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<SEC-DOCUMENT>0000950129-08-002106.txt : 20080404
<SEC-HEADER>0000950129-08-002106.hdr.sgml : 20080404
<ACCEPTANCE-DATETIME>20080404090918
ACCESSION NUMBER:		0000950129-08-002106
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20080514
FILED AS OF DATE:		20080404
DATE AS OF CHANGE:		20080404
EFFECTIVENESS DATE:		20080404

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:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-12317
		FILM NUMBER:		08739274

	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>DEF 14A
<SEQUENCE>1
<FILENAME>h55002ddef14a.htm
<DESCRIPTION>DEFINITIVE PROXY STATEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>def14a</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 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, DC 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>SCHEDULE 14A</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>Proxy Statement Pursuant to Section&nbsp;14(a) of the<BR>
Securities Exchange Act of 1934 (Amendment No. &nbsp;&nbsp;&nbsp; )</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Filed by the Registrant <FONT face="Wingdings">&#254;</FONT><BR>
Filed by a Party Other than the Registrant <FONT face="Wingdings">&#111;</FONT><BR>
Check the Appropriate Box

</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"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Preliminary Proxy Statement</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"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Confidential for Use of the Commission only (as permitted by Rule&nbsp;14a-6(e)(2)).</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"><FONT face="Wingdings">&#254;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Definitive Proxy Statement</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"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Definitive Additional Materials</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"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Soliciting Material Pursuant to &#167; 240.14a-12.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>National Oilwell Varco, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></DIV>


<DIV align="center" style="font-size: 10pt">(Name of Registrant as Specified In Its Charter)</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></DIV>

<DIV align="center" style="font-size: 10pt">(Name of Persons(s) Filing Proxy Statement, if other than the Registrant)</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Payment of Filing Fee (check the appropriate box):

</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"><FONT face="Wingdings">&#254;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>No fee required.</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"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Fee computed on table below per Exchange Act Rules&nbsp;14-a6(i)(1) and 0-11.</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="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Title of each class of securities to which transaction applies:</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="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></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="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Aggregate number of securities to which the transaction applies;</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="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></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="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule
0-11 (set forth the amount on which the filing fee is calculated and state how it was determined.)</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="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></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="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Proposed maximum aggregate value of transaction:</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="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></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="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Total fee paid:</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="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></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="3%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Fee paid previously with preliminary materials.</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"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Check box if any part of the fee is offset as provided by Exchange
Act Rule&nbsp;0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement num-
ber, or the Form or Schedule and the date of its filing.</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="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Amount Previously Paid:</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="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></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="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Form, Schedule or Registration Statement No.:</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="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></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="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Filing Party:</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="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></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="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Date Filed:</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="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

</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">&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>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="95%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="0%">&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="2" style="border-bottom: 1px solid #000000"><B>Page</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#101">NOTICE OF ANNUAL MEETING OF STOCKHOLDERS</A></DIV></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>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#102">PROXY STATEMENT</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">Proposal No.&nbsp;1 &#151; Election of Directors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#104">Committees and Meetings of the Board</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#105">Audit Committee Report</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#106">Proposal No.&nbsp;2 &#151; Ratification of Independent Auditors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#107">Proposal No.&nbsp;3 &#151; Approval of Annual Cash Incentive Plan for Executive
Officers</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#108">Corporate Governance</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#109">Executive Officers</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#110">Stock Ownership</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#111">Compensation Discussion and Analysis</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#112">Executive Compensation</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#113">Certain Relationships and Related Transactions</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#114">Compensation Committee Report on Executive Compensation</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#115">Director Compensation</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#116">Section&nbsp;16(a) Beneficial Ownership Reporting Compliance</A></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"><A href="#117">Stockholder Proposals for the 2009 Annual Meeting</A></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"><A href="#118">Annual Report and Other Matters</A></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"><A href="#119">Annex I &#151; National Oilwell Varco Annual Incentive Plan</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">59</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><DIV style="margin-left:15px; text-indent:-15px"><A href="#120">Appendix&nbsp;I &#151; Charter of the Audit Committee of the Board of Directors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">I-1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#121">Appendix&nbsp;II &#151; Charter of the Compensation Committee of the Board of
Directors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">I-7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#122">Appendix&nbsp;III &#151; Charter of the Nominating/Corporate Governance Committee of the Board of
Directors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">I-10</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#123">Appendix&nbsp;IV &#151; Corporate Governance Guidelines</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">I-15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#124">Appendix&nbsp;V &#151; Code of Business Conduct and Ethics for Members of the Board of
Directors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">I-27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#125">Appendix&nbsp;VI &#151; Code of Ethics For Senior Financial Officers</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">I-30</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

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

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /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="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="h55002dh5500200.gif" alt="(NATIONAL OILWELL VARCO, INC. LOGO)"><BR><BR>

<B>NATIONAL OILWELL VARCO, INC.<BR>
7909 Parkwood Circle Drive<BR>
Houston, Texas 77036</B>
</DIV>

<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>NOTICE OF ANNUAL MEETING OF STOCKHOLDERS</B>

</DIV>
<DIV align="center" style="font-size: 10pt"><B>To Be Held May&nbsp;14, 2008</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="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">DATE:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wednesday, May&nbsp;14, 2008</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">TIME:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">10:00&nbsp;a.m. (Houston time)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">PLACE:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Houston Marriott Westchase</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">2900 Briarpark Drive</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">Houston, Texas 77042</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>The 2008 annual meeting of stockholders of National Oilwell Varco, Inc. will be held at the Houston
Marriott Westchase, 2900 Briarpark Drive, Houston, Texas on Wednesday, May&nbsp;14, 2008, at 10:00&nbsp;a.m.
local time, for the following purposes:</B>
</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">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To elect two directors to hold office for a three-year term;</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">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To consider and act upon a proposal to ratify the appointment of Ernst &#038; Young LLP as
independent auditors of the company for 2008;</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">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To consider and vote on the approval of the National Oilwell Varco, Inc. Annual Cash
Incentive Plan for Executive Officers; 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">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To consider and act upon any other matters that may properly come before the annual
meeting or any postponement or adjournment thereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE TWO
NOMINEES FOR DIRECTOR,
FOR THE PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST &#038; YOUNG LLP AS INDEPENDENT AUDITORS OF THE
COMPANY FOR 2008 AND FOR THE PROPOSAL TO APPROVE THE NATIONAL OILWELL VARCO, INC. ANNUAL CASH
INCENTIVE PLAN FOR EXECUTIVE OFFICERS.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board of Directors has set March&nbsp;27, 2008 as the record date for the annual meeting of the
stockholders (&#147;Annual Meeting&#148;). If you were a stockholder of record at the close of business on
March&nbsp;27, 2008, you are entitled to vote at the Annual Meeting. A complete list of these
stockholders will be available for examination at the Annual Meeting and during ordinary business
hours at our offices at 7909 Parkwood Circle Drive, Houston, Texas for a period of ten days prior
to the Annual Meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You are cordially invited to join us at the Annual Meeting. However, to ensure your representation,
we request that you return your signed proxy card at your earliest convenience, whether or not you
plan to attend the Annual Meeting. You may revoke your proxy at any time if you wish to attend and
vote in person.
</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="48%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="49%">&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 Order of the Board of Directors</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>
</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"><I>/s/ Dwight W. Rettig</I></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>
</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">Dwight W. Rettig</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">Vice President, General Counsel and Secretary</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Houston, Texas<BR>
April&nbsp;4, 2008

</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="center" style="font-size: 10pt; margin-top: 18pt"><B>NATIONAL OILWELL VARCO, INC.<BR>
7909 Parkwood Circle Drive<BR>
Houston, Texas 77036</B>
</DIV>

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

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>PROXY STATEMENT</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Except as otherwise specifically noted in this Proxy Statement, &#147;we,&#148; &#147;our,&#148; &#147;us,&#148; and
similar
words in this Proxy Statement refer to National Oilwell Varco, Inc. In addition, we refer to
National Oilwell Varco, Inc. as the &#147;Company.&#148;
</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="25%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="68%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>ANNUAL MEETING:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Date:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Wednesday, May&nbsp;14, 2008</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="bottom">Time:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">10:00&nbsp;a.m. (Houston time)</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="bottom">Place:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Houston Marriott Westchase</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="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">2900 Briarpark Drive</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="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Houston, Texas 77042</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</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="25%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="73%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>AGENDA:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Proposal 1: For the election of two nominees as
directors of the Company for a term
of three years.</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="bottom">&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="bottom">Proposal 2: For the ratification of the appointment of Ernst &#038; Young
LLP as independent auditors of the Company.</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="bottom">&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="bottom">Proposal 3: For the approval of the National Oilwell Varco, Inc.
Annual Cash Incentive Plan for Executive Officers.</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="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>RECORD DATE/WHO <BR>
CAN VOTE:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">All stockholders of record at the close of business on March&nbsp;27, 2008 are entitled to vote. The only
class of securities entitled to vote at the Annual Meeting is National Oilwell Varco common stock.
Holders of National Oilwell Varco common stock are entitled to one vote per share at the Annual Meeting.</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="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>PROXIES SOLICITED BY:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Your vote and proxy is being solicited by the Board of Directors for use at the Annual Meeting. This
Proxy Statement and enclosed proxy card is being sent on behalf of the Board of Directors to all
stockholders beginning on or about April&nbsp;4, 2008. By completing, signing and returning your proxy card,
you will authorize the persons named on the proxy card to vote your shares according to your
instructions.</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="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>PROXIES:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">If your properly executed proxy does not indicate how you wish to vote your common stock, the persons
named on the proxy card will vote FOR election of the two nominees for director (Proposal 1), FOR the
ratification of the appointment of Ernst &#038; Young LLP as independent auditors (Proposal 2), and FOR the
approval of the National Oilwell Varco, Inc. Annual Cash Incentive Plan for Executive Officers (Proposal
3).</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="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>REVOKING YOUR</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">You can revoke your proxy at any time prior to the time that the</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="25%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="73%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>PROXY:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">vote is taken at the meeting by: (i)&nbsp;filing a written notice revoking your proxy; (ii)&nbsp;filing another
proxy bearing a later date; or (iii)&nbsp;casting your vote in person at the Annual Meeting. Your last vote
will be the vote that is counted.</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="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>QUORUM:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">As of March&nbsp;27, 2008, there were 357,809,633 shares of National Oilwell Varco common stock issued and
outstanding. The holders of these shares have the right to cast one vote for each share held by them.
The presence, in person or by proxy, of stockholders entitled to cast at least 178,904,817 votes
constitutes a quorum for adopting the proposals at the Annual Meeting. Abstentions will be included in
determining the number of shares present at the meeting for the purpose of determining a quorum, as will
broker non-votes. A broker non-vote occurs when a broker is not permitted to vote on a matter without
instructions from the beneficial owner of the shares and no instruction is given. If you have properly
signed and returned your proxy card by mail, you will be considered part of the quorum, and the persons
named on the proxy card will vote your shares as you have instructed them.</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="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>MULTIPLE <BR>
PROXY CARDS:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">If you receive multiple proxy cards, this indicates that your shares are held in more than one account,
such as two brokerage accounts, and are registered in different names. You should vote each of the proxy
cards to ensure that all of your shares are voted.</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="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>HOUSEHOLDING:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">The U.S. Securities and Exchange Commission, or SEC, has adopted rules that permit companies and
intermediaries, such as brokers, to satisfy the delivery requirements for proxy statements with respect
to two or more stockholders sharing the same address by delivering a copy of these materials, other than
the Proxy Card, to those stockholders. This process, which is commonly referred to as &#147;householding,&#148; can
mean extra convenience for stockholders and cost savings for the Company. Beneficial stockholders can
request information about householding from their banks, brokers, or other holders of record. Through
householding, stockholders of record who have the same address and last name will receive only one copy
of our Proxy Statement and Annual Report, unless one or more of these stockholders notifies us that they
wish to continue receiving individual copies. This procedure will reduce printing costs and postage fees.</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="bottom">&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="bottom">Stockholders who participate in householding will continue to receive
separate Proxy Cards. If you are eligible for householding, but you
and other stockholders of record with whom you share an address
currently receive multiple copies of Proxy Statements and Annual
Reports, or if you hold stock in</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="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="25%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="73%">&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="bottom">more than one account and wish to
receive only a single copy of the Proxy Statement or Annual Report
for your household, please contact Broadridge Householding
Department, in writing, at 51 Mercedes Way, Edgewood, New York 11717,
or by phone at (800)&nbsp;542-1061. If, at any time, you no longer wish to
participate in householding
and would prefer to receive a separate Proxy Statement and Annual
Report, please notify your broker if you are a beneficial
stockholder.</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="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>COST OF PROXY <BR>
SOLICITATION:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">We have retained InvestorCom, Inc. to solicit proxies from
our stockholders at an estimated fee of $4,500, plus
expenses. This fee does not include the costs of preparing,
printing, assembling, delivering and mailing the Proxy
Statement. The Company will pay for the cost of soliciting
proxies. Some of our directors, officers and employees may
also solicit proxies personally, without any additional
compensation, by telephone or mail. Proxy materials also
will be furnished without cost to brokers and other nominees
to forward to the beneficial owners of shares held in their
names.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Important Notice Regarding the Availability of Proxy Materials for the<BR>
Stockholder Meeting to Be Held on Wednesday, May&nbsp;14, 2008.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>The Company&#146;s 2008 Proxy Statement and the Annual Report to Stockholders for the year ended 2007
are also available at </B><U>www.nov.com/investor/investor.asp</U><B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For directions to the Annual Meeting, please contact investor relations at 713-346-7500.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PLEASE VOTE &#151; YOUR VOTE IS IMPORTANT</B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->-3-<!-- /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" style="font-size: 10pt; margin-top: 18pt"><B>ELECTION OF DIRECTORS</B>
</DIV>

<DIV align="left">
<A name="103"></A>
</DIV>
<DIV align="center" style="font-size: 10pt"><B>PROPOSAL NO. 1 ON THE PROXY CARD</B></DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board of Directors of National Oilwell Varco (the &#147;Board&#148;) is divided into three classes, each
class serving a term of three years. Directors whose terms expire this year include: Robert E.
Beauchamp and Jeffery A. Smisek.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Robert E. Beauchamp and Jeffery A. Smisek are nominees for directors for a three-year term expiring
at the Annual Meeting in 2011, or when their successors are elected and qualified. We believe each
of the nominees will be able to serve if elected. However, if any nominee is unable to serve, the
remaining members of the Board have authority to nominate another person, elect a substitute, or
reduce the size of the Board. Directors whose terms expire in 2009 and 2010 will continue to serve
in accordance with their prior election or appointment. Proxies cannot be voted for a greater
number of persons than the number of nominees named.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->-4-<!-- /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" style="font-size: 10pt; margin-top: 12pt"><B>Vote Required for Approval</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">National Oilwell Varco&#146;s Bylaws require that each director be elected by the majority of votes cast
with respect to such director in uncontested elections (the number of shares voted &#147;for&#148; a director
nominee must exceed the number of votes cast &#147;against&#148; that nominee). In a contested election (a
situation in which the number of nominees exceeds the number of directors to be elected), the
standard for election of directors would be a plurality of the shares represented in person or by
proxy at any such meeting and entitled to vote on the election of directors. Whether an election is
contested or not is determined as of a date that is fourteen days in advance of when we file our
definitive proxy statement with the SEC; this year&#146;s election was determined to be an uncontested
election, and the majority vote standard will apply. If a nominee who is serving as a director is
not elected at the annual meeting, Delaware law provides that the director would continue to serve
on the Board as a &#147;holdover director.&#148; However, under our Bylaws and Corporate Governance
Guidelines, each director must submit an advance, contingent, irrevocable resignation that the
Board may accept if the director fails to be elected through a majority vote. In that situation,
the Nominating/Corporate Governance Committee would make a recommendation to the Board about
whether to accept or reject the resignation, or whether to take other action. The Board will act on
the Nominating/Corporate Governance Committee&#146;s recommendation and publicly disclose its decision
and the rationale behind it within ninety days from the date the election results are certified. If
a nominee who was not already serving as a director fails to receive a majority of votes cast at
the annual meeting, Delaware law provides that the nominee does not serve on the Board as a
&#147;holdover director.&#148; In 2008, all director nominees are currently serving on the Board.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Information Regarding Nominees for Director for Terms Expiring in 2011:</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="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="68%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Expiration</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Year</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Date of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>First</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Current</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><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" 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" 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">Robert E. Beauchamp
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">48
</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 &#038;
development, vice
president of
strategic marketing
and corporate
development, and
director of
strategic
marketing.
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">2002</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->-5-<!-- /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="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="68%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Expiration</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Year</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Date of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>First</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Current</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><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" 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" 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">Jeffery A. Smisek
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">53
</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 &#151;
Corporate from May
2001 until March
2003.
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">2005</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE ELECTION OF THE
TWO NOMINEES FOR
DIRECTOR.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Information Regarding Continuing Directors:</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="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="0%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="68%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="0%">&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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Expiration</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Year</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>Date of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>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>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 colspan="3" nowrap valign="top" align="center">57<BR>
</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 colspan="3" nowrap valign="top" align="center">2001<BR></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->-6-<!-- /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="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="0%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="68%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="0%">&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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Expiration</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Year</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>Date of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>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>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">Greg L. Armstrong
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap valign="top" align="center">49<BR>
</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 colspan="3" nowrap valign="top" align="center">2005<BR></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 colspan="3" nowrap valign="top" align="center">57<BR>
</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 colspan="3" nowrap valign="top" align="center">1999<BR></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">David D. Harrison
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap valign="top" align="center">60<BR>
</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">&#174;</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 colspan="3" nowrap valign="top" align="center">2003<BR></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->-7-<!-- /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="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="2%">&nbsp;</TD>
    <TD width="0%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="68%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="0%">&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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Expiration</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Year</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>Date of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>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>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">Roger L. Jarvis
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" nowrap valign="top" align="center">54<BR>
</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 colspan="3" nowrap valign="top" align="center">2002<BR></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>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->-8-<!-- /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="104"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>COMMITTEES AND MEETINGS OF THE BOARD</B>
</DIV>


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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board of Directors had the following standing committees: Audit, Compensation, and
Nominating/Corporate Governance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Number of Meetings Held in 2007</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" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Board of Directors</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:15px; text-indent:-15px">Audit Committee</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Compensation Committee</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Nominating/Corporate Governance Committee</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Each incumbent director attended at least 75% of the meetings of the Board and committees of which
that director was a member.
</DIV>

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

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Audit Committee is appointed by the Board of Directors to assist the Board in fulfilling its
oversight responsibilities. The Committee&#146;s primary duties and responsibilities are to:
</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"><font face="wingdings">&#167;</font></td>
    <TD width="1%">&nbsp;</TD>
    <TD>monitor the integrity of the Company&#146;s financial statements, financial reporting
processes, systems of internal controls regarding finance, and disclosure controls and
procedures;</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"><font face="wingdings">&#167;</font></td>
    <TD width="1%">&nbsp;</TD>
    <TD>select and appoint the Company&#146;s independent auditors, pre-approve all audit and
non-audit services to be provided, consistent with all applicable laws, to the Company by
the Company&#146;s independent auditors, and establish the fees and other compensation to be
paid to the independent auditors;</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"><font face="wingdings">&#167;</font></td>
    <TD width="1%">&nbsp;</TD>
    <TD>monitor the independence and performance of the Company&#146;s independent auditors and
internal audit function;</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"><font face="wingdings">&#167;</font></td>
    <TD width="1%">&nbsp;</TD>
    <TD>establish procedures for the receipt, retention, response to and treatment of
complaints, including confidential, anonymous submissions by the Company&#146;s employees,
regarding accounting, internal controls, disclosure or auditing matters, and provide an
avenue of communication among the independent auditors, management, the internal audit
function and the Board of Directors;</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"><font face="wingdings">&#167;</font></td>
    <TD width="1%">&nbsp;</TD>
    <TD>prepare an audit committee report as required by the Securities and Exchange Commission
(the &#147;SEC&#148;) to be included in the Company&#146;s annual proxy statement; 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"><font face="wingdings">&#167;</font></td>
    <TD width="1%">&nbsp;</TD>
    <TD>monitor the Company&#146;s compliance with legal and regulatory requirements.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A copy of the Audit Committee Charter is attached to this Proxy Statement as Appendix&nbsp;I, and is
also available on the Company&#146;s website, <U>www.nov.com</U>, under the Investor Relations/Corporate
Governance section.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->-9-<!-- /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" style="font-size: 10pt; margin-top: 12pt"><B><I>Audit Committee Financial Expert</I></B>
</DIV>


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

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Messrs.&nbsp;Smisek (Chairman), Guill and Jarvis are the current members of the Compensation Committee.
All members of the Compensation Committee are independent as defined by the applicable NYSE listing
standards.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Compensation Committee is appointed by the Board of Directors to assist the Board in fulfilling
its oversight responsibilities. The Committee&#146;s primary duties and responsibilities are to:
</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"><font face="wingdings">&#167;</font></td>
    <TD width="1%">&nbsp;</TD>
    <TD>discharge the Board&#146;s responsibilities relating to compensation of the Company&#146;s
directors and executive officers;</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"><font face="wingdings">&#167;</font></td>
    <TD width="1%">&nbsp;</TD>
    <TD>approve and evaluate all compensation of directors and executive officers, including
salaries, bonuses, and compensation plans, policies and programs of the Company; 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"><font face="wingdings">&#167;</font></td>
    <TD width="1%">&nbsp;</TD>
    <TD>administer all plans of the Company under which shares of common stock may be acquired
by directors or executive officers of the Company.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A copy of the Compensation Committee Charter is attached to this Proxy Statement as Appendix&nbsp;II,
and is also available on the Company&#146;s website, <U>www.nov.com</U>, under the Investor Relations/Corporate
Governance section.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Compensation Committee Interlocks and Insider Participation. </I></B>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;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;Corporate Governance &#151; NYSE Corporate Governance Matters&#148; below.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Messrs.&nbsp;Jarvis (Chairman), Mattson and Smisek are the current members of the Nominating/Corporate
Governance Committee. All members of the Nominating/Corporate Governance Committee are independent
as defined by the applicable NYSE listing standards.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->-10-<!-- /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 Nominating/Corporate Governance Committee is appointed by the Board of Directors to assist the
Board in fulfilling its oversight responsibilities. The Committee&#146;s primary duties and
responsibilities are to:
</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"><font face="wingdings">&#167;</font></td>
    <TD width="1%">&nbsp;</TD>
    <TD>ensure that the Board and its committees are appropriately constituted so that the Board
and directors may effectively meet their fiduciary obligations to stockholders and 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"><font face="wingdings">&#167;</font></td>
    <TD width="1%">&nbsp;</TD>
    <TD>identify individuals qualified to become Board members and recommend to the Board
director nominees for each annual meeting of stockholders and candidates to fill vacancies
in the Board;</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"><font face="wingdings">&#167;</font></td>
    <TD width="1%">&nbsp;</TD>
    <TD>recommend to the Board annually the directors to be appointed to Board committees;</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"><font face="wingdings">&#167;</font></td>
    <TD width="1%">&nbsp;</TD>
    <TD>monitor, review, and recommend, when necessary, any changes to the Corporate Governance
Guidelines; 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"><font face="wingdings">&#167;</font></td>
    <TD width="1%">&nbsp;</TD>
    <TD>monitor and evaluate annually the effectiveness of the Board and management of the
Company, including their effectiveness in implementing the policies and principles of the
Corporate Governance Guidelines.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A copy of the Nominating/Corporate Governance Committee Charter is attached to this Proxy Statement
as Appendix&nbsp;III, and is also available on the Company&#146;s
website, <U>www.nov.com</U>, under the Investor
Relations/Corporate Governance section.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During 2007, Messrs.&nbsp;Beauchamp (Chairman), Jarvis and Smisek served on the Nominating/Corporate
Governance Committee. 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 Nominating/Corporate Governance Committee
effective February&nbsp;14, 2008, and was replaced by Eric L. Mattson. See &#147;Corporate Governance &#151; NYSE
Corporate Governance Matters&#148; below.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Nominating/Corporate Governance Committee has the responsibility of identifying candidates for
election as directors, reviewing background information relating to candidates for director, and
recommending to the Board of Directors nominees for directors to be submitted to stockholders for
election. It is the policy of the committee to consider director candidates recommended by
stockholders. Nominees to be evaluated by the Nominating/Corporate Governance Committee are
selected by the committee from candidates recommended by multiple sources, including other
directors, management, stockholders, and candidates identified by independent search firms (which
firms may be paid by the Company for their services), all of whom will be evaluated based on the
same criteria. As of March&nbsp;27, 2008, we had not received any recommendations from stockholders for
potential director candidates. All of the current nominees for director are standing members of
the Board that are proposed by the entire Board for re-election. Written suggestions for nominees
should be sent to the Secretary of the Company at the address listed below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board of Directors believes that nominees should reflect the following characteristics:
</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"><font face="wingdings">&#167;</font></td>
    <TD width="1%">&nbsp;</TD>
    <TD>have a reputation for integrity, honesty, candor, fairness and discretion;</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"><font face="wingdings">&#167;</font></td>
    <TD width="1%">&nbsp;</TD>
    <TD>be knowledgeable, or willing to become so quickly, in the critical aspects of the
Company&#146;s businesses and operations;</TD>
</TR>

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



</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="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><font face="wingdings">&#167;</font></td>
    <TD width="1%">&nbsp;</TD>
    <TD>be experienced and skillful in serving as a competent overseer of, and trusted advisor
to, the senior management of at least one substantial enterprise; 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"><font face="wingdings">&#167;</font></td>
    <TD width="1%">&nbsp;</TD>
    <TD>have a range of talent, skill and expertise sufficient to provide sound and prudent
guidance with respect to the full scope of the Company&#146;s operations and interests.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any stockholder of record who is entitled to vote for the election of directors may nominate
persons for election as directors if timely written notice in proper form of the intent to make a
nomination at the Annual Meeting is received by the Company at National Oilwell Varco, Inc., 7909
Parkwood Circle Drive &#151; 7<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> Floor, Houston, TX 77036, Attention: Dwight W. Rettig,
Secretary. The notice must be received no later than April&nbsp;14, 2008 &#151; 10&nbsp;days after the first
public notice of the Annual Meeting is first sent to stockholders. To be in proper form, the
notice must contain prescribed information about the proponent and each nominee, including such
information about each nominee as would have been
required to be included in a proxy statement filed pursuant to the rules of the SEC had such
nominee been nominated by the Board of Directors.
</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">
<A name="105"></A>
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The responsibilities of the Audit Committee, which are set forth in the Audit Committee Charter
adopted by the Board of Directors, include providing oversight to the Company&#146;s financial reporting
process through periodic combined and separate meetings with the Company&#146;s independent auditors and
management to review accounting, auditing, internal controls and financial reporting matters. The
management of the Company is responsible for the preparation and integrity of the financial
reporting information and related systems of internal controls. The Audit Committee, in carrying
out its role, relies on the Company&#146;s senior management, including senior financial management, and
its independent auditors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board of Directors has determined that all of the members of the Audit Committee are
independent based on the guidelines set forth by the NYSE and SEC rules for the independence of
Audit Committee members. The Audit Committee held five (5)&nbsp;meetings in 2007, and at each regularly
scheduled quarterly meeting met in executive session with both the internal audit director and the
independent audit partner, without management being present.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Audit Committee reviewed and discussed with senior management the audited financial statements
included in the Company&#146;s Annual Report on Form 10-K. Management has confirmed to the Audit
Committee that such financial statements have been prepared with integrity and objectivity and in
conformity with generally accepted accounting principles.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Audit Committee discussed with Ernst &#038; Young LLP, the Company&#146;s independent auditors, the
matters required to be discussed by Statement on Auditing Standards (&#147;SAS&#148;) No.&nbsp;61 (Codification of
Statements on Auditing Standards, AU Sec. 380), as may be modified or supplemented. SAS No.&nbsp;61
requires independent auditors to communicate certain matters related to the conduct of an audit to
those who have responsibility for oversight of the financial reporting process, specifically the
audit committee. Among the matters to be communicated to the audit committee are: (1)&nbsp;methods used
to account for significant unusual transactions; (2)&nbsp;the effect of significant accounting policies
in controversial or emerging areas for which there is a lack of authoritative guidance or
consensus; (3)&nbsp;the process used by management in formulating particularly sensitive accounting
estimates and the basis for the auditor&#146;s conclusions regarding the reasonableness of those
estimates; and (4)&nbsp;disagreements with management over the application of accounting principles, the
basis for management&#146;s accounting estimates, and the disclosures in the financial statements. In
addition, the Audit Committee reviewed with Ernst &#038; Young their judgment as to the quality, not
just the acceptability, of the Company&#146;s accounting principles.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Audit Committee received from Ernst &#038; Young a letter providing the disclosures required by
Independence Standards Board Standard No.&nbsp;1 (Independence Discussions with Audit Committees) with
respect to any relationships between Ernst &#038; Young LLP and the Company. Ernst &#038; Young LLP has
discussed its independence with the Audit Committee, and has confirmed in such letter that, in its
professional judgment, it is independent of the Company within the meaning of the federal
securities laws.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Based on the review of the financial statements, the discussion with Ernst &#038; Young regarding SAS
No.&nbsp;61, Independence Standards Board Standard No.&nbsp;1, and receipt from them of the required written
disclosures, the Audit Committee recommended to the Board of Directors that the audited financial
statements be included in the Company&#146;s 2007 Annual Report on Form 10-K.

</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">Notwithstanding the foregoing, the Audit Committee&#146;s charter clarifies that it is not the Audit
Committee&#146;s duty to conduct audits or to determine that the Company&#146;s financial statements are
complete and accurate and are in accordance with generally accepted accounting principles (&#147;GAAP&#148;).
Management is responsible for the Company&#146;s financial reporting process, including its system of
internal controls, and for the preparation of financial statements in accordance with GAAP.
Management is also responsible for assuring compliance with laws and regulations and the Company&#146;s
corporate policies, subject to Audit Committee&#146;s oversight in the areas covered by the Audit
Committee&#146;s charter. The independent auditors are responsible for expressing opinions on those
financial statements and on the effectiveness of the Company&#146;s internal control over financial
reporting.
</DIV>

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

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt">David D. Harrison, Committee Chairman<BR>
Greg L. Armstrong<BR>
Ben A. Guill<BR>
Eric L. Mattson
</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="center" style="font-size: 10pt; margin-top: 18pt"><B>RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS</B>
</DIV>

<DIV align="left">
<A name="106"></A>
</DIV>
<DIV align="center" style="font-size: 10pt"><B>PROPOSAL NO. 2 ON THE PROXY CARD</B></DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Information Regarding our Independent Auditors</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Audit Committee of the Board of Directors has reappointed Ernst &#038; Young LLP as independent
auditors for 2008. Stockholders are being asked to vote upon the ratification of the appointment.
Representatives of Ernst &#038; Young will attend the Annual Meeting, where they will be available to
respond to appropriate questions and have the opportunity to make a statement if they desire.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Vote Required for Approval</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The proposal to ratify the appointment of Ernst &#038; Young LLP as independent auditors will require
approval by a majority of the votes cast on the meeting. In accordance with NYSE rules, a proposal
to ratify independent auditors is considered to be a &#147;discretionary&#148; item. This means that
brokerage firms may vote in their discretion on this matter on behalf of beneficial owners who have
not furnished voting instructions within the time period specified in the voting instructions
submitted by such brokerage firms. Abstentions, which will be counted as votes present for the
purpose of determining a quorum, will have the effect of a vote against the proposal. Your shares
will be voted as you specify on your proxy. If your properly executed proxy does not specify how
you want your shares voted, we will vote them for the ratification of the appointment of Ernst &#038;
Young LLP as independent auditors.
</DIV>

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


<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">
<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>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE PROPOSAL TO RATIFY THE APPOINTMENT
OF ERNST &#038; YOUNG LLP.</B>
</DIV>

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

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

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>APPROVAL OF THE NATIONAL OILWELL VARCO, INC.<BR>
EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN</B>
</DIV>

<DIV align="left">
<A name="107"></A>
</DIV>
<DIV align="center" style="font-size: 10pt"><B>PROPOSAL NO. 3 ON THE PROXY CARD</B></DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board has adopted, and the stockholders are being asked to approve, the National Oilwell Varco,
Inc. Annual Cash Incentive Plan for Executive Officers (the &#147;Bonus Plan&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Vote Required for Approval</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The affirmative vote of a majority of the shares represented at the Annual Meeting and entitled to
vote on this proposal is required to approve Proposal No.&nbsp;3.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following summary describes briefly the principal features of the Bonus Plan, and is qualified
in its entirety by reference to the full text of the Bonus Plan, which is provided as Annex I to
this Proxy Statement.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Bonus Plan is designed to benefit the Company and its stockholders by providing certain
officers of the Company with incentive compensation that is tied to the achievement of specified
performance goals. The Compensation Committee of the Board of Directors will select on an annual
basis officers of the Company who will participate in the Bonus Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Bonus Plan will be administered by the Compensation Committee in accordance with the terms of
the Bonus Plan. The Compensation Committee has the authority to: (i)&nbsp;manage the operation and
administration of the Bonus Plan, (ii)&nbsp;interpret the Bonus Plan, (iii)&nbsp;select the executives who
are eligible to participate in the Bonus Plan, (iv)&nbsp;establish the performance objectives and
corresponding award opportunities for each participant, (v)&nbsp;approve all awards, and (vi)&nbsp;make all
other decisions and to take all other actions necessary or appropriate for the proper
administration of the Bonus Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Performance Objectives and Incentive Awards</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For each calendar year, the Compensation Committee will determine the performance objectives and
the corresponding incentive award opportunities for each participant expressed as a percentage of
such participant&#146;s base salary. Performance objectives may be expressed in terms of one or more of
the following performance criteria (with respect to the Company, any of its subsidiaries or
divisions, operating unit or product line):
</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="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>net earnings (either before or after interest, taxes, depreciation and/or amortization);</TD>
</TR>

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

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>net income (either before or after taxes);</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>cash flow (including, but not limited to, operating cash flow and free cash flow);</TD>
</TR>

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

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>return on stockholders&#146; equity;</TD>
</TR>

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

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


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



</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="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>return on assets;</TD>
</TR>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>price per share of stock; 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="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>market share.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Performance objectives may be stated in absolute terms or based on comparisons to peer group
companies or indices to be achieved during a calendar year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Compensation Committee shall determine after the end of each calendar year the extent to which
the performance objectives set for each participant were achieved, and shall certify in writing the
extent to which the objectives have been achieved. Each award, if any, shall be paid in a cash
lump sum as soon as practicable following the Compensation Committee&#146;s certification. The
maximum award any participant may receive for any calendar year is $5&nbsp;million. The relative
benefits or amounts that will be received by or allocated to the various categories of eligible
participants under the Bonus Plan during the life of the Bonus Plan are currently not determinable.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Section&nbsp;162(m) places a limit of $1,000,000 on the amount of compensation that the Company may
deduct in any taxable year with respect to each &#147;covered employee&#148; within the meaning of Section
162(m). However, certain &#147;performance-based compensation&#148; is not subject to the deduction limit if
the compensation is paid based solely on the attainment of pre-established objective performance
measures established by a committee of outside directors and the Bonus Plan providing for such
compensation is approved by the stockholders. The Bonus Plan is designed to meet these
requirements. To qualify, we are seeking stockholder approval of the Bonus Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE PROPOSAL TO APPROVE THE EXECUTIVE
OFFICER ANNUAL INCENTIVE PLAN.</B>
</DIV>

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

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="108"></A>
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">National Oilwell Varco&#146;s Board of Directors is committed to promoting transparency in reporting
information about the Company, complying with the spirit as well as the literal requirements of
applicable laws, rules and regulations, and corporate behavior that conforms to corporate
governance standards that substantially exceed the consensus view of minimum acceptable corporate
governance standards. The Board of Directors adopted Corporate Governance Guidelines which
established provisions for the Board&#146;s composition and function, Board committees and committee
membership, evaluation of director independence, the roles of the Chairman of the Board, the Chief
Executive Officer and the Lead Director, the evaluation of the Chief Executive Officer, regular
meetings of non-management directors, board conduct and review, selection and orientation of
directors, director compensation, access to management and independent advisors, and annual review
of the Corporate Governance Guidelines. A copy of the Corporate Governance Guidelines is attached
to this Proxy Statement as Appendix&nbsp;IV, and is also available on the Company&#146;s website,
<U>www.nov.com</U>, under the Investor Relations/Corporate Governance section. The Company will furnish
print copies of the Corporate Governance Guidelines, as well as its Committee charters, 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>

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

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The non-management members of the Board of Directors have appointed Greg L. Armstrong as Lead
Director. The Lead Director is responsible for developing the agenda for, and presiding over the
executive sessions of, the Board&#146;s non-management directors, and for acting as principal liaison
between the non-management directors and the chief executive officer on matters dealt with in
executive session.
</DIV>

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

<P align="center" style="font-size: 10pt"><!-- Folio -->-19-<!-- /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">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 (attached to this Proxy
Statement as Appendixes V and VI, respectively), as well as the code of ethics applicable to
employees of the Company, are available on the Company&#146;s website, <U>www.nov.com</U>, 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>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board has provided a process for interested parties to communicate with our non-management
directors. Parties wishing to communicate confidentially with our non-management directors may do
so by calling 1-800-372-3956. This procedure is described on the Company&#146;s website, <U>www.nov.com</U>,
in the Investor Relations/Corporate Governance section. Calls to this number will be answered by
an independent, automated system 24 hours a day, 365&nbsp;days a year. A transcript of the call will be
delivered to a member of the Audit Committee. Parties wishing to send written communications to
the Board, other than sales-related communications, should send a letter addressed to the member or
members of the Board to whom the communication is directed, care of the Secretary, National Oilwell
Varco, Inc., 7909 Parkwood Circle Drive, Houston, Texas, 77036. All such communications will be
forwarded to the Board member or members specified.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Director Attendance at Annual Meetings</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company does not have a formal policy with respect to director attendance at annual stockholder
meetings. In 2007, all members of the Board were in attendance at the annual meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NYSE Corporate Governance Matters</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As a listed company with the NYSE, our Chief Executive Officer, as required under Section
303A.12(a) of the NYSE Listed Company Manual, must certify to the NYSE each year whether or not he
is aware of any violation by the company of NYSE Corporate Governance listing standards as of the
date of the certification. On June&nbsp;6, 2007, the Company&#146;s Chief Executive Officer submitted such a
certification to the NYSE which stated that he was not aware of any violation by the Company of the
NYSE Corporate Governance listing standards.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In February&nbsp;2008, the Company&#146;s Chief Executive Officer notified the NYSE that the Company had
become aware that Mr.&nbsp;Robert E. Beauchamp, a current director, did not qualify as an independent
director as defined in Section&nbsp;303A.02 of the NYSE Listed Company Manual. While conducting its
annual corporate governance compliance review to confirm the independence of the Company&#146;s
directors, the Company and Mr.&nbsp;Beauchamp became aware that Mr.&nbsp;Beauchamp&#146;s brother-in-law is the
Chief Executive Officer of a vendor of the Company, which received payments from the Company of
approximately $3&nbsp;million in 2007. These
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->-20-<!-- /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">payments exceed the amounts permitted under the NYSE&#146;s
independence standards in Section&nbsp;303A.02(b)(v). Sections&nbsp;303A.04 and 303A.05 of the NYSE Listed
Company Manual require that all members of the Nominating/Corporate Governance Committee and
Compensation Committee, respectively, must be independent. Due to his lack of independence, Mr.
Beauchamp immediately 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: 6pt">On February&nbsp;29, 2008, the Company filed its 2007 Form 10-K with the SEC, which included as Exhibits
31.1 and 31.2 the Chief Executive Officer and Chief Financial Officer certifications required under
Section&nbsp;302 of the Sarbanes-Oxley Act of 2002.
</DIV>

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

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<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>EXECUTIVE OFFICERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following persons are our current executive officers. 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, directors, or nominees for director has 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="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="0%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="52%">&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="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 &#151; Rig Technology
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Reese has
served as President
- - Rig Technology
since August&nbsp;2007.
Mr.&nbsp;Reese served as
President -
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>
<!-- End Table Body -->
</TABLE>
</DIV>


<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="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="2%">&nbsp;</TD>
    <TD width="0%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="52%">&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="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">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>



<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">
<A name="110"></A>
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Security Ownership of Certain Beneficial Owners</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 nowrap align="center" colspan="3"><B>No. of</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>5% Owners</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Shares</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">
    <TD><DIV style="margin-left:15px; text-indent:-15px">FMR LLC (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51,108,189</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">14.32</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-0px">82 Devonshire Street<br>
Boston, MA 02109</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="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>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Barclays Global Investors, NA<SUP style="font-size: 85%; vertical-align: text-top"> </SUP>(2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,979,862</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">5.88</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-0px">45 Freemont St.<br>
San Francisco, CA 94105</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>
<!-- 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 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-</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">





<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>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)&nbsp;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)&nbsp;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>


<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>Security Ownership of Management</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;27, 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 357,809,633 shares outstanding as of March&nbsp;27, 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;27, 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="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>
    <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 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"><B>Name of Individual</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><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"><B>Days</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><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>&nbsp;</TD>
    <TD align="right">5,230</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</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>&nbsp;</TD>
    <TD align="right">4,586</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</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">35,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53,790</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</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>&nbsp;</TD>
    <TD align="right">24,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</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>&nbsp;</TD>
    <TD align="right">7,886</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</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>&nbsp;</TD>
    <TD align="right">2,624</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</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>&nbsp;</TD>
    <TD align="right">18,706</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">59,116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</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>&nbsp;</TD>
    <TD align="right">475,178</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</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">32,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</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">32,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</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>&nbsp;</TD>
    <TD align="right">16,164</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</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">93,246</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">193,388</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</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>&nbsp;</TD>
    <TD align="right">747,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">681,632</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</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>


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</DIV>

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<DIV align="left">
<A name="111"></A>
</DIV>

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


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

<P align="center" style="font-size: 10pt"><!-- Folio -->-27-<!-- /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">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: 12pt"><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>

<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>

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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">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 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
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->-29-<!-- /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">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: 12pt"><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>

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

<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) =
$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) =
$1,600,000</TD>
</TR>

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


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



</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 -
$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>

<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
</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">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
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->-33-<!-- /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">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 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="23%">&nbsp;</TD>
    <TD width="70%">&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 nowrap align="center" colspan="3"><B>Securities Underlying</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>Options (#) (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">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>

<P align="center" style="font-size: 10pt"><!-- Folio -->-34-<!-- /Folio -->
</DIV>

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<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="30%">&nbsp;</TD>
    <TD width="60%">&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 nowrap align="center" colspan="3"><B>Shares of Restricted Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares of Restricted Stock</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>(18 Months) (#) (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>(36 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>

<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>

<P align="center" style="font-size: 10pt"><!-- Folio -->-35-<!-- /Folio -->
</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>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;<B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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;<B>&#149;</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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>

<P align="center" style="font-size: 10pt"><!-- Folio -->-36-<!-- /Folio -->
</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>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 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 align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#149;</B>&nbsp;&nbsp;&nbsp; deliver the Company&#146;s annual operating plan;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#149;</B>&nbsp;&nbsp;&nbsp; deliver quality equipment on a timely basis;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#149;</B>&nbsp;&nbsp;&nbsp; optimize capacity and capital expenditures for near-term opportunities and long-term
cyclicality;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#149;</B>&nbsp;&nbsp;&nbsp; develop new technologies and products for customers;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#149;</B>&nbsp;&nbsp;&nbsp; identify and execute on strategic growth opportunities;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#149;</B>&nbsp;&nbsp;&nbsp; execute Sarbanes-Oxley 404 compliance;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#149;</B>&nbsp;&nbsp;&nbsp; enhance board member education on the Company and its businesses;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#149;</B>&nbsp;&nbsp;&nbsp; enhance senior management effectiveness through education and exposure to different
opportunities; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#149;</B>&nbsp;&nbsp;&nbsp; develop different programs for employee development.
</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>

<P align="center" style="font-size: 10pt"><!-- Folio -->-37-<!-- /Folio -->
</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>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: 6pt"><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: 6pt"><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 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)&nbsp;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
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->-38-<!-- /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">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="28%">&nbsp;</TD>
    <TD width="65%">&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 nowrap align="center" colspan="3"><B>Securities Underlying</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>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="28%">&nbsp;</TD>
    <TD width="65%">&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 nowrap align="center" colspan="3"><B>Shares of Restricted Stock</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>(36 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;
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->-39-<!-- /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">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"><B><I>Miller, Reese and Rettig</I></B>

</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 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="1%" 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="1%" 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="1%" 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="1%" 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 align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#149;</B>&nbsp;&nbsp;&nbsp; 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;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#149;</B>&nbsp;&nbsp;&nbsp; a failure by the Company to comply with the terms of the agreement; or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#149;</B>&nbsp;&nbsp;&nbsp; requiring Mr.&nbsp;Miller to relocate or to travel to a substantially greater extent than
required at the date of the agreement.
</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>

<P align="center" style="font-size: 10pt"><!-- Folio -->-40-<!-- /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">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="1%" 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="1%" 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="1%" 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="1%" 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: 12pt"><B><I>Williams and Smith</I></B>
</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 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>

<P align="center" style="font-size: 10pt"><!-- Folio -->-41-<!-- /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"><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 align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; a lump sum payment equal to three times base salary;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; 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;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; a lump sum payment equal to three times bonus at expected value;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; full vesting of all accrued benefits under the Company&#146;s 401(k) Plan, SERP, Supplemental Plan and
Medical Plan, as applicable;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; a lump sum payment equal to three years of expected Company contributions under the Company&#146;s
401(k) Plan and Supplemental Plan;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; full vesting of any restricted stock awards and payment of awards earned under any intermediate
or long-term bonus plan;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; an extended option exercise period;&nbsp;and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; 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.
</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>

<P align="center" style="font-size: 10pt"><!-- Folio -->-42-<!-- /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"><B>&#149;</B>&nbsp;&nbsp;&nbsp; executive&#146;s conviction of a felony involving moral turpitude, dishonesty or a breach of trust
towards the Company;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; executives 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;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; 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;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; executive&#146;s unauthorized disclosure of confidential information of the Company that is materially
injurious to the Company;&nbsp;or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; 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.
</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;good reason&#148; means:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; 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;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; 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;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; 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
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#149;</B>&nbsp;&nbsp;&nbsp; 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.
</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
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->-43-<!-- /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">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="48%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="24%">&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="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Involuntary Not for Cause Termination (2)</B></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 $800,000)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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="right">$</TD>
    <TD align="right">4,800,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Continuing welfare and medical benefits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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="right">$</TD>
    <TD align="right">111,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Value of Unvested Stock Options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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="right">$</TD>
    <TD align="right">10,798,620</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Estimated Tax Gross Up</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,742,622</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><DIV style="margin-left:15px; text-indent:-15px"><B>Total:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">38,973,410</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>



<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>

<P align="center" style="font-size: 10pt"><!-- Folio -->-44-<!-- /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="48%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="24%">&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="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Involuntary Not for Cause Termination (2)</B></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="right">$</TD>
    <TD align="right">1,500,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Expected Value Bonus (times 3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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="right">$</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Retirement Contribution and Matching</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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="right">$</TD>
    <TD align="right">5,560,766</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Value of Unvested Restricted Stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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="right">$</TD>
    <TD align="right">39,198</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outplacement Services (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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="right">$</TD>
    <TD align="right">3,538,574</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">14,230,357</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>



<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; Rig Technology.
</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="48%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="24%">&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="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Involuntary Not for Cause Termination (2)</B></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="right">$</TD>
    <TD align="right">385,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Highest Bonus</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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="right">$</TD>
    <TD align="right">16,666</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Retirement Contribution and Matching</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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="right">$</TD>
    <TD align="right">3,847,050</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Value of Unvested Restricted Stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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>
</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="right">$</TD>
    <TD align="right">6,507,316</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
31, 2007.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->-45-<!-- /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">(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="48%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="24%">&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="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Involuntary Not for Cause Termination (2)</B></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="right">$</TD>
    <TD align="right">1,155,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Expected Value Bonus (times 3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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="right">$</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Retirement Contribution and Matching</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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="right">$</TD>
    <TD align="right">3,863,520</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Value of Unvested Restricted Stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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="right">$</TD>
    <TD align="right">39,198</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outplacement Services (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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="right">$</TD>
    <TD align="right">2,482,350</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,987,893</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>



<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>

<P align="center" style="font-size: 10pt"><!-- Folio -->-46-<!-- /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="48%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="24%">&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="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Involuntary Not for Cause Termination (2)</B></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="right">$</TD>
    <TD align="right">350,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Highest Bonus</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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="right">$</TD>
    <TD align="right">16,666</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Retirement Contribution and Matching</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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="right">$</TD>
    <TD align="right">3,847,050</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Value of Unvested Restricted Stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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>
</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="right">$</TD>
    <TD align="right">6,414,566</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
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 -->-47-<!-- /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="112"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXECUTIVE COMPENSATION</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: 6pt"><B>Summary Compensation Table</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="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: 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>&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="3">Change</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&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="3">in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&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="3">Pension</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&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="3">Value</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&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="3">and</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&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="3">Nonqual</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&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="3">-ified</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&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="3">Deferred</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">All</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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&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="3">Non-Equity</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Compen</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Other</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">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="center" colspan="3">Stock</TD>
    <TD>&nbsp;</TD>

       <TD nowrap align="center" colspan="3">Option </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Incentive Plan</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">-sation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Compen</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">Principal</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Salary</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Bonus</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Compensation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Earnings</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">-sation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Total </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">Position</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Year</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)(1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)(2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)(3)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">(a)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(b)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(c)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(d)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(e)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(f)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(g)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(h)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(i)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(j)</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">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">$</TD>
    <TD align="right">1,556,722</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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>&nbsp;</TD>
    <TD align="right">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="right">$</TD>
    <TD align="right">1,600,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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="top"><!-- Blank Space -->
 <TD>&nbsp;</TD></TR>

<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Clay C. Williams</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">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">$</TD>
    <TD align="right">681,819</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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">$</TD>
    <TD align="right">37,357</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,516,955</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>Sr. Vice President
and CFO</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">474,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">454,894</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">800,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">35,057</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">1,764,751</TD>
    <TD>&nbsp;</TD>
</TR><TR valign="top"><!-- Blank Space -->
 <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</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">385,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">269,351</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">503,554</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">577,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">28,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">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
Technology</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">373,231</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">499,260</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">577,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">27,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">1,477,658</TD>
    <TD>&nbsp;</TD>
</TR><TR valign="top"><!-- Blank Space -->
 <TD>&nbsp;</TD></TR>

<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Haynes B. Smith</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">385,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">269,351</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">473,632</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">577,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">36,575</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">1,742,058</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>Group President
Services</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">377,484</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">337,438</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">577,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">35,594</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">1,328,016</TD>
    <TD>&nbsp;</TD>
</TR><TR valign="top"><!-- Blank Space -->
 <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 align="right" valign="top">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">350,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">269,351</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">503,554</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">525,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">23,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">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
&#038; Secretary</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">336,154</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">499,260</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">525,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">22,246</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">$</TD>
    <TD align="right" valign="top">1,382,660</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->-48-<!-- /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">
<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 Form 10-K for the fiscal year ended December
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 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>

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

<TR valign="top">
    <TD nowrap align="left">(a)</TD>
    <TD>&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.
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 style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(b)</TD>
    <TD>&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 -
$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 align="left" style="font-size: 10pt; margin-top: 6pt"><B>Grants of Plan Based Awards</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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: 6pt"><B>Grants of Plan-Based Awards</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="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>
    <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>
    <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>
    <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>
</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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&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="3">All Other</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">All Other</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&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="3">Stock</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Option</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</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="11">Estimated Possible Payouts</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11">Estimated Future Payouts</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Awards:</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Awards:</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Exercise</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="11">Under Non-Equity Incentive</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11">Under Equity Incentive Plan</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Number of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">or Base</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Grant Date</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="11" style="border-bottom: 1px solid #000000">Plan Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000">Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">of Shares</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Securities</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Price of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Fair Value of</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">Thresh-</TD>
    <TD>&nbsp;</TD>
    <TD>&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="3">Thresh-</TD>
    <TD>&nbsp;</TD>
    <TD>&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="3">of Stock</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Underlying</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Option</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Stock and</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Grant</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">old</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Target</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Maximum</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">old</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Target</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Maximum</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">or Units</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Options</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Option</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 0px solid #000000">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000">Date</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)(1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)(1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)(1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(#)(2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(#)(2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(#)(2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000">($/Sh)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Awards (3)</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">(a)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(b)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(c)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(d)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(e)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(f)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(g)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(h)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(i)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(j)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(k)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(l)</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">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">$</TD>
    <TD align="right">1,600,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35.225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,126,670</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Clay C. Williams</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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>&nbsp;</TD>
    <TD align="right">37,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37,500</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">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" 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">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">$</TD>
    <TD align="right">577,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35.225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,238,001</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Haynes B. Smith</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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>&nbsp;</TD>
    <TD align="right">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,500</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">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" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dwight W. Rettig</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">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">$</TD>
    <TD align="right">525,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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>


<P align="center" style="font-size: 10pt"><!-- Folio -->-49-<!-- /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">
<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
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 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.
Williams &#151; $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.&nbsp;Miller &#151; $1,198,670; Mr.&nbsp;Williams -
$599,335; Mr.&nbsp;Reese &#151; $359,601; Mr.&nbsp;Smith &#151; $359,601; and Mr.&nbsp;Rettig &#151; $359,601.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Exercises and Holdings of Previously-Awarded Equity Disclosure</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

<P align="center" style="font-size: 10pt"><!-- Folio -->-50-<!-- /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" style="font-size: 10pt; margin-top: 18pt"><B>Outstanding Equity Awards at Fiscal Year-End</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="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: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="19" style="border-bottom: 1px solid #000000">Option Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 1px solid #000000">Stock Awards</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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&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="3">Equity</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Equity</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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&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="3">Incentive</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Incentive</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="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="center" colspan="3">Plan</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Plan Awards:</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="3">Incentive 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="center" colspan="3">Awards:</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Market or</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Number</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" 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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Market</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Number of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Payout Value</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Number of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" 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="center" colspan="3">Number of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Value of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Unearned</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">of Unearned</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Securities</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Securities</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" 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="center" colspan="3">Shares or</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Shares or</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Shares, Units</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Shares, Units</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Underlying</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Underlying</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" 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="center" colspan="3">Units of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Units of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">or Other</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">or Other</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Unexercised</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Unexercised</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Unexercised</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Option</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Stock That</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Stock That</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Rights That</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Rights That</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Options</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Options</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Unearned</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Exercise</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Option</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Have Not</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Have Not</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Have Not</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Have Not</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Options</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Price</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Expiration</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Vested</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Vested</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Vested</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Vested</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Exercisable</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Unexercisable</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Date</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($) (1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(#) (2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($) (1)</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">(a)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(b)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(c)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(d)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(e)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(f)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(g)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(h)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(i)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(j)</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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100,000 </TD>
    <TD nowrap>&nbsp;(3)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35.225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3/2/17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">72,000</TD>
    <TD nowrap>&nbsp;(4)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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 nowrap align="right">&nbsp;</TD>
    <TD align="right">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">$</TD>
    <TD align="right">33.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2/22/16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">42,667 </TD>
    <TD nowrap>&nbsp;(6)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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>&nbsp;</TD>
    <TD align="right">75,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,509,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Clay C. Williams</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">50,000 </TD>
    <TD nowrap>&nbsp;(3)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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>&nbsp;</TD>
    <TD align="right">33,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD 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">$</TD>
    <TD align="right">33.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2/22/16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57,370</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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>&nbsp;</TD>
    <TD align="right">35,124</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD 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">$</TD>
    <TD align="right">18.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1/26/15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,754,750</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</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD 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">$</TD>
    <TD align="right">35.225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3/2/17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">40,000 </TD>
    <TD nowrap>&nbsp;(5)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">33.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&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 nowrap align="right">&nbsp;</TD>
    <TD 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">$</TD>
    <TD align="right">18.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2/8/15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,652,850</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <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 nowrap align="right">&nbsp;</TD>
    <TD 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">$</TD>
    <TD align="right">35.225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3/2/17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">40,000 </TD>
    <TD nowrap>&nbsp;(5)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">33.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD 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">$</TD>
    <TD align="right">18.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1/26/15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,652,850</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 nowrap align="right">&nbsp;</TD>
    <TD 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">$</TD>
    <TD align="right">35.225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3/2/17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">40,000 </TD>
    <TD nowrap>&nbsp;(5)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">33.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&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 nowrap align="right">&nbsp;</TD>
    <TD 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">$</TD>
    <TD align="right">18.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2/8/15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,652,850</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->-51-<!-- /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">
<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
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 -->-52-<!-- /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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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: 6pt"><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="32%">&nbsp;</TD>
    <TD width="25%">&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>
    <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 nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000">Option Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" 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="center" colspan="3">Number of</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Number of</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">Shares</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Shares</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">Acquired</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Value Realized</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Acquired</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Value Realized</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">on Exercise</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">on Exercise</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">on Vesting</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">on Vesting</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">(a)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(b)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(c)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(d)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(e)</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">218,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8,679,976</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Clay C. Williams</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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>&nbsp;</TD>
    <TD align="right">60,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,085,836</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Haynes B. Smith</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,070</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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>&nbsp;</TD>
    <TD align="right">100,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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>


<P align="center" style="font-size: 10pt"><!-- Folio -->-53-<!-- /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>Post-Employment Compensation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;.
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><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="10%">&nbsp;</TD>
    <TD width="35%">&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>
    <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>
    <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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&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="3">Aggregate</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Executive</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Registrant</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Aggregate</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Aggregate</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Balance</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Contributions in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Contributions in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Earnings in Last</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Withdrawals/</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">at Last</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Last FY</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Last FY</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">FY</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Distributions</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">FYE</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)(1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)(2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)(3)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">(a)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(b)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(c)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(d)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(e)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(f)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD NOWRAP><DIV style="margin-left:15px; text-indent:-15px">Merrill A. Miller, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,335</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">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="right">$</TD>
    <TD align="right">135,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">22,212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">26,590</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">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="right">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">910</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">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="right">$</TD>
    <TD align="right">15,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">16,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">83,185</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">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="right">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">241</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">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>


<DIV align="left">
<A name="113"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Certain Relationships and Related Transactions</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
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->-54-<!-- /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">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 from the Compensation Committee effective February&nbsp;14, 2008, and was
replaced by Roger L. Jarvis.
</DIV>

<DIV align="left">
<A name="114"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><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 proxy statement. Based on this review and discussion, the Compensation
Committee recommended to the Board of Directors that the Compensation Discussion &#038; Analysis be
included in the Company&#146;s 2008 Proxy Statement.
</DIV>


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

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->-55-<!-- /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" style="font-size: 10pt; margin-top: 18pt"><B>DIRECTOR COMPENSATION</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="left">
<A name="115"></A>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><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="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="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="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="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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&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="3">Change in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</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>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&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="3">Pension</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</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">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="center" colspan="3">Value and</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</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">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="center" colspan="3">Non-Equity</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Nonqualified</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</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">Paid in</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Stock</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Option</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Incentive Plan</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Deferred</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">All Other</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">Cash</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Compensation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Compensation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Compensation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Total</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Earnings</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">($)</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">(a)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(b)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(c)(1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(d)(2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(e)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(f)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(g) (3)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(h)</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 align="right">$</TD>
    <TD align="right">73,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">17,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">128,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,935</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">230,647</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Robert E. Beauchamp</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">85,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">17,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">128,564</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>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">231,712</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ben A. Guill</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">84,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">17,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">128,564</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">$</TD>
    <TD align="right">12,329</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">243,041</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="right">$</TD>
    <TD align="right">84,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">17,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">128,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">231,386</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Roger L. Jarvis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">69,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">17,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">128,564</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">$</TD>
    <TD align="right">12,649</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">228,361</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="right">$</TD>
    <TD align="right">73,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">17,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">128,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12,038</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">231,750</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jeffery A. Smisek</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">84,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">17,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">128,564</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>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</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 &#150; Notes to Consolidated
Financial Statements, Note 13, of the Company&#146;s 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 &#150; 1,886;
Mr.&nbsp;Beauchamp &#150; 1,886; Mr.&nbsp;Guill &#150; 1,886; Mr.&nbsp;Harrison &#150; 1,886; Mr.&nbsp;Jarvis &#150; 1,886; Mr.
Mattson &#150; 1,886; and Mr.&nbsp;Smisek &#150; 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 &#150; Notes to Consolidated Financial
Statements, Note 13, of the Company&#146;s 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.&nbsp;Beauchamp &#151; $127,809; Mr.&nbsp;Guill &#151; $127,809; Mr.
Harrison &#151; $127,809; Mr.&nbsp;Jarvis &#151; $127,809; Mr.&nbsp;Mattson &#151; $127,809; and Mr.&nbsp;Smisek -
$127,809. The aggregate number of outstanding stock options as of December&nbsp;31, 2007 for</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->-56-<!-- /Folio -->
</DIV>

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<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>each director are as follows: Mr.&nbsp;Armstrong &#150; 39,000; Mr.&nbsp;Beauchamp &#150; 34,000; Mr.
Guill &#150; 39,000; Mr.&nbsp;Harrison &#150; 54,000; Mr.&nbsp;Jarvis &#150; 79,000; Mr.&nbsp;Mattson &#150; 72,450; and
Mr.&nbsp;Smisek &#150; 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
- - $12,329; Mr.&nbsp;Harrison &#151; $424; Mr.&nbsp;Jarvis &#151; $12,649; and Mr.&nbsp;Mattson &#151; $12,038.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><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 align="left" style="font-size: 10pt; margin-top: 6pt">Directors of the Board who are also employees of the Company do not receive any compensation for
their service as directors.
</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 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: 6pt"><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 -->-57-<!-- /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">
<A name="116"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</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">
<A name="117"></A>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>STOCKHOLDER PROPOSALS FOR THE 2009 ANNUAL MEETING</B>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If you wish to submit proposals to be included in our 2009 Proxy Statement, we must receive them on
or before December&nbsp;5, 2008. Please address your proposals to: <B>Dwight W. Rettig, Vice President,
General Counsel and Secretary, National Oilwell Varco, Inc., 7909 Parkwood Circle Drive, Houston,
Texas 77036</B>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If you wish to submit proposals at the meeting that are not eligible for inclusion in the Proxy
Statement, you must give written notice no later than February&nbsp;18, 2009 to: <B>Dwight W. Rettig, Vice
President, General Counsel and Secretary, National Oilwell Varco, Inc., 7909 Parkwood Circle Drive,
Houston, Texas 77036</B>. If you do not comply with this notice provision, the proxy holders will be
allowed to use their discretionary voting authority on the proposal when it is raised at the
meeting. In addition, proposals must also comply with National Oilwell Varco&#146;s bylaws and the
rules and regulations of the SEC.
</DIV>

<DIV align="left">
<A name="118"></A>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>ANNUAL REPORT AND OTHER MATTERS</B>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At the date this Proxy Statement went to press, we did not know of any other matters to be acted
upon at the meeting other than the election of directors, ratification of the appointment of
independent auditors, and approval of the annual cash incentive plan for executive officers as
discussed in this Proxy Statement. If any other matter is presented, proxy holders will vote on
the matter in accordance with their best judgment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">National Oilwell Varco&#146;s 2007 Annual Report on Form 10-K filed on February&nbsp;29, 2008 is included in
this mailing, but is not considered part of the proxy solicitation materials.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">By order of the Board of Directors,<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 0px solid #000000" align="left"><I>/s/ Dwight W. Rettig</I>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="top"><!-- Blank Space -->
 <TD>&nbsp;</TD></TR>

<TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Dwight W. Rettig&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Vice President, General Counsel and<BR>

Secretary&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Houston, Texas<BR>
April&nbsp;4, 2008

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->-58-<!-- /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="right" style="font-size: 10pt; margin-top: 12pt"><U><B>ANNEX I</B></U></DIV>

<DIV align="left">
<A name="119"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>NATIONAL OILWELL VARCO, INC.</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>ANNUAL INCENTIVE PLAN</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><U><B>Purpose</B></U>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The National Oilwell Varco, Inc. Annual Incentive Plan (the &#147;Plan&#148;) is intended to promote the
interests of National Oilwell Varco, Inc., a Delaware Corporation, (the &#147;Company&#148;) and its
shareholders by providing designated Executives with incentive compensation that is correlated with
the achievement of specified performance goals. The Plan is intended to provide annual incentive
compensation, primarily to Executives who are considered to be &#147;covered employees&#148; within the
meaning of Section&nbsp;162(m)(3) of the Internal Revenue Code of 1986, as amended (the &#147;Code&#148;), that is
considered &#147;performance-based compensation&#148; under Code Section 162(m) and thus not subject to the
annual compensation deduction limit under Section&nbsp;162(m).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE I</B><BR>
<U><B>DEFINITIONS</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of the Plan, unless the context requires otherwise, the following terms shall
have the meanings indicated:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 &#147;Base Salary&#148; means the regular, annual, base salary payable by the Employer for a
Performance Period to a Participant for services rendered, but excluding Incentive Compensation
payable under the Plan, income derived from stock options, restricted stock awards, fringe
benefits, and any bonuses, incentive compensation, special awards or other extraordinary
remuneration. The Committee shall stipulate a Participant&#146;s Base Salary for purposes of computing
Incentive Compensation awarded under the Plan to the Participant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 &#147;Beneficiary&#148; means the beneficiary or beneficiaries designated to receive any amounts
payable under the Plan pursuant to Section&nbsp;6.2 upon the Participant&#146;s death.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 &#147;Board&#148; means the Board of Directors of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4 &#147;Cause&#148; when used in connection with the termination of a Participant&#146;s employment, shall
mean (i)&nbsp;the Participant&#146;s gross negligence or willful misconduct in the performance of
Participant&#146;s duties with respect to the Company or a Subsidiary or (ii)&nbsp;Participant&#146;s final
conviction of a misdemeanor involving moral turpitude or a felony.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5 &#147;Change of Control&#148; means (i)&nbsp;the Company completes the sale of assets having a gross
sales price which exceeds 50% of the consolidated total capitalization of the Company (consolidated
total stockholders&#146; equity plus consolidated total long-term debt as determined in accordance with
generally accepted accounting principles) as at the end of the last full fiscal quarter prior to
the date such determination is made; or (ii)&nbsp;any corporation, person or group within the meaning of
Section&nbsp;13(d)(3) and 14(d)(2) of the Exchange Act, becomes the beneficial owner (within the meaning
of Rule&nbsp;13d-3 under the Exchange Act) of voting securities
</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">of the Company representing more than 30% of the total votes eligible to be cast at any
election of directors of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Notwithstanding the foregoing provisions of this Section&nbsp;1.5, to the extent that any payment or
acceleration hereunder is subject to Code Section&nbsp;409A as deferred compensation, the term Change of
Control shall mean an event described in the foregoing definition of Change of Control that also
constitutes a change in control event as defined in Treasury regulation section 1.409A-3(i)(5).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6 &#147;Code&#148; means the Internal Revenue Code of 1986, as amended. References herein to any
Section of the Code shall also refer to any successor provision thereof, and the regulations and
other authority issued thereunder by the appropriate governmental authority.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7 &#147;Committee&#148; means the Compensation Committee of the Board. The Committee shall be
comprised solely of two (2)&nbsp;or more non-employee members of the Board who qualify to administer the
Plan as &#147;disinterested directors&#148; under Rule&nbsp;16b-3 of the Exchange Act, and as &#147;outside directors&#148;
under Code Section&nbsp;162(m).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.8 &#147;Company&#148; means National Oilwell Varco, Inc., a Delaware corporation, or its successor in
interest.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.9 &#147;Employer&#148; means the Company and any Subsidiary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.10 &#147;Exchange Act&#148; means the Securities Exchange Act of 1934, as amended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.11 &#147;Executive&#148; means an officer of the Company or a Subsidiary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.12 &#147;Incentive Compensation&#148; means the compensation approved by the Committee to be awarded
to a Participant for any Performance Period under the Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.13 &#147;Involuntary Termination&#148; means a Participant&#146;s termination from employment with the
Employer on or within twelve months following a Change of Control that is either (i)&nbsp;initiated by
the Employer for reasons other than Cause, or (ii)&nbsp;initiated by the Participant after (a)&nbsp;a
reduction by the Employer of the Participant&#146;s authority, duties or responsibilities as in effect
immediately prior to the Change of Control (excluding for this purpose (x)&nbsp;an insubstantial
reduction of such authorities, duties or responsibilities or an insubstantial reduction of the
Participant&#146;s offices, titles and reporting requirements, or (y)&nbsp;an isolated, insubstantial and
inadvertent action not taken in bad faith and that is remedied by the Employer promptly after
receipt of notice thereof given by Participant), (b)&nbsp;a reduction of Participant&#146;s Base Salary or
total compensation as in effect immediately prior to the Change of Control (total compensation
means for this purpose: Base Salary, participation in this Plan, and participation in a long-term
incentive plan), or (c)&nbsp;the Participant&#146;s transfer, without the Participant&#146;s express written
consent, to a location which is outside the general metropolitan area in which the Participant&#146;s
principal place of business immediately prior to the Change of Control may be located or the
Employer&#146;s requiring the Participant to travel on Employer business to a substantially greater
extent than required immediately prior to the Change of Control.
</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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.14 &#147;Participant&#148; means an Executive who is selected by the Committee to participate in the
Plan pursuant to Article&nbsp;III for any Performance Period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.15 &#147;Performance Criteria&#148; means the business criteria that are specified by the Committee
pursuant to Article&nbsp;VII.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.16 &#147;Performance Goal&#148; means (a)&nbsp;the selected Performance Criteria and (b)&nbsp;the objective
goals established relative to such Performance Criteria, as determined by the Committee for any
Performance Period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.17 &#147;Performance Period&#148; means the Company&#146;s fiscal year or such other period selected by the
Committee for the award of Incentive Compensation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.18 &#147;Plan&#148; means the National Oilwell Varco, Inc. Annual Incentive Plan, as it may be amended
from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.19 &#147;Subsidiary&#148; means any corporation (whether now or hereafter existing) which constitutes
a &#147;subsidiary&#148; of the Company, as defined in Code Section&nbsp;424(f), and any limited liability
company, partnership, joint venture, or other entity in which the Company controls more than fifty
percent (50%) of its voting power or equity interests.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE II</B><BR>
<U><B>ADMINISTRATION</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the terms and conditions of this Article&nbsp;II, the Plan shall be administered by the
Committee. The Committee shall have the power, in its discretion, to take such actions as may be
necessary to carry out the provisions of the Plan and the authority to control and manage the
operation and administration of the Plan. In order to effectuate the purposes of the Plan, the
Committee shall have the discretionary power and authority to construe and interpret the Plan, to
supply any omissions therein, to reconcile and correct any errors or inconsistencies, to decide any
questions in the administration and application of the Plan, and to make equitable adjustments for
any mistakes or errors made in the administration of the Plan. All such actions or determinations
made by the Committee, and the application of rules and regulations to a particular case or issue
by the Committee, in good faith, shall not be subject to review by anyone, but shall be final,
binding and conclusive on all persons ever interested hereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In construing the Plan and in exercising its power under provisions requiring the Committee&#146;s
approval, the Committee shall attempt to ascertain the purpose of the provisions in question, and
when the purpose is known or reasonably ascertainable, the purpose shall be given effect to the
extent feasible as determined by the Committee. Likewise, the Committee is authorized to determine
all questions with respect to the individual rights of all Participants under the Plan, including,
but not limited to, all issues with respect to eligibility. The Committee shall have all powers
necessary or appropriate to accomplish its duties under the Plan including, but not limited to, the
power to:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) designate the Executives who are eligible to participate in the Plan as
Participants;
</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; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) maintain records of all Plan transactions and other data in the manner necessary
for proper administration of the Plan;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) adopt rules of procedure and regulations necessary for the proper and efficient
administration of the Plan, provided the rules and regulations are not inconsistent with the
terms of the Plan as set out herein;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) enforce the terms of the Plan and the rules and regulations it adopts;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) review claims and render decisions on claims for benefits under the Plan;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) furnish the Company or the Participants, upon request, with information that the
Company or the Participants may require for tax or other purposes;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) employ agents, attorneys, accountants or other persons (who also may be employed by
or represent the Company) for such purposes as the Committee deems necessary or desirable in
connection with its duties hereunder; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) perform any other acts necessary or appropriate for the proper management and
administration of the Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee may delegate to one or more members of the Committee any of its administrative
duties under the Plan pursuant to such conditions or limitations as the Committee may establish
from time to time by directive or practice; provided, however, the Committee cannot delegate to
such member(s) the power or authority to (i)&nbsp;award Incentive Compensation under the Plan or (ii)&nbsp;to
take any action which would contravene the requirements of Code Section 162(m) or the
Sarbanes-Oxley Act of 2002.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For each Performance Period, the Committee shall select the particular Executives to whom
Incentive Compensation may be awarded under the Plan for such Performance Period. Executives who
participate in the Plan may also participate in other incentive or benefit plans maintained by an
Employer.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE IV</B><BR>
<U><B>ESTABLISHMENT OF INCENTIVE COMPENSATION TARGETS </B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <U>Incentive Compensation Award Target</U>. For each award of Incentive Compensation for
a Performance Period, the Committee will establish the level or levels of targeted Incentive
Compensation for each Participant within the first ninety (90)&nbsp;days of the Performance Period (or
within such shorter deadline as may apply under Code Section 162(m) if the Performance Period is
less than 12&nbsp;months). The Incentive Compensation targets for each Participant that are established
by the Committee will be expressed as a percentage of such Participant&#146;s Base Salary; provided,
however, in no event will a Participant&#146;s Incentive Compensation exceed five million dollars
($5,000,000) for any single Performance Period.
</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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <U>Increase in Incentive Compensation</U>. Under no circumstances may the amount of any
Incentive Compensation awarded to any Participant for a specified Performance Period be increased
by the Committee without requisite shareholder approval to the extent required by Code Section
162(m).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE V</B><BR>
<U><B>DETERMINATION OF GOALS FOR INCENTIVE COMPENSATION</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <U>Establishment of Performance Goals</U>. For each Performance Period for which the
Committee determines to establish potential Incentive Compensation awards for one or more
Participants, the Committee, within the first ninety (90)&nbsp;days of such Performance Period (or
within such shorter deadline as may apply under Code Section 162(m) if the Performance Period is
less than 12&nbsp;months), will set forth in writing all of the terms and conditions of such Incentive
Compensation awards, including: (a)&nbsp;the Performance Goals for the Performance Period, including the
Performance Criteria and the objective goals established relative to such Performance Criteria,
which may include a threshold, target and maximum level of achievement, and the relative weighting
of each Performance Goal in determining the Participant&#146;s actual Incentive Compensation; provided,
however, the outcome of such Performance Goals must be substantially uncertain at the time they are
established by the Committee; and (b)&nbsp;with respect to each Participant, the maximum percentage of
his Incentive Compensation payable upon attaining each level of achievement of the Performance
Goals.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <U>Determination</U>. Within a reasonable period of time after the end of each
Performance Period, the Committee shall determine the extent to which the Performance Goals
assigned to each Participant were achieved for the Performance Period, and based solely on such
achievement, shall approve the calculation of the Participant&#146;s actual Incentive Compensation
award. No Incentive Compensation is payable hereunder unless at least the designated threshold
level or levels for such Performance Goals have been achieved, as determined by the Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <U>Committee Discretion</U>. The Committee shall have no discretion to approve an amount
of Incentive Compensation to be paid to a Participant under the Plan that is in excess of the
amount determined pursuant to the pre-established Incentive Compensation award granted to the
Participant for the applicable Performance Period.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE VI</B><BR>
<U><B>PAYMENT OF INCENTIVE COMPENSATION</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <U>Form and Time of Payment</U>. Subject to Section&nbsp;6.2, a Participant&#146;s Incentive
Compensation for each Performance Period, if any, shall be paid in a cash lump sum (net of
applicable tax and other required withholdings) as soon as practicable after (a)&nbsp;the results for
such Performance Period have been finalized and (b)&nbsp;the Committee has certified, in writing, that
the applicable Performance Goals have been satisfied for the Performance Period. For purposes of
the preceding sentence, approved minutes of the Committee meeting in which the certification is
made shall be treated as written certification. The Incentive Compensation shall be paid under the
Plan within two and one-half (2 1/2) months after the end of the calendar year in which the
Performance Period relating to such Incentive Compensation ends.
</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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <U>Payment in the Event of Termination</U>.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If a Participant&#146;s employment terminates for any reason prior to the end of a
Performance Period, then such Participant shall immediately forfeit and relinquish any and
all rights and claims to receive any Incentive Compensation hereunder for such Performance
Period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If a Participant&#146;s employment terminates for any reason after the end of a
Performance Period but prior to the date of actual payment pursuant to Section&nbsp;6.1, then
such Participant (or Participant&#146;s Beneficiary in the event employment is terminated due to
death) shall be entitled to the Incentive Compensation payment determined by the Committee
to be due and payable to such Participant; provided, however, that if (i)&nbsp;such Participant&#146;s
employment is terminated for Cause, or (ii)&nbsp;such Participant voluntarily terminates
employment with the Company (excluding an Involuntary Termination) during the period after
the end of a Performance Period but prior to the date of actual payment pursuant to Section
6.1, then such Participant shall immediately forfeit and relinquish any and all rights and
claims to receive any Incentive Compensation hereunder for such Performance Period.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE VII</B><BR>
<U><B>PERFORMANCE CRITERIA</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As determined by the Committee, Incentive Compensation payable under the Plan is subject to
the performance objectives relating to one or more of the following Performance Criteria (with
respect to the Company, any Subsidiary or any division, operating unit or product line): net
earnings (either before or after interest, taxes, depreciation and/or amortization), sales,
revenue, net income (either before or after taxes), operating profit, cash flow (including, but not
limited to, operating cash flow and free cash flow), cash flow return on capital, return on net
assets, return on stockholders&#146; equity, return on assets, return on capital, stockholder returns,
return on sales, gross or net profit margin, customer or sales channel revenue or profitability,
productivity, expense, margins, cost reductions, controls or savings, operating efficiency,
customer satisfaction, working capital, strategic initiatives, economic value added, earnings per
share, earnings per share from operations, price per share of stock, and market share. Performance
Criteria may be stated in absolute terms or relative to comparison companies or indices to be
achieved during a Performance Period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall establish one or more Performance Criteria for each award of Incentive
Compensation to a Participant. In establishing the Performance Criteria for each award of Incentive
Compensation, the Committee may provide that the effect of specified extraordinary or unusual
events will be included or excluded (including, but not limited to, all items of gain, loss or
expense determined to be extraordinary or unusual in nature or infrequent in occurrence or related
to the disposal of a segment of business or related to a change in accounting principle, all as
determined in accordance with standards set by Opinion No.&nbsp;30 of the Accounting Principles Board
(APB Opinion 30) or other authoritative financial accounting standards). The terms of the stated
Performance Criteria for each applicable award of Incentive Compensation must preclude the
Committee&#146;s discretion to increase the amount payable to any Participant that would otherwise be
due upon attainment of the Performance Criteria. The Performance Criteria
</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">specified need not be applicable to all awards of Incentive Compensation, and may be
particular or unique to an individual Participant&#146;s function, duties or business unit.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE VIII</B><BR>
<U> <B>MISCELLANEOUS PROVISIONS</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 <U>Non-Assignability</U>. A Participant cannot alienate, assign, pledge, encumber,
transfer, sell or otherwise dispose of any rights or benefits under the Plan prior to the actual
receipt thereof; and any attempt to alienate, assign, pledge, sell, transfer or assign prior to
such receipt, or any levy, attachment, execution or similar process upon any such rights or
benefits, shall be null and void.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 <U>No Right to Continue in Employment</U>. Nothing in the Plan confers upon any
Participant the right to continue in the employ of the Company or any Subsidiary, or interferes
with or restricts in any way the right of the Employer to discharge any Participant at any time
(subject to any contract rights of such Participant).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 <U>Indemnification of Committee Members</U>. Each person who is or was a member of the
Committee shall be indemnified by the Company against and from any damage, loss, liability, cost
and expense that may be imposed upon or reasonably incurred by him in connection with or resulting
from any claim, action, suit, or proceeding to which he is or may be a party, or in which he may be
involved, by reason of any action taken or failure to act under the Plan, except for any such act
or omission constituting willful misconduct or gross negligence. Each such person shall be
indemnified by the Company for all amounts paid by him in settlement thereof, with the Company&#146;s
approval, or paid by him in satisfaction of any judgment in any such action, suit, or proceeding
against him, provided he shall give the Company an opportunity, at its own expense, to handle and
defend the same before he undertakes to handle and defend it on his own behalf. The foregoing right
of indemnification shall not be exclusive of any other rights of indemnification to which such
persons may be entitled from the Company, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 <U>No Plan Funding</U>. The Plan shall at all times be entirely unfunded and no
provision shall be made with respect to segregating any assets of any Employer for payment of any
amounts due hereunder. No Participant, Beneficiary, or other person or entity shall have any
interest in any particular assets of an Employer by reason of the right to receive any Incentive
Compensation under the Plan until such payment is actually received by such person. Participants
and Beneficiaries shall have only the rights of general unsecured creditors of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5 <U>Governing Law</U>. The Plan shall be construed in accordance with the laws of the
State of Texas without regard to its conflicts of law provisions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.6 <U>Binding Effect</U>. The Plan shall be binding upon and inure to the benefit of the
Employer and its successors and assigns, and the Participants and their Beneficiaries, heirs, and
personal representatives.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.7 <U>Construction of Plan</U>. The captions used in the Plan are for convenience of
reference only and shall not be construed in interpreting the Plan. Whenever the context so
</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">requires, the masculine shall include the feminine and neuter, and the singular shall also
include the plural, and conversely.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.8 <U>Integrated Plan</U>. The Plan constitutes the final and complete expression of
agreement among the parties hereto with respect to the subject matter hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9 <U>Compliance with Code Section&nbsp;409A</U>. The Plan is not intended to provide for the
payment of any nonqualified deferred compensation that is subject to Code Section&nbsp;409A. However, to
the extent that any payment under the Plan is determined by the Committee to be nonqualified
deferred compensation subject to Section&nbsp;409A, the Plan is intended to comply with Section&nbsp;409A. If
any provision herein results in the imposition of an excise tax on any Participant or Beneficiary
under Section&nbsp;409A, such provision will be reformed to the extent necessary to avoid such
imposition as the Committee determines is appropriate to comply with Section&nbsp;409A.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE IX</B><BR>
<U> <B>AMENDMENT OR DISCONTINUANCE</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee may at any time, and from time to time, without the consent of (or liability of
the Committee or Employer to) any Participant, amend, revise, suspend, or discontinue the Plan, in
whole or in part, subject to any shareholder approval required by law; provided, however, the
Committee may not amend the Plan to change the method for determining Incentive Compensation or the
Performance Goals under Articles IV and V without the approval of the majority of votes cast by the
shareholders of the Company in a separate vote to the extent required by Code Section&nbsp;162(m).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE X</B><BR>
<U> <B>EFFECT OF THE PLAN</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither the adoption of the Plan, nor any action of the Board or the Committee hereunder,
shall be deemed to give any Participant any right to be granted Incentive Compensation hereunder.
In addition, nothing contained in the Plan, and no action taken pursuant to its provisions, shall
be construed to (a)&nbsp;give any Participant any right to any compensation, except as expressly
provided herein; (b)&nbsp;be evidence of any agreement, contract or understanding, express or implied,
that any Employer will employ a Participant in any particular position or for any particular
duration; (c)&nbsp;give any Participant any right, title, or interest whatsoever in, or to, any assets
or investments which the Participant may make to aid it in meeting its obligations hereunder; (d)
create a trust or fund of any kind; or (e)&nbsp;create any type of fiduciary relationship between an
Employer and a Participant or any other person.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ARTICLE XI</B><BR>
<U><B>TERM</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Plan shall be effective as of January&nbsp;1, 2008, contingent upon its approval by the
Company&#146;s shareholders in a manner consistent with the shareholder approval requirements of Code
Section&nbsp;162(m).
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->-66-<!-- /Folio -->
</DIV>

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

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><FONT style="font-variant: SMALL-CAPS"><U><B>Appendix&nbsp;I</B></U></FONT>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>NATIONAL OILWELL VARCO, INC.<BR>
(&#147;Company&#148;)</B>
</DIV>

<DIV align="left">
<A name="120"></A>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>CHARTER OF THE AUDIT COMMITTEE OF THE</B>

</DIV>
<DIV align="center" style="font-size: 10pt"><B>BOARD OF DIRECTORS</B></DIV>



<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Amended and Restated by the Board of Directors on November&nbsp;16, 2005</B>

</DIV>

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

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Audit Committee (the &#147;Committee&#148;) is appointed by the Board of Directors (the &#147;Board&#148;) to
assist the Board in fulfilling its oversight responsibilities. The Committee&#146;s primary duties and
responsibilities are to:
</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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Monitor the integrity of the Company&#146;s financial statements, financial
reporting processes, systems of internal controls regarding finance, and
disclosure controls and procedures.</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>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Select and appoint the Company&#146;s independent auditors, pre-approve all audit
and non-audit services to be provided, consistent with all applicable laws, to
the Company by the Company&#146;s independent auditors, and establish the fees and
other compensation to be paid to the independent auditors.</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>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Monitor the independence and performance of the Company&#146;s independent
auditors and internal audit function.</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>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Establish procedures for the receipt, retention, response to and treatment
of complaints, including confidential, anonymous submissions by the Company&#146;s
employees, regarding accounting, internal controls, disclosure or auditing
matters, and provide an avenue of communication among the independent auditors,
management, the internal audit function and the Board of Directors.</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>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Prepare an audit committee report as required by the Securities and Exchange
Commission (the &#147;SEC&#148;) to be included in the Company&#146;s annual proxy statement.</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>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Monitor the Company&#146;s compliance with legal and regulatory requirements.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Committee has the authority to conduct any investigation appropriate to fulfilling its
responsibilities, and it has direct and confidential access to the independent auditors as well as
officers and employees of the Company. The Committee has the authority to retain, at the Company&#146;s
expense, special legal, accounting or other consultants or experts it deems necessary
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->I-1 <!-- /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">in the performance of its duties. The Company shall at all times make adequate provisions for the
payment of all fees and other compensation, approved by the Committee, to the Company&#146;s independent
auditors in connection with the issuance of its audit report, or to any consultants or experts
employed by the Committee.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>II. Structure and Operations</B>
</DIV>


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

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall be comprised of three or more directors as determined by the Board, each
of whom shall be determined by the Board meet the independence and experience requirements of the
SEC, the New York Stock Exchange and the Corporate Governance Guidelines of the Board (as each may
be modified or supplemented). All members of the Committee shall have a basic understanding of
finance and accounting and be able to read and understand fundamental financial statements of the
sort published by the Company at the time of their appointment to the Committee, and at least one
member of the Committee shall have accounting or related financial management expertise and qualify
as an &#147;audit committee financial expert&#148; in accordance with the requirements of the SEC and other
applicable rules (as may be modified or supplemented).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Director may serve as a member of the Committee if such Director serves on the audit
committee of more than two other public companies.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Committee members shall be appointed by the Board on the recommendation of the Nominating
Corporate Governance Committee of the Board. A Committee member shall serve until such member&#146;s
successor is duly appointed or until such member&#146;s earlier resignation, death or removal. The
members of the Committee may be removed, with or without cause, by majority vote of the Board.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a Committee Chair is not designated by the Board, the members of the Committee may
designate a Chair by majority vote of the Committee members.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall meet at least four times annually, or more frequently as circumstances
dictate. A majority of the members of the Committee shall constitute a quorum. The Chairman of
the Board or any member of the Committee may call meetings of the Committee. All meetings may be
held telephonically. The Committee may act by unanimous written consent, when deemed necessary or
desirable by the Committee or its Chair.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall meet privately in executive session at least four times annually with
management, the manager of internal auditing, the independent auditors, and as a committee to
discuss any matters that the Committee or each of these groups believe should be discussed. In
addition, the Committee, or at least its Chair, shall communicate with management and the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->I-2 <!-- /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">independent auditors quarterly to review the Company&#146;s financial statements and significant
findings based upon the independent auditors&#146; review procedures.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee may request any officer or employee of the Company or the Company&#146;s counsel to
attend a meeting of the Committee or to meet with any member of, or consultants to, the Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Chair of the Committee, with input from the other members of the Committee as well as the
Chief Financial Officer, the General Counsel, the Internal Audit Group, the Risk Mitigation Group
and the independent auditor, shall develop the agenda for each Committee Meeting.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall not be authorized to create any subcommittees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>III. Audit Committee Responsibilities and Duties</B>
</DIV>


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

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Review the Company&#146;s annual audited financial statements prior to filing or release,
including the Company&#146;s disclosures under &#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations.&#148; Review should include discussion with management and the
independent auditors of significant issues regarding critical accounting estimates, accounting
principles, practices and judgments, including, without limitation, a review with the independent
auditors of any auditor report to the Committee required under rules of the Securities and Exchange
Commission (as may be modified or supplemented). Review should also include review of the
independence of the independent auditors (see item 11 below) and a discussion with the independent
auditors of the conduct of their audit (see item 12 below). Based on such review determine whether
to recommend to the Board that the annual audited financial statements be included in the Company&#146;s
Annual Report on Form 10-K filed under the rules of the Securities and Exchange Commission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;In consultation with management, the independent auditors and the internal auditors,
consider the integrity of the Company&#146;s financial reporting processes and controls. Discuss
significant financial risk exposures and the steps management has taken to monitor, control and
report such exposures. Review significant findings prepared by the independent auditors and the
internal audit function together with management&#146;s responses. Review any significant changes to
the Company&#146;s auditing and accounting policies. Resolve disagreements, if any, between management
and the independent auditors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;Review with financial management and the independent auditors the Company&#146;s quarterly
earnings releases and financial statements prior to filing or release, including the use of &#147;pro
forma&#148; or &#147;adjusted&#148; non-GAAP information. The Committee may designate a member of the Committee to
represent the entire Committee for purposes of this review.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->I-3 <!-- /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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;Review any exceptions to the certifications required of the Chief Executive Officer and
Chief Financial Officer in connection with the filings of annual and quarterly financial statements
with the Securities and Exchange Commission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;Periodically review and discuss financial information and earnings guidance provided to
analysts and rating agencies. The Committee may designate a member of the Committee to represent
the entire Committee for purposes of this review.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;Review and reassess the adequacy of this Charter at least annually and submit any
recommended changes herein to the Board at its fourth regularly scheduled meeting in each year.
Submit the Charter to the Board of Directors for approval and cause the Charter to be approved at
least once every three years in accordance with the regulations of the Securities and Exchange
Commission and the New York Stock Exchange (as may be modified or supplemented).
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;The Company&#146;s independent auditors are directly accountable to the Committee and the Board
of Directors. The Committee shall review the independence and performance of the independent
auditors, annually appoint the independent auditors and approve any discharge of auditors when
circumstances warrant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;The Committee shall set clear hiring policies for employees or former employees of the
independent auditors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;Approve the fees and other significant compensation to be paid to the independent auditors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;Approve the independent auditors&#146; annual audit plan, including scope, staffing, locations
and reliance upon management and the internal audit function.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;On an annual basis, review and discuss with the independent auditors all significant
relationships the auditors have with the Company that could impair the auditors&#146; independence.
Such review should include receipt and review of a report from the independent auditors regarding
their independence consistent with Independence Standards Board Standard I (as may be modified or
supplemented). All engagements for non-audit services by the independent auditors must be approved
by the Committee prior to the commencement of services. The Committee may designate a member of
the Committee to represent the entire Committee for purposes of approval of non-audit services,
subject to review by the full Committee at the next regularly scheduled meeting. The Company&#146;s
independent auditors may not be engaged to perform prohibited activities under the Sarbanes-Oxley
Act of 2002 or the rules of the Public Company Accounting Oversight Board or the Securities and
Exchange Commission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;Prior to filing or releasing annual financial statements, discuss the results of the audit
with the independent auditors, including a discussion of the matters required to be communicated to
audit committees in accordance with SAS 61 (as may be modified or supplemented). Prior to filing
or releasing quarterly unaudited financial statements, discuss the
</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">independent auditors matters required to be communicated to audit committees in accordance
with SAS 71 (as may be modified or supplemented).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;Obtain from the independent auditors assurance that Section&nbsp;10A of the Securities Exchange
Act of 1934 (which requires the independent auditor, if it detects or becomes aware of any illegal
act, to assure that the Committee is adequately informed and to provide a report if the independent
auditor has reached specified conclusions with respect to such illegal acts) has not been
implicated.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;Consider the independent auditors&#146; judgment about the quality and appropriateness of the
Company&#146;s accounting principles, including acceptable alternatives and critical accounting
estimates as applied in its financial reporting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Internal Audit Function and Legal Compliance</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;Review the budget and activities of the Company&#146;s internal audit function, audit plans,
procedures and result, and coordination with independent auditors. Regularly review the continued
overall effectiveness of the internal audit function as required under relevant law and the listing
standards of the New York Stock Exchange.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;Review significant reports prepared by the internal audit department together with
management&#146;s response and follow-up to these reports.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.&nbsp;Review reports received by the Company&#146;s Risk Mitigation Group with respect to complaints
regarding accounting, internal accounting controls, disclosure controls and procedures, auditing
matters or violations of the Company&#146;s Code of Ethics (as defined in the Company&#146;s Code of Business
Conduct for Members of the Board of Directors and Executive Officers)(collectively, &#147;Complaints&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.&nbsp;On at least an annual basis, review with the Company&#146;s counsel, any legal matters that
could have a significant impact on the Company&#146;s financial statements, the Company&#146;s compliance
with applicable laws and regulations and inquiries received from regulators or governmental
agencies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.&nbsp;Review and assess at least annually the Company&#146;s Code of Ethics, recommend changes in the
Code of Ethics as conditions warrant and confirm that management has established a system to
monitor compliance with the Code of Ethics by officers and relevant employees of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.&nbsp;Review management&#146;s monitoring of the Company&#146;s compliance with the Code of Ethics, and
confirm that management has a review system in place to maximize the likelihood that the Company&#146;s
financial statements, reports, other financial information and disclosures disseminated to
governmental organizations and the public satisfy applicable legal requirements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.&nbsp;Facilitate and review, as appropriate, the Company&#146;s procedures for the receipt, retention
and treatment of Complaints received by the Company from (a)&nbsp;Company employees through the
Company&#146;s Risk Mitigation Group or (b)&nbsp;Company employees or others through
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->I-5 <!-- /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">confidential, anonymous submission(s) to a post office box (or confidential e-mail) directly
to the Chair of the Audit Committee.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.&nbsp;Confirm that any action requested by the Chair in respect of any alleged Complaint has
been taken as requested by the Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.&nbsp;Serve as the Board&#146;s qualified legal compliance committee pursuant to which an attorney
for the Company may report purported evidence of a material violation of securities law, breach of
fiduciary duty or similar violation by the Company or one of its agents.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24.&nbsp;Annually prepare the report to shareholders as required by the rules of the Securities and
Exchange Commission to be included in the Company&#146;s annual proxy statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25.&nbsp;Review and approve all related-party transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26.&nbsp;Perform any other activities consistent with this Charter, the Company&#146;s bylaws and
governing law, as the Committee or the Board deems necessary or appropriate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27.&nbsp;Maintain minutes of meetings and periodically report to the Board of Directors on
significant results of the foregoing activities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28.&nbsp;The Committee shall be evaluated through the annual evaluation process conducted by the
Nominating/Corporate Governance Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Limitation of Audit Committee&#146;s Role</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While the Committee has the responsibilities and powers set forth in this Charter, it is not
the duty of the Committee to conduct audits or to determine that the Company&#146;s financial statements
are complete and accurate and are in accordance with generally accepted accounting principles.
Management is responsible for the Company&#146;s financial reporting process, including its system of
internal controls, and for the preparation of financial statements in accordance with GAAP.
Management is also responsible for assuring compliance with laws and regulations and the Company&#146;s
corporate policies, subject to the Committee&#146;s oversight in the areas covered by this Charter. The
independent auditors are responsible for expressing an opinion on those financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Committee members are not employees of the Company or accountants or auditors by profession or
experts in the fields of accounting or auditing. They rely, and are entitled to rely, on
management&#146;s representation that the financial statements have been prepared with integrity and
objectivity and in conformity with GAAP and on the representations of the independent auditors
included in their report on the Company&#146;s financial statements.


The Committee&#146;s oversight does not provide it with an independent basis to determine that
management has maintained appropriate accounting and financial reporting principles or policies, or
appropriate internal controls and procedures designed to assure compliance with GAAP and applicable
laws and regulations. Furthermore, the Committee&#146;s considerations and discussions with management
and the independent auditors do not assure that the Company&#146;s

financial statements are presented in accordance with GAAP or that the audit of the Company&#146;s
financial statements has been carried out in accordance with GAAP.
</DIV>

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

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


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><FONT style="font-variant: SMALL-CAPS"><U><B>Appendix&nbsp;II</B></U></FONT>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>NATIONAL OILWELL VARCO, INC.<BR>
(&#147;Company&#148;)</B>
</DIV>

<DIV align="left">
<A name="121"></A>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>CHARTER OF THE COMPENSATION COMMITTEE<BR>
OF THE BOARD OF DIRECTORS</B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Amended and Restated by the Board of Directors on November&nbsp;14, 2007</B>
</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"><B>I.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Purpose</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Compensation Committee (the &#147;Committee&#148;) is appointed by the Board of Directors (the &#147;Board&#148;)
to assist the Board in fulfilling its oversight responsibilities. The Committee&#146;s primary duties
and responsibilities are to:
</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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Discharge the Board&#146;s responsibilities relating to compensation of the
Company&#146;s directors and executive officers.</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>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Approve and evaluate all compensation of directors and executive officers,
including salaries, bonuses, and compensation plans, policies and programs of
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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Administer all plans of the Company under which shares of common stock may
be acquired by directors or executive officers of the Company.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Committee has the authority, at the Company&#146;s expense and to the extent it deems necessary or
appropriate, to retain special legal, compensation or other consultants to advise the Committee.
The Company shall at all times make adequate provisions for the payment of all fees and other
compensation, approved by the Committee, to any consultants or experts employed by the Committee.
</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"><B>II.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Structure and Operations</B></TD>
</TR>

</TABLE>
</DIV>

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

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Committee shall be comprised of three or more directors as determined by the Board, each of
whom shall be determined by the Board to meet the independence requirements of the Securities and
Exchange Commission, the New York Stock Exchange and the Corporate Governance Guidelines of the
Board (as each may be modified or supplemented). In addition, each Committee member shall also be
&#147;non-employee directors&#148; as defined by Rule&nbsp;16b-3 under the Securities Exchange Act of 1934 and
&#147;outside directors&#148; as defined in section 162(m) of the Internal Revenue Code.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->I-7<!-- /Folio -->
</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>Appointment and Removal</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Committee members shall be appointed by the Board on the recommendation of the
Nominating/Corporate Governance Committee of the Board. A Committee member shall serve until such
member&#146;s successor is duly appointed or until such member&#146;s earlier resignation, death or removal.
The members of the Committee may be removed, with or without cause, by majority vote of the Board.
</DIV>

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

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a Committee Chair is not designated by the Board, the members of the Committee may
designate a Chair by majority vote of the Committee members.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall meet at least twice annually, or more frequently as circumstances dictate.
A majority of the members of the Committee shall constitute a quorum. The Chairman of the Board
or any member of the Committee may call meetings of the Committee. All meetings may be held
telephonically. The Committee may act by unanimous written consent, when deemed necessary or
desirable by the Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Chair of the Committee, with input from the other members of the Committee and the
representatives of the Company&#146;s senior management designated by the Chief Executive Officer, shall
develop the agenda for each Committee meeting. The Committee may request any officer or employee
of the Company or the Company&#146;s counsel to attend a meeting of the Committee or to meet with any
member of, or consultants to, the Committee.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall not be authorized to create any subcommittees.
</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"><B>III.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Compensation Committee Responsibilities and Duties</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;<U>Equity-based Plans.</U> The Committee shall make recommendations to the Board with
respect to the adoption of equity-based plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;<U>Plan Administration.</U> The Committee shall have full and final authority in
connection with the administration of all plans of the Company under which incentive compensation
and shares of common stock or other equity securities of the Company may be issued to directors and
executive officers. In furtherance of the foregoing, the Committee shall, in its sole discretion,
grant options and make awards of shares under the Company&#146;s stock plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;<U>Director Compensation.</U> The Committee shall annually assess the adequacy and
suitability of the Company&#146;s compensation plan for members of its Board. In carrying out this
responsibility, the Committee shall consider whether the Company&#146;s director compensation plan is
sufficient to enable the Company to attract talented and qualified individuals to serve on the
Board and its standing committees. Where the Committee considers it appropriate, the Committee may
engage compensation consultants to evaluate the adequacy of the Company&#146;s
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->I-8<!-- /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">director compensation plan. The Committee shall prepare, as appropriate, modifications to the
current director compensation plan and submit any such modifications to the full Board for its
disposition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;<U>Chief Executive Officer (&#147;CEO&#148;) Compensation and Goals.</U> The Committee shall
annually review and approve corporate goals and objectives relevant to CEO compensation, solicit
input from all directors of the Company, evaluate the CEO&#146;s performance in light of those goals and
objectives, recommend to the non-management members of the Board the CEO&#146;s total annual
compensation package and thereafter the Chair of the Committee shall provide development feedback
to the CEO. In determining the long-term incentive component of CEO compensation, the Committee
will consider the Company&#146;s performance and relative shareholder return, the value of similar
incentive awards to CEOs at comparable companies, and the awards given to the CEO in past years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;<U>Approval of Other Executive Officer Compensation.</U> The Committee shall annually
review with the CEO and approve for the executive officers of the Company other than the CEO: (a)
annual base salary level, (b)&nbsp;the annual incentive opportunity level, (c)&nbsp;the long-term incentive
opportunity level, (d)&nbsp;employment agreements, and change in control agreements/provisions, in each
case as, when and if appropriate, and (e)&nbsp;any special or supplemental benefits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;<U>Total Amounts Payable on Termination of Employment.</U> The Committee shall review on
an annual basis or such other time period as it deems appropriate, the total amounts payable to
executive officers under all compensation and benefit plans and agreements under various
termination of employment scenarios, including retirement and change of control.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;<U>Review of Compensation Discussion and Analysis; Annual Report.</U> The Committee shall
review and discuss the Compensation Discussion and Analysis with management and based on such
review and discussions recommend to the Board that such analysis be included in the Company&#146;s proxy
statement. The foregoing matters shall be evidenced in the Committee&#146;s report, which shall be
included in the Company&#146;s proxy statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;<U>Other Activities.</U> The Committee shall perform any other activities consistent with
this Charter, the Company&#146;s bylaws and governing law, as the Committee or the Board deems necessary
or appropriate, including a review and assessment of this Charter at least annually and the
submission of any recommended changes therein to the Board at its fourth regularly scheduled
meeting in each year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;<U>Committee Minutes and Reports.</U> The Committee shall maintain minutes of meetings
and periodically report to the Board on significant results of the foregoing activities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;<U>Section&nbsp;16(b) Approvals</U>. The Committee shall pre-approve all transactions in the
Company&#146;s securities, by and between the Company and any director and executive officer of the
Company, for which exemptive treatment from Section 16(b) of the Exchange Act is sought.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;<U>Evaluations</U>. This Committee shall be evaluated through the annual evaluation
process administered by the Nominating/Corporate Governance Committee.
</DIV>

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

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

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><FONT style="font-variant: SMALL-CAPS"><U><B>Appendix&nbsp;III</B></U></FONT>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>NATIONAL OILWELL VARCO, INC.<BR>
(&#147;Company&#148;)</B>
</DIV>

<DIV align="left">
<A name="122"></A>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>CHARTER OF THE NOMINATING/CORPORATE<BR>
GOVERNANCE COMMITTEE<BR>
OF THE BOARD OF DIRECTORS</B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Amended and Restated by the Board of Directors on November&nbsp;16, 2005</B>
</DIV>


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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Nominating/Corporate Governance Committee (the &#147;Committee&#148;) is appointed by the Board of
Directors (the &#147;Board&#148;) to assist the Board in fulfilling its oversight responsibilities. The
Committee&#146;s primary duties and responsibilities are to:
</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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Ensure that the Board and its committees are appropriately constituted so
that the Board and Directors may effectively meet their fiduciary obligations
to shareholders and 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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Identify individuals qualified to become Board members and recommend to the
Board director nominees for each annual meeting of shareholders and candidates
to fill vacancies in the Board;</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>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Recommend to the Board annually the Directors to be appointed to Board
committees;</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>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Monitor, review, and recommend, when necessary, any changes to the Corporate
Governance Guidelines; 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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Monitor and evaluate annually the effectiveness of the Board and management
of the Company, including their effectiveness in implementing the policies and
principles of the Corporate Governance Guidelines.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Committee shall have the sole authority, at the Company&#146;s expense, to retain and terminate, as
necessary, any search firm to be used to assist the Committee in identifying director candidates,
including the sole authority to approve such search firm&#146;s fees and other retention terms. The
Committee shall also have authority to obtain advice and assistance from internal or external
legal, accounting or other advisors it deems necessary in the performance of its duties. The
Company shall at all times make adequate provisions for the payment of all fees and other
compensation, approved by the Committee, to any consultants or experts employed by the Committee.
</DIV>


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

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




<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"><B>II.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Structure and Operations</B></TD>
</TR>

</TABLE>
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall be comprised of three or more directors as determined by the Board, each
of whom shall be determined by the Board to meet the independence requirements of the Securities
and Exchange Commission, the New York Stock Exchange and the Corporate Governance Guidelines of the
Company (the &#147;Guidelines&#148;) (as each may be modified or supplemented).
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Committee members shall be appointed by the Board on the recommendation of the Committee and
shall serve until such member&#146;s successor is duly appointed or until such member&#146;s earlier
resignation, death or removal. The members of the Committee may be removed, with or without cause,
by a majority vote of the Board.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a Committee Chair is not designated by the Board, the members of the Committee may
designate a Chair by majority vote of the Committee members.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall meet at least twice annually, or more frequently as circumstances dictate.
The Chairman of the Board or any member of the Committee may call meetings of the Committee. All
meetings may be held telephonically. A majority of the members of the Committee shall constitute a
quorum. The Committee may act by unanimous written consent, when deemed necessary or desirable by
the Committee or its Chair.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Chair of the Committee, with input from the other members of the Committee and the
representatives of the Company&#146;s senior management designated by the Chief Executive Officer, shall
develop the agenda for each Committee meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee may request any officer or employee of the Company or the Company&#146;s counsel to
attend a meeting of the Committee or to meet with any member of, or consultants to, the Committee.
</DIV>

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

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall not be authorized to create any subcommittees.
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->I-11<!-- /Folio -->
</DIV>

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


<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"><B>III.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Nominating/Corporate Governance Committee Responsibilities and Duties</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Recommend Nominees for Election as Directors</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Committee shall recommend to the Board the director nominees for each annual meeting of
shareholders and persons to fill vacancies in the Board that occur between meetings of
shareholders. In discharging this responsibility, the Committee shall:
</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>With respect to directors to be nominated to stand for re-election, consider
matters such as attendance at Board and committee meetings, conflicts of interest, and
other relevant factors.</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>Determine the desired skills and attributes for new directors to serve on the
Board;</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">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Evaluate prospective Board members, including candidates suggested by
shareholders, whose skills and attributes reflect those desired;</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">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Interview prospective candidates and ascertain whether they meet the
qualifications for director set forth in the Guidelines;</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">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Secure approval by the entire Board of each nominee for election as a Director
or each person selected to fill a vacancy on the Board; 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">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Approve extending an invitation to join the Board if the invitation is proposed
to be extended by any person other than the Chair of the Committee.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Recommend Appointments</I></B>
</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">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Committee, in consultation with the Chair of the Board, and after
considering the desires, experience and expertise of individual Directors, shall make a
recommendation and report to the Board regarding the assignment of Directors to
Committees, including the designation of Committee Chairs. Committees and their Chairs
shall be appointed by the Board of Directors annually at the annual organizational
meeting of the Board of Directors. It is the Board&#146;s policy that only Directors who at
all times meet the independence and other requirements of applicable laws, listing
requirements and the Guidelines shall serve on the Company&#146;s standing Committees.</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">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Annually, the Committee shall recommend to the non-employee Directors an
independent Director to serve as the Company&#146;s Lead Director.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Evaluate the Board, its Committees and their Members</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Committee shall conduct an annual review and evaluation of the conduct and performance
of the Board, its members, the Board&#146;s committees and their members based upon completion by
each director of an evaluation form circulated in connection with such review and
evaluation. The evaluation form shall include questions designed to solicit an assessment
of:
</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">9.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The size, composition and independence of the Board and each committee of which
a Director is a member;</TD>
</TR>

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

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</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">10.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The adequacy of committee charters;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">11.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Access to and review of information from management by the Board and each
committee on which a Director is a member, and the quality of such information;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">12.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The performance of the members of the Board and each committee of which each
Director is a member;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">13.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Board&#146;s responsiveness to shareholder concerns;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">14.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Maintenance and implementation of the Company&#146;s Code of Ethics (as defined in
Company&#146;s Code of Business Conduct and Ethics for Members of the Board of Directors and
Executive Officer); 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="1%" nowrap align="left">15.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Maintenance and implementation of the Guidelines.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The review shall seek to identify specific areas, if any, in need of improvement or
strengthening, including the need for the creation of additional committees, and the results
shall be summarized in a report by the Committee that is presented to the full Board during
the fourth regularly scheduled Board meeting in each year. The Board shall discuss the
report and consider any recommendations set forth therein. The Board may request that any
member who receives unfavorable performance reviews from at least a majority of the other
members of the Board or any committee upon which he or she serves resign from the Board or
any such committee.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Monitor and Evaluate the Corporate Governance Matters</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Committee shall review the Company&#146;s corporate governance documents, policies and
procedures. In carrying out this responsibility, the Committee shall:
</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">16.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Review periodically the adequacy of the certificate of incorporation and bylaws
of the Company and recommend to the Board, as necessary, that it propose amendments to
those documents for consideration by the shareholders;</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">17.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Determine whether the Guidelines are being effectively adhered to and
implemented;</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">18.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Ensure that the Guidelines are appropriate for the Company and comply with
applicable laws, regulations and listing standards;</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">19.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Recommend any desirable changes in the Guidelines to the Board during the
fourth regularly scheduled Board meeting in each year;</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">20.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Consider any other corporate governance issues that may arise from time to
time, and develop appropriate recommendations to the Board.</TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->I-13<!-- /Folio -->
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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>Board Orientation and Continuing Education</I></B>
</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">21.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Committee, working with the Company&#146;s senior management, shall be
responsible for the development of an orientation program for new Directors, which
shall be designed both to familiarize new Directors with the full scope of the
Company&#146;s business and key challenges and to assist new Directors in developing and
maintaining the skills necessary or appropriate for the discharge of their
responsibilities. The program should include background material, meetings with senior
management and visits to the Company&#146;s key facilities.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Review of Management Succession Plans</I></B>
</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">22.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Committee shall be responsible for planning for succession in the senior
management ranks of the Company, including the office of Chief Executive Officer. The
Chief Executive Officer shall report to the Committee at the time of the fourth
regularly scheduled Board meeting in each year regarding the processes in place to
identify talent within the Company to succeed to senior management positions and the
information developed during the current calendar year pursuant to those processes.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Other Nominating/Corporate Governance Committee Responsibilities</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Committee shall discharge the following additional responsibilities:
</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">23.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Perform any other activities consistent with this Charter, the Company&#146;s bylaws
and governing law, as the Committee or the Board deems necessary or appropriate,
including a review and assessment of this Charter at least annually and the submission
of any recommended changes therein to the Board at its fourth regularly scheduled
meeting in each year.</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">24.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Consider at least annually and recommend to the Board suggested changes, if
any, in the size of the Board.</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">25.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Review the corporate governance disclosures in the Company&#146;s proxy statement
for each annual meeting of shareholders.</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">26.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Approve service by the Chief Executive Officer or any other member of senior
management on the board of directors of any company if the Committee deems such service
appropriate and desirable under the circumstances.</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">27.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Receive, evaluate and formulate a recommendation to the Board regarding any
resignation letter received from a non-management director upon his or her resignation
or retirement from, or termination of, his or her principal current employment, or
other similar change in professional occupation or association.</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">28.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Maintain minutes of meetings and periodically report to the Board of Directors
on significant results of the foregoing activities.</TD>
</TR>

</TABLE>
</DIV>


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



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


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><U><FONT style="font-variant: SMALL-CAPS"><B>Appendix&nbsp;IV</B></FONT></U>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>NATIONAL OILWELL VARCO, INC.<BR>
(&#147;Company&#148;)</B>
</DIV>

<DIV align="left">
<A name="123"></A>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>CORPORATE GOVERNANCE GUIDELINES</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>As Amended and Restated by the Board of Directors on February&nbsp;19, 2008</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>I. Objectives Sought to be Achieved</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board of Directors of the Company (the &#147;Board&#148;) has adopted these guidelines to promote the
effective functioning of the Board and its committees.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>II. Composition, Structure and Qualifications of the Board of Directors</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;<B><I>Size of the Board. </I></B>The bylaws provide that the number of Directors shall be determined
from time to time by resolution of the Board. The Board believes that at the present time the
optimal number of Directors is nine, but the Board will review this matter annually and will
increase or decrease the number of Directors as appropriate after considering the recommendation of
the Nominating/Corporate Governance Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;<B><I>Board Membership Criteria. </I></B>It is the policy of the Board of Directors that the Board will
reflect the following characteristics at the earliest practicable time but in no event later than
the time, if any, that each of the following becomes a legal or regulatory requirement:
</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>Each Director shall have a reputation for integrity, honesty, candor, fairness and
discretion;</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>Each Director shall be knowledgeable, or willing to become so quickly, in the
critical aspects of the Company&#146;s businesses and operations;</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>Each Director shall be experienced and skillful in serving as a competent overseer
of, and trusted advisor to, the senior management of at least one substantial
enterprise;</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>Only one member of the Board shall be an executive officer or other employee of the
Company. It is anticipated that under normal circumstances that employee shall be the
Chief Executive Officer;</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>Directors will be diverse in gender, race and background, consistent with the
Board&#146;s requirements for knowledgeable, experienced, motivated and ethical members;</TD>
</TR>


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

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


<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 majority of the Directors shall meet the standards of independence from the
Company and its management set forth under the section entitled &#147;Director Independence&#148;
below; 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>Directors will possess a range of talent, skill and expertise sufficient to provide
sound and prudent guidance with respect to the full scope of the Company&#146;s operations
and interests.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;<B><I>Director Independence.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. <I>Independence Generally. </I>A majority of the members of the Board shall be
&#147;independent&#148; within the meaning of the rules (the &#147;Listing Rules&#148;) of the New York Stock
Exchange (&#147;NYSE&#148;). Directors who do not meet the NYSE&#146;s independence standards also make
valuable contributions to the Board and to the Company by reason of their experience and
wisdom. For a Director to be deemed &#147;independent,&#148; the Board shall affirmatively determine
that the Director has no material relationship with the Company or its affiliates or any
member of the senior management of the Company or his or her affiliates. In making this
determination, the Board shall not deem a Director to be independent if he or she:
</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>Is, or within the lesser of the past three years or the period since the effective
date of the Listing Rules has been, employed by the Company or any of its affiliates;</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>Is, or within the lesser of the past three years or the period since the effective
date of the Listing Rules has been, affiliated with or employed by a present or former
internal or external auditor of the Company or any of its affiliates;</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>Currently is employed, or within the lesser of the past three years or the period
since the effective date of the Listing Rules was employed, as an executive officer of
another company where any of the present executives of the Company or any of its
affiliates serves on the compensation committee of that 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>Is, or within the lesser of the last three years or the period since the effective
date of the Listing Rules has been, an executive officer or employee of another company
who makes payments to, or receives payments from the Company for property or services
in an amount which, in any single fiscal year exceeds the greater of at least 2% or $1
million of such other company&#146;s consolidated gross revenues for that year;</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>Receives directly or indirectly any consulting, advisory or other compensatory fee
from the Company or an affiliate of the Company (other than compensation received as a
Director); 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>Is a member of the immediate family of any person who would not qualify as
independent under the foregoing standards; provided, that employment of an immediate
family member of a Director in a non-officer position shall not preclude the Board from
determining that the Director is independent.</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->I-16<!-- /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; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. <I>Certain Definitions. </I>For purposes of these Guidelines, the terms:
</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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;affiliate&#148; means any corporation or other entity that controls, is controlled
by or is under common control with the Company, as evidenced by the power to elect
a majority of the board of directors or comparable governing body of such entity;
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>&#147;immediate family&#148; means spouse, parents, children, siblings, mothers- and
fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law and anyone
(other than employees) sharing a person&#146;s home.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. <I>Annual Review. </I>The Board shall undertake an annual review of the independence of
all non-employee Directors. In advance of the meeting at which this review occurs, each
non-employee Director shall be asked to provide the Board with full information regarding
the Director&#146;s business and other relationships with the Company and its affiliates and with
senior management and their affiliates to enable the Board to evaluate the Director&#146;s
independence. Following such annual review, only those Directors whom the Board
affirmatively determines have no material relationship with the Company will be considered
independent Directors, subject to additional qualifications prescribed under the Listing
Rules. The basis for any determination that a relationship is not material will be
published in the Company&#146;s annual proxy statement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. <I>Change in Circumstances. </I>Directors have an affirmative obligation to inform the
Board of any material changes in their circumstances or relationships that may impact their
designation by the Board as &#147;independent.&#148; This obligation includes all business
relationships among Directors, between Directors and the Company and its affiliates or
members of senior management and their affiliates, whether or not such business
relationships are subject to the approval requirement set forth in the provision below
entitled &#147;Directors Who Change Their Corporate Affiliations.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;<B><I>Additional Independence Criteria for Audit Committee Members</I></B>. No Director may serve on the
Audit Committee of the Board unless such director meets all of the criteria established for audit
committee service by the Sarbanes-Oxley Act, any other law and any rule or regulation of any
regulatory body or self-regulatory body applicable to the Company, including the Securities and
Exchange Commission (the &#147;SEC&#148;) and the NYSE.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;<B><I>Directors Who Change Their Corporate Affiliations</I></B><I>. </I>Each Director shall submit to the
Nominating/Corporate Governance Committee for its consideration a letter of resignation upon
resignation or retirement from, or termination of, the Director&#146;s principal current employment, or
other similarly material changes in professional occupation or association. Following receipt of a
recommendation from the Nominating/Corporate Governance Committee, the Board shall be free to
accept or reject the letter of resignation. The Board shall act promptly with respect to each such
letter of resignation and shall promptly notify the Director concerned of its decision.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.&nbsp;<B><I>Age, Term and Other Limits. </I></B>These Guidelines have been adopted to promote high standards
of professionalism and commitment in regards to service by the Company&#146;s
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->I-17<!-- /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">Directors and Executive Officers. A Director shall not be nominated to a new term if he or she
would be age 70 or older at any time during such new term.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G.&nbsp;<B><I>Selection of Directors.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The Nominating/Corporate Governance Committee shall be responsible for identifying
candidates for membership on the Board. Prospective candidates for Director may be
initially identified by the Chair of the Board or any Director, shall be interviewed by
members of the Nominating/Corporate Governance Committee and shall be recommended by that
committee to the full Board for its consideration and approval. Invitations for membership
on the Board shall be extended by the Chair of the Board or such other person as may be
designated by the Nominating/Corporate Governance Committee.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The Board recognizes that it is important for the Board to balance the benefits of
continuity with the benefits of fresh viewpoints and experience. In selecting Directors,
whether new candidates or continuing Directors, the Board shall give the highest priority to
meeting the standards and qualifications set forth at the beginning of these Guidelines. In
this connection, the Board shall seek candidates whose occupation, service on other boards,
or other time constraints will not adversely affect their ability to dedicate the requisite
time to service on this Board.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. The Board shall nominate for election or reelection only candidates who agree to
tender, promptly following the annual meeting at which they are elected or reelected as
director, irrevocable resignations that will be effective upon (i)&nbsp;the failure to receive
the required vote at the next annual meeting at which they face reelection and (ii)&nbsp;Board
acceptance of such resignation. In addition, the Board shall fill director vacancies and
new directorships only with candidates who agree to tender, promptly following their
appointment to the Board, the same form of resignation tendered by other directors in
accordance with these Corporate Governance Guidelines.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H.&nbsp;<B><I>Voting for Directors. </I></B>In accordance with the Company&#146;s Bylaws, a nominee for director shall
be elected to the Board if the votes cast for such nominee&#146;s election exceed the votes cast against
such nominee&#146;s election at any meeting for the election of directors at which a quorum is present,
<I>provided that </I>if as of a date that is fourteen (14)&nbsp;days in advance of the date the Corporation
files its definitive proxy statement with the Securities and Exchange Commission (regardless of
whether or not the proxy statement is thereafter revised or supplemented) the number of nominees
exceeds the number of directors to be elected, the directors shall be elected by the vote of a
plurality of the shares represented in person or by proxy at any such meeting and entitled to vote
on the election of directors. The Board expects a director to tender his or her resignation if he
or she fails to receive the required number of votes for reelection.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If an incumbent director fails to receive the required votes for reelection, the
Nominating/Corporate Governance Committee shall promptly determine whether to accept the director&#146;s
resignation offer and will submit such recommendation for prompt consideration by the Board. In
considering whether to accept or reject the tendered resignation, the
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->I-18<!-- /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">Nominating/Corporate Governance Committee will consider all factors deemed relevant by the members
of the Nominating/Corporate Governance Committee including, without limitation, the stated reasons
why stockholders voted against election of such director, the length of service and the
qualifications of the director whose resignation has been tendered, the director&#146;s contributions to
the Company, applicable Bylaw provisions, and these Corporate Governance Guidelines.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board will act on the Nominating/Corporate Governance Committee&#146;s recommendation no later than
ninety (90)&nbsp;days following certification of the shareholder vote. In considering the
Nominating/Corporate Governance Committee&#146;s recommendation, the Board will consider the factors
considered by the Nominating/Corporate Governance Committee and such additional information and
factors the Board believes to be relevant. Following the Board&#146;s decision on the
Nominating/Corporate Governance Committee&#146;s recommendation, the Company will promptly disclose the
Board&#146;s decision whether to accept the director&#146;s resignation as tendered (providing a full
explanation of the process by which the decision was reached and, if applicable, the reasons for
rejecting the tendered resignation) in a Form 8-K filed with the Securities and Exchange
Commission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board expects any director who fails to receive the required vote for reelection to abstain
from participating in any decision regarding his or her resignation. If a majority of the members
of the Nominating/Corporate Governance Committee failed to receive more votes cast &#147;for&#148; than
&#147;against&#148; his or her election or reelection at the same election, the Board of Directors will
appoint a Board committee of the independent directors who are on the Board who did receive more
votes cast &#147;for&#148; than &#147;against&#148; his or her election or reelection solely for the purposes of
considering the tendered resignations and will recommend to the Board whether to accept or reject
them. This Board committee may, but need not, consist of all of the independent directors who
received more votes cast &#147;for&#148; than &#147;against&#148; his or her election or reelection.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To the extent that one or more of the directors&#146; resignations are accepted by the Board, the
Nominating/Corporate Governance Committee will recommend to the Board whether to fill such vacancy
or vacancies or to reduce the size of the Board. Any such action shall be effected in accordance
with the applicable provisions of the Company&#146;s Certificate of Incorporation and Bylaws and these
Corporate Governance Guidelines. If a director&#146;s resignation is not accepted by the Board, such
director will continue to serve until the next annual meeting and until his successor is duly
elected, or his or her earlier resignation or removal.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This provision on voting for directors will be summarized or included in each proxy statement
relating to the election of directors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>III. Responsibilities of the Board of Directors</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;<B><I>Oversight Functions. </I></B>The Board of Directors has four regularly scheduled meetings a year
at which it reviews and discusses reports by management on the performance of the Company, its
plans and prospects, as well as immediate issues facing the Company. In addition to its general
oversight of management, the Board also performs a number of specific functions, including:
</DIV>

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

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

<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>Selecting, monitoring, evaluating, compensating, and, if necessary, replacing the
Chief Executive Officer and ensuring management succession in consultation with the
Nominating/Corporate Governance Committee and the Compensation Committee;</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>Selecting, monitoring, evaluating, compensating, and, if necessary, replacing the
other senior executives in consultation with the Chief Executive Officer;</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>Reviewing and approving management&#146;s strategic and business plans, including
developing a depth of knowledge of the businesses being served, understanding and
questioning the assumptions upon which such plans are based, and reaching an
independent judgment as to the probability that the plans can be realized;</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>Reviewing and approving the Company&#146;s financial objectives, plans, and actions,
including significant capital allocations and expenditures;</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>Establishing and approving the Company&#146;s policies regarding levels of delegated
authority;</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>Monitoring corporate performance against the Company&#146;s strategic and business plans,
including overseeing the Company&#146;s operating results on a regular basis to evaluate
whether its businesses are being properly managed;</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>Promoting ethical behavior and compliance with laws and regulations, auditing and
accounting principles, and the Company&#146;s own governing documents;</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>Reviewing, approving and periodically revising, as appropriate, the Company&#146;s
mission statement, these Guidelines and the charters of the Board&#146;s various standing
Committees;</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>Assessing the Board&#146;s own effectiveness in fulfilling these and other Board and
committee responsibilities; 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>Performing such other functions as are prescribed by law, or assigned to the Board
in the Company&#146;s governing documents.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board of Directors has delegated to the Chief Executive Officer, working with the other
executive officers of the Company and its affiliates, the authority and responsibility for managing
the business of the Company in a manner consistent with the standards set forth in these
Guidelines, and in accordance with any specific plans, instructions or directions of the Board.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;<B><I>Evaluation of Board Performance.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The Audit Committee shall periodically assess the Company&#146;s Code of Business Conduct
and Ethics for Members of the Board of Directors and Executive Officers (the &#147;Code&#148;) and the
other policies referred to in or constituting part of the
</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; margin-left: 2%">Company&#146;s Code of Ethics (as defined in the Code) to assure that each of them addresses
appropriate topics, contains compliance standards and procedures, and comports with relevant
law and the Listing Rules. Members of the Board of Directors shall act at all times in
accordance with the requirements of the Code of Ethics, which shall be applicable to each
Director. The Board may not waive the application of the Code of Ethics for any Executive
Officer or Director, but may determine that the substantive requirements of the Code of
Ethics are not contravened by a particular set of circumstances.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. The Nominating/Corporate Governance Committee shall conduct an annual review and
evaluation of the conduct and performance of the Board, its members, the Board&#146;s standing
committees and their members based upon completion by each Director of an evaluation form
circulated annually, that includes, among other things, an assessment of:
</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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The composition and independence of the Board and each standing committee of
which such Director is a member;</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="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Access to and review of information from management by the Board and each
standing committee of which a Director is a member, and the quality of such
information;</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="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The performance of the members of the Board and each standing committee of which
such Director is a member;</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="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Board&#146;s responsiveness to stockholder concerns;</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="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Maintenance and implementation of the Company&#146;s Code of Ethics; 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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Maintenance and implementation of these Guidelines.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The review shall seek to identify specific areas, if any, in need of improvement or strengthening
and the results shall be summarized in a report delivered by the Nominating/Corporate Governance
Committee to the full Board annually. The Board shall discuss the report and consider any
recommendations set forth therein. The Board may request that any member who receives unfavorable
performance reviews from at least a majority of the other members of the Board or any committee
upon which he or she serves resign from the Board or any such committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Service on the board of directors of any company by the Chief Executive Officer or any other member
of the Company&#146;s senior management shall be approved by the Nominating/Corporate Governance
Committee prior to the commencement of service on any such board.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;<B><I>Communications with Third Parties. </I></B>Generally, the Chief Executive Officer, the Chief
Financial Officer or one of their designees shall be the chief spokesperson for the Company, except
under extraordinary circumstances, in which event the Chair and/or the Lead Director shall serve as
the spokesperson for the Company.
</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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;<B><I>Access to Managers and Outside Advisors. </I></B>Each Director may consult with any manager or
employee or with any outside advisor to the Company at any time. If appropriate, it is expected
that the Director will inform the Chief Executive Officer when significant issues are being
discussed. The Board, as well as each Committee of the Board, shall have the right to retain, at
the Company&#146;s expense, such outside advisors as the Board or applicable Committee shall deem
appropriate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;<B><I>Selection and Annual Evaluation of Chief Executive Officer</I></B>.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The Chief Executive Officer should exhibit and have a reputation for dedication,
integrity, honesty, candor, fairness and discretion. The Chief Executive Officer should
also be knowledgeable or willing to become so quickly in the critical aspects of the
Company&#146;s businesses and operations. He or she should be experienced in serving in a
leadership position as a member of senior management of a substantial publicly held
corporation, including extensive experience in matters such as dealing with employees,
investors, customers, vendors, competitors, suppliers, rating agencies and regulatory
authorities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Annually, the Compensation Committee shall solicit information from each Director
regarding the performance of the Chief Executive Officer during the current year. The
Compensation Committee shall compile the information and present an evaluation of the Chief
Executive Officer&#146;s performance and a recommendation regarding the terms of his or her
continued employment to the independent members of the Board. Thereafter, the Compensation
Committee shall discuss its evaluation and the recommendation of the independent members of
the Board with the Chief Executive Officer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.&nbsp;<B><I>Management Succession. </I></B>The Nominating/Corporate Governance Committee shall be responsible
for planning for succession in the senior management ranks, including the office of the Chief
Executive Officer. The Chief Executive Officer shall be responsible for: (a)&nbsp;developing processes
to identify talent within the Company to succeed to senior positions in management; and
(b)&nbsp;annually discussing such processes and presenting the information developed pursuant thereto to
the Nominating/Corporate Governance Committee for its consideration.
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;<B><I>General. </I></B>The Chair of the Board, with input from the other members of the Board, shall
determine the timing and length of the meetings of the Board. The Board expects that four regular
meetings at appropriate intervals are in general desirable for the performance of the Board&#146;s
normal responsibilities. In addition to regularly scheduled meetings, unscheduled or special Board
meetings may be called upon appropriate notice at any time to address specific needs of the
Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;<B><I>Attendance. </I></B>Directors are expected to attend and participate in person in each regularly
scheduled Board meeting, as well as the dinner meeting held the evening before each regularly
scheduled Board meeting. It is recognized, however, that telephone conference
</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">participation by a Director may be necessary from time to time and that such participation is
preferable to a Director missing a Board meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;<B><I>Agenda. </I></B>The Chair shall establish the agenda for each Board meeting with input from the
other Directors. Each agenda for a regularly scheduled Board meeting will include an &#147;Other
Business&#148; segment. Each Director shall have the ability to include items on the agenda, request
the presence of or a report by any member of the Company&#146;s senior management or raise subjects
during the &#147;Other Business&#148; segment of each regularly scheduled Board meeting that are not on the
agenda for that meeting. The Chair of the Board or the Corporate Secretary shall circulate the
final agenda among the Directors. To the extent deemed appropriate by the Chief Executive Officer,
the operating heads of the major businesses of the Company shall be afforded an opportunity to make
presentations to the Board. The Company&#146;s Chief Executive Officer (if not a Director), Chief
Financial Officer and Corporate Secretary shall attend each meeting of the Board, unless requested
otherwise by the Board. Directors may request that other appropriate members of senior management
present to the Board information on specific topics relating to the Company and its operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;<B><I>Board Materials</I></B><I>. </I>Directors shall receive information and data that are important to their
understanding of the businesses of the Company in sufficient time to prepare for meetings and in
any event at least two business days prior to any regularly scheduled meeting in the case of a
regular agenda item and as promptly as practicable thereafter with respect to any special agenda
item. Information and data relating to matters to be addressed at a specially scheduled meeting
shall be received by Directors as soon as practicable prior to the meeting. This material shall be
as concise as possible while providing the requisite information; and it shall include highlights
and summaries whenever appropriate. The material may be distributed by electronic means, regular
mail, fax, courier, or overnight mail. However, it is recognized that certain circumstances may on
occasion cause written materials to be unavailable in advance of the meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;<B><I>Meetings of Non-Management Directors in Executive Session</I></B><I>. </I>After each regularly scheduled
meeting of the Board of Directors, the non-management members of the Board shall meet in regularly
scheduled executive session, without the participation of the Chief Executive Officer or other
members of the Company&#146;s management to review matters concerning the relationship of the Board with
the management Directors and other members of the Company&#146;s management and such other matters as
the Lead Director and participating Directors may deem appropriate. The Board shall not take
formal actions at such sessions, although the participating Directors may make recommendations for
consideration by the full Board. Additional executive sessions may be scheduled from time to time
as determined by the Lead Director or a majority of the non-management Directors. The topics
discussed at each meeting shall be summarized for the Chief Executive Officer by the Lead Director
or the other non-management Directors participating in the meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>V. Board Committees and Committee Membership</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;<B><I>Number and Establishment of Committees. </I></B>There are currently three standing Committees of
the Board of Directors: Audit, Compensation and Nominating/Corporate Governance. From time to
time, the Board may designate ad hoc Committees in conformity with
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->I-23<!-- /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 bylaws. Each standing Committee shall have the authority and responsibilities
delineated in the Company&#146;s bylaws, the resolutions creating it and any applicable charter. No
standing Committee is authorized to create a subcommittee. The Board of Directors shall have the
authority to disband any ad hoc or standing Committee when it deems it appropriate to do so,
provided that the Company shall at all times have such Committees as may be required by applicable
law or listing standards.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;<B><I>Assignment of Committee Members. </I></B>The Nominating/Corporate Governance Committee, in
consultation with the Chair of the Board, and after considering the desires, experience and
expertise of individual Directors, shall make a recommendation and report to the Board regarding
the assignment of Directors to Committees, including the designation of Committee Chairs.
Committees and their Chairs shall be appointed by the Board of Directors annually at the annual
organizational meeting of the Board of Directors. It is the Board&#146;s policy that only Directors who
at all times meet the independence and other requirements of applicable law, listing requirements
and these Guidelines shall serve on the Company&#146;s standing Committees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;<B><I>Committee Charters. </I></B>Each standing Committee shall have a written charter, which shall be
approved by the full Board of Directors and state the purpose of such Committee. Committee
charters shall be reviewed periodically to reflect the activities of each of the respective
Committees, changes in applicable law or regulation and other relevant considerations, and proposed
revisions to such charters shall be approved by the full Board of Directors. If any Director
ceases to be independent under the standards set forth herein while serving on any Committee whose
members must be independent, he or she shall promptly resign from that Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;<B><I>Committee Meetings. </I></B>Each Committee Chair, in consultation with the Chair of the Board,
shall establish agendas and, and subject to any requirements in the applicable committee charter,
set meetings at the frequency and length appropriate and necessary to carry out the Committee&#146;s
responsibilities. Any Director who is not a member of a particular Committee may attend any
Committee meeting, unless otherwise requested by the Committee Chair. All Directors shall be
entitled to receive information distributed in respect of any particular Committee meeting, unless
(i)&nbsp;otherwise requested by the Committee Chair or (ii)&nbsp;the Director elects not to receive such
materials.
</DIV>

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

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Compensation Committee shall review annually the Directors&#146; compensation package and make
recommendations as appropriate to the full Board. Director compensation should be sufficient to
enable the Company to attract talented and qualified individuals to serve on the Board and its
standing Committees. Director compensation must be the sole remuneration from the Company for
members of the Audit, Compensation, and Nominating/Corporate Governance Committees.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->I-24<!-- /Folio -->
</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>VII. Board Leadership</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Subject to review from time to time, the Company will continue to combine the roles of Chair of the
Board and Chief Executive Officer and will appoint a Lead Director, as set forth below.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;<B><I>Role of the Chair. </I></B>The Chair is responsible for coordinating the activities of the Board.
In addition to the duties of a regular Board member and those set forth in the Company&#146;s bylaws
applicable to the office, the Chair has the following specific responsibilities:
</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>Schedule&nbsp;Board meetings in a manner that enables the Board and its committees to
perform their duties responsibly while not interfering with the ongoing operations of
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>Prepare, with input from the Chief Executive Officer if the same person does not
hold both offices, committee chairs and other Directors, the agendas for the Board
meetings;</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>Define the quality, quantity and timeliness of the flow of information between
senior management and the Board;</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>Approve, in consultation with other Directors, the retention of consultants who
report directly to the Board;</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>Interview, along with the members of the Nominating/Corporate Governance Committee,
all Board candidates, and make recommendations to that committee;</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>Assist the Board in the implementation of these Guidelines; 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>Consult with the Nominating/Corporate Governance Committee with respect to the
membership of the various Board committees and the selection of the committee chairs.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;<B><I>Role of Lead Director</I></B>. Each year, the non-employee Directors shall appoint a Lead
Director, who shall be an independent Director and whose responsibilities shall include:
</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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>developing the agenda for, and presiding over the executive sessions of, the
Board&#146;s non-management Directors;</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="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>facilitating communications between the Chair of the Board and other members of
the Board;</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="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>with the Chair of the Board and Chief Executive Officer, coordinating the
assessment of the committee structure, organization, and charters, and evaluating
the need for any changes;</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="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>acting as principal liaison between the non-management Directors and the Chief
Executive Officer on matters dealt with in executive session; and</TD>
</TR>

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

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


<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="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>assume such further tasks as the independent directors may determine from time
to time.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Chair of the Board is an independent Director, the Company expects that person shall
also serve as the Lead Director.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>VIII. Director Orientation and Continuing Education</B><B><I>.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Nominating/Corporate Governance Committee, working with the Company&#146;s senior management, shall
provide appropriate orientation programs for new Directors, which shall be designed both to
familiarize new Directors with the full scope of the Company&#146;s businesses and key challenges and to
assist new Directors in developing and maintaining the skills necessary or appropriate for the
performance of their responsibilities. The Nominating/Corporate Governance Committee, working with
the Company&#146;s senior management, shall also periodically provide materials or briefing sessions for
all Directors on subjects that would assist them in discharging their duties and manage for visits
to the Company&#146;s key facilities. The Company shall offer annually to pay the costs for each
Director attending and participating in one professionally sponsored conference or educational
program designated to familiarize directors of publicly held companies with their duties and
responsibilities.
</DIV>


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


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;<B><I>Repricing Stock Options. </I></B>The Company shall not reprice any stock options.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;<B><I>Prohibition on Loans to Directors and Executive Officers</I></B><B>. </B>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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;<B><I>Stock Ownership by Directors and Executive Officers. </I></B>Directors and Executive Officers are
encouraged to own shares of the Company&#146;s stock and increase their ownership of those shares over
time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;<B><I>Corporate Governance Guidelines</I></B><I>. </I>The Nominating/Corporate Governance Committee shall
reevaluate, no less frequently than annually, these Guidelines and recommend to the Board such
revisions as it deems necessary or appropriate for the Board to discharge its responsibilities more
effectively. If the Board ascertains at any time that any of the Guidelines set forth herein are
not in full force and effect, the Board shall take such action as it deem reasonably necessary to
assure full compliance as promptly as practicable. Copies of the current version of these
Guidelines, the Company&#146;s Code of Business Conduct and Ethics for Members of the Board of Directors
and Executive Officers, the Code of Ethics for Senior Financial Officers and the charter for each
standing Committee of the Board shall be posted on the Company&#146;s website.
</DIV>

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

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

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><U><FONT style="font-variant: SMALL-CAPS"><B>Appendix&nbsp;V</B></FONT></U>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>NATIONAL OILWELL VARCO, INC.</B>
</DIV>

<DIV align="left">
<A name="124"></A>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>CODE OF BUSINESS CONDUCT AND ETHICS FOR</B>

</DIV>
<DIV align="center" style="font-size: 10pt"><B>MEMBERS OF THE BOARD OF DIRECTORS</B></DIV>


<DIV align="center" style="font-size: 10pt"><B>AND EXECUTIVE OFFICERS</B></DIV>



<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Amended and Restated by the Board of Directors on November&nbsp;16, 2005</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors (the &#147;Board&#148;) of National Oilwell Varco, Inc. (the &#147;Company&#148;) has
adopted the following Code of Business Conduct and Ethics for Members of the Board of Directors and
Executive Officers (this &#147;Code&#148;). This Code is intended to focus the Board, each Director, Company
management, and each Executive Officer on areas of ethical risk, provide guidance to Directors and
management to help them recognize and deal with ethical issues, provide mechanisms to report
unethical conduct, and help foster a culture of honesty and accountability. Each Director and
Executive Officer must comply with the letter and spirit of this Code. This Code, the Company&#146;s
Business Ethics Policy, Conflict of Interest Policy, Policy Regarding Employee Inventions and
Confidential Information, Improper Business Payments Policy, Policy Regarding U.S. Antitrust Laws,
Code of Ethics for Senior Financial Officers and Policy on Insider Trading, in the aggregate
constitute the Company&#146;s Code of Ethics.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No code or policy can anticipate every situation that may arise. Accordingly, this Code is
intended to serve as a source of guiding principles for Directors and Executive Officers.
Directors and Executive Officers are encouraged to bring questions about particular circumstances
that may implicate one or more of the provisions of this Code to the attention of the Chair of the
Audit Committee, who may consult with legal counsel as appropriate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive Officers of the Company, including Directors who also serve as Executive Officers of
the Company should read this Code in conjunction with the Company&#146;s Business Ethics Policy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.&nbsp;</B><U><B>Conflict of Interest</B></U><B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A &#147;conflict of interest&#148; occurs when a Director&#146;s or Executive Officer&#146;s private interest
interferes in any way, or appears to interfere, with the interests of the Company as a whole.
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 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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Directors and Executive Officers must avoid conflicts of interest 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 Audit Committee.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->I-27<!-- /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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Code does not attempt to describe all possible conflicts of interest which could develop.
Some of the more common conflicts from which Directors and Executive Officers must refrain,
however, are set out 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><I>Relationship of Company with third parties</I>. Directors and Executive Officers may
not engage in any conduct or activities that are inconsistent with the Company&#146;s best
interests or that disrupt or impair the Company&#146;s relationship with any person or
entity with which the Company has or proposes to enter into a business or contractual
relationship.</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><I>Compensation from non-Company sources</I>. Directors and Executive Officers may not
accept compensation, in any form, for services performed for the Company from any
source other than 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><I>Gifts</I>. Directors and Executive Officers and members of their families may not
offer, give or receive gifts from persons or entities who deal with the Company in
those cases where any such gift is being made in order to influence the Directors&#146; or
Executive Officers&#146; actions as members of the Board and senior management of the
Company, or where acceptance of the gifts could create the appearance of a conflict of
interest.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.&nbsp;</B><U><B>Corporate Opportunities</B></U><B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Directors and Executive Officers owe a duty to the Company to advance its legitimate interests
when the opportunity to do so arises. Executive Officers, and Directors when an opportunity that
relates to the Company&#146;s business has been presented to the Directors solely by the Company or its
agents and until such time as the Company has determined that it will not pursue the opportunity,
are prohibited from: (a)&nbsp;taking for themselves personally opportunities that are discovered through
the use of corporate property, information or the Director&#146;s or Executive Officer&#146;s position;
(b)&nbsp;using the Company&#146;s property, information, or position for personal gain; or (c)&nbsp;personally
competing with the Company, directly or indirectly, for business opportunities. However, if it has
been determined that the Company will not pursue an opportunity that relates to the Company&#146;s
business, a non-management Director may do so.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.&nbsp;</B><U><B>Confidentiality</B></U><B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Directors and Executive Officers must maintain the confidentiality of information entrusted to
them by the Company or its customers, and any other confidential information about the Company that
comes to them, from whatever source, in their capacity as Director or Executive Officer, except
when disclosure is authorized or required by laws or regulations. Confidential information
includes all non-public information that might be of use to competitors, or harmful to the Company
or its customers, if disclosed.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->I-28<!-- /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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.&nbsp;</B><U><B>Protection and Proper Use of Company Assets</B></U><B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Theft, carelessness and waste of assets have a direct impact on the Company&#146;s profitability.
Directors and Executive Officers shall protect the Company&#146;s assets and ensure their efficient use.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.&nbsp;</B><U><B>Fair Dealing</B></U><B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The conduct required by fair dealing requires honesty in fact and the observance of reasonable
commercial standards of fair dealing. Directors and Executive Officers shall deal fairly and
oversee fair dealing by employees and officers with the Company&#146;s directors, officers, employees,
customers, suppliers and competitors. None should do anything that could be interpreted as
dishonest or outside reasonable commercial standards of fair dealing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.&nbsp;</B><U><B>Compliance with Laws, Rules and Regulations</B></U><B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Directors and Executive Officers shall comply, and oversee compliance by employees, officers
and other directors, with all laws, rules and regulations applicable to the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.&nbsp;</B><U><B>Compliance with this Code Cannot be Waived.</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While compliance with this Code cannot be waived by the Board or any Committee of the Board,
the Board may, upon a favorable recommendation from its Audit Committee, determine that a proposed
course of conduct does not contravene the substantive requirements of this Code.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.&nbsp;</B><U><B>Encouraging the Reporting of any Illegal or Unethical Behavior</B></U><B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Directors and Executive Officers should promote ethical behavior and take steps to create a
working environment at the Company that: (a)&nbsp;encourages employees to talk to supervisors, managers
and other appropriate personnel when in doubt about the best course of action in a particular
situation; (b)&nbsp;encourages employees to report violations of laws, rules, regulations or the
Company&#146;s Code of Ethics to appropriate personnel; and (c)&nbsp;fosters the understanding among
employees that the Company will not permit retaliation for reports made in good faith.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>9.&nbsp;</B><U><B>Failure to Comply; Compliance Procedures</B></U><B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A failure by any Director or Executive Officer to comply with the laws or regulations
governing the Company&#146;s business, this Code or any other Company policy or requirement may result
in disciplinary action, and, if warranted, legal proceedings. Directors and Executive Officers
should communicate any suspected violations of this Code promptly to the Chair of the Audit
Committee. Violations will be investigated by the Audit Committee or by a person or persons
designated by the Audit Committee and appropriate action will be taken in the event of any
violations of this Code.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.&nbsp;</B><U><B>Annual Review</B></U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Annually, each Director and Executive Officer shall provide written certification that he or
she has read and understands this Code and its contents and that he or she has not violated, and is
not aware that any other Director or Executive Officer has violated, this Code.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->I-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="right" style="font-size: 10pt; margin-top: 12pt"><U><FONT style="font-variant: SMALL-CAPS"><B>Appendix&nbsp;VI</B></FONT></U>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>NATIONAL OILWELL VARCO, INC.</B>
</DIV>

<DIV align="left">
<A name="125"></A>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>CODE OF ETHICS FOR SENIOR FINANCIAL OFFICERS</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Amended and Restated by the Board of Directors on November&nbsp;16, 2005</B>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I certify that I will adhere to the following principles and responsibilities, as well as the
Company&#146;s Policy on Business Ethics and other legal and compliance policies and procedures
(collectively the &#147;Code&#148;):
</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>Act with honesty and integrity, avoiding actual or apparent conflicts of interest
involving personal and professional relationships;</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>To the best of my knowledge and abilities, I will provide other officials and
constituents of the Company information that is full, fair, complete, objective, timely
and understandable;</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>To the maximum extent possible, take actions and develop financial and accounting
procedures that ensure that the Company&#146;s books and records are accurate, and in
conformance with recognized and required accounting standards, nationally and
internationally;</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>To the best of my knowledge and abilities, I will comply with rules and regulations
of U.S. and non-U.S. governmental entities, as well as other private and public
regulatory agencies, to which the Company is subject;</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>Act at all times in good faith, responsibly, with due care, competence and
diligence, and without any misrepresentation of material facts;</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>Act objectively, without allowing my independent judgment to be subordinated;</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>Respect the confidentiality of Company information, except when authorized or
otherwise required to make any disclosure, and avoid the use of any Company information
for personal advantage;</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>Share my knowledge and skills with others to improve the Company&#146;s communications to
its constituents;</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>Promote ethical behavior among employees under my supervision at 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>Promptly report to the Chair of the Audit Committee of the Board of Directors of the
Company any violations of the Code; 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>Protect the Company&#146;s assets and resources and ensure their efficient use.</TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->I-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="center" style="font-size: 8pt; margin-top: 18pt"><B>NATIONAL OILWELL VARCO, INC.<BR>
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS<BR>
ON MAY 14, 2008</B>
</DIV>


<DIV align="justify" style="font-size: 8pt; margin-top: 6pt">The undersigned hereby appoints Clay C. Williams and Dwight W. Rettig or either of them with full
power of substitution, the proxy or proxies of the undersigned to attend the Annual Meeting of
Stockholders of National Oilwell Varco, Inc. to be held on Wednesday, May&nbsp;14, 2008, and any
adjournments thereof, and to vote the shares of stock that the signer would be entitled to vote if
personally present as indicated on the reverse side and, at their discretion, on any other matters
properly brought before the meeting, and any adjournments thereof, all as set forth in the April&nbsp;4,
2008 proxy statement.
</DIV>

<DIV align="justify" style="font-size: 8pt; margin-top: 6pt"><B>This proxy is solicited on behalf of the board of directors of National Oilwell Varco, Inc. The
shares represented by this proxy will be voted as directed by the Stockholder. If no direction is
given when the duly executed proxy is returned, such shares will be voted in accordance with the
recommendations of the board of directors for all director nominees, for the ratification of the
independent auditors and for the approval of the National Oilwell Varco Annual Incentive Plan.</B>
</DIV>

<DIV align="justify" style="font-size: 8pt; margin-top: 6pt">The undersigned acknowledges receipt of the April&nbsp;4, 2008 Notice of Annual Meeting and the Proxy
Statement, which more particularly describes the matters referred to herein.
</DIV>

<DIV align="center" style="font-size: 8pt; margin-top: 10pt"><B>(Continued and to be signed on the reverse side)</B>
</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="center" style="font-size: 8pt; margin-top: 18pt"><B>Please date, sign and mail your proxy card back as soon as possible!</B>
</DIV>


<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8pt">

<TR valign="top" style="font-size: 8pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="center" valign="top"><DIV style="border-bottom: 2px solid #000000; border-top: 2px solid #000000; border-left: 2px solid #000000; border-right: 2px solid #000000; font-size: 10px"><B>x</B></DIV></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Please mark your vote<br>
as in this example.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="Center" style="font-size: 8pt; margin-top: 10pt"><DIV style="width: 100%; border-bottom: 1px dotted #000000; font-size: 1px">&nbsp;</DIV>

</DIV>
<DIV align="left" style="font-size: 8pt; margin-top: 10pt"><B>THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE &#147;FOR&#148; THE ELECTION OF DIRECTORS, &#147;FOR&#148; PROPOSAL 2
AND &#147;FOR&#148; <BR>
PROPOSAL 3.</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 10pt">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">1.</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" valign="top" align="left">The election of directors:</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD colspan="6" valign="top" align="left">Robert E. Beauchamp</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" 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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="center" valign="top" colspan="2" style="font-size: 17pt"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="font-size: 8pt">FOR</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="font-size: 17pt"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="font-size: 8pt">AGAINST</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="font-size: 17pt"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="font-size: 8pt">ABSTAIN</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- 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="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" 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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD colspan="6" valign="top" align="left">Jeffery A. Smisek</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" 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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="center" valign="bottom" colspan="2" style="font-size: 17pt"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="font-size: 8pt">FOR</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" style="font-size: 17pt"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="font-size: 8pt">AGAINST</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" style="font-size: 17pt"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="font-size: 8pt">ABSTAIN</TD>
</TR>
<TR valign="bottom" style="line-height: 2pt"><!-- 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="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" 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 style="font-size: 1px">
    <TD colspan="15" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="line-height: 15pt"><!-- 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="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" 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">2.</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" valign="top" align="left">Ratification of Independent Auditors:</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- 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="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" 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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="center" valign="top" colspan="2" style="font-size: 17pt"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="font-size: 8pt">FOR</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="font-size: 17pt"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="font-size: 8pt">AGAINST</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="font-size: 17pt"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="font-size: 8pt">ABSTAIN</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- 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="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" 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">3.</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" valign="top" align="left">Approval of National Oilwell Varco Annual Incentive Plan</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt"><!-- 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="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" 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">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="center" valign="top" colspan="2" style="font-size: 17pt"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="middle" style="font-size: 8pt">FOR</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="font-size: 17pt"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="middle" style="font-size: 8pt">AGAINST</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="font-size: 17pt"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="middle" align="left" style="font-size: 8pt">ABSTAIN</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</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="43%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Signature
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature if held jointly</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="top"><!-- Blank Space -->
 <TD>&nbsp;</TD></TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&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="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="top"><!-- Blank Space -->
 <TD>&nbsp;</TD></TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="justify" style="font-size: 8pt; margin-top: 6pt">(Signature(s) should be exactly as name or names appear on this proxy. If stock is held jointly,
each holder should sign. If signing is by attorney, executor, administrator, trustee or guardian,
please give full title.)
</DIV>



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