
context.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center"><DIV style="margin-left:15px; text-indent:-15px"><A href="#101"><B>PART III</B></A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#102">ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#103">ITEM 11. EXECUTIVE COMPENSATION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:55px; text-indent:-55px"><A href="#104">ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#105">ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#106">ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD align="center"><DIV style="margin-left:15px; text-indent:-15px"><A href="#107"><B>PART IV</B></A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#108">ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">CERTIFICATIONS PURSUANT TO RULE 13A-14A AND RULE 15D-14(A)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h54883a1exv31w1.htm">Certification Pursuant to Rule 13a-14(a) and Rule 15d-14(a)</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h54883a1exv31w2.htm">Certification Pursuant to Rule 13a-14(a) and Rule 15d-14(a)</A></FONT></TD></TR>
</TABLE>
</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART III</B>
</DIV>

<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Directors</I></B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table identifies our directors and lists their names, ages, terms of office, business
backgrounds, and other directorships.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Expiration Date</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Year First</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of Current</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Became</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Age</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Term</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Biography</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Director</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Merrill A. Miller, Jr.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">57</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2009</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Miller has been
a Director of the
Company since May
2001 and Chairman
of the Board since
July&nbsp;22, 2005. He
also served as
Chairman of the
Board from May&nbsp;2002
through March&nbsp;11,
2005. He served as
the Company&#146;s Chief
Operating Officer
from November&nbsp;2000
through March&nbsp;11,
2005. He has
served as President
since November&nbsp;2000
and as Chief
Executive Officer
since May&nbsp;2001. He
has served in
various senior
executive positions
with National
Oilwell since
February&nbsp;1996. Mr.
Miller also serves
as a director of
Chesapeake Energy
Corporation, a
company engaged in
the development,
acquisition,
production,
exploration, and
marketing of
onshore oil and
natural gas
properties in the
United States.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2001</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Greg L. Armstrong
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">49</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2009</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Armstrong has
been a Director of
the Company since
March&nbsp;2005. Mr.
Armstrong served as
a Director of Varco
from May&nbsp;20, 2004
until its merger
with the Company on
March&nbsp;11, 2005.
Since 1998, he has
been the Chairman
of the Board and
Chief Executive
Officer of Plains
All American GP
LLC, the general
partner and
controlling entity
of Plains All
American Pipeline,
L.P., a publicly
traded master
limited partnership
engaged in the
business of
marketing,
gathering,
transporting,
terminalling and
storing crude oil.
Mr.&nbsp;Armstrong is a
member of the
National Petroleum
Council and a
member of the Board
of BreitBurn Energy
Partners.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2005</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">Robert E. Beauchamp
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">48</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2008</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Beauchamp has
been a Director of
the Company since
August&nbsp;2002. Since
1988, he has served
in various
capacities at BMC
Software, Inc., a
leading provider of
enterprise
management
solutions, most
recently as
President and Chief
Executive Officer
and as a director.
During his career
with BMC, he also
served as senior
vice president of
research&nbsp;&#038;
development, vice
president of
strategic marketing
and corporate
development, and
director of
strategic
marketing.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2002</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Ben A. Guill
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">57</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2010</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Guill has
served as a
Director of the
Company since 1999.
Until April&nbsp;2007,
he was President of
First Reserve
Corporation, a
corporate manager
of private
investments
focusing on the
energy and
energy-related
sectors, which he
joined in September
1998. Prior to
joining First
Reserve, Mr.&nbsp;Guill
was the Managing
Director and
Co-head of
Investment Banking
of Simmons &#038;
Company
International, an
investment-banking
firm specializing
in the oil service
industry. Mr.
Guill also serves
as a director of
the general partner
of Cheniere Energy
Partners, L.P. and
as a director of
Trico Marine
Services, Inc.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1999</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Expiration Date</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Year First</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of Current</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Became</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Age</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Term</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Biography</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Director</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">David D. Harrison
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">60</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2009</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Harrison has
been a Director of
the Company since
August&nbsp;2003. He has
served as Executive
Vice President and
Chief Financial
Officer of Pentair,
Inc., a diversified
manufacturer in
water technologies
and enclosures
businesses, since
February&nbsp;2000 until
his retirement in
February&nbsp;2007. He
also served as
Executive Vice
President and Chief
Financial Officer
of Pentair, Inc.
from 1994 to 1996.
From 1972 through
1994, Mr.&nbsp;Harrison
held various
domestic and
international
finance positions
with a combination
of General Electric
and Borg-Warner
Chemicals. Mr.
Harrison serves as
a director of
Navistar
International
Corporation, a
holding company
whose wholly owned
subsidiaries
produce
International<SUP style="font-size: 85%; vertical-align: text-top">
<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP></SUP> brand
commercial trucks,
MaxxForce brand
diesel engines, IC
brand school buses,
and Workhorse brand
chassis for motor
homes and step
vans.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2003</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Roger L. Jarvis
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">54</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2010</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Jarvis has been
a Director of the
Company since
February&nbsp;2002.
Since 2007, he has
served as Chairman,
Chief Executive
Officer and
President of Common
Resources LLC, a
privately held
company engaged in
the business of
exploration for and
production of
hydrocarbons in the
United States. He
served as
President, Chief
Executive Officer
and Director of
Spinnaker
Exploration
Company, a natural
gas and oil
exploration and
production company,
from 1996 and as
its Chairman of the
Board from 1998,
until its
acquisition by
Norsk Hydro ASA in
December&nbsp;2005.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2002</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Eric L. Mattson
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">56</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2010</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Mattson has
been a Director of
the Company since
March&nbsp;2005. Mr.
Mattson served as a
Director of Varco
(and its
predecessor,
Tuboscope Inc.)
from January&nbsp;1994
until its merger
with the Company on
March&nbsp;11, 2005.
Mr.&nbsp;Mattson has
served as Senior
Vice President and
Chief Financial
Officer of
VeriCenter, Inc., a
private provider of
managed hosting
services, since
2003, until its
acquisition in
August&nbsp;2007. From
November&nbsp;2002 until
October&nbsp;2003,
Mr.&nbsp;Mattson worked
as an independent
consultant.
Mr.&nbsp;Mattson was the
Chief Financial
Officer of Netrail,
Inc., a private
Internet backbone
and broadband
service provider,
from September&nbsp;1999
until November
2002. From July
1993 until May
1999, Mr.&nbsp;Mattson
served as Senior
Vice President and
Chief Financial
Officer of Baker
Hughes
Incorporated, a
provider of
products and
services to the
oil, gas and
process industries.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2005</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>



<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Jeffery A. Smisek
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">53</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2008</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Smisek has been
a Director of the
Company since March
2005. Mr.&nbsp;Smisek
served as a
Director of Varco
(and its
predecessor,
Tuboscope Inc.)
from February&nbsp;1998
until its merger
with the Company on
March&nbsp;11, 2005.
Since December&nbsp;30,
2004, Mr.&nbsp;Smisek
has served as
President and a
director of
Continental
Airlines, Inc.
Mr.&nbsp;Smisek
previously served
Continental
Airlines, Inc. as: Executive Vice
President from
March&nbsp;2003 until
December&nbsp;2004; and
Executive Vice
President&nbsp;&#151;
Corporate from May
2001 until March
2003.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2005</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->









</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Executive Officers</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table identifies our current executive officers and lists their names, ages, terms of
office, and business backgrounds. The executive officers of the Company serve at the pleasure of
the Board of Directors and are subject to annual appointment by the Board of Directors. None of
the executive officers or directors have any family relationships with each other.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="59%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Age</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Position</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Biography</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Merrill A. Miller, Jr.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">57</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and Chief
Executive Officer
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Miller has
served as the
Company&#146;s President
since November
2000, Chief
Executive Officer
since May&nbsp;2001 and
Chairman of the
Board since July
22, 2005. Mr.
Miller also served
as Chairman of the
Board from May&nbsp;2002
through March&nbsp;11,
2005. He served as
the Company&#146;s Chief
Operating Officer
from November&nbsp;2000
through March&nbsp;11,
2005. He has
served in various
senior executive
positions with the
Company since
February&nbsp;1996. Mr.
Miller also serves
as a director of
Chesapeake Energy
Corporation, a
company engaged in
the development,
acquisition,
production,
exploration, and
marketing of
onshore oil and
natural gas
properties in the
United States.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Robert W. Blanchard
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">46</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President, Corporate
Controller and Chief
Accounting Officer
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Blanchard has
served as the
Company&#146;s Vice
President,
Corporate
Controller and
Chief Accounting
Officer since May
2005. Mr.
Blanchard served as
Controller of Varco
from 1999 and as
its Vice President
from 2002 until its
merger with the
Company on March
11, 2005.</TD>
</TR>



<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>




<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Mark A. Reese
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">49</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President &#150; Rig Technology
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Reese has
served as President
&#150; Rig Technology
since August&nbsp;2007.
Mr.&nbsp;Reese served as
President &#150;
Expendable Products
from January&nbsp;2004
to August&nbsp;2007. He
served as President
of the Company&#146;s
Mission Products
Group from August
2000 to January
2004. From May
1997 to August&nbsp;2000
he was Vice
President of
Operations for the
Company&#146;s
Distribution
Services Group.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Dwight W. Rettig
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">47</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President, General
Counsel and Secretary
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Rettig has
served as the
Company&#146;s Vice
President and
General Counsel
since February
1999, and from
February&nbsp;1998 to
February&nbsp;1999 as
General Counsel of
the Company&#146;s
Distribution
Services Group.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Clay C. Williams
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">45</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice President and
Chief Financial Officer
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Williams has
served as the
Company&#146;s Senior
Vice President and
Chief Financial
Officer since March
2005. He served as
Varco&#146;s Vice
President and Chief
Financial Officer
from January&nbsp;2003
until its merger
with the Company on
March&nbsp;11, 2005.
From May&nbsp;2002 until
January&nbsp;2003, Mr.
Williams served as
Varco&#146;s Vice
President Finance
and Corporate
Development. From
February&nbsp;2001 until
May&nbsp;2002, and from
February&nbsp;1997 until
February&nbsp;2000, he
served as Varco&#146;s
Vice
President&#151;Corporate
Development.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Section&nbsp;16(a) Beneficial Owner Reporting Compliance</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The rules of the SEC require that the Company disclose late filings of reports of stock ownership
(and changes in stock ownership) by its directors, executive officers, and beneficial owners of
more than ten percent of the Company&#146;s stock. The Company has undertaken responsibility for
preparing and filing the stock ownership forms required under Section 16(a) of the Securities and
Exchange Act of 1934, as amended, on behalf of its officers and directors. Based upon a review of
forms filed and information provided by the Company&#146;s officers and directors, we believe that all
Section 16(a) reporting requirements were met during 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Policies on Business Ethics and Conduct</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company has a long-standing Business Ethics Policy. In April&nbsp;2003, the Board adopted the Code
of Business Conduct and Ethics For Members of the Board of Directors and Executive Officers and the
Code of Ethics for Senior Financial Officers. These codes are designed to focus the Board and
management on areas of ethical risk, provide guidance to personnel to help them recognize and deal
with ethical issues, provide mechanisms to report unethical conduct and help to foster a culture of
honesty and accountability. As set forth in the Corporate Governance Guidelines, the Board may not
waive the application of the Company&#146;s policies on business ethics and conduct for any Director or
Executive Officer. Copies of the Code of Business Conduct and Ethics For Members of the Board of
Directors and Executive Officers and the Code of Ethics for Senior Financial Officers, as well as
the code of ethics applicable to employees of the Company, are available on the Company&#146;s website,
www.nov.com, under the Investor Relations/Corporate Governance section. The Company will furnish
print copies of these Codes to interested stockholders without charge, upon request. Written
requests for such copies should be addressed to: Dwight W. Rettig, Secretary, National Oilwell
Varco, Inc., 7909 Parkwood Circle Drive, Houston, Texas 77036.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Standing Audit Committee</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Messrs.&nbsp;Harrison (Chairman), Armstrong, Guill and Mattson are the current members of the Audit
Committee. All members of this committee are &#147;independent&#148; within the meaning of the rules
governing audit committees by the New York Stock Exchange, or NYSE. The Board of Directors has
determined that all members of the Audit Committee meet the NYSE standard of having accounting or
related financial management expertise and meet the SEC&#146;s criteria of an Audit Committee Financial
Expert.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 11. EXECUTIVE COMPENSATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Compensation Discussion and Analysis</I></B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>General Overview</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">National Oilwell Varco&#146;s executive compensation program is administered by the Compensation
Committee of the Board of Directors. The Compensation Committee establishes specific compensation
levels for the Company&#146;s executive officers and administers the Company&#146;s long-term incentive award
plans. The Compensation Committee&#146;s objective regarding executive compensation is to design and
implement a compensation program that will attract and retain the best available individuals to
serve on the Company&#146;s executive team and properly incentivize those executives to achieve the
Company&#146;s short-term and long-term financial and operational goals. To this end, the Compensation
Committee strives to provide compensation packages for key executives that offer compensation
opportunities in the median range of oilfield service companies described below. Data sources
reviewed by the Compensation Committee and its independent compensation consultants include
industry survey groups, national survey databases, proxy disclosures and general trend data, which
are updated annually. The Compensation Committee reviews all elements of executive compensation
both separately and in the aggregate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Components of the executive compensation program for 2007 were base salary, participation in the
Company&#146;s annual cash incentive (bonus)&nbsp;plan and the grant of non-qualified stock options and
performance-based restricted stock awards (long-term incentives).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Compensation Philosophy</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company believes it is important for each executive to have a set amount of cash compensation,
in the form of base salary, that is not dependent on the performance or results of the Company.
The Company recognizes that a certain amount of financial certainty must be provided to its
executives as part of their compensation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">While the Company believes a competitive base salary is needed to attract and retain talented
executives, the Company&#146;s compensation program also places a strong emphasis on annual and
long-term incentives to align the executive&#146;s interests with stockholder value. The annual and
long-term incentives are calculated and paid based primarily on financial measures of profitability
and stockholder value creation. Executives of the Company have the incentive of increasing the
Company&#146;s profitability and stockholder return in order to earn a major portion of their
compensation package.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company seeks to structure a balance between achieving strong short-term annual results and
ensuring the Company&#146;s long-term success and viability. The Company wants each of its executives
to balance his focus between the Company&#146;s day-to-day operational performance and the Company&#146;s
long-term goals and strategies. To reinforce the importance of balancing these perspectives, the
Company&#146;s executives are provided both short and long-term incentives.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Base salary is designed to reward the executive for his performance of his normal, everyday job
functions. The Company&#146;s annual cash incentive (bonus)&nbsp;plan and long-term incentives are designed
to reward the executive for executing business plans that will benefit the Company in the short and
long-term. The Company believes that the mix of short and long-term incentives allows the Company
to deliver results aligned with the interests of stockholders. Stock options create a focus on
share price appreciation, while the annual cash incentive (bonus)&nbsp;and performance-based restricted
stock awards emphasize financial performance, both absolute and relative.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Given the inherent nature of this form of compensation, the Company understands that its annual
cash incentives and long-term compensation will result in varying compensation for its executives
each year. Because of this, the Company has tried to design its annual cash incentives and
long-term compensation program in such a way to provide substantive financial benefits to its
executives during times when the Company&#146;s financial and operational performance is strong, while
motivating executives to stay with the Company during times when the Company&#146;s performance may not
be as strong.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There are no compensation policy differences among the individual executives, except that the more
senior officers, such as the chief executive officer, receive higher compensation consistent with
their increased responsibilities. These differences are considered in connection with the
compensation analysis performed by the Compensation Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Competitive Positioning</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Because of these goals and objectives for executive compensation, the Company believes each element
of compensation should be properly designed, as well as competitive with the marketplace, to
incentivize its executives in the manner stated above.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As part of its process to establish compensation levels for the Company&#146;s named executive officers,
the Compensation Committee compares total compensation and base salary for each of its named
executive officers against the median total compensation and median base salary earned by
comparable executive officers as paid by the designated peer group. When analyzing peer group data,
the Compensation Committee does not establish a specific numeric range around the median data
points, which it considers reasonable or acceptable. Rather, in setting compensation for any
particular named executive officer, the Compensation Committee considers any variance from the
median, taking into account other factors as discussed below, and determines whether such variance
is appropriate. If the Compensation Committee determines that any variance is unwarranted, the
Compensation Committee will make appropriate adjustments to the compensation levels.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company does not target a specific percentile of its designated peer group for its annual cash
incentive compensation or its long-term equity compensation. The Compensation Committee recognizes
that these elements of compensation can vary significantly in value from year to year, making
comparisons to peer group data less meaningful.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In January&nbsp;2007, the Company engaged its compensation consultant, Mercer Human Resource Consulting
(&#147;Mercer&#148;), to conduct a review of senior executive compensation, using the following peer group
against which to compare executive pay: Baker Hughes, Inc.; BJ Services Co.; Cameron International
Corporation; Halliburton Co.; Hanover Compressor Co.; Schlumberger Ltd.; Smith International, Inc.;
and Weatherford International Ltd. The peer group consisted of companies in the oilfield services
sector with varying ranges of market capitalization and revenues. The Company&#146;s revenue and market
capitalization prior to the time of such review were each near the median revenue and median market
capitalization, respectively, for the peer group. The peer group was used to benchmark executive
compensation levels against companies that have executive positions with responsibilities similar
in breadth and scope to those of the Company and have businesses that compete with the Company for
executive talent. Benchmarking and aligning base salaries are critical to a competitive
compensation program.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mercer analyzed and compared each position&#146;s responsibilities and job title to develop competitive
market data based on data from proxy statements as well as published salary surveys in the energy
industry as well as the general industry. Mercer&#146;s proxy analysis focused on the top five
executives. The executive compensation review covered the following elements of compensation: base
salaries, annual bonuses, and equity compensation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mercer provided comprehensive data on elements of the Company&#146;s compensation program compared to
the market 25<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> percentile, market 50<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> percentile and market 75<SUP style="font-size: 85%; vertical-align: text-top">th</SUP>
percentile of the designated peer group. For total direct compensation (total cash compensation
plus long-term incentive compensation), Mercer compared the Company named executive officers&#146; total
direct compensation for 2006 with the market 25<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> percentile, market 50<SUP style="font-size: 85%; vertical-align: text-top">th</SUP>
percentile and market 75<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> percentile for comparable executive officers in the
designated peer group. Based on the compiled data and the comparisons prepared by Mercer, the
Compensation Committee, in consultation with Frederic W. Cook &#038; Co., the Compensation Committee&#146;s
independent compensation consultant (&#147;Frederic Cook&#148;), determined that the total direct
compensation for the Company&#146;s named executive officers relative to the designated peer group was
in the median range of the designated peer group, except for Mr.&nbsp;Miller, whose total direct
compensation was significantly below the median range of the designated peer group. The deviation
for Mr.&nbsp;Miller&#146;s total direct compensation was due in part to Mr.&nbsp;Miller declining to have his base
salary adjusted in 2006, as well as the variable nature and value of long-term incentive
compensation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Components of Compensation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following describes the elements of the Company&#146;s compensation program for 2007, why they were
selected, and how the amounts of each element were determined.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Base Salary</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Base salaries provide executives with a set level of monthly cash income. While the Compensation
Committee is aware of competitive levels, actual salary levels are based on factors including
individual performance and level and scope of responsibility. The Company does not give specific
weights to these factors. The Compensation Committee determines median base salary levels by a
comprehensive review of information provided in proxy statements filed by oilfield service
companies with varying ranges of market capitalization and revenues. Generally, each executive is
reviewed by the Compensation Committee individually on an annual basis. Salary adjustments are
based on the individual&#146;s experience and background, the individual&#146;s performance during the prior
year, the general movement of salaries in the marketplace, our financial position and, for each
executive other than the chief executive officer, the recommendations of our chief executive
officer. The Compensation Committee does not establish specific, individual goals for the Company&#146;s
named executive officers, other than the chief executive officer (see &#147;Compensation of the Chief
Executive Officer&#148; below for a discussion of the chief executive officer&#146;s goals). The
Compensation Committee&#146;s analysis of the individual performance of any particular named executive
officer, other than the chief executive officer, is subjective in nature and takes into
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">account the recommendations of the chief executive officer. As a result of these factors, an
executive&#146;s base salary may be above or below the targeted median at any point in time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In January&nbsp;2007, the Compensation Committee reviewed with Frederic Cook base salary adjustment
recommendations made by the chief executive officer for the other named executive officers. The
Compensation Committee concluded that the top five executives of the Company, other than the chief
executive officer, had a base salary that was in the market median base salary range for his
position. The Compensation Committee also considered in its review of base salary compensation for
the top five executives the scope and size of the Company and the financial and operating
performance of the Company during 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Based on these factors, the Company&#146;s named executive officers did not receive any adjustments to
their base salaries in 2007. The Compensation Committee noted that the base salary adjustments for
the named executive officers in 2006, other than its chief executive officer who did not receive
any base salary adjustment, put such executive&#146;s base salary pay at that time above the median base
salary range near the market 65<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> percentile. Prior to such adjustments in 2006, the
Compensation Committee noted that the top five executives of the Company, other than the chief
executive officer who was excluded from the review, had a base salary that was below market median
base salary for his position. The salary adjustments in 2006 were also made as a result of the
successful integration of the Company with Varco International, Inc. and the successful financial
and operating performance of the Company during 2005. The Compensation Committee determined that
the named executive officers&#146; base salary (other than the chief executive officer) was in the
median base salary range in 2007, which is consistent with the Company&#146;s stated philosophy of
maintaining executive compensation in the median range of other similarly situated oilfield service
companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Annual Incentive Award</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The objectives of the Company&#146;s annual cash incentive bonus plan are to incent performance to
achieve the Company&#146;s corporate growth and profitability goals, encourage smart investments and
prudent employment of capital, and provide competitive compensation packages to attract and retain
management talent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Substantially all exempt employees, including executive officers, participated in the Company&#146;s
annual incentive plan in 2007, aligning a portion of each employee&#146;s cash compensation with Company
performance against a predetermined operating profit target. As in prior years, the incentive plan
provided for cash awards if objectives related to the Company&#146;s achievement of a certain specified
operating profit target based on the Company&#146;s financial plan were met. The Company&#146;s annual
financial plan, including the Company&#146;s target operating profit level, is established through a
comprehensive budget and financial planning process, which includes a detailed analysis of the
Company&#146;s market outlook and available strategic alternatives, and is approved by the Board each
year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The designated performance objective under the incentive plan is the Company&#146;s operating profit.
There are three levels set under the incentive plan using this single performance metric &#150; minimum,
target and maximum. Based on the Company&#146;s annual financial plan, each level is assigned a
specified operating profit net of the bonus expense. Entry level is the &#147;minimum&#148; level of
operating profit for which the Company provides an annual incentive payout. If the Company&#146;s
operating profit is less than the entry level threshold, then there is no payout in that fiscal
year. If the Company achieves the entry level threshold, the &#147;minimum&#148; level payout of 10% of the
target incentive amount is earned, which is a percentage of base salary. The target incentive
amount (100%) is earned when the target operating profit is reached by the Company. For the
&#147;maximum&#148; level payout of 200% of the target incentive amount to occur, the Company&#146;s operating
profit must equal or exceed the maximum operating profit goal that was set for the incentive plan.
Results falling between the stated thresholds of minimum, target and maximum will result in an
interpolated, or sliding scale payout.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Compensation Committee believes the use of operating profit as the designated performance
objective under the incentive plan best aligns the interests of the Company&#146;s stockholders and the
Company&#146;s executive officers. The &#147;target&#148; objective is set at the target operating profit level
provided under the Company&#146;s annual financial plan approved by the Board. The &#147;target&#148; objective
is set at a level that the Company believes is challenging to meet but achievable if the Company
properly executes its operational plan and market conditions are as forecasted by the Company at
the beginning of the year. The &#147;minimum&#148; and &#147;maximum&#148; level of operating profit under the
incentive plan are set based off of the &#147;target&#148; objective, so that the &#147;minimum&#148; objective is
approximately 80% of the &#147;target&#148; objective and the &#147;maximum&#148; objective is approximately 110% of
the &#147;target&#148; objective. The Compensation Committee believes this objective, formulaic measure
allows the &#147;minimum&#148; objective to be set at a level that the Company can achieve even if forecasted
market conditions are not as favorable as anticipated and/or the Company&#146;s operational plan is not
executed as efficiently as planned. The &#147;minimum&#148; objective serves to motivate the Company&#146;s
executives to continue to work towards executing the Company&#146;s operational plan if market
conditions, which are generally outside the control of the Company, are not as favorable as
forecasted. The Compensation Committee believes this objective, formulaic measure allows the
&#147;maximum&#148; objective to be set at a level that would be very challenging for the Company to achieve.
The Compensation Committee believes that, for the &#147;maximum&#148; objective to be achieved, a combination
of market conditions being more favorable than initially forecasted and the Company executing its
operational plan in a highly efficient manner would need to occur.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All participants in the incentive plan have a minimum of 25% of their bonus awards tied to the
Company&#146;s consolidated corporate operating profit, while senior executives, including business unit
heads, have a minimum of 50% of their bonus awards tied to the Company&#146;s consolidated corporate
operating profit, with the remainder of their bonus awards, if applicable, tied to their business
unit performance. 100% of each named executive officer&#146;s annual bonus award is tied to the
financial performance of the Company. Participant award opportunities will vary depending upon
individual levels of participation in the incentive plan (participation level). The Company
designed the incentive plan with the idea that a portion of each executive&#146;s cash compensation
should be tied to the financial and operating performance of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Payouts are calculated by multiplying (A)&nbsp;the incremental increase in operating profit over a
specified target (&#147;performance result&#148; multiplier amount can be anywhere from 10% (minimum)&nbsp;to 100%
(target)&nbsp;to 200% (maximum)) by (B)&nbsp;the participant&#146;s base salary by (C)&nbsp;the participant&#146;s
designated target percentage of base salary (participation level). For 2007, the chief executive
officer&#146;s participation level was 100%, the chief financial officer&#146;s participation level was 80%,
and the other executive officers&#146; participation level was 75%. These participation level
percentages are based on each executive&#146;s level of responsibility for the Company&#146;s financial
performance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following examples calculate an annual incentive award payment for Mr.&nbsp;Miller assuming (1)&nbsp;the
Company&#146;s 2007 operating profit was equal to the operating profit target set under the incentive
plan and (2)&nbsp;the Company&#146;s 2007 operating profit exceeded the maximum operating profit target set
under the incentive plan:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>100% (performance result) x $800,000 (base salary) x 100% (participation level) =<br>
$800,000</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>200% (performance result) x $800,000 (base salary) x 100% (participation level) =<br>
$1,600,000</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Additionally, certain key executives including all executive officers were subject to a 25% maximum
adjustment to their bonus payouts. If a predetermined capital employed target was exceeded, the
bonus payout would be reduced by up to 25%. If a predetermined capital employed target was not
exceeded, the bonus payout would be increased by up to 25%; provided that in no event may the 200%
maximum target incentive amount be exceeded. The Compensation Committee does not have the
discretion to increase or decrease payouts under the Company&#146;s annual cash incentive bonus plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Based on the Company&#146;s strong financial results &#151; the Company&#146;s actual operating profit for 2007
exceeded the maximum operating profit target set under the Company&#146;s annual incentive plan &#151; bonus
payments were made to the Company&#146;s named executive officers, other than its chief executive
officer, at the &#147;maximum&#148; level payout of 200% of the
target incentive, as follows: Mr.&nbsp;Williams &#151; $800,000; Mr.&nbsp;Reese &#151; $577,500; Mr.&nbsp;Smith &#151; $577,500; and Mr.&nbsp;Rettig &#151; $525,000. These bonus
payouts reflected the strong financial performance the Company achieved in 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s annual incentive plan is designed to reward its executives in line with the financial
performance of the Company on an annual basis. When the Company is achieving strong financial
results, its executives will be rewarded well through its annual incentive plan. The Company
believes this structure helps keep the executives properly motivated to continue helping the
Company achieve these strong results. While the executives&#146; financial benefit is reduced during
times when the Company&#146;s performance is not as strong, other forms of the Company&#146;s compensation
program, namely its long-term incentive compensation as well as base salary, help motivate its
executives to remain with the Company to help it achieve strong financial and operational results,
thereby benefiting the executive, the Company and its stockholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Long-Term Incentive Compensation</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The primary purpose of the Company&#146;s long-term incentive compensation is to focus its executive
officers on a longer-term perspective in their managerial responsibilities. This component of an
executive officer&#146;s compensation directly links the officers&#146; interests with those of the Company&#146;s
other stockholders. In addition, long-term incentives encourage management to focus on the
Company&#146;s long-term development and prosperity in addition to annual operating profits. This
program helps balance long-term versus short-term business objectives, reinforcing that one should
not be achieved at the expense of the other. The Company&#146;s Corporate Governance Guidelines
encourage its directors and executive officers to own shares of the Company&#146;s stock and increase
their ownership of those shares over time. However, the Company does not have any specific
security ownership requirements or guidelines for its executives, but the Board has adopted stock
ownership guidelines for the Company&#146;s directors (see &#147;Stock Ownership Guidelines&#148; below for
further information).
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->9<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s long-term incentive compensation granted in 2007 to its named executive officers
consisted of stock options and performance-based restricted stock awards.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The goal of the stock option program is to provide a compensation program that is competitive
within the industry while directly linking a significant portion of the executive&#146;s compensation to
the enhancement of stockholder value. The ultimate value of any stock option is based solely on the
increase in value of the shares of the Company&#146;s common stock over the grant price. Accordingly,
stock options have value only if the Company&#146;s stock price appreciates from the date of grant.
Additionally, the option holder must remain employed during the period required for the option to
&#147;vest&#148;, thus providing an incentive for an option holder to remain employed by the Company. This
at-risk component of compensation focuses executives on the creation of stockholder value over the
long-term.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The goal of the performance-based restricted stock award program is to provide a compensation
program that is also competitive within the industry while directly linking a significant portion
of the executive&#146;s compensation to the financial performance of the Company relative to a
designated peer group. The performance-based restricted stock awards received by the executives
have value only if the Company&#146;s designated financial performance objective exceeds the median
level financial performance objective for a designated peer group. Additionally, the holder must
also remain employed during the period required for the award to &#147;vest&#148;, thus providing an
additional incentive for the award holder to remain employed by the Company. This at-risk
component of compensation focuses executives on achieving strong financial performance for the
Company over the long-term.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company grants stock options and performance-based restricted stock awards to the Company&#146;s key
executives based on competitive grants within the industry and based on the level of long-term
incentives appropriate for the competitive long-term compensation component of total compensation.
Such executives are eligible to receive stock options and restricted stock awards annually with
other key managers being eligible on a discretionary basis. Eligibility for an award does not
ensure receipt of an award. Options are granted with an exercise price per share equal to the fair
market value of the Company&#146;s common stock on the date of grant and generally vest in equal annual
installments over a three-year period, and have a ten-year term subject to earlier termination.
Option grants and restricted stock award grants must be reviewed and approved by the Compensation
Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In January&nbsp;2007, Company management proposed to the Compensation Committee that the Company&#146;s
long-term incentive compensation program be modified to provide for 50% stock options and 50%
restricted stock awards, based on value. In the past, the Company&#146;s long-term incentive
compensation program consisted solely of stock option grants. In a survey conducted by Mercer, the
Company noted that a combination of stock options and restricted stock was the most prevalent mix
of long-term incentive compensation provided by its oilfield service peers. Frederic Cook advised
the Compensation Committee that there has been a shift towards greater use of restricted stock in
the Company&#146;s industry as a vehicle for long-term equity compensation. The Compensation Committee
approved changing the Company&#146;s long-term incentive compensation structure to provide for 50% stock
options and 50% restricted stock awards.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Compensation Committee determined that the vesting for the restricted stock award grants to
employees other than members of senior management could be based solely on the passage of time, but
that it was increasingly common practice for the vesting of restricted stock awards for members of
management to be based on the achievement of a specified performance condition. The Compensation
Committee believed that the performance condition used for vesting of the restricted stock awards
should be a measure that would incentivize the Company&#146;s executives to achieve strong financial
results for the Company relative to its peers. The Compensation Committee also believed that the
measure should not be made on an absolute basis, but be based on a comparison to its peers so as to
reward financial performance only if it exceeded that of the Company&#146;s peers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">After consultation with Company management and Frederic Cook, the Compensation Committee determined
that the performance measure to be used for vesting of the restricted stock awards for executives
would be the Company&#146;s operating profit growth over a period of time needing to exceed a designated
peer group&#146;s median operating profit growth over the same period. The Compensation Committee
believed that such a performance measure would serve to motivate the Company&#146;s executives to
deliver results aligned with the interests of Company stockholders. To introduce the new long-term
incentive compensation structure for executives, the Compensation Committee approved two separate
grants of performance-based restricted stock awards for executives in 2007. After 2007, the
Compensation Committee agreed that only one grant of performance-based restricted stock awards
would be made annually to executives.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Compensation Committee set the following peer group for comparison purposes in determining
vesting of the performance-based restricted stock awards: Baker Hughes, Inc.; BJ Services Co.;
Cameron International Corporation; FMC Technologies, Inc.; Grant Prideco Inc.; Hydril Co.; Smith
International, Inc.; and Weatherford International Ltd.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s long-term incentive compensation program is focused on employees who will have a
greater impact on the direction and long-term results of the Company by virtue of their roles and
responsibilities. The Company presented data, based on information
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->10<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">available in public filings, to the Compensation Committee showing that the Company&#146;s past equity
incentive programs on a pro forma basis have historically been in-line with its oilfield service
peers. The Company noted that the 2007 equity incentive program award values would be consistent
with the 2006 equity incentive program award values. The Company also noted the impact of FAS123R
expensing that went into effect at the beginning of 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Based on the foregoing, on March&nbsp;1, 2007, the Compensation Committee approved the grant of stock
options to the Company&#146;s named executive officers, other than its chief executive officer, as
follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="55%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Securities Underlying Options (#) (1)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD nowrap><DIV style="margin-left:15px; text-indent:-15px">Clay C. Williams</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mark A. Reese</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Haynes B. Smith</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dwight W. Rettig</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,000</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Number of shares has been adjusted to reflect the two-for-one stock split in the form of a
stock dividend to the Company&#146;s stockholders of record on September&nbsp;7, 2007 with a distribution of
shares on September&nbsp;28, 2007.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The options were granted at a price equal to the closing trading price of the Company&#146;s common
stock on the New York Stock Exchange on the date of approval of the grants by the Compensation
Committee. Each of such options has a term of ten years and vests in three equal annual
installments commencing on the first anniversary of the grant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On March&nbsp;26, 2007, the Compensation Committee approved the grant of performance vesting restricted
stock awards to the Company&#146;s named executive officers, other than its chief executive officer, as
follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="54%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares of Restricted Stock (18</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares of Restricted Stock (36</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Months) (#) (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Months) (#) (1)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Clay C. Williams</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mark A. Reese</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Haynes B. Smith</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dwight W. Rettig</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,000</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Number of shares has been adjusted to reflect the two-for-one stock split in the form
of a stock dividend to the Company&#146;s stockholders of record on September&nbsp;7, 2007 with a
distribution of shares on September&nbsp;28, 2007.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The restricted stock awards granted by the Company to its executive officers are as follows: (1)
one set of grants vest 100% on the eighteen month anniversary of the date of grant (&#147;18 Month
Grant&#148;), and (2)&nbsp;one set of grants vest 100% on the third anniversary of the date of grant (&#147;36
Month Grant&#148;), with the 18 Month Grant contingent on the Company&#146;s operating income growth,
measured on a percentage basis, from January&nbsp;1, 2007 to June&nbsp;30, 2008 exceeding the median
operating income growth for a designated peer group over the same period, and with the 36 Month
Grant contingent on the Company&#146;s average operating income growth, measured on a percentage basis,
from January&nbsp;1, 2007 to December&nbsp;31, 2009 exceeding the median average operating income growth for
a designated peer group over the same period. One-time, non-recurring, non-operational gains or
charges to income taken by the Company or any member of the designated peer group that are publicly
reported would be excluded from the income calculation and comparison set forth above. If the
Company&#146;s operating income growth does not exceed the median operating income growth of the
designated peer group over the designated period, the applicable restricted stock award grant for
the executives will not vest and would be forfeited.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company recognizes that its stock price fluctuates over time, and in certain cases quite
significantly. As stock option grants have historically been granted on an annual basis during the
first quarter of the calendar year, executives who have been employed with the Company for some
time have received grants with varying exercise prices. This option grant process has helped
incentivize its executives to continue employment with the Company during times when the Company&#146;s
stock performance is not as positive, allowing its executives to receive option grants with lower
exercise prices during those times. Additionally, the ten year term of the options also helps
reward its executives who remain with the Company, as it provides the executives time, so long as
they continue employment with the Company, to realize financial benefits from their option grants
after vesting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The addition of restricted stock award grants to its executives helps reduce the Company&#146;s
long-term incentive compensation reliance on positive stock price movements. The restricted stock
awards will have value to the executive even if the Company&#146;s stock price falls below the price on
the date of grant, provided that the designated performance condition is achieved.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->11<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company believes that its equity incentive grants must be sufficient in size and duration to
provide a long-term performance and retention incentive for executives and to increase their
interest in the appreciation of the Company&#146;s stock and achievement of positive financial results
relative to its peers. The Company believes that stock option and restricted stock award grants at
a competitive level, with certain vesting requirements, are an effective way of promoting the
long-term nature of its business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Retirement, Health and Welfare Benefits</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company offers retirement, health and welfare programs to all eligible employees. The
Company&#146;s executive officers generally are eligible for the same benefit programs on the same basis
as the rest of the Company&#146;s employees. The health and welfare programs cover medical, pharmacy,
dental, vision, life, accidental death and dismemberment and disability insurance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company offers retirement programs that are intended to supplement the employee&#146;s personal
savings. The programs include the National Oilwell Varco, Inc. 401(k) and Retirement Savings Plan
(&#147;401k Plan&#148;) and National Oilwell Varco, Inc. Supplemental Savings Plan (&#147;Supplemental Plan&#148;).
The Company&#146;s U.S. employees, including its executives, are generally eligible to participate in
the 401k Plan. Employees of the Company whose base salary meets or exceeds a certain dollar
threshold established by the Company&#146;s benefits plan administrative committee are eligible to
participate in the Supplemental Plan (&#147;Supplemental Employees&#148;). Participation in the 401k Plan
and Supplemental Plan are voluntary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company established the 401k Plan to allow employees to save for retirement through a
tax-advantaged combination of employee and Company contributions and to provide employees the
opportunity to directly manage their retirement plan assets through a variety of investment
options. The 401k Plan allows eligible employees to elect to contribute a portion of their
eligible compensation into the 401k Plan. Wages and salaries from the Company are generally
considered eligible compensation. Employee contributions are matched in cash by the Company at the
rate of $1.00 per $1.00 employee contribution for the first 4% of the employee&#146;s salary. In
addition, the Company makes cash contributions for all eligible employees between 2.5% and 5.5% of
their salary depending on the employee&#146;s full years of service with the Company. Such
contributions vest immediately. The 401k Plan offers 17 different investment options, for which
the participant has sole discretion in determining how both the employer and employee contributions
are invested. The 401k Plan does provide the Company&#146;s employees the option to invest directly in
the Company&#146;s stock. The 401k Plan offers in-service withdrawals in the form of loans and hardship
distributions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">The Company established the Supplemental Plan, a non-qualified plan, to
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149; allow Supplemental Employees to continue saving towards retirement when, due to compensation
and contribution ceilings established under the Internal Revenue Code of 1986, as amended (the
&#147;Internal Revenue Code&#148;), they can no longer contribute to the 401k Plan; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;
provide Company base and matching contributions that cannot be contributed to the 401k Plan
due to compensation and contribution ceilings established under the Internal Revenue Code.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Compensation which may be deferred into the Supplemental Plan includes wages and salaries from the
Company and bonus payments made under the Company&#146;s annual incentive plan. Supplemental Employees
may elect to defer a percentage of their base pay and bonus payments received under the Company&#146;s
incentive plan into the Supplemental Plan. Contributions in the Supplemental Plan vest immediately.
The investment options offered in the Supplemental Plan are similar to the investment options
offered in the 401k Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Compensation of the Chief Executive Officer</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Compensation Committee determines the compensation of the chief executive officer based on
leadership, meeting operational goals, executing the Company&#146;s business plan, and achieving certain
financial results. Components of Mr.&nbsp;Miller&#146;s compensation for 2007 were consistent with those for
executive officers as described above and included base salary, participation in the annual
incentive plan and the grant of stock options and performance-based restricted stock awards.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In considering Mr.&nbsp;Miller&#146;s salary level, the Compensation Committee, generally on an annual basis,
reviews the compensation level of chief executive officers of oilfield service companies with
varying ranges of market capitalization and revenues and considers Mr.&nbsp;Miller&#146;s individual
performance and success in achieving the Company&#146;s strategic objectives.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Compensation Committee establishes goals and objectives for Mr.&nbsp;Miller for each fiscal year.
Mr.&nbsp;Miller&#146;s performance was measured in four key areas of the Company: (1)&nbsp;financial performance,
(2)&nbsp;formulation and implementation of Company strategy, (3)&nbsp;controls and compliance, and (4)
management and employee development. The specific goals within these four areas were set based
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->12<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">on a determination of prioritizing Mr.&nbsp;Miller&#146;s efforts on those specific areas and
responsibilities that would have the greatest impact on the Company, and included the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>deliver the Company&#146;s annual operating plan;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>deliver quality equipment on a timely basis;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>optimize capacity and capital expenditures for near-term opportunities and long-term
cyclicality;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>develop new technologies and products for customers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>identify and execute on strategic growth opportunities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>execute Sarbanes-Oxley 404 compliance;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>enhance board member education on the Company and its businesses;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>enhance senior management effectiveness through education and exposure to different
opportunities; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>develop different programs for employee development.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Compensation Committee reviewed such goals and objectives against Mr.&nbsp;Miller&#146;s and the
Company&#146;s performance, and determined that Mr.&nbsp;Miller had achieved each of his pre-established
goals and objectives. The Compensation Committee took Mr.&nbsp;Miller&#146;s successful achievement of his
goals into consideration when reviewing his compensation in 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2007, based on this review, Mr.&nbsp;Miller received an option to purchase 100,000 shares of National
Oilwell Varco common stock, with terms consistent with the options granted to the other executives
described above, and two separate grants of performance-based restricted stock awards: 25,000
shares of restricted stock (18&nbsp;month vesting) and 50,000 shares of restricted stock (36&nbsp;month
vesting), with terms consistent with the performance-based restricted stock awards granted to the
other executives described above. Mr.&nbsp;Miller was also paid a bonus at the maximum 200% level of
$1,600,000 under the annual incentive plan. The Compensation Committee offered to raise Mr.
Miller&#146;s base salary to be more in line with the median range of base salaries for chief executive
officers of the designated peer group. Mr.&nbsp;Miller declined to have his base salary adjusted.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>U.S. Income Tax Limits on Deductibility</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Section&nbsp;162(m) of the Internal Revenue Code imposes a $1&nbsp;million limitation on the deductibility of
certain compensation paid to our chief executive officer and the next four highest paid executives.
Excluded from the limitation is compensation that is &#147;performance based.&#148; For compensation to be
performance based, it must meet certain criteria, including being based on predetermined objective
standards approved by stockholders. Although the Compensation Committee takes the requirements of
Section 162(m) into account in designing executive compensation, there may be circumstances when it
is appropriate to pay compensation to our five highest paid executives that does not qualify as
&#147;performance based compensation&#148; and thus is not deductible by us for federal income tax purposes.
Our stock option and performance-based restricted stock award grants are designed to be
&#147;performance based compensation.&#148; Future bonus payments to our executives under the Company&#146;s
annual cash incentive bonus plan will also be excluded from this limitation if the Bonus Plan is
approved by the Company&#146;s stockholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Option Grant Practices</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Historically, the Company has granted stock options to its key employees, including executives, in
the first quarter of the year. The Company does not have any program, plan or practice to time its
option grants to its executives in coordination with the release of material non-public
information, and has not timed its release of material non-public information for the purposes of
affecting the value of executive compensation. The Company does not set the grant date of its
stock option grants to new executives in coordination with the release of material non-public
information.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Compensation Committee has the responsibility of approving any Company stock option grants.
The Compensation Committee does not delegate material aspects of long-term incentive plan
administration to any other person. The Company&#146;s senior executives in coordination with the
Compensation Committee set a time for the committee to meet during the first quarter of the year to
review and approve stock option grants proposed by the senior executives. The specific timing of
the meeting during the quarter is dependent on committee member schedules and availability and the
Company finalizing its stock option grant proposal. If approved by the Compensation Committee, the
grant date for the stock option grants is the date the committee meets and approves the grant, with
the exercise price for the option grant being based on the Company&#146;s closing stock price on the
date of grant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Recent Developments</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;19, 2008, the Compensation Committee approved the performance terms of the 2008
National Oilwell Varco Incentive Plan (the &#147;2008 Incentive Plan&#148;). Under the 2008 Incentive Plan,
certain exempt employees of the Company, including its executive officers, are entitled to earn
cash bonus compensation based upon the Company&#146;s achievement of a certain specified operating
profit
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->13<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">target based on the Company&#146;s financial plan. Each participant is assigned to one of thirteen
target levels based on that participant&#146;s level of responsibility at the Company. Each target
level is assigned a target percentage of base salary that will be used to determine a participant&#146;s
bonus. The amount of a participant&#146;s bonus is calculated by multiplying (A)&nbsp;the incremental
increase in operating profit over a specified target by (B)&nbsp;the participant&#146;s base salary by (C)
the participant&#146;s designated target percentage of base salary. Assuming the Company achieves its
target operating profit, participants in the first two target levels, the chief executive officer
and chief financial officer, are eligible to receive a bonus payment of 100% and 80% of their base
salary, respectively. Participants in the third target level, which includes certain other senior
executive officers, are eligible to receive a bonus payment equal to 75% of their base salary if
the Company achieves target operating profit. In addition, certain key executives are subject to a
bonus increase or decrease if a specified &#147;capital employed&#148; target is under- or over-achieved.
&#147;Capital employed&#148; is defined as the Company&#146;s (a)&nbsp;total assets, excluding cash, minus (b)&nbsp;total
liabilities, excluding debt.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;19, 2008, the Compensation Committee also approved the grant of stock options to its
executive officers pursuant to the National Oilwell Varco, Inc. Long-Term Incentive Plan, as
follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="73%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>

<TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>Securities Underlying Options (#)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Merrill A. Miller, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">125,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Clay C. Williams</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mark A. Reese</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dwight W. Rettig</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Robert W. Blanchard</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The exercise price of the stock options is $64.16 per share, which was the closing stock price of
National Oilwell Varco, Inc. common stock on the date of grant. The stock options have terms of
ten years from the date of grant and vest in three equal annual installments beginning on the first
anniversary of the date of the grant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;19, 2008, the Compensation Committee approved the grant of performance vesting
restricted stock awards to its executive officers pursuant to the National Oilwell Varco, Inc.
Long-Term Incentive Plan, as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3"><B>Shares of Restricted Stock (36</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 1px solid #000000"><B>Months) (#)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Merrill A. Miller, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Clay C. Williams</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mark A. Reese</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dwight W. Rettig</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Robert W. Blanchard</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,000</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The restricted stock awards granted by the
Company to its executive officers vest 100% on the third
anniversary of the date of grant, contingent on the Company&#146;s average operating
income growth, measured on a percentage basis, from January&nbsp;1, 2008 to December&nbsp;31, 2010 exceeding
the median average operating income growth for a designated peer group over the same period.
One-time, non-recurring, non-operational gains or charges to income taken by the Company or any
member of the designated peer group that are publicly reported would be excluded from the income
calculation and comparison set forth above. If the Company&#146;s operating income growth does not
exceed the median operating income growth of the designated peer group over the designated period,
the applicable restricted stock award grant for the executives will not vest and would be
forfeited.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;19, 2008, the Compensation Committee, in connection with its annual review of executive
compensation and performance, after consulting with Frederic Cook, approved the following base
salary increases for the Company&#146;s executive officers: Merrill A. Miller, Jr. &#150; from $800,000 to
$950,000; Clay Williams &#150; from $500,000 to $550,000; Mark Reese &#150; from $385,000 to $490,000; and
Dwight Rettig &#150; from $350,000 to $450,000. Increases for the executive officers were approved,
effective January&nbsp;1, 2008, as a result of the Company&#146;s successful financial and operating
performance in 2007 and to better align their salaries with comparable salaries offered by the
Company&#146;s oilfield services sector peers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Employment Contracts and Termination of Employment and Change-in-Control Arrangements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Miller, Reese and Rettig</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company entered into an employment agreement on January&nbsp;1, 2002 with Mr.&nbsp;Miller. Under the
employment agreement, Mr.&nbsp;Miller is provided a base salary, currently set at $950,000. The
employment agreement also entitles him to receive an annual bonus
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->14<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">and to participate in the Company&#146;s incentive, savings and retirement plans. The agreement has a
term of three years and is automatically extended on an annual basis. The agreement provides for a
base salary, participation in employee incentive plans, and employee benefits as generally provided
to all employees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, the agreement contains certain termination provisions. If the employment relationship
is terminated by the Company for any reason other than
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>voluntary termination;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>termination for cause (as defined);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>death; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>long-term disability;</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">or if the employment relationship is terminated by the employee for Good Reason, as defined below,
Mr.&nbsp;Miller is entitled to receive three times the sum of his current base salary plus the highest
annual bonus received by him over the preceding three-year period, three times the amount equal to
the total of the employer matching contributions under the Company&#146;s 401(k) Plan and Supplemental
Plan, and three years participation in the Company&#146;s welfare and medical benefit plans. Mr.&nbsp;Miller
will have the right, during the 60-day period after such termination, to elect to surrender all or
part of any stock options held by him at the time of termination, whether or not exercisable, for a
cash payment equal to the spread between the exercise price of the option and the highest reported
per share sales price during the 60-day period prior to the date of termination. Any option not so
surrendered will remain exercisable until the earlier of one year after the date of termination or
the stated expiration date of the specific option grant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Under the agreement, termination by Mr.&nbsp;Miller for &#147;Good Reason&#148; means
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the assignment to him of any duties inconsistent with his current position or any
action by the Company that results in a diminution in his position, authority, duties or
responsibilities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a failure by the Company to comply with the terms of the agreement; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>requiring Mr.&nbsp;Miller to relocate or to travel to a substantially greater extent than
required at the date of the agreement.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, compensation will be &#147;grossed up&#148; for any excise tax imposed under Section&nbsp;4999 of the
Internal Revenue Code as a result of any payment or benefit provided to Mr.&nbsp;Miller under the
employment agreement. The agreement also contains restrictions on competitive activities and
solicitation of our employees for three years following the date of termination.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We entered into employment agreements on January&nbsp;1, 2002 with Messrs.&nbsp;Reese and Rettig that contain
certain termination provisions. Under the employment agreements, Messrs.&nbsp;Reese and Rettig are
provided base salary. The agreements have a one-year term and are automatically extended on an
annual basis. The agreements also provide for participation in employee incentive plans, and
employee benefits as generally provided to all employees. If the employment relationship is
terminated by the Company for any reason other than
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>voluntary termination;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>termination for cause (as defined);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>death; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>long-term disability;</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">or if the employment relationship is terminated by the employee for Good Reason, the employee is
entitled to receive the sum of his current base salary plus the highest annual bonus he would be
entitled to earn under the current year incentive plan and an amount equal to the total of the
employer matching contributions under the Company&#146;s 401(k) Plan and Supplemental Plan, and one
year&#146;s participation in the Company&#146;s welfare and medical benefit plans. The agreements also
contain restrictions on competitive activities and solicitation of our employees for one year
following the date of termination.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Additionally, the Company&#146;s stock option agreements and restricted stock agreements provide for
full vesting of unvested outstanding options and restricted stock, respectively, in the event of a
change of control of the Company and a change in the holder&#146;s responsibilities following a change
of control.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Williams and Smith</I>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company assumed the Amended and Restated Executive Agreements entered into on December&nbsp;19,
2003, by Varco with Messrs.&nbsp;Williams and Smith. The agreements have an initial term that continues
in effect through December&nbsp;31, 2006, and are automatically
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->15<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">extended for one or more additional terms of three (3)&nbsp;years each. The agreements contain certain
termination provisions, as further described below under &#147;Varco Change in Control Severance Plan&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Varco Supplemental Executive Retirement Plan</I>. Messrs.&nbsp;Williams and Smith were participants in the
Amendment and Restatement of the Supplemental Executive Retirement Plan of Varco which was assumed
by the Company as a result of the merger (the &#147;Merger&#148;) with Varco International, Inc. (the
&#147;Amended SERP&#148;). The Amended SERP provides for retirement, death and disability benefits, payable
over ten years. The annual benefit amount is generally equal to 50% of the average of a
participant&#146;s highest five calendar years of base salary, or if greater, in the case of a change of
control that occurs prior to January&nbsp;1, 2006 (which occurred as a result of the Merger), 50% of the
average salary in effect since January&nbsp;2001. This annual benefit is subject to a service reduction
in the event the participant retires or his employment is terminated prior to reaching age&nbsp;65
(excluded from this reduction are terminations following a change in control).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Messrs.&nbsp;Williams and Smith are currently fully vested in the benefits provided by the Amended SERP.
Based on historical earnings and presuming normal retirement at age 65, Messrs.&nbsp;Williams and
Smith would be entitled to an annual benefit of approximately $159,000 and $165,360, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Amendment and Restatement of the Varco Executive Retiree Medical Plan. </I>Messrs.&nbsp;Williams and Smith
were participants in the Amendment and Restatement of the Varco International, Inc. Executive
Retiree Medical Plan which was assumed by the Company as a result of the Merger (the &#147;Medical
Plan&#148;). Upon and following (i)&nbsp;certain retirements of a participant at or after age&nbsp;55, or (ii)&nbsp;the
death or disability of a participant, or (iii)&nbsp;terminations of a participant prior to age 55 (but
benefits are not payable until age 55), the participant, his spouse and dependent children shall be
provided the medical, dental, vision and prescription drug benefits that are then provided to the
Company&#146;s executive officers. These Medical Plan benefits are, however, conditioned upon the
Company&#146;s receipt of a monthly cash contribution in an amount not greater than that paid by the
executive officers for similar benefits, and, in certain circumstances, the participant having
achieved 10&nbsp;years of service with the Company or any of its predecessor companies prior to
retirement or termination of employment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Messrs.&nbsp;Williams and Smith are currently fully vested in the benefits provided by the Medical Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Varco Change in Control Severance Plan. </I>Messrs.&nbsp;Williams and Smith (for purposes of this
subsection, each an &#147;executive&#148;) were participants in the Varco change in control severance plan,
which was assumed by the Company as a result of the Merger.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The change in control severance plan provides benefits if the executive is terminated other than
for cause or if the executive terminates his employment for good reason (each as defined below)
within twenty four months of a qualifying change in control. Upon such qualifying termination
following a change in control, the executive is entitled to severance compensation and benefits,
including those set forth below:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a lump sum payment equal to three times base salary;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a lump sum cash payment equal to the participant&#146;s annual bonus at the higher of
Expected Value (as defined) or actual results during the year of termination, which is
pro-rated to the date of termination;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a lump sum payment equal to three times bonus at expected value;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>full vesting of all accrued benefits under the Company&#146;s 401(k) Plan, SERP,
Supplemental Plan and Medical Plan, as applicable;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a lump sum payment equal to three years of expected Company contributions under the
Company&#146;s 401(k) Plan and Supplemental Plan;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>full vesting of any restricted stock awards and payment of awards earned under any
intermediate or long-term bonus plan;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an extended option exercise period;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the gross-up of certain payments, subject to excise taxes under the Internal Revenue
Code as &#147;parachute payments,&#148; so that the participant receives the same amount he would
have received had there been no applicable excise taxes.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under the change in control severance plan, a participant is also entitled to receive, upon a
qualifying termination, medical and dental benefits (based on the cost sharing arrangement in place
on the date of termination) and automobile benefits, each throughout the three year payout period,
and outplacement services valued at not more than 15% of base salary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under the terms of the amended and restated executive agreement, which contains the change of
control severance plan, the term &#147;cause&#148; means:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>executive&#146;s conviction of a felony involving moral turpitude, dishonesty or a breach
of trust towards the Company;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>executive&#146;s commission of any act of theft, fraud, embezzlement or misappropriation
against the Company that is materially injurious to the Company regardless of whether a
criminal conviction is obtained;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>executive&#146;s willful and continued failure to devote substantially all of his business
time to the Company&#146;s business affairs (excluding failures due to illness, incapacity,
vacations, incidental civic activities and incidental personal time) which failure is
not remedied within a reasonable time after a written demand by the Company specifically
identifying executive&#146;s failure is delivered by the Company;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>executive&#146;s unauthorized disclosure of confidential information of the Company that
is materially injurious to the Company;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>executive&#146;s knowing or willful material violation of federal or state securities
laws, as determined in good faith by the Company&#146;s board of directors.</TD>
</TR>

</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->16<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under the terms of the amended and restated executive agreement, which contains the change of
control severance plan, the term &#147;good reason&#148; means:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure to re-elect or appoint the executive to any corporate office or directorship
held at the time of the change of control or a material reduction in executive&#146;s
authority, duties or responsibilities (including status, offices, titles and reporting
requirements) or if executive is assigned duties or responsibilities inconsistent in any
material respect from those of executive at the time of the relevant change of control
all on the basis of which executive makes a good faith determination that the terms of
his employment have been detrimentally and materially affected;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a material reduction of executive&#146;s compensation, benefits or perquisites, including
annual base salary, annual bonus, intermediate or long-term cash or equity incentive
opportunities or plans from those in effect prior to the change of control;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company fails to obtain a written agreement satisfactory to executive from any
successor or assigns of the Company to assume and perform the amended and restated
executive agreement;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company requires executive to be based at any office located more than fifty
(50)&nbsp;miles from the Company&#146;s current offices without executive&#146;s consent.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Potential Payments Upon Termination or Change in Control</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company has entered into certain agreements and maintains certain plans that will require the
Company to provide compensation to the Named Executive Officers in the event of a termination of
employment or change in control of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s Compensation Committee believes the payment and benefit levels provided to its named
executive officers under their employment agreements and/or change of control plans upon
termination or change of control should correspond to the level of responsibility and risk assumed
by the named executive officer. Thus, the payment and benefit levels for Mr.&nbsp;Miller, Mr.&nbsp;Reese and
Mr.&nbsp;Rettig are based on their levels of responsibility and market considerations at the time the
Company entered into the relevant agreements. The payment and benefit levels for Mr.&nbsp;Williams and
Mr.&nbsp;Smith are based on similar considerations but certain differences in their benefits are due to
the particular terms of their executive agreements, which were assumed by the Company in the
Merger. The Compensation Committee recognizes that it is not likely that the Company&#146;s named
executive officers would be retained by an acquiror in the event of a change of control. As a
result, the Compensation Committee believes that a certain amount of cash compensation, from one
year&#146;s cash compensation for certain executives to three years&#146; cash compensation for the chief
executive officer and chief financial officer, along with immediate vesting of all unvested equity
compensation, is an appropriate and sufficient incentive for the named executive officers to remain
employed with the Company, even if a change of control were imminent. It is believed that these
benefit levels should provide the Company&#146;s named executive officers with reasonable financial
security so that they could continue to make strategic decisions that impact the future of the
Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The amount of compensation payable to each Named Executive Officer in each situation is listed in
the tables below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table describes the potential payments upon termination or change in control of the
Company as of December&nbsp;31, 2007 for Merrill A. Miller, Jr., the Company&#146;s Chief Executive Officer.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Executive Benefits and Payments Upon Termination (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2" style="border-bottom: 1px solid #000000"><B>Involuntary Not for Cause Termination (2)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Base Salary (3 times base of $800,000)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,400,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Highest Bonus (times 3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,800,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Continuing welfare and medical benefits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Retirement Contribution and Matching</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">111,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Value of Unvested Stock Options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,071,168</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Value of Unvested Restricted Stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,798,620</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Estimated Tax Gross Up</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">9,742,622</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">38,973,410</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>For purposes of this analysis, we assumed the Executive&#146;s compensation is
as follows: base salary as of December&nbsp;31, 2007 of $800,000 and 2007 bonus payment
as highest bonus earned. Unvested stock options include 42,667 options from 2005
grant at $29.125/share, 133,334 options from 2006 grant at $33.29/share, and 100,000
options from 2007 grant at $35.225. Unvested restricted stock includes 72,000 shares
from 2005 grant and 75,000 shares from 2007 grant. Value of unvested stock options
and restricted stock based on a share price of $73.46, the Company&#146;s closing stock
price on December&nbsp;31, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumes the employment relationship is terminated by the Company for any
reason other than voluntary termination, termination for cause, death, or
disability, or if the employment relationship is terminated by the executive for
&#147;Good Reason&#148;, as of December&nbsp;31, 2007. Termination by the executive for &#147;Good
Reason&#148; means the assignment to the employee of any duties inconsistent with his
current position or any action by the Company that results in a diminution in the
executive&#146;s position, authority, duties or responsibilities; a failure by the
Company to comply with the terms of the executive&#146;s employment agreement; or the
requirement of the executive to relocate or to travel to a substantially greater
extent than required at the date of the employment agreement.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->17<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table describes the potential payments upon termination or change in control of the
Company as of December&nbsp;31, 2007 for Clay C. Williams, the Company&#146;s Chief Financial Officer.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">

<TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Executive Benefits and Payments Upon Termination (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2" style="border-bottom: 1px solid #000000"><B>Involuntary Not for Cause Termination (2)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Base Salary (3 times)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,500,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Expected Value Bonus (times 3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">600,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Continuing welfare and medical benefits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Retirement Contribution and Matching</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">112,069</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Value of Unvested Stock Options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,560,766</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Value of Unvested Restricted Stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,754,750</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Car Allowance and Fuel Card</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">39,198</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outplacement Services (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">75,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Estimated Tax Gross Up</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,538,574</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">14,230,357</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>For purposes of this analysis, we assumed the Executive&#146;s compensation is
as follows: base salary as of December&nbsp;31, 2007 of $500,000. Unvested stock options
include 17,562 options from 2005 grant at $18.17/share, 66,667 options from 2006
grant at $33.29/share, and 50,000 options from 2007 grant at $35.225/share.
Unvested restricted stock includes 37,500 shares from 2007 grant. Value of unvested
stock options and restricted stock based on a share price of $73.46, the Company&#146;s
closing stock price on December&nbsp;31, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumes the employment relationship is terminated by the Company for
other than cause or if the executive terminates his employment for good reason, as
of December&nbsp;31, 2007, as further described under the caption &#147;Williams and Smith&#148;
above.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Executive also entitled to outplacement services valued at not more than
15% of base salary. For purposes of this analysis, we valued the outplacement
services at 15% of base salary.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->18<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table describes the potential payments upon termination or change in control of the
Company as of December&nbsp;31, 2007 for Mark A. Reese, the Company&#146;s Group President &#150; Expendable
Products.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">

<TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Executive Benefits and Payments Upon Termination (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2" style="border-bottom: 1px solid #000000"><B>Involuntary Not for Cause Termination (2)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Base Salary</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">385,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Highest Bonus</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">577,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Continuing welfare and medical benefits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">16,666</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Retirement Contribution and Matching</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">28,250</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Value of Unvested Stock Options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,847,050</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Value of Unvested Restricted Stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,652,850</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
</TR>


<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,507,316</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>For purposes of this analysis, we assumed the Executive&#146;s compensation is
as follows: base salary as of December&nbsp;31, 2007 of $385,000 and 2007 bonus payment
as highest bonus earned. Unvested stock options include 20,000 options from 2005
grant at $18.80/share, 40,000 options from 2006 grant at $33.29/share, and 30,000
options from 2007 grant at $35.225/share. Unvested restricted stock includes 22,500
shares from 2007 grant. Value of unvested stock options and restricted stock based
on a share price of $73.46, the Company&#146;s closing stock price on December&nbsp;31, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumes the employment relationship is terminated by the Company for any
reason other than voluntary termination, termination for cause, death, or
disability, or if the employment relationship is terminated by the executive for
&#147;Good Reason&#148;, as of December&nbsp;31, 2007. Termination by the executive for &#147;Good
Reason&#148; means the assignment to the employee of any duties inconsistent with his
current position or any action by the Company that results in a diminution in the
executive&#146;s position, authority, duties or responsibilities; a failure by the
Company to comply with the terms of the executive&#146;s employment agreement; or the
requirement of the executive to relocate or to travel to a substantially greater
extent than required at the date of the employment agreement.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table describes the potential payments upon termination or change in control of the
Company as of December&nbsp;31, 2007 for Haynes B. Smith, the Company&#146;s Group President &#150; Services.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">

<TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Executive Benefits and Payments Upon Termination (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2" style="border-bottom: 1px solid #000000"><B>Involuntary Not for Cause Termination (2)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Base Salary (3 times)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,155,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Expected Value Bonus (times 3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">577,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Continuing welfare and medical benefits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Retirement Contribution and Matching</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">109,725</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Value of Unvested Stock Options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,863,520</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Value of Unvested Restricted Stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,652,850</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Car Allowance and Fuel Card</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">39,198</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outplacement Services (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">57,750</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Estimated Tax Gross Up</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,482,350</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">9,987,893</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>For purposes of this analysis, we assumed the Executive&#146;s compensation is
as follows: base salary as of December&nbsp;31, 2007 of $385,000. Unvested stock options
include 20,070 options from 2005 grant at $18.17/share, 40,000 options from 2006
grant at $33.29/share, and 30,000 options from 2007 grant at $35.225/share.
Unvested restricted stock includes 22,500 shares from 2007 grant. Value of
unvested stock options based on a share price of $73.46, the Company&#146;s closing stock
price on December&nbsp;31, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumes the employment relationship is terminated by the Company for
other than cause or if the executive terminates his employment for good reason, as
of December&nbsp;31, 2007, as further described under the caption &#147;Williams and Smith&#148;
above.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Executive also entitled to outplacement services valued at not more than
15% of base salary. For purposes of this analysis, we valued the outplacement
services at 15% of base salary.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table describes the potential payments upon termination or change in control of the
Company as of December&nbsp;31, 2007 for Dwight W. Rettig, the Company&#146;s Vice President, General Counsel
and Secretary.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">

<TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Executive Benefits and Payments Upon Termination (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2" style="border-bottom: 1px solid #000000"><B>Involuntary Not for Cause Termination (2)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Base Salary</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">350,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Highest Bonus</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">525,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Continuing welfare and medical benefits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">16,666</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Retirement Contribution and Matching</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">23,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Value of Unvested Stock Options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,847,050</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Value of Unvested Restricted Stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,652,850</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
</TR>


<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,414,566</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>For purposes of this analysis, we assumed the Executive&#146;s compensation is
as follows: base salary as of December&nbsp;31, 2007 of $350,000 and 2007 bonus payment
as highest bonus earned. Unvested stock options include 20,000 options from 2005
grant at $18.80/share, 40,000 options from 2006 grant at $33.29/share, and 30,000
options from 2007 grant at $35.225/share. Unvested restricted stock includes 22,500
shares from 2007 grant. Value of unvested stock options and restricted stock based
on a share price of $73.46, the Company&#146;s closing stock price on December&nbsp;31, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumes the employment relationship is terminated by the Company for any
reason other than voluntary termination, termination for cause, death, or
disability, or if the employment relationship is terminated by the executive for
&#147;Good Reason&#148;, as of December&nbsp;31, 2007. Termination by the executive for &#147;Good
Reason&#148; means the assignment to the employee of any duties inconsistent with his
current position or any action by the Company that results in a diminution in the
executive&#146;s position, authority, duties or responsibilities; a failure by the
Company to comply with the terms of the executive&#146;s employment agreement; or the
requirement of the executive to relocate or to travel to a substantially greater
extent than required at the date of the employment agreement.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->20<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Executive Compensation</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table sets forth for the year ended December&nbsp;31, 2007 the compensation paid by the
Company to its Chief Executive Officer and Chief Financial Officer and three other most highly
compensated executive officers (the &#147;Named Executive Officers&#148;) serving in such capacity at
December&nbsp;31, 2007.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Summary Compensation Table</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="19%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Change</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Pension</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Value</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">and</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Nonqual</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">-ified</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Deferred</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">All</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Non-Equity</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Compen</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Other</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD nowrap align="left">Name and</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Stock</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Option</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Incentive Plan</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">-sation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Compen</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD nowrap align="left">Principal</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Salary</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Bonus</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Compensation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Earnings</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">-sation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD nowrap align="left">Position</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Year</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)(1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)(2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)(3)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Total ($)</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD nowrap align="left">(a)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(b)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(c)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(d)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(e)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(f)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(g)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(h)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(i)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(j)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px; background: #cceeff">
    <TD colspan="37" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Merrill A.
Miller, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">800,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,693,921</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,556,722</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,600,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">37,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,687,643</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>President and CEO</I></DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">800,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,495,264</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD align="left">$</TD>
    <TD align="right">1,600,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">36,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,932,064</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Clay C. Williams<br></DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">497,779</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">681,819</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD align="left">$</TD>
    <TD align="right">800,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">37,357</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,516,955</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap><DIV style="margin-left:15px; text-indent:-15px"><I>Sr. Vice
President and CFO</I></DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">474,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">454,894</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD align="left">$</TD>
    <TD align="right">800,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35,057</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,764,751</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mark A. Reese<br></DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">385,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">269,351</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">503,554</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD align="left">$</TD>
    <TD align="right">577,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">28,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,763,655</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>Group President Rig</I></DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">373,231</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">499,260</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD align="left">$</TD>
    <TD align="right">577,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">27,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,477,658</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>Technology</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Haynes B. Smith<br></DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">385,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">269,351</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">473,632</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD align="left">$</TD>
    <TD align="right">577,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">36,575</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,742,058</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>Group President</I></DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">377,484</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">337,438</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD align="left">$</TD>
    <TD align="right">577,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35,594</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,328,016</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>Services</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dwight W. Rettig<br></DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">350,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">269,351</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">503,554</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD align="left">$</TD>
    <TD align="right">525,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">23,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,670,905</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>VP, General Counsel</I></DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">336,154</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">499,260</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD align="left">$</TD>
    <TD align="right">525,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">22,246</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,382,660</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>&#038; Secretary</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumptions made in calculating the value of the restricted stock awards
are further discussed in Item&nbsp;15. Exhibits and Financial Statement Schedules &#150; Notes
to Consolidated Financial Statements, Note 13, of the Company&#146;s Original Form 10-K
for the fiscal year ended December&nbsp;31, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumptions made in calculating the value of option awards are further
discussed in Item&nbsp;15. Exhibits and Financial Statement Schedules &#150; Notes to
Consolidated Financial Statements, Note 13, of the Company&#146;s Original Form 10-K for
the fiscal year ended December&nbsp;31, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>The amounts include:</TD>
</TR>

</TABLE>



<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company&#146;s cash contributions for 2007 under the
National Oilwell Varco 401(k) and Retirement Savings Plan, a defined
contribution plan, on behalf of Mr.&nbsp;Miller &#151; $16,875; Mr.&nbsp;Williams &#151;
$15,145; Mr.&nbsp;Reese &#151; $20,250; Mr.&nbsp;Smith &#151; $20,475; and Mr.&nbsp;Rettig &#151;
$18,000.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company&#146;s cash contributions for 2007 under the
National Oilwell Varco Supplemental Savings Plan, a defined contribution
plan, on behalf of Mr.&nbsp;Miller &#151; $20,125; Mr.&nbsp;Williams &#151; $22,212; Mr.&nbsp;Reese
 &#151; $8,000; Mr.&nbsp;Smith &#151; $16,100; and Mr.&nbsp;Rettig &#151; $5,000.</TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->21<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Grants of Plan Based Awards</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table provides information concerning stock options and restricted stock awards
granted to Named Executive Officers during the fiscal year ended December&nbsp;31, 2007. The Company
has granted no stock appreciation rights.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Grants of Plan-Based Awards</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
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    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
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    <TD width="3%">&nbsp;</TD>
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    <TD width="3%">&nbsp;</TD>
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    <TD width="1%">&nbsp;</TD>
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    <TD width="3%">&nbsp;</TD>
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    <TD width="1%">&nbsp;</TD>
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    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
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    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD nowrap align="left" colspan="45" style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">All</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Other</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Stock</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">All Other</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Awards:</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Option</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Awards:</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Exercise</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="11">Estimated Possible Payouts</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="11">Estimated Future Payouts</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Number of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">or Base</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Grant Date</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="11" style="border-bottom: 0px solid #000000">Under Non-Equity Incentive</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="11" style="border-bottom: 0px solid #000000">Under Equity Incentive</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Shares</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Securities</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Price of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Fair Value</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="11" style="border-bottom: 1px solid #000000">Plan Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="11" style="border-bottom: 1px solid #000000">Plan Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">of Stock</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Underlying</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Option</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">of Stock</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Grant</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Threshold</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Target</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Maximum</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Threshold</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Target</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Maximum</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">or Units</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Options</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">and Option</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 0px solid #000000">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 0px solid #000000">Date</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)(1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)(1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)(1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(#)(2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(#)(2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(#)(2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 0px solid #000000">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 0px solid #000000">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 0px solid #000000">($/Sh)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3" style="border-bottom: 0px solid #000000">Awards (3)</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD nowrap align="left">(a)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(b)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(c)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(d)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(e)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(f)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(g)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(h)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(i)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(j)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(k)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(l)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="45" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Merrill A. Miller, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">80,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">800,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,600,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">75,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">75,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD colspan="2" align="left">75,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">100,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35.225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,126,670</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Clay C. Williams</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">40,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">400,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">800,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">37,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">37,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">37,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">50,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35.225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,063,335</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mark A. Reese</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">28,875</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">288,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">577,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">30,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35.225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,238,001</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Haynes B. Smith</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">28,875</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">288,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">577,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

 <TD colspan="2" align="left">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">30,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35.225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,238,001</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dwight W. Rettig</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">26,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">262,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">525,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">30,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35.225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,238,001</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents possible payouts under our annual incentive compensation plan.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>On March&nbsp;26, 2007, each of the Named Executive Officers was granted
shares of performance-based restricted stock awards, which are reflected in the
&#147;Estimated Future Payouts Under Equity Incentive Plan Awards&#148; column in the table
above. One set of grants vest 100% on the eighteen month anniversary of the date of
grant (&#147;18 Month Grant&#148;), and one set of grants vest 100% on the third anniversary
of the date of grant (&#147;36 Month Grant&#148;), with the 18 Month Grant contingent on the
Company&#146;s operating income growth, measured on a percentage basis, from January&nbsp;1,
2007 to June&nbsp;30, 2008 exceeding the median operating income growth for a designated
peer group over the same period, and with the 36 Month Grant contingent on the
Company&#146;s average operating income growth, measured on a percentage basis, from
January&nbsp;1, 2007 to December&nbsp;31, 2009 exceeding the median average operating income
growth for a designated peer group over the same period. One-time, non-recurring,
non-operational gains or charges to income taken by the Company or any member of the
designated peer group that are publicly reported would be excluded from the income
calculation and comparison set forth above. If the Company&#146;s operating income
growth does not exceed the median operating income growth of the designated peer
group over the designated period, the applicable restricted stock award grant for
the executives will not vest and would be forfeited.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumptions made in calculating the value of option and restricted stock
awards are further discussed in Item&nbsp;15. Exhibits and Financial Statement Schedules
&#150; Notes to Consolidated Financial Statements, Note 13, of the Company&#146;s Original
Form 10-K for the fiscal year ended December&nbsp;31, 2007. The grant date fair value of
the restricted stock awards are as follows: Mr.&nbsp;Miller &#151; $2,928,000; Mr.&nbsp;Williams -
$1,464,000; Mr.&nbsp;Reese &#151; $878,400; Mr.&nbsp;Smith &#151; $878,400; and Mr.&nbsp;Rettig &#151; $878,400.
The grant date fair value of the option awards are as follows: Mr.
Miller &#151; $1,198,670; Mr.&nbsp;Williams &#151; $599,335; Mr.&nbsp;Reese &#151; $359,601; Mr.&nbsp;Smith -
$359,601; and Mr.&nbsp;Rettig &#151; $359,601.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->22<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Exercises and Holdings of Previously-Awarded Equity Disclosure</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table provides information regarding outstanding awards that have been granted to
Named Executive Officers where the ultimate outcomes of such awards have not been realized, as of
December&nbsp;31, 2007.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Outstanding Equity Awards at Fiscal Year-End</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="19%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD nowrap align="left" colspan="37" style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="19" style="border-bottom: 1px solid #000000">Option Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="15" style="border-bottom: 1px solid #000000">Stock Awards</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Equity</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Incentive</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Plan</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Awards:</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Equity</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Equity</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Incentive</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Incentive Plan</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Plan</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Unearned</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Awards:</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Number</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Awards:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Market</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Shares,</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Market or</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Number of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Number of</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">of Shares</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Value of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Units or</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Payout Value</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Securities</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Securities</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Securities</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">or Units</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Shares or</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Other</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">of Unearned</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Underlying</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Underlying</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Underlying</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">of Stock</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Units of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Rights</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Shares, Units</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Unexercised</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Unexercised</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Unexercised</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Option</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">That Have</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Stock That</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">That</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">or Other Rights</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Options</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Options</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Unearned</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Exercise</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Option</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Not</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Have Not</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Have Not</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">That Have Not</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Options</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Price</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Expiration</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Vested</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Vested</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Vested</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Vested</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD nowrap align="left">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Exercisable</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Unexercisable</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Date</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($) (1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(#) (2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($) (1)</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom">
    <TD nowrap align="left">(a)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(b)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(c)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(d)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(e)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(f)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(g)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(h)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(i)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(j)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px; background: #cceeff">
    <TD colspan="37" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Merrill A. Miller, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">100,000 </TD>
    <TD nowrap>&nbsp;(3)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35.225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3/2/17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD nowrap colspan="2" align="left">72,000(4)</TD>
    <TD nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,289,120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">133,334 </TD>
    <TD nowrap>&nbsp;(5)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">33.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2/22/16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="right">42,667 </TD>
    <TD nowrap>&nbsp;(6)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">29.125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10/13/15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">75,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,509,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Clay C. Williams</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="right">50,000 </TD>
    <TD nowrap>&nbsp;(3)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35.225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3/2/17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">33,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="right">66,667 </TD>
    <TD nowrap>&nbsp;(5)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">33.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2/22/16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">57,370</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">13.085</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1/28/14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">35,124</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD colspan="2" align="right">
    17,562 </TD>
    <TD nowrap>&nbsp;(7)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1/26/15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">37,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,754,750</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="37" align="left">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mark A. Reese</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">30,000 </TD>
    <TD nowrap>&nbsp;(3)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35.225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">3/2/17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">40,000 </TD>
    <TD nowrap>&nbsp;(5)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">33.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">2/22/16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">20,000 </TD>
    <TD nowrap>&nbsp;(8)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">2/8/15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="right">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,652,850</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Haynes B. Smith</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">30,000 </TD>
    <TD nowrap>&nbsp;(3)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35.225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">3/2/17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">40,000 </TD>
    <TD nowrap>&nbsp;(5)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">33.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">2/22/16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">20,070 </TD>
    <TD nowrap>&nbsp;(7)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">1/26/15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="right">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,652,850</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dwight W. Rettig</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">30,000 </TD>
    <TD nowrap>&nbsp;(3)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35.225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">3/2/17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="right">20,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">40,000 </TD>
    <TD nowrap>&nbsp;(5)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">33.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">2/22/16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">20,000 </TD>
    <TD nowrap>&nbsp;(8)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">2/8/15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="right">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,652,850</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Calculations based upon the closing price ($73.46) of the Company&#146;s
common stock on December&nbsp;31, 2007, the last trading day of the year.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>On March&nbsp;26, 2007, each of the Named Executive Officers was granted
shares of performance-based restricted stock awards, which are reflected in this
column in the table above. One set of grants vest 100% on the eighteen month
anniversary of the date of grant (&#147;18 Month Grant&#148;), and one set of grants vest 100%
on the third anniversary of the date of grant (&#147;36 Month Grant&#148;), with the 18 Month
Grant contingent on the Company&#146;s operating income growth, measured on a percentage
basis, from January&nbsp;1, 2007 to June&nbsp;30, 2008 exceeding the median operating income
growth for a designated peer group over the same period, and with the 36 Month Grant
contingent on the Company&#146;s average operating income growth, measured on a
percentage basis, from January&nbsp;1, 2007 to December&nbsp;31, 2009 exceeding the median
average operating income growth for a designated peer group over the same period.
One-time, non-recurring, non-operational gains or charges to income taken by the
Company or any member of the designated peer group that are publicly reported would
be excluded from the income calculation and comparison set forth above. If the
Company&#146;s operating income growth does not exceed the median operating income growth
of the designated peer group over the designated period, the applicable restricted
stock award grant for the executives will not vest and would be forfeited.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>2007 Stock Option Grant &#151; Stock options vest at the rate of 33 1/3%/year,
with vesting dates of 3/1/08, 3/1/09 and 3/1/10.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>The restricted stock award shall vest commencing on October&nbsp;12, 2008, the
third anniversary of the date of grant.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>2006 Stock Option grant &#151; Stock options vest at the rate of 33 1/3%/year,
with vesting dates of 2/21/07, 2/21/08 and 2/21/09.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(6)</TD>
    <TD>&nbsp;</TD>
    <TD>2005 Stock Option grant &#151; Stock options vest at the rate of 33 1/3%/year,
with vesting dates of 10/12/06, 10/12/07 and 10/12/08.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(7)</TD>
    <TD>&nbsp;</TD>
    <TD>2005 Stock Option Grant &#151; Stock options vest at the rate of 33 1/3%/year,
with vesting dates of 1/26/06, 1/26/07 and 1/26/08.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(8)</TD>
    <TD>&nbsp;</TD>
    <TD>2005 Stock Option Grant &#151; Stock options vest at the rate of 33 1/3%/year,
with vesting dates of 2/7/06, 2/7/07 and 2/7/08.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->23<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table provides information on the amounts received by the Named Executive Officers
during 2007 upon exercise of stock options.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Option Exercises and Stock Vested</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" colspan="17" style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="7" style="border-bottom: 1px solid #000000">Option Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="7" style="border-bottom: 1px solid #000000">Stock Awards</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Number of</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Number of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Shares</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Shares</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Acquired</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Value Realized</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Acquired</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Value Realized</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">on Exercise</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">on Exercise</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">on Vesting</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">on Vesting</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(a)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(b)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(c)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(d)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(e)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Merrill A. Miller, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
      <TD colspan="2" align="right">218,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,679,976</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Clay C. Williams</DIV></TD>
    <TD>&nbsp;</TD>
      <TD colspan="2" align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mark A. Reese</DIV></TD>
    <TD>&nbsp;</TD>
      <TD colspan="2" align="right">60,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,085,836</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Haynes B. Smith</DIV></TD>
    <TD>&nbsp;</TD>
      <TD colspan="2" align="right">40,070</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,264,397</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dwight W. Rettig</DIV></TD>
    <TD>&nbsp;</TD>
      <TD colspan="2" align="right">100,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,056,232</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Post-Employment Compensation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table provides information on nonqualified deferred compensation provided under the
Supplemental Plan to the Named Executive Officers during the fiscal year ended December&nbsp;31, 2007.
For a more detailed discussion, see the section titled &#147;Compensation Discussion and Analysis &#150;
Retirement, Health and Welfare Benefits&#148; above.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Nonqualifed Deferred Compensation</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>

    <TD width="5%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Aggregate</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Executive</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Registrant</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Aggregate</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Aggregate</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Balance</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Contributions in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Contributions in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Earnings in Last</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Withdrawals/</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">at Last</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Last FY</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Last FY</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">FY</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Distributions</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">FYE</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)(1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)(2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)(3)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(a)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(b)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(c)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(d)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(e)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(f)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Merrill A. Miller, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">20,125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,335</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">82,387</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Clay C. Williams</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">135,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">22,212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26,590</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">594,178</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mark A. Reese</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">910</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">16,953</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Haynes B. Smith</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">15,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">16,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">83,185</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">930,989</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dwight W. Rettig</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">241</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,912</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Executive contributions were from the executive&#146;s salary and are included
in the Summary Compensation Table under the &#147;Salary&#148; column.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Registrant contributions are included in the Summary Compensation Table
under the &#147;All Other Compensation&#148; column.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Aggregate earnings reflect the returns of the investment funds selected
by the executives and are not included in the Summary Compensation Table.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->24<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Compensation Committee Report</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The responsibilities of the Compensation Committee, which are set forth in the Compensation
Committee Charter adopted by the Board of Directors, include approving and evaluating all
compensation of directors and executive officers, including salaries, bonuses, and compensation
plans, policies and programs of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have reviewed and discussed with senior management the Compensation Discussion &#038; Analysis
section included in this Annual Report on Form 10-K/A. Based on this review and discussion, the
Compensation Committee recommended to the Board of Directors that the Compensation Discussion &#038;
Analysis be included in this Annual Report on Form 10-K/A.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Members of the Compensation Committee</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Jeffery A. Smisek, Committee Chairman<BR>
Ben A. Guill<BR>
Roger L. Jarvis

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Compensation Committee Interlocks and Insider Participation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During 2007, Messrs.&nbsp;Smisek, Beauchamp and Guill served on the Compensation Committee. Except as
described in the following sentence, none of these members is a former or current officer or
employee of the Company or any of its subsidiaries, is involved in a relationship requiring
disclosure as an interlocking executive officer/director, or had any relationship requiring
disclosure under Item&nbsp;404 of Regulation&nbsp;<BR>S-K.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In February&nbsp;2008, the Company and Mr.&nbsp;Beauchamp learned that Mr.&nbsp;Beauchamp&#146;s brother-in-law serves
as Chief Executive Officer of a vendor of the Company. During 2007, this vendor received
approximately $3&nbsp;million in payments from the Company. Due to this relationship, Mr.&nbsp;Beauchamp
could not be considered an independent director under applicable NYSE listing standards. As a
result, Mr.&nbsp;Beauchamp resigned from the Compensation Committee effective February&nbsp;14, 2008, and was
replaced by Roger L. Jarvis. See &#147;Certain Relationships and Related Transactions, and Director
Independence &#150; Certain Relationships and Related Transactions&#148; below for further information.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Director Compensation</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Directors who are employees of the Company do not receive compensation for serving on the Board of
Directors. The following table sets forth the compensation paid by the Company to its non-employee
members of the Board of Directors for the year ended December&nbsp;31, 2007.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Director Compensation</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" colspan="29" style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Change in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Pension</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Fees Earned</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Value and</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">or</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Non-Equity</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Nonqualified</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Paid in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Stock</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Option</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Incentive Plan</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Deferred</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">All Other</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Cash</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Compensation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Compensation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Compensation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Total</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">Earnings</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">($)</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(a)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(b)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(c)(1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(d)(2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(e)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(f)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(g) (3)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="3">(h)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Greg L. Armstrong</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">73,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">17,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">128,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="2" align="left">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,935</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">230,647</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="29" align="left">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Robert E. Beauchamp</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">85,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">17,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">128,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD colspan="2" align="left">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD colspan="2" align="left">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD colspan="2" align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">231,712</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ben A. Guill</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">84,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">17,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">128,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD colspan="2" align="left">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD colspan="2" align="left">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">12,329</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">243,041</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">David D. Harrison</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">84,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">17,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">128,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD colspan="2" align="left">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD colspan="2" align="left">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">231,386</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Roger L. Jarvis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">69,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">17,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">128,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD colspan="2" align="left">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD colspan="2" align="left">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">12,649</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">228,361</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Eric L. Mattson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">73,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">17,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">128,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD colspan="2" align="left">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD colspan="2" align="left">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">12,038</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">231,750</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jeffery A. Smisek</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">84,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">17,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">128,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD colspan="2" align="left">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD colspan="2" align="left">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
<TD colspan="2" align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">230,462</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumptions made in calculating the value of the restricted stock awards are
further discussed in Item&nbsp;15. Exhibits and Financial Statement Schedules &#151; Notes to
Consolidated Financial Statements, Note 13, of the Company&#146;s Original Form 10-K for
the fiscal year ended December&nbsp;31, 2007. The grant date fair value of the restricted
stock awards granted to the directors in 2007 are as follows: Mr.&nbsp;Armstrong &#151; $92,546;
Mr.&nbsp;Beauchamp &#151; $92,546; Mr.&nbsp;Guill &#151; $92,546; Mr.&nbsp;Harrison &#151; $92,546; Mr.&nbsp;Jarvis &#151;
$92,546; Mr.&nbsp;Mattson &#151; $92,546; and Mr.&nbsp;Smisek &#151; $92,546. The aggregate number of
outstanding shares of restricted stock awards as of December&nbsp;31, 2007 for each
director are as follows: Mr.&nbsp;Armstrong &#151; 1,886;
Mr.&nbsp;Beauchamp &#151; 1,886; Mr.&nbsp;Guill &#151;
1,886; Mr.&nbsp;Harrison &#151; 1,886; Mr.&nbsp;Jarvis &#151; 1,886;
Mr.&nbsp;Mattson &#151; 1,886; and Mr.&nbsp;Smisek &#151;
1,886.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumptions made in calculating the value of the option awards are further
discussed in Item&nbsp;15. Exhibits and Financial Statement Schedules &#151; Notes to
Consolidated Financial Statements, Note 13, of the Company&#146;s Original Form 10-K for
the fiscal year ended December&nbsp;31, 2007. The grant date fair value of the option
awards granted to the directors in 2007 are as follows: Mr.&nbsp;Armstrong &#151; $127,809; Mr.
Beauchamp &#151; $127,809; Mr.&nbsp;Guill &#151; $127,809; Mr.&nbsp;Harrison &#151; $127,809; Mr.&nbsp;Jarvis -
$127,809; Mr.&nbsp;Mattson &#151; $127,809; and Mr.&nbsp;Smisek &#151; $127,809. The aggregate number of
outstanding stock options as of December&nbsp;31, 2007 for each director are as follows:
Mr.&nbsp;Armstrong &#151; 39,000; Mr.&nbsp;Beauchamp &#151; 34,000;
Mr.&nbsp;Guill &#151; 39,000; Mr.&nbsp;Harrison &#151;
54,000; Mr.&nbsp;Jarvis &#151; 79,000; Mr.&nbsp;Mattson &#151; 72,450; and Mr.&nbsp;Smisek &#151; 30,342.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Expenses for non-business related activities associated with the Company&#146;s
board meeting in Beijing, China, comprised mainly of air travel and sightseeing
expenses for spouses of directors, paid by the Company on behalf of Mr.&nbsp;Armstrong &#151;
$10,935; Mr.&nbsp;Guill &#151; $12,329; Mr.&nbsp;Harrison &#151; $424; Mr.&nbsp;Jarvis &#151; $12,649; and Mr.
Mattson &#151; $12,038.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->25<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Board Compensation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Members of the Company&#146;s Board of Directors who are not full-time employees of the Company receive
the following cash compensation:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For service on the Board of Directors &#150; an annual retainer of $55,000, paid
quarterly;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For service as chairman of the audit committee of the Board of Directors &#150; an annual
retainer of $20,000, paid quarterly;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For service as chairman of each of the compensation committee and the
nominating/corporate governance committee of the Board of Directors &#150; an annual retainer
of $10,000, paid quarterly;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For service as a member of the audit committee of the Board of Directors &#150; an annual
retainer of $7,500, paid quarterly;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For service as a member of each of the compensation committee and the
nominating/corporate governance committee of the Board of Directors &#150; an annual retainer
of $5,000, paid quarterly; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>$1,500 for each Board meeting and each committee meeting attended.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD colspan="3">Directors of the Board who are also employees of the Company do not receive any compensation for
their service as directors.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Members of the Board are also eligible to receive stock options and awards, including restricted
stock, performance awards, phantom shares, stock payments, or SARs under the National Oilwell Varco
Long-Term Incentive Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board approved the grant of 8,000 options and 1,886 shares of restricted stock awards on June
5, 2007 to each non-employee director under the National Oilwell Varco Long-Term Incentive Plan.
The exercise price of the options is $49.07 per share, which was
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->26<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the fair market value of one share
of the Company&#146;s common stock on the date of grant. The options have a term of ten years from the
date of grant and vest in three equal annual installments beginning on the first anniversary of the
date of the grant. The restricted stock award shares vest in three equal annual installments
beginning on the first anniversary of the date of the grant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Stock Ownership Guidelines</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board has adopted a policy whereby each member of the Board should have beneficial ownership of
a minimum of 5,000 shares of the Company&#146;s common stock. Beneficial ownership is defined as set
forth in the rules of the Securities and Exchange Commission, and thus would include any shares as
to which the director has the right to acquire within 60&nbsp;days of a relevant measuring date.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->27<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Securities Authorized for Issuance Under Equity Compensation Plans</I></B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table sets forth information as of our fiscal year ended December&nbsp;31, 2007, with
respect to compensation plans under which our common stock may be issued:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Number of securities</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">remaining available for</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">future issuance under</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Number of securities to be</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Weighted-average</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">equity</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">issued upon exercise of</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">exercise</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">compensation plans</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">outstanding options,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">price of outstanding</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(excluding securities</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">warrants</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">options, warrant</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">reflected in column (a)</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">and rights</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">and rights</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(c))</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">Plan Category</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(a)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(b)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(1)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Equity compensation
plans approved by
security holders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,409,702</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">29.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,014,404</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Equity compensation
plans not approved by
security holders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,409,702</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">29.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,014,404</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Shares could be issued other than upon the exercise of stock options, warrants or rights;
however, none are anticipated during 2008.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Security Ownership of Certain Beneficial Owners</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Based on information filed with the SEC as of the most recent practicable date, this table shows
the number and percentage of shares beneficially owned by owners of more than five percent of the
outstanding shares of the stock of the Company at December&nbsp;31, 2007. The number and percentage of
shares beneficially owned is based on 356,867,498 shares outstanding as of December&nbsp;31, 2007.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Percent of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>5% Owner</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Number of Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Class</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">FMR LLC (1)<br>
82 Devonshire Street<br>
Boston, MA 02109</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">51,108,189</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right" valign="top">14.32</TD>
    <TD valign="top" nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Barclays Global Investors, NA<SUP style="font-size: 85%; vertical-align: text-top"> </SUP>(2)<br>
45 Freemont St.<br>
San Francisco, CA 94105</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">20,979,862</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right" valign="top">5.88</TD>
    <TD valign="top" nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Shares owned at December&nbsp;31, 2007, as reflected in Amendment No.&nbsp;9 to
Schedule&nbsp;13G filed with the SEC on February&nbsp;14, 2008. Fidelity Management &#038;
Research Company (&#147;Fidelity&#148;), a wholly-owned subsidiary of FMR LLC (&#147;FMR&#148;), is the
beneficial owner of 46,273,126 shares as a result of acting as investment adviser to
various investment companies (the &#147;Funds&#148;). Edward C. Johnson 3d and FMR, through
its control of Fidelity, and the Funds each has sole power to dispose of the
46,273,126 shares owned by the Funds. Members of the family of Edward C. Johnson 3d,
Chairman of FMR, are the predominant owners, directly or through trusts, of Series&nbsp;B
shares of common stock of FMR, representing 49% of the voting power of FMR. The
Johnson family group and all other Series&nbsp;B Shareholders have entered into a
shareholders&#146; voting agreement under which all Series&nbsp;B shares will be voted in
accordance with the majority vote of Series&nbsp;B Shares. Accordingly, through their
ownership of voting common stock and the execution of the shareholders&#146; voting
agreement, members of the Johnson family may be deemed, under the Investment Company
Act of 1940, to form a controlling group with respect to FMR. Neither FMR nor
Edward C. Johnson 3d has the sole power to vote or direct the voting of the shares
owned directly by the Funds, which power resides with the Funds&#146; Boards of Trustees.
Fidelity carries out the voting of the shares under written guidelines established
by the Funds&#146; Boards of Trustees. Strategic Advisers, Inc., a wholly-owned
subsidiary of FMR, provides investment advisory services to individuals. As such,
FMR&#146;s beneficial ownership includes 97,866 shares beneficially owned through
Strategic Advisers, Inc. Pyramis Global Advisors, LLC (&#147;PGALLC&#148;), an indirect
wholly-owned subsidiary of FMR, is the beneficial owner of 220,938 shares as a
result of its serving as investment adviser to institutional accounts, non-U.S.
mutual funds, or investment companies registered under</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->28<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Section&nbsp;8 of the Investment Company Act of 1940 owning such shares. Edward C. Johnson
3d and FMR, through its control of PGALLC, each has sole dispositive power over
220,938 shares and sole power to vote or to direct the voting of 220,938 shares owned
by the institutional accounts or funds advised by PGALLC. Pyramis Global Advisors
Trust Company (&#147;PGATC&#148;), an indirect wholly-owned subsidiary of FMR, is the beneficial
owner of 1,864,097 shares as a result of its serving as investment manager of
institutional accounts owning such shares. Edward C. Johnson 3d and FMR, through its
control of PGATC, each has sole dispositive power over 1,864,097 shares and sole power
to vote or to direct the voting of 1,475,559 shares owned by the institutional
accounts managed by PGATC. Fidelity International Limited and various foreign-based
subsidiaries provide investment advisory and management services to a number of
non-U.S. investment companies (the &#147;International Funds&#148;) and certain institutional
investors. Fidelity International Limited is the beneficial owner of 2,652,162 shares.
Fidelity International Limited has sole dispositive power over 2,652,162 shares owned
by the International Funds. Fidelity International Limited has sole power to vote or
direct the voting of 2,546,262 shares and no power to vote or direct the voting of
105,900 shares held by the International Funds as reported above.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Shares owned at December&nbsp;31, 2007, as reflected in Schedule&nbsp;13G jointly
filed with the SEC on February&nbsp;5, 2008 by Barclays Global Investors, NA, Barclays
Global Fund Advisors, Barclays Global Investors, Ltd., Barclays Global Investors
Japan Trust and Banking Company Limited, Barclays Global Investors Japan Limited,
Barclays Global Investors Canada Limited, Barclays Global Investors Australia
Limited and Barclays Global Investors (Deutschland) AG. Within this group, (a)
Barclays Global Investors, NA has sole voting power over 11,283,342 shares of common
stock and sole dispositive power over 13,593,609 shares of common stock, (b)
Barclays Global Fund Advisors has sole voting and dispositive power over 3,771,862
shares of common stock, (c)&nbsp;Barclays Global Investors, Ltd. has sole voting power
over 2,299,354 shares of common stock and sole dispositive power over 2,657,898
shares of common stock, (d)&nbsp;Barclays Global Investors Japan Limited has sole voting
and dispositive power over 720,932 shares of common stock, and (e)&nbsp;Barclays Global
Investors Canada Limited has sole voting and dispositive power over 235,561 shares
of common stock.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Security Ownership of Management</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This table shows the number and percentage of shares of the Company&#146;s stock beneficially owned as
of March&nbsp;10, 2008 by each of our current directors and executive officers and by all current
directors and executive officers as a group. The number and percentage of shares beneficially
owned is based on 357,788,805 shares outstanding as of March&nbsp;10, 2008. Beneficial ownership
includes any shares as to which the director or executive officer has the right to acquire within
60&nbsp;days of March&nbsp;10, 2008 through the exercise of any stock option, warrant or other right. Each
stockholder has sole voting and investment power, or shares these powers with his spouse, with
respect to the shares beneficially owned.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Shares Beneficially Owned</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Outstanding</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Options</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Common</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Within 60</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percent</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name of Individual</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Shares</B><SUP style="font-size: 85%; vertical-align: text-top"><B>(1)</B></SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Days</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>of Class*</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Greg L. Armstrong</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">5,230</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">20,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Robert E. Beauchamp</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">4,586</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">15,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Robert W. Blanchard</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">35,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">53,790</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ben A. Guill</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">24,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">20,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">David D. Harrison</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">7,886</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">35,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Roger L. Jarvis</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">2,624</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">60,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Eric L. Mattson</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">18,706</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">54,116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Merrill A. Miller, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">475,178</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">100,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mark A. Reese</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">32,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">10,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dwight W. Rettig</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">32,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">70,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jeffery A. Smisek</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">16,164</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">12,008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Clay C. Williams</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">93,246</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">193,388</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">All current directors and executive officers as a group
(12 persons)</DIV></TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">747,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="right">646,632</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TD colspan="2" align="left">*</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Less than 1&nbsp;percent.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes shares deemed held by executive officers and directors in the Company&#146;s 401(k) plans and
deferred compensation plans.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->29<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Certain Relationships and Related Transactions</I></B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We transact business with companies with which certain of our Directors are affiliated. All
transactions with these companies are on terms competitive with other third party vendors, and none
of these is material either to us or any of these companies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A &#147;conflict of interest&#148; occurs when a director or executive officer&#146;s private interest interferes
in any way, or appears to interfere, with the interests of the Company. Conflicts of interest can
arise when a director or executive officer, or a member of his or her immediate family, have a
direct or indirect material interest in a transaction with us. Conflicts of interest also arise
when a director or executive officer, or a member of his or her immediate family, receives improper
personal benefits as a result of his or her position as a director or executive officer of the
Company. The Company&#146;s Code of Business Conduct and Ethics for Members of the Board of Directors
and Executive Officers provides that directors and executive officers must avoid conflicts of
interests with the Company. Any situation that involves, or may reasonably be expected to involve,
a conflict of interest with the Company must be disclosed immediately to the Chair of the Company&#146;s
Audit Committee for his review and approval or ratification. This code also provides that the
Company shall not make any personal loans or extensions of credit to nor become contingently liable
for any indebtedness of directors or executive officers or a member of his or her family.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In February&nbsp;2008, the Company and Mr.&nbsp;Beauchamp learned that Mr.&nbsp;Beauchamp&#146;s brother-in-law serves
as Chief Executive Officer of a vendor of the Company. During 2007, this vendor received
approximately $3&nbsp;million in payments from the Company. Due to this relationship, Mr.&nbsp;Beauchamp
could not be considered an independent director under applicable NYSE listing standards. As a
result, Mr.&nbsp;Beauchamp resigned as Chair and a member of the Nominating/Corporate Governance
Committee and as a member of the Compensation Committee in order for both committees to be in
compliance with the NYSE&#146;s independence rules concerning these committees. The Board of Directors
appointed Eric L. Mattson to serve as an additional member of the Nominating/Corporate Governance
Committee and for Roger L. Jarvis to serve as Chair of that committee, and appointed Mr.&nbsp;Jarvis to
serve as an additional member of the Compensation Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Director Independence</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Corporate Governance Guidelines address, among other things, standards for evaluating the
independence of the Company&#146;s directors. The Board undertakes an annual review of director
independence and considers transactions and relationships during the prior year between each
director or any member of his or her immediate family and the Company and its affiliates, including
those reported under &#147;Certain Relationships and Related Transactions&#148; in this Annual Report on Form
10-K/A. In February&nbsp;2008, as a result of this annual review, the Board affirmatively determined
that a majority of the members of the Board of Directors are independent of the Company and its
management under the standards set forth in the Corporate Governance Guidelines. The following
directors were affirmed as independent: Greg L. Armstrong, Ben A. Guill, David D. Harrison, Roger
L. Jarvis, Eric L. Mattson, and Jeffery A. Smisek.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->30<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Audit Committee Pre-Approval Policies</I></B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Audit Committee pre-approves all services provided by the Company&#146;s independent auditors to the
Company and its subsidiaries. Consideration and approval of such services generally occurs in the
regularly scheduled quarterly meetings of the Audit Committee. The Audit Committee has delegated
the Chairman of the Audit Committee to pre-approve allowed non-audit services, subject to review by
the full committee at the next regularly scheduled meeting. The Audit Committee has considered
whether the provision of all services other than those rendered for the audit of the Company&#146;s
financial statements is compatible with maintaining Ernst &#038; Young&#146;s independence and has concluded
that their independence is not compromised.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Audit Fees</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table sets forth Ernst &#038; Young LLP&#146;s fees for services rendered during 2006 and 2007.
All 2007 services provided by Ernst &#038; Young LLP were pre-approved by the Audit Committee.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2006</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><I>(in thousands)</I></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,941</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,635</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit Related Fees<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">261</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tax Fees<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,704</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">653</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">All Other Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,735</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,549</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Consists primarily of fees for employee benefit plans, due diligence related
to acquisition transactions, and accounting consultations.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Consists primarily of fees for compliance, planning and advice with respect
to various domestic and foreign corporate tax matters.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->31<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART IV</B>
</DIV>

<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Financial Statements and Exhibits
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;Financial Statements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following financial statements are presented in response to Part&nbsp;II, Item&nbsp;8:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="92%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Page</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Consolidated Balance Sheets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">58</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Consolidated Statements of Income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">59</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Consolidated Statements of Cash Flows</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Consolidated Statements of Stockholders&#146; Equity and Comprehensive Income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">61</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Notes to Consolidated Financial Statements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">62</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;Financial Statement Schedule
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="92%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Schedule&nbsp;II &#150; Valuation and Qualifying Accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">87</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All schedules, other than Schedule&nbsp;II, are omitted because they are not applicable, not required or
the information is included in the financial statements or notes thereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The foregoing financial statements and financial statement schedule were included in our Original
Form 10-K filed on February&nbsp;29, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;Exhibits
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="95%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Agreement and Plan of Merger, effective as of August&nbsp;11, between National-Oilwell, Inc.
and Varco International, Inc. (4).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom"> <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agreement and Plan of Merger, effective as of December&nbsp;16, 2007, between National Oilwell Varco, Inc., NOV
Sub, Inc., and Grant Prideco, Inc. (9)</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom"> <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Certificate of Incorporation of National-Oilwell, Inc. (Exhibit&nbsp;3.1) (1).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom"> <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated By-laws of National Oilwell Varco, Inc. (Exhibit&nbsp;3.1) (10).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom"> <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement dated as of January&nbsp;1, 2002 between Merrill A. Miller, Jr. and National Oilwell.
(Exhibit&nbsp;10.1) (2).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom"> <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement dated as of January&nbsp;1, 2002 between Dwight W. Rettig and National Oilwell, with similar
agreement with Mark A. Reese. (Exhibit&nbsp;10.2) (2).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom"> <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Amended and Restated Executive Agreement of Clay C. Williams. (Exhibit&nbsp;10.12) (3).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom"> <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">National Oilwell Varco Long-Term Incentive Plan (5)*.</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom"> <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Employee Stock Option Agreement (Exhibit&nbsp;10.1) (7)</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom"> <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Non-Employee Director Stock Option Agreement (Exhibit&nbsp;10.2) (7).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom"> <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Credit Agreement, dated as of June&nbsp;21, 2005, among National Oilwell Varco, Inc., the
financial institutions signatory thereto, including Wells Fargo Bank, National Association, in their
capacities as lenders thereunder, as US administrative agent for the lenders, as Lead Arranger and Sole Book
Runner, DnB NOR Bank ASA, as Norwegian Administrative Agent, DnB NOR Bank ASA and the Bank of Nova Scotia as
Co-Documentation Agents, and Comerica Bank and JPMorgan Chase Bank, N.A. as Co-Syndication Agents. (Exhibit
10.1) (6).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom"> <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Performance-Based Restricted Stock (18 Month) Agreement (Exhibit&nbsp;10.1) (8).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom"> <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Performance-Based Restricted Stock (36 Month) Agreement (Exhibit&nbsp;10.2) (8).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom"> <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">21.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subsidiaries of the Registrant (11)</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom"> <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Ernst &#038; Young LLP (11)</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom"> <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (included on signature page hereto). (11)</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom"> <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification pursuant to Rule&nbsp;13a-14a and Rule&nbsp;15d-14(a) of the Securities and Exchange Act, as amended (12)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->32<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="94%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification pursuant to Rule&nbsp;13a-14a and Rule&nbsp;15d-14(a) of the Securities and Exchange Act, as amended (12)</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom"> <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002. (11)</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom"> <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002. (11)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Compensatory plan or arrangement for management or others</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as an Exhibit to our Quarterly Report on Form 10-Q filed on August&nbsp;11, 2000.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as an Exhibit to our Annual Report on Form 10-K filed on March&nbsp;28, 2002.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as an Exhibit to Varco International, Inc.&#146;s Quarterly Report on Form 10-Q filed on May
6, 2004.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as Annex A to our Registration Statement on Form S-4 filed on September&nbsp;16, 2004.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as Annex D to our Amendment No.&nbsp;1 to Registration Statement on Form S-4 filed on
January&nbsp;31, 2005.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(6)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as an Exhibit to our Current Report on Form 8-K filed on June&nbsp;23, 2005.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(7)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as an Exhibit to our Current Report on Form 8-K filed on February&nbsp;23, 2006.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(8)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as an Exhibit to our Current Report on Form 8-K filed on March&nbsp;27, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(9)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as Annex A to our Registration Statement on Form S-4 filed on January&nbsp;28, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(10)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as an Exhibit to our Current Report on Form 8-K filed on February&nbsp;21, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(11)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed or furnished as an Exhibit to our Original Form 10-K filed on February&nbsp;29, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(12)</TD>
    <TD>&nbsp;</TD>
    <TD>Our original certifications pursuant to Rule&nbsp;13a-14a and Rule&nbsp;14d-14(a) are filed with our
Original Form 10-K filed on February&nbsp;29, 2008. The certifications filed with this Amendment
are limited to the matters addressed herein.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->33<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><B>NATIONAL OILWELL VARCO, INC.</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Dated: March&nbsp;13, 2008
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><I>/s/ Clay C. Williams</I>
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Clay C. Williams
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" valign="top">Senior Vice President and Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="110"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Exhibit&nbsp;Index</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="94%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
<TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Agreement and Plan of Merger, effective as of August&nbsp;11, between National-Oilwell, Inc.
and Varco International, Inc. (4).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agreement and Plan of Merger, effective as of December&nbsp;16, 2007, between National Oilwell Varco, Inc., NOV
Sub, Inc., and Grant Prideco, Inc. (9)</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Certificate of Incorporation of National-Oilwell, Inc. (Exhibit&nbsp;3.1) (1).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated By-laws of National Oilwell Varco, Inc. (Exhibit&nbsp;3.1) (10).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement dated as of January&nbsp;1, 2002 between Merrill A. Miller, Jr. and National Oilwell.
(Exhibit&nbsp;10.1) (2).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement dated as of January&nbsp;1, 2002 between Dwight W. Rettig and National Oilwell, with similar
agreement with Mark A. Reese. (Exhibit&nbsp;10.2) (2).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Amended and Restated Executive Agreement of Clay C. Williams. (Exhibit&nbsp;10.12) (3).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">National Oilwell Varco Long-Term Incentive Plan (5)*.</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Employee Stock Option Agreement (Exhibit&nbsp;10.1) (7)</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Non-Employee Director Stock Option Agreement (Exhibit&nbsp;10.2) (7).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Credit Agreement, dated as of June&nbsp;21, 2005, among National Oilwell Varco, Inc., the
financial institutions signatory thereto, including Wells Fargo Bank, National Association, in their
capacities as lenders thereunder, as US administrative agent for the lenders, as Lead Arranger and Sole Book
Runner, DnB NOR Bank ASA, as Norwegian Administrative Agent, DnB NOR Bank ASA and the Bank of Nova Scotia as
Co-Documentation Agents, and Comerica Bank and JPMorgan Chase Bank, N.A. as Co-Syndication Agents. (Exhibit
10.1) (6).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Performance-Based Restricted Stock (18 Month) Agreement (Exhibit&nbsp;10.1) (8).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Performance-Based Restricted Stock (36 Month) Agreement (Exhibit&nbsp;10.2) (8).</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">21.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subsidiaries of the Registrant (11)</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Ernst &#038; Young LLP (11)</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (included on signature page hereto). (11)</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification pursuant to Rule&nbsp;13a-14a and Rule&nbsp;15d-14(a) of the Securities and Exchange Act, as amended (12)</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification pursuant to Rule&nbsp;13a-14a and Rule&nbsp;15d-14(a) of the Securities and Exchange Act, as amended (12)</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002. (11)</TD>
</TR>
<TR style="font-size: 6pt" valign="bottom">   <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002. (11)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Compensatory plan or arrangement for management or others</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as an Exhibit to our Quarterly Report on Form 10-Q filed on August&nbsp;11, 2000.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as an Exhibit to our Annual Report on Form 10-K filed on March&nbsp;28, 2002.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as an Exhibit to Varco International, Inc.&#146;s Quarterly Report on Form 10-Q filed on May
6, 2004.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as Annex A to our Registration Statement on Form S-4 filed on September&nbsp;16, 2004.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as Annex D to our Amendment No.&nbsp;1 to Registration Statement on Form S-4 filed on
January&nbsp;31, 2005.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(6)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as an Exhibit to our Current Report on Form 8-K filed on June&nbsp;23, 2005.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(7)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as an Exhibit to our Current Report on Form 8-K filed on February&nbsp;23, 2006.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(8)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as an Exhibit to our Current Report on Form 8-K filed on March&nbsp;27, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(9)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as Annex A to our Registration Statement on Form S-4 filed on January&nbsp;28, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(10)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed as an Exhibit to our Current Report on Form 8-K filed on February&nbsp;21, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(11)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed or furnished as an Exhibit to our Original Form 10-K filed on February&nbsp;29, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(12)</TD>
    <TD>&nbsp;</TD>
    <TD>Our original certifications pursuant to Rule&nbsp;13a-14a and Rule&nbsp;14d-14(a) are filed with our
Original Form 10-K filed on February&nbsp;29, 2008. The certifications filed with this Amendment
are limited to the matters addressed herein.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>h54883a1exv31w1.htm
<DESCRIPTION>CERTIFICATION PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)
<TEXT>
<HTML>
<HEAD>
<TITLE>exv31w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;31.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CERTIFICATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I, Merrill A. Miller, Jr., certify that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have reviewed this annual report on Form 10-K/A of National Oilwell Varco, Inc. for the
fiscal year ended December&nbsp;31, 2007; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Date: March&nbsp;13, 2008
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:&nbsp;&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>/s/ Merrill A. Miller, Jr. </I>&nbsp;
&nbsp;<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>

    <TD nowrap colspan="3" align="left" valign="top">
Merrill A. Miller, Jr.
<BR>
Chairman, President
and Chief
Executive Officer&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>h54883a1exv31w2.htm
<DESCRIPTION>CERTIFICATION PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)
<TEXT>
<HTML>
<HEAD>
<TITLE>exv31w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;31.2</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CERTIFICATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I, Clay C. Williams, certify that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have reviewed this annual report on Form 10-K/A of National Oilwell Varco, Inc. for the
fiscal year ended December&nbsp;31, 2007; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Date: March&nbsp;13, 2008
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:&nbsp;&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>/s/ Clay C. Williams</I>&nbsp;
&nbsp; <DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>

</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
Clay C. Williams
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="left" valign="top">Senior Vice President
and Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



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</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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