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<SEC-DOCUMENT>0000950129-08-001743.txt : 20080317
<SEC-HEADER>0000950129-08-001743.hdr.sgml : 20080317
<ACCEPTANCE-DATETIME>20080317160859
ACCESSION NUMBER:		0000950129-08-001743
CONFORMED SUBMISSION TYPE:	S-4/A
PUBLIC DOCUMENT COUNT:		10
FILED AS OF DATE:		20080317
DATE AS OF CHANGE:		20080317

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:		S-4/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-148885
		FILM NUMBER:		08693071

	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>S-4/A
<SEQUENCE>1
<FILENAME>h53191a2sv4za.htm
<DESCRIPTION>AMENDMENT NO.2 TO FORM S-4 - REGISTRATION NO. 333-148885
<TEXT>
<HTML>
<HEAD>
<TITLE>sv4za</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="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 94%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B> As filed with the Securities and Exchange Commission on
    March&#160;17, 2008</B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="right" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B> Registration No.&#160;333-148885</B>
</DIV>

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<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=0 -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">SECURITIES AND EXCHANGE
    COMMISSION</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">Washington,&#160;D.C.
    20549</FONT></B>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=84 -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt"> Amendment No.&#160;2<BR>
    to</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 18pt"><FONT style="white-space: nowrap">Form&#160;S-4</FONT></FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">REGISTRATION
    STATEMENT</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">UNDER</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">THE SECURITIES ACT OF
    1933</FONT></B>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=84 -->

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 23pt">National Oilwell Varco,
    Inc.</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 9pt">(Exact name of registrant as
    specified in its charter)</FONT></I>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="34%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="32%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="32%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD nowrap align="center" valign="top">
    <B>Delaware</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    <B>5084</B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    <B>76-0475815</B>
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
    <I>(State or other jurisdiction of<BR>
    incorporation or organization)</I>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <I><FONT style="font-size: 8pt">(Primary Standard Industrial<BR>
    Classification Code Number)</FONT></I>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <I><FONT style="font-size: 8pt">(I.R.S. Employer<BR>
    Identification No.)</FONT></I><FONT style="font-size: 8pt">
    </FONT>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 36pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 11pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD align="center" valign="bottom">
<DIV style="text-indent: -11pt; margin-left: 11pt">
    <B>7909 Parkwood Circle Drive Houston, Texas  77036-6565 (713)
    346-7500</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B>Clay C. Williams <BR>
    Senior Vice President and Chief Financial Officer <BR>
    7909 Parkwood Circle Drive <BR>
    Houston, Texas
    <FONT style="white-space: nowrap">77036-6565</FONT><BR>
    <FONT style="white-space: nowrap">(713)&#160;346-7500</FONT></B>
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="bottom">
<DIV style="text-indent: -11pt; margin-left: 11pt">
    <I><FONT style="font-size: 9pt">(Address, including zip code,
    and telephone number, including<BR>
    area code, of registrant&#146;s principal executive
    offices)</FONT></I>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <I><FONT style="font-size: 9pt">(Name, address, including zip
    code, and telephone number, including area code, of agent for
    service) </FONT></I>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=84 -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Copies to:</I></B>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="26%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="23%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="23%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="23%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD align="center" valign="top">
    <B>Dwight W. Rettig<BR>
    Vice President and<BR>
    General Counsel<BR>
    National Oilwell Varco, Inc.<BR>
    7909 Parkwood Circle Drive<BR>
    Houston, TX 77036-6565<BR>
    (713) 346-7500</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B>David C. Buck<BR>
    Andrews Kurth LLP<BR>
    600 Travis, Suite 4200<BR>
    Houston, TX 77002<BR>
    (713) 220-4200</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B>Philip A. Choyce<BR>
    Vice President, Secretary<BR>
    and General Counsel<BR>
    Grant Prideco, Inc. <BR>
    400&#160;N.&#160;Sam Houston<BR>
    Parkway East, Ste. 900<BR>
    Houston, TX 77060<BR>
    (281) 878-8000</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B>Scott A. Barshay<BR>
    Cravath, Swaine&#160;&#038; Moore LLP<BR>
    Worldwide Plaza<BR>
    825 Eighth Avenue<BR>
    New York, NY 10019
    <FONT style="white-space: nowrap">(212)&#160;474-1000</FONT></B>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Approximate date of commencement of proposed sale of the
    securities to the public:&#160;&#160;</B>As soon as practicable
    after the effective date of this Registration Statement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the securities being registered on this Form are being
    offered in connection with the formation of a holding company
    and there is compliance with General Instruction&#160;G, check
    the following
    box.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If this Form is filed to register additional securities for an
    offering pursuant to Rule&#160;462(b) under the Securities Act,
    check the following box and list the Securities Act registration
    statement number of the earlier effective registration statement
    for the same
    offering.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If this Form is a post-effective amendment filed pursuant to
    Rule&#160;462(d) under the Securities Act, check the following
    box and list the Securities Act registration statement number of
    the earlier effective registration statement for the same
    offering.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Indicate by check mark whether the registrant is a large
    accelerated filer, an accelerated filer, a non-accelerated
    filer, or a smaller reporting company. See the definitions of
    &#147;large accelerated filer,&#148; &#147;accelerated
    filer&#148; and &#147;smaller reporting company&#148; in
    <FONT style="white-space: nowrap">Rule&#160;12b-2</FONT>
    of the Exchange Act. (Check one):
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="24%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="33%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="20%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Large accelerated filer
    <FONT style="font-family: Wingdings; font-variant: normal">&#254;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Accelerated filer
    <FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    Non-accelerated filer
    <FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Smaller reporting company
    <FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    (Do not check if a smaller reporting company
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>The Registrant hereby amends this Registration Statement on
    such date or dates as may be necessary to delay its effective
    date until the Registrant shall file a further amendment which
    specifically states that this Registration Statement shall
    thereafter become effective in accordance with Section&#160;8(a)
    of the Securities Act of 1933, as amended, or until the
    Registration Statement shall become effective on such date as
    the Commission, acting pursuant to said Section&#160;8(a), may
    determine.</B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=0 -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=0 -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

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

<DIV style="width: 94%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE style="color: #FF0000" width="100%" border="1" cellpadding="5"><TR><TD style=text-align:justify>
<FONT style="font-size: 8pt; font-family: Arial, Helvetica; color: #E8112D">The
information in this proxy statement/prospectus is not complete
and may be changed. We may not sell these securities until the
registration statement filed with the Securities and  Exchange
Commission is effective. This proxy statement/prospectus is not
an offer to sell these securities and we are not soliciting an
offer to buy these securities in any state where the offer or
sale  is not permitted.<BR>
</FONT>
</TD></TR></TABLE>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="color: #E8112D"> Subject To Completion, Dated
    March 17, 2008</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>PROPOSED MERGER&#160;&#151; YOUR VOTE IS VERY IMPORTANT</B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="h53191a2h5319100.gif" alt="GRANTPRIDECO LOGO">
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dear Stockholders of Grant Prideco, Inc.:
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On December&#160;16, 2007, National Oilwell Varco, Inc. and
    Grant Prideco, Inc. entered into an Agreement and Plan of Merger
    pursuant to which National Oilwell Varco will acquire all of the
    issued and outstanding shares of common stock of Grant Prideco.
    Pursuant to the merger agreement, Grant Prideco will merge with
    and into NOV Sub, Inc., a wholly owned subsidiary of National
    Oilwell Varco, with NOV Sub being the surviving company in the
    merger. As described in greater detail in this document, we
    believe the transaction will benefit the stockholders of both
    companies by creating a larger, more diversified company that is
    better positioned to compete in the global marketplace.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the merger, each stockholder of Grant Prideco will receive
    0.4498 of a share of common stock of National Oilwell Varco and
    $23.20 in cash for each share of common stock of Grant Prideco
    that the stockholder owns, plus cash in lieu of fractional
    shares. Stockholders of National Oilwell Varco will continue to
    own their existing shares, which will not be affected by the
    merger. Based on the number of outstanding shares of common
    stock of Grant Prideco on the record date and the number of
    outstanding shares of common stock of National Oilwell Varco on
    March&#160;14, 2008, we anticipate that stockholders of Grant
    Prideco will own approximately 14% of the outstanding shares of
    common stock of National Oilwell Varco immediately following the
    merger. Shares of common stock of National Oilwell Varco and
    Grant Prideco are traded on the New York Stock Exchange under
    the trading symbols &#147;NOV&#148; and &#147;GRP&#148;,
    respectively. On March&#160;14, 2008, the last trading day
    before the date of this proxy statement/prospectus, the common
    stock of National Oilwell Varco closed at $60.17 per share as
    reported on the New York Stock Exchange. We do not expect that
    stockholders of Grant Prideco will recognize any gain or loss
    for U.S.&#160;federal income tax purposes as a result of the
    merger, except to the extent of the cash consideration they
    receive in the merger.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to consummate the merger, the merger agreement must be
    adopted by the stockholders of Grant Prideco. The obligations of
    National Oilwell Varco and Grant Prideco to complete the merger
    are also subject to the satisfaction or waiver of several other
    conditions to the merger, including receiving approvals from
    regulatory agencies. This proxy statement/prospectus contains
    detailed information about National Oilwell Varco and Grant
    Prideco and the proposed merger. <B>We encourage you to read
    carefully this entire proxy statement/prospectus before voting,
    including the section entitled &#147;Risk Factors&#148;
    beginning on page&#160;13 for a discussion of the risks relating
    to the merger. </B>You can also obtain information about
    National Oilwell Varco and Grant Prideco from documents that
    have been filed with the Securities and Exchange Commission.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>The board of directors of Grant Prideco has unanimously
    approved the merger agreement and determined that it is
    advisable and in the best interests of Grant Prideco and its
    stockholders. Accordingly, Grant Prideco&#146;s board of
    directors recommends that stockholders of Grant Prideco vote
    &#147;FOR&#148; the proposal to adopt the merger agreement.</B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The proposal is being presented to the stockholders of Grant
    Prideco at a special meeting of stockholders. The date, time and
    place of the meeting is as follows:
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 3%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 8pt">April&#160;21, 2008 at
    10:00&#160;a.m., Houston time at the Crowne Plaza Hotel Houston
    <FONT style="white-space: nowrap">North-Greenspoint,</FONT>
    425&#160;North Sam Houston Pkwy&#160;E, Houston, Texas 77060.
    </FONT>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Your vote is very important.&#160;</I>The merger cannot be
    completed unless the stockholders of Grant Prideco vote to
    approve and adopt the merger agreement. Whether or not you plan
    to attend Grant Prideco&#146;s special meeting, please take the
    time to vote your proxy (in writing, over the Internet or by
    telephone) by following the instructions on the enclosed proxy
    card. If your shares are held in an account with a bank, broker
    or other nominee, you must instruct your bank, broker or nominee
    how to vote those shares.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 50%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 8pt">Sincerely,
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 50%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="h53191a2h5319101.gif" alt="-s- Michael McShane"><FONT style="font-size: 8pt">
    </FONT>
</DIV>

<DIV align="left" style="margin-left: 50%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 8pt">Michael McShane
    </FONT>
</DIV>

<DIV align="left" style="margin-left: 50%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 8pt">Chairman, President and Chief
    Executive Officer</FONT></I>
</DIV>

<DIV align="left" style="margin-left: 50%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 8pt">GRANT PRIDECO, INC.
    </FONT>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of the
    securities to be issued under this proxy statement/prospectus or
    has passed upon the adequacy or accuracy of the disclosure in
    this proxy statement/prospectus. Any representation to the
    contrary is a criminal offense.</B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This proxy statement/prospectus is dated March&#160;   , 2008,
    and is first being mailed to stockholders of Grant Prideco on or
    about March&#160;20, 2008.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

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

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">GRANT
    PRIDECO, INC.<BR>
    400&#160;N.&#160;Sam Houston Parkway East, Suite&#160;900<BR>
    Houston, Texas 77060</FONT></B>
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>NOTICE OF SPECIAL MEETING OF STOCKHOLDERS</B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Date</B>:&#160;April&#160;21, 2008
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Time</B>:&#160;10:00&#160;a.m. (Houston time)
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    <B>Place</B>:&#160;</TD>
    <TD align="left">
    Crowne Plaza Hotel Houston North-Greenspoint
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
     425&#160;North Sam Houston Pkwy&#160;E
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
     Houston, Texas 77060
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the Stockholders of Grant Prideco, Inc.:
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will hold a special meeting of stockholders of Grant Prideco,
    Inc., on April&#160;21, 2008 at 10:00&#160;a.m., Houston time,
    at the Crowne Plaza Hotel Houston North-Greenspoint,
    425&#160;North Sam Houston Pkwy&#160;E, Houston, Texas 77060, in
    order to consider and to vote upon a proposal to adopt the
    Agreement and Plan of Merger, dated as of December&#160;16,
    2007, among National Oilwell Varco, Inc., a Delaware
    corporation, NOV Sub, Inc., a Delaware corporation and a wholly
    owned subsidiary of National Oilwell Varco, Inc., and Grant
    Prideco, Inc., a Delaware corporation, pursuant to which Grant
    Prideco will be merged with and into NOV Sub, Inc. and each
    outstanding share of common stock of Grant Prideco will be
    converted into the right to receive 0.4498 of a share of common
    stock of National Oilwell Varco and $23.20 in cash, plus cash in
    lieu of fractional shares.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Only stockholders of record at the close of business on
    March&#160;14, 2008 are entitled to notice of, and to vote at,
    the special meeting and any adjournments or postponements of the
    special meeting. A complete list of stockholders of record of
    Grant Prideco entitled to vote at the special meeting will be
    available for the 10&#160;days before the special meeting at our
    executive offices and principal place of business at
    400&#160;N.&#160;Sam Houston Parkway East, Suite&#160;900,
    Houston, Texas 77060 for inspection by stockholders during
    ordinary business hours for any purpose germane to the special
    meeting. The list will also be available at the special meeting
    for examination by any stockholder of record present at the
    special meeting. Whether or not a quorum of stockholders is
    present at the special meeting, the presiding officer may choose
    to adjourn the meeting for any reason, including if he or she
    determines that it would be in the best interests of Grant
    Prideco to extend the period of time for solicitation of
    additional proxies, and the presiding officer may do so until he
    or she decides conclusively that the business to be conducted at
    the meeting is completed.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Your vote is very important.</I>&#160;&#160;All stockholders
    of Grant Prideco are cordially invited to attend the special
    meeting in person. However, to ensure your representation at the
    special meeting, we request that you return your signed proxy
    card in the postage-paid envelope provided, or using the
    internet or telephone, in each case following the procedures in
    the voting instructions provided to you, at your earliest
    convenience, whether or not you plan to attend the special
    meeting.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You may revoke your proxy at any time before it is voted at the
    special meeting in the manner described in the proxy
    statement/prospectus. Any stockholder of record present at the
    special meeting may revoke its proxy and vote personally at the
    meeting. If your shares are held in an account at a brokerage
    firm, bank or other nominee, you must instruct them on how to
    vote your shares and you must contact your broker, bank or
    nominee to revoke your instructions.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This proxy statement/prospectus describes the proposed merger in
    detail. We encourage you to read carefully the entire proxy
    statement/prospectus before voting your shares.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>The board of directors of Grant Prideco unanimously
    recommends that stockholders of Grant Prideco vote
    &#147;FOR&#148; the adoption of the merger agreement.</B>
</DIV>

<DIV style="margin-top: 14pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    BY ORDER OF THE BOARD OF DIRECTORS,
</DIV>

<DIV style="margin-top: 20pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="h53191a2h5319150.gif" alt="-s- Philip A. Choyce">
</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Philip A. Choyce
</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Vice President, General Counsel and Secretary</I>
</DIV>

<DIV style="margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Houston, Texas
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
     March&#160;17, 2008
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

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

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ADDITIONAL
    INFORMATION</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This proxy statement/prospectus incorporates by reference
    important business and financial information about National
    Oilwell Varco and Grant Prideco from documents filed with the
    Securities and Exchange Commission that are not included in or
    delivered with this proxy statement/prospectus. These documents
    are available to stockholders of Grant Prideco without charge
    upon written or oral request, excluding any exhibits to those
    documents, unless the exhibit is specifically incorporated by
    reference as an exhibit in this proxy statement/prospectus. You
    can obtain any of the documents incorporated by reference in
    this proxy statement/prospectus by requesting them in writing or
    by telephone from the appropriate company at the following
    addresses and telephone numbers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD align="center" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    National Oilwell Varco, Inc.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Grant Prideco, Inc.
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    7909 Parkwood Circle Drive
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    400&#160;N.&#160;Sam Houston Parkway East, Suite 900
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Houston, Texas
    <FONT style="white-space: nowrap">77036-6565</FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Houston, Texas 77060
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Attention: Investor Relations
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Attention: Investor Relations
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Telephone number:
    <FONT style="white-space: nowrap">(713)&#160;346-7500</FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Telephone number: (281) 878-8000
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See &#147;Where You Can Find More Information&#148; beginning on
    page&#160;94 for a detailed description of the documents
    incorporated by reference into this proxy statement/prospectus.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>In order for you to receive timely delivery of the documents
    in advance of the meeting, National Oilwell Varco or Grant
    Prideco, as applicable, should receive your request by no later
    than April&#160;14, 2008.</B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Information contained on the web sites of National Oilwell Varco
    and Grant Prideco is expressly not incorporated by reference
    into this proxy statement/prospectus.
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<DIV align="left">
<!-- TOC -->
</DIV>

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

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="97%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
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<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#101'>QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE
    SPECIAL MEETING</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    ii
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#102'>SUMMARY</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#103'>RISK FACTORS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#104'>CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
    STATEMENTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    23
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#105'>THE COMPANIES</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    24
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#106'>RECENT DEVELOPMENTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    26
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#107'>THE SPECIAL MEETING OF GRANT PRIDECO&#146;S
    STOCKHOLDERS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#108'>THE MERGER</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#109'>THE MERGER AGREEMENT</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    53
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#110'>DIRECTORS AND EXECUTIVE OFFICERS OF NATIONAL
    OILWELL VARCO</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    68
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#111'>SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    70
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#112'>COMPARISON OF THE RIGHTS OF STOCKHOLDERS OF
    NATIONAL OILWELL VARCO AND GRANT PRIDECO</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    74
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#113'>UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
    STATEMENTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    79
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#121'>NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
    FINANCIAL STATEMENTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    82
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#114'>DESCRIPTION OF THE CAPITAL STOCK OF NATIONAL
    OILWELL VARCO</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    86
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#115'>MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    89
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#116'>SUBMISSION OF STOCKHOLDER PROPOSALS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    93
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#117'>LEGAL MATTERS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    93
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#118'>EXPERTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    93
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#119'>WHERE YOU CAN FIND MORE INFORMATION</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    94
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#120'>TRANSFER AGENTS AND REGISTRARS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    95
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B><U>ANNEXES</U></B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Annex&#160;A&#160;&#151; Agreement and Plan of Merger
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Annex&#160;B&#160;&#151; Opinion of Credit Suisse Securities
    (USA) LLC
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Annex&#160;C&#160;&#151; Section&#160;262 of the General
    Corporation Law of the State of Delaware
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h53191a2exv23w3.htm">Consent of Ernst & Young LLP</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h53191a2exv23w4.htm">Consent of Deloitte & Touche LLP</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h53191a2exv99w1.htm">Form of Proxy Card</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h53191a2exv99w2.htm">Consent of Credit Suisse Securities (USA) LLC</A></FONT></TD></TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

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

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    i
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<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='101'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">QUESTIONS
    AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>The following are brief answers to some questions that
    stockholders of Grant Prideco may have regarding the proposed
    merger being considered at the special meeting of Grant
    Prideco&#146;s stockholders and regarding the special meeting.
    You are urged to read and consider carefully the remainder of
    this proxy statement/prospectus, including the Risk Factors
    beginning on page&#160;13 and the attached Annexes, because the
    information in this section does not provide all of the
    information that might be important to you. Additional important
    information and descriptions of risks are also contained in the
    documents incorporated by reference in this proxy
    statement/prospectus.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Your vote
    is very important. You are encouraged to submit a proxy as soon
    as possible.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>Why am I receiving these materials?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    National Oilwell Varco and Grant Prideco have agreed to the
    merger of Grant Prideco with and into a subsidiary of National
    Oilwell Varco under the terms of a merger agreement that is
    described in this proxy statement/prospectus and attached to
    this proxy statement/prospectus as Annex&#160;A. The merger
    cannot be completed without obtaining approval for the adoption
    of the merger agreement from the stockholders of Grant Prideco.
    Grant Prideco will hold a special meeting of its stockholders to
    obtain this approval.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>Why is Grant Prideco proposing the merger?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    After careful consideration of a number of factors, the board of
    directors of Grant Prideco approved the merger agreement. For a
    discussion of the factors considered by the board of directors
    of Grant Prideco, please refer to the section of this proxy
    statement/prospectus entitled &#147;The Merger&#160;&#151; Grant
    Prideco&#146;s Reasons for the Merger and Recommendation of
    Grant Prideco&#146;s Board of Directors&#148;, beginning on
    page&#160;36.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>What will happen to Grant Prideco as a result of the
    merger?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    As a result of the merger, Grant Prideco will be merged with and
    into a direct, wholly owned subsidiary of National Oilwell
    Varco, and the subsidiary will continue as the surviving
    company. Thus, the successor of Grant Prideco will be a
    subsidiary of National Oilwell Varco.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>What will stockholders receive in the merger?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    Each stockholder of Grant Prideco will receive 0.4498 of a share
    of common stock of National Oilwell Varco and $23.20 in cash in
    exchange for each share of common stock of Grant Prideco that
    the stockholder owns at the effective time of the merger.
    Instead of receiving fractional shares, stockholders of Grant
    Prideco will receive cash from National Oilwell Varco in an
    amount reflecting the market value of any fractional share.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Each stockholder of National Oilwell Varco will continue to hold
    the shares of common stock of National Oilwell Varco that it
    held prior to the merger; however, those shares will represent a
    smaller portion of the total outstanding shares of National
    Oilwell Varco after the merger.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>Is the merger subject to National Oilwell Varco receiving
    financing?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    No.&#160;National Oilwell Varco is expected to receive financing
    to fund the cash component of the merger, but receipt of the
    financing is not a condition to completing the merger.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>What stockholder approvals are needed to complete the
    merger?</B></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    The holders of at least a majority of the shares of common stock
    of Grant Prideco outstanding on March&#160;14, 2008, the record
    date set for the meeting of stockholders of Grant Prideco, must
    vote in favor of adopting the merger agreement.</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>Are any other matters being voted on at the special
    meeting?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    There are no other matters being voted on at the special meeting.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>How does the board of directors of Grant Prideco recommend
    that I vote?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    The board of directors of Grant Prideco unanimously recommends
    that the stockholders of Grant Prideco vote &#147;FOR&#148; the
    proposal to adopt the merger agreement.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    ii
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>When do you expect the merger to be completed?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    We are working to complete the merger as soon as possible. A
    number of conditions must be satisfied before we can complete
    the merger, including approval by the stockholders of Grant
    Prideco and the expiration or early termination of applicable
    waiting periods under the
    <FONT style="white-space: nowrap">Hart-Scott-Rodino</FONT>
    Antitrust Improvements Act of 1976 and approvals in certain
    foreign jurisdictions. Upon receipt of stockholder and
    regulatory approvals and satisfaction of other conditions to
    consummating the merger, we intend to complete the merger as
    soon as possible.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>What are the tax consequences to stockholders of the
    transaction?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    It is generally expected that the merger will qualify as a
    tax-free reorganization within the meaning of
    Section&#160;368(a) of the Internal Revenue Code of 1986, as
    amended (the &#147;Internal Revenue Code&#148;), and the
    consummation of the merger is conditioned on the receipt by each
    of National Oilwell Varco and Grant Prideco of opinions from
    their respective counsel to the effect that the merger will so
    qualify.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Assuming that the merger qualifies as a reorganization under the
    Internal Revenue Code, you will recognize gain (but not loss) in
    an amount not to exceed any cash received as part of the merger
    consideration for U.S. federal income tax purposes as a result
    of the merger and you will recognize gain or loss with respect
    to any cash received in lieu of a fractional share of National
    Oilwell Varco&#146;s common stock in the merger. <B>Tax matters
    are very complicated, and the tax consequences of the merger to
    a particular stockholder of Grant Prideco will depend on the
    facts and circumstances of each holder&#146;s own situation.
    </B>For a description of the material federal income tax
    consequences of the merger, please see the information set forth
    in &#147;Material U.S. Federal Income Tax Consequences&#148;. We
    also urge each stockholder of Grant Prideco to consult the
    stockholder&#146;s own tax advisor for a full understanding of
    the tax consequences of the merger.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>What do I need to do now?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    You should read this proxy statement/prospectus carefully. Then,
    if you are the record holder of your shares and choose to vote
    by proxy, you should do so as soon as possible by
    (1)&#160;accessing the Internet website specified on your
    enclosed proxy card; (2)&#160;calling the telephone number
    specified on your proxy card; or (3)&#160;completing, signing
    and mailing your proxy card. If you hold your shares through a
    brokerage firm, bank or other nominee, you must instruct your
    broker, bank or nominee how to vote your shares.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>If I am planning on attending the special meeting in person,
    should I still grant my proxy?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    Yes. Whether or not you plan to attend the special meeting, you
    should grant your proxy as described above. Your shares will not
    be voted unless you attend the meeting and vote in person or
    grant your proxy. A failure to vote would have the same effect
    as a vote against adoption of the merger agreement.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>If my shares are held in &#147;street name&#148; by my
    broker, will my broker vote my stock for me?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    Your broker will not vote your stock for or against adoption of
    the merger agreement unless you tell the broker how to vote. To
    tell your broker how to vote, you should follow the directions
    that your broker provides to you. A non-vote by your broker will
    have the same effect as a vote against the adoption of the
    merger agreement.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>Can I change my vote after I have granted my proxy?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    Yes. Stockholders who hold shares in their own name can change
    their vote at any time before their proxy is voted at Grant
    Prideco&#146;s special meeting by:</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    &#149;&#160;timely delivery by mail of a valid, subsequently
    dated proxy;</DIV>
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    &#149;&#160;submitting another proxy by telephone or the
    Internet (the latest voting instructions will be followed);</DIV>
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    &#149;&#160;delivery to the Secretary of Grant Prideco at or
    before the special meeting of written notice revoking your proxy
    or of your intention to vote by ballot at the special meeting; or</DIV>
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    &#149;&#160;submitting a vote by ballot at the special meeting
    (note that your attendance alone will not revoke your proxy).</DIV>
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    If your shares are held in a street name account, you must
    contact your broker, bank or nominee to change your vote.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    iii
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>Where and when is the special meeting?</B></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    The special meeting of the stockholders of Grant Prideco will
    take place at the Crowne Plaza Hotel Houston North-Greenspoint,
    425&#160;North Sam Houston Pkwy&#160;E, Houston,
    Texas&#160;77060, on April&#160;21, 2008, at 10:00&#160;a.m.,
    Houston time.</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>Should stockholders of Grant Prideco send in their
    certificates representing the common stock of Grant Prideco
    now?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    No.&#160;After the merger is completed, stockholders of Grant
    Prideco will receive written instructions for exchanging their
    certificates representing common stock of Grant Prideco. Please
    do not send in your certificates representing common stock of
    Grant Prideco with your proxy card.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>What should I do if I receive more than one set of voting
    materials?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    You may receive more than one set of voting materials, including
    multiple copies of this proxy statement/prospectus and multiple
    proxy cards or voting instruction cards. For example, if you
    hold your shares in more than one brokerage account, you will
    receive a separate voting instruction card for each brokerage
    account in which you hold shares. If you are a holder of record
    and your shares are registered in more than one name, you will
    receive more than one proxy card. Please vote each proxy by
    (1)&#160;accessing the Internet website specified on the proxy
    card; (2)&#160;calling the telephone number specified on the
    proxy card; or (3)&#160;completing, signing and mailing the
    enclosed proxy card.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>Can I submit my proxy by telephone or the Internet?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    Yes. Holders of record may submit their proxies by telephone or
    by the Internet. See &#147;The Special Meeting of Grant
    Prideco&#160;&#151; Vote Required&#148; beginning on
    page&#160;27.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>Do I have appraisal rights?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    Yes, stockholders of Grant Prideco are entitled to appraisal
    rights under Section&#160;262 of the General Corporation Law of
    the State of Delaware, or the DGCL. For more information
    regarding appraisal rights, see &#147;The Merger&#160;&#151;
    Appraisal Rights&#148; beginning on page&#160;47. In addition, a
    copy of Section&#160;262 of the DGCL is attached to this proxy
    statement/prospectus as Annex&#160;C.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>Who will bear the cost of solicitation?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    The expense of soliciting proxies of stockholders of Grant
    Prideco will be borne by Grant Prideco. Grant Prideco has
    retained Innisfree M&#038;A Incorporated, a proxy solicitation
    firm, to solicit proxies in connection with the special meeting
    at a cost not to exceed $125,000, plus reimbursement of
    out-of-pocket fees and expenses. In addition, Grant Prideco will
    reimburse brokers, banks and other custodians, nominees and
    fiduciaries representing beneficial owners of shares for their
    reasonable expenses in forwarding soliciting materials to
    beneficial owners. Proxies may also be solicited by certain of
    Grant Prideco&#146;s directors, officers and employees,
    personally or by telephone, facsimile or other means of
    communication. No additional compensation will be paid for these
    services.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>Whom do I call if I have further questions about voting, the
    special meeting or the merger?</B></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    Stockholders of Grant Prideco who have questions about voting,
    the special meeting or the merger may call the Investor
    Relations department of Grant Prideco at
    <FONT style="white-space: nowrap">(281)&#160;878-8000</FONT>
    or Innisfree M&#038;A Incorporated toll-free at
    (877)&#160;717-3898 (from the U.S. or Canada). Banks and brokers
    may call collect at
    <FONT style="white-space: nowrap">(212)&#160;750-5833</FONT>
    or +44 (0)20 7710 9960.</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    iv
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    If you need additional copies of this proxy statement/prospectus
    or the proxy card, please contact:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Innisfree M&#038;A Incorporated
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    501 Madison Avenue
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    New York, NY 10022
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

    <FONT style="white-space: nowrap">(877)&#160;717-3898</FONT>
    (toll-free from the U.S. and Canada)
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
     Banks and Brokers call collect: +1
    <FONT style="white-space: nowrap">(212)&#160;750-5833</FONT>
    or +44 (0)20 7710 9960
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You may also obtain additional information about National
    Oilwell Varco and Grant Prideco from documents filed with the
    Securities and Exchange Commission by following the instructions
    in the section entitled &#147;Where You Can Find More
    Information&#148;.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    v
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
<A name='102'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SUMMARY</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>This summary highlights some of the information in this proxy
    statement/prospectus. It may not contain all of the information
    that is important to you. To understand the merger fully and for
    a more complete description of the terms of the merger agreement
    and the merger, you should read carefully this proxy
    statement/prospectus, the documents we incorporate by reference
    and the full text of the merger agreement included as
    Annex&#160;A to this proxy statement/prospectus. Please also
    read &#147;Where You Can Find More Information&#148;. We have
    included references to other portions of this proxy
    statement/prospectus to direct you to a more complete
    description of the topics presented in this summary.</I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Unless otherwise indicated, pro forma financial results
    presented in this proxy statement/prospectus give effect to the
    completion of the merger.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Companies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>National Oilwell Varco, Inc.</I>&#160;&#160;National Oilwell
    Varco, Inc. is a worldwide leader in the design, manufacture and
    sale of equipment and components used in oil and gas drilling
    and production, the provision of oilfield services and supply
    chain integration services to the upstream oil and gas industry.
    With over 700 worldwide manufacturing and service center
    locations across six continents, National Oilwell Varco supplies
    customer-focused solutions to meet the quality, productivity,
    safety and environmental requirements of the oil and gas
    industry.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco designs, manufactures, sells and services
    complete systems for drilling, completion and servicing of oil
    and gas wells both on land and offshore. It also provides a
    variety of consumable goods and services used to drill,
    complete, remediate and workover oil and gas wells and service
    pipelines, flowlines and other oilfield tubular goods. In
    addition, National Oilwell Varco provides maintenance, repair
    and operating supplies and spare parts to drill site and
    production locations worldwide.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco&#146;s common stock is traded on the NYSE
    under the symbol &#147;NOV&#148;. National Oilwell Varco&#146;s
    principal executive offices are located at 7909 Parkwood Circle
    Drive, Houston, Texas 77036 and its telephone number is
    <FONT style="white-space: nowrap">(713)&#160;346-7500.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Grant Prideco, Inc.</I>&#160;&#160;Grant Prideco, Inc. is a
    world leader in drill stem technology development and drill pipe
    manufacturing, sales and service, as well as a leader in drill
    bit and specialty tools, manufacturing, sales and service. In
    addition, Grant Prideco provides an integrated package of
    large-bore tubular products and services.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco manufactures and sells drill stem products,
    including drill pipe products, drill collars and heavyweight
    drill pipe and drill stem accessories, as well as designs,
    manufactures and distributes drill bits, hole-opening or hole
    enlarging tools, coring services and other related technology to
    the oil and gas industry. Grant Prideco also offers an
    integrated package of large-bore tubular products and services
    for offshore wells and well-site data transmission services.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco&#146;s common stock is traded on the NYSE under
    the symbol &#147;GRP&#148;. Grant Prideco&#146;s principal
    executive offices are located at 400&#160;N.&#160;Sam Houston
    Parkway East, Suite&#160;900, Houston, Texas 77060 and its
    telephone number is
    <FONT style="white-space: nowrap">(281)&#160;878-8000.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>NOV Sub, Inc.</I>&#160;&#160;NOV Sub, Inc. is a direct,
    wholly owned subsidiary of National Oilwell Varco. NOV Sub was
    formed as a corporation under the laws of the State of Delaware
    on December&#160;14, 2007, solely for the purpose of effecting
    the merger. NOV Sub has not conducted any business operations
    other than activities incidental to its formation and in
    connection with the transaction contemplated by the merger
    agreement. NOV Sub&#146;s principal executive offices and
    telephone numbers are the same as those for National Oilwell
    Varco.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Merger (see page&#160;31)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the merger agreement dated as of December&#160;16,
    2007, at the effective time of the merger, Grant Prideco will
    merge with and into NOV Sub, a wholly owned subsidiary of
    National Oilwell Varco, with NOV Sub surviving the merger. As a
    result of the merger, each stockholder of Grant Prideco will
    receive 0.4498 of a share of common stock of National Oilwell
    Varco and $23.20 in cash for each share of common stock of Grant
    Prideco that the stockholder owns at the effective time of the
    merger. National Oilwell Varco will not issue any fractional
    shares.
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    1
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
     Instead, stockholders of Grant Prideco will receive cash from
    National Oilwell Varco in an amount that reflects the market
    value of any fractional share that would have been issued. Based
    on the number of outstanding shares of common stock of Grant
    Prideco and National Oilwell Varco as of March&#160;14, 2008, we
    anticipate that National Oilwell Varco will issue approximately
    56.3&#160;million shares of its common stock in the merger and
    that, upon completion of the merger, stockholders of Grant
    Prideco will own approximately 14% of National Oilwell Varco and
    stockholders of National Oilwell Varco will own approximately
    86% of National Oilwell Varco.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Recommendation
    of the Board of Directors of Grant Prideco and Reasons for the
    Merger (see page&#160;36)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    After careful consideration, the board of directors of Grant
    Prideco determined that the merger is advisable and fair to and
    in the best interests of the stockholders of Grant Prideco and
    unanimously approved the merger agreement and the merger. The
    board unanimously recommends that stockholders of Grant Prideco
    vote FOR the proposal to adopt the merger agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To review the background of and reasons for the merger, as well
    as certain risks related to the merger, see the sections
    entitled &#147;The Merger&#160;&#151; Background of the
    Merger&#148; and &#147;The Merger&#160;&#151; Grant
    Prideco&#146;s Reasons for the Merger and Recommendation of
    Grant Prideco&#146;s Board of Directors&#148;, beginning on
    pages&#160;31 and 36, respectively.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Opinion
    of Credit Suisse</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Credit Suisse Securities (USA) LLC, which we refer to as Credit
    Suisse, rendered its oral opinion to the board of directors of
    Grant Prideco (which was subsequently confirmed in writing by
    delivery of Credit Suisse&#146;s written opinion dated the same
    date) to the effect that, as of December&#160;16, 2007, the
    merger consideration to be received by the holders of shares of
    common stock of Grant Prideco pursuant to the merger agreement
    was fair, from a financial point of view, to such holders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Credit Suisse&#146;s opinion was prepared for the information of
    the board of directors of Grant Prideco in connection with its
    consideration of the merger. Credit Suisse&#146;s opinion only
    addressed the fairness from a financial point of view of the
    merger consideration to be received by the holders of common
    stock of Grant Prideco pursuant to the merger agreement, and did
    not address any other aspect or implication of the merger. The
    summary of Credit Suisse&#146;s opinion in this proxy
    statement/prospectus is qualified in its entirety by reference
    to the full text of its written opinion, which is included as
    Annex&#160;B to this proxy statement/prospectus and sets forth
    the procedures followed, assumptions made, qualifications and
    limitations on the review undertaken and other matters
    considered by Credit Suisse in preparing its opinion. However,
    neither Credit Suisse&#146;s written opinion nor the summary of
    its opinion and the related analyses set forth in this proxy
    statement/prospectus are intended to be, and do not constitute,
    advice or a recommendation to any stockholder as to how such
    stockholder should act or vote with respect to any matter
    relating to the merger. For a more complete description of
    Credit Suisse&#146;s opinion, see &#147;The Merger&#160;&#151;
    Opinion of Credit Suisse Securities (USA) LLC&#160;&#151;
    Financial Advisor to Grant Prideco&#148; beginning on
    page&#160;38.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Interests
    of Certain Persons in the Merger</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In considering the recommendation of the board of directors of
    Grant Prideco with respect to the merger, the stockholders of
    Grant Prideco should be aware that some of the executive
    officers and directors of Grant Prideco have interests in the
    transactions that differ from, or are in addition to, the
    interests of the stockholders of Grant Prideco generally. The
    board of directors of Grant Prideco was aware of these interests
    and considered them, among other matters, when making its
    decision to approve the merger agreement and the merger and
    recommend that the stockholders of Grant Prideco vote in favor
    of the adoption of the merger agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For a more complete description of these interests, see
    &#147;The Merger&#160;&#151; Interests of Certain Persons in the
    Merger&#148; beginning on page&#160;43.
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Special Meeting; Shares Entitled to Vote and Vote Required (see
    page&#160;27)</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Where and when:</I>&#160;&#160;The special meeting of Grant
    Prideco&#146;s stockholders will take place at the Crowne Plaza
    Hotel Houston North-Greenspoint, 425&#160;North Sam Houston Pkwy
    E, Houston, TX 77060 on April&#160;21, 2008 at 10:00&#160;a.m.,
    Houston time.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>What you are being asked to vote on:</I>&#160;&#160;At the
    special meeting, stockholders of Grant Prideco will be asked to
    consider and to vote on the adoption of the Agreement and Plan
    of Merger, dated as of December&#160;16, 2007, among National
    Oilwell Varco, Inc., a Delaware corporation, NOV Sub, Inc., a
    Delaware corporation and a wholly owned subsidiary of National
    Oilwell Varco, Inc., and Grant Prideco, Inc., a Delaware
    corporation, pursuant to which Grant Prideco will be merged with
    and into NOV Sub and each outstanding share of common stock of
    Grant Prideco will be converted into the right to receive 0.4498
    of a share of common stock of National Oilwell Varco and $23.20
    in cash, plus cash in lieu of fractional shares.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Who may vote:</I>&#160;&#160;You may vote at the Grant
    Prideco meeting if you owned common stock of Grant Prideco at
    the close of business on the record date, March&#160;14, 2008.
    On that date, there were 126,557,389&#160;shares of common stock
    of Grant Prideco outstanding and entitled to vote. You may cast
    one vote for each share of common stock of Grant Prideco that
    you owned on the record date.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>What vote is needed:</I>&#160;&#160;The affirmative vote of
    the holders of at least a majority of the shares of outstanding
    common stock of Grant Prideco on the record date is required to
    adopt the merger agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Whether or not a quorum of stockholders is present at the
    special meeting, the presiding officer may choose to adjourn the
    meeting for any reason, including if he or she determines that
    it would be in the best interests of Grant Prideco to extend the
    period of time for solicitation of additional proxies, and the
    presiding officer may do so until he or she decides conclusively
    that the business to be conducted at the meeting is completed.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the record date, less than 1.7% of the outstanding common
    stock of Grant Prideco was held by its directors and executive
    officers and their affiliates.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Overview
    of the Merger Agreement</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Conditions
    to the Merger (see page&#160;62)</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco and Grant Prideco will complete the
    merger only if the conditions set forth in the merger agreement
    are satisfied or, in some cases, waived. These conditions
    include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the adoption by stockholders of Grant Prideco of the merger
    agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the expiration or early termination of the waiting period under
    the
    <FONT style="white-space: nowrap">Hart-Scott-Rodino</FONT>
    Antitrust Improvements Act of 1976;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the receipt of all authorizations, consents, orders and
    approvals from governmental entities, the failure of which to
    obtain is reasonably likely to have a material adverse effect on
    National Oilwell Varco or Grant Prideco;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the declaration of effectiveness of the registration statement,
    of which this proxy statement/prospectus is a part, by the
    Securities and Exchange Commission and the absence of any stop
    order or proceedings seeking a stop order;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the absence of any order, injunction, judgment, decree, statute,
    rule or regulation that prohibits the merger or makes the merger
    illegal;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the approval for listing on the NYSE of the shares of common
    stock of National Oilwell Varco to be issued in the merger,
    subject to official notice of issuance;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the absence of litigation by any governmental entity that has a
    reasonable likelihood of success seeking to interfere with the
    consummation of the merger or that otherwise is reasonably
    likely to have a material adverse effect on Grant Prideco or
    National Oilwell Varco;
</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the continued accuracy of the representations and warranties of
    National Oilwell Varco and Grant Prideco contained in the merger
    agreement, except where the failure of a representation or
    warranty to be accurate would not reasonably be expected to have
    a material adverse effect on National Oilwell Varco or Grant
    Prideco;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the performance by National Oilwell Varco and Grant Prideco in
    all material respects of their respective obligations under the
    merger agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the receipt of legal opinions from counsel for each of National
    Oilwell Varco and Grant Prideco to the effect that for federal
    income tax purposes the merger will qualify as a reorganization
    within the meaning of Section&#160;368(a) of the Internal
    Revenue Code;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the absence of any events that have had or are reasonably
    expected to have a material adverse effect on either National
    Oilwell Varco or Grant Prideco.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco and Grant Prideco may choose to waive
    these conditions and complete the merger even though a condition
    to its obligations has not been satisfied if the necessary
    approval of the stockholders of Grant Prideco has been obtained
    and the law allows them to do so.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">No
    Solicitation (see page&#160;59)</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement contains restrictions on the ability of
    Grant Prideco to solicit or engage in discussions or
    negotiations with a third party with respect to a proposal to
    acquire a significant interest in Grant Prideco&#146;s equity or
    assets. Notwithstanding these restrictions, before stockholders
    of Grant Prideco adopt the merger agreement, the merger
    agreement provides that, under specified circumstances, if Grant
    Prideco receives a proposal from a third party to acquire a
    significant interest in the company that the board of directors
    determines in good faith may reasonably be expected to lead to a
    proposal that is superior to the merger, Grant Prideco may
    furnish nonpublic information to that third party and engage in
    negotiations regarding a transaction with that third party.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Termination
    of Merger Agreement (see page&#160;64)</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement may be terminated at any time prior to the
    completion of the merger, whether before or after the approval
    of Grant Prideco&#146;s stockholders has been obtained:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by mutual written consent of National Oilwell Varco, Grant
    Prideco and NOV Sub;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by either National Oilwell Varco or Grant Prideco, if the merger
    is not completed by August&#160;31, 2008;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by either National Oilwell Varco or Grant Prideco, if a court or
    other government entity issues a nonappealable final order,
    decree or ruling, or takes any other nonappealable final action,
    having the effect of permanently restraining, enjoining or
    otherwise prohibiting the merger;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by either National Oilwell Varco or Grant Prideco, if the
    necessary approval of the stockholders of Grant Prideco is not
    obtained at the stockholder meeting at which the merger is voted
    upon;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by National Oilwell Varco, if the board of directors of Grant
    Prideco withdraws or modifies its recommendation of the merger
    to the stockholders of Grant Prideco or recommends an
    acquisition transaction by a third party relating to Grant
    Prideco;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by Grant Prideco, upon certain breaches by National Oilwell
    Varco or NOV Sub of its representations, warranties, covenants
    or agreements in the merger agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by National Oilwell Varco, upon certain breaches by Grant
    Prideco of its representations, warranties, covenants or
    agreements in the merger agreement;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by Grant Prideco, if, prior to the adoption of the merger
    agreement by stockholders of Grant Prideco, the board of
    directors of Grant Prideco receives a superior acquisition
    proposal from a third party and the board of directors of Grant
    Prideco concludes, following receipt of the advice of its
    outside legal counsel, that the failure to accept the superior
    acquisition proposal would be inconsistent with its fiduciary
    duties under applicable law.
</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    4
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Notwithstanding these provisions for termination of the merger
    agreement, none of National Oilwell Varco, Grant Prideco and NOV
    Sub may terminate the merger agreement if the failure to close
    is due to breach of a representation, warranty, covenant or
    agreement by the party seeking termination.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Termination
    Fee; Expenses (see page&#160;66)</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco may be required to pay National Oilwell Varco a
    termination fee of $185.0&#160;million in certain circumstances.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event of a termination of the merger agreement under
    certain other circumstances, the non-terminating party may be
    required to pay to the terminating party up to $5.0&#160;million
    in reimbursement of expenses in connection with the merger
    agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Additional
    Terms</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subject to the terms and conditions of the merger agreement,
    National Oilwell Varco and Grant Prideco have agreed to use
    their reasonable best efforts to take all actions necessary and
    proper under applicable law to consummate the merger and to
    obtain all required governmental and third party consents and
    approvals. As a result of these requirements, National Oilwell
    Varco and Grant Prideco may be required, conditional upon
    closing, to divest assets that would not reasonably be expected
    to have a material adverse effect on the applicable company.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Grant
    Prideco Stock Options, Restricted Stock, Employee Stock Purchase
    Plan and Deferred Compensation Plans (see pages&#160;61 and
    62)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The treatment of stock options, restricted stock, Grant
    Prideco&#146;s employee stock purchase plan and deferred stock
    units under Grant Prideco&#146;s compensation plans is discussed
    under the heading &#147;The Merger Agreement&#160;&#151; Stock
    Options and Employee Benefits&#148; beginning on page&#160;61.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risk
    Factors (see page&#160;13)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There are risks associated with the merger and the combined
    operations of National Oilwell Varco after the merger. See
    &#147;Risk Factors&#148; for a discussion of factors you should
    carefully consider before deciding how to vote at the special
    meeting of Grant Prideco&#146;s stockholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Material
    U.S. Federal Income Tax Consequences (see
    page&#160;89)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is generally expected that the merger will qualify as a
    tax-free reorganization within the meaning of
    Section&#160;368(a) of the Internal Revenue Code so that
    stockholders generally will recognize gain (but not loss) in an
    amount not to exceed any cash received as part of the merger
    consideration for U.S.&#160;federal income tax purposes as a
    result of the merger and stockholders will recognize gain or
    loss with respect to any cash received in lieu of a fractional
    share of National Oilwell Varco&#146;s common stock in the
    merger. The consummation of the merger is conditioned on the
    receipt by each of National Oilwell Varco and Grant Prideco of
    opinions from their respective counsel to the effect that the
    merger will so qualify. Grant Prideco may not waive these
    conditions to the merger after stockholders of Grant Prideco
    have adopted the merger agreement unless further approval from
    stockholders is obtained with appropriate disclosure.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Tax matters are very complicated, and the tax consequences of
    the merger to a particular stockholder of Grant Prideco will
    depend on the facts and circumstances of each holder&#146;s own
    situation. </B>For a description of the material federal income
    tax consequences of the merger, please see the information set
    forth in &#147;Material U.S.&#160;Federal Income Tax
    Consequences&#148;. We also urge each stockholder of Grant
    Prideco to consult the stockholder&#146;s own tax advisor for a
    full understanding of the tax consequences of the merger.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Accounting
    Treatment (see page&#160;51)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco will account for the merger using the
    purchase method of accounting. Under that method of accounting,
    the aggregate consideration that National Oilwell Varco pays for
    Grant Prideco will be allocated to the assets and liabilities of
    Grant Prideco based on their fair values, with any excess being
    treated as
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    5
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    goodwill. Under the purchase method of accounting, goodwill and
    indefinite-lived intangible assets are not amortized but are
    tested for impairment at least annually. National Oilwell Varco
    currently expects to record approximately $2,670.7&#160;million
    of goodwill and $752.0&#160;million in indefinite-lived
    intangibles for certain tradenames upon completion of the
    merger, but that estimate is subject to change based upon the
    final number of shares of common stock of National Oilwell Varco
    issued at the time of closing and the final valuation of the
    identified assets and liabilities of Grant Prideco.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Other
    Information Related to the Merger</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Regulatory
    Approvals (see page&#160;51)</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger is subject to antitrust laws. On February&#160;6,
    2008, National Oilwell Varco and Grant Prideco refiled antitrust
    documents relating to the merger with the Federal Trade
    Commission, or FTC, and the Antitrust Division of the Department
    of Justice, or DOJ. On March&#160;6, 2008, the parties received
    early termination of the waiting period from the FTC and the DOJ.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco and Grant Prideco have made, or are in
    the process of making, the required filings relating to the
    merger with various government authorities in a number of
    foreign jurisdictions in which one or both companies have a
    sufficient market presence to require filings.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco and Grant Prideco continue to work with
    these various governmental agencies regarding the proposed
    merger. Upon receipt of all required regulatory approvals,
    National Oilwell Varco and Grant Prideco intend to close the
    merger as soon as possible thereafter. However, it cannot be
    assured that these regulatory approvals will be obtained or that
    the granting of these regulatory approvals will not involve the
    imposition of conditions on the completion of the merger. These
    conditions could result in the conditions to the merger not
    being satisfied.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Financing
    of the Merger</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to finance some or all of the cash portion of the
    merger consideration, National Oilwell Varco expects to incur
    incremental indebtedness of between $1.5&#160;billion and
    $2.0&#160;billion, whether or not Grant Prideco has completed
    the pending sale of a significant portion of its former Tubular
    Technology and Services business. In order to fund such amount,
    National Oilwell Varco intends to replace its existing
    $500&#160;million senior unsecured revolving credit facility
    with an aggregate of $3.0&#160;billion of unsecured credit
    facilities. National Oilwell Varco expects the facilities to
    consist of a $2.0&#160;billion, five-year revolving credit
    facility and a $1.0&#160;billion, 364-day revolving credit
    facility, with the credit facilities closing concurrent with the
    merger closing. National Oilwell Varco also expects to use such
    proceeds, if any, as necessary to refinance amounts outstanding
    under Grant Prideco&#146;s existing credit facility. National
    Oilwell Varco&#146;s obligation to complete the merger is not
    conditional on it obtaining financing.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although National Oilwell Varco has secured a bridge financing
    commitment of up to $2.0&#160;billion from Goldman Sachs Credit
    Partners L.P. and Wells Fargo Bank, National Oilwell Varco does
    not currently expect to borrow under this available bridge
    financing.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result of the merger, Grant Prideco may be required to
    offer to repurchase Grant Prideco&#146;s outstanding
    6<FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">8</FONT>%&#160;senior
    notes due 2015 at 101% of the principal amount thereof. National
    Oilwell Varco expects that funds to finance the repurchase will
    be available either from the cash on hand at Grant Prideco, from
    available cash or debt incurred by National Oilwell Varco or a
    combination thereof. At December&#160;31, 2007, the aggregate
    principal amount of Grant Prideco&#146;s outstanding senior
    notes was $174.6&#160;million. On March&#160;7, 2008, National
    Oilwell Varco also filed a registration statement in connection
    with its offer to exchange new National Oilwell Varco
    6<FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">8</FONT>%&#160;senior
    notes due 2015 for all of the outstanding Grant Prideco senior
    notes in connection with the merger. The closing of this
    exchange offer and related proposed amendments to the Grant
    Prideco senior notes is conditional on the consummation of the
    merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Comparison
    of the Rights of Stockholders of National Oilwell Varco and
    Grant Prideco (see page&#160;74)</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The stockholders of Grant Prideco are being asked to adopt the
    merger agreement pursuant to which each share of common stock of
    Grant Prideco (other than shares of common stock of Grant
    Prideco held directly or indirectly by National Oilwell Varco,
    NOV Sub or Grant Prideco) will be converted into
    0.4498&#160;shares of common stock of National Oilwell Varco and
    $23.20 in cash. Consequently, such stockholders will no longer
    hold shares in Grant Prideco but will instead hold shares in
    National Oilwell Varco and their rights as stockholders of
    National Oilwell
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    6
</DIV><!-- END PAGE WIDTH -->
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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="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Varco will be governed by Delaware law, the amended and restated
    certificate of incorporation of National Oilwell Varco and the
    amended and restated bylaws of National Oilwell Varco. There are
    various differences between the rights of stockholders of Grant
    Prideco and the rights of stockholders of National Oilwell Varco.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Listing
    of Common Stock to be Issued in the Merger (see
    page&#160;52)</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco has agreed to file an application to have
    the shares of common stock of National Oilwell Varco issued in
    the merger listed on the NYSE, the approval of which is a
    condition to closing the merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    After the effective time of the merger, shares of common stock
    of National Oilwell Varco will continue to trade on the NYSE
    under the ticker symbol &#147;NOV&#148;.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Appraisal
    Rights (see page&#160;47)</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Holders of shares of Grant Prideco&#146;s common stock will be
    entitled to demand an appraisal of their shares under
    Section&#160;262 of the Delaware General Corporation Law, or
    DGCL. To obtain an appraisal, stockholders of Grant Prideco must
    not vote in favor of the adoption of the merger agreement, must
    submit a written demand for an appraisal before the vote on the
    approval of the merger agreement and must continue to hold their
    shares of common stock of Grant Prideco through the effective
    date of the merger. Stockholders of Grant Prideco must also
    comply with other procedures as required by the DGCL. If
    appraisal rights are available, stockholders of Grant Prideco
    who validly demand appraisal of their shares in accordance with
    the DGCL, and do not withdraw their demand or otherwise forfeit
    their appraisal rights, will not receive the merger
    consideration. Instead, after completion of the proposed merger,
    the Court of Chancery of the State of Delaware will determine
    the fair value of their shares exclusive of any value arising
    from the proposed merger. This appraisal amount will be paid in
    cash and could be more than, the same as or less than the amount
    a stockholder of Grant Prideco would be entitled to receive
    under the terms of the merger agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The DGCL requirements for exercising appraisal rights are
    described in further detail in this proxy statement/prospectus
    in the section entitled &#147;The Merger&#160;&#151; Appraisal
    Rights&#148; beginning on page&#160;47, and Section&#160;262 of
    the DGCL regarding appraisal rights is reproduced and attached
    as Annex&#160;C of this proxy statement/prospectus.
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    7
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Selected
    Historical Consolidated Financial Data of National Oilwell
    Varco</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco is providing the following information to
    aid in your analysis of the financial aspects of the merger. The
    following selected historical financial data for each of the
    years in the five-year period ended December&#160;31, 2007 has
    been derived from audited consolidated financial statements for
    National Oilwell Varco.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The information is only a summary. You should read it along with
    the historical financial statements and related notes and the
    section titled &#147;Management&#146;s Discussion and Analysis
    of Financial Condition and Results of Operations&#148; contained
    in the Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for National Oilwell Varco for the year ended December&#160;31,
    2007 on file with the Securities and Exchange Commission and
    incorporated by reference into this proxy statement/prospectus.
    See &#147;Where You Can Find More Information&#148;.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="59%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="18" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2006</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2005(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2004</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2003</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="18" align="center" valign="bottom">
    <B>(In millions, except per share data)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Operation Data:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Revenue
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9,789.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,025.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,644.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,318.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,004.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Operating Profit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,044.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,111.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    476.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    176.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    164.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Income before Taxes and Minority Interest
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,028.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,049.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    430.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    138.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    121.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net Income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,337.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    684.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    286.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    115.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    79.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net Income per Share(2):
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Basic
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.77
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1.95
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.92
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.67
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.47
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Diluted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.76
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1.93
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.91
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.67
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.47
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Balance Sheet Data (at end of period):</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total Assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    12,114.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9,019.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6,678.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,576.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,213.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Long-term Debt, less Current Maturities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    737.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    834.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    835.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    350.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    594.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Stockholders&#146; Equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,661.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,023.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,194.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,270.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,059.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Financial results of Varco International, Inc.
    (&#147;Varco&#148;) have been included in National Oilwell
    Varco&#146;s consolidated financial statements beginning
    March&#160;11, 2005, the date the Varco merger was completed and
    Varco&#146;s common shares were exchanged for shares of National
    Oilwell Varco&#146;s common stock. Financial information for
    prior periods and dates may not be comparable with 2005 due to
    the impact of this business combination on National Oilwell
    Varco&#146;s financial position and results of operation. See
    Note&#160;3 of the Notes to National Oilwell Varco&#146;s
    Consolidated Financial Statements (incorporated herein by
    reference to National Oilwell Varco&#146;s annual report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2006) for a description of
    the Varco merger and related adjusted financial information.
    Results for the year ended December&#160;31, 2005 include
    integration costs associated with the Varco merger of
    $31.7&#160;million and stock-based compensation costs of
    $15.6&#160;million related to the amortization expense of
    options assumed in the Varco merger.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    All periods reflect a two-for-one stock split effected as a
    stock dividend in September 2007.</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    8
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Selected
    Historical Consolidated Financial Data of Grant
    Prideco</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco is providing the following information to aid in
    your analysis of the financial aspects of the merger. The
    following selected historical financial data for each of the
    years in the five-year period ended December&#160;31, 2007 has
    been derived from audited consolidated financial statements for
    Grant Prideco. This information has been adjusted in all periods
    to reflect the pending sale of Grant Prideco&#146;s Atlas
    Bradford Premium Threading and Services, TCA Premium Casing and
    Tube-Alloy Accessories to Vallourec S.A. and Vallourec &#038;
    Mannesmann Holdings, Inc., including the disposal of certain
    other divisions in Canada and Venezuela, and the sale of Grant
    Prideco&#146;s Texas Arai division in 2004 as discontinued
    operations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The information is only a summary. You should read it along with
    historical financial statements and related notes and the
    section titled &#147;Management&#146;s Discussion and Analysis
    of Financial Condition and Results of Operations&#148; contained
    in the Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for Grant Prideco for the year ended December&#160;31, 2007 on
    file with the Securities and Exchange Commission and
    incorporated by reference into this proxy statement/prospectus.
    See &#147;Where You Can Find More Information&#148;.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="64%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="18" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2006(1)(2)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2005(3)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2004(4)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2003(5)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="18" align="center" valign="bottom">
    <B>(In millions, except per share data)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <B>Operation Data:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 16pt">
    Revenue
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,908.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,530.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,089.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    767.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    628.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 16pt">
    Operating Income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    580.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    470.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    233.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    121.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 16pt">
    Income (Loss) from Continuing Operations
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    478.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    404.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    139.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    50.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (3.4
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 16pt">
    Net Income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    519.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    464.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    189.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    55.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <B>Income (Loss) Per Share:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 16pt">
    Income (Loss) from Continuing Operations:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 25pt">
    Basic
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.73
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.41
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (0.03
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 25pt">
    Diluted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.69
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.05
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.07
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.03
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 16pt">
    Net Income:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 25pt">
    Basic
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.05
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.56
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.49
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.45
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.04
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 25pt">
    Diluted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.01
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.45
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.44
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.04
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <B>Balance Sheet Data (at end of period):</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 16pt">
    Total Assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,350.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,022.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,540.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,344.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,262.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 16pt">
    Long-Term Debt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    176.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    237.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    217.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    377.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    426.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -8pt; margin-left: 16pt">
    Stockholders&#146; Equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,709.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,362.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    996.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    705.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    606.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    See discussion of other operating items related to 2007 and 2006
    in Note&#160;6 to Grant Prideco&#146;s consolidated financial
    statements for the year ended December&#160;31, 2007 that are
    incorporated by reference to Grant Prideco&#146;s annual report
    on Form 10-K for the year ended December&#160;31, 2007.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes a license and royalty payment in 2006 of
    $20.0&#160;million that Grant Prideco received in exchange for
    the use of ReedHycalog&#146;s patented technology for the
    shallow leaching of PDC cutters (see Note&#160;5 to Grant
    Prideco&#146;s consolidated financial statements for the year
    ended December&#160;31, 2007 that are incorporated by reference
    to Grant Prideco&#146;s annual report on Form 10-K for the year
    ended December&#160;31, 2007).</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes total refinancing charges of $57.1&#160;million in
    2005, which includes $35.4&#160;million related to replacing
    Grant Prideco&#146;s previous $190&#160;million credit facility
    with a new $350&#160;million credit facility, and an early
    redemption of Grant Prideco&#146;s $200&#160;million
    9<FONT style="vertical-align: text-top; font-size: 70%;">5</FONT>/<FONT style="font-size: 70%;">8</FONT>%&#160;Senior
    Notes due 2007 and $21.7&#160;million related to the repurchase
    of substantially all of Grant Prideco&#146;s 9%&#160;Senior
    Notes.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes $9.0&#160;million of charges in 2004, which include
    $3.8&#160;million related to the relocation of Grant
    Prideco&#146;s Corporate offices, $2.0&#160;million due to lease
    termination, severance and other exit costs related to the
    Drilling Products rationalization program and $3.2&#160;million
    of severance costs related to the former Tubular Technology and
    Services organizational restructuring.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes $37.8&#160;million of charges in 2003, which includes
    $24.9&#160;million related to fixed asset write-downs,
    $6.4&#160;million related to inventory reserves for exited
    product lines, $6.4&#160;million related to asset impairments,
    $1.5&#160;million related to stock-based compensation expense
    offset by a benefit of $1.4&#160;million related to the
    settlement of a contingent liability.</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    9
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Selected
    Unaudited Pro Forma Condensed Combined Financial and Other
    Data</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger will be accounted for under the purchase method of
    accounting, which means that the assets and liabilities of Grant
    Prideco will be recorded, as of the completion of the merger, at
    their fair values and added to those of National Oilwell Varco.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Presented below are selected unaudited pro forma condensed
    combined financial information that is intended to provide you
    with a better picture of what the businesses might have looked
    like had National Oilwell Varco actually owned Grant Prideco as
    of December&#160;31, 2007. The unaudited pro forma combined
    balance sheet combines the audited historical consolidated
    balance sheet of National Oilwell Varco with the Grant Prideco
    Unaudited Pro&#160;Forma Condensed Consolidated Balance Sheet
    (which adjusts Grant Prideco&#146;s historical consolidated
    balance sheet to reflect&#160;the pending disposition of certain
    Grant Prideco tubular business units as if it occurred on
    December&#160;31, 2007) and gives effect to the merger as if it
    also occurred on December&#160;31, 2007. The unaudited pro forma
    combined statement of operations combine the historical
    consolidated statement of income of National Oilwell Varco with
    the historical consolidated statement of operations of Grant
    Prideco for the year ended December&#160;31, 2007, giving effect
    to the merger as if it occurred on January&#160;1, 2007. The
    pending disposition is expected to close in the first half of
    2008 subject to customary closing conditions, including
    regulatory approval. However, there can be no assurance the
    pending disposition will be completed prior to the closing of
    the merger or at all. The selected unaudited pro forma condensed
    combined financial information does not reflect cost savings
    that may result from the merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should not rely on the selected unaudited pro forma
    condensed combined financial information as being indicative of
    the historical results that would have occurred had the
    companies been combined or the future results that may be
    achieved after the merger. The condensed combined financial
    information would have been different, perhaps materially, had
    the companies actually been combined during the period
    presented. The following selected unaudited pro forma combined
    financial information has been derived from, and should be read
    in conjunction with, the unaudited pro forma condensed combined
    financial statements and related notes included elsewhere in
    this proxy statement/prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="84%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Year Ended<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>(In millions, except<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>per share data)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Statement of Operations Data:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Revenues
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,646.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Operating Profit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,433.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income from Continuing Operations
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,629.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income from Continuing Operations per Share:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Basic
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.97
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Diluted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.95
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    &#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>(In millions)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Balance Sheet Data (at end of period):</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cash and Cash Equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,000.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total Assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19,437.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Long-Term Debt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,408.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total Stockholders&#146; Equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,860.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    10
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">UNAUDITED
    COMPARATIVE PER SHARE DATA</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table presents:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    historical per share data for National Oilwell Varco;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    pro forma per share data for National Oilwell Varco after giving
    effect to (i) the merger as a purchase of Grant Prideco and
    (ii)&#160;the sale of assets by Grant Prideco; and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    historical and equivalent pro forma per share data for Grant
    Prideco, as adjusted for the pending disposition of assets by
    Grant Prideco.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The pro forma amounts included in the table below are presented
    as if the merger had been effective for the periods presented,
    have been prepared in accordance with accounting principles
    generally accepted in the United States and are based on the
    purchase method of accounting. Neither National Oilwell Varco
    nor Grant Prideco has declared or paid dividends on its common
    stock during the periods presented. The pro forma amounts in the
    table below do not, however, give consideration to the impact,
    if any, of asset dispositions or cost savings that may result
    from the merger or any non-recurring charges directly
    attributable to the merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should read this table together with the historical
    consolidated financial statements of National Oilwell Varco and
    Grant Prideco that are filed with the Securities and Exchange
    Commission and incorporated by reference into this proxy
    statement/prospectus and the unaudited pro forma condensed
    consolidated financial statements and accompanying discussions
    and notes beginning on page&#160;79 of this proxy
    statement/prospectus. See &#147;Where You Can Find More
    Information&#148;. The pro forma amounts presented in the table
    below are presented for informational purposes only. You should
    not rely on the pro forma per share data as being indicative of
    actual results had the merger occurred prior to the dates
    indicated below. The combined financial information as of and
    for the periods presented may have been different had the
    companies actually been combined as of or during those periods.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="49%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="14" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>At and for the Year Ended December&#160;31, 2007</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>National<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Combined<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Grant Prideco</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Oilwell Varco<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Company<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Equivalent<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Historical</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Pro Forma(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Pro Forma(2)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Pro Forma(3)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Earnings from continuing operations per share:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Basic
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.77
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.97
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.73
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1.79
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Diluted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.76
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.95
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.69
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1.78
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cash dividends per share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Book value per share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    18.84
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    26.49
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    16.60
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11.92
</TD>
<TD nowrap align="left" valign="bottom">
    (4)
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    The combined company pro forma data includes the effect of the
    merger and the pending disposition of assets by Grant Prideco on
    the basis described in the notes to the unaudited pro forma
    condensed consolidated financial statements beginning on
    page&#160;79.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Grant Prideco Unaudited Pro&#160;Forma Condensed Consolidated
    Balance Sheet represents historical Grant Prideco, as adjusted
    to reflect the pending disposition of certain Grant Prideco
    tubular businesses as if it occurred on December&#160;31, 2007.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    The equivalent pro forma information for Grant Prideco was
    calculated by multiplying the corresponding information for the
    combined company pro forma by 0.4498. The exchange ratio does
    not include the $23.20 cash portion of the merger consideration.
    This information shows how each share of common stock of Grant
    Prideco would have participated in the corresponding earnings,
    dividends and book values of National Oilwell Varco had the
    companies been combined for the periods presented.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Grant Prideco equivalent pro forma book value per share is
    calculated by multiplying the combined company pro forma book
    value per share by an assumed exchange ratio of
    0.4498&#160;shares of National Oilwell Varco common stock per
    share of Grant Prideco common stock.</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    11
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">COMPARATIVE
    PER SHARE MARKET PRICE AND DIVIDEND INFORMATION</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Shares of the common stock of National Oilwell Varco are traded
    on the New York Stock Exchange under the symbol &#147;NOV&#148;
    and shares of the common stock of Grant Prideco are traded on
    the New York Stock Exchange under the symbol &#147;GRP&#148;.
    The following table sets forth, for the periods indicated, the
    range of high and low sales prices per share for common stock of
    National Oilwell Varco and common stock of Grant Prideco, on the
    New York Stock Exchange Composite Transactions Tape.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="65%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>Shares of Common Stock of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>Shares of Common Stock of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>National Oilwell Varco(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Grant Prideco</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>High</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Low</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>High</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Low</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>2005</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    First Quarter
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25.25
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    16.54
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    17.83
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Second Quarter
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24.61
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    19.63
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    27.47
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    21.41
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Third Quarter
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    34.16
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    23.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    41.49
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    26.58
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Fourth Quarter
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    33.70
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    26.57
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    47.82
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    32.38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>2006</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    First Quarter
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    38.80
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    27.89
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    51.47
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    35.67
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Second Quarter
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    36.49
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    28.16
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    55.43
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    39.70
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Third Quarter
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    34.32
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    27.43
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    48.33
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    34.32
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Fourth Quarter
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    34.30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25.81
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    45.32
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    33.11
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>2007</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    First Quarter
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    39.64
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    26.87
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    50.71
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    35.61
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Second Quarter
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    54.78
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    38.27
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    59.99
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    48.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Third Quarter
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    75.04
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    48.90
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    59.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    48.38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Fourth Quarter
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    82.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    61.05
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    56.94
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    44.67
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>2008</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    First Quarter (through March&#160;6, 2008)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    77.84
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    52.51
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    57.54
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    46.20
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    All periods reflect the two-for-one stock split effected as a
    100% stock dividend paid on September&#160;28, 2007 to National
    Oilwell Varco&#146;s stockholders of record as of
    September&#160;7, 2007.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Since December&#160;31, 2004, neither National Oilwell Varco nor
    Grant Prideco has paid cash dividends. Any potential future
    decision regarding the payment of dividends by National Oilwell
    Varco would depend on business conditions, National Oilwell
    Varco&#146;s financial condition, earnings, capital requirements
    and other factors. National Oilwell Varco has no immediate plans
    to declare or pay any dividends.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Recent
    Closing Prices</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table shows the closing sales prices per share of
    the common stocks of National Oilwell Varco and Grant Prideco
    and the equivalent value per share of common stock of Grant
    Prideco on December&#160;14, 2007 (the last full trading day
    before National Oilwell Varco and Grant Prideco announced the
    proposed merger) and March&#160;14, 2008, the most recent
    practicable date prior to the mailing of this proxy
    statement/prospectus to stockholders of Grant Prideco. The
    equivalent value per share of common stock of Grant Prideco was
    determined by reference to the value of the merger consideration
    to be received in respect of each share in the merger. Because
    the merger consideration per share of common stock of Grant
    Prideco is fixed at $23.20 in cash plus 0.4498&#160;shares of
    common stock of National Oilwell Varco, the value of the total
    merger consideration to be received by stockholders of Grant
    Prideco will fluctuate based on the market price of the common
    stock of National Oilwell Varco. We urge you to obtain the
    market prices of the common stocks of National Oilwell Varco and
    Grant Prideco before you vote.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="45%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="9%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="6%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="7%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Equivalent<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Value per Share of<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Common Stock of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Common Stock of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Common Stock of<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Date</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>National Oilwell Varco</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Grant Prideco</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Grant Prideco</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    December&#160;14, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    77.37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    47.46
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    58.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    March&#160;14, 2008
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    60.17
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    49.75
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    50.26
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    12
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='103'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RISK
    FACTORS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>In addition to the other information included in this proxy
    statement/prospectus, including the matters addressed in
    &#147;Cautionary Statement Regarding Forward-Looking
    Statements&#148;, you should carefully consider the following
    risks before deciding whether to vote for adoption of the merger
    agreement. In addition, you should read and consider the risks
    associated with each of the businesses of National Oilwell Varco
    and Grant Prideco because these risks will also affect the
    combined company. These risks can be found in National Oilwell
    Varco&#146;s and Grant Prideco&#146;s respective Annual Reports
    on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2007, which reports are
    filed with the SEC and incorporated by reference into this proxy
    statement/prospectus.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to the Merger and the Related Transactions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    not be able to successfully integrate the operations of the two
    companies and realize the anticipated benefits of the
    merger.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Achieving the benefits we expect from the merger will depend in
    large part on integrating our technology, operations and
    personnel in a timely and efficient manner to minimize the
    impact on customers, employees and management. Integration of
    the two previously independent companies will be a complex, time
    consuming and costly process. Failure to timely and successfully
    integrate these companies may have a material adverse effect on
    the combined company&#146;s business, financial condition and
    results of operations. The difficulties of combining the
    companies will present challenges to the combined company&#146;s
    management, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    operating a significantly larger combined company with
    operations in more geographic areas and with more business lines;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    integrating personnel with diverse backgrounds and
    organizational cultures;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    coordinating sales and marketing functions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    retaining key employees, customers or suppliers;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    preserving the research and development, collaboration,
    distribution, marketing, promotion and other important
    relationships of National Oilwell Varco and Grant Prideco;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    integrating the internal controls and procedures that National
    Oilwell Varco will be required to maintain under the
    Sarbanes-Oxley Act of 2002;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    consolidating other corporate and administrative functions.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The combined company will also be exposed to other risks that
    are commonly associated with transactions similar to the merger,
    such as unanticipated liabilities and costs, some of which may
    be material, and diversion of management&#146;s attention. As a
    result, we cannot assure you that we will realize any of the
    anticipated benefits of the merger, including anticipated cost
    savings, and failure to do so could adversely affect the
    business of the combined company after the merger.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    costs of the merger could adversely affect combined financial
    results.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect the total merger-related costs, including executive
    severance but exclusive of other employee benefit costs, to be
    approximately $110&#160;million, consisting primarily of
    executive severance, financial advisory, legal and accounting
    fees, financial printing costs and other related charges. The
    amount of these expenses is a preliminary estimate and is
    subject to change. In addition, the combined company will incur
    certain integration costs, including, but not limited to, costs
    associated with consolidating administrative and operational
    functions and the closure of certain facilities. If the benefits
    of the merger do not exceed the costs associated with the
    merger, including any dilution to the stockholders of both
    companies resulting from the issuance of shares in connection
    with the merger, the combined company&#146;s financial results,
    including earnings per share, could be adversely affected.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    13
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    exchange ratio for the common stock of National Oilwell Varco to
    be received in the merger is fixed and will not be adjusted in
    the event of any change in stock price.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon completion of the merger, each share of common stock of
    Grant Prideco will be exchanged for 0.4498 of a share of common
    stock of National Oilwell Varco and $23.20 in cash. The share
    conversion number is fixed and will not be adjusted as a result
    of any change in the price of the common stocks of either
    National Oilwell Varco or Grant Prideco. In addition, neither
    National Oilwell Varco nor Grant Prideco may terminate the
    merger agreement solely because of changes in the market price
    of either company&#146;s common stock. Therefore, if the value
    of the common stock of National Oilwell Varco declines prior to
    the completion of the merger, the value of the merger
    consideration to be received by stockholders of Grant Prideco
    will decline. The share prices of the common stocks of both
    National Oilwell Varco and Grant Prideco are by nature subject
    to the general price fluctuations in the market for publicly
    traded equity securities and have experienced significant
    volatility, and we cannot predict or give any assurances as to
    the market prices of the respective common stocks of National
    Oilwell Varco and Grant Prideco on the date of the special
    meeting of Grant Prideco&#146;s stockholders, the date of the
    completion of the merger or at any time after the completion of
    the merger. Stockholders of Grant Prideco are encouraged to
    obtain current market price quotations for the common stocks of
    National Oilwell Varco and Grant Prideco before voting their
    shares at the special meeting.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Existing
    stockholders of Grant Prideco will represent a minority of the
    stockholders of National Oilwell Varco after the
    merger.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Based on the number of outstanding shares of the common stock of
    Grant Prideco as of March&#160;14, 2008, National Oilwell Varco
    will issue to stockholders of Grant Prideco approximately
    56.3&#160;million shares of common stock of National Oilwell
    Varco in the merger. As a result, the current stockholders of
    Grant Prideco and National Oilwell Varco will hold approximately
    14% and 86%, respectively, of the common stock outstanding of
    National Oilwell Varco after the completion of the merger, based
    on the common stock of National Oilwell Varco and Grant Prideco
    outstanding as of March&#160;14, 2008. As a result, Grant
    Prideco&#146;s stockholders, as a general matter, will have
    significantly less influence over the management and policies of
    National Oilwell Varco than they currently exercise over the
    management and policies of Grant Prideco.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Failure
    to complete the merger or delays in completing the merger could
    negatively impact National Oilwell Varco&#146;s and Grant
    Prideco&#146;s stock prices and future business and
    operations.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the merger is not completed for any reason, National Oilwell
    Varco and Grant Prideco may be subject to a number of material
    risks, including the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the individual companies will not realize the benefits expected
    from becoming part of a combined company, including potentially
    enhanced financial and competitive position;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    under certain circumstances, Grant Prideco may be required to
    pay National Oilwell Varco a termination fee of
    $185.0&#160;million, and under certain other circumstances,
    either of the companies may be required to reimburse the other
    party for up to $5.0&#160;million in merger-related expenses;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the price of common stock of National Oilwell Varco or Grant
    Prideco may decline to the extent that the current market price
    of the common stock reflects a market assumption that the merger
    will be completed;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    some costs related to the merger, such as legal, accounting and
    financial advisor fees, must be paid even if the merger is not
    completed.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Whether
    or not the merger is completed, the pendency of the transaction
    could cause disruptions in the businesses of National Oilwell
    Varco and Grant Prideco, which could have an adverse effect on
    their businesses and financial results.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In response to the announcement of the merger, National Oilwell
    Varco&#146;s or Grant Prideco&#146;s customers may delay or
    defer purchasing decisions. Any delay or deferral of purchasing
    decisions by customers could negatively affect the business and
    results of operations of National Oilwell Varco and Grant
    Prideco, regardless of whether the
</DIV>

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    <BR>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    merger is ultimately completed. Similarly, current and
    prospective employees of National Oilwell Varco and Grant
    Prideco may experience uncertainty about their future roles with
    the companies until after the merger is completed or if the
    merger is not completed. This may adversely affect the ability
    of National Oilwell Varco and Grant Prideco to attract and
    retain key management, marketing and technical personnel. In
    addition, the diversion of the attention of the companies&#146;
    respective management teams away from the day-to-day operations
    during the pendency of the transaction could have an adverse
    effect on the financial condition and operating results of
    either company.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    merger agreement limits Grant Prideco&#146;s ability to pursue
    alternatives to the merger, and in certain instances requires
    payment of a termination fee, which could deter a third party
    from proposing an alternative transaction to the
    merger.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    While the merger agreement is in effect, subject to certain
    limited exceptions, Grant Prideco is prohibited from soliciting,
    initiating, encouraging or entering into any extraordinary
    transactions, such as a merger, sale of assets or other business
    combination, with any third party. As a result of these
    limitations, Grant Prideco may lose opportunities to enter into
    a more favorable transaction. If the merger is terminated and
    the board of directors of Grant Prideco determines to seek
    another merger or business combination, Grant Prideco cannot
    assure you that it will be able to find a transaction providing
    as much stockholder value as this merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See the section entitled &#147;The Merger Agreement&#160;&#151;
    No Solicitation&#148; beginning on page&#160;59.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Moreover, under specified circumstances, Grant Prideco could be
    required to pay National Oilwell Varco a termination fee of
    $185.0&#160;million in connection with the termination of the
    merger agreement. See the section entitled &#147;The Merger
    Agreement&#160;&#151; Termination; Termination Fees and
    Expenses&#148; beginning on page&#160;64. This termination fee
    could deter a third party from proposing an alternative to the
    merger.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">National
    Oilwell Varco and Grant Prideco could be required to divest,
    hold separate or license assets to complete the
    merger.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We cannot complete the merger until the waiting period under the
    <FONT style="white-space: nowrap">Hart-Scott-Rodino</FONT>
    Antitrust Improvements Act of 1976, or HSR, or any other
    applicable waiting period has expired or is otherwise
    terminated. On February&#160;6, 2008, National Oilwell Varco and
    Grant Prideco refiled antitrust documents relating to the merger
    with the FTC and the DOJ. On March&#160;6, 2008, the parties
    received early termination of the waiting period from the FTC
    and the DOJ. National Oilwell Varco and Grant Prideco have also
    made, or are in the process of making, the required filings
    relating to the merger with various government authorities in a
    number of foreign jurisdictions in which one or both companies
    have sufficient market presence to require filings. We continue
    to work with these various governmental agencies to obtain
    regulatory clearance to complete the merger. As a prerequisite
    to obtaining the expiration or termination of this waiting
    period, or to avoid an injunction by a governmental entity,
    whether foreign or domestic, National Oilwell Varco, Grant
    Prideco or both companies may be required to divest, hold
    separate or license certain assets. Although each of National
    Oilwell Varco and Grant Prideco have agreed to use their
    reasonable best efforts to obtain the expiration or termination
    of this waiting period and to obtain any other governmental
    clearance or approvals under federal, state or foreign antitrust
    laws, neither National Oilwell Varco nor Grant Prideco is
    required to divest, hold separate or license any of their
    respective businesses, product lines or assets, take or agree to
    take any other action or agree to any limitation, that would
    reasonably be expected to have a material adverse effect on the
    financial condition, results of operations or prospects of
    National Oilwell Varco or Grant Prideco or that is not
    conditioned upon completion of the merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Divestitures or licensing of assets can be time consuming and
    may delay or prevent completion of the proposed merger. Because
    there may be a limited number of potential buyers or licensees
    for the assets subject to divestiture or license and because
    potential buyers will likely be aware of the circumstances of
    the sale or license, these assets could be sold or licensed at
    prices or rates lower than their fair market values or the
    prices National Oilwell Varco or Grant Prideco paid for these
    assets. Asset divestitures or licenses of National Oilwell
    Varco&#146;s or Grant Prideco&#146;s assets could also
    significantly reduce the value of the combined company,
    eliminate potential cost savings opportunities or lessen the
    anticipated benefits of the merger.
</DIV>

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    <BR>
    15
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Some
    of the directors and executive officers of Grant Prideco have
    interests that differ in several respects from those of Grant
    Prideco&#146;s stockholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In considering the recommendation of the board of directors of
    Grant Prideco to adopt the merger agreement, the stockholders of
    Grant Prideco should consider that some of their directors and
    executive officers have interests that differ from, or are in
    addition to, their interests as stockholders of Grant Prideco
    generally. These interests include the expectation of being
    appointed an officer of the combined company, the benefits that
    directors and officers may receive in connection with any
    acceleration of the vesting of their outstanding equity awards
    as a result of the merger or their terminations of service, and
    the potential payments that certain officers of Grant Prideco
    may receive as a result of the merger. As a result, these
    officers and directors may be more likely to vote to adopt the
    merger agreement than if they did not hold these interests. You
    should consider whether these interests may have influenced
    these officers and directors to support or recommend the merger.
    For a detailed discussion of the interests of the directors and
    executive officers of Grant Prideco, please read &#147;The
    Merger&#160;&#151; Interests of Certain Persons in the
    Merger&#148;.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If
    National Oilwell Varco or Grant Prideco fails to obtain all
    required consents and waivers, third parties may terminate or
    alter existing contracts.</FONT></I></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain agreements with suppliers, customers, licensors or other
    business partners may require National Oilwell Varco or Grant
    Prideco to obtain the approval or waiver of these other parties
    in connection with the merger. National Oilwell Varco and Grant
    Prideco have agreed to use reasonable efforts to secure the
    necessary approvals and waivers. However, we cannot assure you
    that National Oilwell Varco
    <FONT style="white-space: nowrap">and/or</FONT> Grant
    Prideco will be able to obtain all of the necessary approvals
    and waivers, and failure to do so could have a material adverse
    effect on the business of the combined company after the merger.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Certain
    litigation against Grant Prideco, its directors and National
    Oilwell Varco has been instituted. This litigation could delay
    or prevent the merger. Similar litigation could also be
    instituted in the future.</FONT></I></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the date of this proxy statement/prospectus, National
    Oilwell Varco and Grant Prideco are aware of five lawsuits that
    have been filed in connection with the proposed merger. All five
    cases were filed in the district court of Harris County, Texas.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The plaintiffs in these lawsuits are stockholders of Grant
    Prideco. They allege, among other things, breaches of fiduciary
    duties of the directors of Grant Prideco owed to the
    stockholders of Grant Prideco in connection with the proposed
    merger. In one of the complaints, the plaintiffs also allege
    aiding and abetting by National Oilwell Varco of the alleged
    breaches. The plaintiffs seek to enjoin the merger and ask for
    other legal and equitable relief. National Oilwell Varco and
    Grant Prideco believe that these lawsuits are without merit and
    intend to defend against them. This litigation could, however,
    delay or prevent the proposed merger. It is also possible that
    additional suits seeking to enjoin the proposed merger could be
    filed. Any such suit could delay or prevent the proposed merger.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to the Combined Company&#146;s Business</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">National
    Oilwell Varco and Grant Prideco are dependent upon the oil and
    gas industry, which may be volatile.</FONT></I></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The oil and gas industry in which National Oilwell Varco and
    Grant Prideco participate historically has experienced
    significant volatility. Demand for our services and products
    depends primarily upon the number of oil rigs in operation, the
    number of oil and gas wells being drilled, the depth and
    drilling conditions of these wells, the volume of production,
    the number of well completions, capital expenditures of other
    oilfield service companies and the level of workover activity.
    Drilling and workover activity can fluctuate significantly in a
    short period of time, particularly in the United States and
    Canada. The willingness of oil and gas operators to make capital
    expenditures to explore for and produce oil and natural gas and
    the willingness of oilfield service companies to invest in
    capital equipment will continue to be influenced by numerous
    factors over which we have no control, including:
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability of the members of the Organization of Petroleum
    Exporting Countries, or OPEC, to maintain price stability
    through voluntary production limits, the level of production by
    non-OPEC countries and worldwide demand for oil and gas;
</TD>
</TR>


<TR style="line-height: 4pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    level of production from known reserves;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    16
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    cost of exploring for and producing oil and gas;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    level of drilling activity and drilling rig dayrates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    worldwide economic activity;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    national government political requirements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    development of alternate energy sources;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    environmental regulations.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If there is a significant reduction in demand for drilling
    services, in cash flows of drilling contractors, well servicing
    companies or production companies or in drilling or well
    servicing rig utilization rates, then demand for the products
    and services of the combined company after the merger will
    decline, and could lead to cancellations of orders placed with
    the combined company and a reduction of its backlog.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Volatile
    oil and gas prices affect demand for our products.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Oil and gas prices have been volatile since 1990. In general,
    oil prices approximated $18-22 per barrel from 1991 through
    1997, experienced a decline into the low teens in 1998 and 1999,
    and have generally ranged between $25-100 per barrel since 2000.
    Spot gas prices generally ranged between $1.80-2.60 per mmbtu of
    gas from 1991 through 1999, then experienced severe spikes into
    the $10 range in 2001 and 2003. Absent occasional spikes and
    dips due to imbalances in supply and demand, prices have
    generally ranged between $5.00-10.00 per mmbtu during the last
    two years.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Expectations for future oil and gas prices cause many shifts in
    the strategies and expenditure levels of oil and gas companies
    and drilling contractors, particularly with respect to decisions
    to purchase major capital equipment of the type we manufacture.
    Oil and gas prices, which are determined by the marketplace, may
    fall below a range that is acceptable to our customers, which
    could reduce demand for our products.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Competition
    in our industry could ultimately lead to lower revenues and
    earnings.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The oilfield products and services industry is highly
    competitive. National Oilwell Varco and Grant Prideco both
    compete with regional, national and foreign competitors in each
    of their current major product lines. These competitors may have
    greater financial, technical, manufacturing and marketing
    resources than National Oilwell Varco or Grant Prideco, even on
    a combined basis, and may be in a better competitive position.
    The following competitive actions can each affect our revenues
    and earnings:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    price changes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    new product and technology introductions;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    improvements in availability and delivery.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, certain foreign jurisdictions and government-owned
    petroleum companies located in some of the countries in which
    National Oilwell Varco and Grant Prideco operate have adopted
    policies or regulations that may give local nationals in these
    countries competitive advantages over National Oilwell Varco and
    Grant Prideco and that could impact the operations of the
    combined company after the merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We cannot assure you that the competitive environment in which
    National Oilwell Varco and Grant Prideco operate will not have
    an adverse effect on the combined company after the merger.
    Competition in our industry could lead to lower revenues and
    earnings.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Increases
    in the prices of our raw materials could affect our results of
    operations.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The combined company of National Oilwell Varco and Grant Prideco
    is likely to use large amounts of steel and alloy tubulars and
    bars in the manufacturing of its drilling products. The price of
    steel and these alloy raw materials has a significant impact on
    the cost of production. If the combined company is unable to
    pass future raw material
</DIV>

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    <BR>
    17
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    price increases on to customers, its margins and results of
    operations, stockholders&#146; equity, cash flows and financial
    condition could be adversely affected.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Steel and alloy prices have increased significantly during the
    past several years, caused primarily by significant increases in
    the prices paid by suppliers for scrap and coke and alloys
    utilized in their operations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, rising alloy and steel costs also have the
    potential to delay increases in demand for Grant Prideco&#146;s
    drill stem components. As drill stem products are not
    consumables, Grant Prideco&#146;s customers could elect to defer
    purchases until such time as they determine that steel prices
    have stabilized or returned to more normalized conditions. Grant
    Prideco&#146;s forward-looking statements do not assume that
    there will be any reduced demand for drill stem products as a
    result of increased prices caused by the current shortages being
    experienced in the worldwide steel and alloy markets. Reduced
    demand could adversely affect the results of operations,
    stockholders&#146; equity, cash flows and financial condition of
    the combined company.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Interruptions
    in the supply of raw materials could materially adversely affect
    our results of operations.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The combined company of National Oilwell Varco and Grant Prideco
    will rely on various suppliers to supply the components utilized
    to manufacture drilling products. The availability of the raw
    materials is not only a function of the availability of steel,
    but also the alloy materials utilized by suppliers in
    manufacturing component parts that meet the combined
    company&#146;s proprietary requirements. If material disruptions
    to the availability of raw materials occurs, it could adversely
    affect the results of operations, stockholders&#146; equity,
    cash flows and financial condition of the combined company, as
    well as its ability to increase manufacturing operations to help
    meet its revenue targets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In this regard, Grant Prideco is party to a green-tube supply
    agreement with voestalpine Tubulars GmbH&#160;&#038; Co. KG, or
    VAT, a company in which Grant Prideco beneficially owns a 50.01%
    interest, the term of which expires March&#160;31, 2009. If the
    combined company is unsuccessful in renewing this agreement with
    VAT in the future, the pricing terms of the existing agreement
    result in a material increase in the combined company&#146;s
    green-tube costs or the combined company or VAT fail to perform
    under the terms of the contract, it could have an adverse affect
    on the company&#146;s results of operations, stockholders&#146;
    equity, cash flows and financial condition and the
    company&#146;s ability to increase its manufacturing operations
    to meet the increased revenues upon which its forward-looking
    statements are based.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">National
    Oilwell Varco and Grant Prideco have each aggressively expanded
    their businesses, and the combined company intends to maintain
    an aggressive growth strategy after the merger.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco and Grant Prideco have aggressively
    expanded and grown their businesses during the past several
    years, primarily through acquisitions. We anticipate that
    National Oilwell Varco will continue to pursue an aggressive
    growth strategy following the merger; however, we cannot assure
    you that attractive acquisitions will be available after the
    merger, at reasonable prices or at all. In addition, we cannot
    assure you that we will successfully integrate the operations
    and assets of any acquired business with our own or that our
    management will be able to manage effectively the increased size
    of the combined company or operate any new lines of business.
    Any inability on the part of management to integrate and manage
    acquired businesses and their assumed liabilities could
    adversely affect our business and financial performance. In
    addition, after the merger, we may need to incur substantial
    indebtedness to finance future acquisitions. We cannot assure
    you that we will be able to obtain this financing on terms
    acceptable to us or at all. Future acquisitions may result in
    increased depreciation and amortization expense, increased
    interest expense, increased financial leverage or decreased
    operating income for the combined company, any of which could
    cause our business to suffer.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Both
    National Oilwell Varco&#146;s and Grant Prideco&#146;s operating
    results have fluctuated during recent years and these
    fluctuations may continue for the combined company after the
    merger.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Both National Oilwell Varco and Grant Prideco have experienced
    in the past, and the combined company may experience in the
    future, fluctuations in quarterly operating results. We cannot
    assure you that the combined company will realize expected
    earnings growth or that earnings in any particular quarter will
    not fall short of either a
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    18
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    prior fiscal quarter or investors&#146; expectations. The
    following factors, in addition to others not listed, may affect
    the combined company&#146;s quarterly operating results in the
    future:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fluctuations in the oil and gas industry;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    competition;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability to effectively and efficiently integrate the
    operations and businesses of National Oilwell Varco and Grant
    Prideco;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability to service the debt obligations of the combined
    company;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability to identify strategic acquisitions at reasonable
    prices;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability to manage and control operating costs of the
    combined company;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fluctuations in political and economic conditions in the United
    States and abroad;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability to protect National Oilwell Varco&#146;s and Grant
    Prideco&#146;s intellectual property rights.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">In
    connection with their business operations, National Oilwell
    Varco and Grant Prideco could be subject to substantial
    liability claims that adversely affect their results of
    operations.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Both National Oilwell Varco and Grant Prideco manufacture
    complex products and equipment and the failure of these products
    and equipment to operate properly or to meet specifications may
    greatly increase customers&#146; costs of drilling a well. In
    addition, many of these products are used in hazardous drilling
    and production applications where an accident or product failure
    can cause personal injury or loss of life, damage to property,
    equipment or the environment, regulatory investigations and
    penalties, and the suspension of the end-user&#146;s operations.
    If National Oilwell Varco&#146;s or Grant Prideco&#146;s
    products or services fail to meet specifications or are involved
    in accidents or failures, the combined company could face
    warranty, contract or other litigation claims for which we may
    be held responsible and our reputation for providing quality
    products may suffer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The insurance carried by National Oilwell Varco and Grant
    Prideco may not be adequate in risk coverage or policy limits to
    cover all losses or liabilities that we may incur or for which
    we may be responsible. Moreover, in the future we may not be
    able to maintain insurance at levels of risk coverage or policy
    limits that we deem adequate or at premiums that are reasonable
    for us, particularly in the recent environment of significant
    insurance premium increases. Further, any claims made under our
    policies will likely cause our premiums to increase.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any future damages deemed to be caused by the products or
    services of National Oilwell Varco or Grant Prideco that are
    assessed against us and that are not covered by insurance, or
    that are in excess of policy limits or subject to substantial
    deductibles, could have a material adverse effect on our results
    of operations and financial condition. Litigation and claims for
    which we are not insured can occur, including employee claims,
    intellectual property claims, breach of contract claims and
    warranty claims. Any forward-looking statements of National
    Oilwell Varco and Grant Prideco assume that such uninsured
    claims or issues will not occur. If the combined company
    accounts for warranty reserves on a specific identification
    basis, a significant unexpected warranty issue during a
    particular quarter or year could cause a material reduction in
    the results of operations, stockholders&#146; equity, cash flows
    and financial condition of the combined company in the quarter
    or year in which the reserve for such warranty is made.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    results of operations for National Oilwell Varco or Grant
    Prideco could be adversely affected by actions under U.S. trade
    laws and new foreign entrants into U.S. markets.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although National Oilwell Varco and Grant Prideco are
    <FONT style="white-space: nowrap">U.S.-based</FONT>
    manufacturing companies, each owns and operates international
    manufacturing operations that support the
    <FONT style="white-space: nowrap">U.S.-based</FONT>
    businesses. If actions under U.S.&#160;trade laws were
    instituted that limited access to these products, the combined
    company&#146;s ability to meet customer specifications and
    delivery requirements would be reduced. Any adverse effects on
    the ability to import products from foreign subsidiaries could
    have a material adverse effect on the results of operations,
    stockholders&#146; equity, cash flows and financial condition of
    the combined company.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    19
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">There
    are risks associated with National Oilwell Varco&#146;s and
    Grant Prideco&#146;s presence in international markets,
    including political or economic instability and currency
    restrictions.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Approximately 59% of National Oilwell Varco&#146;s revenues and
    42% of Grant Prideco&#146;s revenues in 2007 were derived from
    operations outside the United States (based on revenue
    destination for National Oilwell Varco and based on origination
    for Grant Prideco). National Oilwell Varco&#146;s foreign
    operations include significant operations in Canada, Europe, the
    Middle East, Africa, Southeast Asia, South America and other
    international markets. Grant Prideco has significant foreign
    operations in Europe, Canada, Latin America, Southeast Asia and
    other international markets. Both companies&#146; revenues and
    operations are subject to the risks normally associated with
    conducting business in foreign countries, including uncertain
    political and economic environments, which may limit or disrupt
    markets, restrict the movement of funds or result in the
    deprivation of contract rights or the taking of property without
    fair compensation. Government-owned petroleum companies located
    in some of the countries in which National Oilwell Varco or
    Grant Prideco operates have adopted policies, or are subject to
    governmental policies, giving preference to the purchase of
    goods and services from companies that are majority-owned by
    local nationals. As a result of these policies, National Oilwell
    Varco and Grant Prideco rely on joint ventures, license
    arrangements and other business combinations with local
    nationals in these countries. In addition, political
    considerations may disrupt the commercial relationships between
    National Oilwell Varco and Grant Prideco and government-owned
    petroleum companies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under broad powers granted to the President of Venezuela by the
    National Assembly on January&#160;31, 2007, the Venezuelan
    government began asserting closer government control over its
    oil and gas reserves. National Oilwell Varco generated revenue
    of $69.6&#160;million from its Venezuelan operations in 2007,
    and as of December&#160;31, 2007 had a net equity investment in
    Venezuela of $53.7&#160;million. These political events could
    adversely affect the combined company&#146;s operations in
    Venezuela and financial results in the future.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    results of our operations are subject to market risk from
    changes in foreign currency exchange rates.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco and Grant Prideco earn revenues, pay
    expenses and incur liabilities in countries using currencies
    other than the U.S. dollar, including the Canadian dollar, the
    Euro, the British Pound and the Norwegian Kroner. Approximately
    59% of National Oilwell Varco&#146;s 2007 revenue and 42% of
    Grant Prideco&#146;s 2007 revenue was derived from sales outside
    the United States. Because our consolidated financial statements
    are presented in U.S. dollars, we must translate revenues,
    income and expenses into U.S. dollars at exchange rates in
    effect during or at the end of each reporting period. Thus,
    increases or decreases in the value of the U.S. dollar against
    other currencies in which our operations are conducted will
    affect our revenues and operating income. Because of the
    geographic diversity of our operations, weaknesses in some
    currencies might be offset by strengths in others over time. We
    also use derivative financial instruments to further reduce our
    net exposure to currency exchange fluctuations. National Oilwell
    Varco had forward contracts with a notional amount of $4,104.1
    million (with a fair value of $106.0 million) as of December 31,
    2007 to reduce the impact of foreign currency exchange rate
    movements, but is also subject to risks that the counterparties
    to these contracts fail to meet the terms of National Oilwell
    Varco&#146;s foreign currency contracts. We cannot assure you
    that fluctuations in foreign currency exchange rates would not
    affect our financial results.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">An
    impairment of goodwill or indefinite-lived intangibles could
    reduce the combined company&#146;s earnings.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco had recorded approximately
    $2,445.1&#160;million of goodwill on its consolidated balance
    sheet as of December&#160;31, 2007. National Oilwell Varco
    currently expects to record approximately $2,670.7&#160;million
    of goodwill and $752.0&#160;million for the Reed Hycalog and
    Grant Prideco tradenames which are considered indefinite lived
    upon completion of the merger, but that estimate is subject to
    change based upon the final number of shares of common stock of
    National Oilwell Varco issued at the time of closing of the
    merger and the final valuation of the identified assets and
    liabilities of Grant Prideco. Consequently, following the
    merger, we expect that approximately $5,867.8&#160;million,
    representing approximately 30.2% of the combined company&#146;s
    consolidated assets on a pro forma as adjusted basis, may be
    recorded as goodwill and indefinite-lived intangibles. Goodwill
    is recorded when the purchase price of a business exceeds the
    fair market value of the tangible and separately measurable
    intangible net assets. Generally accepted accounting principles
    will require the combined company to test goodwill and
    indefinite-lived intangibles for impairment on an annual basis
    or when events or circumstances occur indicating that an
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    20
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    impairment might exist. If the combined company were to
    determine that any of its remaining balance of goodwill or
    indefinite-lived tradenames were impaired, it would record an
    immediate charge to earnings with a corresponding reduction in
    stockholders&#146; equity and increase in balance sheet leverage
    as measured by debt to total capitalization.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    could be adversely affected if we fail to comply with any of the
    numerous federal, state and local laws, regulations and policies
    that govern environmental protection, zoning and other matters
    applicable to our businesses.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The businesses of National Oilwell Varco and Grant Prideco are
    subject to numerous federal, state and local laws, regulations
    and policies governing environmental protection, zoning and
    other matters. These laws and regulations have changed
    frequently in the past and it is reasonable to expect additional
    changes in the future. If existing regulatory requirements
    change, we may be required to make significant unanticipated
    capital and operating expenditures. We cannot assure you that
    our operations will continue to comply with future laws and
    regulations. Governmental authorities may seek to impose fines
    and penalties on us or to revoke or deny the issuance or renewal
    of operating permits for failure to comply with applicable laws
    and regulations. Under these circumstances, we might be required
    to reduce or cease operations or conduct site remediation or
    other corrective action which could adversely impact our
    operations and financial condition.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    businesses expose us to potential environmental
    liability.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our businesses expose us to the risk that harmful substances may
    escape into the environment, which could result in:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    personal injury or loss of life;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    severe damage to or destruction of property;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    environmental damage and suspension of operations.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our current and past activities, as well as the activities of
    our former divisions and subsidiaries, could result in our
    facing substantial environmental, regulatory and other
    liabilities. These could include the costs of cleanup of
    contaminated sites and site closure obligations. These
    liabilities could also be imposed on the basis of one or more of
    the following theories:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    negligence;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    strict liability;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    breach of contract with customers;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    as a result of our contractual agreement to indemnify our
    customers in the normal course of our business, which is
    normally the case.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    not have adequate insurance for potential environmental
    liabilities.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    While National Oilwell Varco and Grant Prideco maintain
    liability insurance, this insurance is subject to coverage
    limits. In addition, certain policies do not provide coverage
    for damages resulting from environmental contamination. We face
    the following risks with respect to our insurance coverage:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we may not be able to continue to obtain insurance on
    commercially reasonable terms;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we may be faced with types of liabilities that will not be
    covered by our insurance;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our insurance carriers may not be able to meet their obligations
    under the policies;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the dollar amount of any liabilities may exceed our policy
    limits.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Even a partially uninsured claim, if successful and of
    significant size, could have a material adverse effect on our
    consolidated financial statements.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    21
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD>

</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">There
    are risks associated with certain contracts for our drilling
    equipment.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2007, National Oilwell Varco had a
    backlog of approximately $9&#160;billion of drilling equipment
    to be manufactured, assembled, tested and delivered by its Rig
    Technology group. The following factors, in addition to others
    not listed, could reduce our margins on these contracts,
    adversely affect our position in the market and subject us to
    contractual penalties:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our failure to adequately estimate costs for making this
    drilling equipment;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our inability to deliver equipment that meets contracted
    technical requirements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our inability to maintain our quality standards during the
    design and manufacturing process;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our inability to secure parts made by third party vendors at
    reasonable costs and within required timeframes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    unexpected increases in the costs of raw materials; and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our inability to manage unexpected delays due to weather,
    shipyard access, labor shortages or other factors beyond our
    control.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Such developments could have a material adverse effect on our
    consolidated financial statements.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    22
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='104'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CAUTIONARY
    STATEMENT REGARDING FORWARD-LOOKING STATEMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This proxy statement/prospectus and the documents incorporated
    by reference contain various forward-looking statements and
    information that are based on the beliefs of National Oilwell
    Varco and Grant Prideco, as well as assumptions made by National
    Oilwell Varco and Grant Prideco and information currently
    available to us. When used in this proxy statement/prospectus,
    words such as &#147;anticipate,&#148; &#147;project,&#148;
    &#147;expect,&#148; &#147;plan,&#148; &#147;goal,&#148;
    &#147;forecast,&#148; &#147;intend,&#148; &#147;could,&#148;
    &#147;believe,&#148; &#147;may,&#148; and similar expressions
    and statements regarding our plans and objectives for future
    operations, are intended to identify forward-looking statements.
    Forward-looking statements in this proxy statement/prospectus
    also include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    statements relating to the cost savings, transaction costs or
    integration costs that National Oilwell Varco and Grant Prideco
    anticipate to arise from the merger;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    statements with respect to various actions to be taken or
    requirements to be met in connection with completing the merger
    or integrating National Oilwell Varco and Grant Prideco;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    statements relating to revenue, income and operations of the
    combined company after the merger is completed;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    statements regarding the expected financing available to
    National Oilwell Varco for the cash portion of the consideration
    payable in the merger;&#160;and
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    statements relating to Grant Prideco&#146;s expected sale of
    certain tubular business units.
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These forward-looking statements are subject to a number of
    factors and uncertainties that could cause actual results to
    differ materially from those described in the forward-looking
    statements. The following factors, among others, including those
    discussed in the &#147;Risk Factors&#148; section of this proxy
    statement/prospectus, could cause actual results to differ
    materially from those described in the forward-looking
    statements:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    expected cost savings from the merger may not be fully realized
    or realized within the expected time frame;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    revenue of the combined company following the transaction may be
    lower than expected;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    costs or difficulties related to obtaining regulatory approvals
    for completing the merger and, following the transaction, to the
    integration of the businesses of National Oilwell Varco and
    Grant Prideco, may be greater than expected;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    general economic conditions, either internationally or
    nationally or in the jurisdictions in which National Oilwell
    Varco or Grant Prideco is doing business, may be less favorable
    than expected;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the potential for rapid and significant changes in technology
    and their effect on the combined company&#146;s operations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    inability to retain key personnel after the merger;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    operating, legal and regulatory risks.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except for its ongoing obligations to disclose material
    information as required by the federal securities laws, neither
    National Oilwell Varco nor Grant Prideco has any intention or
    obligation to update these forward-looking statements after it
    distributes this proxy statement/prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although we believe that such expectations reflected in such
    forward-looking statements are reasonable, we cannot give any
    assurances that such expectations will prove to be correct. Such
    statements are subject to a variety of risks, uncertainties and
    assumptions. If one or more of these risks or uncertainties
    materialize, or if underlying assumptions prove incorrect, our
    actual results may vary materially from those anticipated,
    estimated, projected or expected.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should not put undue reliance on any forward-looking
    statements. When considering forward-looking statements, please
    review the risk factors described under &#147;Risk Factors&#148;
    in this proxy statement/prospectus and incorporated by reference
    into this proxy statement/prospectus.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    23
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='105'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">THE
    COMPANIES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">National
    Oilwell Varco&#146;s Business</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>This section summarizes information from National Oilwell
    Varco&#146;s Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2007. For a more detailed
    discussion of National Oilwell Varco&#146;s business, please
    read National Oilwell Varco&#146;s Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2007 and its other filings
    incorporated into this proxy statement/prospectus by
    reference.</I>
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Business
    Segments</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco&#146;s business has three reportable
    operating segments:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Rig Technology;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Petroleum Services&#160;&#038; Supplies;&#160;and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Distribution Services.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Rig
    Technology</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco&#146;s Rig Technology segment designs,
    manufactures, sells and services complete systems for the
    drilling, completion, and servicing of oil and gas wells. The
    segment offers a comprehensive line of highly-engineered
    equipment that automates complex well construction and
    management operations, such as offshore and onshore drilling
    rigs; derricks; pipe lifting, racking, rotating and assembly
    systems; coiled tubing equipment and pressure pumping units;
    well workover rigs; wireline winches; and cranes. Demand for Rig
    Technology products is primarily dependent on capital spending
    plans by drilling contractors, oilfield service companies, and
    oil and gas companies, and secondarily on the overall level of
    oilfield drilling activity, which drives demand for spare parts
    for the segment&#146;s large installed base of equipment.
    National Oilwell Varco has made strategic acquisitions and other
    investments during the past several years in an effort to expand
    its product offering and its global manufacturing capabilities,
    including adding additional operations in the United States,
    Canada, Norway, the United Kingdom, China, India and Belarus.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Petroleum
    Services &#038; Supplies</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco&#146;s Petroleum Services&#160;&#038;
    Supplies segment provides a variety of consumable goods and
    services used to drill, complete, remediate and workover oil and
    gas wells and service pipelines, flowlines and other oilfield
    tubular goods. The segment manufactures, rents and sells a
    variety of products and equipment used to perform drilling
    operations, including transfer pumps, solids control systems,
    drilling motors and other downhole tools, rig instrumentation
    systems, and mud pump consumables. Demand for these services and
    supplies is determined principally by the level of oilfield
    drilling and workover activity by drilling contractors, major
    and independent oil and gas companies, and national oil
    companies. Oilfield tubular services include the provision of
    inspection and internal coating services and equipment for
    drillpipe, linepipe, tubing, casing and pipelines; and the
    design, manufacture and sale of coiled tubing pipe and advanced
    composite pipe for application in highly corrosive environments.
    The segment sells its tubular goods and services to oil and gas
    companies; drilling contractors; pipe distributors, processors
    and manufacturers; and pipeline operators. This segment has
    benefited from several strategic acquisitions and other
    investments completed during the past few years, including
    adding additional operations in the United States, Canada, the
    United Kingdom, China, the United Arab Emirates, Kazakhstan,
    Mexico, Russia, Argentina, India, Bolivia, the Netherlands,
    Singapore, Malaysia and Vietnam.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Distribution
    Services</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco&#146;s Distribution Services segment
    provides maintenance, repair and operating supplies and spare
    parts to drill site and production locations worldwide. In
    addition to its comprehensive network of field locations
    supporting land drilling operations throughout North America,
    the segment supports major offshore drilling contractors through
    locations in Mexico, the Middle East, Europe, Southeast Asia and
    South America. Using its advanced information technology
    platforms and processes, the Distribution Services segment can
    provide complete procurement, inventory management, and
    logistics services to its customers. Demand for the
    segment&#146;s services are determined primarily by the level of
    drilling, servicing and oil and gas production activities.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    24
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Grant
    Prideco&#146;s Business</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>This section summarizes information from Grant Prideco&#146;s
    Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2007. For a more detailed
    discussion of Grant Prideco&#146;s business, please read Grant
    Prideco&#146;s Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2007.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Business
    Segments</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco&#146;s business activities are segregated into
    four distinct segments:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Drilling Products and Services;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    ReedHycalog;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Other (which includes results of IntelliServ, Inc. and XL
    Systems); and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Corporate
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For information relating to revenues from external customers,
    operating income and total assets of each segment, please read
    the financial statements incorporated by reference into this
    proxy statement/prospectus.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Drilling
    Products and Services</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco&#146;s Drilling Products and Services segment
    manufactures and sells a variety of drill stem products used for
    the drilling of oil and gas wells. The principal products sold
    by this segment are: (1)&#160;drill pipe products,
    (2)&#160;drill collars and heavyweight drill pipe and
    (3)&#160;drill stem accessories. Demand for the segment&#146;s
    drill stem products is impacted primarily by changes in drilling
    activity and worldwide rig activity, but also by the level of
    inventory held by customers and their perceptions as to future
    activity and the near-term need for new drill stem products.
    With the increased complexity of drilling activity, demand for
    the segment&#146;s proprietary line of
    eXtreme<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    drilling and other premium drilling products has remained
    strong. The segment&#146;s premium drilling products are
    specifically designed for extreme drilling conditions such as
    extended reach, directional, horizontal, deep gas, offshore and
    ultra-deepwater drilling, as well as high-temperature,
    high-pressure and corrosive well conditions. The segment&#146;s
    drill stem products are sold to a variety of customers,
    including oil and gas drilling contractors, rental tool
    companies and major, independent and state-owned oil and gas
    companies. The principal competitors for our drill stem products
    include Smith International Inc., Texas Steel Conversion,
    Vallourec and Mannesmann and various smaller local manufacturers
    in the U.S.&#160;and worldwide.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ReedHycalog</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco&#146;s ReedHycalog segment is a leading global
    designer, manufacturer and distributor of drill bits,
    hole-opening or hole enlarging tools, coring services and other
    related technology to the oil and gas industry. This segment
    services its customer base through a technical sales and
    marketing network in virtually every significant oil and
    gas-producing region in the world. All of the products and
    services are generally sold directly to the upstream oil and gas
    operators and, to a lesser extent, drilling contractors on
    turnkey and footage contracts. Competition is based on technical
    performance, price and service. ReedHycalog manufactures and
    sells both fixed-cutter bits and roller-cone bits on a global
    basis. The primary market driver for these bits is worldwide
    drilling activity or, more specifically, total footage drilled,
    as well as a function of well depth and complexity; demand for
    fixed-cutter bits is tied more strongly to offshore, directional
    or horizontal drilling. This segment provides a complete series
    of drill bits incorporating advanced materials technology and a
    range of performance-enhancing features. In addition, the
    segment provides drill bit selection, well-planning services and
    vibration monitoring and control through its field sales and
    engineering organization. Grant Prideco&#146;s principal
    competitors are Hughes Christensen (a division of Baker Hughes
    Inc.), Smith Bits (a division of Smith International Inc.), and
    Security DBS (a division of Halliburton Company) as well as
    numerous smaller competitors throughout the world.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Other
    Segment</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco&#146;s Other segment primarily includes the
    operations of IntelliServ, Inc. (Intelliserv) and XL Systems. In
    September 2005, Grant Prideco acquired full ownership of
    IntelliServ, a company focused on the
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    25
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    provision of well-site data transmission services.
    IntelliServ&#146;s core product, &#147;The
    IntelliServ<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    Network&#148;, was commercialized in 2006 and incorporates
    various proprietary mechanical and electrical components into
    its premium drilling tubulars to allow bi-directional data
    transfer via the drill string. This network functions at speeds
    several orders of magnitude higher than current mud pulse and
    electromagnetic transmission systems and will potentially
    deliver significant improvements in drilling efficiency and well
    placement. IntelliServ began its commercial operations in the
    last quarter of 2006 and offers its products and services on a
    rental basis to oil and gas operators. XL Systems provides
    integrated packages of large-bore tubular products and services
    for offshore wells, including a proprietary line of wedge thread
    marine connections on large-bore tubulars and related
    engineering and design services. XL Systems provides its product
    line for drive pipe, jet strings and conductor casing and also
    offers weld-on connections and service personnel in connection
    with the installation of these products. In early 2007, XL
    Systems completed development of its new high-strength
    Viper<SUP style="font-size: 85%; vertical-align: text-top">TM</SUP>
    weld-on connector which Grant Prideco believes will permit it to
    penetrate traditional markets that do not require the enhanced
    performance of XL Systems&#146; proprietary wedge-thread system.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Corporate
    Segment</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco&#146;s Corporate segment includes its general
    corporate overhead expenses.
</DIV>
<A name='106'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RECENT
    DEVELOPMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the date of this proxy statement/prospectus, National
    Oilwell Varco and Grant Prideco are aware of five shareholder
    lawsuits that have been filed in connection with the proposed
    merger. These lawsuits, each of which has been filed in the
    District Court of Harris County, Texas, against Grant Prideco,
    its board of directors and, in one case, National Oilwell Varco,
    are as follows: <I>Mark Bornstein, On Behalf of Himself and All
    Others Similarly Situated vs. Grant Prideco, Inc., et al.</I>,
    Cause
    <FONT style="white-space: nowrap">No.&#160;2007-76092,</FONT>
    In the District Court of Harris County, Texas,
    269th&#160;Judicial District; <I>Catholic Medical Mission Board,
    On Behalf of Itself and All Others Similarly Situated vs. Grant
    Prideco, Inc., et al.</I>, Cause
    <FONT style="white-space: nowrap">No.&#160;2007-76418,</FONT>
    In the District Court of Harris County, Texas,
    55th&#160;Judicial District; <I>Thomas Gray, On Behalf of
    Himself and All Others Similarly Situated vs. Grant Prideco,
    Inc., et al.</I>, Cause
    <FONT style="white-space: nowrap">No.&#160;2007-76419,</FONT>
    In the District Court of Harris County, Texas,
    133rd&#160;Judicial District; <I>Roslyn Feder, On Behalf of
    Herself and All Others Similarly Situated vs. Grant Prideco,
    Inc., et al.</I>, In the District Court of Harris County, Texas,
    61st&#160;Judicial District; and <I>Kenneth Engberg, On Behalf
    of Himself and All Others Similarly Situated vs. Grant Prideco,
    Inc., et al.</I>, Cause
    <FONT style="white-space: nowrap">No.&#160;2008-02244,</FONT>
    In the District Court of Harris County, Texas,
    281st&#160;Judicial District.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each of the plaintiffs in these five lawsuits alleges that they
    are stockholders of Grant Prideco and each of these five
    lawsuits is brought as a putative class action. Each of these
    lawsuits alleges that the proposed merger consideration is
    inadequate and that Grant Prideco and its individual directors
    breached fiduciary duties owed to the stockholders of Grant
    Prideco in connection with the proposed merger. Additionally, in
    the <I>Bornstein </I>suit, plaintiff alleges that National
    Oilwell Varco aided and abetted the alleged breach of fiduciary
    duty by Grant Prideco and its board of directors. The plaintiffs
    in each of these actions seek certification of their lawsuits as
    class actions, seek to enjoin the proposed merger and also ask
    for other legal and equitable relief, including an award of
    attorneys&#146; fees and costs of court. On January&#160;17,
    2008, Grant Prideco filed a motion requesting that all of these
    shareholder actions be consolidated with the <I>Bornstein
    </I>case in the 269th&#160;Judicial District Court of Harris
    County, Texas. On March&#160;6, 2008, the Court signed an order
    granting the consolidation motion and consolidating all five of
    the lawsuits under the <I>Bornstein</I> cause number.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This litigation is in its very early stages; however, National
    Oilwell Varco and Grant Prideco believe that each of these five
    lawsuits is without merit and intend to defend them.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    26
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='107'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">THE
    SPECIAL MEETING OF GRANT PRIDECO&#146;S STOCKHOLDERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>This proxy statement/prospectus is being provided to the
    stockholders of Grant Prideco as part of a solicitation of
    proxies by Grant Prideco&#146;s board of directors for use at
    Grant Prideco&#146;s special meeting to be held at the time and
    place specified below, and at any properly convened meeting
    following an adjournment or postponement thereof. This proxy
    statement/prospectus provides stockholders of Grant Prideco with
    the information they need to know to be able to vote or instruct
    their vote to be cast at Grant Prideco&#146;s special
    meeting.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Date,
    Time and Place of the Special Meeting of Grant Prideco&#146;s
    Stockholders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The special meeting is scheduled to be held as follows:
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Crowne Plaza Hotel Houston North-Greenspoint, 425 North Sam
    Houston Pkwy E, Houston, Texas 77060 on April&#160;21, 2008 at
    10:00&#160;a.m., Houston time.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Purpose
    of the Special Meeting of Grant Prideco&#146;s
    Stockholders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The special meeting of Grant Prideco&#146;s stockholders is
    being held in order to consider and vote on the adoption of the
    Agreement and Plan of Merger, dated as of December&#160;16,
    2007, among National Oilwell Varco, Inc., a Delaware
    corporation, NOV Sub, Inc., a wholly owned subsidiary of
    National Oilwell Varco, Inc. and a Delaware corporation, and
    Grant Prideco, Inc., a Delaware corporation, as amended prior to
    the special meeting, pursuant to which Grant Prideco will be
    merged with and into NOV Sub and each outstanding share of
    common stock of Grant Prideco will be converted into 0.4498 of a
    share of common stock of National Oilwell Varco and $23.20 in
    cash, plus cash in lieu of fractional shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Recommendation
    of the Board of Directors of Grant Prideco</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Recommendation
    of the Board of Directors of Grant Prideco</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The board of directors of Grant Prideco has determined that the
    merger agreement and the transactions contemplated by the merger
    agreement are advisable and in the best interests of Grant
    Prideco and its stockholders, and has approved the merger
    agreement and merger.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Grant
    Prideco&#146;s board of directors unanimously recommends that
    you vote &#147;FOR&#148; the adoption of the merger
    agreement.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Record
    Date; Stockholders Entitled to Vote; Quorum</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Only holders of record of the common stock of Grant Prideco at
    the close of business on March&#160;14, 2008, the record date
    for Grant Prideco&#146;s special meeting, are entitled to notice
    of, and to vote at, Grant Prideco&#146;s special meeting. At the
    close of business on the record date, 126,557,389&#160;shares of
    common stock of Grant Prideco were issued and outstanding and
    held by 2,340&#160;holders of record. Holders of record of the
    common stock of Grant Prideco on the record date are entitled to
    one vote per share at the special meeting on each proposal. A
    list of stockholders of Grant Prideco will be available for
    review for any purpose germane to the special meeting at Grant
    Prideco&#146;s executive offices and principal place of business
    during regular business hours for a period of 10&#160;days
    before the special meeting. The list will also be available at
    the special meeting for examination by any stockholder of record
    present at the special meeting.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A quorum is necessary to hold a valid special meeting. A quorum
    will be present at Grant Prideco&#146;s special meeting if the
    holders of a majority of the outstanding shares of the common
    stock of Grant Prideco entitled to vote on the record date are
    present, in person or by proxy. If a quorum is not present at
    the special meeting, we expect the presiding officer to adjourn
    the meeting to solicit additional proxies. Abstentions and
    broker &#147;non-votes&#148; count as present for establishing a
    quorum for the transaction of all business.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Vote
    Required</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The adoption of the merger agreement requires the affirmative
    vote of the holders of a majority of the outstanding shares of
    the common stock of Grant Prideco entitled to vote at the
    special meeting, either in person or
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    27
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    by proxy. Whether or not a quorum of stockholders is present at
    the special meeting, the presiding officer may choose to adjourn
    the meeting for any reason, including if he or she determines
    that it would be in the best interests of Grant Prideco to
    extend the period of time for solicitation of additional
    proxies, and the presiding officer may do so until he or she
    decides conclusively that the business to be conducted at the
    meeting is completed.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the record date for Grant Prideco&#146;s special meeting,
    the directors and executive officers of Grant Prideco as a group
    owned and were entitled to vote 2,122,821&#160;shares of the
    common stock of Grant Prideco, or less than 1.7% of the
    outstanding shares of the common stock of Grant Prideco on that
    date.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Voting
    at the Special Meeting</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Whether or not you plan to attend Grant Prideco&#146;s special
    meeting, please vote your shares. If your shares are held in
    your name, you may vote in person at the special meeting or by
    proxy. If your shares are held in an account with a broker, bank
    or other nominee, you must follow the instructions from your
    broker, bank or nominee in order to vote.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Voting
    in Person</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If you plan to attend Grant Prideco&#146;s special meeting and
    wish to vote in person, you will be given a ballot at the
    special meeting. Please note, however, that if your shares are
    held in &#147;street name&#148;, which means your shares are
    held of record by a broker, bank or other nominee, and you wish
    to vote at the special meeting, you must bring to the special
    meeting a proxy from the record holder (your broker, bank or
    nominee) of the shares authorizing you to vote at the special
    meeting.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Voting
    by Proxy</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should vote your proxy even if you plan to attend Grant
    Prideco&#146;s special meeting. You can always change your vote
    at the special meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Stockholders of Grant Prideco of record may submit their proxies
    by:&#160;(1)&#160;accessing the Internet website specified on
    their proxy cards; (2)&#160;calling the telephone number
    specified on their proxy cards; or (3)&#160;completing, signing
    and mailing their proxy cards. If you vote your proxy over the
    Internet or by telephone, you should NOT return your proxy card
    in the postage-paid envelope. If you hold your shares of common
    stock of Grant Prideco in street name, you will receive
    instructions from your broker, bank or other nominee that you
    must follow in order to vote your shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If you vote via the Internet or by telephone, you should be
    aware that you may incur costs such as usage charges from
    telephone companies or Internet service providers, and that you
    must bear these costs.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">How
    Proxies are Counted</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All shares represented by properly executed proxies received in
    time for the special meeting will be voted at the appropriate
    special meeting in the manner specified by the stockholders
    giving those proxies. Properly executed proxies that do not
    contain voting instructions will be voted &#147;FOR&#148; the
    adoption of the merger agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Only shares affirmatively voted for the proposal, and properly
    executed proxies that do not contain voting instructions, will
    be counted as favorable votes for the adoption of the merger
    agreement. Shares of common stock of Grant Prideco held by
    persons attending the special meeting but not voting, shares of
    common stock held by persons not represented at the meeting in
    person or by proxy and shares of common stock of Grant Prideco
    for which Grant Prideco received proxies but with respect to
    which holders of those shares have abstained from voting, will
    have the same effect as votes against the adoption of the merger
    agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A broker &#147;non-vote&#148; occurs when a nominee holding
    shares for a beneficial owner has not received instructions from
    the beneficial owner and does not have discretionary authority
    to vote the shares. Shares represented by proxies that reflect a
    broker &#147;non-vote&#148; will be counted for purposes of
    determining whether a quorum exists, and those proxies will have
    the same effect as votes against the adoption of the merger
    agreement.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    28
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Revocation
    of Proxies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Submitting a proxy on the enclosed form does not preclude you
    from voting in person at the special meeting. A stockholder of
    record may revoke a proxy at any time before it is voted by:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    filing with the corporate secretary of Grant Prideco, at or
    before the company&#146;s special meeting, a duly executed
    revocation of proxy bearing a date later than the proxy;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    submitting another proxy by telephone or the Internet (the
    latest voting instructions will be followed);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    submitting a duly executed proxy to the corporate secretary of
    Grant Prideco with a date later than the proxy that is being
    revoked;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    appearing at the special meeting and voting in person.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A stockholder of record may revoke a proxy by any of these
    methods, regardless of the method used to deliver the
    stockholder&#146;s previous proxy. Attendance at the special
    meeting without voting will not itself revoke a proxy.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Written notices of revocation and other communications with
    respect to the revocation of proxies should be addressed:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco, Inc.
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    400&#160;N.&#160;Sam Houston Parkway East
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Suite&#160;900
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Houston, Texas 77060
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Attention: Corporate Secretary
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Please note that if your shares are held of record by a broker,
    bank or other nominee, and you decide to attend and vote at the
    special meeting, your vote in person at the special meeting will
    not be effective unless you have obtained and present a proxy
    issued in your name from the record holder (your broker, bank or
    nominee). If your shares are held in the name of a broker, bank
    or other nominee, you may change your vote by submitting new
    voting instructions to your broker, bank or nominee in
    accordance with its established procedures.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Solicitation
    of Proxies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco is soliciting proxies for its special meeting from
    its stockholders. Grant Prideco will pay its own cost of
    soliciting proxies, including the cost of mailing this proxy
    statement, from its stockholders. In addition to solicitation by
    use of the mails, proxies may be solicited by Grant
    Prideco&#146;s directors, officers and employees in person or by
    telephone or other means of communication. These persons will
    not receive additional compensation, but may be reimbursed for
    reasonable out-of-pocket expenses in connection with this
    solicitation. In addition, Grant Prideco has retained the
    services of Innisfree M&#038;A Incorporated to assist in the
    solicitation of proxies for an estimated fee not to exceed
    $125,000, plus reimbursement of out-of-pocket expenses. Grant
    Prideco will make arrangements with brokerage houses,
    custodians, nominees and fiduciaries to forward proxy
    solicitation materials to beneficial owners of shares held of
    record by them. Grant Prideco will also reimburse these
    brokerage houses, custodians, nominees and fiduciaries for their
    reasonable expenses incurred in forwarding the proxy materials.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    29
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Assistance</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Stockholders who have questions regarding the materials, need
    assistance voting their shares or require additional copies of
    the proxy statement/prospectus or proxy card should contact or
    call:
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco, Inc.
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    400&#160;N.&#160;Sam Houston Parkway East
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Suite&#160;900
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Houston, Texas 77060
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Attention: Corporate Secretary
</DIV>

<DIV style="margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    or
</DIV>

<DIV style="margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Innisfree M&#038;A Incorporated
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    501 Madison Avenue
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    New York, NY 10022
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Banks and Brokerage Firms, Please Call Collect:
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    +1
    <FONT style="white-space: nowrap">(212)&#160;750-5833</FONT>
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    +44 (0)20 7710 9960
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Stockholders, Please Call:
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

    <FONT style="white-space: nowrap">(877)&#160;717-3898</FONT>
    (toll-free from the U.S. and Canada)
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    30
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='108'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">THE
    MERGER</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Background
    of the Merger</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    With both companies being leaders in the oilfield services
    industry, the managements of National Oilwell Varco and Grant
    Prideco are generally familiar with each other&#146;s business.
    In addition, both companies regularly assess the industry and
    potential opportunities for business combinations and other
    strategic relationships to enhance stockholder value.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During 2004, Merrill A. Miller,&#160;Jr., the Chairman,
    President and Chief Executive Officer of National Oilwell Varco
    (which was at that time called National Oilwell), and Michael
    McShane, the Chairman, President and Chief Executive Officer of
    Grant Prideco, met and discussed the idea of exploring a
    strategic transaction between National Oilwell and Grant
    Prideco. Among other things, Messrs.&#160;Miller and McShane
    discussed the industrial logic of combining the product lines of
    the two companies. No proposals were made or agreements reached
    during this discussion. After these discussions, in August 2004,
    National Oilwell announced that it had reached an agreement to
    acquire Varco International. National Oilwell and Grant Prideco
    did not have any further discussions of a potential transaction
    at that time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On September&#160;5, 2005, Mr.&#160;Miller contacted
    Mr.&#160;McShane by telephone to discuss a potential business
    combination between Grant Prideco and National Oilwell Varco.
    Messrs.&#160;Miller and McShane discussed the potential benefits
    to their respective stockholders of a strategic transaction
    between the two companies. Mr.&#160;McShane indicated to
    Mr.&#160;Miller that Grant Prideco was not for sale, but in
    order to explore the possibilities of such a strategic
    transaction, they agreed to negotiate and execute a
    confidentiality agreement, exchange certain information about
    the companies&#146; businesses and financial results and further
    explore the potential benefits to stockholders of a strategic
    transaction. Mr.&#160;McShane informally notified each of the
    members of Grant Prideco&#146;s board of directors regarding his
    discussion with Mr.&#160;Miller and Grant Prideco&#146;s intent
    to enter into a confidentiality agreement in order to gain more
    information on the potential benefits of a strategic combination
    with National Oilwell Varco.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On September&#160;13, 2005, the two companies executed a mutual
    confidentiality agreement pursuant to which they agreed not to
    disclose information shared with each other in the course of
    their exploration of a potential transaction. Beginning on
    September&#160;16, 2005 and continuing throughout October and
    November 2005, members of the companies&#146; senior management
    teams exchanged documents, engaged in telephone conferences and
    met on various occasions to conduct management presentations and
    perform accounting, financial and legal due diligence reviews of
    the two companies. From time to time, Mr.&#160;McShane also
    informally updated Grant Prideco&#146;s board of directors on
    the progress of these discussions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On September&#160;30, 2005, Mr.&#160;Miller and Mr.&#160;McShane
    met to discuss the status of their discussions and due
    diligence. No specific terms of a potential transaction were
    discussed at this meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On October&#160;13, 2005, Mr.&#160;McShane and Mr.&#160;Miller
    met again to discuss the status of their discussions and due
    diligence. At this meeting, Mr.&#160;Miller informed
    Mr.&#160;McShane that National Oilwell Varco was considering a
    stock-for-stock transaction similar to the transaction between
    National Oilwell and Varco. Mr.&#160;McShane indicated to
    Mr.&#160;Miller that any stock transaction without some sort of
    meaningful control premium would be difficult for him to support
    and asked if Mr.&#160;Miller would consider a meaningful control
    premium. Mr.&#160;Miller indicated he would have to get back to
    Mr.&#160;McShane.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On October&#160;25, 2005, Mr.&#160;Miller and Mr.&#160;McShane
    met for breakfast. Mr.&#160;Miller proposed a combination
    between Grant Prideco and National Oilwell Varco in which Grant
    Prideco&#146;s stockholders would receive $40.69 per share of
    Grant Prideco&#146;s common stock based upon the preceding
    day&#146;s closing price of National Oilwell Varco&#146;s common
    stock, to be paid in the form of shares of National Oilwell
    Varco&#146;s common stock. Mr.&#160;McShane indicated that he
    would present Mr.&#160;Miller&#146;s proposal for discussion at
    the meeting of Grant Prideco&#146;s board of directors scheduled
    in November 2005.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At a meeting of Grant Prideco&#146;s board of directors held on
    November&#160;10, 2005, the board considered the company&#146;s
    strategic plan and potential alternatives to maximize
    stockholder value, including, among other things, continuing to
    operate as a stand-alone company and pursuing a potential
    transaction with National Oilwell Varco on
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    the terms proposed by Mr.&#160;Miller. Representatives of
    Fulbright&#160;&#038; Jaworski L.L.P., Grant Prideco&#146;s
    outside legal counsel, reviewed with the board the fiduciary
    duties of directors in the context of considering a
    company&#146;s strategic alternatives. After further discussion
    with the board and members of Grant Prideco&#146;s management,
    the board determined at the meeting that it was advisable and in
    the best interests of Grant Prideco&#146;s stockholders at that
    time to pursue the company&#146;s existing strategic plan and
    not to pursue the proposed strategic transaction with National
    Oilwell Varco. Mr.&#160;McShane subsequently informed
    Mr.&#160;Miller of this determination.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On March&#160;30, 2007, at Mr.&#160;Miller&#146;s request,
    Messrs.&#160;Miller and McShane met for breakfast in Houston,
    Texas. During the course of this meeting, Mr.&#160;Miller
    indicated that National Oilwell Varco was aware of the recent
    consolidation occurring in the oil country tubular industry and
    of potential interest in Grant Prideco, and that National
    Oilwell Varco was still interested in a combination with Grant
    Prideco. Mr.&#160;Miller did not make any specific proposals at
    this meeting. After the meeting, Mr.&#160;McShane contacted each
    of the members of Grant Prideco&#146;s board of directors to
    update them on his conversation with Mr.&#160;Miller that day.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On April&#160;10, 2007, Messrs.&#160;Miller and McShane met for
    breakfast in Houston, Texas. During the course of that meeting,
    Mr.&#160;Miller proposed a combination in which Grant
    Prideco&#146;s shareholders would receive $56.00 per share, half
    of which would be paid in cash and half in the form of shares of
    National Oilwell Varco&#146;s common stock. No agreement was
    reached at this meeting on these matters or on whether to pursue
    a transaction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Later on April&#160;10, 2007, following Mr.&#160;McShane&#146;s
    meeting with Mr.&#160;Miller, Grant Prideco&#146;s board of
    directors held a special meeting by telephone. During the course
    of the meeting, the board received an update on
    Mr.&#160;McShane&#146;s contacts with Mr.&#160;Miller and an
    update on industry developments, including recent transactions
    involving other oilfield services and equipment companies. The
    board also considered the financial terms of National Oilwell
    Varco&#146;s proposal and senior management&#146;s analyses of
    the potential synergies that could be realized in a combination
    of the two companies. After further discussions with the board
    and Grant Prideco&#146;s senior management, the board determined
    at that meeting that it was advisable and in the best interests
    of Grant Prideco&#146;s stockholders to explore further the
    strategic alternatives to enhance stockholder value, including,
    among other things, through a potential business combination
    with National Oilwell Varco or another party. Following this
    meeting, on April&#160;11, 2007, Grant Prideco engaged Credit
    Suisse to act as its financial advisor and Cravath,
    Swaine&#160;&#038; Moore LLP to act as its outside legal counsel
    in connection with this exploration of Grant Prideco&#146;s
    strategic alternatives. Mr.&#160;McShane informed
    Mr.&#160;Miller that Grant Prideco had engaged Credit Suisse to
    assist in the process of evaluating Grant Prideco&#146;s
    alternatives.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Thereafter, and continuing into May 2007, Credit Suisse, based
    on discussions with management of Grant Prideco, began
    contacting other companies in the oil services and equipment
    industries who might be interested in a potential business
    combination with Grant Prideco and assisting Grant Prideco in
    evaluating potential transactions. Over the course of the
    following weeks, Credit Suisse contacted six companies on behalf
    of Grant Prideco. During that period, three companies met with
    Grant Prideco&#146;s management, either in person or by
    conference call, to conduct due diligence reviews of Grant
    Prideco&#146;s business and financial results.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During that period, Grant Prideco&#146;s management also
    continued discussions with National Oilwell Varco. On
    April&#160;25, 2007, National Oilwell Varco and Grant Prideco
    entered into a second mutual confidentiality agreement relating
    to the new process, pursuant to which the companies agreed not
    to disclose certain information in connection with their
    evaluation of a potential business combination. In the following
    days, members of Grant Prideco&#146;s management met with
    management of National Oilwell Varco and presented updated
    financial information and projections as part of National
    Oilwell Varco&#146;s due diligence review of Grant Prideco.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Other than National Oilwell Varco, no parties contacted by
    Credit Suisse on behalf of Grant Prideco decided to submit a
    business combination proposal with respect to a business
    combination involving Grant Prideco. On April&#160;28, 2007,
    Messrs.&#160;Miller and McShane met again for breakfast in
    Houston, Texas. During the course of that meeting,
    Messrs.&#160;Miller and McShane discussed, among other things,
    the consideration that would be paid to Grant Prideco&#146;s
    stockholders in a proposed combination, including the possible
    form in which consideration would be paid. Following some
    discussion, Mr.&#160;Miller made a revised offer of $57.00 per
    share of Grant Prideco&#146;s common stock, half of which would
    be paid in the form of cash and half in the form of shares of
    common stock of National Oilwell Varco. No agreement was reached
    on these matters at this meeting. In the week following this
    meeting,
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Mr.&#160;McShane contacted each of the members of Grant
    Prideco&#146;s board of directors to update them on his
    conversation with Mr.&#160;Miller.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On May&#160;4, 2007, Mr.&#160;McShane contacted Mr.&#160;Miller
    by telephone to discuss further the consideration that would be
    paid to Grant Prideco&#146;s stockholders in a potential
    transaction between the companies. Mr.&#160;McShane asked if
    Mr.&#160;Miller could increase the consideration that National
    Oilwell Varco was willing to pay and requested a price of $62.00
    per share, which proposed price had been determined after
    consultation with Grant Prideco&#146;s directors.
    Messrs.&#160;Miller and McShane spoke again by telephone on
    May&#160;7, 2007, to discuss further the matter and
    Mr.&#160;Miller informed Mr.&#160;McShane that National Oilwell
    Varco was not able to increase its offer. No agreement was
    reached on these matters during the course of these telephone
    calls.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At the regular meeting of Grant Prideco&#146;s board of
    directors on May&#160;17, 2007, the board received an update on
    the ongoing exploration of Grant Prideco&#146;s strategic
    alternatives. Members of Grant Prideco&#146;s senior management
    reviewed for the board the financial and strategic analyses that
    management undertook with respect to the proposed transaction
    with National Oilwell Varco. Members of management and
    representatives of Credit Suisse updated the board on the
    contacts made with other companies, noting that at least four
    parties had expressed preliminary interest, but that after
    receiving further information from Grant Prideco, all these
    parties had stated that, although they were interested in
    acquiring parts of Grant Prideco&#146;s businesses, they were
    not interested in exploring further a transaction involving the
    entire company. Members of Grant Prideco&#146;s management also
    reviewed with the board management&#146;s analysis of the
    financial and strategic considerations relating to a potential
    sale of the company in pieces, including the tax inefficiencies
    and execution risks that management had identified.
    Representatives of Credit Suisse discussed with the board
    certain strategic considerations with respect to the
    alternatives being explored by Grant Prideco. Representatives of
    Cravath and Fulbright reviewed with the board the fiduciary
    duties of directors in the context of considering the
    company&#146;s strategic alternatives. After further discussion
    with Grant Prideco&#146;s legal and financial advisors and
    members of management, the board directed the company&#146;s
    management to terminate its discussions with National Oilwell
    Varco. Mr.&#160;McShane subsequently informed Mr.&#160;Miller of
    this decision.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On August&#160;1, 2007, Messrs.&#160;Miller and McShane met for
    lunch in Houston, Texas. During the course of the meeting,
    Mr.&#160;Miller indicated that National Oilwell Varco continued
    to be interested in discussing a transaction involving Grant
    Prideco in its entirety. Mr.&#160;McShane indicated to
    Mr.&#160;Miller that Grant Prideco was not for sale and informed
    Mr.&#160;Miller that Grant Prideco had been contacted by another
    company in the oil services industry regarding a potential sale
    of parts of Grant Prideco&#146;s Tubular Technologies and
    Services, or TTS, division and that he would be seeking approval
    from Grant Prideco&#146;s board to pursue a process of exploring
    this possibility. Thus, Mr.&#160;McShane informed
    Mr.&#160;Miller that if National Oilwell Varco was serious about
    making a new proposal, there would be a need to move quickly.
    Mr.&#160;Miller and Mr.&#160;McShane agreed to have their
    respective management teams update due diligence. Following a
    discussion about the terms of a transaction, Mr.&#160;Miller
    indicated to Mr.&#160;McShane that he would get back to him with
    a revised proposal once due diligence was completed.
    Subsequently, members of National Oilwell Varco&#146;s and Grant
    Prideco&#146;s managements exchanged documents and conducted
    telephone calls in connection with their due diligence reviews
    of the companies and a potential transaction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On August&#160;9, 2007, at a regularly scheduled meeting of
    Grant Prideco&#146;s board of directors, the board authorized
    management to explore a potential sale of several product lines
    within the TTS segment, to engage in discussions with the party
    that had contacted Mr.&#160;McShane regarding the TTS business
    and to contact other companies in the oil country tubular steel
    industries to gauge their interest in acquiring these
    businesses. Grant Prideco engaged Credit Suisse to assist it in
    this process. Mr.&#160;McShane also discussed with the board his
    conversation with Mr.&#160;Miller.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following the August&#160;9, 2007 board meeting and continuing
    into September 2007, Credit Suisse, based on discussions with
    the management of Grant Prideco, contacted four parties, in
    addition to the party that contacted Mr.&#160;McShane in July
    2007, that might be interested in acquiring product lines within
    the TTS segment. Some of these potential acquirors had
    previously been contacted by Credit Suisse in May 2007 with
    respect to their potential interest in engaging in a business
    combination with Grant Prideco. Through Credit Suisse, Grant
    Prideco also received unsolicited inquiries from two additional
    companies interested in acquiring some or all of the TTS
    segment. In the course of discussions with these potential
    acquirors, Credit Suisse inquired of one of these parties&#146;
</DIV>

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    financial advisors as to whether such party had any interest in
    a transaction involving Grant Prideco in its entirety and was
    informed that such party was still not interested in a
    transaction involving the entire company, but was only
    interested in certain of Grant Prideco&#146;s product lines.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On September&#160;6, 2007, Messrs.&#160;Miller and McShane met
    for breakfast in New York to continue discussing a potential
    transaction between the companies, including the potential
    consideration that would be paid to Grant Prideco&#146;s
    stockholders. During the course of the meeting, Mr.&#160;Miller
    made a revised proposal of $58.00 per share, half of which would
    be paid in the form of shares of National Oilwell Varco&#146;s
    common stock and half of which would be paid in cash.
    Mr.&#160;McShane inquired as to whether there was room for
    National Oilwell Varco to increase its proposed price.
    Mr.&#160;Miller stated that National Oilwell Varco was not
    prepared to raise its proposed price. The following day,
    Mr.&#160;McShane contacted each of the members of Grant
    Prideco&#146;s board of directors to update them on his meeting
    with Mr.&#160;Miller.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On September&#160;12, 2007, Mr.&#160;McShane and Mr.&#160;Miller
    spoke on the telephone and Mr.&#160;McShane updated
    Mr.&#160;Miller on contacts the company had received regarding
    potential joint ventures with certain of the company&#146;s
    product lines as well as other positive developments within its
    product lines. Mr.&#160;Miller informed Mr.&#160;McShane that he
    would consider these factors but his offer had not changed.
    Mr.&#160;McShane informally updated Grant Prideco&#146;s board
    of Mr.&#160;Miller&#146;s response.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On September&#160;19, 2007, Grant Prideco received preliminary
    offers for the purchase of the TTS division. Mr.&#160;McShane
    updated the directors regarding the offers and obtained
    concurrence to move forward with the TTS division sale process
    and to terminate discussions with National Oilwell Varco.
    National Oilwell Varco was informed of Grant Prideco&#146;s
    decision.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On October&#160;30, 2007, Grant Prideco announced that it had
    entered into a definitive agreement to sell three of the four
    business units within its TTS division to Vallourec S.A.
    Following the announcement, Mr.&#160;McShane and Mr.&#160;Miller
    exchanged informal communications that the parties should keep
    in touch.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In early December 2007, Mr.&#160;Miller contacted
    Mr.&#160;McShane to schedule a breakfast meeting for
    December&#160;7, 2007. The meeting was canceled due to an
    unforeseen conflict and on December&#160;8, 2007,
    Mr.&#160;Miller contacted Mr.&#160;McShane by telephone.
    Mr.&#160;Miller indicated to Mr.&#160;McShane that National
    Oilwell Varco was still interested in a transaction with Grant
    Prideco and was still willing to offer $58.00 per share of Grant
    Prideco&#146;s common stock, half of which would be paid in cash
    and half in shares of common stock of National Oilwell Varco.
    Mr.&#160;McShane updated Mr.&#160;Miller on Grant Prideco&#146;s
    expectations for 2008, noting that due to declining North
    American demand for Grant Prideco&#146;s products, the
    company&#146;s expectations for 2008 were lower compared to the
    projections previously provided to National Oilwell Varco.
    Mr.&#160;Miller and Mr.&#160;McShane also discussed the positive
    results of the TTS sale process. Mr.&#160;Miller informed
    Mr.&#160;McShane that this was the highest price that National
    Oilwell Varco was prepared to offer and, given declining
    conditions in North America, Mr.&#160;Miller did not believe the
    board of National Oilwell Varco would consider any increase in
    price. No agreement was reached on the proposed transaction
    during the course of this phone call. Messrs.&#160;Miller and
    McShane agreed to schedule a conference call for the following
    week between their respective management teams to update their
    due diligence reviews. Mr.&#160;McShane also agreed to discuss
    the potential merger consideration, including the possible form
    in which consideration would be paid, with Grant Prideco&#146;s
    board of directors. Following his discussion with
    Mr.&#160;Miller, Mr.&#160;McShane contacted each of the members
    of Grant Prideco&#146;s board regarding his discussion with
    Mr.&#160;Miller.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On December&#160;9, 2007, Mr.&#160;McShane contacted a senior
    officer of one of the companies previously contacted by Credit
    Suisse in April 2007 in order to gauge whether the company had
    any interest in pursuing a transaction with Grant Prideco. This
    senior officer had recently indicated to Mr.&#160;McShane during
    unrelated business discussions that his company would be
    interested in participating in any renewed process. On
    December&#160;10, 2007, this company stated that it was not
    interested in pursuing a transaction involving Grant Prideco in
    its entirety, but would be very interested in purchasing some,
    but not all, of Grant Prideco&#146;s product lines.
    Mr.&#160;McShane contacted each of the members of Grant
    Prideco&#146;s board to update them on these discussions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On December&#160;10, 2007, members of senior management of Grant
    Prideco and National Oilwell Varco held a conference call to
    continue their due diligence reviews. Over the course of the
    next few days, members of Grant Prideco&#146;s senior management
    forwarded additional business and financial information to
    National Oilwell Varco in
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    response to its due diligence requests and participated in
    various phone calls to answer
    <FONT style="white-space: nowrap">follow-up</FONT>
    questions posed by its management.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On December 12 and 13, 2007, Messrs.&#160;Miller and McShane
    spoke several times to discuss the consideration that would be
    paid to Grant Prideco&#146;s stockholders in the proposed
    transaction, including the form in which the consideration would
    be paid. Mr.&#160;Miller informed Mr.&#160;McShane that National
    Oilwell Varco would not increase its offer. No agreement was
    reached with respect to these matters during these discussions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On the morning of December&#160;13, 2007, the board of directors
    of Grant Prideco held a special meeting by telephone.
    Representatives of Credit Suisse, Cravath and Fulbright also
    participated in the call. On the telephone call,
    Mr.&#160;McShane updated the board on the status of his
    discussions with National Oilwell Varco and with the other
    company he contacted on December&#160;9, 2007. Mr.&#160;McShane
    also reviewed with the board management&#146;s analysis of the
    potential benefits and risks of the proposed transaction with
    National Oilwell Varco. Representatives of Cravath and Fulbright
    reviewed with the board the fiduciary duties of directors in the
    context of the evaluation of a company&#146;s strategic
    alternatives. Representatives of Credit Suisse reviewed with the
    board certain strategic considerations with respect to the
    proposed transaction with National Oilwell Varco.
    Mr.&#160;McShane and representatives of Credit Suisse also
    discussed their contacts over the previous several months with
    other companies that might be interested in a potential business
    combination with Grant Prideco. After further discussion, the
    board of directors of Grant Prideco authorized Mr.&#160;McShane
    to continue negotiations with National Oilwell Varco and to seek
    a larger equity component to the transaction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On December&#160;13, 2007, Messrs.&#160;Miller and McShane
    concluded their price discussions and agreed upon a price of
    $58.00 per share of Grant Prideco&#146;s common stock, 60% of
    which would be in the form of shares of National Oilwell
    Varco&#146;s common stock, subject to a fixed exchange ratio
    that would be determined based on the closing trading price of
    National Oilwell Varco&#146;s common stock on the business day
    immediately prior to the execution of a merger agreement. This
    agreement on price was made subject to the negotiation of a
    definitive merger agreement and the approval of each
    company&#146;s board of directors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On December&#160;13, 2007, National Oilwell Varco and its legal
    advisor, Andrews Kurth LLP, provided Grant Prideco, Cravath and
    Fulbright with an initial draft of the merger agreement for
    their review. The companies&#146; legal advisors began
    negotiation of the merger agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On December&#160;13, 2007, Mr.&#160;McShane was contacted by the
    chief executive officer of another company in the oilfield
    services and equipment industry. The company&#146;s chief
    executive officer informed Mr.&#160;McShane that his company had
    been evaluating, and was interested in pursuing, a transaction
    with Grant Prideco. That afternoon, Mr.&#160;McShane met with
    this chief executive officer to discuss further a potential
    transaction. The chief executive officer indicated that his
    company would be interested in acquiring Grant Prideco and
    subsequently selling certain of Grant Prideco&#146;s product
    lines. Mr.&#160;McShane discussed the potential tax
    inefficiencies of such a strategy and the chief executive
    officer informed Mr.&#160;McShane that he believed his company
    had the ability to reduce the tax inefficiencies. However, the
    other company needed additional information to analyze further
    the potential tax consequences of making those subsequent sales.
    After this meeting, Mr.&#160;McShane updated the board of
    directors of Grant Prideco on his discussions and, in order to
    aid with this company&#146;s tax analysis, on December&#160;13,
    2007, members of Grant Prideco&#146;s senior management provided
    management of this other company with the financial information
    of Grant Prideco that such company requested in order to
    complete its analysis. On December&#160;14, 2007, this other
    company&#146;s chief executive officer contacted
    Mr.&#160;McShane and stated that, after completing its analysis
    of the potential tax consequences, his company was no longer
    interested in pursuing a transaction with Grant Prideco due to
    the tax inefficiencies. Mr.&#160;McShane updated Grant
    Prideco&#146;s board of directors on this contact.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    From December&#160;14, 2007 through December&#160;16, 2007, the
    management teams, financial advisors and legal advisors of
    National Oilwell Varco and Grant Prideco had frequent
    negotiations regarding the terms of the merger agreement and
    related documents and discussions regarding due diligence
    matters. During that period, a number of drafts of the merger
    agreement and related documentation were negotiated, and various
    financial, operational and legal due diligence items were
    exchanged between the parties.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On December&#160;16, 2007, Grant Prideco&#146;s board of
    directors held a special meeting, at which the company&#146;s
    senior management and outside legal and financial advisors were
    present. Prior to the meeting, Grant Prideco&#146;s
</DIV>

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    <BR>
    35
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    board was provided with a summary of the proposed merger
    agreement and a copy of the current draft of the merger
    agreement. Also prior to the meeting, Grant Prideco&#146;s board
    was provided a summary of Credit Suisse&#146;s preliminary
    financial analyses of the transaction. At the meeting, members
    of Grant Prideco&#146;s management updated the board on the
    conclusion of discussions with National Oilwell Varco and
    reviewed with the board the strategic rationale and potential
    benefits and risks of the proposed transaction. Members of Grant
    Prideco&#146;s management also reviewed Grant Prideco&#146;s
    stand-alone strategic plan and financial forecasts, its
    financial analyses of other strategic alternatives available to
    Grant Prideco, the current conditions in the financial markets
    and in the markets for Grant Prideco&#146;s products, and
    management&#146;s findings regarding due diligence with respect
    to National Oilwell Varco. Members of Grant Prideco&#146;s
    management also reviewed with the board the industry
    participants that had been contacted throughout 2007 as to a
    potential transaction with Grant Prideco and management&#146;s
    analysis of the inefficiencies that would have been involved in
    selling the company in pieces to the participants that had
    indicated interest in that type of sale. Representatives of
    Cravath reviewed with the board the fiduciary duties of
    directors in the context of considering a company&#146;s
    strategic alternatives, including the proposed transaction with
    National Oilwell Varco. Representatives of Cravath and Grant
    Prideco&#146;s General Counsel, Philip A. Choyce, also reviewed
    various other legal matters with the board and reviewed with the
    board the proposed terms of the merger agreement and related
    matters. Representatives of Credit Suisse reviewed Credit
    Suisse&#146;s financial analyses of the proposed transaction and
    delivered its oral opinion to Grant Prideco&#146;s board (which
    was subsequently confirmed in writing dated as of the same date)
    to the effect that, as of December&#160;16, 2007, the merger
    consideration to be received by the holders of shares of Grant
    Prideco common stock pursuant to the merger agreement was fair,
    from a financial point of view, to such holders. Following these
    presentations, a careful consideration of the merger agreement
    and a lengthy discussion, all members of management, including
    Mr.&#160;McShane, left the meeting and further discussions were
    conducted among the non-management directors and representatives
    of Credit Suisse, Cravath and Fulbright. After a brief
    discussion, the representatives of Credit Suisse also left the
    meeting and further discussions were conducted among the
    non-management directors and representatives of Cravath and
    Fulbright. Following the additional discussions and
    deliberation, all parties rejoined the meeting and Grant
    Prideco&#146;s board of directors unanimously determined that
    the merger agreement and the merger were advisable and in the
    best interests of Grant Prideco&#146;s stockholders, unanimously
    approved the merger agreement and the merger in accordance with
    Delaware law and unanimously recommended that Grant
    Prideco&#146;s stockholders adopt the merger agreement. The
    board of directors of Grant Prideco authorized the appropriate
    officers of Grant Prideco to execute and deliver the merger
    agreement and related documentation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco, NOV Sub, Inc. and Grant Prideco executed
    the merger agreement on the evening of December&#160;16, 2007.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to the opening of financial markets on December&#160;17,
    2007, National Oilwell Varco and Grant Prideco issued a joint
    press release announcing the execution of the merger agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Grant
    Prideco&#146;s Reasons for the Merger and Recommendation of
    Grant Prideco&#146;s Board of Directors</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The board of directors of Grant Prideco believes that the terms
    of the merger are advisable and in the best interests of Grant
    Prideco and its stockholders and has unanimously approved the
    merger agreement and the merger and recommends that the
    stockholders of Grant Prideco vote &#147;FOR&#148; the proposal
    to adopt the merger agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In reaching its conclusion, the board of directors of Grant
    Prideco consulted with its management and legal, financial and
    other advisors, and considered a variety of factors weighing in
    favor of the merger, including the factors listed below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Expected Benefits of the Merger.</I>&#160;&#160;The
    combination of National Oilwell Varco and Grant Prideco is
    expected to result in several significant strategic benefits to
    the combined companies and Grant Prideco&#146;s stockholders,
    including the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Premium to Grant Prideco&#146;s
    Stockholders.</I>&#160;&#160;Based on the closing prices of the
    common stock of Grant Prideco and National Oilwell Varco as of
    December&#160;14, 2007, the trading day most recently preceding
    the date of the merger agreement, the merger consideration
    represented at the time a premium of 22% to Grant Prideco&#146;s
    stockholders.
</TD>
</TR>

</TABLE>

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    <BR>
    36
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Stock Consideration</I>.&#160;&#160;Grant Prideco&#146;s
    stockholders will receive a portion of the merger consideration
    in the form of shares of National Oilwell Varco&#146;s common
    stock, which will allow Grant Prideco&#146;s stockholders to
    share in growth and other opportunities of the combined company
    National Oilwell Varco after the merger.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Increased Scope and Scale of Operations.</I>&#160;&#160;The
    combined company is expected to have substantially greater cash
    flow, liquidity and financial flexibility than Grant Prideco on
    a stand-alone basis, strengthening Grant Prideco&#146;s ability
    to pursue growth opportunities and expansion into new
    businesses, to continue to develop new technology and to compete
    in the highly competitive oilfield services and tubular steel
    industries.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Creates a Leading Oilfield Services
    Company.</I>&#160;&#160;By combining two companies with
    complementary strengths and product offerings, the merger will
    create a combined company that is one of the four largest
    oilfield services companies in the world, and that is expected
    to provide the additional benefits of increased size and an
    expanded customer base. In addition, the combined company may
    result in higher trading multiples and lower trading volatility
    than Grant Prideco on a stand-alone basis.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Synergy Opportunities.</I>&#160;&#160;Grant Prideco believes
    that the potential synergies resulting from the transactions are
    expected to be between $30&#160;million and $40&#160;million and
    are achievable within twelve months after the merger. These
    synergies are expected to come primarily from reduced corporate
    overhead expenses and field location consolidations.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Other Material Factors Considered.</I>&#160;&#160;During the
    course of its deliberations relating to the merger agreement and
    the merger, the board of directors of Grant Prideco considered
    the following factors in addition to the benefits described
    above:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>The Companies&#146; Operating and Financial Market
    Conditions.</I>&#160;&#160;The business operations and prospects
    of each of Grant Prideco, National Oilwell Varco and the
    combined company, and the then-current financial market
    conditions and historical market prices, volatility and trading
    information with respect to shares of common stock of Grant
    Prideco and National Oilwell Varco.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Consideration of Uncertainty in Revenue
    Forecasts.</I>&#160;&#160;The risk that the forecasts relating
    to Grant Prideco&#146;s stand-alone business, as well as the
    combined businesses of Grant Prideco and National Oilwell Varco
    on a pro forma basis, which were prepared by management and
    shared with Grant Prideco&#146;s board of directors and Grant
    Prideco&#146;s financial advisors, may not be achieved.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Impact of the Announcement of the Transaction on Business
    Operations.</I>&#160;&#160;The potential impact of the
    announcement of the transaction on Grant Prideco&#146;s and
    National Oilwell Varco&#146;s business operations and on their
    respective suppliers, creditors, customers and employees.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Stockholder Vote.</I>&#160;&#160;The fact that Grant
    Prideco&#146;s stockholders will have an opportunity to vote
    upon the proposal to adopt the merger agreement.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Provisions of the Merger Agreement.</I>&#160;&#160;The
    structure of the transaction and terms and conditions of the
    merger agreement, including the ability, under certain
    circumstances, for Grant Prideco&#146;s board of directors to
    entertain alternative acquisition proposals and to terminate the
    merger agreement and accept a superior proposal. See the section
    entitled &#147;The Merger Agreement&#148; beginning on
    page&#160;53.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Market Capitalization and Capital
    Structure.</I>&#160;&#160;The relative market capitalizations of
    Grant Prideco and National Oilwell Varco and the expected
    capital structure and market capitalization of the combined
    company after the merger.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Strategic Alternatives.</I>&#160;&#160;The strategic
    alternatives available to Grant Prideco, including the
    alternatives available to Grant Prideco if it proceeded on a
    stand-alone basis or attempted to sell the company in parts.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Due Diligence.&#160;&#160;</I>The results of the due
    diligence investigations of National Oilwell Varco by Grant
    Prideco&#146;s management and financial and other advisors.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Market Reaction.</I>&#160;&#160;Possible stock market
    reaction to the transaction.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    37
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Financial Advisor&#146;s Analysis and
    Opinion.</I>&#160;&#160;The financial analysis reviewed and
    discussed with Grant Prideco&#146;s board of directors by
    representatives of Credit Suisse, as well as the oral opinion of
    Credit Suisse to Grant Prideco&#146;s board of directors on
    December&#160;16, 2007 (which was subsequently confirmed in
    writing by delivery of Credit Suisse&#146;s written opinion
    dated the same date) with respect to the fairness, from a
    financial point of view, of the merger consideration to be
    received by the holders of shares of common stock of Grant
    Prideco pursuant to the merger agreement.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The board of directors of Grant Prideco weighed these factors
    against a number of other material factors identified in its
    deliberations weighing negatively against the merger, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The challenges inherent in the combination of two businesses
    with the size and scope of the businesses of Grant Prideco and
    National Oilwell Varco and the possible diversion of
    management&#146;s attention for an extended period of time;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The risk of not capturing all of the anticipated synergies
    between Grant Prideco and National Oilwell Varco and the risk
    that other anticipated benefits might not be fully realized;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The conditions to the merger agreement requiring receipt of
    certain regulatory approvals and clearances. See the sections
    entitled &#147;The Merger&#160;&#151; Regulatory Approvals
    Required for the Merger&#148; and &#147;The Merger
    Agreement&#160;&#151; Conditions to the Merger&#148; on
    pages&#160;51 and 62, respectively.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The risk that the merger may not be consummated despite the
    parties&#146; efforts or that consummation may be unduly
    delayed, even if the requisite approval is obtained from Grant
    Prideco&#146;s stockholders;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The possibility that business partners may decide to terminate
    their relationship with the combined company;&#160;and
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The other risks described in the section entitled &#147;Risk
    Factors&#148; beginning on page&#160;13.
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    After consideration of these material factors, the board of
    directors of Grant Prideco determined that these risks could be
    mitigated or managed by Grant Prideco or National Oilwell Varco
    or the combined company, were reasonably acceptable under the
    circumstances or were unlikely to have a material impact on the
    merger or the combined company or that, overall, the risks were
    significantly outweighed by the potential benefits of the merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This discussion of the information and factors considered by the
    board of directors of Grant Prideco includes the material
    positive and negative factors considered by the board of
    directors, but is not intended to be exhaustive and may not
    include all of the factors considered by Grant Prideco&#146;s
    board. Grant Prideco&#146;s board of directors did not quantify
    or assign any relative or specific weights to the various
    factors that it considered in reaching its determination that
    the merger agreement and the merger are advisable and in the
    best interests of Grant Prideco&#146;s stockholders. Rather,
    Grant Prideco&#146;s board of directors viewed its position and
    recommendation as being based on the totality of the information
    presented to it and the factors it considered. In addition,
    individual members of the board of directors of Grant Prideco
    may have given differing weights to different factors. It should
    be noted that this explanation of the reasoning of the board of
    directors of Grant Prideco and certain information presented in
    this section is forward-looking in nature and, therefore, that
    information should be read in light of the factors discussed in
    the section entitled &#147;Cautionary Statement Regarding
    Forward-Looking Statements&#148; in this proxy
    statement/prospectus, beginning on page&#160;23.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Opinion
    of Credit Suisse Securities (USA) LLC&#160;&#151; Financial
    Advisor to Grant Prideco</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Credit
    Suisse Opinion</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco retained Credit Suisse to act as Grant
    Prideco&#146;s financial advisor in connection with the proposed
    merger. In connection with Credit Suisse&#146;s engagement,
    Grant Prideco requested that Credit Suisse evaluate the
    fairness, from a financial point of view, of the merger
    consideration to be received by holders of shares of common
    stock of Grant Prideco pursuant to the merger agreement. On
    December&#160;16, 2007, Credit Suisse rendered its oral opinion
    to the Board of Directors of Grant Prideco (which was
    subsequently confirmed in writing by delivery of Credit
    Suisse&#146;s written opinion dated the same date) to the effect
    that, as of December&#160;16, 2007, the merger consideration to
    be received by the holders of shares of common stock of Grant
    Prideco pursuant to the merger agreement was fair, from a
    financial point of view, to such holders.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    38
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Credit Suisse&#146;s opinion was prepared for the information
    of Grant Prideco&#146;s Board of Directors in connection with
    its consideration of the merger. Credit Suisse&#146;s opinion
    only addressed the fairness from a financial point of view of
    the merger consideration to be received by the holders of common
    stock of Grant Prideco in the merger and did not address any
    other aspect or implication of the merger. The summary of Credit
    Suisse&#146;s opinion in this proxy statement/prospectus is
    qualified in its entirety by reference to the full text of its
    written opinion, which is included as Annex&#160;B to this proxy
    statement/prospectus and sets forth the assumptions made,
    procedures followed, qualifications and limitations on the
    review undertaken and other matters considered by Credit Suisse
    in preparing its opinion. However, neither Credit Suisse&#146;s
    written opinion nor the summary of its opinion and the related
    analyses set forth in this proxy statement/prospectus are
    intended to be, and do not constitute, advice or a
    recommendation to any stockholder as to how such stockholder
    should act or vote with respect to any matter relating to the
    merger.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In arriving at its opinion, Credit Suisse:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reviewed the merger agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reviewed certain publicly available business and financial
    information relating to Grant Prideco and National Oilwell Varco;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reviewed certain other information relating to Grant Prideco and
    National Oilwell Varco, including certain financial projections
    relating to the future financial performance of Grant Prideco
    prepared by the management of Grant Prideco and certain publicly
    available research analyst estimates relating to the future
    financial performance of National Oilwell Varco, provided to or
    discussed with Credit Suisse by Grant Prideco and National
    Oilwell Varco;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    met with Grant Prideco&#146;s management and National Oilwell
    Varco&#146;s management to discuss the business and prospects of
    Grant Prideco and National Oilwell Varco, respectively;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    considered certain financial and stock market data of Grant
    Prideco and National Oilwell Varco, and compared that data with
    similar data for other publicly held companies in businesses
    Credit Suisse deemed similar to that of Grant Prideco and
    National Oilwell Varco;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    considered, to the extent publicly available, the financial
    terms of certain other business combinations and other
    transactions that have recently been effected or
    announced;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    considered such other information, financial studies, analyses
    and investigations and financial, economic and market criteria
    that Credit Suisse deemed relevant.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with its review, Credit Suisse did not
    independently verify any of the foregoing information, and
    Credit Suisse assumed and relied upon such information being
    complete and accurate in all material respects. With respect to
    the financial projections for Grant Prideco referred to above,
    Credit Suisse was advised by Grant Prideco&#146;s management,
    and with Grant Prideco&#146;s consent assumed, that such
    projections were reasonably prepared on bases reflecting the
    best currently available estimates and judgments of Grant
    Prideco&#146;s management with respect to the future financial
    performance of Grant Prideco. With respect to the publicly
    available research analyst estimates for National Oilwell Varco
    referred to above, Credit Suisse was advised by National Oilwell
    Varco&#146;s management, and with Grant Prideco&#146;s consent
    assumed, that such estimates represented reasonable estimates
    and judgments with respect to the future financial performance
    of National Oilwell Varco. Credit Suisse assumed, with Grant
    Prideco&#146;s consent, that the proposed merger would be
    treated as a tax-free reorganization for federal income tax
    purposes. Credit Suisse also assumed, with Grant Prideco&#146;s
    consent, that, in the course of obtaining any regulatory or
    third party consents, approvals or agreements in connection with
    the proposed merger, no delay, limitation, restriction or
    condition would be imposed that would have an adverse effect on
    Grant Prideco, National Oilwell Varco or the contemplated
    benefits of the proposed merger and that the proposed merger
    would be consummated in accordance with the terms of the merger
    agreement without waiver, modification or amendment of any
    material term, condition or agreement thereof. In addition,
    Credit Suisse was not requested to make, and has not made, an
    independent evaluation or appraisal of the assets or liabilities
    (contingent or otherwise) of Grant Prideco or National Oilwell
    Varco, nor was Credit Suisse furnished with any such evaluations
    or appraisals.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    39
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In preparing its opinion to the Board of Directors of Grant
    Prideco, Credit Suisse performed a variety of analyses,
    including those described below. The summary of Credit
    Suisse&#146;s valuation analyses is not a complete description
    of the analyses underlying Credit Suisse&#146;s fairness
    opinion. The preparation of a fairness opinion is a complex
    process involving various quantitative and qualitative judgments
    and determinations with respect to the financial, comparative
    and other analytic methods employed and the adaptation and
    application of these methods to the unique facts and
    circumstances presented. As a consequence, neither a fairness
    opinion nor its underlying analyses are readily susceptible to
    partial analysis or summary description. Credit Suisse arrived
    at its opinion based on the results of all analyses undertaken
    by it and assessed as a whole and did not draw, in isolation,
    conclusions from or with regard to any individual analysis,
    analytic method or factor. Accordingly, Credit Suisse believes
    that its analyses must be considered as a whole and that
    selecting portions of its analyses, analytic methods and
    factors, without considering all analyses and factors or the
    narrative description of the analyses, could create a misleading
    or incomplete view of the processes underlying its analyses and
    opinion.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In performing its analyses, Credit Suisse considered business,
    economic, industry and market conditions, financial and
    otherwise, and other matters as they existed on, and could be
    evaluated as of, the date of its written opinion. No company,
    transaction or business used in Credit Suisse&#146;s analyses
    for comparative purposes is identical to Grant Prideco, National
    Oilwell Varco or the proposed merger. While the results of each
    analysis were taken into account in reaching its overall
    conclusion with respect to fairness, Credit Suisse did not make
    separate or quantifiable judgments regarding individual
    analyses. The reference valuation ranges indicated by Credit
    Suisse&#146;s analyses are illustrative and not necessarily
    indicative of actual values or predictive of future results or
    values, which may be significantly more or less favorable than
    those suggested by the analyses. In addition, any analyses
    relating to the value of businesses or securities do not purport
    to be appraisals or to reflect the prices at which businesses or
    securities actually may be sold, which may depend on a variety
    of factors, many of which are beyond Grant Prideco&#146;s
    control and the control of Credit Suisse. Much of the
    information used in, and accordingly the results of, Credit
    Suisse&#146;s analyses are inherently subject to substantial
    uncertainty.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Credit Suisse&#146;s opinion and analyses were provided to the
    Board of Directors of Grant Prideco in connection with its
    consideration of the proposed merger and were among many factors
    considered by the Board of Directors of Grant Prideco in
    evaluating the proposed merger. Neither Credit Suisse&#146;s
    opinion nor its analyses were determinative of the merger
    consideration or of the views of Grant Prideco&#146;s Board of
    Directors or Grant Prideco&#146;s management with respect to the
    merger. The amount of consideration payable in the proposed
    merger was determined through negotiation between Grant Prideco
    and National Oilwell Varco. Credit Suisse&#146;s opinion did not
    address the fairness of the amount or nature of, or any other
    aspect relating to, any compensation to any officers, directors
    or employees of any party to the merger, or class of such
    persons, relative to the merger consideration or otherwise. The
    issuance of Credit Suisse&#146;s opinion was approved by an
    authorized internal committee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a summary of the material valuation analyses
    performed in connection with the preparation of Credit
    Suisse&#146;s opinion rendered to the Board of Directors of
    Grant Prideco on December&#160;16, 2007. Considering the
    narrative description of the analyses without considering the
    methodologies underlying, and the assumptions, qualifications
    and limitations affecting, each analysis could create a
    misleading or incomplete view of Credit Suisse&#146;s analyses.
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of its analyses, Credit Suisse reviewed a number of
    financial metrics of Grant Prideco, National Oilwell Varco and
    certain other companies, including:
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Enterprise Value </I>&#151;&#160;generally the value as of a
    specified date of the relevant company&#146;s outstanding equity
    securities (taking into account its outstanding options and
    other convertible securities) plus the value of its minority
    interests plus the value of its net debt (the value of its
    outstanding indebtedness and capital lease obligations less the
    amount of cash and cash equivalents on its balance sheet) as of
    a specified date.
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>EBITDA </I>&#151;&#160;generally the amount of the relevant
    company&#146;s earnings before interest, taxes, depreciation,
    and amortization for a specified time period.
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>After-Tax Cash Flow </I>&#151;&#160;generally the amount of
    the relevant company&#146;s net income plus the amounts of
    depreciation and amortization, deferred taxes and other non-cash
    operating items for a specified time period.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    40
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless the context indicates otherwise, enterprise and per share
    equity values used in the selected companies analysis described
    below were calculated using the closing price of the common
    stock of Grant Prideco, the common stock of National Oilwell
    Varco and the common stock of the selected tubular steel and
    oilfield services companies listed below as of December&#160;14,
    2007, and the transaction values for the target companies used
    in the selected transactions analysis described below were
    calculated as of the announcement date of the relevant
    transaction based on the purchase prices paid in the selected
    transactions. Estimates of EBITDA and After-Tax Cash Flow for
    Grant Prideco for the fiscal years ending December&#160;31, 2007
    and December&#160;31, 2008 were based on estimates provided by
    Grant Prideco&#146;s management, as adjusted for the pending
    sale of its tubular businesses to Vallourec S.A. Estimates of
    EBITDA and After-Tax Cash Flow for National Oilwell Varco for
    the fiscal years ending December&#160;31, 2007 and
    December&#160;31, 2008 were based on publicly available research
    analyst estimates. Estimates of EBITDA and After Tax Cash Flow
    for the selected companies listed below for the fiscal years
    2007 and 2008 were based on publicly available research analyst
    estimates for those companies. For purposes of its analyses and
    opinion, Credit Suisse assumed (based on the closing price of
    common stock of National Oilwell Varco on December&#160;14,
    2007)&#160;that the merger consideration had an implied value of
    $58 per share of the common stock of Grant Prideco.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Selected
    Companies Analysis</FONT></I>
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Credit Suisse reviewed enterprise value as a multiple of
    estimated 2007 and 2008 EBITDA and equity value as a multiple of
    estimated 2007 and 2008 After-Tax Cash Flow for Grant Prideco
    and selected companies with publicly-traded equity securities.
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The selected companies were selected because they were deemed to
    be similar to Grant Prideco in one or more respects, which
    included nature of business, size, diversification, financial
    performance and geographic concentration. The selected companies
    were:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Baker Hughes Incorporated
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    BJ Services Company
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Cameron International Corporation
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    FMC Technologies, Inc.
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Halliburton Company
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco, Inc.
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    OAO TMK
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Schlumberger Limited
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Smith International, Inc.
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    SSAB Svenskt St&#229;l AB
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Tenaris S.A.
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    United States Steel Corporation
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Vallourec S.A.
</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Weatherford International Ltd.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Credit Suisse applied ranges of enterprise value and equity
    value multiples based on the selected companies analysis to
    corresponding financial data for Grant Prideco provided by Grant
    Prideco&#146;s management. The selected companies analysis
    indicated an implied reference range value per share of Grant
    Prideco&#146;s common stock of $47.93 to $60.46, as compared to
    the implied value of the proposed merger consideration of $58.00
    per share of common stock of Grant Prideco.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Discounted
    Cash Flow Analysis</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Credit Suisse also calculated the net present value of the
    estimated unlevered, free cash flows that Grant Prideco could
    generate over fiscal years 2008 through 2012, based on the two
    sets of assumptions provided by Grant Prideco&#146;s management
    (Case One and Case Two). Credit Suisse then calculated a range
    of terminal values by multiplying estimated EBITDA for the 2012
    fiscal year by selected multiples ranging from 8.0x to 9.0x. The
    estimated unlevered free cash flow and terminal values were then
    discounted to the present value using discount rates ranging
    from 9.5% to 11.5%, which were calculated based on estimates of
    Grant Prideco&#146;s weighted average cost of capital. The
    discounted cash flow analyses indicated an implied reference
    range value per share of Grant Prideco&#146;s common stock of
    $48.60 to $55.78 for Case One and $54.59 to $62.87 for Case Two,
    as compared to the implied value of the proposed merger
    consideration of $58.00 per share of common stock of Grant
    Prideco.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    41
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Selected
    Transactions Analysis</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Credit Suisse calculated enterprise value multiples of certain
    financial data based on the purchase prices paid in selected
    publicly-announced transactions involving target companies that
    it deemed relevant. The calculated multiples included enterprise
    value as a multiple of the target company&#146;s latest twelve
    months of EBITDA. The selected transactions were selected
    because Credit Suisse deemed the target companies similar to
    Grant Prideco in one or more respects, including the nature of
    their business, size, diversification, financial performance and
    geographic concentration.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The selected transactions were:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="42%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="40%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="13%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Acquirer</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Target</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Date Announced</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Vallourec S.A.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Grant Prideco Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    10/30/07
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    United States Steel Corporation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Stelco Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    8/26/07
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Management, CAI Capital Partners, Goldman Sachs Capital
    Partners, Kelso &#038; Company, Vestar Capital Partners, British
    Columbia Investment Management Corp. and O.S.S.&#160;Capital
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    CCS Income Trust Company
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    6/29/07
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cal Dive International, Inc.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Horizon Offshore, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    6/12/07
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    SSAB Svenskt St&#229;l AB
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    IPSCO, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    5/3/07
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    United States Steel Corporation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Lone Star Technologies, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    3/29/07
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Tenaris S.A.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Hydril Company
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    2/12/07
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Hanover Compressor Company
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Universal Compression, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    2/5/07
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    General Electric Company
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Vetco Gray, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    1/8/07
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    ValueAct Capital Partners, L.P.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Seitel, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    11/1/06
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    IPSCO, Inc.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    NS Group, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    9/11/06
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Compagnie G&#233;n&#233;rale de G&#233;ophysique
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Veritas DGC Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    9/5/06
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Tenaris S.A.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Maverick Tube Corporation
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    6/13/06
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Schlumberger Limited
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Western Geco LLC
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    4/21/06
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    SEACOR Holdings Inc.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Seabulk International, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    3/16/05
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    First Reserve Corp.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Dresser Rand Unit of Ingersoll-Rand Company
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    8/25/04
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    National-Oilwell, Inc.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Varco International, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    8/12/04
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
     3i Group, Candover Investments and JPMorgan Partners LLC
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    ABB Ltd.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    1/16/04
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Saipem SPA
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Bouygues Offshore S.A.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    5/8/02
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Technip SA
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Coflexip SA
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    7/3/01
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Hanover Compressor Company
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Schlumberger Limited
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    6/28/01
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Credit Suisse applied ranges of multiples based on the selected
    transactions analysis to corresponding historical financial data
    for Grant Prideco provided by Grant Prideco&#146;s management,
    as adjusted for the pending sale of its tubular businesses to
    Vallourec S.A. The selected transactions analysis indicated an
    implied reference range value per share of Grant Prideco&#146;s
    common stock of $52.69 to $64.84, as compared to the implied
    value of the proposed merger consideration of $58.00 per share
    of common stock of Grant Prideco.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Other
    Considerations</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Credit Suisse also calculated multiples of enterprise value and
    equity value and considered certain financial data for National
    Oilwell Varco, Grant Prideco and certain of the selected
    companies identified above that Credit Suisse deemed similar to
    National Oilwell Varco. Credit Suisse applied multiple ranges
    based on the selected companies analysis to corresponding
    financial data for National Oilwell Varco based on publicly
    available research analyst estimates for National Oilwell Varco.
    The selected companies analysis indicated an implied reference
    range
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    42
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    value per share of National Oilwell Varco&#146;s common stock of
    $68.25 to $79.18, as compared to the closing price per share of
    National Oilwell Varco&#146;s common stock on December&#160;14,
    2007 of $77.37.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Other
    Matters</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Board of Directors of Grant Prideco engaged Credit Suisse
    pursuant to a letter agreement dated as of April&#160;17, 2007,
    as amended, to act as Grant Prideco&#146;s financial advisor
    with respect to certain potential transactions including a
    possible sale of Grant Prideco. The Board of Directors of Grant
    Prideco selected Credit Suisse as Grant Prideco&#146;s financial
    advisor based on Credit Suisse&#146;s qualifications, experience
    and reputation, and its familiarity with Grant Prideco&#146;s
    Board of Directors and Grant Prideco&#146;s business. Credit
    Suisse is an internationally recognized investment banking firm
    and is regularly engaged in the valuation of businesses and
    securities in connection with mergers and acquisitions,
    leveraged buyouts, negotiated underwritings, competitive
    biddings, secondary distributions of listed and unlisted
    securities, private placements and valuations for corporate and
    other purposes. Pursuant to the engagement letter, Grant Prideco
    will pay Credit Suisse a fee for its services, a significant
    portion of which is contingent upon the consummation of the
    proposed merger. Credit Suisse also became entitled to a fee
    upon the delivery of its opinion. Grant Prideco has also agreed
    to reimburse Credit Suisse for certain expenses and to indemnify
    Credit Suisse and certain related parties against certain
    liabilities, including liabilities arising under the federal
    securities laws, and to reimburse certain other expenses arising
    out of or relating to Credit Suisse&#146;s engagement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Credit Suisse and its affiliates have in the past provided, and
    may in the future provide, investment banking and financial
    services to Grant Prideco, National Oilwell Varco
    <FONT style="white-space: nowrap">and/or</FONT> their
    respective affiliates, as well as private investment firms with
    investments in or otherwise affiliated or associated with Grant
    Prideco, and other entities affiliated or associated with such
    private investment firms, for which Credit Suisse and its
    affiliates have received, and would expect to receive,
    compensation, including during the past two years having acted
    as (i)&#160;financial advisor to Grant Prideco in connection
    with its pending sale of certain tubular technologies and
    services businesses, (ii)&#160;a lender in a credit facility of
    Grant Prideco and (iii)&#160;a lender in a credit facility of
    National Oilwell Varco. Credit Suisse is a full service
    securities firm engaged in securities trading and brokerage
    activities as well as providing investment banking and other
    financial services. In the ordinary course of business, Credit
    Suisse and its affiliates may acquire, hold or sell, for its and
    its affiliates own accounts and the accounts of customers,
    equity, debt and other securities and financial instruments
    (including bank loans and other obligations) of Grant Prideco,
    National Oilwell Varco and any other company that may be
    involved in the proposed merger, as well as provide investment
    banking and other financial services to such companies.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Interests
    of Certain Persons in the Merger</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In considering the recommendation of the board of directors of
    Grant Prideco with respect to the merger, the stockholders of
    Grant Prideco should be aware that some of the executive
    officers and directors of Grant Prideco have interests in the
    transaction that differ from, or are in addition to, the
    interests of the stockholders of Grant Prideco generally. The
    board of directors of Grant Prideco was aware of these interests
    and considered them, among other matters, when making its
    decision to approve the merger agreement and the merger and
    recommend that the stockholders of Grant Prideco vote in favor
    of the adoption of the merger agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Stock
    Options and Restricted Stock</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the date of this proxy statement/prospectus, certain of
    Grant Prideco&#146;s directors and executive officers hold
    options to purchase shares of common stock of Grant Prideco. At
    the effective time of the merger, all options that are
    outstanding at the effective time of the merger to purchase
    Grant Prideco&#146;s common stocks granted to Grant
    Prideco&#146;s executive officers and directors under Grant
    Prideco&#146;s equity compensation plans will be converted into
    a right to purchase National Oilwell Varco&#146;s common stock
    pursuant to the terms of the merger agreement, as discussed in
    more detail in the section entitled &#147;The Merger
    Agreement&#160;&#151; Stock Options and Employee Benefits.&#148;
    Except for options to purchase 4,165&#160;shares granted to
    Quintin V. Kneen, the Vice President of Finance of Grant
    Prideco, all of Grant Prideco&#146;s stock options granted to
    Grant Prideco&#146;s executive officers and directors will
    already be fully vested and exercisable at the time of the
    merger and will not become vested and exercisable as a result of
    the merger. The unvested options granted to Mr.&#160;Kneen will
    vest as a result of the merger.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    43
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the date of this proxy statement/prospectus, certain of
    Grant Prideco&#146;s directors and executive officers hold
    restricted shares of Grant Prideco&#146;s common stock. At the
    effective time of the merger, all shares of Grant Prideco&#146;s
    restricted common stock granted to Grant Prideco&#146;s
    executive officers and directors under Grant Prideco&#146;s
    equity compensation plans that have not vested immediately prior
    to the effective time of the merger will, pursuant to their
    terms, become partially or fully vested upon the effective time
    of the merger or convert in an equivalent value of restricted
    shares of National Oilwell Varco common stock. As a result, the
    directors and officers will be entitled to receive the same
    merger consideration in respect of those shares as shareholders
    are entitled to receive in respect of outstanding shares of
    Grant Prideco&#146;s common stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco estimates that the numbers of shares of its common
    stock held by Grant Prideco&#146;s directors and executive
    officers that may become vested as a result of the merger and
    the value of the merger consideration that will be payable in
    respect of those shares, calculated based on the closing trading
    price of shares of National Oilwell Varco&#146;s common stock on
    December&#160;14, 2007, the business day immediately preceding
    the date of the merger agreement would be as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="66%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="14%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="11%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Estimated<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Estimated<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>value of merger<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
    <B>Name</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>number of
    shares<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>consideration</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Gordon T. Hall
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    174,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Michael McShane
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    143,885
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,345,330
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    David R. Black
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    73,861
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,283,938
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Greg L. Boane
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,421
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    430,418
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Jim Briehan
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16,802
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    974,516
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Philip A. Choyce
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38,607
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,239,206
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    John D. Deane
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19,191
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,113,078
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Matthew D. Fitzgerald
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    49,034
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,843,972
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Quintin V. Kneen
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,384
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    196,272
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 2pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    (1)&#160;</TD>
    <TD align="left">
    Excludes shares of restricted stock of Grant Prideco that will
    not vest as a result of the merger and will be converted into an
    equivalent value of restricted shares of National Oilwell common
    stock as follows: Mr.&#160;Black: 30,000&#160;shares;
    Mr.&#160;Boane: 10,000&#160;shares; Mr.&#160;Breihan:
    17,500&#160;shares; Mr.&#160;Deane: 25,000&#160;shares; and
    Mr.&#160;Kneen: 10,000&#160;shares. Such shares will vest on the
    earliest to occur of (i)&#160;the second anniversary of the date
    of grant (February 2010), (ii)&#160;in the event such
    individuals employment is terminated without cause as defined in
    the award agreement, (iii)&#160;in the event the individual
    terminates employment for good reason as defined in the award
    agreement, (iv)&#160;a subsequent change of control.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the foregoing, pursuant to the terms of the
    merger agreement, Grant Prideco is permitted to grant additional
    options and restricted shares in the ordinary course of business
    in accordance with past practice, following consultation with
    National Oilwell Varco and provided that the amounts so granted
    do not exceed the amounts granted to such persons (or persons
    similarly situated in the case of new or additional
    responsibilities or new hires) during 2007. Any such awards may
    also become fully vested upon the effective time of the merger.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Grant
    Prideco&#146;s Nonqualified Deferred Compensation Plans Covering
    Executive Officers</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain of Grant Prideco&#146;s executive officers are
    participants in Grant Prideco&#146;s Nonqualified Deferred
    Compensation (the &#147;NQDC Plan&#148;)
    <FONT style="white-space: nowrap">and/or</FONT> Grant
    Prideco&#146;s Executive Deferred Compensation Plan (the
    &#147;EDC Plan&#148;). It is anticipated that, immediately prior
    to the effective time of the merger, Grant Prideco will
    terminate the NQDC Plan and the EDC Plan and make accelerated
    distributions thereunder to plan participants, including Grant
    Prideco&#146;s executive officers, upon the effective time of
    the merger. All executive officers are fully vested in their
    benefits earned under the NQDC Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The EDC Plan provides for deferred amounts and company
    contributions to be credited to each executive&#146;s account as
    &#147;non-monetary units&#148; that are equal to the number of
    whole shares of common stock of Grant Prideco that could have
    been purchased at a price equal to the average closing price
    during the calendar month for which the allocation was made.
    Grant Prideco will amend the EDC Plan to provide that, upon the
    effective time of the merger,
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    44
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;the executive officers and other participants will have
    fully nonforfeitable interests in their benefits earned under
    the EDC Plan and (ii)&#160;each non-monetary unit will entitle
    the holder thereof to receive the same merger consideration as
    the other holders of Grant Prideco common stock upon the
    effective time of the merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the date of this proxy statement/prospectus, all of Grant
    Prideco&#146;s executive officers who are participants in the
    EDC Plan other than Matthew D. Fitzgerald have fully
    nonforfeitable interests in their EDC Plan benefits. Effective
    as of December&#160;31, 2007, the EDC Plan account balance of
    Mr.&#160;Fitzgerald was $667,072 of which, $533,658 was fully
    vested. As noted above, in connection with the merger, the EDC
    Plan will be amended so that all participants, including
    Mr.&#160;Fitzgerald, will have fully nonforfeitable interests in
    their unvested amounts as of the effective time of the merger.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Grant
    Prideco, Inc. Deferred Compensation Plan for Non-Employee
    Directors</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All of Grant Prideco&#146;s directors, other than
    Mr.&#160;McShane, are participants in Grant Prideco&#146;s
    Deferred Compensation Plan for Non-Employee Directors (the
    <I>&#147;Director Deferred Compensation Plan&#148;</I>). The
    Director Deferred Compensation Plan provides for deferred
    amounts and company contributions to be credited to each
    executive&#146;s account as &#147;non-monetary units&#148; that
    are equal to the number of whole shares of common stock of Grant
    Prideco that could have been purchased at a price equal to the
    mean between the high and low sales price per share of common
    stock of Grant Prideco determined on the last trading day of the
    calendar month for which the allocation was made. Grant
    Prideco&#146;s non-employee directors have benefits accrued
    under the Director Deferred Compensation Plan. Grant Prideco
    will amend the Director Deferred Compensation Plan to specify
    that each non-monetary unit will entitle the holder thereof to
    receive the same merger consideration as the other holders of
    Grant Prideco&#146;s common stock upon the effective date of the
    merger. It is anticipated that Grant Prideco will terminate the
    Director Deferred Compensation Plan and make accelerated
    distributions thereunder to Grant Prideco&#146;s non-employee
    directors upon the effective time of the merger.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Employment
    Agreement with Mr.&#160;McShane</FONT></I></B>
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the terms of Mr.&#160;McShane&#146;s employment agreement
    with Grant Prideco, if Grant Prideco (or its successor)
    terminates Mr.&#160;McShane&#146;s employment for any reason
    other than &#147;cause&#148; or &#147;disability&#148; or if he
    terminates his employment for &#147;good reason&#148;, as
    defined in the employment agreement, Mr.&#160;McShane will be
    entitled to receive the following benefits: (a)&#160;three times
    the sum of (i)&#160;his current annual base compensation and
    (ii)&#160;the highest bonus paid to Mr.&#160;McShane during the
    three years prior to the year of termination; (b)&#160;an annual
    incentive payment equal to the highest bonus paid to
    Mr.&#160;McShane during the three years prior to the year of
    termination (or if greater, his most recently paid fiscal year
    bonus), pro-rated to the date of termination; (c)&#160;three
    times the amount that was credited on Mr.&#160;McShane&#146;s
    behalf as the employer matching contribution under the Grant
    Prideco 401(k) Plan, the EDC Plan and NQDC Plan for the prior
    <FONT style="white-space: nowrap">12-month</FONT>
    period, grossed up for any taxes owed on this amount;
    (d)&#160;the maintenance of all welfare benefits after
    termination for a period of three years provided
    Mr.&#160;McShane makes his required contribution; (e)&#160;a
    cash lump sum amount equal to three times his annual car
    allowance; (f)&#160;outplacement services; and (g)&#160;an
    additional amount (a
    <FONT style="white-space: nowrap">&#147;gross-up&#148;</FONT>
    payment) in respect of excise taxes that may be imposed under
    the &#147;golden parachute&#148; rules on payments and benefits
    received in connection with the merger. The
    <FONT style="white-space: nowrap">gross-up</FONT>
    payment would make Mr.&#160;McShane whole for excise taxes (and
    for all taxes on the
    <FONT style="white-space: nowrap">gross-up</FONT>
    payment) in respect of payments and benefits received pursuant
    to all plans, agreements and arrangements of Grant Prideco
    (including for example, acceleration of vesting of equity
    awards). Assuming the effective time of the merger was
    March&#160;15, 2008 and Mr.&#160;McShane&#146;s employment were
    to have terminated under one of the circumstances described
    above, Grant Prideco estimates that Mr.&#160;McShane would have
    been entitled to a lump-sum cash payment equal to approximately
    $8,494,715 and to other benefits with an estimated value of
    approximately $36,000.
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The definition of &#147;good reason&#148; in
    Mr.&#160;McShane&#146;s employment agreement includes:
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a material reduction in the position, authority, duties, title,
    reporting requirements
    <FONT style="white-space: nowrap">and/or</FONT>
    responsibilities of Mr.&#160;McShane;
</TD>
</TR>


<TR style="line-height: 5pt; font-size: 1pt"><TD>&nbsp;</TD></TR>




<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    relocation of Mr.&#160;McShane&#146;s office more than
    35&#160;miles from downtown Houston, Texas;&#160;or
</TD>
</TR>


<TR style="line-height: 5pt; font-size: 1pt"><TD>&nbsp;</TD></TR>




<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any material reduction in Mr.&#160;McShane&#146;s compensation
    or benefits.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    45
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Employment
    Agreement with Mr.&#160;Fitzgerald</FONT></I></B>
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the terms of his employment agreement, if in connection
    with the merger Grant Prideco (or its successor) terminates
    Mr.&#160;Fitzgerald&#146;s employment for any reason other than
    &#147;cause&#148; or &#147;disability&#148; or if
    Mr.&#160;Fitzgerald terminates his employment for &#147;good
    reason&#148;, as defined in the employment agreement,
    Mr.&#160;Fitzgerald will be entitled to receive the following
    benefits: (a)&#160;three times the sum of (i)&#160;his current
    annual base compensation and (ii)&#160;the highest bonus paid to
    Mr.&#160;Fitzgerald during the three years prior to the year of
    termination; (b)&#160;an annual incentive payment equal to the
    highest bonus paid to Mr.&#160;Fitzgerald during the three years
    prior to the year of termination (or if greater, most recently
    earned, but not yet paid fiscal year bonus), prorated to the
    date of termination; (c)&#160;three times the amount that was
    credited on Mr.&#160;Fitzgerald&#146;s behalf as the employer
    matching contribution under Grant Prideco&#146;s 401(k) Plan,
    the EDC Plan and NQDC Plan for the prior
    <FONT style="white-space: nowrap">12-month</FONT>
    period, grossed up for any taxes owed on this amount;
    (d)&#160;all welfare benefits would be maintained after
    termination for a period of three years provided
    Mr.&#160;Fitzgerald makes his required contribution;
    (e)&#160;his car allowance for three years;
    (f)&#160;outplacement services; and (g)&#160;an additional
    amount (a
    <FONT style="white-space: nowrap">&#147;gross-up&#148;</FONT>
    payment) in respect of excise taxes that may be imposed under
    the &#147;golden parachute&#148; rules on payments and benefits
    received in connection with the merger. The
    <FONT style="white-space: nowrap">gross-up</FONT>
    payment would make Mr.&#160;Fitzgerald whole for excise taxes
    (and for all taxes on the
    <FONT style="white-space: nowrap">gross-up</FONT>
    payment) in respect of payments and benefits received pursuant
    to all plans, agreements and arrangements of Grant Prideco
    (including for example, acceleration of vesting of equity
    awards). Assuming the effective time of the merger was
    March&#160;15, 2008 and Mr.&#160;Fitzgerald&#146;s employment
    were to have terminated under one of the circumstances described
    above, Grant Prideco estimates that Mr.&#160;Fitzgerald would
    have been entitled to a lump-sum cash payment equal to
    approximately $3,521,828 and to other benefits with an estimated
    value of approximately&#160;$36,000.
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The definition of &#147;good reason&#148; in
    Mr.&#160;Fitzgerald&#146;s employment agreement includes:
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a material reduction in the position, authority, duties, title,
    reporting requirements
    <FONT style="white-space: nowrap">and/or</FONT>
    responsibilities of Mr.&#160;Fitzgerald;
</TD>
</TR>


<TR style="line-height: 5pt; font-size: 1pt"><TD>&nbsp;</TD></TR>




<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    relocation of Mr.&#160;Fitzgerald&#146;s office more than
    50&#160;miles from downtown Houston, Texas;&#160;or
</TD>
</TR>


<TR style="line-height: 5pt; font-size: 1pt"><TD>&nbsp;</TD></TR>




<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any material reduction in Mr.&#160;Fitzgerald&#146;s
    compensation or benefits.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Change
    of Control Agreements with Other Executive
    Officers</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the agreements with Messrs.&#160;McShane and
    Fitzgerald, Grant Prideco entered into a change of control
    agreement with each of its other executive officers,
    Messrs.&#160;Black, Boane, Breihan, Deane, Kneen and Choyce.
    Under these agreements, the executives will be provided with
    certain benefits if there is both a change of control of Grant
    Prideco and the executive is subsequently terminated for any
    reason other than for &#147;cause&#148; or elects to terminate
    his employment for &#147;good reason&#148; within two years
    after a change of control. Under these agreements, if there is a
    change of control of Grant Prideco, and the executive is
    terminated for &#147;cause&#148; or &#147;good reason&#148;, the
    executive would be entitled to the following benefits:
    (a)&#160;two times the sum of (i)&#160;his current annual base
    compensation and (ii)&#160;his highest annual bonus paid during
    the three years prior to the year of termination; (b)&#160;an
    annual incentive payment equal to the highest annual bonus paid
    to him during the three years prior to the year of termination
    (or if greater, the most recently earned, but not yet paid
    fiscal year bonus) (prorated to the date of termination);
    (c)&#160;two times the amount that was credited on the
    executive&#146;s behalf as the employer matching contribution
    under Grant Prideco&#146;s 401(k) Plan, the EDC Plan and NQDC
    Plan for the prior
    <FONT style="white-space: nowrap">12-month</FONT>
    period, grossed up for any taxes owed on this amount;
    (d)&#160;all welfare benefits would be maintained after
    termination for a period of two years provided the executive
    makes his required contribution; (e)&#160;an amount equal to two
    times the total amount of all fringe benefits received by the
    executive on an annualized basis; and (f)&#160;an additional
    amount (a
    <FONT style="white-space: nowrap">&#147;gross-up&#148;</FONT>
    payment) in respect of excise taxes that may be imposed under
    the &#147;golden parachute&#148; rules on payments and benefits
    received in connection with the merger. The
    <FONT style="white-space: nowrap">gross-up</FONT>
    payment would make the officer whole for excise taxes (and for
    all taxes on the
    <FONT style="white-space: nowrap">gross-up</FONT>
    payment) in respect of payments and benefits received pursuant
    to all plans, agreements and arrangements of Grant Prideco
    (including for example, acceleration of vesting of equity
    awards).
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    46
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The definition of &#147;good reason&#148; in the
    executives&#146; change of control agreements includes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a material reduction in the position, authority, duties, title,
    reporting requirements
    <FONT style="white-space: nowrap">and/or</FONT>
    responsibilities of the executive;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    relocation of the executive&#146;s office more than
    50&#160;miles from downtown Houston, Texas;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any material reduction in the executive&#146;s compensation or
    benefits.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Assuming the effective time of the merger was March&#160;15,
    2008 and each executive officer&#146;s employment were to have
    terminated under one of the circumstances described above, Grant
    Prideco estimates that such executive officer would have been
    entitled to a lump-sum cash payment and to other benefits with
    estimated values as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="53%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="13%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Lump-Sum Cash<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Estimated Value of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Payment</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Other Benefits</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    David R. Black
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,125,306
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,149,306
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Greg L. Boane
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,269,706
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,293,706
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Jim Breihan
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,886,511
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,910,511
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    John D. Deane
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,001,928
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,025,928
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Quintin V. Kneen
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,748,168
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,772,168
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Philip A. Choyce
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,194,826
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,218,826
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Grant
    Prideco, Inc.&#146;s Supplemental Executive Retirement
    Plan</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Michael McShane is also a beneficiary of Grant Prideco&#146;s
    Supplemental Executive Retirement Plan (the
    &#147;<I>SRP</I>&#148;). If Mr.&#160;McShane incurs a separation
    from service in connection with the merger, he will receive an
    accelerated distribution of the actuarial equivalent of his
    early retirement benefit under the SRP, calculated as if he had
    worked for Grant Prideco for an additional three years and he
    was three years older. The estimated value of this benefit is
    $12,469,919, calculated assuming that the effective time of the
    merger occurred on January&#160;15, 2008 and Mr.&#160;McShane
    incurs a separation from service at such time. Such benefit
    would be paid in the form of a lump sum payment on the date of
    Mr.&#160;McShane&#146;s separation from service (or six months
    following his separation from service if required under
    Section&#160;409A of the Internal Revenue Code).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Indemnification
    and Directors&#146; and Officers&#146; Insurance</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the merger agreement, National Oilwell Varco and NOV Sub
    have agreed to indemnify each present and former director and
    officer of Grant Prideco and its subsidiaries to the fullest
    extent permitted under Delaware law for all acts or omissions
    prior to the merger by such individuals in such capacities.
    National Oilwell Varco has also agreed to provide, for six years
    after the merger, directors&#146; and officers&#146; liability
    insurance in respect of acts or omissions occurring prior to the
    merger covering each person currently covered by the
    directors&#146; and officers&#146; liability insurance policy of
    Grant Prideco on terms and in amounts no less favorable than
    those of the policies of Grant Prideco, provided that National
    Oilwell Varco will not be required to pay an annual premium for
    the insurance in excess of 300% of the premium for the 2007
    fiscal year. If such insurance cannot be obtained, or can only
    be obtained at an annual premium in excess of the maximum
    premium, National Oilwell Varco will obtain the most
    advantageous policy of insurance obtainable for an annual
    premium equal to the maximum premium. If so requested by Grant
    Prideco, National Oilwell Varco will provide this insurance by
    purchasing a &#147;tail&#148; directors&#146; and officers&#146;
    liability insurance policy for Grant Prideco and its directors
    and officers if such a policy is available.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Appraisal
    Rights</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Holders of shares of common stock of Grant Prideco will be
    entitled to demand an appraisal of their shares under
    Section&#160;262 of the Delaware General Corporation Law, or
    DGCL. If appraisal rights are exercised, shares of common stock
    of Grant Prideco outstanding immediately prior to the effective
    time of the merger and held by a holder who has not voted in
    favor of, or consented in writing to, the adoption of the merger
    agreement and who has delivered a written demand for appraisal
    of such shares in accordance with Section&#160;262 of the DGCL
    will not be converted into the right to receive the merger
    consideration, unless and until the dissenting holder fails to
    perfect or
</DIV>

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    47
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    effectively withdraws or otherwise loses his or her right to
    appraisal and payment under the DGCL. If, after the effective
    time of the merger, a dissenting stockholder fails to perfect or
    otherwise waives, or withdraws or loses his or her right to
    appraisal, or a court determines that such holder is not
    entitled to relief under the DGCL, then such holder or holders
    (as the case may be) shall forfeit such rights and his or her
    shares of common stock of Grant Prideco will be treated as if
    they had been converted as of the effective time of the merger
    into the right to receive the merger consideration without
    interest thereon, upon surrender of the certificate or
    certificates that formerly evidenced such shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following discussion is not a complete statement of
    appraisal rights under the DGCL and is qualified in its entirety
    by the full text of Section&#160;262 of the DGCL, which explains
    the procedures and requirements for exercising statutory
    appraisal rights and which is attached as Annex&#160;C to this
    proxy statement/prospectus and incorporated herein by reference.
    All references in Section&#160;262 of the DGCL and in this
    summary to a &#147;stockholder&#148; are to the record holder of
    the shares of common stock of Grant Prideco as to which
    appraisal rights are asserted. Stockholders intending to
    exercise appraisal rights should carefully review Annex&#160;C.
    This proxy statement/prospectus constitutes notice to
    stockholders of Grant Prideco concerning the availability of
    appraisal rights under Section&#160;262 of the DGCL.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>A stockholder of Grant Prideco who wishes to exercise
    appraisal rights should carefully review the following
    discussion and Annex&#160;C to this proxy statement/prospectus,
    because failure to comply timely and fully with the procedures
    required by Section&#160;262 of the DGCL will result in the loss
    of appraisal rights.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the DGCL, stockholders of Grant Prideco who do not wish to
    accept the merger consideration have the right, subject to
    compliance with the requirements summarized below, to demand an
    appraisal by the Delaware Court of Chancery of the &#147;fair
    value&#148; of their shares of common stock of Grant Prideco and
    to be paid in cash such amount in lieu of the merger
    consideration that they would otherwise be entitled to receive
    if the merger is consummated. For this purpose, the fair value
    of shares of common stock of Grant Prideco will be their fair
    value, excluding any element of value arising from the
    consummation or expectation of consummation of the merger as
    determined by that court. Unless that court determines otherwise
    for good cause shown, interest from the effective date of the
    merger through the date of payment of the judgment shall accrue
    at 5% over the Federal Reserve discount rate. Stockholders who
    desire to exercise their appraisal rights must satisfy all of
    the conditions of Section&#160;262 of the DGCL, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Written Demand for Appraisal Prior to the Vote at the Special
    Meeting.</I>&#160;&#160;A stockholder must deliver to Grant
    Prideco a written demand for appraisal meeting the requirements
    of Section&#160;262 of the DGCL before stockholders of Grant
    Prideco vote on the adoption of the merger agreement at the
    special meeting. Voting against or abstaining with respect to
    the adoption of the merger agreement, failing to return a proxy
    or returning a proxy voting against or abstaining with respect
    to the proposal to adopt the merger agreement will not
    constitute the making of a written demand for appraisal. The
    written demand for appraisal must be separate from any proxy,
    abstention from the vote on the merger agreement or vote against
    the merger agreement. The written demand must reasonably inform
    Grant Prideco of the identity of the stockholder and the intent
    thereby to demand appraisal of his, her or its shares. Failure
    to timely deliver a written demand for appraisal will cause a
    stockholder to lose his, her or its appraisal rights.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Refrain from Voting in Favor of Adoption of the Merger
    Agreement.</I>&#160;&#160;In addition to making a written demand
    for appraisal, a stockholder must not vote his, her or its
    shares of common stock of Grant Prideco in favor of the adoption
    of the merger agreement. A submitted proxy not marked
    &#147;AGAINST&#148; or &#147;ABSTAIN&#148; will be voted in
    favor of the proposal to adopt the merger agreement and will
    result in the waiver of appraisal rights. A stockholder that has
    not submitted a proxy will not waive his, her or its appraisal
    rights solely by failing to vote if the stockholder satisfies
    all other provisions of Section&#160;262 of the DGCL.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Continuous Ownership of the Common Stock of Grant
    Prideco.</I>&#160;&#160;A stockholder must also continuously
    hold his, her or its shares of common stock of Grant Prideco
    from the date the stockholder makes the written demand for
    appraisal through the effective time of the merger. Accordingly,
    a stockholder who is the record holder of shares of common stock
    of Grant Prideco on the date the written demand for appraisal is
    made but who thereafter transfers the shares prior to the
    effective time of the merger will lose any right to appraisal
    with respect to such shares.
</TD>
</TR>

</TABLE>

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    <BR>
    48
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Petition with the Chancery Court.</I>&#160;&#160;Within
    120&#160;days after the effective date of the merger (but not
    thereafter), either the surviving corporation or any stockholder
    who has complied with the requirements of Section&#160;262 of
    the DGCL, which are briefly summarized above, must file a
    petition in the Delaware Court of Chancery demanding a judicial
    determination of the value of the shares of common stock of
    Grant Prideco held by all stockholders who are entitled to
    appraisal rights. This petition in effect initiates a court
    proceeding in Delaware. National Oilwell Varco does not have any
    intention at this time to file such a petition if a demand for
    appraisal is made and stockholders seeking to exercise appraisal
    rights should not assume that National Oilwell Varco will file
    such a petition or that National Oilwell Varco will initiate any
    negotiations with respect to the fair value of such shares.
    Accordingly, because National Oilwell Varco has no obligation to
    file such a petition, if no stockholder files such a petition
    with the Delaware Court of Chancery within 120&#160;days after
    the effective date of the merger, appraisal rights will be lost,
    even if a stockholder has fulfilled all other requirements to
    exercise appraisal rights. If such a petition is filed, the
    Delaware Court of Chancery could determine that the fair value
    of shares of common stock of Grant Prideco is more than, the
    same as or less than the merger consideration.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Neither voting (in person or by proxy) against, abstaining
    from voting on or failing to vote on the proposal to adopt the
    merger agreement will constitute a written demand for appraisal
    within the meaning of Section&#160;262 of the DGCL. The written
    demand for appraisal must be in addition to and separate from
    any proxy or vote.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A demand for appraisal must be executed by or on behalf of the
    stockholder of record, fully and correctly, as the name of such
    stockholder appears on the stock certificate. If the shares are
    owned of record in a fiduciary capacity, such as by a trustee,
    guardian or custodian, this demand must be executed by or for
    the fiduciary. If the shares are owned by or for more than one
    person, as in a joint tenancy or tenancy in common, such demand
    must be executed by or for all joint owners. An authorized
    agent, including an agent for two or more joint owners, may
    execute the demand for appraisal for a stockholder of record.
    However, the agent must identify the record owner and expressly
    disclose the fact that, in exercising the demand, he is acting
    as agent for the record owner. <B>A person having a beneficial
    interest in the common stock of Grant Prideco held of record in
    the name of another person, such as a broker or nominee, must
    act promptly to cause the record holder to follow the steps
    summarized herein in a timely manner to perfect whatever
    appraisal rights the beneficial owners may have.</B>
    Notwithstanding the foregoing, a person who is the beneficial
    owner of shares held either in a voting trust or by a nominee on
    behalf of such person may, in such person&#146;s own name, file
    a petition or request from National Oilwell Varco the statement
    described below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A stockholder who elects to exercise appraisal rights should
    mail or deliver his, her or its written demand to the principal
    executive offices of Grant Prideco at 400 North Sam Houston
    Parkway East, Suite&#160;900, Houston, Texas 77060, Attention:
    Corporate Secretary. The written demand for appraisal should
    state the name and mailing address of the stockholder, the
    number of shares of common stock of Grant Prideco owned by the
    stockholder and must reasonably inform Grant Prideco that the
    stockholder intends thereby to demand appraisal of his, her or
    its shares of common stock of Grant Prideco. Within ten days
    after the effective date of the merger, National Oilwell Varco
    will provide notice of the effective date of the merger to all
    stockholders of Grant Prideco who have complied with
    Section&#160;262 of the DGCL and have not voted for the merger.
    A record holder, such as a broker, fiduciary, depositary or
    other nominee, who holds shares of common stock of Grant Prideco
    as a nominee for others, may exercise appraisal rights with
    respect to the shares held for all or less than all beneficial
    owners of shares as to which such person is the record owner. In
    such case, the written demand must set forth the number of
    shares covered by such demand. Where the number of shares is not
    expressly stated, the demand will be presumed to cover all
    shares of common stock of Grant Prideco outstanding in the name
    of such record owner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Within 120&#160;days after the effective date of the merger (but
    not thereafter), any stockholder who has satisfied the
    requirements of Section&#160;262 of the DGCL may deliver to
    National Oilwell Varco a written demand for a statement listing
    the aggregate number of shares not voted in favor of the merger
    and with respect to which demands for appraisal have been
    received and the aggregate number of holders of such shares.
    National Oilwell Varco must mail such written statement to the
    stockholder within ten days after the request of the stockholder
    is received by National Oilwell Varco or within ten days after
    the latest date for delivery of a demand for appraisal under
    Section&#160;262 of the DGCL, whichever is later. Upon the
    filing of a petition in the Court of Chancery of the State of
    Delaware within
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    120&#160;days after the effective date of the merger as set
    forth above by a stockholder demanding a determination of the
    fair value of the common stock of Grant Prideco, service of a
    copy of the petition must be made upon National Oilwell Varco.
    National Oilwell Varco must then, within 20&#160;days after
    service, file in the office of the Register in Chancery in which
    the petition was filed, a duly verified list containing the
    names and addresses of all stockholders who have demanded
    payment for their shares and with whom agreements as to the
    value of their shares have not been reached with National
    Oilwell Varco. If National Oilwell Varco files a petition, the
    petition must be accompanied by the duly verified list. The
    Register in Chancery, if so ordered by the court, will give
    notice of the time and place fixed for the hearing of such
    petition by registered or certified mail to National Oilwell
    Varco and to the stockholders shown on the list at the addresses
    therein stated, and notice also will be given by publishing a
    notice at least one week before the day of the hearing in a
    newspaper of general circulation published in the City of
    Wilmington, Delaware, or such publication as the court deems
    advisable. The court must approve the forms of the notices by
    mail and by publication, and National Oilwell Varco must bear
    the costs of the notices.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At the hearing on the petition, the Court of Chancery of the
    State of Delaware will determine which stockholders have become
    entitled to appraisal rights. The court may require the
    stockholders who have demanded an appraisal for their shares
    (and who hold stock represented by certificates) to submit their
    stock certificates to the Register in Chancery for notation of
    the pendency of the appraisal proceedings and the Court of
    Chancery of the State of Delaware may dismiss the proceedings as
    to any stockholder that fails to comply with such direction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    After determining which stockholders are entitled to appraisal
    rights, the court will appraise the shares owned by these
    stockholders, determining the &#147;fair value&#148; of such
    shares, exclusive of any element of value arising from the
    accomplishment or expectation the merger, together with interest
    to be paid, if any, upon the amount determined to be the fair
    value. In determining such fair value, the court shall take into
    account all relevant factors. Unless the court determines
    otherwise for good cause shown, interest from the effective date
    of the merger through the date of payment of the judgment shall
    accrue at 5% over the Federal Reserve discount rate.
    <B>Stockholders of Grant Prideco considering seeking appraisal
    of their shares should note that the fair value of their shares
    determined under Section&#160;262 of the DGCL could be more
    than, the same as or less than the consideration they would
    receive pursuant to the merger agreement if they did not seek
    appraisal of their shares.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The costs of the appraisal proceeding (which do not include
    attorney&#146;s fees or the fees or expenses of experts) may be
    determined by the court and taxed against the parties as the
    court deems equitable under the circumstances. Upon application
    of a stockholder who has perfected appraisal rights, the court
    may order that all or a portion of the expenses incurred by any
    stockholder in connection with the appraisal proceeding,
    including, without limitation, reasonable attorney&#146;s fees
    and the fees and expenses of experts, be charged pro rata
    against the value of all shares entitled to appraisal.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If a stockholder demands appraisal rights in compliance with the
    requirements of Section&#160;262 of the DGCL, then, after the
    effective time of the merger, such stockholder will not be
    entitled to: (i)&#160;vote such stockholder&#146;s shares of
    common stock of Grant Prideco for any purpose; (ii)&#160;receive
    payment of dividends or other distributions on such
    stockholder&#146;s shares that are payable to stockholders of
    record at a date after the effective time of the merger; or
    (iii)&#160;receive payment of any consideration provided for in
    the merger agreement. A stockholder may withdraw his, her or its
    demand for appraisal rights by a writing withdrawing his, her or
    its demand for appraisal and accepting the merger consideration
    at any time within 60&#160;days after the effective time of the
    merger, or at any time thereafter with written approval from
    National Oilwell Varco. Notwithstanding the foregoing, no
    appraisal proceeding in the Delaware Court of Chancery shall be
    dismissed as to any stockholder without the approval of the
    court, and such approval may be conditioned upon such terms as
    the court deems just. Subject to the foregoing, if any
    stockholder of Grant Prideco withdraws his, her or its demand
    for appraisal rights, then his, her or its shares of common
    stock of Grant Prideco will be automatically converted into the
    right to receive the merger consideration, without interest.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Any stockholder wishing to exercise appraisal rights is urged
    to consult legal counsel before attempting to exercise appraisal
    rights. Failure to comply strictly with all of the procedures
    set forth in Section&#160;262 of the DGCL may result in the loss
    of the statutory appraisal rights of a stockholder.</B>
</DIV>

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    <BR>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Regulatory
    Approvals Required for the Merger</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger is subject to review by the Antitrust Division of the
    U.S.&#160;Department of Justice and the U.S.&#160;Federal Trade
    Commission under the
    <FONT style="white-space: nowrap">Hart-Scott-Rodino</FONT>
    Antitrust Improvements Act of 1976. Under the
    <FONT style="white-space: nowrap">Hart-Scott-Rodino</FONT>
    Antitrust Improvements Act of 1976, National Oilwell Varco and
    Grant Prideco are required to make pre-merger notification
    filings and to await the expiration or early termination of the
    statutory waiting period prior to completing the merger. On
    February&#160;6, 2008, National Oilwell Varco and Grant Prideco
    each refiled a Premerger Notification and Report Form with the
    Antitrust Division of the U.S.&#160;Department of Justice and
    the U.S.&#160;Federal Trade Commission. On March&#160;6, 2008,
    the parties received early termination of the waiting period
    from the Department of Justice and the Federal Trade Commission.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger is also subject to antitrust review by government
    authorities in a number of foreign jurisdictions in which one or
    both companies have a significant market presence to require
    filings. As of the date of this proxy statement, the parties
    have made the necessary antitrust filings in some, but not all
    of, these jurisdictions. National Oilwell Varco and Grant
    Prideco continue to work with the governmental authorities in
    these jurisdictions regarding the proposed merger between the
    companies. If one or more of these foreign approvals are not
    obtained prior to the special meeting of stockholders of Grant
    Prideco, National Oilwell Varco and Grant Prideco may elect to
    proceed with the merger subject to certain restrictions on the
    combination of the operations of the companies in certain
    jurisdictions until such approvals could be obtained.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    While National Oilwell Varco and Grant Prideco expect to resolve
    matters related to the antitrust review of the Department of
    Justice and foreign authorities and to receive regulatory
    clearance, we cannot assure you that the Department of Justice
    or the antitrust authorities in other jurisdictions will give
    regulatory clearance to complete the merger at all or without
    restrictions or conditions that would have a materially adverse
    effect on the combined company if the merger is completed. These
    restrictions and conditions could include the grant of a
    complete or partial license, divestiture, spin-off or the
    holding separate of assets or businesses. Under the terms of the
    merger agreement, neither National Oilwell Varco nor Grant
    Prideco is required to commit to any divestitures, licenses or
    hold separate or similar arrangements with respect to its assets
    or conduct of business arrangements if such divestiture,
    license, holding separate or arrangement is not conditioned upon
    the consummation of the merger or would have a material adverse
    effect on National Oilwell Varco or Grant Prideco. In this case,
    either National Oilwell Varco or Grant Prideco may refuse to
    complete the merger if any such restrictions or conditions are
    required by governmental authorities as a condition to approving
    the merger. No additional stockholder approval is expected to be
    required or sought for any decision by National Oilwell Varco or
    Grant Prideco, after the special meeting of Grant Prideco, to
    agree to any terms and conditions necessary to resolve any
    regulatory objections to the merger, and stockholder approval
    will not be sought unless additional stockholder approval is
    required to approve the terms and conditions under applicable
    law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, during or after any statutory waiting periods (as
    applicable) and clearance of the merger, and even after
    completion of the merger, either the Antitrust Division of the
    U.S.&#160;Department of Justice, the U.S.&#160;Federal Trade
    Commission or foreign governmental authorities could challenge
    the consummated merger under the antitrust laws. Also, in some
    jurisdictions, a competitor, customer or other third party could
    initiate a private action under the antitrust laws challenging
    or seeking to enjoin the merger, before or after it is
    completed. National Oilwell Varco and Grant Prideco cannot be
    sure that a challenge to the merger will not be made or that, if
    a challenge is made, National Oilwell Varco and Grant Prideco
    will prevail.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Accounting
    Treatment</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In accordance with accounting principles generally accepted in
    the United States, National Oilwell Varco will account for the
    merger using the purchase method of accounting. Under this
    method of accounting, National Oilwell Varco will record the
    market value (based on an average of the closing prices of the
    common stock of National Oilwell Varco for a range of trading
    days from two days before and after December&#160;17, 2007, the
    announcement date) of its common stock issued in the merger, the
    fair value of options to purchase shares of common stock of
    National Oilwell Varco issued in exchange for the options to
    purchase shares of common stock of Grant Prideco and the amount
    of direct transaction costs associated with the merger as the
    estimated purchase price of acquiring Grant Prideco. National
    Oilwell Varco will allocate the estimated purchase price to the
    net tangible and
</DIV>

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    <BR>
    51
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    intangible assets (amortizable and indefinite lived) acquired
    based on their respective fair values at the date of the
    completion of the merger. Any excess of the estimated purchase
    price over the fair value of net assets acquired will be
    accounted for as goodwill.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Amortizable intangible assets, currently estimated at
    $2,833.0&#160;million, will generally be amortized over useful
    lives, which range from 10 to 30 years. Identified intangibles
    include tradenames valued at $752.0&#160;million, which are
    considered indefinite lived. In accordance with the Statement of
    Financial Accounting Standards No.&#160;142, &#147;Goodwill and
    Other Intangible Assets,&#148; goodwill resulting from the
    business combination currently estimated at
    $2,670.7&#160;million, and indefinite-lived intangibles will not
    be amortized but instead will be tested for impairment at least
    annually (more frequently if certain indicators are present).
    The foregoing preliminary amounts are subject to change based
    upon the final number of shares of common stock of National
    Oilwell Varco issued at the time of closing and the final
    valuation of the identified assets and liabilities of Grant
    Prideco.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event that the management of National Oilwell Varco
    determines that the value of goodwill has become impaired, the
    combined company will incur an accounting charge for the amount
    of impairment during the fiscal quarter in which the
    determination is made. The amounts listed in the above paragraph
    are only preliminary estimates, however, actual amounts may
    differ from these estimates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Listing
    of the Common Stock of National Oilwell Varco</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is a condition to the merger that the shares of common stock
    of National Oilwell Varco to be issued in the merger be approved
    for listing on the New York Stock Exchange, subject to official
    notice of issuance. In addition, National Oilwell Varco will use
    reasonable best efforts to cause the shares of common stock of
    National Oilwell Varco to be issued upon the exercise of
    converted stock options to be approved for listing on the New
    York Stock Exchange.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following the merger, National Oilwell Varco&#146;s name will
    continue to be National Oilwell Varco, Inc. and its trading
    symbol on the New York Stock Exchange will continue to be
    &#147;NOV&#148;.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Delisting
    and Deregistration of the Common Stock of Grant
    Prideco</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the merger is completed, the common stock of Grant Prideco
    will be delisted from the New York Stock Exchange and
    deregistered under the Securities Exchange Act of 1934, and
    Grant Prideco will no longer file periodic reports with the SEC.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Restrictions
    on Sales of Shares of the Common Stock of National Oilwell Varco
    Received in the Merger</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The shares of common stock of National Oilwell Varco issued in
    the merger will not be subject to any restrictions on transfer
    arising under the Securities Act of 1933. This proxy
    statement/prospectus does not cover resales of the common stock
    of National Oilwell Varco received by any person upon
    competition of the merger and no person is authorized to make
    any use of this proxy statement/prospectus in connection with
    any such resale.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    52
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='109'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">THE
    MERGER AGREEMENT</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following summary describes certain material provisions of
    the merger agreement. A copy of the merger agreement is attached
    to this proxy statement/prospectus as Annex&#160;A and is
    incorporated by reference into this proxy statement/prospectus.
    While the discussion below summarizes many of the material
    provisions of the merger agreement, it may not contain all of
    the information about the merger agreement that is important to
    you. We encourage you to read the merger agreement in its
    entirety for a more complete description of the terms and
    conditions of the merger.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">General</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement provides that Grant Prideco will be merged
    with and into NOV Sub, Inc., a wholly owned subsidiary of
    National Oilwell Varco, at the effective time of the merger. NOV
    Sub will continue as the surviving corporation in accordance
    with the Delaware General Corporation Law, or DGCL, and will
    remain as a wholly owned subsidiary of National Oilwell Varco.
    Based on the number of outstanding shares of common stock of
    Grant Prideco on the record date and the number of outstanding
    shares of common stock of National Oilwell Varco on
    March&#160;14, 2008, we anticipate that stockholders of Grant
    Prideco will own approximately 14% of the outstanding shares of
    common stock of National Oilwell Varco following the merger. At
    the effective time of the merger, all the property, rights,
    privileges, powers and franchises of Grant Prideco and NOV Sub
    before the merger will vest in the surviving corporation, and
    all debts, liabilities and duties of Grant Prideco and NOV Sub
    before the merger will become the debts, liabilities and duties
    of the surviving corporation.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger will be completed after all conditions in the merger
    agreement are met or waived and National Oilwell Varco and Grant
    Prideco file a certificate of merger with the Secretary of State
    of the State of Delaware. The merger agreement provides that the
    closing of the merger will take place at 10:00&#160;a.m.,
    Houston time, on a date specified by National Oilwell Varco and
    Grant Prideco but not later than the second business day after
    satisfaction or waiver of the conditions to the merger unless
    the companies otherwise agree.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Conversion
    of Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement provides that each issued and outstanding
    share of the common stock of Grant Prideco, other than shares
    owned by Grant Prideco, National Oilwell Varco or NOV Sub, and
    other than shares held by stockholders effecting their appraisal
    rights, will be converted into the right to receive 0.4498 of a
    share of National Oilwell Varco&#146;s common stock, which we
    refer to as the exchange ratio, and $23.20 of cash
    consideration. However, if prior to the merger, the outstanding
    shares of the common stocks of Grant Prideco or National Oilwell
    Varco are changed into a different number of shares or a
    different class, by reason of any stock dividend, subdivision,
    reclassification, recapitalization, split, combination or
    exchange of shares, the exchange ratio and cash consideration
    will be adjusted accordingly.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each share of the outstanding common stock of National Oilwell
    Varco will be unaffected by the merger and will remain
    outstanding.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No fractional shares of the common stock of National Oilwell
    Varco will be issued in the merger. Each holder of common stock
    of Grant Prideco who would have otherwise been entitled to
    receive a fraction of a share of the common stock of National
    Oilwell Varco will receive cash in lieu of a fractional share of
    the common stock of National Oilwell Varco. The amount of cash
    will be equal to the relevant fraction times the average of the
    last reported sales price of the common stock of National
    Oilwell Varco on the New York Stock Exchange Composite
    Transactions Tape on each of the ten consecutive trading days
    immediately preceding the date of the effective time of the
    merger.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Procedure
    for the Exchange of Stock Certificates</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Exchange
    of Stock Certificates</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco and Grant Prideco have designated
    American Stock Transfer&#160;&#038; Trust&#160;Company to serve
    as exchange agent for the exchange of certificates representing
    shares of the common stock of Grant Prideco for both
    certificates representing shares of the common stock of National
    Oilwell Varco and checks representing the
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    53
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    cash component for each share of Grant Prideco&#146;s common
    stock as well as the cash payment in lieu of fractional shares.
    Promptly after the merger is completed, the exchange agent will
    mail transmittal forms and exchange instructions to each holder
    of record of shares of the common stock of Grant Prideco. After
    receiving the transmittal form, each holder of certificates
    formerly representing shares of Grant Prideco&#146;s common
    stock will be able to surrender the certificates to the exchange
    agent and receive certificates evidencing the appropriate number
    of whole shares of National Oilwell Varco&#146;s common stock as
    well as the cash consideration and cash in lieu of fractional
    shares. After the merger, each certificate formerly representing
    shares of the common stock of Grant Prideco, until surrendered
    and exchanged, will be deemed, for all purposes, to evidence
    only the right to receive a certificate representing the number
    of whole shares of National Oilwell Varco&#146;s common stock
    that the holder&#146;s shares of Grant Prideco&#146;s common
    stock were converted to in the merger, along with the cash
    consideration for each share of the common stock of Grant
    Prideco and cash in lieu of fractional shares, if any. For
    purposes of determining quorums at stockholders&#146; meetings
    and the stockholders entitled to notice of, and to vote at,
    meetings of stockholders, holders of unsurrendered certificates
    of shares of Grant Prideco&#146;s common stock will be
    considered to be record holders of the shares of National
    Oilwell Varco&#146;s common stock represented by their
    certificates of shares of Grant Prideco&#146;s common stock.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Dividends
    and Distributions</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The holder of an unexchanged certificate of shares of Grant
    Prideco&#146;s common stock will not be entitled to receive any
    dividends or other distributions otherwise payable by National
    Oilwell Varco until the certificate has been exchanged. Subject
    to applicable laws, following surrender of a certificate of
    shares of Grant Prideco&#146;s common stock by the holder,
    National Oilwell Varco will pay the holder any accrued and
    unpaid dividends and distributions that have become payable
    between the effective time of the merger and the time the
    certificate is surrendered, without interest.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Lost
    Certificates</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A stockholder must provide an appropriate affidavit to the
    exchange agent if any certificate of shares of Grant
    Prideco&#146;s common stock are lost, stolen or destroyed, in
    order to receive shares of the common stock of National Oilwell
    Varco, cash consideration, cash in lieu of fractional shares or
    unpaid dividends and distributions in respect of the lost,
    stolen or destroyed certificates. In addition, the surviving
    corporation may require the holder of lost, stolen or destroyed
    certificates to post a bond as indemnity against any claim that
    may be made against the surviving corporation or the exchange
    agent with respect to the certificates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">No
    Liability</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    None of National Oilwell Varco, NOV Sub, or the exchange agent
    will be liable to any former holder of shares of Grant
    Prideco&#146;s common stock for shares of National Oilwell
    Varco&#146;s common stock, or dividends or distributions made
    with respect to those shares, delivered to a public official
    under any applicable abandoned property, escheat or similar law.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Withholding
    Right</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco, the surviving corporation or the
    exchange agent on behalf of the surviving corporation, is
    entitled to deduct and withhold from the consideration payable
    to any former holder of shares of common stock of Grant Prideco
    the amount it is required to deduct and withhold from the
    consideration under the Internal Revenue Code or any provision
    of state, local or foreign tax law. Any amounts withheld will be
    treated as having been paid to the former holder of the common
    stock of Grant Prideco.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Representations
    and Warranties</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco, NOV Sub, and Grant Prideco have made
    mutual representations and warranties in the merger agreement
    relating to the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    their organization and the organization of their subsidiaries,
    if any;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    54
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    their capital structures;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the authorization, execution, delivery and enforceability of the
    merger agreement and related matters;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the board of directors adopting resolutions approving (and
    recommending in the case of Grant Prideco&#146;s Board of
    Directors) the merger agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the absence of conflicts under their certificates of
    incorporation, bylaws, agreements and applicable laws;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#149; required consents or approvals;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    documents and financial statements filed with the Securities and
    Exchange Commission and the accuracy of the information
    contained in those documents and financial statements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the absence of material undisclosed liabilities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the absence of material adverse events or changes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    taxes and tax returns;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    certain agreements and contracts;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    absence of any litigation with a reasonable likelihood of having
    a material adverse effect;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    compliance with laws;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the accuracy of information contained in the registration
    statement filed by National Oilwell Varco and this proxy
    statement/prospectus;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    opinions of financial advisors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the absence of any stockholder rights plan;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    compliance with the applicable provisions of the Sarbanes-Oxley
    Act of 2002, the Exchange Act of 1934, and the applicable
    listing and corporate governance rules and regulations of the
    New York Stock Exchange, including the proper establishment and
    maintenance of disclosure controls and procedures;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the absence of broker&#146;s or finder&#146;s fees in connection
    with any transaction within the merger agreement.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, Grant Prideco has made representations and
    warranties in the merger agreement with respect to the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    properties;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    intellectual property;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    environmental matters;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    employee benefit plans;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    labor matters;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    insurance;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the absence of existing discussions with other parties;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the inapplicability to the merger of anti-takeover laws.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, National Oilwell Varco has made a representation
    and warranty in the merger agreement to the effect that it has
    access to sufficient cash resources to pay the amounts required
    to be paid under the merger agreement.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    55
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Certain
    Covenants of National Oilwell Varco and Grant Prideco</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco has agreed that, during the period from the date
    of the merger agreement until the completion of the merger,
    except as otherwise consented to in writing by National Oilwell
    Varco or as contemplated by the merger agreement, Grant Prideco
    will, and will cause its subsidiaries to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    carry on its business in the ordinary course;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    pay its debts and taxes when due, subject to good faith disputes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    pay or perform other obligations when due;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    use reasonable efforts to preserve intact its present business
    organization, management team and business relationships;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    refrain from accelerating, amending or changing the period of
    exercisability or vesting of options, stock purchase rights,
    restricted stock, or other stock awards granted under any stock
    plan or authorizing cash payments in exchange for any options,
    stock purchase rights, restricted stock or other stock awards
    granted under any stock plan, except as required pursuant to the
    plan or any related agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not declare or pay any dividends on, or make other distributions
    in respect of, any of its capital stock;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not effect certain other changes in its capitalization;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not purchase or otherwise acquire any shares of its capital
    stock except from former employees, directors and consultants at
    a price not greater than the then current fair market value in
    accordance with agreements providing for the repurchase of
    shares in connection with the termination of service;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not grant, issue, deliver or sell, or authorize or propose to
    issue, deliver or sell any shares of its capital stock or
    securities convertible into shares of its capital stock, or any
    subscriptions, rights, warrants or options to acquire or other
    agreements obligating it to issue any shares or other
    convertible securities, except that Grant Prideco may continue
    to issue stock equivalents under its deferred compensation
    plans, Grant Prideco may make grants of stock options and
    restricted stock to officers and employees in the ordinary
    course of business in accordance with past practice, following
    consultation with National Oilwell Varco (provided that the
    amount of stock options and restricted stock granted to those
    persons does not exceed the amounts granted to such persons in
    2007)&#160;and certain other exceptions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not make any acquisitions, except for all such acquisitions
    involving total consideration of $50&#160;million or less;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    except for transactions among Grant Prideco and its
    subsidiaries, not redeem, purchase, acquire or offer to purchase
    or acquire any shares of its capital stock or any options,
    warrants or rights to acquire any of its capital stock or any
    security convertible into or exchangeable for its capital stock
    other than in certain limited exceptions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not sell, lease, license or otherwise dispose of properties or
    assets other than (i)&#160;in the ordinary course of business or
    as may be required by law, (ii)&#160;sales of inventory and
    other current assets in the ordinary course of business,
    (iii)&#160;sales or dispositions of assets in one or a series of
    related transactions having an aggregate value of
    $25&#160;million or less or (iv)&#160;divestitures pursuant to
    the terms of the merger agreement and the pending sale of Grant
    Prideco&#146;s tubular business to Vallourec S.A.;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not increase the compensation or benefits payable to Grant
    Prideco&#146;s or Grant Prideco&#146;s subsidiaries&#146;
    directors, officers or employees, except (i)&#160;for increases
    consistent with past practices, including bonuses, and after
    consultation with National Oilwell Varco, (ii)&#160;pursuant to
    any Grant Prideco employee plan or other contractual
    arrangements in effect on the date of the merger agreement,
    (iii)&#160;in connection with the assumption by the officer or
    employee of material new or additional responsibilities and
    after consultation with National Oilwell Varco or (iv)&#160;to
    respond to offers of employment made by third parties;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    56
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not grant additional severance or termination pay or enter into
    employment or severance agreements with any employees or
    officers, other than:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;payments or agreements paid to or entered into with
    employees, other than executive officers, in the ordinary course
    of business and following consultation with National Oilwell
    Varco;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;as provided under any employee benefit plan of Grant
    Prideco or any other contractual agreement as in effect on the
    date of the merger agreement;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;implementing a severance plan covering up to 30
    individuals selected by Grant Prideco, after consultation with
    National Oilwell Varco, that will remain in effect until at
    least the six-month anniversary of the merger that will require
    National Oilwell Varco to pay those individuals the greater of
    (i)&#160;any severance amounts due under the existing severance
    program of National Oilwell Varco or (ii)&#160;six months&#146;
    salary and bonus amounts if they are terminated without cause
    during that period (less any salary paid to such individual
    during the period);
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;amending Grant Prideco&#146;s deferred compensation
    plans in order to, among other things, comply with Section 409A
    of the Internal Revenue Code, provide for full vesting of all
    benefits issued under those plans, provide that plan
    participants will receive the merger consideration in exchange
    for any payments that would have been made in Grant
    Prideco&#146;s common stock under those plans, and to provide
    for the funding by means of a &#147;rabbi trust&#148; of all
    amounts payable under those plans to the extent such amounts are
    subject to the
    <FONT style="white-space: nowrap">six-month</FONT>
    delay provisions of Section&#160;409A of the Internal Revenue
    Code;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;amending Grant Prideco&#146;s change of control
    agreements with certain executives to provide for funding by
    means of a &#147;rabbi trust&#148; of all severance amounts
    payable under those agreements to the extent such amounts are
    subject to the
    <FONT style="white-space: nowrap">six-month</FONT>
    delay provisions of Section&#160;409A of the Internal Revenue
    Code;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;increasing the salary of each participant in Grant
    Prideco&#146;s non qualified deferred compensation plans to
    compensate for the loss of Grant Prideco&#146;s contributions
    under those plans.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not establish, adopt, enter into, or materially and adversely
    amend any collective bargaining agreement except as required by
    law;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not establish, adopt, enter into, materially amend or terminate
    any Grant Prideco employee benefit plan, except for any
    amendments in order to comply with applicable law or as
    expressly permitted by the merger agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not amend its charter or bylaws;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not incur indebtedness, other than:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;borrowings pursuant to credit agreements in effect as
    of the date of the merger agreement or replacement credit
    agreements on substantially similar terms as Grant
    Prideco&#146;s credit agreements in effect as of the date of the
    merger agreement and having aggregate borrowing capacity not to
    exceed 150% of borrowing capacity under credit agreements
    existing as of the date of the merger agreement;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;seller financings in connection with acquisitions
    permitted by the merger agreement;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not enter into any agreement or arrangement that limits or
    otherwise restricts the ability of Grant Prideco or its
    subsidiaries from engaging or competing in any line of business
    or in any geographic area;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not change any method or principle of financial accounting in a
    manner that is inconsistent with past practice, except to the
    extent required by generally accepted accounting principles or
    change in law, as advised by Grant Prideco&#146;s regular
    independent accountants;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not make, change or revoke any material tax election, or settle
    or compromise any material tax liability or refund;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not enter into any closing agreements with respect to material
    taxes or agree to any adjustment of any material tax attribute;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    57
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not file or surrender any claim for a material refund of taxes
    or file any material amended tax return or obtain any material
    tax ruling;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not execute or consent to any waivers extending the statutory
    period of limitations with respect to the collection or
    assessment of material taxes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not make or commit to any capital expenditures other than in the
    ordinary course of business;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not take any action that is intended or would reasonably be
    expected to result in any of the conditions to the merger not
    being satisfied;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not take any action to exempt or make not subject to the
    provisions of Section&#160;203 of the DGCL or any other state
    takeover statute or state law that purports to limit or restrict
    business combinations or the ability to acquire or vote
    shares;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not repay indebtedness for borrowed money with the proceeds from
    any assets sold other than in the ordinary course of business.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco has agreed that, except as otherwise
    consented to in writing by Grant Prideco or as contemplated by
    the merger agreement, it will, and will cause its subsidiaries
    to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    solely as to National Oilwell Varco, not declare or pay any
    dividends on or make any other distributions in respect of any
    of its capital stock, or split, combine or reclassify any of its
    capital stock or issue or authorize the issuance of any other
    securities of or for shares of its capital stock;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not acquire or purchase an equity interest in or assets of any
    business, or take any other action, that in any such case could
    reasonably be expected to delay, prevent or interfere with the
    consummation of the merger;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not amend its charter or bylaws in a manner reasonably expected
    to adversely impact the consummation of the merger or Grant
    Prideco and its stockholders (other than in the same respect as
    all other stockholders of National Oilwell Varco);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not change any method or principle of financial accounting in a
    manner that is inconsistent with past practice, except to the
    extent required by generally accepted accounting principles or
    change in law, as advised by National Oilwell Varco&#146;s
    regular independent accountants;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not make or change any material tax election;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not settle or compromise any material tax liability or
    refund;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    not take any action that is intended or would reasonably be
    expected to result in any of the conditions to the merger not
    being satisfied.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Also, subject to compliance with applicable law, from the date
    of the merger agreement to the completion of the merger, each of
    Grant Prideco and National Oilwell Varco shall confer on a
    regular and frequent basis with one or more representatives of
    the other party to report on the general status of ongoing
    operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Certain
    Additional Agreements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, National Oilwell Varco and Grant Prideco also have
    each agreed to use its reasonable best efforts to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    cause the merger to qualify as a reorganization within the
    meaning of Section&#160;368(a) of the Internal Revenue Code;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    take all appropriate action to complete the merger promptly;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    obtain any required consents, licenses, permits, waivers,
    approvals, authorizations or orders from governmental entities
    or other third parties required to complete the merger;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    make all necessary filings and submissions required by federal
    and state securities laws, antitrust laws and other applicable
    laws;&#160;and
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    58
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    obtain any governmental clearances required for the closing of
    the merger, to respond to any government requests for
    information and to contest and resist any governmental action
    that would prohibit the merger;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco and Grant Prideco also have agreed, among
    other things:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    only as to Grant Prideco, to convene and hold a meeting of its
    stockholders on the earliest practicable date, and use all
    reasonable efforts to obtain proxies from its stockholders in
    favor of adoption of the merger agreement and the merger;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to afford to the other party, upon reasonable notice, access
    during normal business hours to its properties, books,
    contracts, commitments and records, subject to certain
    contractual or legal restrictions or sensitivity of information
    concerns;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to give prompt notice to the other party of (i)&#160;any notice
    from any person alleging that the consent of such person is or
    may be required in connection with the merger, (ii)&#160;any
    notice from any governmental entity in connection with the
    merger, (iii)&#160;any actions, suits, claims, investigations or
    proceedings commenced or threatened in writing against or
    somehow involving or affecting Grant Prideco or National Oilwell
    Varco that relate to the consummation of the merger and
    (iv)&#160;if there has been a material change in the business,
    financial condition or results of operations or any event that
    might reasonably be expected to cause any representations or
    warranties to be untrue or inaccurate in any material respect.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    However, neither National Oilwell Varco nor Grant Prideco nor
    any of their subsidiaries are required (i)&#160;to divest or
    hold separate any of their respective businesses, product lines
    or assets, or to take or agree to take any other action or agree
    to any limitation, that would reasonably be expected to have a
    material adverse effect on the financial condition, results of
    operations or prospects of either National Oilwell Varco or
    Grant Prideco, or (ii)&#160;to agree to or effect any
    divestiture, hold separate any business or take any other action
    that is not conditioned on the consummation of the merger.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">No
    Solicitation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the merger agreement, Grant Prideco has agreed not to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    solicit, initiate, knowingly encourage or facilitate an
    acquisition proposal;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    engage in negotiations or discussions concerning, or provide any
    non-public information to any person relating to, or take any
    other action to facilitate any inquiries or the making of any
    proposal that constitutes, or could reasonably be expected to
    lead to, any acquisition proposal;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    enter into any agreement, arrangement or understanding
    contemplating or relating to any acquisition proposal or
    requiring Grant Prideco to abandon, terminate or fail to
    consummate the merger.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    However, prior to adoption by Grant Prideco&#146;s stockholders
    of the merger agreement, Grant Prideco&#146;s board of directors
    may furnish non-public information to, or enter into discussions
    or negotiations with, any person regarding a bona fide written
    acquisition proposal, if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    such acquisition proposal was made after the date of the merger
    agreement and shall not have been withdrawn;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    such acquisition proposal was not solicited, initiated,
    knowingly encouraged or facilitated after the date of the merger
    agreement in breach of, and did not otherwise result from a
    breach of, the merger agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the board of directors of Grant Prideco determines in good
    faith, after consultation with outside legal counsel and
    financial advisors, that such acquisition proposal is, or is
    reasonably likely to lead to, a superior proposal;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    prior to taking these actions, Grant Prideco receives an
    executed confidentiality agreement from the person with terms as
    to confidentiality no less favorable in all material respects
    than those contained in the confidentiality agreement between
    National Oilwell Varco and Grant Prideco;&#160;and
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    59
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco&#146;s board of directors also may respond to any
    tender offer that may be made in order to comply with the
    requirements of
    <FONT style="white-space: nowrap">Rule&#160;14e-2</FONT>
    or
    <FONT style="white-space: nowrap">Rule&#160;14d-9</FONT>
    under the Securities Exchange Act of 1934. However, any
    withdrawal of, or adverse change in, the recommendation relating
    to this merger by Grant Prideco&#146;s board or any board
    committee must be effected in accordance with the terms of the
    merger agreement. See &#147;&#151;&#160;Change of
    Recommendation.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco is required to notify National Oilwell Varco,
    orally and in writing, promptly after receipt (and in any event
    within one business day) of any acquisition proposal or any
    request for nonpublic information or access to its properties,
    books or records that could reasonably be expected to lead to an
    acquisition proposal. The notice must detail the identity of the
    offeror and the terms and conditions of the proposal, inquiry or
    contact. Grant Prideco is also required to keep National Oilwell
    Varco informed on a prompt basis of the status of any material
    developments relating to any acquisition proposal (in any event
    within two business days).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An &#147;acquisition proposal&#148; is any contract, offer or
    proposal (whether or not in writing and whether or not delivered
    to the stockholders of Grant Prideco) with respect to a
    potential or proposed acquisition transaction, which is:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any merger, consolidation, business combination, or similar
    transaction involving Grant Prideco or its subsidiaries (which
    subsidiaries collectively represent 20% or more of the
    consolidated revenues, net income or assets of Grant Prideco and
    its subsidiaries);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any sale, lease or other disposition directly or indirectly by
    merger, consolidation, business combination, share exchange,
    joint venture, or otherwise of any business or assets of Grant
    Prideco or its subsidiaries representing 20% or more of the
    consolidated revenues, net income or assets of Grant Prideco and
    its subsidiaries;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any issuance, sale, or other disposition of securities
    representing 20% or more of the voting power of Grant Prideco;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any other transaction in which a person acquires beneficial
    ownership, or the right to acquire beneficial ownership of 20%
    or more of the outstanding voting capital stock of Grant
    Prideco;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any combination of the foregoing (in each case, other than the
    merger agreement).
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Change of
    Recommendation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Neither Grant Prideco&#146;s board of directors nor any
    committee thereof may withdraw or adversely modify its
    recommendation that the stockholders of Grant Prideco adopt the
    merger agreement, except in the case where each of the following
    is satisfied:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the stockholders of Grant Prideco have not yet adopted the
    merger agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Grant Prideco&#146;s board of directors has determined in good
    faith, after consultation with outside counsel, that the failure
    to withdraw or adversely modify its recommendation would be
    inconsistent with its fiduciary duties under applicable law;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Grant Prideco&#146;s board of directors has notified National
    Oilwell Varco in writing of the determination described above;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    at least four business days following receipt by National
    Oilwell Varco of the notice has elapsed and taking into account
    any revised proposal by (and provided that during such period,
    Grant Prideco has, if requested by National Oilwell Varco,
    negotiated in good faith with National Oilwell Varco to attempt
    to make such adjustments in the terms and conditions of the
    merger agreement as would enable Grant Prideco to proceed with
    the transactions contemplated in the merger agreement), the
    board of directors of Grant Prideco maintains its determination
    described above;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Grant Prideco has not violated the no solicitation provisions of
    the merger agreement.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    60
</DIV><!-- END PAGE WIDTH -->
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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="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Stock
    Options and Employee Benefits</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Stock
    Options</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the record date for Grant Prideco&#146;s special meeting
    of stockholders, Grant Prideco had outstanding options to
    purchase a total of 2,063,057 shares of the common stock of
    Grant Prideco. These options were issued under Grant
    Prideco&#146;s employee and non-employee directors equity
    participation plans.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement provides that options to purchase shares of
    common stock of Grant Prideco will be converted into options to
    purchase shares of common stock of National Oilwell Varco and be
    assumed by National Oilwell Varco. Each Grant Prideco option so
    assumed and converted will continue to have the same terms and
    conditions as set forth in the applicable Grant Prideco plan and
    any agreements thereunder immediately prior to the effective
    time of the merger, except that, as of the effective time of the
    merger, each Grant Prideco option so assumed and converted will
    be exercisable for a number of whole shares of National Oilwell
    Varco common stock (rounded down to the nearest whole share)
    equal to the product of (x)&#160;the number of shares of Grant
    Prideco common stock subject to such option, multiplied by
    (y)&#160;the &#147;Option Exchange Ratio&#148;, with a per share
    exercise price of National Oilwell Varco common stock equal to
    the quotient of (a)&#160;the per share exercise price of the
    Grant Prideco option divided by (b)&#160;the &#147;Option
    Exchange Ratio&#148;. For purposes of the merger agreement, the
    &#147;Option Exchange Ratio&#148; means the sum of (A)&#160;the
    exchange ratio (0.4498 of a share of National Oilwell common
    stock) and (B)&#160;the quotient of (i)&#160;the cash
    consideration per share ($23.20) divided by (ii)&#160;the
    average of the last reported sales price of National Oilwell
    Varco common stock, as reported on the NYSE Composite
    Transactions Tape, on each of the ten consecutive trading days
    immediately preceding the effective time of the merger. Some
    converted options will become fully vested and exercisable at
    the effective time of the merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco has agreed to reserve enough shares of
    common stock of National Oilwell Varco to cover the stock
    options of Grant Prideco so assumed. The board of directors of
    Grant Prideco will take any necessary actions to convert the
    stock options into options to acquire common stock of National
    Oilwell Varco as described above without the consent of the
    holders of such awards.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As soon as practicable after the merger is completed, National
    Oilwell Varco will file a registration statement on
    <FONT style="white-space: nowrap">Form&#160;S-8</FONT>
    with respect to the shares of the common stock of National
    Oilwell Varco subject to the stock options assumed and National
    Oilwell Varco has agreed to use its reasonable best efforts to
    maintain the effectiveness of the registration statement for so
    long as these options remain outstanding.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Restricted
    Stock Grants</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco has issued shares of its common stock to employees
    as part of an incentive bonus program. Such shares are subject
    to vesting or other forfeiture restrictions or repurchase
    conditions. After the merger, these shares will continue to vest
    and have the rights and be subject to the conditions as set
    forth in the benefit plans and related award agreement under
    Grant Prideco&#146;s stock benefit plans.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Stock
    Purchase Plan</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under Grant Prideco&#146;s employee stock purchase plan (ESPP),
    employees may purchase shares of the common stock of Grant
    Prideco at a discount through payroll deductions. The stock
    purchase plan provides for
    <FONT style="white-space: nowrap">12-month</FONT>
    purchase periods ending on the last trading day on or before the
    last date of December of each year. At the end of a purchase
    period, payroll deductions are applied to the purchase of shares
    of the common stock of Grant Prideco at a price per share equal
    to 85% of the fair market value of the common stock of Grant
    Prideco at the beginning or end of the plan period, whichever is
    lower.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement provides that each participant&#146;s
    accumulated payroll deductions will be used to purchase shares
    of Grant Prideco Common Stock immediately prior to the effective
    time of the merger in accordance with the terms of the ESPP, and
    the shares so purchased will be converted into the right to
    receive the same merger consideration as any other share of
    common stock of Grant Prideco. Grant Prideco will cause the
    employee stock purchase plan to terminate at the effective time
    of the merger, and no further purchase rights will be granted or
    exercised under the ESPP thereafter.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    61
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Executive
    Deferred Compensation Plan, Foreign Executive Deferred
    Compensation Plan and Deferred Compensation Plan for
    Non-Employee Directors</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, Grant Prideco will terminate the Executive Deferred
    Compensation Plan, the Foreign Executive Deferred Compensation
    Plan and the Deferred Compensation Plan for Non-Employee
    Directors and make accelerated distributions thereunder to the
    participants in such plans upon the effective time of the
    merger. Grant Prideco will amend such plans to provide that upon
    the effective time of the merger (i)&#160;the participants in
    such plans will have fully nonforfeitable interests in their
    benefits earned under the plans and (ii)&#160;each non-monetary
    unit allocated to a participant&#146;s account under the plans
    (a non-monetary unit representing a share of Grant
    Prideco&#146;s common stock) will be converted into the right to
    receive the same merger consideration as the other holders of
    Grant Prideco&#146;s common stock upon the effective time of the
    merger.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Director
    and Officer Indemnification</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement provides that, after the merger, National
    Oilwell Varco and NOV Sub will indemnify and hold harmless each
    present and former director and officer of Grant Prideco and its
    subsidiaries against all liabilities or expenses, including
    reasonable attorneys&#146; fees, arising out of any acts or
    omissions in their capacities as officers or directors before
    the completion of the merger, including for acts and omissions
    occurring in connection with the adoption of the merger
    agreement. This right to indemnification will apply regardless
    of whether the claim was asserted before or after the merger is
    completed. National Oilwell Varco&#146;s indemnification
    obligations will be to the fullest extent permitted under
    Delaware law and are in addition to any other indemnification
    rights available to Grant Prideco&#146;s current and former
    directors and officers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For six years from the effective time, National Oilwell Varco
    will cause to be maintained in effect for the benefit of Grant
    Prideco&#146;s directors and officers an insurance and
    indemnification policy that provides coverage for acts or
    omissions occurring prior to the effective time covering each
    such person currently covered by Grant Prideco&#146;s
    directors&#146; and officers&#146; liability insurance policies
    on terms with respect to coverage and in amounts no less
    favorable than those of Grant Prideco&#146;s policies in effect
    on the date of the merger agreement with the same or comparable
    quality insurance carriers. However, National Oilwell Varco is
    not required to pay an annual premium for the insurance in
    excess of 300% of the premium for the 2007 fiscal year and, if
    the insurance coverage cannot be obtained at all, or can only be
    obtained at an annual premium in excess of the maximum premium,
    National Oilwell Varco shall obtain the most advantageous
    policies of directors&#146; and officers&#146; insurance
    obtainable for an annual premium equal to the maximum premium.
    If requested by Grant Prideco, National Oilwell Varco will
    effect such coverage by purchasing a &#147;tail&#148;
    directors&#146; and officers&#146; liability insurance policy
    for Grant Prideco and its directors and officers if such a
    policy is available.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">State
    Takeover Statutes</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If any state takeover statute or state law that purports to
    limit or restrict business combinations or the ability to
    acquire or vote shares is or may become applicable to the
    merger, each of Grant Prideco and its board of directors and
    National Oilwell Varco and its board of directors are to grant
    such approvals and take such other actions as are necessary so
    that such transactions may be consummated as promptly as
    practicable on the terms contemplated by the merger agreement
    and otherwise act to eliminate or minimize the effects of such
    statute or law on the merger agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Conditions
    to the Merger</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Joint
    Conditions to the Merger</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement provides that the obligations of National
    Oilwell Varco and Grant Prideco to effect the merger are subject
    to the satisfaction or waiver of the following conditions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the stockholders of Grant Prideco must adopt the merger
    agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the waiting period under the
    <FONT style="white-space: nowrap">Hart-Scott-Rodino</FONT>
    Antitrust Improvements Act of 1976 shall have expired or been
    terminated;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    62
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    other than approvals related to the
    <FONT style="white-space: nowrap">Hart-Scott-Rodino</FONT>
    Antitrust Improvements Act of 1976, all governmental consents
    and approvals must be obtained and all waiting periods imposed
    by any governmental entity must expire, unless the failure to
    obtain approval or the continuation of the waiting period of any
    of these is not reasonably likely to have a material adverse
    effect;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    National Oilwell Varco&#146;s registration statement must be
    effective under the Securities Act of 1933 and not be the
    subject of a stop order or proceeding seeking a stop order;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the absence of any order, injunction, judgment, decree, statute,
    rule or regulation that makes the merger illegal or otherwise
    prohibits the consummation of the merger;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the shares of the common stock of National Oilwell Varco to be
    issued in the merger must be approved for listing on the New
    York Stock Exchange, subject to official notice of
    issuance;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    there shall not be pending or threatened any suit, action or
    proceeding by any governmental entity that has a reasonable
    likelihood of success that would interfere with the consummation
    of the merger or that otherwise is reasonably likely to have a
    material adverse effect on Grant Prideco or National Oilwell
    Varco.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">National
    Oilwell Varco&#146;s and NOV Sub&#146;s Conditions to the
    Merger</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the merger agreement provides that National Oilwell
    Varco&#146;s and NOV Sub&#146;s obligations to effect the merger
    are subject to the satisfaction or waiver of the following
    conditions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the representations and warranties of Grant Prideco regarding
    its capital structure and corporate power and authority must be
    true and correct in all material respects as of the date of the
    merger agreement and as of the date of the closing of the merger
    (except to the extent such representations and warranties were
    expressly made as of an earlier date, in which case as of such
    date);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all other representations and warranties of Grant Prideco must
    be true and correct as of the date of the merger agreement and
    as of the date of the closing of the merger (except to the
    extent such representations and warranties were expressly made
    as of an earlier date, in which case as of such date), except
    where the failure to be true and correct, individually or in the
    aggregate, has not had and would not reasonably be expected to
    have a material adverse effect on Grant Prideco;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Grant Prideco must have performed, in all material respects, all
    of its obligations under the merger agreement prior to the
    closing of the merger;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    National Oilwell Varco must receive a written legal opinion of
    Andrews Kurth LLP to the effect that the merger will qualify for
    federal income tax purposes as a reorganization within the
    meaning of Section&#160;368(a) of the Internal Revenue Code. See
    &#147;The Merger&#160;&#151; Material U.S. Federal Income Tax
    Consequences&#148;;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    since the date of the merger agreement, there shall not have
    been any event that has had or would reasonably be expected to
    have a material adverse effect on Grant Prideco&#146;s business,
    assets, liabilities or obligations, financial condition or
    results of operations.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Grant
    Prideco&#146;s Conditions to the Merger</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the merger agreement provides that Grant
    Prideco&#146;s obligation to effect the merger is subject to the
    satisfaction or waiver of the following conditions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the representations and warranties of National Oilwell Varco
    regarding its capital structure and corporate power and
    authority must be true and correct in all material respects as
    of the date of the merger agreement and as of the date of the
    closing of the merger (except to the extent such representations
    and warranties were expressly made as of an earlier date, in
    which case as of such date);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all other representations and warranties of National Oilwell
    Varco must be true and correct as of the date of the merger
    agreement and as of the date of the closing of the merger
    (except to the extent such representations and warranties were
    expressly made as of an earlier date, in which case as of such
    date), except where
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    63
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
    the failure to be true and correct, individually or in the
    aggregate, has not had and would not reasonably be expected to
    have a material adverse effect on National Oilwell Varco;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    each of National Oilwell Varco and NOV Sub must have performed,
    in all material respects, all of its obligations under the
    merger agreement prior to the date of the closing of the merger;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Grant Prideco must receive a written legal opinion of Cravath,
    Swaine&#160;&#038; Moore LLP to the effect that the merger will
    qualify for federal income tax purposes as a reorganization
    within the meaning of Section&#160;368(a) of the Internal
    Revenue Code. See &#147;The Merger&#160;&#151; Material U.S.
    Federal Income Tax Consequences&#148;;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    since the date of the merger agreement, there shall not have
    been any event that has had or would reasonably be expected to
    have a material adverse effect on National Oilwell Varco&#146;s
    business, assets, liabilities or obligations, financial
    condition or results of operations.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Material
    Adverse Effect Definition</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain representations and warranties of National Oilwell Varco
    and Grant Prideco, and certain other provisions in the merger
    agreement, are qualified by references to a &#147;material
    adverse effect&#148;. For purposes of the merger agreement, a
    &#147;material adverse effect&#148; on a person means a material
    adverse effect on (i)&#160;the business, assets, liabilities or
    obligations, financial condition or results of operations of
    such person and its subsidiaries, taken as a whole,
    (ii)&#160;the ability of such person to perform its obligations
    under the merger agreement or (iii)&#160;the ability of such
    person to consummate the merger. However, a &#147;material
    adverse effect&#148; does not include changes or conditions
    relating to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the economy, or financial or capital markets, in the
    U.S.&#160;or elsewhere in which such person or subsidiary has
    significant operations or sales unless they have a
    disproportionate effect on the person relative to other
    participants in the oilfield services industry;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the oilfield services industry in general in the U.S.&#160;or in
    any other country in which the person has significant operations
    or sales unless they have a disproportionate effect on the
    person relative to other participants in the oilfield services
    industry;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any change in such person&#146;s stock price or trading volume,
    in and of itself;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any change after the date of the merger agreement in the law or
    generally accepted accounting principles;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the announcement or pendency of the merger agreement or the
    merger itself;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    acts of war, sabotage or terrorism;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    natural disasters such as earthquakes, hurricanes or tornados
    unless they have a disproportionate effect on the person
    relative to other participants in the oilfield services industry;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Grant Prideco&#146;s failure in and of itself to meet any
    internal or published projections, forecasts, or other
    predictions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any change in the price of oil or natural gas or the number of
    active drilling rigs operating in the geographic areas where
    such person and its subsidiaries have significant operations or
    sales;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any change in the price of steel or other raw materials of the
    type and grade customarily purchased by such person and its
    subsidiaries.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Termination;
    Termination Fees and Expenses</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Termination
    of the Merger Agreement</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement may be terminated at any time prior to the
    completion of the merger, before or after adoption of the merger
    agreement by the stockholders of Grant Prideco:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by mutual written consent of National Oilwell Varco, Grant
    Prideco and NOV Sub;&#160;or
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    64
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by either National Oilwell Varco or Grant Prideco if:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;the merger is not consummated on or before
    August&#160;31, 2008;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;the stockholder approval of Grant Prideco has not been
    obtained at a meeting of such stockholders at which the merger
    agreement is voted upon;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;a court or other governmental entity has issued an
    order, decree or ruling that cannot be appealed and that
    prohibits the completion of the merger;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by National Oilwell Varco if:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;the Grant Prideco board of directors withdraws or
    modifies its recommendation of the merger;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;the Grant Prideco board of directors recommends an
    acquisition transaction other than the merger to stockholders of
    Grant Prideco;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Grant Prideco has breached a representation, warranty,
    covenant or agreement contained in the merger agreement, which
    has not been cured within 10 business days after receiving
    written notice of the breach.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by Grant Prideco, if:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;National Oilwell Varco has breached a representation,
    warranty, covenant or agreement contained in the merger
    agreement, which has not been cured within 10 business days
    after receiving written notice of the breach;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;prior to the receipt of approval of stockholders of
    Grant Prideco, Grant Prideco receives a superior proposal, its
    board of directors determines to approve and enter into an
    agreement relating to such superior proposal, Grant Prideco
    gives National Oilwell Varco four business days&#146; prior
    written notice of its intention to terminate the merger
    agreement, such acquisition proposal continues to constitute a
    superior proposal after taking into account any revised proposal
    made by National Oilwell Varco during such period of time and
    Grant Prideco&#146;s board of directors determines in good
    faith, following receipt of advice of its outside legal counsel,
    that the failure to accept such superior proposal would be
    inconsistent with its fiduciary duties under applicable law;
    <I>provided, however</I>, that such termination will not be
    effective until such time as payment of the termination fee
    shall have been made by Grant Prideco; <I>provided, further</I>,
    that Grant Prideco&#146;s right to terminate the merger
    agreement shall not be available if it breached the no
    solicitation provision of the merger agreement in any material
    respect in connection with such superior proposal.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>&#147;Superior proposal&#148; </I>means any bona fide written
    proposal made by a third party to acquire substantially all the
    equity securities or assets of Grant Prideco (including
    substantially all of the assets of Grant Prideco&#146;s
    subsidiaries), pursuant to a tender or exchange offer, a merger,
    a consolidation, a liquidation or dissolution, a
    recapitalization, a sale of all or substantially all of its and
    its subsidiaries&#146; assets or otherwise, on terms which the
    board of directors of Grant Prideco determines in good faith,
    after consultation with Grant Prideco&#146;s outside legal
    counsel and financial advisors and after taking into account all
    material legal, financial, strategic, regulatory and other
    aspects of such proposal and the party making such proposal,
    (i)&#160;to be more favorable from a financial point of view to
    the holders of Grant Prideco&#146;s common stock than the merger
    agreement, taking into account all the terms and conditions of
    the merger agreement (including any proposal by National Oilwell
    Varco to amend the terms of the merger or the merger agreement)
    and (ii)&#160;is reasonably likely to be consummated.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the merger agreement is terminated by either National Oilwell
    Varco or Grant Prideco as provided above, the merger agreement
    will become void and National Oilwell Varco, Grant Prideco and
    NOV Sub will not have any continuing liabilities or obligations
    under the merger agreement, except for:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any obligation to reimburse certain expenses or pay a
    termination fee under the circumstances described below;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the provisions of the confidentiality agreement, which shall
    remain in full force and effect;&#160;and
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    65
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    liabilities for any knowing or willful misrepresentation in or
    breach of a representation, warranty, covenant or agreement
    contained in the merger agreement.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Termination
    Fee</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco will be required to pay a termination fee of
    $185.0&#160;million if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the merger agreement is terminated by National Oilwell Varco
    because Grant Prideco&#146;s board of directors withdraws or
    modifies its recommendation of the merger agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the merger agreement is terminated by National Oilwell Varco
    because Grant Prideco&#146;s board of directors recommends an
    acquisition transaction other than the merger;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the merger agreement is terminated by Grant Prideco for a
    superior proposal as described under
    &#147;&#151;&#160;Termination of Merger Agreement&#148;;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the merger agreement is terminated because the stockholders of
    Grant Prideco did not adopt the merger agreement and, at any
    time after December&#160;16, 2007, an acquisition proposal has
    been publicly disclosed (or a third-party publicly announced an
    intention to make an acquisition proposal) and not publicly
    withdrawn and Grant Prideco consummates an acquisition
    transaction involving 50% or more of its assets or equity within
    12&#160;months after the termination of the merger agreement or
    enters into a definitive agreement with respect to an
    acquisition transaction within 12&#160;months and such
    acquisition transaction is consummated (whether before or after
    such
    <FONT style="white-space: nowrap">12-month</FONT>
    period).
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco&#146;s payment of the $185.0&#160;million
    termination fee is the sole and exclusive remedy of National
    Oilwell Varco and NOV Sub with respect to the matters giving
    rise to the payment obligation. Notwithstanding the foregoing
    sentence, nothing shall relieve Grant Prideco from liability for
    any knowing or willful misrepresentation or inaccuracy in any of
    its representations or warranties contained in the merger
    agreement or any knowing or willful breach of any of its
    covenants or agreements contained in the merger agreement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Obligation
    to Pay Expenses</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement provides that, except as set forth below,
    whether or not the merger is completed, each party will pay its
    own expenses, except that National Oilwell Varco or NOV Sub and
    Grant Prideco will each pay one-half of the expenses incurred in
    filing, printing and mailing this proxy statement/prospectus,
    including Securities and Exchange Commission filing fees.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco has agreed to reimburse Grant Prideco for
    up to $5.0&#160;million in merger-related expenses incurred by
    Grant Prideco prior to the termination of the merger agreement
    where Grant Prideco terminates the merger agreement because
    National Oilwell Varco or NOV Sub has breached a representation,
    warranty, covenant or agreement contained in the merger
    agreement, which has not been cured within 10 business days
    after receiving written notice of the breach.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco has agreed to reimburse National Oilwell Varco for
    up to $5.0&#160;million in merger-related expenses incurred by
    National Oilwell Varco prior to termination of the merger
    agreement where National Oilwell Varco terminates the merger
    agreement because Grant Prideco has breached a representation,
    warranty, covenant or agreement contained in the merger
    agreement, which has not been cured within 10 business days
    after receiving written notice of the breach.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These expense reimbursements must be made within one business
    day after the happening of the event giving rise to the payment
    obligation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, if a party fails to promptly pay the other party an
    amount due, such failing party shall pay the costs and expenses
    of such other party (including reasonable legal fees and
    expenses) in connection with any action, including the filing of
    any lawsuit or legal action, taken to collect payment, together
    with interest on the amount of the payment, at the prime rate of
    Citibank, N.A. in effect on the date such payment was required
    to be made.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    66
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Amendment
    and Waiver</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement may be amended at any time by action taken
    by the boards of directors of National Oilwell Varco, NOV Sub
    and Grant Prideco, before or after adoption of the merger
    agreement by Grant Prideco&#146;s stockholders. However, once
    the merger agreement is so adopted by the stockholders, no
    change can be made where further stockholder approval is
    required by law. National Oilwell Varco and Grant Prideco also
    may extend the time for performance of the obligations or other
    acts of the other, may waive inaccuracies in the representations
    or warranties contained in the merger agreement and may waive
    compliance with any agreements or conditions contained in the
    merger agreement.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    67
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='110'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DIRECTORS
    AND EXECUTIVE OFFICERS OF NATIONAL OILWELL VARCO</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Directors</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The certificate of incorporation of National Oilwell Varco
    divides the board of directors of National Oilwell Varco into
    three classes. At each annual meeting, National Oilwell Varco
    stockholders elect the members of one of the three classes.
    Immediately following the merger, the board of directors of
    National Oilwell Varco is expected to continue to consist of the
    following eight members:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Merrill A. &#147;Pete&#148; Miller,&#160;Jr.</I> has served
    as Chairman of National Oilwell Varco since July&#160;22, 2005
    and previously served as Chairman from May 2002 through
    March&#160;11, 2005; he has served as a director of National
    Oilwell Varco (and its predecessor, National Oilwell) since May
    2001. From November 2000 through March&#160;11, 2005, he served
    as the Chief Operating Officer of National Oilwell.
    Mr.&#160;Miller has served as President since November 2000 and
    as Chief Executive Officer since May 2001, as well as in various
    senior executive positions with National Oilwell since February
    1996. Mr.&#160;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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Greg L. Armstrong </I>has been a director of National Oilwell
    Varco since March 2005. Mr.&#160;Armstrong served as a director
    of Varco from May&#160;20, 2004 until its merger with the
    Company on March&#160;11, 2005. Since 1998, he has served as
    Chairman 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.&#160;Armstrong is a member of the National Petroleum Council
    and a member of the board of directors of BreitBurn Energy
    Partners.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Robert E. Beauchamp </I>has been a director of National
    Oilwell Varco (and its predecessor, National Oilwell) since
    August 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&#160;&#038;
    Development, Vice President of Strategic Marketing and Corporate
    Development and Director of Strategic Marketing.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Ben A. Guill </I>has been a director of National Oilwell
    Varco (and its predecessor, National Oilwell) since 1999. Until
    April 2007, he served as 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, he was the Managing
    Director and Co-head of Investment Banking of
    Simmons&#160;&#038; Company International, an investment-banking
    firm specializing in the oil service industry. Mr.&#160;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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>David D. Harrison </I>has been a director of National Oilwell
    Varco (and its predecessor, National Oilwell) since August 2003.
    He served as Executive Vice President and Chief Financial
    Officer of Pentair, Inc., a diversified manufacturer in water
    technologies and enclosures businesses from February 2000 until
    his retirement in February&#160;2007. He also served as
    Executive Vice President and Chief Financial Officer of Pentair,
    Inc. from 1994 to 1996. From 1972 through 1994,
    Mr.&#160;Harrison held various domestic and international
    finance positions with a combination of General Electric and
    Borg-Warner Chemicals. Mr.&#160;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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Roger L. Jarvis </I>has been a director of National Oilwell
    Varco (and its predecessor, National Oilwell) since February
    2002. Since 2007, Mr.&#160;Jarvis has served as Chairman, Chief
    Executive Officer and President of Common Resources LLC, a
    privately held oil and gas exploration and production company in
    the United States. He has served as President, Chief Executive
    Officer and a director of Spinnaker Exploration Company, a
    natural gas and oil exploration and production company, since
    1996, and served as its Chairman from 1998 until its acquisition
    by Norsk Hydro ASA in December 2005.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Eric L. Mattson </I>has been a director of National Oilwell
    Varco since March 2005. Mr.&#160;Mattson served as a director of
    Varco (and its predecessor, Tuboscope Inc.) from January 1994
    until its merger with National Oilwell on
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    68
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    March&#160;11, 2005. Mr.&#160;Mattson has served as Senior Vice
    President and Chief Financial Officer of VeriCenter, Inc., a
    private provider of managed hosting services, from 2003 until
    its acquisition in August 2007. From November 2002 until October
    2003, Mr.&#160;Mattson worked as an independent consultant.
    Mr.&#160;Mattson was the Chief Financial Officer of Netrail,
    Inc., a private Internet backbone and broadband service
    provider, from September 1999 until November 2002. From July
    1993 until May 1999, Mr.&#160;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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Jeffery A. Smisek </I>has been a director of National Oilwell
    Varco since March 2005. Mr.&#160;Smisek served as a director of
    Varco (and its predecessor, Tuboscope Inc.) from February 1998
    until its merger with National Oilwell on March&#160;11, 2005.
    Since December&#160;30, 2004, Mr.&#160;Smisek has served as
    President and a director of Continental Airlines, Inc.
    Mr.&#160;Smisek previously served Continental Airlines, Inc. as
    Executive Vice President from March 2003 until December 2004 and
    as Executive Vice President&#160;&#151; Corporate from May 2001
    until March 2003.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Executive
    Officers</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following persons are expected to continue to be the
    executive officers of National Oilwell Varco at the effective
    time of the merger:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See &#147;&#151;&#160;Directors&#148; for information about
    Mr.&#160;Miller.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Clay C. Williams </I>has served as Senior Vice President and
    Chief Financial Officer of National Oilwell Varco since March
    2005. From January 2003 to March&#160;11, 2005, he served as
    Vice President and Chief Financial Officer of Varco. From May
    2002 until January 2003, Mr.&#160;Williams served as Vice
    President Finance and Corporate Development for Varco. From
    February 2001 until May 2002, and from February 1997 until
    February 2000, he served as Vice President&#160;&#151; Corporate
    Development at Varco.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Dwight W. Rettig </I>has served as Vice President and General
    Counsel of National Oilwell Varco (and its predecessor National
    Oilwell) since February 1999, and from February 1998 to February
    1999 as General Counsel of the Distribution Services Group at
    National Oilwell.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Robert Blanchard </I>has served as the Vice President,
    Corporate Controller and Chief Accounting Officer of National
    Oilwell Varco since May 2005. He served as Controller of Varco
    from 1999 and as its Vice President from 2002 until the merger
    of National Oilwell and Varco.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Mark Reese </I>has served as President&#160;&#151; Rig
    Technology for National Oilwell Varco since August 2007. He
    served as President&#160;&#151; Expendable Products from January
    2004 to August 2007. Mr.&#160;Reese served as President of
    National Oilwell&#146;s Mission Products Group from August 2000
    to January 2004. From May 1997 to August 2000, he was Vice
    President of Operations for the Distribution Services Group for
    National Oilwell.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Directors
    and Executive Officers of NOV Sub, Inc.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The directors and executive officers of NOV Sub, Inc.
    immediately prior to the effective time of the merger will
    continue as the directors and executive officers of such entity
    as the surviving entity to Grant Prideco after the effective
    time of the merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The sole director of NOV Sub is Daniel L. Molinaro.
    Mr.&#160;Molinaro has served as a Vice President of National
    Oilwell Varco since 2003 and as Treasurer of National Oilwell
    Varco since 1987. Set forth below is a list of the executive
    officers of NOV Sub.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Merrill A. Miller, Jr.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Chief Executive Officer
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Clay C. Williams
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    President
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Dwight W. Rettig
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Vice President, General Counsel and Secretary
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Daniel L. Molinaro
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Vice President and Treasurer
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    69
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='111'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SECURITY
    OWNERSHIP OF PRINCIPAL STOCKHOLDERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following tables set forth information regarding the
    beneficial ownership of:
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    National Oilwell Varco&#146;s outstanding common stock as of
    March&#160;14, 2008 and Grant Prideco&#146;s outstanding common
    stock as of March&#160;14, 2008;
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    each current director and executive officer of National Oilwell
    Varco and each current director and named executive officer of
    Grant Prideco;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all current executive officers and directors as a group;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    each person known by National Oilwell Varco or Grant Prideco, as
    applicable, to own beneficially more than 5% of the outstanding
    shares of common stock of National Oilwell Varco or Grant
    Prideco, as applicable.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Beneficial ownership has been determined in accordance with
    applicable SEC rules, under which a person is deemed to be the
    beneficial owner of securities if he or she has or shares voting
    power or investment power with respect to such securities or has
    the right to acquire beneficial ownership within 60&#160;days.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless otherwise indicated, to the knowledge of National Oilwell
    Varco or Grant Prideco, as applicable, the persons listed in the
    table below have sole voting and investment powers with respect
    to the shares indicated. The address of National Oilwell
    Varco&#146;s directors and officers is National Oilwell Varco,
    Inc., 7909 Parkwood Circle Drive, Houston, Texas
    <FONT style="white-space: nowrap">77036-6565.</FONT>
    The address of the Grant Prideco&#146;s directors and officers
    is Grant Prideco, Inc., 400&#160;N.&#160;Sam Houston Parkway
    East, Ste. 900, Houston, Texas 77060.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The percentages are based on (i)&#160;126,557,389&#160;shares of
    Grant Prideco common stock issued and outstanding on
    March&#160;14, 2008 and (ii)&#160;357,799,271&#160;shares of
    National Oilwell Varco common stock issued and outstanding as of
    March&#160;14, 2008.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">National
    Oilwell Varco</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="15%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="13%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Amount and Nature of Beneficial
    <FONT style="white-space: nowrap">Ownership(1)</FONT></B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Outstanding Options<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of Shares of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Exercisable Within<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name of Beneficial Owner</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Common Stock Owned</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>60 Days</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Percent of Class</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Greg L. Armstrong
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,230
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20,666
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Robert E. Beauchamp
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,586
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15,666
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Robert Blanchard
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    35,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    53,790
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ben A. Guill
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    24,200
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20,666
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    David D. Harrison
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,886
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    35,666
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Roger L. Jarvis
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,624
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    60,666
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Eric L. Mattson
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18,706
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54,116
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Merrill A. Miller, Jr.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    475,178
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    100,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Mark A. Reese
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Dwight W. Rettig
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    70,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Jeffery A. Smisek
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16,164
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    12,008
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Clay C. Williams
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    93,246
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    193,388
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    All Directors and Officers as a group (12&#160;persons)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    747,820
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    646,632
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    FMR LLC(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    51,108,189
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14.3
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Barclays Global Investors, NA(3)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20,979,862
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.9
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    *&#160;</TD>
    <TD></TD>
    <TD valign="bottom">
    Represents less than 1%.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes shares deemed held by executive officers and directors
    in National Oilwell Varco&#146;s 401(k) plans and deferred
    compensation plans.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    70
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based on shares owned as of December&#160;31, 2007, as reflected
    in Amendment No.&#160;9 to Schedule&#160;13G filed with the SEC
    on February&#160;14, 2008. Fidelity Management&#160;&#038;
    Research Company (&#147;Fidelity&#148;), a wholly-owned
    subsidiary of FMR LLC (&#147;FMR&#148;), is the beneficial owner
    of 46,273,126&#160;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&#160;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&#160;B shares of
    common stock of FMR, representing 49% of the voting power of
    FMR. The Johnson family group and all other Series&#160;B
    Shareholders have entered into a shareholders&#146; voting
    agreement under which all Series&#160;B shares will be voted in
    accordance with the majority vote of Series&#160;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&#160;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&#160;shares as a result
    of its serving as investment adviser to institutional accounts,
    non-U.S. mutual funds, or investment companies registered under
    Section&#160;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&#160;shares
    and sole power to vote or to direct the voting of
    220,938&#160;shares owned by the institutional accounts or funds
    advised by PGALLC. Pyramis Global Advisors Trust&#160;Company
    (&#147;PGATC&#148;), an indirect wholly-owned subsidiary of FMR,
    is the beneficial owner of 1,864,097&#160;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&#160;shares and sole power to vote or to direct the
    voting of 1,475,559&#160;shares owned by the institutional
    accounts managed by PGATC. Fidelity International Limited and
    various foreign-based subsidiaries provide investment advisory
    and management services to a number of non-U.S. investment
    companies (the &#147;International Funds&#148;) and certain
    institutional investors. Fidelity International Limited is the
    beneficial owner of 2,652,162&#160;shares. Fidelity
    International Limited has sole dispositive power over
    2,652,162&#160;shares owned by the International Funds. Fidelity
    International Limited has sole power to vote or direct the
    voting of 2,546,262&#160;shares and no power to vote or direct
    the voting of 105,900&#160;shares held by the International
    Funds as reported above.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based on shares owned as of December&#160;31, 2007, as reflected
    in Schedule&#160;13G jointly filed with the SEC on
    February&#160;5, 2008 by Barclays Global Investors, NA, Barclays
    Global Fund&#160;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)&#160;Barclays Global Investors, NA
    has sole voting power over 11,283,342&#160;shares of common
    stock and sole dispositive power over 13,593,609&#160;shares of
    common stock, (b)&#160;Barclays Global Fund&#160;Advisors has
    sole voting and dispositive power over 3,771,862&#160;shares of
    common stock, (c)&#160;Barclays Global Investors, Ltd. has sole
    voting power over 2,299,354&#160;shares of common stock and sole
    dispositive power over 2,657,898&#160;shares of common stock,
    (d)&#160;Barclays Global Investors Japan Limited has sole voting
    and dispositive power over 720,932&#160;shares of common stock,
    and (e)&#160;Barclays Global Investors Canada Limited has sole
    voting and dispositive power over 235,561&#160;shares of common
    stock.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    71
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Grant
    Prideco</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="78%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Amount<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>and Nature<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>of Beneficial<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Percent<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name of Beneficial Owner</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Ownership(1)(2)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>of Class</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 5pt">
<TD>
&nbsp;
</TD>
<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 nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Michael McShane
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    655,923
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 5pt">
<TD>
&nbsp;
</TD>
<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 align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    David L. Butters(3)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    155,663
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 5pt">
<TD>
&nbsp;
</TD>
<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 align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Eliot M. Fried
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    110,301
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 5pt">
<TD>
&nbsp;
</TD>
<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 align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Gordon T. Hall
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,875
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 5pt">
<TD>
&nbsp;
</TD>
<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 align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Dennis R. Hendrix
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32,783
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 5pt">
<TD>
&nbsp;
</TD>
<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 align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Harold E. Layman
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    70,691
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 5pt">
<TD>
&nbsp;
</TD>
<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 align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Robert K. Moses, Jr.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    209,042
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 5pt">
<TD>
&nbsp;
</TD>
<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 align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Joseph E. Reid
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65,308
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 5pt">
<TD>
&nbsp;
</TD>
<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 align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    David A. Trice
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    50,131
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 5pt">
<TD>
&nbsp;
</TD>
<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 align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    David R. Black
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    168,498
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 5pt">
<TD>
&nbsp;
</TD>
<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 align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Philip A. Choyce
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    96,449
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 5pt">
<TD>
&nbsp;
</TD>
<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 align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    John D. Deane
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    118,746
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 5pt">
<TD>
&nbsp;
</TD>
<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 align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Matthew D. Fitzgerald
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    222,124
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 5pt">
<TD>
&nbsp;
</TD>
<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 align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Executive Officers and Directors as a group (consisting of
    16&#160;persons)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,122,821
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.7
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="line-height: 5pt">
<TD>
&nbsp;
</TD>
<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 align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    ClearBridge Advisors, LLC(4)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14,692,521
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11.6
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="line-height: 5pt">
<TD>
&nbsp;
</TD>
<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 align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Barclays Global Investors(5)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,658,305
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.8
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="line-height: 5pt">
<TD>
&nbsp;
</TD>
<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 align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Invesco National Trust(6)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,816,070
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.4
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    *&#160;</TD>
    <TD></TD>
    <TD valign="bottom">
    Less than 1%.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes shares of restricted stock that are subject to vesting
    requirements.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Under the regulations of the Securities and Exchange Commission,
    shares are deemed to be &#147;beneficially owned&#148; by a
    person if he directly or indirectly has or shares the power to
    vote or dispose of, or to direct the voting or disposition of,
    such shares, whether or not he has any pecuniary interest in
    such shares, or if he has the right to acquire the power to vote
    or dispose of such shares within 60&#160;days, including any
    right to acquire such power through the exercise of any option,
    warrant or right. Accordingly, the shares above include shares
    of common stock that can be acquired through stock options
    exercisable on or prior to March&#160;24, 2008 and rights to
    acquire shares under the Company&#146;s deferred compensation
    arrangements as of December&#160;31, 2007. The shares above
    exclude options and deferred compensation vesting after
    March&#160;24, 2008. The shares beneficially owned by
    (i)&#160;Mr. McShane include 58,916&#160;shares, (ii)&#160;Mr.
    Butters include 62,801&#160;shares, (iii)&#160;Mr. Fried include
    64,301&#160;shares, (iv)&#160;Mr. Hendrix include
    21,783&#160;shares, (v)&#160;Mr. Layman include
    62,691&#160;shares, (vi)&#160;Mr.&#160;Moses include
    3,042&#160;shares, (vii)&#160;Mr. Reid include
    56,808&#160;shares, (viii)&#160;Mr. Trice include
    42,131&#160;shares, (ix)&#160;Mr.&#160;Black include
    18,320&#160;shares, (x)&#160;Mr. Choyce include
    29,932&#160;shares, (xi)&#160;Mr. Deane include
    20,203&#160;shares, (xii)&#160;Mr. Fitzgerald include
    91,002&#160;shares and (xiii)&#160;the executive officers and
    directors as a group include 587,469&#160;shares, that may be
    acquired by such persons within 60&#160;days through the
    exercise of stock options or deferred compensation arrangements.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes 26,772&#160;shares held by his wife, for which he
    disclaims beneficial ownership, and 14,388&#160;shares held in
    trusts for his children for which Mr.&#160;Butters is the
    custodian, having voting and dispositive power. Reportings do
    not include holdings by Lehman Brothers for which
    Mr.&#160;Butters does not have a beneficial interest or voting
    or dispositive control.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    72
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents a group consisting of ClearBridge Advisors, LLC
    (&#147;CAL&#148;) and Smith Barney Fund Management LLC
    (&#147;Smith Barney&#148;). Within this group, CAL beneficially
    owns 14,488,521&#160;shares and Smith Barney beneficially owns
    204,000&#160;shares. The address for ClearBridge Advisors, LLC
    is 399 Park Avenue, New York, New York 10022. </TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents a group comprised of Barclays Global Investors, N.A.
    (&#147;BGI&#148;), Barclays Global Fund&#160;Advisors
    (&#147;BGFA&#148;), Barclays Global Investors, Ltd.
    (&#147;BGIL&#148;), Barclays Global Investors Japan Trust and
    Banking Company Limited &#147;(BGIJTBCL&#148;), Barclays Global
    Investors Canada Limited (&#147;BGICL&#148;), Barclays Global
    Investors Australia Limited (&#147;BGIAL&#148;), and Barclays
    Global Investors (Detchsland) AG (&#147;BGID&#148;). BGI
    beneficially owns 5,633,435&#160;shares, BGFA
    2,134,339&#160;shares, BGIL 515,044&#160;shares, BGIJTBCL
    0&#160;shares, BGIJL 328,381&#160;shares, BGICL
    47,106&#160;shares, BGIAL 0&#160;shares and BGID 0&#160;shares.
    The address for Barclays is Murray House, 1 Royal Mint Court,
    London, EC3N 4HH.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (6) </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents a group consisting of Invesco National
    Trust&#160;Company (&#147;INTC&#148;), PowerShares Capital
    Management LLC (&#147;PSCM&#148;), PowerShares Capital
    Management Ireland LTD (&#147;PSCMI&#148;), AIM Advisors, Inc.
    (&#147;AAI&#148;), AIM Capital Management, Inc.
    (&#147;ACM!&#148;), Invesco Institutional (N.A.), Inc.
    (&#147;III&#148;), Stein Roe Investment Counsel, Inc.
    (&#147;SRIC&#148;), AIM Private Asset Management, Inc.
    (&#147;APAM&#148;), Invesco Asset Management Limited
    (&#147;IAML&#148;)and Invesco Management S.A.
    (&#147;IMSA&#148;). INTC beneficially owns 86,358&#160;shares,
    PSCM 221,486&#160;shares, PSCM 16&#160;shares, AAI
    5,672,954&#160;shares, ACMI 520,515&#160;shares, III
    167,800&#160;shares, SRIC 101,382&#160;shares, APAM
    32,380&#160;shares, IAML 8,792&#160;shares and IMSA
    4,387&#160;shares. The address for Invesco Ltd. is 1360
    Peachtree Street NE, Atlanta, GA 30309.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    73
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='112'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">COMPARISON
    OF THE RIGHTS OF STOCKHOLDERS OF<BR>
    NATIONAL OILWELL VARCO AND GRANT PRIDECO</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The rights of stockholders of Grant Prideco are currently
    governed by Delaware law, the amended and restated certificate
    of incorporation of Grant Prideco and the amended and restated
    bylaws of Grant Prideco. Upon completion of the merger,
    stockholders of Grant Prideco will become stockholders of
    National Oilwell Varco and their rights as stockholders of
    National Oilwell Varco will be governed by Delaware law, the
    amended and restated certificate of incorporation of National
    Oilwell Varco and the amended and restated bylaws of National
    Oilwell Varco, all of which may be amended in the future.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following describes the material differences between the
    rights of stockholders of Grant Prideco and the rights of
    stockholders of National Oilwell Varco. It is not a complete
    summary of the provisions affecting, and the differences
    between, the rights of stockholders of Grant Prideco and the
    rights of stockholders of National Oilwell Varco. The
    identification of specific differences is not intended to
    indicate that other equally or more significant differences do
    not exist. The summary is qualified in its entirety by reference
    to the Delaware General Corporation Law; the amended and
    restated certificate of incorporation of Grant Prideco; the
    amended and restated bylaws of Grant Prideco; the amended and
    restated certificate of incorporation of National Oilwell Varco;
    and the amended and restated bylaws of National Oilwell Varco.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Authorized
    Capital Stock</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    The authorized capital stock of National Oilwell Varco consists
    of 500&#160;million shares of common stock, par value $0.01 per
    share, and 10&#160;million shares of preferred stock, par value
    $0.01 per share.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    The authorized capital stock of Grant Prideco consists of 300
    million shares of common stock, par value $0.01 per share, and
    10 million shares of preferred stock, par value $0.01 per share.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Size of
    Board of Directors</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    National Oilwell Varco&#146;s board of directors has eight
    members. National Oilwell Varco&#146;s amended and restated
    certificate of incorporation does not fix the number of
    directors outside of stating that the number of directors will
    not be less than three, but does provide that the actual number
    of directors may be fixed exclusively by the board of directors
    through a resolution adopted by a majority of the entire board.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Grant Prideco&#146;s board of directors has nine members. Grant
    Prideco&#146;s amended and restated certificate of incorporation
    and bylaws provide for no fixed, minimum, or maximum number of
    directors, but the bylaws permit the number of directors to be
    increased or decreased by a vote of at least two-thirds of the
    directors then in office.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Cumulative
    Voting</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    Stockholders of National Oilwell Varco are not entitled to
    cumulative voting.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Stockholders of Grant Prideco are not entitled to cumulative
    voting.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Classes
    of Directors; Elections</FONT></B>
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    National Oilwell Varco&#146;s amended and restated certificate
    of incorporation provides that its board of directors is divided
    into three classes, as equally in numbers as possible, with each
    class being elected to a staggered three-year term. National
    Oilwell Varco&#146;s amended and restated bylaws provide that a
    director is elected by receiving a majority of votes cast with
    respect to such director in uncontested elections. In a
    contested election, directors are elected by plurality vote.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Neither Grant Prideco&#146;s amended and restated certificate of
    incorporation nor its amended and restated bylaws provide for a
    classified board of directors.  Grant Prideco&#146;s bylaws
    provide for directors to be elected annually, by a plurality
    vote.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    74
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Removal
    of Directors</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    National Oilwell Varco&#146;s amended and restated certificate
    of incorporation provides that a director may be removed only
    for cause and only by an affirmative vote of the holders of at
    least 80% of the outstanding shares of the classes or series of
    stock then entitled to be voted at an election of directors,
    voting together as a single class and cast either at the annual
    meeting of stockholders or at a special meeting of stockholders
    called by a majority of the entire board of directors for such
    purpose.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Grant Prideco&#146;s amended and restated bylaws provide that a
    director may be removed from office with or without cause by a
    vote of the holders of a majority of shares of Grant
    Prideco&#146;s stock entitled to vote in an election of
    directors, or with cause by a majority of the directors then in
    office to the extent permitted by law.  If removal is for cause,
    the director being removed must receive reasonable notice and be
    afforded the opportunity to be heard before the body proposing
    his or her removal.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Vacancies
    on the Board of Directors</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    National Oilwell Varco&#146;s amended and restated certificate
    of incorporation provides that vacancies in the board of
    directors, whether due to death, resignation, retirement,
    disqualification, removal from office or other cause and newly
    created directorships resulting from any increase in the
    authorized number of directors, may be filled by the affirmative
    vote of a majority of the remaining directors designated to
    represent the same classes of stockholders as that of the vacant
    position once filled (even if less than a quorum).
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Grant Prideco&#146;s amended and restated bylaws provide that
    any vacancy on the board of directors, including those resulting
    from an increase in the number of directors, may be filled by a
    vote of the majority of the remaining directors or as otherwise
    provided by law.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Action by
    Written Consent</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    Under Delaware law, unless the certificate of incorporation
    provides otherwise, any stockholder action may be taken without
    a meeting if consent in writing, setting forth the action so
    taken, is signed by the holders of outstanding shares having not
    less than the minimum number of votes which would be necessary
    to authorize or take the action at a meeting at which all shares
    entitled to vote were present and voted. National Oilwell
    Varco&#146;s amended and restated certificate of incorporation
    specifically prohibits common stockholders from taking action by
    written consent and thus any action required or permitted to be
    taken by stockholders must be effected at a duly called annual
    or special meeting of stockholders.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    In line with Delaware law, Grant Prideco&#146;s amended and
    restated bylaws provide that any action required or permitted to
    be taken at any annual or special meeting of stockholders may be
    taken without a meeting, without prior notice and without a vote
    as long as a written consent setting forth such action has been
    signed by holders of outstanding stock having at least the
    minimum number of votes needed to authorize or to take such
    action at a meeting in which all shares entitled to vote on the
    action were present and voted.  If such written consent is less
    than unanimous, prompt notice of the corporate action to be
    taken must be given stockholders who did not consent in writing.
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    National Oilwell Varco&#146;s amended and restated bylaws permit
    the board of directors of National Oilwell Varco to take any
    action required or permitted to be taken at any meeting of the
    board by means of a unanimous written consent as long as such
    consent is filed with the board&#146;s minutes of its
    proceedings.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Grant Prideco&#146;s amended and restated bylaws permit any
    action required or permitted to be taken at a meeting of the
    board of directors to be taken without such a meeting if all
    members of the board consent in writing and such writing is
    filed with the board&#146;s minutes of its meetings.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    75
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Amendments
    to Certificate of Incorporation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -0pt; margin-left: 0pt;">
Under Delaware law, a proposed amendment to the certificate of incorporation requires a resolution adopted by the board of directors and, unless otherwise provided in the certificate of incorporation, the affirmative vote of the holders of a majority of the outstanding stock entitled to vote thereon and (if applicable) the affirmative vote of the holders of a majority of the outstanding stock of each
class entitled to vote thereon as a class. National Oilwell Varco&#146;s amended and restated certificate of incorporation provides that the certificate of incorporation may be amended, changed or repealed in the manner prescribed by law, except that:<BR><BR>
</DIV>
<DIV style="text-indent: -4pt; margin-left: 4pt;">
&#149;&#160;&#160;&#160;any amendment related to capital stock requires prior written consent of the holders of a majority of the then outstanding common shares voting as a single class, and if such amendment adversely affects the powers, preferences or special rights of any class of common stock, also requires the prior consent of the holders of a majority of the then outstanding shares of such affected
class of common stock, voting as single class;<BR><BR>
</DIV>
<DIV style="text-indent: -4pt; margin-left: 4pt;">
&#149;&#160;&#160;&#160;any amendment related to the provisions dealing with the composition of the board, bylaw amendments and certain stockholders actions requires approval of at least 80% of the outstanding shares of stock entitled to be voted in an election of directors, voting together as a single class; and<BR><BR>
</DIV>
<DIV style="text-indent: -4pt; margin-left: 4pt;">
&#149;&#160;&#160;&#160;any amendment or repeal of the provision providing for elimination of certain personal liability of directors to National Oilwell Varco or its stockholders shall be prospective only and shall not operate to eliminate or reduce the effect of this provision in any matter or cause of action, suit or claim that would accrue or arise absent the provision.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Grant Prideco&#146;s amended and restated certificate of
    incorporation expressly reserves the general right of the
    corporation to amend, alter, change or repeal any provision in
    the certificate of incorporation as prescribed under Delaware
    law (requiring a majority vote of Grant Prideco&#146;s
    outstanding common stock entitled to vote on the change, and if
    applicable, a majority of the outstanding common stock in any
    class of stock entitled to a class vote, in order to adopt the
    amendment).  However, the vote of
    66<FONT style="vertical-align: text-top; font-size: 70%;">2</FONT>/<FONT style="font-size: 70%;">3</FONT>%
    of the voting power of all shares entitled to vote in the
    election of directors, voting together as a single class, is
    required to amend the provisions of the certificate of
    incorporation dealing with liability and indemnification of
    directors of Grant Prideco, and any such amendment shall be
    prospective only.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    76
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Amendments
    to Bylaws</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    National Oilwell Varco&#146;s amended and restated certificate
    of incorporation permits bylaws to be altered, repealed or
    adopted at an annual or special meeting of stockholders if
    notice of such a proposal for change is contained in the notice
    for the annual or special meeting of stockholders and such
    change receives the affirmative vote of a majority of the stock
    issued, outstanding and entitled to vote, voting together as a
    single class. The bylaws may also be altered, repealed and
    adopted if there is notice of such a proposal for change
    contained in the notice of a regular or special meeting of the
    board of directors accompanied by the affirmative vote of a
    majority of the members of the board present at such meeting
    (without any stockholder action).
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    As permitted by Delaware law, Grant Prideco&#146;s amended and
    restated certificate of incorporation provides Grant
    Prideco&#146;s board of directors with the power to adopt, amend
    or repeal Grant Prideco&#146;s bylaws. Under Delaware law, the
    stockholders also have the power to adopt, amend or repeal the
    bylaws.  In addition to requirements of law, provisions of the
    amended and restated certificate of incorporation and bylaws and
    certain resolutions of the board of directors adopted pursuant
    to the article dealing with the capital stock of Grant Prideco
    in the amended and restated certificate of incorporation, the
    amended and restated certificate of incorporation requires an
    affirmative vote of the holders of at least 80% of the combined
    voting power of the then outstanding shares of stock of all
    classes and series of stock entitling holders to vote generally
    in the election of directors in order for the stockholders to
    adopt, amend, alter or repeal bylaws.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Special
    Meeting of Stockholders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -0pt; margin-left: 0pt;">
As permitted by Delaware law, National Oilwell Varco&#146;s amended and restated certificate of incorporation and bylaws provide that special meetings of the stockholders may be called only by:<BR><BR>
</DIV>
<DIV style="text-indent: -4pt; margin-left: 4pt;">
&#149;&#160;&#160;&#160;the chairman of the board of directors;<BR><BR>
</DIV>
<DIV style="text-indent: -4pt; margin-left: 4pt;">
&#149;&#160;&#160;&#160;the president; or<BR><BR>
</DIV>
<DIV style="text-indent: -4pt; margin-left: 4pt;">
&#149;&#160;&#160;&#160;the board of directors pursuant to a resolution approved by a majority of the members of the board then in office.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    As permitted by Delaware law, Grant Prideco&#146;s amended and
    restated bylaws provide that special meetings of the
    stockholders may only be called by the chairman of the board or
    the board of directors.  At any special meeting, the only
    business that may be conducted is that which was provided for in
    the resolution(s) calling the special meeting, or in the absence
    of such resolution(s), that which was provided in the notice to
    stockholders of the special meeting.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Vote on
    Extraordinary Corporate Transactions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    Under Delaware law, a sale or other disposition of all or
    substantially all of a corporation&#146;s assets, a merger or
    consolidation of a corporation with another corporation or a
    dissolution of a corporation requires the affirmative vote of
    the corporation&#146;s board of directors (except in limited
    circumstances) plus, with limited exceptions, the affirmative
    vote of a majority of the outstanding stock entitled to vote on
    the transaction.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Stockholders of Grant Prideco are subject to the same Delaware
    law provision.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    77
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Inspection
    of Documents</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    Delaware law allows any stockholder the right to inspect for any
    proper purpose the corporation&#146;s stock ledger, a list of
    its stockholders and its other books and records, and to make
    copies or extracts from those documents. A proper purpose means
    a purpose reasonably related to the person&#146;s interest as a
    stockholder.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Stockholders of Grant Prideco are subject to the same Delaware
    law provisions.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">State
    Anti-Takeover Statutes</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    Delaware law generally prohibits public corporations from
    engaging in significant business transactions, including
    mergers, with a holder of 15% or more of the corporation&#146;s
    outstanding voting stock (thus becoming an &#147;interested
    stockholder&#148;) for a period of three years after the holder
    attains that ownership level, unless:
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Stockholders of Grant Prideco are subject to the same Delaware
    law provisions.
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -4pt; margin-left: 4pt">
    &#149;&#160;&#160;&#160;prior to the time when the stockholder
    became an interested stockholder, the board approved either the
    significant business transaction in question or the transaction
    that resulted in the stockholder becoming an interested
    stockholder based on its direct or indirect ownership of 15% of
    the corporation&#146;s outstanding voting stock;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -4pt; margin-left: 4pt">
    &#149;&#160;&#160;&#160;when the interested stockholder meets or
    exceeds the 15% threshold, it was the holder of at least 85% of
    the outstanding shares not held by certain affiliates, such as
    pursuant to a tender offer; or
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -4pt; margin-left: 4pt">
    &#149;&#160;&#160;&#160;the transaction is approved by the board
    of directors and the holders of at least two-thirds of the
    corporation&#146;s shares entitled to vote thereon, excluding
    the shares held by the interested stockholder, at a meeting of
    stockholders. Delaware law permits this vote to occur at or
    after the interested stockholder&#146;s share acquisition date.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Stockholder
    Rights Plan</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    National Oilwell Varco does not have a stockholder rights plan.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Grant Prideco does not have a stockholder rights plan.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 15pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Special
    Voting Stock</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    National Oilwell Varco does not have special voting stock.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Grant Prideco does not have special voting stock.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    78
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='113'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">UNAUDITED
    PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The unaudited pro forma condensed combined financial statements
    have been prepared assuming the merger of National Oilwell Varco
    and Grant Prideco is accounted for as a purchase under
    U.S.&#160;generally accepted accounting principles, and are
    based on the historical consolidated financial statements of
    each company which include, in the opinion of management of both
    companies, all adjustments necessary to present fairly the
    results for such periods. The unaudited pro forma condensed
    combined financial statements reflect  the pending disposition
    of certain Grant Prideco tubular business units as further
    discussed in Note&#160;F to the Unaudited Pro Forma Condensed
    Combined Financial Statements. The disposition is expected to
    close in the first half of 2008 subject to customary closing
    conditions, including regulatory approval. However, there can be
    no assurance the pending disposition will be completed prior to
    the closing of the merger or at all. The Pro Forma Financial
    Statements do not reflect cost savings that may result from the
    merger. The following unaudited pro forma condensed combined
    balance sheet as of December&#160;31, 2007, and unaudited pro
    forma condensed combined statement of operations for the year
    ended December&#160;31, 2007, should be read in conjunction with
    the historical financial statements of National Oilwell Varco
    and Grant Prideco and the related notes which are incorporated
    by reference into this document. The unaudited pro forma
    condensed combined balance sheet was prepared as if the merger
    occurred on December&#160;31, 2007 and the unaudited pro forma
    condensed income statement was prepared as if the merger
    occurred on January&#160;1, 2007.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The unaudited pro forma condensed combined financial statements
    are not necessarily indicative of results of operations or
    financial position that would have occurred had the merger been
    consummated earlier, nor are they necessarily indicative of
    future results.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco estimates that it will incur fees and
    expenses totaling approximately $110&#160;million in connection
    with the acquisition of Grant Prideco, and it has included these
    costs in calculating the purchase price. After the acquisition
    is completed, National Oilwell Varco expects to incur additional
    charges and expenses relating to restructuring overhead
    functions and certain operations. The amount of these charges
    has not yet been determined. In addition, the pro forma
    information assumes a
    <FONT style="white-space: nowrap">write-up</FONT> in
    inventory to fair market value of $112.7&#160;million. National
    Oilwell Varco expects that the majority of this
    <FONT style="white-space: nowrap">write-up</FONT>
    will flow out to costs of goods sold during the 12-month period
    following the closing date of the acquisition. The allocation of
    purchase price to the assets and liabilities of Grant Prideco is
    subject to change based on the final valuation by National
    Oilwell Varco&#146;s independent third-party valuation firm.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    79
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NATIONAL
    OILWELL VARCO, INC. AND GRANT PRIDECO, INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">UNAUDITED
    PRO FORMA CONDENSED COMBINED BALANCE SHEET<BR>
    </FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">(In
    millions)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="48%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="11%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="5%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="14" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31, 2007</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Historical<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>National<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Pro Forma<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Pro Forma<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Oilwell Varco</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Grant Prideco (F)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Adjustments</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Combined</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    <B>ASSETS</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Current assets:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (3,032.4
</TD>
<TD nowrap align="left" valign="bottom">
    )&#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Cash and cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,841.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    696.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,494.4
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(B)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,000.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Receivables, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,099.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    415.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (10.4
</TD>
<TD nowrap align="left" valign="bottom">
    )&#160;(D)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,504.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Inventories, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,574.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    471.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    112.7
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,158.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Costs in excess of billings
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    643.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    643.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Prepaid and other current assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    434,0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    86.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    520.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 27pt">
    Total current assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,593.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,669.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,435.7
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,827.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Property, plant and equipment, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,197.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    328.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    142.1
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,668.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Goodwill
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,445.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    458.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,211.9
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,115.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Intangibles, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    774.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    81.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,503.8
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,359.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Investment in unconsolidated affiliate
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    134.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    203.0
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    337.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Other assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    104.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    24.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    128.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Total assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    12,114.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,697.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,625.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    19,437.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD colspan="17">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD colspan="17" valign="bottom">
    <B>LIABILITIES AND STOCKHOLDERS&#146; EQUITY </B>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Current liabilities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Current portion of long-term debt and short-term borrowings
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    152.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    153.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Accounts payable
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    604.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    127.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (10.4
</TD>
<TD nowrap align="left" valign="bottom">
    )&#160;(D)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    721.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Billings in excess of costs
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,396.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,396.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Accrued income taxes
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    112.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    77.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    190.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Other accrued liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,761.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    118.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,880.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 27pt">
    Total current liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,026.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    324.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (10.4
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,341.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Long-term debt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    737.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    176.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,494.4
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(B)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,408.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Deferred income taxes
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    564.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,022.3
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,652.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Other liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    61.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    91.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Total liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,390.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    595.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,506.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,492.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Minority interest
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    62.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    83.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<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 align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Commitments and contingencies
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<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 nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Stockholders&#146; equity:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1.3
</TD>
<TD nowrap align="left" valign="bottom">
    )&#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Common stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.6
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;&#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (750.0
</TD>
<TD nowrap align="left" valign="bottom">
    )&#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Additional
    <FONT style="white-space: nowrap">paid-in-capital</FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,617.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    750.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,198.7
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;&#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,815.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Retained earnings
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,845.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,733.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,733.4
</TD>
<TD nowrap align="left" valign="bottom">
    )&#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,845.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Treasury stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (426.6
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    426.6
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;&#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Deferred compensation obligation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (10.6
</TD>
<TD nowrap align="left" valign="bottom">
    )&#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Accumulated other comprehensive income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    195.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (11.8
</TD>
<TD nowrap align="left" valign="bottom">
    )&#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    195.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 27pt">
    Total stockholders&#146; equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,661.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,080.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,118.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,860.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Total liabilities and stockholders&#146; equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    12,114.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,697.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,625.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    19,437.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    80
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NATIONAL
    OILWELL VARCO, INC. AND GRANT PRIDECO, INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">UNAUDITED
    PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS<BR>
    </FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">(In
    millions, except per share data)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="14" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31, 2007</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Historical<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>National<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Historical<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Pro Forma<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Oilwell Varco</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Grant Prideco</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Adjustments</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Combined</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Revenues
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9,789.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,908.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (51.3
</TD>
<TD nowrap align="left" valign="bottom">
    )(D)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,646.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    191.2
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(C)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cost of products and services sold
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,958.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    975.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (51.3
</TD>
<TD nowrap align="left" valign="bottom">
    )(D)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,074.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Gross profit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,830.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    933.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (191.2
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,572.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Selling, general and administrative
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    785.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    352.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,138.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Operating profit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,044.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    580.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (191.2
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,433.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Interest and financial costs
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (50.3
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (14.2
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (89.7
</TD>
<TD nowrap align="left" valign="bottom">
    )(B)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (154.2
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other income (expense), net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    34.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1.6
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    33.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Equity income in unconsolidated affiliate
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    124.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    124.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income from continuing operations before income taxes and
    minority interest
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,028.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    689.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (280.8
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,437.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (30.5
</TD>
<TD nowrap align="left" valign="bottom">
    )(B)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Provision for income taxes
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    675.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    201.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (65.0
</TD>
<TD nowrap align="left" valign="bottom">
    )(C)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    781.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income from continuing operations before minority interest
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,353.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    488.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (185.4
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,655.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Minority interest in income of consolidated subsidiaries
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income from continuing operations
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,337.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    478.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (185.4
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,629.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income from continuing operations per share:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Basic
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.77
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.73
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.97
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Diluted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.76
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.69
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.95
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Weighted average shares outstanding:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (128.1
</TD>
<TD nowrap align="left" valign="bottom">
    )(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Basic
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    354.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    128.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    56.3
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    410.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.1
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(E)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (129.6
</TD>
<TD nowrap align="left" valign="bottom">
    )(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Dilutive
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    355.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    129.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    56.3
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    412.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    81
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='121'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    UNAUDITED PRO FORMA<BR>
    </A> <BR>
    CONDENSED COMBINED FINANCIAL STATEMENTS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD valign="top">
    (A) </TD>
    <TD></TD>
    <TD valign="bottom">
    To record the issuance of: (i)&#160;56,293,781&#160;shares of
    National Oilwell Varco common stock, at an assumed market price
    of $72.74 per share, and an assumed cash payment of
    $2,903.5&#160;million to acquire all of the 125,152,915
    outstanding shares of Grant Prideco common stock at
    December&#160;12, 2007 at the agreed exchange ratio of 0.4498
    per share plus cash paid per outstanding Grant Prideco share of
    $23.20 per share; and (ii)&#160;options to purchase
    1,708,919&#160;shares of National Oilwell Varco common stock at
    an average price of $27.19 per share, in exchange for all of the
    outstanding options to purchase shares of Grant Prideco common
    stock at an average price of $20.89 per share. This also
    reflects the exchange of 365,971&#160;shares of National Oilwell
    Varco common stock, at an assumed market price of $72.74 per
    share, and cash of $18.9&#160;million in exchange for
    outstanding Grant Prideco restricted stock awards. The estimated
    initial transaction costs of $110.0&#160;million include
    one-time professional and advisory fees, and change of control
    costs. The following table summarizes the estimated purchase
    price (in millions).</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="60%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="14%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Estimated<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Estimated<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Non-Cash Fair Value<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Estimated<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Total<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>of NOV Stock and<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Cash to<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Purchase<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Options to be Issued</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>be Paid</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Price</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Outstanding Grant Prideco Stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,094.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,903.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6,998.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Fair Value of Grant Prideco Options
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    77.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    77.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Outstanding Grant Prideco Restricted Stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    26.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    45.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Estimated Initial Transaction Costs
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    110.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    110.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total Purchase Price
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,199.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,032.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,231.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Based on preliminary independent valuation estimates, the
    transaction is assumed to result in the write up of Grant
    Prideco&#146;s inventory by $112.7&#160;million and fixed assets
    by $142.1&#160;million, the identification of additional Grant
    Prideco intangible assets of $3,503.8&#160;million, the write up
    of other assets of $203.0&#160;million, and related deferred
    taxes of $1,022.3&#160;million. The identified intangibles
    include patents, customer relationships and tradenames, with
    lives ranging from 10 to 30&#160;years, except for the Reed
    Hycalog and Grant Prideco tradenames, valued at
    $752.0&#160;million, which are considered indefinite lived. The
    asset and liability valuations and estimated lives used to
    calculate the depreciation and amortization identified in
    (C)&#160;below are preliminary and are subject to change based
    on the final valuation by National Oilwell Varco&#146;s
    independent valuation experts. The excess of the purchase price
    over the net assets acquired of $2,670.7&#160;million is
    included in goodwill.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (B) </TD>
    <TD></TD>
    <TD valign="bottom">
    To record estimated debt issued of $1,494.4&#160;million and
    related cash proceeds as a result of the transaction and to
    reflect cash balance required to meet working capital needs. The
    related interest costs on the incremental debt is
    $89.7&#160;million for the year ended December&#160;31, 2007,
    calculated at an estimated annual interest rate of 6.0%. The pro
    forma tax benefit on the additional estimated interest costs is
    $30.5&#160;million for the year ended December&#160;31, 2007,
    calculated at an estimated tax rate of 34%. If the pending
    disposition of certain Grant Prideco tubular business units were
    not to occur, National Oilwell Varco would expect to have an
    additional $535.9&#160;million in long-term debt. This would
    increase pro forma interest expense by $32.2&#160;million on a
    pre-tax basis and $21.2&#160;million on an after-tax basis and
    would increase pro forma long-term debt from
    $2,408.4&#160;million to $2,944.3&#160;million. National Oilwell
    Varco expects that substantially all of the
    $1,494.4&#160;million of estimated debt issued will be under new
    unsecured credit facilities for an aggregate of
    $3.0&#160;billion that will close concurrent with the merger
    closing. These facilities, which are expected to consist of a
    $2.0&#160;billion, five-year revolving credit facility and a
    $1.0&#160;billion,
    <FONT style="white-space: nowrap">364-day</FONT>
    revolving credit facility, will replace National Oilwell
    Varco&#146;s existing $500&#160;million credit facility.
    National Oilwell Varco is also making an exchange offer of new
    6<FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">8</FONT>%&#160;Senior
    Notes due 2015 of National Oilwell Varco to holders of Grant
    Prideco&#146;s existing $174.6&#160;million outstanding
    principal amount of
    6<FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">8</FONT>%&#160;Senior
    Notes due 2015. No additional pro forma net debt would be issued
    by National Oilwell Varco as a result of this exchange offer.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (C) </TD>
    <TD></TD>
    <TD valign="bottom">
    To record the increased depreciation and amortization expense of
    $191.2&#160;million for the year ended December&#160;31, 2007,
    associated with the write up of fixed assets and identified
    intangibles, as noted in </TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    82
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    (A)&#160;above. The pro forma tax benefit on the additional
    depreciation and amortization costs is $65.0&#160;million for
    the year ended December&#160;31, 2007, calculated at an
    estimated tax rate of 34%.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (D) </TD>
    <TD></TD>
    <TD valign="bottom">
    To eliminate (i)&#160;revenue and costs of goods sold of
    $51.3&#160;million for the year ended December&#160;31, 2007,
    associated with sales between National Oilwell Varco and Grant
    Prideco on the Pro Forma Statement of Operations and
    (ii)&#160;accounts receivable and accounts payable balances of
    $10.4&#160;million between National Oilwell Varco and Grant
    Prideco on the Pro Forma Balance Sheet at December&#160;31, 2007.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (E) </TD>
    <TD></TD>
    <TD valign="bottom">
    To record additional dilution of 1,119,416 National Oilwell
    Varco shares related to the estimated exchange of the Grant
    Prideco stock options and restricted stock awards pursuant to
    the merger agreement.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (F) </TD>
    <TD></TD>
    <TD valign="bottom">
    The Grant Prideco Unaudited Pro Forma Condensed Consolidated
    Balance Sheet includes the historical consolidated balance sheet
    of Grant Prideco, adjusted to reflect the pending disposition
    of certain Grant Prideco tubular business units that are
    expected to be divested prior to the close of the merger. Atlas
    Bradford Premium Connections and Services, Tube-Alloy
    Accessories and TCA Premium Casing are being sold pursuant to an
    October 2007 purchase and sale agreement between Grant Prideco
    and Vallourec S.A. and Vallourec&#160;&#038; Mannesmann
    Holdings, Inc. (collectivity referred to as
    &#147;Vallourec&#148;). In addition to the businesses being sold
    to Vallourec above, a tubular business located in Venezuela is
    being otherwise sold or discontinued by Grant Prideco. The
    related historical balances for all of the businesses not
    expected to be acquired by National Oilwell Varco have been
    excluded in the Grant Prideco Unaudited Pro Forma Condensed
    Consolidated Balance Sheet. In addition, the Grant Prideco
    Unaudited Pro Forma Condensed Consolidated Balance Sheet has
    been adjusted to reflect the sale of the three business units to
    Vallourec and the estimated net cash proceeds of
    $535.9&#160;million (net of estimated transaction costs and
    income taxes) received in that disposition. The Grant Prideco
    Unaudited Pro Forma Condensed Consolidated Balance Sheet is
    based on preliminary estimates of transaction costs and net cash
    proceeds received that could differ following consummation of
    these transactions. Additionally, there can be no assurance the
    sales will be completed prior to the closing of the merger or at
    all.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following are details related to Grant Prideco&#146;s Unaudited
    Pro Forma Condensed Consolidated Balance Sheet.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    83
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">GRANT
    PRIDECO, INC.<BR>
    UNAUDITED PRO FORMA CONDENSED CONSOLIDATED<BR>
    BALANCE SHEET<BR>
    </FONT></B><FONT style="font-family: 'Times New Roman', Times">(in
    millions)
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="61%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>As of December&#160;31, 2007</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Historical<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Pro Forma<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Grant Prideco</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Adjustments(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Grant Prideco</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Current Assets:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Cash and cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    161.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    535.2
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(2)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    696.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Receivables, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    415.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    415.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Inventories, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    471.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    471.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Assets held for sale
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    186.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (184.8
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Prepaids and other current assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    86.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1.6
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    84.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Total Current Assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,320.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    348.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,669.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Property, Plant and Equipment, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    329.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.6
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    328.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Goodwill
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    458.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    458.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Intangibles, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    82.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.8
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    81.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Investment in unconsolidated affiliate
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    134.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    134.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1.1
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    24.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Total assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,350.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    346.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,697.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Current liabilities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Current portion of long-term debt and short-term borrowings
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Accounts payable
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    127.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    127.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Accrued income taxes
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    77.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    77.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Liabilities held for sale
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (16.5
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Other accrued liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    119.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.7
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    118.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Total current liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    342.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17.2
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    324.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Long-term debt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    176.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    176.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Deferred income taxes
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    72.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (7.2
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Total Liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    620.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (24.4
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    595.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Minority interests
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Commitments and contingencies
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Stockholders&#146; equity:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Common stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Additional
    <FONT style="white-space: nowrap">paid-in-capital</FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    748.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    750.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Retained earnings
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,364.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    369.1
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(3)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,733.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Treasury stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (426.6
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (426.6
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Deferred compensation obligation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Accumulated other comprehensive income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Total stockholders&#146; equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,709.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    370.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,080.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 50pt">
    Total liabilities and stockholders&#146; equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,350.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    346.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,697.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    84
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents adjustments to reflect the historical balances of
    certain tubular businesses that are expected to be disposed of
    prior to the merger involving National Oilwell Varco and Grant
    Prideco. Atlas Bradford Premium Connections and Services,
    Tube-Alloy Accessories and TCA Premium Casing are being sold
    pursuant to an October 2007 purchase and sale agreement between
    Grant Prideco and Vallourec S.A. and Vallourec&#160;&#038;
    Mannesmann Holdings, Inc. (collectively, referred to as
    &#147;Vallourec&#148; ). In addition to the businesses being
    sold to Vallourec above, a tubular business located in Venezuela
    is being otherwise sold or discontinued by Grant Prideco. The
    related historical balances for all of the businesses not being
    acquired by National Oilwell have been eliminated in the Grant
    Prideco Unaudited Pro Forma Condensed Consolidated Balance Sheet.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Adjustment reflects the estimated cash proceeds of
    $535.9&#160;million, net of tax, related to the sale of certain
    tubular businesses to Vallourec which is based on preliminary
    estimates of remaining transaction costs of $12.2&#160;million
    and income taxes of $242.8&#160;million that could differ
    following the consummation of the transaction with Vallourec,
    partially offset by cash paid of $0.7&#160;million related to
    certain employee liabilities not being acquired by Vallourec.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Adjustment reflects the estimated gain of $369.1&#160;million,
    net of tax, on the sale of certain tubular businesses to
    Vallourec which is based on preliminary estimates of transaction
    costs and income taxes that could differ following the
    consummation of the transaction with Vallourec.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    85
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='114'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DESCRIPTION
    OF THE CAPITAL STOCK OF NATIONAL OILWELL VARCO</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The capital stock of National Oilwell Varco is as summarized
    below. Such summary is qualified in its entirety by reference to
    the amended and restated certificate of incorporation of
    National Oilwell Varco in existence prior to the adoption of the
    merger agreement, as well as to amendments made to the
    certificate of incorporation at the time of the merger of
    National Oilwell and Varco.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The certificate of incorporation of National Oilwell Varco, as
    amended, currently authorizes 500,000,000&#160;shares of common
    stock of National Oilwell Varco and 10,000,000&#160;shares of
    preferred stock of National Oilwell Varco.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Common
    Stock</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There were 356,863,804&#160;shares of the common stock of
    National Oilwell Varco issued and outstanding as of
    December&#160;13, 2007. The holders of the common stock of
    National Oilwell Varco are entitled to one vote per share on all
    matters voted on by the stockholders, including the election of
    directors. Holders of the common stock of National Oilwell Varco
    are not entitled to cumulate their votes in elections of
    directors. Common stockholders have no preemptive rights or
    other rights to subscribe for additional shares. Holders of
    common stock of National Oilwell Varco have an equal and ratable
    right to receive dividends when, as and if declared by the board
    of directors out of funds legally available therefor subject
    only to any payment requirements or other restrictions imposed
    by any series of preferred stock that may be issued in the
    future. The transfer agent and registrar for the common stock of
    National Oilwell Varco is American Stock Transfer and
    Trust&#160;Company.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Preferred
    Stock</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The board of directors of National Oilwell Varco, without any
    action by National Oilwell Varco&#146;s stockholders, is
    authorized to issue up to 10,000,000&#160;shares of preferred
    stock, in one or more series and to determine the voting rights
    (including the right to vote as a series on particular matters),
    preferences as to dividends and in liquidation and the
    conversion and other rights of each such series. There are no
    shares of preferred stock issued and outstanding.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Certain
    Anti-Takeover and Other Provisions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The amended and restated certificate of incorporation and bylaws
    of National Oilwell Varco contain provisions that could have an
    anti-takeover effect. These provisions are intended to enhance
    the likelihood of continuity and stability in the composition of
    the board of directors of National Oilwell Varco and in the
    policies formulated by the board of directors and to discourage
    certain types of transactions which may involve an actual or
    threatened change of control of National Oilwell Varco. The
    provisions are designed to reduce the vulnerability of National
    Oilwell Varco to an unsolicited proposal for a takeover of
    National Oilwell Varco that does not contemplate the acquisition
    of all of its outstanding shares or an unsolicited proposal for
    the restructuring or sale of all or part of National Oilwell
    Varco. The provisions are also intended to discourage certain
    tactics that may be used in proxy fights. The board of directors
    believes that, as a general rule, such takeover proposals would
    not be in the best interest of National Oilwell Varco and its
    stockholders. Set forth below is a description of such
    provisions in the amended and restated certificate of
    incorporation and the bylaws. The description of such provisions
    set forth below discloses, in the opinion of National Oilwell
    Varco&#146;s management, all material elements of such
    provisions, but is intended only as a summary and is qualified
    in its entirety by reference to the pertinent sections of the
    amended and restated certificate of incorporation, the amended
    and restated bylaws and further amendments to both the
    certificate of incorporation and bylaws of National Oilwell
    Varco. The board of directors has no current plans to formulate
    or effect additional measures that could have an anti-takeover
    effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Classified Board of Directors.</I>&#160;&#160;The
    classification of directors has the effect of making it more
    difficult for stockholders to change the composition of the
    board of directors. At least two annual meetings of stockholders
    generally will be required to effect a change in a majority of
    the board of directors. Such a delay may help ensure that
    National Oilwell Varco&#146;s directors, if confronted by a
    stockholder attempting to force a proxy contest, a tender or
    exchange offer or an extraordinary corporate transaction, would
    have sufficient time to review the proposal as well as any
    available alternatives to the proposal and to act in what they
    believe to be the best interests of the stockholders. The
    classification provisions will apply to every election of
    directors, however, regardless of whether
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    86
</DIV><!-- END PAGE WIDTH -->
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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="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    a change in the composition of the board of directors would be
    beneficial to National Oilwell Varco and its stockholders and
    whether a majority of National Oilwell Varco stockholders
    believes that such a change would be desirable. Pursuant to the
    amended and restated certificate of incorporation, the
    provisions relating to the classification of directors may only
    be amended by the affirmative vote of at least 80% of the then
    outstanding shares of National Oilwell Varco&#146;s capital
    stock entitled to vote thereon.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Removal of Directors Only for Cause.</I>&#160;&#160;Pursuant
    to the amended and restated certificate of incorporation,
    National Oilwell Varco&#146;s directors can be removed from
    office prior to the expiration of their term of office only for
    cause and only by the affirmative vote of at least 80% of the
    then outstanding shares of National Oilwell Varco&#146;s capital
    stock entitled to vote thereon. Vacancies on the board of
    directors may be filled only by a majority vote of the remaining
    directors then in office who are also designated to represent
    the same class or classes of stockholders that the vacant
    position is to represent once filled (though less than a
    quorum), and not by the stockholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Number of Directors.</I>&#160;&#160;The amended and restated
    certificate of incorporation provides that the entire board of
    directors of National Oilwell Varco will consist of not less
    than three members, the exact number to be set from time to time
    by resolution of the board of directors. Accordingly, the board
    of directors, and not the stockholders, has the authority to
    determine the number of directors and could delay any
    stockholder from obtaining majority representation on the board
    of directors by enlarging the board of directors and filling the
    new vacancies with its own nominees until the next stockholder
    election.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>No Written Consent of Stockholders.</I>&#160;&#160;The
    amended and restated certificate of incorporation also provides
    that any action required or permitted to be taken by the
    stockholders of National Oilwell Varco must be taken at a duly
    called annual or special meeting of stockholders and may not be
    taken by written consent. In addition, special meetings may only
    be called by (i)&#160;the Chairman of the Board, (ii)&#160;the
    President or (iii)&#160;the board of directors pursuant to a
    resolution adopted by a majority of the then-authorized number
    of directors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Certificate of Incorporation and Bylaws.</I>&#160;&#160;The
    amended and restated certificate of incorporation provides that
    National Oilwell Varco reserves the right to amend, change or
    repeal provisions of the certificate of incorporation in the
    manner prescribed by Delaware law. Under Section&#160;242 of the
    DGCL, amending the certificate of incorporation requires the
    board of directors to adopt a resolution setting forth the
    proposed amendment and an affirmative vote of the holders of a
    majority of the outstanding stock entitled to vote thereon (and
    if applicable, the affirmative vote of the holders of a majority
    of the outstanding stock of any class of stock entitled to a
    class vote). The amended and restated certificate of
    incorporation sets forth certain deviations from this procedure
    for amendments aimed at provisions dealing with the following:
    capital stock (any amendment requires prior written consent of
    the holders of a majority of the then outstanding common shares
    voting as a single class, as well as the consent of holders of a
    majority of any adversely affected class of common stock voting
    as a single class); directors (any amendment requires approval
    of at least 80% of the outstanding shares of stock entitled to
    vote thereon, voting as a single class); or the elimination of
    personal liability for directors (any amendment is prospective
    only and shall not operate to eliminate or reduce the effect of
    the provision eliminating such personal liability of directors).
    The amended and restated certificate of incorporation of
    National Oilwell Varco provides that either the majority vote of
    the board of directors or the holders of the stock issued,
    outstanding and entitled to vote, voting together as a single
    class, may adopt, alter, amend or repeal provisions of the
    bylaws as long as proper notice of such proposed amendment is
    given to the board or stockholders, respectively, in
    anticipation of their vote at a board meeting or stockholder
    meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Business Combinations under Delaware
    Law.</I>&#160;&#160;National Oilwell Varco is subject to
    Section&#160;203 of the DGCL, which prohibits certain
    transactions between a Delaware corporation and an interested
    stockholder, which is defined as a person who, together with any
    affiliates
    <FONT style="white-space: nowrap">and/or</FONT>
    associates of such person, beneficially owns, directly or
    indirectly, 15% or more of the outstanding voting shares of a
    Delaware corporation. This provision prohibits certain business
    combinations (defined broadly to include mergers,
    consolidations, sales or other dispositions of assets having an
    aggregate market value equal to 10% or more of the consolidated
    assets of the corporation, and certain transactions that would
    increase the interested stockholder&#146;s proportionate share
    ownership in the corporation) between an interested stockholder
    and a corporation for a period of three years after the date the
    interested stockholder acquired its stock, unless (i)&#160;the
    business combination or the transaction which resulted in the
    stockholder becoming an interested stockholder is approved by
    the corporation&#146;s board of directors prior to the date the
    interested stockholder acquired shares, (ii)&#160;the interested
    stockholder acquired at least 85% of the voting stock of
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    87
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    the corporation in the transaction in which it became an
    interested stockholder or (iii)&#160;the business combination is
    approved by a majority of the board of directors and by the
    affirmative vote of two-thirds of the votes entitled to be cast
    by disinterested stockholders at an annual or special meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Preferred Stock.</I>&#160;&#160;The amended and restated
    certificate of incorporation authorizes the board of directors
    of National Oilwell Varco, without any action by the
    stockholders of National Oilwell Varco, to issue up to
    10,000,000&#160;shares of preferred stock, in one or more series
    and to determine features of these series such as the voting
    rights (including the right to vote as a series on particular
    matters), preferences as to dividends and in liquidation and the
    conversion and other rights of each such series. Because the
    terms of the preferred stock may be fixed by the board of
    directors of National Oilwell Varco without stockholder action,
    the preferred stock could be issued quickly with terms designed
    to make more difficult a proposed takeover of National Oilwell
    Varco or the removal of its management, thus affecting the
    market price of the common stock of National Oilwell Varco and
    preventing stockholders from obtaining any premium offered by
    the potential buyer. The board of directors will make any
    determination to issue such shares based on its judgment as to
    the best interests of National Oilwell Varco and its
    stockholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Liability
    of Officers and Directors&#160;&#151; Indemnification</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Delaware law authorizes corporations to limit or eliminate the
    personal liability of officers and directors to corporations and
    their stockholders for monetary damages for breach of
    officers&#146; and directors&#146; fiduciary duty of care. The
    duty of care requires that, when acting on behalf of the
    corporation, officers and directors must exercise an informed
    business judgment based on all material information reasonably
    available to them. Absent the limitations authorized by Delaware
    law, officers and directors are accountable to corporations and
    their stockholders for monetary damages for conduct constituting
    gross negligence in the exercise of their duty of care. Delaware
    law enables corporations to limit available relief to equitable
    remedies such as injunction or rescission. The amended and
    restated certificate of incorporation limits the liability of
    officers and directors of National Oilwell Varco to National
    Oilwell Varco or its stockholders to the fullest extent
    permitted by Delaware law. Specifically, officers and directors
    of National Oilwell Varco will not be personally liable for
    monetary damages for breach of an officer&#146;s or
    director&#146;s fiduciary duty in such capacity, except for
    liability (i)&#160;for any breach of the officers&#146; or
    directors&#146; duty of loyalty to National Oilwell Varco or its
    stockholders, (ii)&#160;for acts or omissions not in good faith
    or which involve intentional misconduct or a knowing violation
    of law, (iii)&#160;for unlawful payments of dividends or
    unlawful stock repurchases or redemptions as provided in
    Section&#160;174 of the DGCL or (iv)&#160;for any transaction
    from which the officer or director derived an improper personal
    benefit. The inclusion of this provision in the amended and
    restated certificate of incorporation may have the effect of
    reducing the likelihood of derivative litigation against
    officers and directors, and may discourage or deter stockholders
    or management from bringing a lawsuit against officers and
    directors for breach of their duty of care, even though such an
    action, if successful, might otherwise have benefited National
    Oilwell Varco and its stockholders. Both National Oilwell
    Varco&#146;s amended and restated certificate of incorporation
    and bylaws provide indemnification to National Oilwell
    Varco&#146;s officers and directors and certain other persons
    with respect to certain matters to the maximum extent allowed by
    Delaware law as it exists now or may hereafter be amended. These
    provisions do not alter the liability of officers and directors
    under the U.S.&#160;federal securities laws and do not affect
    the right to sue (or to recover monetary damages) under federal
    securities laws for violations thereof.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    88
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='115'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MATERIAL
    U.S. FEDERAL INCOME TAX CONSEQUENCES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following discussion summarizes the material
    U.S.&#160;federal income tax considerations of the merger to
    U.S.&#160;holders. This summary is based on the Internal Revenue
    Code, its legislative history, applicable U.S.&#160;Treasury
    regulations, judicial authority, published positions of the
    Internal Revenue Service and other applicable authorities, all
    as in effect as of the date of this proxy statement/prospectus,
    all of which are subject to change or differing interpretations,
    possibly with retroactive effect. This summary does not purport
    to be a complete discussion of all U.S.&#160;federal income tax
    consequences of the merger. It is limited to U.S.&#160;holders
    who hold Grant Prideco shares as capital assets for
    U.S.&#160;federal income tax purposes (generally, assets held
    for investment). The discussion below does not address any
    state, local or foreign tax consequences of the merger and does
    not address the tax consequences of the merger under U.S.
    federal tax law other than income tax law. In addition, this
    discussion may not apply, in whole or in part, to particular
    stockholders in light of their individual circumstances or to
    stockholders who are subject to special rules, such as
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    individuals who hold options in respect of the common stock of
    Grant Prideco or who have acquired the common stock of Grant
    Prideco under a compensatory or other employment-related
    arrangement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    insurance companies;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    tax-exempt organizations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    financial institutions or broker-dealers;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    expatriates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    U.S. holders (as defined below) that have a functional currency
    other than the United States dollar;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    persons who are
    <FONT style="white-space: nowrap">non-United</FONT>
    States holders (as defined below);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    traders in securities that elect to mark-to-market;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    S&#160;corporations or other pass-through entities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    persons who exercised appraisal rights;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    persons who hold the common stock of Grant Prideco as part of a
    hedge, straddle or conversion transaction.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of this discussion, the term &#147;U.S.
    holder&#148; means:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an individual who is a citizen or resident of the United States;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a corporation or other entity treated as a corporation created
    or organized under the laws of the United States or any of its
    political subdivisions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a trust that (i)&#160;is subject to the supervision of a court
    within the United States and the control of one or more United
    States persons or (ii)&#160;has validly elected under U.S.
    Treasury regulations to be treated as a United States
    person;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an estate that is subject to U.S. federal income tax on its
    income regardless of its source.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The term
    <FONT style="white-space: nowrap">&#147;non-U.S.</FONT>
    holder&#148; means a holder other than a U.S. holder and other
    than an entity taxable as a partnership for U.S.&#160;federal
    income tax purposes. If a partnership or other entity treated as
    a partnership for U.S.&#160;federal income tax purposes holds
    Grant Prideco common stock, the tax treatment of a partner will
    generally depend on the status of a partner and on the
    activities of the partnership. Partners of partnerships holding
    Grant Prideco common stock are urged to consult their tax
    advisors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>This summary is not a substitute for an individual analysis
    of the tax consequences of the merger to you. Stockholders of
    Grant Prideco are urged to consult their tax advisors as to the
    particular tax consequences of the merger to them, including the
    applicability and effect of any U.S.&#160;federal, state, local
    or foreign laws, and the effect of possible changes in
    applicable tax laws.</I>
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    89
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">General</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is a condition to closing of the merger that National Oilwell
    Varco receive an opinion of its counsel, Andrews Kurth LLP, and
    that Grant Prideco receive an opinion of its counsel, Cravath,
    Swaine&#160;&#038; Moore LLP, in each case, dated as of the
    effective date of the merger to the effect that for
    U.S.&#160;federal income tax purposes the merger will qualify as
    a reorganization within the meaning of Section&#160;368(a) of
    the Internal Revenue Code. Grant Prideco may not waive such tax
    opinion closing condition to the merger after stockholders of
    Grant Prideco have approved the merger unless further approval
    is obtained from stockholders of Grant Prideco with appropriate
    disclosure. The opinions of counsel will assume (1)&#160;that
    the statements and facts concerning the merger set forth in the
    merger agreement and described in this proxy
    statement/prospectus are true, correct and complete,
    (2)&#160;that the merger will be consummated in the manner
    contemplated by, and in accordance with the terms set forth in,
    the merger agreement and described in this proxy
    statement/prospectus, and (3)&#160;certain customary factual
    assumptions, including assumptions regarding the absence of
    changes in existing facts. In addition, the tax opinions will be
    based on representations and covenants made in representation
    letters provided by National Oilwell Varco and Grant Prideco and
    will assume that these representations are true, correct and
    complete without regard to any knowledge limitation, and that
    these covenants will be complied with. If any of these
    assumptions or representations is inaccurate in any way, or the
    covenants are not complied with, the tax consequences of the
    merger could differ from those described here. The opinions of
    counsel to be delivered in connection with the merger represent
    the best legal judgment of counsel to National Oilwell Varco and
    counsel to Grant Prideco and are not binding on the Internal
    Revenue Service or the courts. Neither National Oilwell Varco
    nor Grant Prideco has requested nor will request a ruling from
    the Internal Revenue Service as to the tax consequences of the
    merger, and there can be no assurance that the Internal Revenue
    Service will agree with the conclusions in the above-described
    opinions or in the discussion below.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax
    Consequences of the Merger to U.S. Holders of Common Stock of
    Grant Prideco</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Assuming the merger qualifies as a &#147;reorganization&#148;
    within the meaning of Section&#160;368(a) of the Internal
    Revenue Code, stockholders of Grant Prideco will recognize
    neither gain nor loss with respect to the stock portion of the
    merger consideration, while with respect to the cash portion of
    the merger consideration, stockholders of Grant Prideco will
    generally recognize gain (but not loss) in an amount generally
    equal to the lesser of:
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount of cash received pursuant to the merger (excluding
    any cash received in lieu of fractional shares of National
    Oilwell Varco);&#160;and
</TD>
</TR>


<TR style="line-height: 4pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount, if any, by which the sum of the fair market value of
    the shares of National Oilwell Varco as of the effective time of
    the merger and the amount of cash received pursuant to the
    merger for the Grant Prideco shares exceeds the adjusted tax
    basis of the U.S.&#160;holder in these shares of Grant Prideco.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Gain recognized upon the exchange generally will be capital
    gain, unless the receipt of cash by a U.S.&#160;holder has the
    effect of a distribution of a dividend, in which case the gain
    will be treated as dividend income to the extent of the
    U.S.&#160;holder&#146;s ratable share of the accumulated
    earnings and profits for Grant Prideco, as calculated for
    U.S.&#160;federal income tax purposes. In general, the
    determination as to whether the receipt of cash has the effect
    of a distribution of a dividend depends upon whether and to what
    extent the transactions related to the merger will be deemed to
    reduce the percentage ownership of a U.S.&#160;holder in Grant
    Prideco following the merger. For purposes of that
    determination, a U.S.&#160;holder will be treated as if he or
    she first exchanged all of the common stock of Grant Prideco
    held by the U.S.&#160;holder solely for common stock of National
    Oilwell Varco, and then a portion of that common stock of
    National Oilwell Varco was immediately redeemed by National
    Oilwell Varco for the cash that the U.S.&#160;holder actually
    received in the merger. The Internal Revenue Service has
    indicated that a reduction in the interest of a minority
    stockholder that owns a small number of shares in a publicly and
    widely-held corporation and that exercises no control over
    corporate affairs would result in capital gain (as opposed to
    dividend) treatment. In determining whether or not the receipt
    of cash has the effect of a distribution of a dividend, certain
    constructive ownership rules must be taken into account. Any
    recognized capital gain will be long-term capital gain if the
    U.S.&#160;holder has held the shares of Grant Prideco for more
    than one year.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Stockholders of Grant Prideco who hold shares of Grant Prideco
    with differing bases or holding periods are urged to consult
    their tax advisors with regard to identifying the bases or
    holding periods of the particular shares of common stock of
    National Oilwell Varco received in the merger.
</DIV>

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    <BR>
    90
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If a U.S.&#160;holder receives cash in lieu of a fractional
    share of common stock of National Oilwell Varco, subject to the
    discussion above regarding possible dividend treatment, he or
    she will generally recognize capital gain or loss equal to the
    difference between the cash received in lieu of this fractional
    share and the portion of his or her adjusted tax basis in shares
    of Grant Prideco surrendered that is allocable to this
    fractional share. The capital gain or loss will be long-term
    capital gain or loss if the holding period for shares of Grant
    Prideco exchanged for cash in lieu of the fractional share of
    common stock of National Oilwell Varco is more than one year as
    of the date of the merger.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S.&#160;holder will have an aggregate tax basis in shares of
    common stock of National Oilwell Varco received in the merger
    equal to the aggregate adjusted tax basis in shares of common
    stock of Grant Prideco surrendered in the merger, reduced by:
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the portion of his or her adjusted tax basis in those shares of
    common stock of Grant Prideco that is allocable to a fractional
    share of the common stock of National Oilwell Varco for which
    cash is received;&#160;and
</TD>
</TR>


<TR style="line-height: 4pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount of cash received by him or her for shares of common
    stock of Grant Prideco in the merger;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    and increased by the amount of gain (including the portion of
    this gain that is treated as a dividend as described above)
    recognized by him or her in the exchange (but not by any gain
    recognized upon the receipt of cash in lieu of a fractional
    share of the common stock of National Oilwell Varco pursuant to
    the merger).
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The holding period of the shares of common stock of National
    Oilwell Varco received by a stockholder of Grant Prideco
    pursuant to the merger will include the holding period of shares
    of common stock of Grant Prideco surrendered in exchange for the
    shares of common stock of National Oilwell Varco, if these
    shares of common stock of Grant Prideco are held as capital
    assets as of the effective time of the merger.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Stockholders of Grant Prideco are entitled to dissenters&#146;
    rights under Delaware law in connection with the merger. If a
    U.S.&#160;holder receives cash pursuant to the exercise of
    dissenters&#146; rights, that U.S.&#160;holder generally will
    recognize gain or loss measured by the difference between the
    cash received and his or her adjusted tax basis in his or her
    shares of common stock of Grant Prideco. This gain should be
    long-term capital gain or loss if the U.S.&#160;holder held
    shares of common stock of Grant Prideco for more than one year.
    Any stockholder of Grant Prideco that plans to exercise his or
    her dissenters&#146; rights in connection with the merger is
    urged to consult with a tax advisor to determine the related tax
    consequences.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the merger is not treated as a &#147;reorganization&#148;
    within the meaning of Section&#160;368(a) of the Internal
    Revenue Code, then each U.S.&#160;holder would recognize gain or
    loss equal to the difference between the sum of the fair market
    value of shares of common stock of National Oilwell Varco and
    the amount of cash received in the merger (including cash
    received in lieu of fractional shares of the common stock of
    National Oilwell Varco) and his or her tax basis in the shares
    of the common stock of Grant Prideco surrendered in exchange for
    the common stock of National Oilwell Varco and the cash
    consideration. Further, if the merger is not treated as a
    &#147;reorganization&#148; within the meaning of
    Section&#160;368(a) of the Internal Revenue Code, Grant Prideco
    would be subject to tax on the deemed sale of its assets to NOV
    Sub, Inc., with gain or loss for this purpose measured by the
    difference between Grant Prideco&#146;s tax basis in its assets
    and the fair market value of the consideration deemed to be
    received therefor, or in other words, the cash and shares of
    common stock of National Oilwell Varco. This gain or loss would
    be reported on the final tax return of Grant Prideco, subject to
    the effect of any tax carryovers and the effect of its other
    income or loss for that periods, and NOV Sub, Inc. would become
    liable for any such tax liability by virtue of the merger.
</DIV>

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    <BR>
    91
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Backup
    Withholding; Information Reporting</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The cash payments in the merger may be subject to &#147;backup
    withholding&#148; for U.S.&#160;federal income tax purposes
    unless certain requirements are met. Payments will not be
    subject to backup withholding if the holder (1)&#160;is a
    corporation or comes within certain other exempt categories and,
    when required, demonstrates this fact, or (2)&#160;provides
    National Oilwell Varco or the third-party paying agent, as
    appropriate, with the holder&#146;s correct taxpayer
    identification number and completes a form in which the holder
    certifies that the holder is not subject to backup withholding.
    The taxpayer identification number of a U.S.&#160;holder who is
    an individual is his or her Social Security number. Any amount
    paid as backup withholding will be credited against the
    holder&#146;s U.S.&#160;federal income tax liability provided
    the holder furnishes the required information to the Internal
    Revenue Service. Holders must also comply with the information
    reporting requirements of the Treasury regulations under the
    tax-free reorganization provisions of the Internal Revenue Code.
    Appropriate documentation for the foregoing purposes will be
    provided to holders by the exchange agent and must be completed,
    signed and returned to the exchange agent.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Tax matters are very complicated, and the tax consequences of
    the merger to a particular stockholder of Grant Prideco will
    depend on that stockholder&#146;s own tax situation. Grant
    Prideco&#146;s stockholders are urged to consult their tax
    advisors regarding the specific tax consequences of the merger,
    including tax return reporting requirements, the applicability
    of federal, state, local and foreign tax laws and the effect of
    any proposed change in the tax laws.</B>
</DIV>

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    <BR>
    92
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='116'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SUBMISSION
    OF STOCKHOLDER PROPOSALS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco will hold an annual meeting in 2008 only if the
    merger has not already been completed. The deadline for a
    stockholder to submit a proposal considered for presentation at
    the annual meeting, and have such proposal included in the proxy
    statement and form of proxy used in connection with such
    meeting, was January&#160;18, 2008.
</DIV>
<A name='117'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    MATTERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The validity of the securities to be issued in the transaction
    will be passed upon for National Oilwell Varco by Andrews Kurth
    LLP. We expect that the opinions referred to in the discussion
    set forth in the &#147;Material Federal Income Tax
    Consequences&#148; section of this proxy statement/prospectus
    will be provided to National Oilwell Varco by Andrews Kurth LLP
    and to Grant Prideco by Cravath, Swaine&#160;&#038; Moore LLP.
</DIV>
<A name='118'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">EXPERTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The consolidated financial statements and schedule of National
    Oilwell Varco, Inc. at December&#160;31, 2007 and 2006 and for
    each of the three years in the period ended December&#160;31,
    2007, and the effectiveness of National Oilwell Varco&#146;s
    internal control over financial reporting as of
    December&#160;31, 2007 incorporated by reference into this
    prospectus and registration statement have been audited by
    Ernst&#160;&#038; Young LLP, independent registered public
    accounting firm, as set forth in their reports incorporated by
    reference herein. Such consolidated financial statements are
    incorporated by reference herein in reliance upon such report
    given on the authority of such firm as experts in accounting and
    auditing.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The consolidated financial statements and related financial
    statement schedule of Grant Prideco, Inc. as of
    December&#160;31, 2007 and 2006, and for each of the three years
    in the period ended December&#160;31, 2007, and the
    effectiveness of Grant Prideco&#146;s internal control over
    financial reporting incorporated by reference in this prospectus
    have been audited by Deloitte&#160;&#038; Touche LLP, an
    independent registered public accounting firm, as stated in
    their reports incorporated herein (which reports
    (1)&#160;express an unqualified opinion on the financial
    statements and financial statement schedule and include an
    explanatory paragraph regarding the Company&#146;s adoption of
    Statement of Financial Accounting Standards No.&#160;123(R),
    <I>Share-based Payment,</I> on January&#160;1, 2006 and
    (2)&#160;express an unqualified opinion on the effectiveness of
    internal control over financial reporting), and have been so
    included in reliance upon the reports of such firm given upon
    their authority as experts in accounting and auditing.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    93
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='119'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">WHERE YOU
    CAN FIND MORE INFORMATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco has filed with the Securities and
    Exchange Commission a registration statement under the
    Securities Act of 1933 that registers the distribution of the
    shares of common stock of National Oilwell Varco to be issued to
    stockholders of Grant Prideco in connection with the merger.
    That registration statement, including the attached exhibits and
    schedules, contains additional relevant information about the
    common stock of National Oilwell Varco. The rules and
    regulations of the Securities and Exchange Commission allow us
    to omit some of the information included in the registration
    statement from this proxy statement/prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, National Oilwell Varco and Grant Prideco file
    reports, proxy statements and other information with the
    Securities and Exchange Commission under the Securities Exchange
    Act of 1934. You may read and copy that information at the
    Securities and Exchange Commission&#146;s public reference room
    at the following location:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Public Reference Room<BR>
    450&#160;Fifth Street, N.W.<BR>
    Washington,&#160;D.C. 20549<BR>
    <FONT style="white-space: nowrap">1-800-732-0330</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You may also obtain copies of this information by mail from the
    Public Reference Section of the Securities and Exchange
    Commission, 450&#160;Fifth Street, N.W., Room&#160;1024,
    Washington,&#160;D.C. 20549, at prescribed rates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Securities and Exchange Commission also maintains an
    Internet world wide website that contains reports, proxy
    statements and other information about issuers, including
    National Oilwell Varco and Grant Prideco, that file
    electronically with the Securities and Exchange Commission. The
    address of that site is
    <I><FONT style="white-space: nowrap">http://www.sec.gov.</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Securities and Exchange Commission allows National Oilwell
    Varco and Grant Prideco to &#147;incorporate by reference&#148;
    information into this proxy statement/prospectus. This means
    that National Oilwell Varco and Grant Prideco can disclose
    important information by referring you to another document filed
    separately with the Securities and Exchange Commission. The
    information incorporated by reference is considered to be part
    of this proxy statement/prospectus, except for any information
    that is superseded by information that is included directly in
    this proxy statement/prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This proxy statement/prospectus incorporates by reference the
    documents listed below that National Oilwell Varco and Grant
    Prideco have previously filed with the Commission, excluding any
    information furnished in a Current Report
    <FONT style="white-space: nowrap">Form&#160;8-K.</FONT>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">National
    Oilwell Varco&#146;s Filings (File
    <FONT style="white-space: nowrap">No.&#160;001-12317)</FONT></FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2007 filed with the
    Commission on February&#160;29, 2008
    <FONT style="white-space: nowrap">(10-K)</FONT> and
    March&#160;13, 2008
    <FONT style="white-space: nowrap">(10-K/A);</FONT> and
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Description of the common stock of National Oilwell Varco
    contained in the Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-4/A,</FONT>
    filed with the Commission on January&#160;31, 2005.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You may request a copy of National Oilwell Varco&#146;s filings
    at no cost by making written or telephone requests for copies
    to: National Oilwell Varco, Inc., 7909 Parkwood Circle Drive,
    Houston, Texas 77036,
    <FONT style="white-space: nowrap">(713)&#160;375-3700,</FONT>
    Attention: Investor Relations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco also makes available free of charge on
    its Internet website at
    <I><FONT style="white-space: nowrap">http://www.nov.com</FONT>
    </I>its Annual Reports on
    <FONT style="white-space: nowrap">Form&#160;10-K,</FONT>
    Quarterly Reports on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    and Current Reports on
    <FONT style="white-space: nowrap">Form&#160;8-K,</FONT>
    and any amendments to those reports, as soon as reasonably
    practicable after it electronically files such material with, or
    furnishes it to, the Commission. Information contained on the
    web site of National Oilwell Varco is not part of this proxy
    statement/prospectus.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Grant
    Prideco&#146;s Filings (File
    <FONT style="white-space: nowrap">No.&#160;001-15423)</FONT></FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2007 filed with the
    Commission on February&#160;29, 2008; and
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    94
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Current Report on
    <FONT style="white-space: nowrap">Form&#160;8-K</FONT>
    dated February&#160;29, 2008.
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You may request a copy of Grant Prideco&#146;s filings at no
    cost by making written or telephone requests for copies to Grant
    Prideco, Inc., 400&#160;N.&#160;Sam Houston Parkway East,
    Suite&#160;900, Houston, Texas 77060, Telephone:
    <FONT style="white-space: nowrap">(281)&#160;878-8000,</FONT>
    Attention: Investor Relations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco also makes available free of charge on its
    Internet website at
    <I><FONT style="white-space: nowrap">http://www.grantprideco.com</FONT>
    </I>its Annual Reports on
    <FONT style="white-space: nowrap">Form&#160;10-K,</FONT>
    Quarterly Reports on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    and Current Reports on
    <FONT style="white-space: nowrap">Form&#160;8-K,</FONT>
    and any amendments to those reports, as soon as reasonably
    practicable after it electronically files such material with, or
    furnishes it to, the Commission. Information contained on the
    web site of Grant Prideco is not part of this proxy
    statement/prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco and Grant Prideco also incorporate by
    reference additional documents that either company may file with
    the Securities and Exchange Commission pursuant to
    Section&#160;13(a), 13(c), 14 or 15(d) of the Securities
    Exchange Act of 1934 between the date of this proxy
    statement/prospectus and the date of the meeting of stockholders
    of Grant Prideco. Those documents include periodic reports such
    as an Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K,</FONT>
    Quarterly Reports on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    and Current Reports on
    <FONT style="white-space: nowrap">Form&#160;8-K,</FONT>
    as well as proxy statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You can obtain any of the documents incorporated by reference
    into this proxy statement/prospectus through National Oilwell
    Varco or Grant Prideco, as the case may be, or from the
    Securities and Exchange Commission&#146;s website at
    <I><FONT style="white-space: nowrap">http://www.sec.gov</FONT></I>.
    Documents incorporated by reference are available from National
    Oilwell Varco and Grant Prideco without charge, excluding any
    exhibits to those documents unless the exhibit is specifically
    incorporated by reference into this proxy statement/prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Neither National Oilwell Varco nor Grant Prideco has authorized
    anyone to give any information or make any representation about
    the merger, National Oilwell Varco or Grant Prideco, that is
    different from, or in addition to, the information contained in
    this proxy statement/prospectus or in any of the materials that
    have been incorporated into this proxy statement/prospectus by
    reference. Therefore, if anyone does give you information of
    this sort, you should not rely on it. If you are in a
    jurisdiction where offers to exchange or sell, or solicitations
    of offers to exchange or purchase, the securities offered by
    this proxy statement/prospectus or the solicitation of proxies
    is unlawful, or if you are a person to whom it is unlawful to
    direct these types of activities, then the offer presented in
    this proxy statement/prospectus does not extend to you. The
    information contained in this proxy statement/prospectus speaks
    only as of the date of this proxy statement/prospectus unless
    the information specifically indicates that another date applies.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<A name='120'>
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TRANSFER
    AGENTS AND REGISTRARS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    American Stock Transfer&#160;&#038; Trust&#160;Company is the
    transfer agent and registrar for both common stock of National
    Oilwell Varco and Grant Prideco. You may write to or telephone
    the appropriate company as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    National Oilwell Varco Common Stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    Grant Prideco Common Stock
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    American Stock Transfer and Trust Company
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    American Stock Transfer and Trust Company
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    59 Maiden Lane
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    40 Wall Street
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    New York, NY 10038
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    New York, NY 10005
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <I><FONT style="white-space: nowrap">http://www.amstock.com</FONT></I>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <I><FONT style="white-space: nowrap">http://www.amstock.com</FONT></I>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    (718) 921-8200
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    (718) 921-8200
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    (800) 937-5449
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    95
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ANNEX&#160;A</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">AGREEMENT
    AND PLAN OF MERGER<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NATIONAL
    OILWELL VARCO, INC.,<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOV SUB,
    INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">and<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">GRANT
    PRIDECO, INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Dated as
    of December&#160;16, 2007</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

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

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="13%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="80%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">ARTICLE&#160;I. THE MERGER
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    <FONT style="font-variant: SMALL-CAPS">A-1
    </FONT>
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;1.01
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    The Merger
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-1
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;1.02
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Effective Time of the Merger
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-1
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;1.03
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Closing
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-1
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;1.04
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Effects of the Merger
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-1
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;1.05
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Certificate of Incorporation and Bylaws
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-2
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;1.06
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Officers and Directors of the Survivor
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-2
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    ARTICLE&#160;II. CONVERSION OF SECURITIES
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-2
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;2.01
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Conversion of Capital Stock
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-2
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;2.02
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Exchange of Certificates
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-2
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;2.03
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Dissenting Shares
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-5
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;2.04
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Fixed Consideration
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-5
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    ARTICLE&#160;III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-5
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.01
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Organization of the Company
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-5
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.02
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Company Capital Structure
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-6
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.03
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Authority; No Conflict; Required Filings and Consents
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-7
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.04
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    SEC Filings; Financial Statements
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-8
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.05
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    No Undisclosed Liabilities
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-8
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.06
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Absence of Certain Changes or Events
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-8
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.07
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Taxes
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-8
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.08
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Properties
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-10
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.09
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Intellectual Property
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-10
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.10
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Agreements and Contracts
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-10
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.11
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Litigation
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-11
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.12
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Environmental Matters
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-11
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.13
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Employee Benefit Plans
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-11
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.14
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Compliance With Laws
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-13
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.15
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Tax Matters
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-13
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.16
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Registration Statement; Proxy Statement/Prospectus
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-13
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.17
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Labor Matters
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-13
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.18
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Insurance
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-14
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.19
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    No Existing Discussions
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-14
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.20
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Opinion of Financial Advisor
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-14
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.21
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Anti-Takeover Laws
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-14
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.22
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Company Rights Plan
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-14
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.23
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Sarbanes-Oxley Act
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-14
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;3.24
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Brokers or Finders
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-15
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    i
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="13%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="80%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    ARTICLE&#160;IV. REPRESENTATIONS AND WARRANTIES OF PARENT AND
    MERGER SUB
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-15
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;4.01
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Organization of Parent
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-15
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;4.02
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Parent Capital Structure
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-15
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;4.03
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Authority; No Conflict; Required Filings and Consents
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-16
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;4.04
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    SEC Filings; Financial Statements
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-17
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;4.05
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    No Undisclosed Liabilities
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-17
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;4.06
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Absence of Certain Changes or Events
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-17
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;4.07
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Taxes
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-18
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;4.08
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Agreements and Contracts
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-19
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;4.09
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Litigation
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-19
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;4.10
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Compliance With Laws
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-19
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;4.11
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Tax Matters
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-19
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;4.12
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Registration Statement; Proxy Statement/Prospectus
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-20
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;4.13
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Opinion of Financial Advisor
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-20
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;4.14
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Rights Plan
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-20
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;4.15
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Sarbanes-Oxley Act
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-20
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;4.16
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Brokers or Finders
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-21
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;4.17
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Sufficient Funds
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-21
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    ARTICLE&#160;V. CONDUCT OF BUSINESS
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-21
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;5.01
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Covenants of the Company
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-21
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;5.02
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Covenants of Parent
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-23
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;5.03
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Cooperation
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-24
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    ARTICLE&#160;VI. ADDITIONAL AGREEMENTS
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-24
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;6.01
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    No Solicitation
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-24
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;6.02
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Proxy Statement/Prospectus; Registration Statement
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-26
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;6.03
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Access to Information
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-26
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;6.04
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Stockholders Meeting
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-27
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;6.05
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Appropriate Actions; Consents; Filings
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-27
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;6.06
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Public Disclosure
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-28
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;6.07
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Rule&#160;145
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-29
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;6.08
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section&#160;16 Matters
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-29
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;6.09
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    NYSE Listing
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-29
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;6.10
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Stock Plans
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-29
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;6.11
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Indemnification
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-30
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;6.12
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Letter of the Company&#146;s Accountants
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-31
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;6.13
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Letter of Parent&#146;s Accountants
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-31
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;6.14
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    State Takeover Statutes
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-31
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;6.15
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Tax-Free Reorganization Treatment
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-31
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;6.16
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Parent Guarantee
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-32
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;6.17
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Consent to Use of Financial Statements; Financing Cooperation
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-32
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;6.18
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Employee Matters
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-32
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    ii
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="13%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="80%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    ARTICLE&#160;VII. CONDITIONS TO MERGER
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-33
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;7.01
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Conditions to Each Party&#146;s Obligation To Effect the Merger
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-33
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;7.02
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Additional Conditions to Obligations of the Company
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-33
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;7.03
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Additional Conditions to Obligations of Parent and Merger Sub
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-34
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    ARTICLE&#160;VIII. TERMINATION AND AMENDMENT
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-35
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;8.01
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Termination
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-35
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;8.02
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Effect of Termination
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-36
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;8.03
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Fees and Expenses
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-36
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;8.04
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Amendment
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-37
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;8.05
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Extension; Waiver
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-37
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    ARTICLE&#160;IX. MISCELLANEOUS
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-37
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;9.01
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Nonsurvival of Representations, Warranties and Agreements
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-37
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;9.02
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Notices
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-37
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;9.03
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Definitions
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-38
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;9.04
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Interpretation
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-42
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;9.05
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Counterparts
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-42
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;9.06
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Entire Agreement; No Third Party Beneficiaries
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-42
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;9.07
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Governing Law
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-42
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;9.08
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Assignment
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-42
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;9.09
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Enforcement; Waiver of Jury Trial
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    A-42
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    iii
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><U><FONT style="font-family: 'Times New Roman', Times">AGREEMENT
    AND PLAN OF MERGER</FONT></U></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    AGREEMENT AND PLAN OF MERGER (the &#147;Agreement&#148;), dated
    as of December&#160;16, 2007, by and among National Oilwell
    Varco, Inc., a Delaware corporation (&#147;Parent&#148;), NOV
    Sub, Inc., a Delaware corporation (&#147;Merger Sub&#148;), and
    Grant Prideco, Inc., a Delaware corporation (the
    &#147;Company&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    WHEREAS, the respective Boards of Directors of Parent, Merger
    Sub and the Company have each approved this Agreement and the
    merger of the Company with and into Merger Sub on the terms and
    subject to the conditions set forth in this Agreement, whereby
    each issued share of common stock, par value $0.01 per share, of
    the Company (&#147;Company Common Stock&#148;) not owned by
    Parent, Merger Sub or the Company, and other than Dissenting
    Shares, shall be converted into the right to receive (1)&#160;a
    portion of a share of common stock, par value $0.01 per share,
    of Parent (&#147;Parent Common Stock&#148;) and (2)&#160;cash
    consideration (the &#147;Cash Consideration&#148; and,
    collectively with such Parent Common Stock, the &#147;Merger
    Consideration&#148;) as set forth in this Agreement;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    WHEREAS, in order to effectuate the foregoing, the Company, upon
    the terms and subject to the conditions of this Agreement and in
    accordance with the Delaware General Corporation Law (the
    &#147;DGCL&#148;), will merge with and into Merger Sub, with
    Merger Sub surviving the merger (the
    &#147;Merger&#148;);&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    WHEREAS, for Federal income tax purposes, the Company and Parent
    intend that (i)&#160;the Merger shall qualify as a
    reorganization within the meaning of Section&#160;368(a) of the
    Internal Revenue Code of 1986, as amended (the &#147;Code&#148;)
    and (ii)&#160;Parent, Merger Sub and the Company will be parties
    to such reorganization within the meaning of Section&#160;368 of
    the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    NOW, THEREFORE, in consideration of the foregoing and the
    respective representations, warranties, covenants and agreements
    set forth below, the parties agree as follows:
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;I.<BR>
    THE MERGER</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;1.01&#160;&#160;<U>The Merger</U>.&#160;&#160;Upon
    the terms and subject to the conditions of this Agreement and in
    accordance with the applicable provisions of the DGCL, at the
    Effective Time, the Company shall merge with and into Merger
    Sub, the separate corporate existence of the Company shall cease
    and Merger Sub shall continue as the surviving entity. Merger
    Sub, as the surviving entity after the Merger, is hereinafter
    sometimes referred to as the &#147;Survivor.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;1.02&#160;&#160;<U>Effective Time of the
    Merger</U>.&#160;&#160;As early as practicable on the Closing
    Date, the parties shall cause the Merger to be consummated by
    filing with the Secretary of State of the State of Delaware a
    certificate of merger or other appropriate documents (in any
    such case, the &#147;Certificate of Merger&#148;) in accordance
    with the relevant provisions of the DGCL and in a form as
    mutually agreed to by the Company and Parent. At or prior to
    consummation of the Merger, the parties shall make all other
    filings, recordings or publications required under the DGCL in
    connection with the Merger. The Merger shall become effective on
    the date and at the time of the filing of the Certificate of
    Merger with the Delaware Secretary of State in accordance with
    the DGCL, or at such other time as the parties may agree and
    specify in such filings in accordance with applicable Law (the
    time the Merger becomes effective being the &#147;Effective
    Time&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;1.03&#160;&#160;<U>Closing</U>.&#160;&#160;The
    closing of the Merger (the &#147;Closing&#148;) will take place
    at 10:00&#160;a.m., Houston time, on a date (the &#147;Closing
    Date&#148;) to be specified by the Company and Parent, which
    date shall be no later than the second Business Day after the
    satisfaction or waiver of the conditions set forth in
    Article&#160;VII (other than those conditions that by their
    nature are to be satisfied as of the Closing), at the offices of
    the Company at the address indicated in Section&#160;9.02 unless
    another date, place or time is agreed to in writing by the
    Company and Parent.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;1.04&#160;&#160;<U>Effects of the
    Merger</U>.&#160;&#160;At the Effective Time, the effect of the
    Merger shall be as provided by applicable Law, including the
    DGCL. Without limiting the generality of the foregoing and
    subject thereto, at the Effective Time, all the property,
    rights, privileges, powers and franchises of the Company and
    Merger Sub will vest in the Survivor, and all of the debts,
    Liabilities and duties of the Company and Merger Sub will become
    the debts, Liabilities and duties of the Survivor.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-1
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;1.05&#160;&#160;<U>Certificate of Incorporation and
    Bylaws</U>.&#160;&#160;At the Effective time, the certificate of
    incorporation of Merger Sub, as in effect immediately prior to
    the Effective Time, shall be the certificate of incorporation of
    the Survivor until thereafter changed or amended as provided
    therein or by applicable Law. The bylaws of Merger Sub, as in
    effect immediately prior to the Effective Time, shall be the
    bylaws of the Survivor until thereafter changed or amended as
    provided therein or by applicable Law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;1.06&#160;&#160;<U>Officers and Directors of the
    Survivor</U>.&#160;&#160;The officers of the Company as of the
    Effective Time shall be the officers of the Survivor, until the
    earlier of their resignation or removal or otherwise ceasing to
    be officers or until their respective successors are duly
    elected and qualified, as the case may be. The directors of
    Merger Sub as of the Effective Time shall be the directors of
    the Survivor until the earlier of their resignation or removal
    or otherwise ceasing to be directors or until their respective
    successors are duly elected and qualified, as the case may be.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;II.<BR>
    CONVERSION OF SECURITIES</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;2.01&#160;&#160;<U>Conversion of Capital
    Stock</U>.&#160;&#160;As of the Effective Time, by virtue of the
    Merger and without any action on the part of the Company or
    Merger Sub or the holder of any shares of capital stock of the
    Company, Parent or Merger Sub:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<U>Cancellation of Treasury Stock and Parent-Owned
    Stock</U>.&#160;&#160;All shares of Company Common Stock that
    are owned by the Company as treasury stock and any shares of
    Company Common Stock owned by Parent or any Subsidiary of
    Parent, including Merger Sub, shall be canceled and retired and
    shall cease to exist and no consideration, including Parent
    Common Stock or other Merger Consideration, shall be delivered
    in exchange therefor.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<U>Exchange Ratio for Company Common
    Stock</U>.&#160;&#160;Subject to Section&#160;2.02, each issued
    and outstanding share of Company Common Stock (other than shares
    to be canceled in accordance with Section&#160;2.01(a) and
    Dissenting Shares) shall be converted into the right to receive
    (1) .4498 of a fully paid and nonassessable share (the
    &#147;Exchange Ratio&#148;) of Parent Common Stock and
    (2)&#160;$23.20 of Cash Consideration. All such shares of
    Company Common Stock, when so converted, shall no longer be
    outstanding and shall automatically be canceled and retired and
    shall cease to exist, and each holder of a certificate
    representing any such shares shall cease to have any rights with
    respect thereto, except the right to receive the Merger
    Consideration and any cash in lieu of fractional shares of
    Parent Common Stock to be issued or paid in consideration
    therefor and any dividends or other distributions to which
    holders become entitled upon the surrender of such certificate
    in accordance with Section&#160;2.02, without interest.
    Notwithstanding the foregoing, if between the date of this
    Agreement and the Effective Time the outstanding shares of
    Parent Common Stock or Company Common Stock shall have been
    changed into a different number of shares or a different class,
    by reason of any stock dividend, subdivision, reclassification,
    recapitalization, split, combination or exchange of shares, or
    any similar event shall have occurred, then the Exchange Ratio
    and the Cash Consideration contemplated shall be correspondingly
    adjusted to provide to Parent and the holders of Company Common
    Stock the same economic effect as contemplated by this Agreement
    prior to such event.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<U>Merger Sub Common Stock</U>.&#160;&#160;Each share
    of common stock, par value $0.01 per share, of Merger Sub issued
    and outstanding immediately prior to the Effective Time shall
    remain issued, outstanding and unchanged as a validly issued,
    fully paid and nonassessable share of common stock, par value
    $0.01 per share, of the Survivor at the Effective Time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;2.02&#160;&#160;<U>Exchange of
    Certificates</U>.&#160;&#160;The procedures for exchanging
    certificates which immediately prior to the Effective Time
    represented outstanding shares of Company Common Stock for
    certificates representing shares of Parent Common Stock and the
    Cash Consideration pursuant to the Merger are as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<U>Exchange Agent</U>.&#160;&#160;At the Effective
    Time, Parent shall make available to a bank or trust company
    designated by Parent and the Company (the &#147;Exchange
    Agent&#148;), in trust for the benefit of the holders of
    certificates which immediately prior to the Effective Time
    represented outstanding shares of Company Common Stock, for
    exchange in accordance with this Section&#160;2.02, through the
    Exchange Agent, certificates
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-2
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    representing the shares of Parent Common Stock, the Cash
    Consideration and an estimated amount of cash in lieu of
    fractional shares (such certificates representing shares of
    Parent Common Stock, together with any dividends or
    distributions with respect thereto, the Cash Consideration and
    cash in lieu of fractional shares being hereinafter referred to
    as the &#147;Exchange Fund&#148;) issuable pursuant to
    Section&#160;2.01 upon conversion of outstanding shares of
    Company Common Stock. The Exchange Agent shall invest any cash
    included in the Exchange Fund as directed by Parent. Any
    interest and other income resulting from such investments shall
    be the property of, and be paid to, Parent.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<U>Exchange Procedures</U>.&#160;&#160;As soon as
    reasonably practicable after the Effective Time, Parent shall
    cause the Exchange Agent to mail to each holder of record of a
    certificate or certificates which immediately prior to the
    Effective Time represented outstanding shares of Company Common
    Stock (the &#147;Certificates&#148;) whose shares were converted
    pursuant to Section&#160;2.01 into the right to receive shares
    of Parent Common Stock and Cash Consideration (i) a letter of
    transmittal which shall specify that delivery shall be effected,
    and risk of loss and title to the Certificates shall pass, only
    upon delivery of the Certificates to the Exchange Agent and
    shall be in such form and have such other provisions as the
    Company and Parent may reasonably specify and
    (ii)&#160;instructions for effecting the surrender of the
    Certificates in exchange for certificates representing shares of
    Parent Common Stock and the Cash Consideration (plus cash in
    lieu of fractional shares, if any, of Parent Common Stock as
    provided below). Upon surrender of a Certificate to the Exchange
    Agent or to such other agent or agents as may be appointed by
    Parent, together with such letter of transmittal, duly completed
    and validly executed in accordance with the instructions
    thereto, and such other documents as may reasonably be required
    by the Exchange Agent, the holder of such Certificate shall be
    entitled to receive in exchange therefor a certificate
    representing that number of whole shares of Parent Common Stock
    into which the holder&#146;s shares of Company Common Stock were
    converted pursuant to Section&#160;2.01(b) and a check
    representing (1)&#160;the Cash Consideration and (2)&#160;cash
    in lieu of fractional shares which the holder has the right to
    receive pursuant to Section&#160;2.02(e) and any dividends or
    other distributions which the holder has the right to receive
    pursuant to Section&#160;2.02(c), and the Certificate so
    surrendered shall immediately be canceled. In the event of a
    transfer of ownership of Company Common Stock which is not
    registered in the transfer records of the Company, a certificate
    representing the proper number of shares of Parent Common Stock
    determined in accordance with Section&#160;2.01(b) and a check
    representing (1)&#160;the Cash Consideration and (2)&#160;cash
    in lieu of fractional shares which the holder is entitled to
    receive pursuant to Section&#160;2.02(e) and any dividends or
    other distributions which the holder is entitled to receive
    pursuant to Section&#160;2.02(c) may be issued to a transferee
    if the Certificate representing such Company Common Stock is
    presented to the Exchange Agent, accompanied by all documents
    required to evidence and effect such transfer and by evidence
    that any applicable stock transfer taxes have been paid. Until
    surrendered as contemplated by this Section&#160;2.02, each
    Certificate shall be deemed at any time after the Effective Time
    to represent only the right to receive, upon such surrender, a
    certificate representing shares of Parent Common Stock into
    which the holders of shares of Company Common Stock were
    converted pursuant to Section&#160;2.01(b) and a check
    representing (1)&#160;the Cash Consideration and (2)&#160;cash
    in lieu of any fractional shares of Parent Common Stock as
    contemplated by Section&#160;2.02(e) and any dividends or other
    distributions pursuant to Section&#160;2.02(c).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<U>Treatment of Unexchanged Shares</U>.&#160;&#160;No
    dividends or other distributions declared or made with respect
    to Parent Common Stock with a record date after the Effective
    Time shall be paid to the holder of any unsurrendered
    Certificate with respect to the certificates representing shares
    of Parent Common Stock represented thereby that the holder would
    be entitled to upon surrender of such Certificate and no cash
    payment of the Cash Consideration or in lieu of fractional
    shares as contemplated by subsection&#160;(e) below shall be
    paid to any such holder until the holder of such Certificate
    shall surrender such Certificate in accordance with this
    Section&#160;2.02. Subject to the effect of applicable Laws,
    following surrender of any such Certificate, there shall be paid
    to the holder of the Certificates representing whole shares of
    Parent Common Stock issued in exchange therefor, without
    interest, (i)&#160;at the time of such surrender, the Cash
    Consideration and the amount of any cash payable in lieu of a
    fractional share of Parent Common Stock to which such holder is
    entitled pursuant to subsection&#160;(e) below and the amount of
    dividends or other distributions with a record date after the
    Effective Time previously paid with respect to such whole shares
    of Parent Common Stock, and (ii)&#160;at the appropriate payment
    date, the amount of dividends or other distributions with a
    record date after the Effective Time but prior to surrender and
    a payment date subsequent to surrender payable with respect to
    such whole
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    shares of Parent Common Stock. For purposes of determining
    quorums at meetings of stockholders of Parent and the
    stockholders of Parent entitled to notice of, and to vote at,
    meetings of stockholders, holders of unsurrendered Certificates
    shall be considered record holders of the shares of Parent
    Common Stock represented thereby.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;<U>No Further Ownership Rights in Company Common
    Stock</U>.&#160;&#160;All shares of Parent Common Stock issued
    upon the surrender for exchange of Certificates in accordance
    with the terms hereof and any cash paid pursuant to subsection
    (b), (c)&#160;or (e)&#160;of this Section&#160;2.02 shall be
    deemed to have been issued or paid in full satisfaction of all
    rights pertaining to the shares of Company Common Stock
    represented thereby. Notwithstanding the foregoing, the Survivor
    is obligated to pay any dividends or make any other
    distributions with a record date prior to the Effective Time
    which may have been declared or made by the Company on shares of
    Company Common Stock in accordance with the terms of this
    Agreement (to the extent permitted under Section&#160;5.01)
    prior to the date hereof and which remain unpaid at the
    Effective Time. From and after the Effective Time, there shall
    be no further registration of transfers on the stock transfer
    books of the Company of the shares of Company Common Stock which
    were outstanding immediately prior to the Effective Time. If,
    after the Effective Time, Certificates are presented to the
    Survivor or the Exchange Agent for any reason, they shall be
    canceled and exchanged as provided in this Section&#160;2.02.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;<U>No Fractional Shares</U>.&#160;&#160;No certificate
    or scrip representing fractional shares of Parent Common Stock
    shall be issued in the Merger or upon the surrender for exchange
    of Certificates, and such fractional share interests will not
    entitle the owner thereof to vote or to any other rights of a
    stockholder of Parent. Notwithstanding any other provision of
    this Agreement, each holder of shares of Company Common Stock
    converted pursuant to the Merger who would otherwise have been
    entitled to receive a fraction of a share of Parent Common Stock
    (after taking into account all Certificates delivered by such
    holder) shall receive, in lieu thereof, cash (without interest)
    in an amount equal to such fractional amount multiplied by the
    average of the last reported sales prices of Parent Common
    Stock, as reported on the New York Stock Exchange
    (&#147;NYSE&#148;) Composite Transactions Tape (as reported in
    <U>The Wall Street Journal</U> or, if not reported therein, in
    another authoritative source mutually selected by Parent and the
    Company), on each of the ten consecutive trading days
    immediately preceding the date of the Effective Time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;<U>Termination of Exchange Fund</U>.&#160;&#160;Any
    portion of the Exchange Fund which remains undistributed to the
    holders of Certificates for 180&#160;days after the Effective
    Time shall be delivered to Parent or otherwise on the
    instruction of the Survivor, and any holders of Certificates who
    have not previously complied with this Section&#160;2.02 shall
    thereafter look only to Parent for the certificates representing
    shares of Parent Common Stock, the Cash Consideration, any cash
    in lieu of fractional shares of Parent Common Stock and any
    dividends or distributions with respect to Parent Common Stock
    to which such holders are entitled pursuant to
    Sections&#160;2.01 and 2.02. Any portion of the Exchange Fund
    which remains undistributed to the holders of Certificates for
    five years after the Effective Time (or such earlier date
    immediately prior to such time as the Exchange Fund would
    otherwise escheat or become the property of any public official
    or government) shall, to the extent permitted by Law, become the
    property of Parent free and clear of any claims or interest of
    any holders of Certificates previously entitled thereto.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (g)&#160;<U>No Liability</U>.&#160;&#160;None of Parent, the
    Survivor, the Exchange Agent or any party hereto shall be liable
    to any former holder of shares of Company Common Stock for any
    portion of the Exchange Fund delivered to a public official
    pursuant to any applicable abandoned property, escheat or
    similar Law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (h)&#160;<U>Withholding Rights</U>.&#160;&#160;Each of the
    Exchange Agent, Parent and the Survivor shall be entitled to
    deduct and withhold from the consideration otherwise payable
    pursuant to this Agreement to any former holder of shares of
    Company Common Stock such amounts as it is required to deduct
    and withhold with respect to the making of such payment under
    the Code and the rules and regulations promulgated thereunder,
    or any provision of state, local or foreign Tax Law. To the
    extent that amounts are so withheld by the Exchange Agent,
    Parent or the Survivor, such withheld amounts shall be treated
    for all purposes of this Agreement as having
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    been paid to the holder of the shares of Company Common Stock in
    respect of which such deduction and withholding was made by the
    Exchange Agent, Parent or the Survivor.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;<U>Lost Certificates</U>.&#160;&#160;If any Certificate
    shall have been lost, stolen or destroyed, upon the making of an
    affidavit of that fact by the person claiming such Certificate
    to be lost, stolen or destroyed and, if required by Parent, the
    posting by such person of a bond in such reasonable amount as
    Parent may direct as indemnity against any claim that may be
    made against it on account of the alleged loss, theft or
    destruction of such Certificate, the Exchange Agent will issue
    in exchange for such lost, stolen or destroyed Certificate the
    certificate representing the shares of Parent Common Stock, the
    Cash Consideration, any cash in lieu of fractional shares, and
    unpaid dividends and distributions on the certificate
    deliverable in respect thereof pursuant to this Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;2.03&#160;&#160;<U>Dissenting
    Shares</U>.&#160;&#160;Notwithstanding anything in this
    Agreement to the contrary, no share of Company Common Stock, the
    holder of which shall not have voted in favor of or consented in
    writing to the Merger and shall have properly complied with the
    provisions of Section&#160;262 of the DGCL as to appraisal
    rights (a &#147;Dissenting Share&#148;), shall be deemed
    converted into and to represent the right to receive Merger
    Consideration hereunder; and the holders of Dissenting Shares,
    if any, shall be entitled to such rights (but only such rights)
    as are granted by Section&#160;262 of the DGCL; <I>provided,
    however,</I> that if any holder of Dissenting Shares shall fail
    to perfect or otherwise shall waive, withdraw or lose the right
    to appraisal under Section&#160;262 of the DGCL or a court of
    competent jurisdiction shall determine that such holder is not
    entitled to the relief provided by Section&#160;262 of the DGCL,
    then such holder or holders (as the case may be) shall forfeit
    such rights as are granted by Section&#160;262 and each such
    Dissenting Share shall thereupon be deemed to have been
    converted into, as of the Effective Time, the right to receive
    the Merger Consideration, without any interest thereon, upon
    surrender, in the manner provided in Section&#160;2.02, of the
    certificate or certificates that formerly evidenced such shares
    of Company Common Stock. The Company shall give Parent prompt
    notice of any written demands for appraisal of any Company
    Common Stock and the opportunity to participate in all
    negotiations and proceedings with respect to demands for
    appraisal under the DGCL. The Company shall not, except with the
    prior written consent of Parent, voluntarily make any payment
    with respect to any demands for appraisal of Company Common
    Stock, or offer to settle or settle any such demands. Any amount
    payable to any holder of Dissenting Shares exercising appraisal
    rights shall be paid in accordance with the DGCL solely by the
    Survivor from its own funds.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;2.04&#160;&#160;<U>Fixed
    Consideration</U>.&#160;&#160;Notwithstanding any provision of
    this Agreement to the contrary, the parties agree that .4498 of
    a share of Parent Common Stock represents greater than 40% of
    the total value of the Merger Consideration per share of Company
    Common Stock determined as of the date of this Agreement, based
    on the closing sales price of Parent Common Stock on the NYSE
    Composite Transactions Tape (as reported by <U>The Wall Street
    Journal</U> or, if not so reported therein, in another
    authoritative source mutually selected by Parent and the
    Company) for the last trading day preceding the date of this
    Agreement.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;III.<BR>
    REPRESENTATIONS AND WARRANTIES OF THE COMPANY</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company represents and warrants to Parent and Merger Sub
    that the statements contained in this Article&#160;III are true
    and correct except as set forth herein and in the disclosure
    letter delivered by the Company to Parent and Merger Sub on or
    before the date of this Agreement (the &#147;Company Disclosure
    Letter&#148;). The Company Disclosure Letter shall be arranged
    in paragraphs corresponding to the numbered and lettered
    paragraphs contained in this Article&#160;III and the disclosure
    in any paragraph shall qualify other paragraphs in this
    Article&#160;III only to the extent that it is reasonably
    apparent from a reading of such disclosure that it also
    qualifies or applies to such other paragraphs.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.01&#160;&#160;<U>Organization of the
    Company</U>.&#160;&#160;Each of the Company and its Subsidiaries
    is a corporation or unincorporated entity duly organized,
    validly existing and in good standing under the Laws of the
    jurisdiction of its incorporation or organization, has all
    requisite corporate or entity power to own, lease and operate
    its property and to carry on its business as now being conducted
    and as proposed to be conducted, and is duly qualified to do
    business and is in good standing as a foreign corporation or
    organization in each jurisdiction in which the failure to be so
    qualified would reasonably be expected to have a Company
    Material Adverse Effect. Except as set forth in Company SEC
    Reports filed prior to the date hereof, neither the Company nor
    any of its Subsidiaries directly or
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    indirectly owns any equity or similar interest in, or any
    interest convertible into or exchangeable or exercisable for,
    any corporation, partnership, joint venture or other business
    association or entity, excluding securities in any publicly
    traded company held for investment by the Company or its
    Subsidiaries and comprising less than five percent (5%) of the
    outstanding stock of such company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.02&#160;&#160;<U>Company Capital Structure</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The authorized capital stock of the Company consists of
    300,000,000&#160;shares of Company Common Stock and
    10,000,000&#160;shares of Preferred Stock, par value $0.01 per
    share (&#147;Company Preferred Stock&#148;). As of
    December&#160;12, 2007, (i)&#160;125,941,284&#160;shares of
    Company Common Stock were issued and outstanding, of which
    783,656 were subject to vesting or other forfeiture restrictions
    or repurchase conditions (such shares, together with any similar
    shares issued after December&#160;12, 2007, the &#147;Company
    Restricted Shares&#148;), (ii)&#160;no shares of Company
    Preferred Stock were issued and outstanding,
    (iii)&#160;10,194,829&#160;shares of Company Common Stock and no
    shares of Company Preferred Stock were held in the treasury of
    the Company or by Subsidiaries of the Company, (iv)&#160;a
    sufficient number of shares of Company Common Stock were
    reserved and available for issuance pursuant to the
    Company&#146;s 2006 Long-Term Incentive Plan, 2001 Stock Option
    and Restricted Stock Plan, 2000 Employee Stock Option and
    Restricted Stock Plan, 2000 Non-Employee Director Stock Option
    Plan and Employee Stock Purchase Plan (the
    &#147;<U>ESPP</U>&#148;) (such plans, collectively, the
    &#147;Company Stock Plans&#148;), of which
    (A)&#160;2,223,888&#160;shares of Company Common Stock were
    subject to outstanding options (other than rights under the
    ESPP) to acquire shares of Company Common Stock from the Company
    (such options, whether granted pursuant to a Company Stock Plan
    and the 32,842&#160;shares of Company Common Stock referred to
    in clause&#160;(v) below, together with any similar options
    granted after December&#160;12, the &#147;Company Stock
    Options&#148;) and (B)&#160;137,150&#160;shares of Company
    Common Stock were subject to outstanding purchase rights under
    the ESPP (determined by dividing the value of all accumulated
    payroll deductions under the ESPP from January&#160;1, 2007
    through the last payroll period that ended immediately prior to
    December&#160;12, 2007 by $31.96), (v)&#160;32,842&#160;shares
    of Company Common Stock were subject to outstanding Company
    Stock Options that were not granted under a Company Stock Plan
    and (vi)&#160;624,761 Company Stock Equivalents were outstanding
    under the Company&#146;s Executive Deferred Compensation Plan,
    Foreign Executive Deferred Compensation Plan and Deferred
    Compensation Plan for Non-Employee Directors (such plans,
    collectively, the &#147;Deferred Compensation Plans&#148;). For
    purposes of this Agreement, a &#147;Company Stock
    Equivalent&#148; shall mean a stock equivalent with respect to
    one share of Company Common Stock granted by the Company under a
    Deferred Compensation Plan. Except for (x)&#160;the issuance of
    shares of Company Common Stock in connection with the exercise
    of Company Stock Options, (y)&#160;the issuance of Company Stock
    Equivalents pursuant to the Deferred Compensation Plans and
    (z)&#160;the grant of purchase rights pursuant to the ESPP, no
    change in such capitalization has occurred between
    December&#160;12, 2007 and the date of this Agreement. All
    outstanding shares of Company Common Stock are duly authorized,
    validly issued, fully paid and nonassessable. All shares of
    Company Common Stock subject to issuance as specified above will
    be duly authorized and, upon issuance on the terms and
    conditions specified in the instruments pursuant to which they
    are issuable, will be validly issued, fully paid and
    nonassessable. There are no obligations, contingent or
    otherwise, of the Company or any of its Subsidiaries to
    repurchase, redeem or otherwise acquire any shares of Company
    Common Stock or the capital stock of any Subsidiary or to
    provide funds to or make any material investment (in the form of
    a loan, capital contribution or otherwise) in any such
    Subsidiary or any other entity other than guarantees of
    obligations of Subsidiaries entered into in the ordinary course
    of business and other than pursuant to (x)&#160;the
    Company&#146;s 401(k) Savings Plan (the &#147;Company 401(k)
    Plan&#148;), (y)&#160;the Company Stock Plans and (z)&#160;the
    Deferred Compensation Plans. The Company has not repurchased any
    outstanding shares of Company Common Stock since
    December&#160;12, 2007, other than pursuant to the Company
    401(k) Plan or the Deferred Compensation Plans or in connection
    with the exercise of Company Stock Options or the withholding of
    shares of Company Common Stock to satisfy Tax withholding
    obligations with respect to awards under the Company Stock
    Plans. All of the outstanding shares of capital stock of each of
    the Company&#146;s Subsidiaries are duly authorized, validly
    issued, fully paid and nonassessable and all such shares (other
    than directors&#146; qualifying shares in the case of foreign
    Subsidiaries) are owned by the Company or another Subsidiary of
    the Company free and clear of all Liens, agreements or
    limitations on the Company&#146;s voting rights.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;As of the date hereof, except as set forth in this
    Section&#160;3.02 or as reserved for future grants of securities
    under the Company Stock Plans, there are no equity securities of
    any class of the Company or any securities exchangeable into or
    exercisable for such equity securities, issued, reserved for
    issuance or outstanding. As of the
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    date hereof, except as set forth in this Section&#160;3.02 and
    other than obligations pursuant to the Company 401(k) Plan,
    there are no options, warrants, equity securities, calls,
    rights, commitments or agreements of any character to which the
    Company or any of its Subsidiaries is a party or by which it is
    bound obligating the Company or any of its Subsidiaries to
    issue, deliver or sell, or cause to be issued, delivered or
    sold, additional shares of equity securities of any class of the
    Company or any of its Subsidiaries, or any securities
    exchangeable into or exercisable for such equity securities, or
    obligating the Company or any of its Subsidiaries to grant,
    extend, accelerate the vesting of or enter into any such option,
    warrant, equity security, call, right, commitment or agreement.
    To the best knowledge of the Company, there are no voting
    trusts, proxies or other voting agreements or understandings
    with respect to the shares of capital stock of the Company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.03&#160;&#160;<U>Authority; No Conflict; Required
    Filings and Consents</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The Company has all requisite corporate power and
    authority to enter into this Agreement and to consummate the
    transactions contemplated by this Agreement. The execution and
    delivery of this Agreement and the consummation of the
    transactions contemplated by this Agreement by the Company have
    been duly authorized by all necessary corporate action on the
    part of the Company, subject only to the adoption of this
    Agreement by the Company&#146;s stockholders under the DGCL.
    This Agreement has been duly executed and delivered by the
    Company and constitutes the valid and binding obligation of the
    Company, enforceable in accordance with its terms, subject to
    bankruptcy, insolvency, fraudulent transfer, reorganization,
    moratorium and similar Laws of general applicability relating to
    or affecting creditors&#146; rights and to general equity
    principles (the &#147;Bankruptcy and Equity Exception&#148;). On
    or prior to the date hereof, the Board of Directors of the
    Company has unanimously adopted resolutions that have
    (i)&#160;approved and declared advisable this Agreement and the
    Merger, (ii)&#160;directed that this Agreement be submitted to
    the Company&#146;s stockholders for adoption at a meeting of
    such stockholders (the &#147;Company Stockholders&#146;
    Meeting&#148;) and (iii)&#160;recommended (the &#147;Company
    Recommendation&#148;) that the stockholders of the Company adopt
    this Agreement, and such resolutions, as of the date of this
    Agreement, have not been subsequently rescinded, modified or
    withdrawn in any way. The Company stockholder vote required for
    the adoption of this Agreement is the affirmative vote of a
    majority of the shares of Company Common Stock outstanding on
    the record date for the Company Stockholders&#146; Meeting (the
    &#147;Company Stockholder Approval&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;The execution and delivery of this Agreement by the
    Company does not, and the consummation of the transactions
    contemplated hereby will not, (i)&#160;conflict with, or result
    in any violation or breach of, any provision of the certificate
    of incorporation or by-laws of the Company, (ii)&#160;result in
    any violation or breach of, or constitute (with or without
    notice or lapse of time, or both) a default (or give rise to a
    right of termination, cancellation or acceleration of any
    obligation, give rise to any obligation to make an offer to
    purchase any debt instrument or give rise to any loss of any
    material benefit) under, or require a consent or waiver under,
    any of the terms, conditions or provisions of any note, bond,
    mortgage, indenture, lease, contract or other agreement,
    instrument or obligation to which the Company or any of its
    Subsidiaries is a party or by which any of them or any of their
    properties or assets may be bound, or (iii)&#160;conflict with
    or violate any permit, concession, franchise, license, judgment,
    order, decree or Law applicable to the Company or any of its
    Subsidiaries or any of its or their properties or assets, except
    in the case of (ii)&#160;and (iii)&#160;for any such conflicts,
    breaches, violations, defaults, terminations, cancellations,
    obligations, losses or accelerations which are not, individually
    or in the aggregate, reasonably likely to have a Company
    Material Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;No consent, approval, order or authorization of, or
    registration, declaration or filing with, any court,
    administrative agency or commission or other governmental
    authority or instrumentality (&#147;Governmental Entity&#148;)
    is required by or with respect to the Company or any of its
    Subsidiaries in connection with the execution and delivery of
    this Agreement or the consummation of the transactions
    contemplated hereby, except for (i)&#160;the filing of the
    pre-merger notification report under the Hart Scott Rodino
    Antitrust Improvements Act of 1976, as amended (&#147;HSR
    Act&#148;), (ii)&#160;the filing of the Certificate of Merger
    with the Delaware Secretary of State, (iii)&#160;the filing of
    the Proxy Statement with the Securities and Exchange Commission
    (the &#147;SEC&#148;) in accordance with the Securities Exchange
    Act of 1934, as amended (the &#147;Exchange Act&#148;),
    (iv)&#160;such consents, approvals, orders, authorizations,
    registrations, declarations and filings as may be required under
    applicable state securities Laws and the Laws of any foreign
    country and the European Union, and (v)&#160;such other
    consents, authorizations, filings, approvals and registrations
    which, if not obtained or made, would not be reasonably likely
    to have a Company Material Adverse Effect.
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.04&#160;&#160;<U>SEC Filings; Financial
    Statements</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The Company has filed and made available to Parent all
    forms, reports and documents required to be filed by the Company
    with the SEC since January&#160;1, 2004 (collectively, the
    &#147;Company SEC Reports&#148;). Each of the Company SEC
    Reports (i)&#160;at the time filed, complied in all material
    respects with the applicable requirements of the Securities Act
    of 1933, as amended (the &#147;Securities Act&#148;), and the
    Exchange Act, as the case may be, and (ii)&#160;did not at the
    time it was filed (or if amended or superseded by a filing prior
    to the date of this Agreement, then on the date of such filing)
    contain any untrue statement of a material fact or omit to state
    a material fact required to be stated in such Company SEC Report
    or necessary in order to make the statements in such Company SEC
    Report, in the light of the circumstances under which they were
    made, not misleading. None of the Company&#146;s Subsidiaries is
    required to file any forms, reports or other documents with the
    SEC.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Each of the consolidated financial statements
    (including, in each case, any related notes) contained in the
    Company SEC Reports complied as to form in all material respects
    with the applicable published rules and regulations of the SEC
    with respect thereto, was prepared in accordance with generally
    accepted accounting principles applied on a consistent basis
    throughout the periods involved (except as may be indicated in
    the notes to such financial statements or, in the case of
    unaudited statements, as permitted by
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    of the SEC) and fairly presented in all material respects the
    consolidated financial position of the Company and its
    Subsidiaries as of the dates and the consolidated results of
    their operations and cash flows for the periods indicated,
    except that the unaudited interim financial statements were or
    are subject to normal and recurring year end adjustments which
    were not or are not expected to be material in amount. The
    audited balance sheet of the Company as of December&#160;31,
    2006 is referred to herein as the &#147;Company Balance
    Sheet.&#148; For each period covered by the Company SEC Reports,
    the books and records of the Company and its Subsidiaries have
    been, and are being, maintained, in all material respects, in
    accordance with generally accepted accounting principles,
    consistently applied, and all other legal and accounting
    requirements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.05&#160;&#160;<U>No Undisclosed
    Liabilities</U>.&#160;&#160;Except as disclosed in the Company
    SEC Reports filed prior to the date hereof, and except for
    normal or recurring Liabilities incurred since December&#160;31,
    2006 in the ordinary course of business consistent with past
    practices, the Company and its Subsidiaries do not have any
    Liabilities, either accrued, contingent or otherwise (whether or
    not required to be reflected in financial statements in
    accordance with generally accepted accounting principles), and
    whether due or to become due, which individually or in the
    aggregate are reasonably likely to have a Company Material
    Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.06&#160;&#160;<U>Absence of Certain Changes or
    Events</U>.&#160;&#160;Except as disclosed in the Company SEC
    Reports filed prior to the date hereof, since the date of the
    Company Balance Sheet, the Company and its Subsidiaries have
    conducted their businesses only in the ordinary course and in a
    manner consistent with past practice. Since the date of the
    Company Balance Sheet, there has not been (i)&#160;any material
    adverse change in the financial condition, results of
    operations, business or properties of the Company and its
    Subsidiaries, taken as a whole, or any development or
    combination of developments of which the management of the
    Company is aware that, individually or in the aggregate, has
    had, or is reasonably likely to have, a Company Material Adverse
    Effect, (ii)&#160;any damage, destruction or loss (whether or
    not covered by insurance) with respect to the Company or any of
    its Subsidiaries having a Company Material Adverse Effect,
    (iii)&#160;except as disclosed in the Company SEC Reports filed
    prior to the date hereof or as required by GAAP or applicable
    Law, any material change by the Company in its accounting
    methods, principles or practices to which Parent has not
    previously consented in writing, (iv)&#160;except as disclosed
    in the Company SEC Reports filed prior to the date hereof, any
    revaluation by the Company of any of its assets having a Company
    Material Adverse Effect, or (v)&#160;except as disclosed in the
    Company SEC Reports filed prior to the date hereof, any material
    elections or changes in elections with respect to Taxes by the
    Company or any Subsidiary of the Company or settlement or
    compromise by the Company or any Subsidiary of the Company of
    any material Tax Liability or refund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.07&#160;&#160;<U>Taxes</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The Company and each of its Subsidiaries and any
    affiliated, combined or unitary group of which the Company or
    any of its Subsidiaries is or was a member have timely filed
    with the appropriate Tax authorities all Tax Returns required to
    be filed by them (taking into account extensions), except for
    any such returns which are not reasonably likely, individually
    or in the aggregate, to have a Company Material Adverse Effect.
    All such Tax
</DIV>

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    A-8
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Returns are true, complete and correct in all respects, except
    for any such omissions or errors which are not reasonably
    likely, individually or in the aggregate, to have a Company
    Material Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;The Company and each of its Subsidiaries have timely
    paid (or the Company has paid on its Subsidiaries&#146; behalf)
    all Taxes due and payable on all Tax Returns described in
    Section&#160;3.07(a) herein or otherwise due by the Company and
    each of its Subsidiaries, except to the extent that such taxes
    otherwise due are not reasonable likely, individually or in the
    aggregate, to have a Company Material Adverse Effect. The
    Company&#146;s most recent consolidated financial statements
    reflect an adequate reserve for all Taxes (excluding any reserve
    for deferred Taxes established to reflect differences between
    book and Tax income) payable by the Company and its Subsidiaries
    for all taxable periods and portions thereof through the date of
    such financial statements, except to the extent that any such
    Taxes are not reasonably likely, individually or in the
    aggregate, to have a Company Material Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Neither the Internal Revenue Service (the
    &#147;IRS&#148;) nor any other Tax authority has asserted any
    claim for Taxes, or to the knowledge of the executive officers
    of the Company, is threatening to assert any claims for Taxes,
    which claims, individually or in the aggregate, are reasonably
    likely to have a Company Material Adverse Effect. No audits or
    other administrative proceedings or court proceedings are
    presently pending with regard to any Taxes for which the Company
    or any of its Subsidiaries would be liable (other than those
    which are not reasonably likely, individually or in the
    aggregate, to have a Company Material Adverse Effect), and no
    deficiencies for any Taxes (other than those which are not
    reasonably likely, individually or in the aggregate, to have a
    Company Material Adverse Effect) have been proposed, asserted or
    assessed against the Company or any of its Subsidiaries that
    have not been fully paid or adequately provided for in the
    appropriate financial statements of the Company and its
    Subsidiaries, no requests for waivers of the time to assess any
    Taxes are pending, and, except as disclosed in the Company
    Disclosure Letter, none of the Company or any of its
    Subsidiaries has waived any statute of limitations in respect of
    Taxes or agreed to any extension of time with respect to a Tax
    assessment or deficiency.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;The Company and each of its Subsidiaries have complied
    in all respects with all applicable Laws relating to the
    withholding of Taxes and have withheld or collected and paid
    over to the appropriate governmental authorities (or are
    properly holding for such payment) all Taxes required by Law to
    be withheld or collected.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;There are no Liens for Taxes upon the assets of the
    Company or any of its Subsidiaries (other than Liens for current
    Taxes that are not yet due and payable or Liens for Taxes that
    are being contested in good faith by appropriate proceedings and
    for which adequate reserves have been provided in the
    Company&#146;s most recent consolidated financial statements),
    except for Liens which are not reasonably likely, individually
    or in the aggregate, to have a Company Material Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;Neither the Company nor any of its Subsidiaries has
    liability for the Taxes of any person other than the Company and
    its Subsidiaries (i)&#160;under Treasury Regulations
    <FONT style="white-space: nowrap">Section&#160;1.1502-6</FONT>
    (or any similar provision of state, local or foreign law),
    (ii)&#160;as a transferee or successor, (iii)&#160;by contract,
    or (iv)&#160;otherwise, except, in each case, where such
    liabilities are not reasonably likely, individually or in the
    aggregate, to have a Company Material Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (g)&#160;Neither the Company nor any of its Subsidiaries is a
    party to, is bound by or has any obligation under any Tax
    sharing, Tax allocation or Tax indemnity agreement or similar
    arrangements, other than with respect to any such agreement or
    arrangement among the Company and any of its Subsidiaries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (h)&#160;Neither the Company nor any of its Subsidiaries has
    distributed the stock of any corporation in a transaction
    satisfying the requirements of Section&#160;355 of the Code (or
    any similar provision of state or local Law) during the two-year
    period ending on the date of this Agreement, and neither the
    stock of the Company nor the stock of any of its Subsidiaries
    has been distributed in a transaction satisfying the
    requirements of Section&#160;355 of the Code during the two-year
    period ending on the date of this Agreement and no such
    distribution otherwise constitutes part of a &#147;plan&#148; or
    &#147;series of related transactions&#148; within the meaning of
    Section&#160;355(e) that includes the Merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;Neither the Company nor any of its Subsidiaries has
    executed or entered into with the IRS or any Taxing authority a
    closing agreement pursuant to Section&#160;7121 of the Code or
    any similar provision of state or local income Tax Law that
    relates to the Company or any of its Subsidiaries.
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.08&#160;&#160;<U>Properties</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The Company has provided to Parent a true and complete
    list of all real property leased by the Company or its
    Subsidiaries pursuant to material leases (collectively
    &#147;Company Material Leases&#148;). The Company is not in
    default under any such Company Material Leases, except where the
    existence of such defaults, individually or in the aggregate, is
    not reasonably likely to have a Company Material Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;The Company has provided to Parent a true and complete
    list of all real property that the Company or any of its
    Subsidiaries owns. With respect to each such item of real
    property, except for such matters that, individually or in the
    aggregate, are not reasonably likely to have a Company Material
    Adverse Effect: (a)&#160;the Company or the identified
    Subsidiary has good and clear record and marketable title to
    such property, free and clear of any security interest,
    easement, covenant or other restriction, except for security
    interests, easements, covenants and other restrictions which do
    not materially impair the current uses or occupancy of such
    property; and (b)&#160;the improvements constructed on such
    property are in good condition, and all mechanical and utility
    systems servicing such improvements are in good condition, free
    in each case of material defects.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Each of the Company and its Subsidiaries has good and
    marketable title to all of its personal properties and assets
    except for such as are no longer used or useful in the conduct
    of its business or as have been disposed of in the ordinary
    course of business and except for defects in title that,
    individually or in the aggregate, are not reasonably likely to
    have a Company Material Adverse Effect. All major items of
    equipment owned by the Company or any of its Subsidiaries are,
    in the aggregate, in a state of repair so as to be adequate in
    all material respects for reasonably prudent operations in the
    areas in which they are used or operated, or are to be used or
    operated, except, individually or in the aggregate, as would not
    be reasonably likely to have a Company Material Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.09&#160;&#160;<U>Intellectual
    Property</U>.&#160;&#160;The Company and its Subsidiaries own,
    or are licensed or otherwise possesses legally enforceable
    rights to use, all patents, trademarks, trade names, service
    marks, copyrights, and any applications for such trademarks,
    trade names, service marks and copyrights, know how, computer
    software programs or applications, databases and tangible or
    intangible proprietary information or material (collectively,
    the &#147;Company Intellectual Property&#148;) that are
    necessary to conduct the business of the Company and its
    Subsidiaries as currently conducted, subject to such exceptions
    that would not be reasonably likely to have a Company Material
    Adverse Effect. Subject to such exceptions that would not be
    reasonably likely, individually or in the aggregate, to have a
    Company Material Adverse Effect, (i)&#160;none of the Company
    Intellectual Property is the subject of any pending or
    threatened action, suit, claim, investigation, arbitration or
    other proceeding, (ii)&#160;no person, entity or Governmental
    Entity has given written notice to the Company or its
    Subsidiaries claiming (A)&#160;that any of the Company
    Intellectual Property is invalid, (B)&#160;that the use of any
    the Company Intellectual Property is infringing or has infringed
    any domestic or foreign patent, trademark, service mark, trade
    name, or copyright, or (C)&#160;that the Company or its
    Subsidiaries has misappropriated or improperly used or disclosed
    any trade secret, confidential information or know-how, and
    (iii)&#160;the Company has no knowledge of any third party
    rights or conduct that infringes or conflicts with the Company
    Intellectual Property.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.10&#160;&#160;<U>Agreements and Contracts</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;As of the date hereof, there is no contract, agreement
    or understanding that is material to the business, properties,
    assets, financial condition or results of operations of the
    Company and its Subsidiaries, taken as a whole, that is required
    to be filed as an exhibit to any Company SEC Report filed with
    the SEC subsequent to December&#160;31, 2006 that is not filed
    as required by the Securities Act or the Exchange Act, as the
    case may be (any such contract, agreement or understanding
    whether or not so filed, a &#147;Company Material
    Contract&#148;). Except as would not individually or in the
    aggregate have a Company Material Adverse Effect, each Company
    Material Contract is a valid and binding obligation of the
    Company or one of its Subsidiaries and is in full force and
    effect and enforceable against the Company or one of its
    Subsidiaries and, to the knowledge of the Company, the other
    party or parties thereto, in each case in accordance with its
    terms, other than any Company Material Contract which is by its
    terms no longer in force or effect and except as enforceability
    may be limited by bankruptcy, insolvency, moratorium or other
    similar laws affecting or relating to the enforcement of
    creditors&#146; rights generally and is subject to general
    principles of equity. The Company is not in violation or breach
    of or in default under any Company Material Contract, nor to the
    Company&#146;s knowledge is any other party to any such Company
    Material Contract, except to the
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    extent any such violation, breach or default would not
    individually or in the aggregate have a Company Material Adverse
    Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Except for documents filed or listed as exhibits to the
    Company SEC Reports filed with the SEC subsequent to
    December&#160;31, 2006 and prior to the date hereof, as of the
    date hereof, neither the Company nor any of its Subsidiaries is
    a party to or bound by any (a)&#160;contract, agreement or
    arrangement (including any lease of real property)
    (i)&#160;materially restricting the ability of the Company or
    any of its Subsidiaries (or after the Merger, Parent or any of
    its Subsidiaries) to compete in or conduct any line of business
    or to engage in business in any significant geographic area,
    (ii)&#160;relating to indebtedness for borrowed money providing
    for payment or repayment in excess of $25.0&#160;million,
    (iii)&#160;relating to any material joint venture, partnership,
    strategic alliance or similar arrangement, (iv)&#160;requiring
    the Company or any of its Subsidiaries to register for resale
    under the Securities Act any securities of the Company or any of
    its Subsidiaries, (v)&#160;relating to the disposition or
    acquisition of material assets not in the ordinary course of
    business, or (vi)&#160;providing for performance guarantees or
    contingent payments by the Company or any of its Subsidiaries
    (excluding such guarantees or payments by the Company or its
    Subsidiaries to wholly owned Subsidiaries of the Company), in
    each case involving more than $15.0&#160;million over the term
    of the relevant contract, or (b)&#160;financial derivatives
    master agreements, confirmation, or futures account opening
    agreements
    <FONT style="white-space: nowrap">and/or</FONT>
    brokerage statements evidencing financial hedging or other
    trading activities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.11&#160;&#160;<U>Litigation</U>.&#160;&#160;There
    is no action, suit or proceeding, claim, arbitration or
    investigation against the Company or any of its Subsidiaries
    pending or as to which the Company or any of its Subsidiaries
    has received any written notice of assertion, which,
    individually or in the aggregate, is reasonably likely to have a
    Company Material Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.12&#160;&#160;<U>Environmental
    Matters</U>.&#160;&#160;Except for such matters that,
    individually or in the aggregate, are not reasonably likely to
    have a Company Material Adverse Effect: (i)&#160;the Company and
    its Subsidiaries comply, and within all applicable statute of
    limitation periods have complied, with all applicable
    Environmental Laws; (ii)&#160;neither the Company nor its
    Subsidiaries are subject to liability for any Hazardous
    Substance disposal or contamination on any third party property;
    (iii)&#160;neither the Company nor any of its Subsidiaries are
    subject to liability for any release of, or any exposure of any
    person or property to, any Hazardous Substance;
    (iv)&#160;neither the Company nor any of its Subsidiaries has
    received any notice, demand, letter, claim or request for
    information alleging that the Company or any of its Subsidiaries
    may be in violation of or liable under any Environmental Law;
    (v)&#160;neither the Company nor any of its Subsidiaries is
    subject to any orders, decrees or injunctions issued by, or
    other arrangements with, any Governmental Entity or is subject
    to any indemnity or other agreement with any third party
    relating to liability under any Environmental Law or relating to
    Hazardous Substances; (vi)&#160;there are no circumstances or
    conditions involving the Company or any of its Subsidiaries that
    could reasonably be expected to cause the Company or any of its
    Subsidiaries to become subject to any claims, liability,
    investigations or costs, or to restrictions on the ownership,
    use or transfer of any property of the Company or any of its
    Subsidiaries, pursuant to any Environmental Law; and
    (vii)&#160;the Company and its Subsidiaries have all of the
    Environmental Permits necessary for the conduct and operation of
    the business as now being conducted, and all such permits are in
    good standing.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.13&#160;&#160;<U>Employee Benefit Plans</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Section&#160;3.13 of the Company Disclosure Letter sets
    forth a list, as of the date hereof, of all material employee
    benefit plans (as defined in Section&#160;3(3) of the Employee
    Retirement Income Security Act of 1974, as amended
    (&#147;ERISA&#148;)) and all material bonus, stock option, stock
    purchase, incentive, deferred compensation, supplemental
    retirement, severance and other similar employee benefit plans,
    programs and agreements, and all material unexpired employment,
    individual consulting and severance agreements, written or
    otherwise, for the benefit of, or relating to, any current or
    former employee individual consultant or director of the Company
    or any Subsidiary of the Company or any trade or business
    (whether or not incorporated) which is a member of a group that
    includes, or which is under common control with, the Company or
    any Subsidiary of the Company, within the meaning of
    Section&#160;414(b), (c), (m)&#160;or (o)&#160;of the Code, and
    all other material employee benefit plans under which the
    Company or any Subsidiary of the Company has or could reasonably
    be expected to have any liability or obligation, including any
    foreign plans, other than (i)&#160;any &#147;multiemployer
    plan&#148; (within the meaning of Section&#160;3(37) of ERISA)
    or (B)&#160;any plan, program, agreement or arrangement mandated
    by applicable Law (such plans,
</DIV>

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    <BR>
    A-11
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    together with any plan, program, agreement or arrangement
    entered into or established after the date hereof, the
    &#147;Company Employee Plans&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;With respect to each Company Employee Plan, the Company
    has made available to Parent (if applicable), a true and correct
    copy of (i)&#160;the most recent annual report
    (Form&#160;5500)&#160;filed with the IRS, (ii)&#160;such Company
    Employee Plan (or, if unwritten, a written description of the
    material terms thereof), (iii)&#160;each trust agreement and
    group annuity contract, if any, relating to such Company
    Employee Plan, (iv)&#160;the most recent actuarial report or
    valuation relating to such Company Employee Plan, and
    (v)&#160;the most recent summary plan description (and any
    summaries of material modifications) relating to such Company
    Employee Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;With respect to the Company Employee Plans,
    individually and in the aggregate, no event has occurred, and,
    to the knowledge of the Company, there exists no condition or
    set of circumstances, in connection with which the Company or
    any Subsidiary of the Company could be subject to any liability
    that is reasonably likely to have a Company Material Adverse
    Effect under ERISA, the Code or any other applicable Law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;With respect to the Company Employee Plans,
    individually and in the aggregate, there are no funded benefit
    obligations for which contributions have not been made or
    properly accrued and there are no unfunded benefit obligations
    which have not been accounted for by reserves, or otherwise
    properly reflected in accordance with generally accepted
    accounting principles, on the financial statements of the
    Company, which obligations, in either case, are reasonably
    likely to have a Company Material Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;Except as disclosed in Company SEC Reports filed prior
    to the date of this Agreement, neither the Company nor any of
    its Subsidiaries is a party to any oral or written
    (i)&#160;agreement with any officer or other employee of the
    Company or any of its Subsidiaries, the benefits of which are
    contingent, or the terms of which are materially altered, upon
    the occurrence of a transaction involving the Company of the
    nature contemplated by this Agreement, or (ii)&#160;agreement or
    plan, including any stock option plan, stock appreciation right
    plan, phantom stock plan, restricted stock plan or stock
    purchase plan or incentive plan, any of the benefits of which
    will be increased, or the vesting of the benefits of which will
    be accelerated, by the occurrence of any of the transactions
    contemplated by this Agreement or the value of any of the
    benefits of which will be calculated on the basis of any of the
    transactions contemplated by this Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;Section&#160;3.13(f) of the Company Disclosure Letter
    contains a true and complete schedule, as of the date of this
    Agreement, of all benefits provided to, and all outstanding
    awards held by, officers or directors, or employees in the
    aggregate of the Company, including Company Stock Options and
    Company Restricted Shares, that are not disclosed in the Company
    SEC Reports and that will increase in value (other than as a
    result of changes in the trading value of the Parent Common
    Stock or the Company Common Stock), or accelerate in vesting or
    time of payment, as a result of the Merger or any of the other
    transactions contemplated in this Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (g)&#160;Except (i)&#160;as set forth in Section&#160;3.13(g) of
    the Company Disclosure Letter, (ii)&#160;to comply with
    Section&#160;409A of the Code or (iii)&#160;in the ordinary
    course of business consistent with past practice (and not in
    connection with, or in anticipation of or otherwise related to,
    the Merger and the transactions contemplated hereby), since
    January&#160;1, 2007, neither the Company nor any Subsidiary has
    entered into any new, or modified or amended any existing
    employment agreement or Company Employee Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (h)&#160;The treatment of Company Stock Options as set forth in
    Section&#160;6.10(a) will not require the consent of any holder
    of any such Company Stock Option.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;Neither the Company nor any of its Subsidiaries has,
    during the six years prior to the date hereof, maintained or
    contributed to any plan that is: (i)&#160;covered by
    Title&#160;IV of ERISA; (ii)&#160;subject to the minimum funding
    requirements of Section&#160;412 of the Code; (iii)&#160;a
    &#147;multiemployer plan&#148; as defined in Section&#160;3(37)
    of ERISA; (iv)&#160;subject to Section&#160;4063 or 4064 of
    ERISA; or (v)&#160;a multiple employer plan as defined in
    Section&#160;413(c) of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (j)&#160;Neither the Company nor any of its Subsidiaries
    maintains or contributes to any plan that is funded by a
    voluntary employees&#146; beneficiary association within the
    meaning of Code Section&#160;501(c)(9).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (k)&#160;After the date hereof, the Company will provide a good
    faith description (including identification of the recipient) of
    the estimated amount paid or payable (whether in cash, in
    property, or in the form of benefits,
</DIV>

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    <BR>
    A-12
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    accelerated cash, property, or benefits, or otherwise) in
    connection with the transactions contemplated hereby (either
    solely as a result thereof or as a result of such transactions
    in conjunction with any other event) that could be an
    &#147;excess parachute payment&#148; within the meaning of
    Section&#160;280G of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (l)&#160;Except for the Grant Prideco, Inc. 401(k) Savings Plan
    and the Reed Hourly Thrift Plan, no Company Employee Plan holds
    any &#147;qualifying employer securities&#148; or
    &#147;qualifying employer real estate&#148;.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.14&#160;&#160;<U>Compliance With Laws</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The Company and each of its Subsidiaries has complied
    with, is not in violation of, and has not received any notices
    of violation with respect to, any federal, state or local Law
    with respect to the conduct of its business, or the ownership or
    operation of its business, except for failures to comply or
    violations which, individually or in the aggregate, have not had
    and are not reasonably likely to have a Company Material Adverse
    Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Except as would not be material to the Company,
    (i)&#160;no funds, assets or properties of the Company or any of
    its Subsidiaries have been used or offered for illegal purposes,
    (ii)&#160;none of the Company or any of its Subsidiaries or, to
    the knowledge of the Company, any director, officer,
    representative, agent or employee acting on behalf of the
    Company or any of its Subsidiaries: (A)&#160;has used any
    corporate funds for any unlawful contribution, gift,
    entertainment or anything of value relating to political
    activity; (B)&#160;has made any direct or indirect unlawful
    payment to any employee, agent, officer, director,
    representative or stockholder of a Governmental Entity or
    political party, or official or candidate thereof, or any
    immediate family member of the foregoing; or (C)&#160;has made
    any bribe, unlawful rebate, payoff, influence payment, kickback
    or other unlawful payment in connection with the conduct of the
    business of the Company or any of its Subsidiaries,
    (iii)&#160;none of the Company or any of its Subsidiaries or, to
    the knowledge of the Company, any director, officer,
    representative, agent or employee of the Company or any of its
    Subsidiaries has received any bribes, kickbacks or other
    improper payments from vendors, suppliers or other persons and
    (iv)&#160;the Company has no knowledge that any payment made to
    a person would be, or has thereafter been, offered, given or
    provided to any foreign official, political party or official
    thereof, or to any candidate for public office.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.15&#160;&#160;<U>Tax
    Matters</U>.&#160;&#160;Neither the Company nor any of its
    Affiliates has taken or agreed to take any action which would
    prevent the Merger from qualifying as a reorganization under
    Section&#160;368(a) of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.16&#160;&#160;<U>Registration Statement; Proxy
    Statement/Prospectus</U>.&#160;&#160;The information to be
    supplied in writing by the Company for inclusion in the
    registration statement on
    <FONT style="white-space: nowrap">Form&#160;S-4</FONT>
    pursuant to which shares of Parent Common Stock issued in the
    Merger will be registered under the Securities Act (the
    &#147;Registration Statement&#148;) shall not at the time the
    Registration Statement is declared effective by the SEC contain
    any untrue statement of a material fact or omit to state any
    material fact required to be stated in the Registration
    Statement or necessary in order to make the statements in the
    Registration Statement, in light of the circumstances under
    which they were made, not misleading. The information supplied
    in writing by the Company for inclusion in the proxy
    statement/prospectus (the &#147;Proxy Statement&#148;) to be
    sent to the Company&#146;s stockholders in connection with the
    Company Stockholders&#146; Meeting shall not, on the date the
    Proxy Statement is first mailed to the Company&#146;s
    stockholders, at the time of the Company Stockholders&#146;
    Meeting and at the Effective Time, contain any statement which,
    at such time and in light of the circumstances under which it
    shall be made, is false or misleading with respect to any
    material fact, or omit to state any material fact necessary in
    order to make the statements made in the Proxy Statement not
    false or misleading; or omit to state any material fact
    necessary to correct any statement in any earlier communication
    with respect to the solicitation of proxies for the Company
    Stockholders&#146; Meeting which has become false or misleading.
    If at any time prior to the Effective Time any event relating to
    the Company or any of its Affiliates, officers or directors
    should be discovered by the Company which should be set forth in
    an amendment to the Registration Statement or a supplement to
    the Proxy Statement, the Company shall promptly so inform Parent.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.17&#160;&#160;<U>Labor Matters</U>.&#160;&#160;As
    of the date of this Agreement, neither the Company nor any of
    its Subsidiaries is a party to or otherwise bound by any
    collective bargaining agreement, contract or other agreement or
    understanding with a labor union or labor organization, nor is
    any such contract or agreement presently being negotiated. To
    the knowledge of the Company, as of the date of this Agreement,
    there are no, nor have there been in the last five years,
    material union organizing activities concerning employees of the
    Company or its Subsidiaries and there are no material campaigns
    being conducted to solicit cards from employees of the Company
    or its
</DIV>

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    <BR>
    A-13
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subsidiaries to authorize representation by any labor
    organization, nor is the Company or any of its Subsidiaries a
    party to, or bound by, any consent decree with, or citation by,
    any governmental agency relating to employees or employment
    practices. Nor, as of the date hereof, is the Company or any of
    its Subsidiaries the subject of any material proceeding before
    the National Labor Relations Board asserting that the Company or
    any of its Subsidiaries has committed an unfair labor practice
    or seeking to compel it to bargain with any labor union or labor
    organization, and, as of the date of this Agreement, there is no
    pending or, to the knowledge of the Company, threatened material
    labor strike, dispute, walkout, work stoppage, slow-down or
    lockout involving the Company or any of its Subsidiaries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.18&#160;&#160;<U>Insurance</U>.&#160;&#160;All
    material fire and casualty, general liability, business
    interruption, product liability, and sprinkler and water damage
    insurance policies maintained by the Company or any of its
    Subsidiaries are with reputable insurance carriers and are in
    character and amount at least equivalent to that carried by
    persons engaged in similar businesses and subject to the same or
    similar perils or hazards, except for any such failures to
    maintain insurance policies that, individually or in the
    aggregate, are not reasonably likely to have a Company Material
    Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.19&#160;&#160;<U>No Existing
    Discussions</U>.&#160;&#160;As of the date hereof, the Company
    is not engaged, directly or indirectly, in any discussions or
    negotiations with any other party with respect to an Acquisition
    Proposal.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.20&#160;&#160;<U>Opinion of Financial
    Advisor</U>.&#160;&#160;The financial advisor of the Company,
    Credit Suisse Securities (USA) LLC, has delivered to the Company
    an opinion, dated the date of this Agreement, to the effect that
    the Merger Consideration is fair to the holders of Company
    Common Stock from a financial point of view.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.21&#160;&#160;<U>Anti-Takeover
    Laws</U>.&#160;&#160;The restrictions contained in
    Section&#160;203 of the DGCL, as in effect on the date hereof,
    with respect to a &#147;business combination&#148; (as defined
    in DGCL Section&#160;203)&#160;have been rendered inapplicable
    to the authorization, execution, delivery and performance of the
    Agreement by the Company and to the consummation of the Merger
    by the Company. As of the date hereof, no other &#147;fair
    price,&#148; &#147;moratorium,&#148; &#147;control share
    acquisition&#148; or other similar anti-takeover statute or
    regulation is applicable to the Company or (solely by reason of
    the Company&#146;s participation therein) the Merger or the
    other transactions contemplated by this Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.22&#160;&#160;<U>Company Rights
    Plan</U>.&#160;&#160;Neither the Company nor any of its
    Subsidiaries has adopted a stockholder rights plan or
    &#147;poison pill.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.23&#160;&#160;<U>Sarbanes-Oxley Act</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The Company and each of its officers and directors are
    in compliance with, and have complied, in all material respects
    with (i)&#160;the applicable provisions of the Sarbanes-Oxley
    Act of 2002 and the related rules and regulations promulgated
    under such Act (the &#147;Sarbanes-Oxley Act&#148;) and the
    Exchange Act and (ii)&#160;the applicable listing and corporate
    governance rules and regulations of The New York Stock Exchange.
    The Company has established and maintains disclosure controls
    and procedures (as such term is defined in
    <FONT style="white-space: nowrap">Rule&#160;13a-15(e)</FONT>
    under the Exchange Act); such disclosure controls and procedures
    are designed to provide that information relating to the
    Company, including its consolidated Subsidiaries, required to be
    disclosed by the Company in the reports that it files or submits
    under the Exchange Act is accumulated and communicated to the
    Company&#146;s principal executive officer and its principal
    financial officer to allow timely decisions regarding required
    disclosure, and such disclosure controls and procedures are
    effective to ensure that information required to be disclosed by
    the Company in the reports that it files or submits under the
    Exchange Act is recorded, processed, summarized and reported
    within the time periods specified in SEC rules and forms. The
    Company&#146;s principal executive officer and its principal
    financial officer have disclosed, based on their most recent
    evaluation, to the Company&#146;s auditors and the audit
    committee of the Board of Directors of the Company (x)&#160;all
    significant deficiencies and material weaknesses in the design
    or operation of internal controls over financial reporting which
    are reasonably likely to adversely affect the Company&#146;s
    ability to record, process, summarize and report financial data
    and have identified for the Company&#146;s auditors any material
    weaknesses in internal controls and (y)&#160;any fraud, whether
    or not material, that involves management or other employees who
    have a significant role in the Company&#146;s internal controls.
    The Company has established and maintains internal control over
    financial reporting (as defined in
    <FONT style="white-space: nowrap">Rule&#160;13a-15(f)</FONT>
    under the Exchange Act) as required by
    <FONT style="white-space: nowrap">Rule&#160;13a-15</FONT>
    under the Exchange Act. Management of the Company has completed
    its assessment of the
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    effectiveness of the Company&#146;s internal control over
    financial reporting in compliance with the requirements of
    Section&#160;404 of the Sarbanes-Oxley Act for the year ended
    December&#160;31, 2006, and such assessment concluded that such
    controls were effective. Since December&#160;31, 2006, any
    material change in internal control over financial reporting
    required to be disclosed in any Company SEC Reports has been so
    disclosed.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Since January&#160;1, 2007 and as of the date hereof,
    (A)&#160;neither the Company nor any of its Subsidiaries nor, to
    the knowledge of the Company, any director, officer, employee,
    auditor, accountant or representative of the Company or any of
    its Subsidiaries has received or otherwise obtained knowledge of
    any material complaint, allegation, assertion or claim, whether
    written or oral, regarding the accounting or auditing practices,
    procedures, methodologies or methods of the Company or any of
    its Subsidiaries or their respective internal accounting
    controls relating to periods after December&#160;31, 2006,
    including any material complaint, allegation, assertion or claim
    that the Company or any of its Subsidiaries has engaged in
    questionable accounting or auditing practices (except for any of
    the foregoing received after the date of this Agreement that
    have no reasonable basis), and (B)&#160;to the knowledge of the
    Company, no attorney representing the Company or any of its
    Subsidiaries, whether or not employed by the Company or any of
    its Subsidiaries, has reported evidence of a material violation
    of securities Laws, breach of fiduciary duty or similar
    violation, relating to periods after December&#160;31, 2006 by
    the Company or any of its officers, directors, employees or
    agents to the Board of Directors of the Company or any committee
    thereof or to any director or executive officer of the Company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.24&#160;&#160;<U>Brokers or
    Finders</U>.&#160;&#160;The Company represents, as to itself,
    its Subsidiaries and its Affiliates, that no agent, broker,
    investment banker, financial advisor or other firm or person is
    or will be entitled to any broker&#146;s or finder&#146;s fee or
    any other commission or similar fee in connection with any of
    the transactions contemplated by this Agreement, except Credit
    Suisse Securities (USA) LLC, whose fees and expenses will be
    paid by the Company in accordance with the Company&#146;s
    agreements with such firm.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;IV.<BR>
    REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER
    SUB</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Parent and Merger Sub jointly and severally represent and
    warrant to the Company that the statements contained in this
    Article&#160;IV are true and correct except as set forth herein
    and in the disclosure letter delivered by Parent to the Company
    on or before the date of this Agreement (the &#147;Parent
    Disclosure Letter&#148;). The Parent Disclosure Letter shall be
    arranged in paragraphs corresponding to the numbered and
    lettered paragraphs contained in this Article&#160;IV and the
    disclosure in any paragraph shall qualify other paragraphs in
    this Article&#160;IV only to the extent that it is reasonably
    apparent from a reading of such disclosure that it also
    qualifies or applies to such other paragraphs.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;4.01&#160;&#160;<U>Organization of
    Parent</U>.&#160;&#160;(a)&#160;Each of Parent and its
    Subsidiaries, including Merger Sub, is a corporation or
    unincorporated entity duly organized, validly existing and in
    good standing under the Laws of the jurisdiction of its
    incorporation or organization, has all requisite corporate or
    entity power to own, lease and operate its property and to carry
    on its business as now being conducted and as proposed to be
    conducted, and is duly qualified to do business and is in good
    standing as a foreign corporation or organization in each
    jurisdiction in which the failure to be so qualified would
    reasonably be expected to have a Parent Material Adverse Effect.
    Except as set forth in Parent SEC Reports filed prior to the
    date hereof, neither Parent nor any of its Subsidiaries directly
    or indirectly owns any equity or similar interest in, or any
    interest convertible into or exchangeable or exercisable for,
    any corporation, partnership, joint venture or other business
    association or entity, excluding securities in any publicly
    traded company held for investment by Parent or its Subsidiaries
    and comprising less than five percent (5%) of the outstanding
    stock of such company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Since the date of its incorporation, Merger Sub has not
    carried on any business or conducted any operations other than
    the execution of this Agreement, the performance of its
    obligations hereunder and matters ancillary thereto. Merger Sub
    has no subsidiaries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;4.02&#160;&#160;<U>Parent Capital Structure</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The authorized capital stock of Parent consists of
    500,000,000&#160;shares of Parent Common Stock and
    10,000,000&#160;shares of Preferred Stock, $.01&#160;par value
    (&#147;Parent Preferred Stock&#148;). As of December&#160;13,
    2007,
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;356,863,804&#160;shares of Parent Common Stock were
    issued and outstanding, all of which are validly issued, fully
    paid and nonassessable, (ii)&#160;no shares of Parent Preferred
    Stock were issued and outstanding and (iii)&#160;no shares of
    Parent Common Stock and no shares of Parent Preferred Stock were
    held in the treasury of Parent or by Subsidiaries of Parent. As
    of December&#160;13, 2007, a sufficient number of shares of
    Parent Common Stock were reserved for future issuance pursuant
    to warrants, stock options and other stock awards, and
    restricted stock awards granted and outstanding as of
    December&#160;13, 2007 under Parent&#146;s Long-Term Incentive
    Plan and inactive stock option plans that were acquired in
    connection with acquisitions of Dreco Energy Services, Ltd, IRI
    International, Corporation and Varco International, Inc.
    (collectively, the &#147;Parent Stock Plans&#148;). Except for
    (1)&#160;the issuance of shares of Parent Common Stock in
    connection with the Parent Stock Plans (including the exercise
    of warrants, stock options or other stock awards thereunder), or
    (2)&#160;as set forth in the Parent Disclosure Letter, no change
    in such capitalization has occurred between December&#160;13,
    2007 and the date of this Agreement. All shares of Parent Common
    Stock subject to issuance as specified above are duly authorized
    and, upon issuance on the terms and conditions specified in the
    instruments pursuant to which they are issuable, shall be
    validly issued, fully paid and nonassessable. There are no
    obligations, contingent or otherwise, of Parent or any of its
    Subsidiaries to repurchase, redeem or otherwise acquire any
    shares of Parent Common Stock or the capital stock of any
    Subsidiary or to provide funds to or make any material
    investment (in the form of a loan, capital contribution or
    otherwise) in any such Subsidiary or any other entity other than
    guarantees of obligations of Subsidiaries entered into in the
    ordinary course of business. Parent has not repurchased any
    outstanding shares of Parent Common Stock since
    December&#160;13, 2007. All of the outstanding shares of capital
    stock of each of Parent&#146;s Subsidiaries are duly authorized,
    validly issued, fully paid and nonassessable and all such shares
    (other than directors&#146; qualifying shares in the case of
    foreign Subsidiaries) are owned by Parent or another Subsidiary
    of Parent free and clear of all Liens, agreements or limitations
    on Parent&#146;s voting rights.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;As of the date hereof, except as set forth in this
    Section&#160;4.02 or as reserved for future grants of securities
    under the Parent Stock Plans, there are no equity securities of
    any class of Parent or any securities exchangeable into or
    exercisable for such equity securities, issued, reserved for
    issuance or outstanding. As of the date hereof, except as set
    forth in this Section&#160;4.02, there are no options, warrants,
    equity securities, calls, rights, commitments or agreements of
    any character to which Parent or any of its Subsidiaries is a
    party or by which it is bound obligating Parent or any of its
    Subsidiaries to issue, deliver or sell, or cause to be issued,
    delivered or sold, additional shares of equity securities of any
    class of Parent or any of its Subsidiaries, or any securities
    exchangeable into or exercisable for such equity securities, or
    obligating Parent or any of its Subsidiaries to grant, extend,
    accelerate the vesting of or enter into any such option,
    warrant, equity security, call, right, commitment or agreement.
    To the best knowledge of Parent, there are no voting trusts,
    proxies or other voting agreements or understandings with
    respect to the shares of capital stock of Parent.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;4.03&#160;&#160;<U>Authority; No Conflict; Required
    Filings and Consents</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Each of Parent and Merger Sub have all requisite
    corporate power and authority to enter into this Agreement and
    to consummate the transactions contemplated by this Agreement.
    The execution and delivery of this Agreement and the
    consummation of the transactions contemplated by this Agreement
    by each of Parent and Merger Sub have been duly authorized by
    all necessary corporate or company action on the respective part
    of each of Parent and Merger Sub. Parent, as the sole
    stockholder of Merger Sub, has adopted this Agreement. This
    Agreement has been duly executed and delivered by each of Parent
    and Merger Sub and constitutes the valid and binding obligation
    of each of Parent and Merger Sub, enforceable in accordance with
    its terms, subject to the Bankruptcy and Equity Exception. On or
    prior to the date hereof, the Board of Directors of Parent has
    unanimously adopted resolutions that have approved this
    Agreement and the Merger, and such resolutions, as of the date
    of this Agreement, have not been subsequently rescinded,
    modified or withdrawn in any way.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;The execution and delivery of this Agreement by each of
    Parent and Merger Sub does not, and the consummation of the
    transactions contemplated hereby will not, (i)&#160;conflict
    with, or result in any violation or breach of, any provision of
    the certificate of incorporation or by-laws of Parent or of the
    certificate of incorporation or bylaws of Merger Sub,
    (ii)&#160;result in any violation or breach of, or constitute
    (with or without notice or lapse of time, or both) a default (or
    give rise to a right of termination, cancellation or
    acceleration of any obligation, give rise to any obligation to
    make an offer to purchase any debt instrument or give rise to
    any loss of any material benefit) under, or require a consent or
    waiver under, any of the terms, conditions or provisions of any
    note, bond, mortgage,
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    indenture, lease, contract or other agreement, instrument or
    obligation to which Parent or any of its Subsidiaries is a party
    or by which any of them or any of their properties or assets may
    be bound, or (iii)&#160;conflict with or violate any permit,
    concession, franchise, license, judgment, order, decree or Law
    applicable to Parent or any of its Subsidiaries or any of its or
    their properties or assets, except in the case of (ii)&#160;and
    (iii)&#160;for any such conflicts, violations, breaches,
    defaults, terminations, cancellations, obligations, losses or
    accelerations which are not, individually or in the aggregate,
    reasonably likely to have a Parent Material Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;No consent, approval, order or authorization of, or
    registration, declaration or filing with, any Governmental
    Entity is required by or with respect to Parent or any of its
    Subsidiaries in connection with the execution and delivery of
    this Agreement or the consummation of the transactions
    contemplated hereby, except for (i)&#160;the filing of the
    pre-merger notification report under the HSR Act, (ii)&#160;the
    filing of the Registration Statement with the SEC in accordance
    with the Securities Act, (iii)&#160;the filing of the
    Certificate of Merger with the Delaware Secretary of State,
    (iv)&#160;the filing of the Proxy Statement with the SEC in
    accordance with the Exchange Act, (v)&#160;such consents,
    approvals, orders, authorizations, registrations, declarations
    and filings as may be required under applicable state securities
    Laws and the Laws of any foreign country and the European Union,
    and (vi)&#160;such other consents, authorizations, filings,
    approvals and registrations which, if not obtained or made,
    would not be reasonably likely to have a Parent Material Adverse
    Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;4.04&#160;&#160;<U>SEC Filings; Financial
    Statements</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Parent has filed and made available to the Company all
    forms, reports and documents required to be filed by Parent with
    the SEC since January&#160;1, 2004 (collectively, the
    &#147;Parent SEC Reports&#148;). Each of the Parent SEC Reports
    (i)&#160;at the time filed, complied in all material respects
    with the applicable requirements of the Securities Act and the
    Exchange Act, as the case may be, and (ii)&#160;did not at the
    time it was filed (or if amended or superseded by a filing prior
    to the date of this Agreement, then on the date of such filing)
    contain any untrue statement of a material fact or omit to state
    a material fact required to be stated in such Parent SEC Report
    or necessary in order to make the statements in such Parent SEC
    Report, in the light of the circumstances under which they were
    made, not misleading. None of Parent&#146;s Subsidiaries is
    required to file any forms, reports or other documents with the
    SEC.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Each of the consolidated financial statements
    (including, in each case, any related notes) contained in the
    Parent SEC Reports complied as to form in all material respects
    with the applicable published rules and regulations of the SEC
    with respect thereto, was prepared in accordance with generally
    accepted accounting principles applied on a consistent basis
    throughout the periods involved (except as may be indicated in
    the notes to such financial statements or, in the case of
    unaudited statements, as permitted by
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    of the SEC) and fairly presented in all material respects the
    consolidated financial position of Parent and its Subsidiaries
    as of the dates and the consolidated results of their operations
    and cash flows for the periods indicated, except that the
    unaudited interim financial statements were or are subject to
    normal and recurring year end adjustments which were not or are
    not expected to be material in amount. The audited balance sheet
    of Parent as of December&#160;31, 2006 is referred to herein as
    the &#147;Parent Balance Sheet.&#148; For each period covered by
    the Parent SEC Reports, the books and records of Parent and its
    Subsidiaries have been, and are being, maintained, in all
    material respects, in accordance with generally accepted
    accounting principles, consistently applied, and all other legal
    and accounting requirements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;4.05&#160;&#160;<U>No Undisclosed
    Liabilities</U>.&#160;&#160;Except as disclosed in the Parent
    SEC Reports filed prior to the date hereof, and except for
    normal or recurring Liabilities incurred since December&#160;31,
    2006 in the ordinary course of business consistent with past
    practices, Parent and its Subsidiaries do not have any
    Liabilities, either accrued, contingent or otherwise (whether or
    not required to be reflected in financial statements in
    accordance with generally accepted accounting principles), and
    whether due or to become due, which individually or in the
    aggregate are reasonably likely to have a Parent Material
    Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;4.06&#160;&#160;<U>Absence of Certain Changes or
    Events</U>.&#160;&#160;Except as disclosed in the Parent SEC
    Reports filed prior to the date hereof, since the date of the
    Parent Balance Sheet, Parent and its Subsidiaries have conducted
    their businesses only in the ordinary course and in a manner
    consistent with past practice. Since the date of the Parent
    Balance Sheet, there has not been (i)&#160;any material adverse
    change in the financial condition, results of operations,
    business or properties of Parent and its Subsidiaries, taken as
    a whole, or any development or combination of developments of
    which the management of Parent is aware that, individually or in
    the aggregate, has had, or is reasonably likely to have, a
    Parent Material Adverse Effect, (ii)&#160;any damage,
    destruction or loss (whether or not
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    covered by insurance) with respect to Parent or any of its
    Subsidiaries having a Parent Material Adverse Effect,
    (iii)&#160;except as disclosed in the Parent SEC Reports filed
    prior to the date hereof or as required by GAAP or applicable
    Law, any material change by Parent in its accounting methods,
    principles or practices to which the Company has not previously
    consented in writing, (iv)&#160;except as disclosed in the
    Parent SEC Reports filed prior to the date hereof, any
    revaluation by Parent of any of its assets having a Parent
    Material Adverse Effect, or (v)&#160;except as disclosed in the
    Parent SEC Reports filed prior to the date hereof, any material
    elections or changes in elections with respect to Taxes by
    Parent or any Subsidiary of Parent or settlement or compromise
    by Parent or any Subsidiary of Parent of any material Tax
    Liability or refund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;4.07&#160;&#160;<U>Taxes</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Parent and each of its Subsidiaries and any affiliated,
    combined or unitary group of which Parent or any of its
    Subsidiaries is or was a member have timely filed with the
    appropriate Tax authorities all Tax Returns required to be filed
    by them (taking into account extensions), except for any such
    returns which are not reasonably likely, individually or in the
    aggregate, to have a Parent Material Adverse Effect. All such
    Tax Returns are true, complete and correct in all respects,
    except for any such omissions or errors which are not reasonably
    likely, individually or in the aggregate, to have a Parent
    Material Adverse Effect. (b)&#160;Parent and each of its
    Subsidiaries have timely paid (or Parent has paid on its
    Subsidiaries&#146; behalf) all Taxes due and payable on all Tax
    Returns described in Section&#160;4.07(a) herein or otherwise
    due by Parent and each of its Subsidiaries, except to the extent
    that such taxes otherwise due are not reasonable likely,
    individually or in the aggregate, to have a Parent Material
    Adverse Effect. Parent&#146;s most recent consolidated financial
    statements reflect an adequate reserve for all Taxes (excluding
    any reserve for deferred Taxes established to reflect
    differences between book and Tax income) payable by Parent and
    its Subsidiaries for all taxable periods and portions thereof
    through the date of such financial statements, except to the
    extent that any such Taxes are not reasonably likely,
    individually or in the aggregate, to have a Parent Material
    Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Neither the IRS nor any other Tax authority has
    asserted any claim for Taxes, or to the knowledge of the
    executive officers of Parent, is threatening to assert any
    claims for Taxes, which claims, individually or in the
    aggregate, are reasonably likely to have a Parent Material
    Adverse Effect. No audits or other administrative proceedings or
    court proceedings are presently pending with regard to any Taxes
    for which Parent or any of its Subsidiaries would be liable
    (other than those which are not reasonably likely, individually
    or in the aggregate, to have a Parent Material Adverse Effect),
    and no deficiencies for any Taxes (other than those which are
    not reasonably likely, individually or in the aggregate, to have
    a Parent Material Adverse Effect) have been proposed, asserted
    or assessed against Parent or any of its Subsidiaries that have
    not been fully paid or adequately provided for in the
    appropriate financial statements of Parent and its Subsidiaries,
    no requests for waivers of the time to assess any Taxes are
    pending, and, except as disclosed in the Parent Disclosure
    Letter, none of Parent or any of its Subsidiaries has waived any
    statute of limitations in respect of Taxes or agreed to any
    extension of time with respect to a Tax assessment or deficiency.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;Parent and each of its Subsidiaries have complied in
    all respects with all applicable Laws relating to the
    withholding of Taxes and have withheld or collected and paid
    over to the appropriate governmental authorities (or are
    properly holding for such payment) all Taxes required by Law to
    be withheld or collected.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;There are no Liens for Taxes upon the assets of Parent
    or any of its Subsidiaries (other than Liens for current Taxes
    that are not yet due and payable or Liens for Taxes that are
    being contested in good faith by appropriate proceedings and for
    which adequate reserves have been provided in Parent&#146;s most
    recent consolidated financial statements), except for Liens
    which are not reasonably likely, individually or in the
    aggregate, to have a Parent Material Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;Neither Parent nor any of its Subsidiaries has
    liability for the Taxes of any person other than Parent and its
    Subsidiaries (i)&#160;under Treasury Regulations
    <FONT style="white-space: nowrap">Section&#160;1.1502-6</FONT>
    (or any similar provision of state, local or foreign law),
    (ii)&#160;as a transferee or successor, (iii)&#160;by contract,
    or (iv)&#160;otherwise, except, in each case, where such
    liabilities are not reasonably likely, individually or in the
    aggregate, to have a Parent Material Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (g)&#160;Neither Parent nor any of its Subsidiaries is a party
    to, is bound by or has any obligation under any Tax sharing, Tax
    allocation or Tax indemnity agreement or similar arrangements,
    other than with respect to any such agreement or arrangement
    among Parent and any of its Subsidiaries.
</DIV>

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    <BR>
    A-18
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (h)&#160;Neither Parent nor any of its Subsidiaries has
    distributed the stock of any corporation in a transaction
    satisfying the requirements of Section&#160;355 of the Code (or
    any similar provision of state or local Law) during the two-year
    period ending on the date of this Agreement, and neither the
    stock of Parent nor the stock of any of its Subsidiaries has
    been distributed in a transaction satisfying the requirements of
    Section&#160;355 of the Code during the two-year period ending
    on the date of this Agreement and no such distribution otherwise
    constitutes part of a &#147;plan&#148; or &#147;series of
    related transactions&#148; within the meaning of
    Section&#160;355(e) that includes the Merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;Neither Parent nor any of its Subsidiaries has executed
    or entered into with the IRS or any Taxing authority a closing
    agreement pursuant to Section&#160;7121 of the Code or any
    similar provision of state or local income Tax Law that relates
    to Parent or any of its Subsidiaries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;4.08&#160;&#160;<U>Agreements and Contracts</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as set forth in Section&#160;4.08(a) of the Parent
    Disclosure Letter, as of the date hereof, there is no contract,
    agreement or understanding that is material to the business,
    properties, assets, financial condition or results of operations
    of Parent and its Subsidiaries, taken as a whole, that is
    required to be filed as an exhibit to any Parent SEC Report
    filed with the SEC subsequent to December&#160;31, 2006 that is
    not filed as required by the Securities Act or the Exchange Act,
    as the case may be (any such contract, agreement or
    understanding whether or not so filed, a &#147;Parent Material
    Contract&#148;). Except as would not individually or in the
    aggregate have a Parent Material Adverse Effect, each Parent
    Material Contract is a valid and binding obligation of Parent or
    one of its Subsidiaries and is in full force and effect and
    enforceable against Parent or one of its Subsidiaries and, to
    the knowledge of Parent, the other party or parties thereto, in
    each case in accordance with its terms, other than any Parent
    Material Contract which is by its terms no longer in force or
    effect and except as enforceability may be limited by
    bankruptcy, insolvency, moratorium or other similar laws
    affecting or relating to the enforcement of creditors&#146;
    rights generally and is subject to general principles of equity.
    Parent is not in violation or breach of or in default under any
    Parent Material Contract, nor to Parent&#146;s knowledge is any
    other party to any such Parent Material Contract, except to the
    extent any such violation, breach or default would not
    individually or in the aggregate have a Parent Material Adverse
    Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;4.09&#160;&#160;<U>Litigation</U>.&#160;&#160;There
    is no action, suit or proceeding, claim, arbitration or
    investigation against Parent or any of its Subsidiaries pending
    or as to which Parent or any of its Subsidiaries has received
    any written notice of assertion, which, individually or in the
    aggregate, is reasonably likely to have a Parent Material
    Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;4.10&#160;&#160;<U>Compliance With Laws</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Parent and each of its Subsidiaries has complied with,
    is not in violation of, and has not received any notices of
    violation with respect to, any federal, state or local Law with
    respect to the conduct of its business, or the ownership or
    operation of its business, except for failures to comply or
    violations which, individually or in the aggregate, have not had
    and are not reasonably likely to have a Parent Material Adverse
    Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Except as would not be material to Parent, (i)&#160;no
    funds, assets or properties of Parent or any of its Subsidiaries
    have been used or offered for illegal purposes, (ii)&#160;none
    of Parent or any of its Subsidiaries or, to the knowledge of
    Parent, any director, officer, representative, agent or employee
    acting on behalf of Parent or any of its Subsidiaries:
    (A)&#160;has used any corporate funds for any unlawful
    contribution, gift, entertainment or anything of value relating
    to political activity; (B)&#160;has made any direct or indirect
    unlawful payment to any employee, agent, officer, director,
    representative or stockholder of a Governmental Entity or
    political party, or official or candidate thereof, or any
    immediate family member of the foregoing; or (C)&#160;has made
    any bribe, unlawful rebate, payoff, influence payment, kickback
    or other unlawful payment in connection with the conduct of the
    business of Parent or any of its Subsidiaries, (iii)&#160;none
    of Parent or any of its Subsidiaries or, to the knowledge of
    Parent, any director, officer, representative, agent or employee
    of Parent or any of its Subsidiaries has received any bribes,
    kickbacks or other improper payments from vendors, suppliers or
    other persons and (iv)&#160;Parent has no knowledge that any
    payment made to a person would be, or has thereafter been,
    offered, given or provided to any foreign official, political
    party or official thereof, or to any candidate for public office.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;4.11&#160;&#160;<U>Tax
    Matters</U>.&#160;&#160;Neither Parent nor any of its Affiliates
    has taken or agreed to take any action which would prevent the
    Merger from qualifying as a reorganization under
    Section&#160;368(a) of the Code.
</DIV>

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    <BR>
    A-19
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;4.12&#160;&#160;<U>Registration Statement; Proxy
    Statement/Prospectus</U>.&#160;&#160;The information in the
    Registration Statement (except for information supplied in
    writing by the Company for inclusion in the Registration
    Statement, as to which Parent makes no representation) shall not
    at the time the Registration Statement is declared effective by
    the SEC contain any untrue statement of a material fact or omit
    to state any material fact required to be stated in the
    Registration Statement or necessary in order to make the
    statements in the Registration Statement, in light of the
    circumstances under which they were made, not misleading. The
    information supplied in writing by Parent and Merger Sub for
    inclusion in the Proxy Statement shall not, on the date the
    Proxy Statement is first mailed to the Company&#146;s
    stockholders, at the time of the Company Stockholders&#146;
    Meeting and at the Effective Time, contain any statement which,
    at such time and in light of the circumstances under which it
    shall be made, is false or misleading with respect to any
    material fact, or omit to state any material fact necessary in
    order to make the statements made in the Proxy Statement not
    false or misleading; or omit to state any material fact
    necessary to correct any statement in any earlier communication
    with respect to the solicitation of proxies for the Company
    Stockholders&#146; Meeting which has become false or misleading.
    If at any time prior to the Effective Time any event relating to
    Parent or Merger Sub or any of their respective Affiliates,
    officers or directors should be discovered by Parent or Merger
    Sub which should be set forth in an amendment to the
    Registration Statement or a supplement to the Proxy Statement,
    Parent shall promptly so inform the Company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;4.13&#160;&#160;<U>Opinion of Financial
    Advisor</U>.&#160;&#160;The financial advisor of Parent,
    Goldman, Sachs&#160;&#038; Co., has delivered to Parent an
    opinion, dated the date of this Agreement, to the effect that
    the Merger Consideration is fair to Parent from a financial
    point of view.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;4.14&#160;&#160;<U>Rights
    Plan</U>.&#160;&#160;Neither Parent nor any of its Subsidiaries
    has adopted a stockholder rights plan or &#147;poison pill&#148;.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;4.15&#160;&#160;<U>Sarbanes-Oxley Act</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Parent and each of its officers and directors are in
    compliance with, and have complied, in all material respects
    with (i)&#160;the applicable provisions of the Sarbanes-Oxley
    Act and the Exchange Act and (ii)&#160;the applicable listing
    and corporate governance rules and regulations of The New York
    Stock Exchange. Parent has established and maintains disclosure
    controls and procedures (as such term is defined in
    <FONT style="white-space: nowrap">Rule&#160;13a-15(e)</FONT>
    under the Exchange Act); such disclosure controls and procedures
    are designed to provide that information relating to Parent,
    including its consolidated Subsidiaries, required to be
    disclosed by Parent in the reports that it files or submits
    under the Exchange Act is accumulated and communicated to
    Parent&#146;s principal executive officer and its principal
    financial officer to allow timely decisions regarding required
    disclosure, and such disclosure controls and procedures are
    effective to ensure that information required to be disclosed by
    Parent in the reports that it files or submits under the
    Exchange Act is recorded, processed, summarized and reported
    within the time periods specified in SEC rules and forms.
    Parent&#146;s principal executive officer and its principal
    financial officer have disclosed, based on their most recent
    evaluation, to Parent&#146;s auditors and the audit committee of
    the Board of Directors of Parent (x)&#160;all significant
    deficiencies and material weaknesses in the design or operation
    of internal controls over financial reporting which are
    reasonably likely to adversely affect Parent&#146;s ability to
    record, process, summarize and report financial data and have
    identified for Parent&#146;s auditors any material weaknesses in
    internal controls and (y)&#160;any fraud, whether or not
    material, that involves management or other employees who have a
    significant role in Parent&#146;s internal controls. Parent has
    established and maintains internal control over financial
    reporting (as defined in
    <FONT style="white-space: nowrap">Rule&#160;13a-15(f)</FONT>
    under the Exchange Act) as required by
    <FONT style="white-space: nowrap">Rule&#160;13a-15</FONT>
    under the Exchange Act. Management of Parent has completed its
    assessment of the effectiveness of Parent&#146;s internal
    control over financial reporting in compliance with the
    requirements of Section&#160;404 of the Sarbanes-Oxley Act for
    the year ended December&#160;31, 2006, and such assessment
    concluded that such controls were effective. Since
    December&#160;31, 2006, any material change in internal control
    over financial reporting required to be disclosed in any Parent
    SEC Reports has been so disclosed.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Since January&#160;1, 2007 and as of the date hereof,
    (A)&#160;neither Parent nor any of its Subsidiaries nor, to the
    knowledge of Parent, any director, officer, employee, auditor,
    accountant or representative of Parent or any of its
    Subsidiaries has received or otherwise obtained knowledge of any
    material complaint, allegation, assertion or claim, whether
    written or oral, regarding the accounting or auditing practices,
    procedures, methodologies or methods of Parent or any of its
    Subsidiaries or their respective internal accounting controls
    relating to periods after December&#160;31, 2006, including any
    material complaint, allegation, assertion or claim that Parent
    or any of its
</DIV>

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    <BR>
    A-20
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subsidiaries has engaged in questionable accounting or auditing
    practices (except for any of the foregoing received after the
    date of this Agreement that have no reasonable basis), and
    (B)&#160;to the knowledge of Parent, no attorney representing
    Parent or any of its Subsidiaries, whether or not employed by
    Parent or any of its Subsidiaries, has reported evidence of a
    material violation of securities Laws, breach of fiduciary duty
    or similar violation, relating to periods after
    December&#160;31, 2006 by Parent or any of its officers,
    directors, employees or agents to the Board of Directors of
    Parent or any committee thereof or to any director or executive
    officer of Parent.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;4.16&#160;&#160;<U>Brokers or
    Finders</U>.&#160;&#160;Parent represents, as to itself, its
    Subsidiaries and its Affiliates, that no agent, broker,
    investment banker, financial advisor or other firm or person is
    or will be entitled to any broker&#146;s or finder&#146;s fee or
    any other commission or similar fee in connection with any of
    the transactions contemplated by this Agreement, except Goldman,
    Sachs&#160;&#038; Co., whose fees and expenses will be paid by
    Parent in accordance with Parent&#146;s agreements with such
    firm.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;4.17&#160;&#160;<U>Sufficient
    Funds</U>.&#160;&#160;Parent has, and will at the Closing and
    from time to time thereafter as required by this Agreement have,
    access to sufficient cash resources to pay the cash amounts
    required to be paid by Parent, Merger Sub and the Survivor under
    this Agreement.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;V.<BR>
    CONDUCT OF BUSINESS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;5.01&#160;&#160;<U>Covenants of the
    Company</U>.&#160;&#160;During the period from the date of this
    Agreement and continuing until the earlier of the termination of
    this Agreement or the Effective Time, the Company agrees as to
    itself and its Subsidiaries (except to the extent that Parent
    shall otherwise consent in writing, which consent shall not be
    unreasonably withheld or delayed), to carry on its business in
    the usual, regular and ordinary course in substantially the same
    manner as previously conducted, to pay its debts and Taxes when
    due subject to good faith disputes over such debts or Taxes, to
    pay or perform its other obligations when due, and, to the
    extent consistent with such business, to use all reasonable
    efforts consistent with past practices and policies to preserve
    intact its present business organization, keep available the
    services of its present officers and key employees and preserve
    its relationships with customers, suppliers, distributors, and
    others having material business dealings with it. The Company
    shall promptly notify the Parent in writing of any material
    event or occurrence not in the ordinary course of business of
    the Company. Except as expressly contemplated by this Agreement
    or as set forth in Section&#160;5.01 of the Company Disclosure
    Letter, the Company shall not (and shall not permit any of its
    Subsidiaries to), without the prior written consent of Parent
    (which consent shall not be unreasonably withheld or delayed):
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Accelerate, amend or change the period of
    exercisability or vesting of options, stock purchase rights,
    restricted stock or other stock awards granted under the Company
    Stock Plans, or authorize cash payments in exchange for any
    options, stock purchase rights, restricted stock or other stock
    awards granted under the Company Stock Plans, except as required
    by the terms of the Company Stock Plans or any related
    agreements in effect as of the date of this Agreement;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Declare or pay any dividends on or make any other
    distributions (whether in cash, stock or property) in respect of
    any of its capital stock, or split, combine or reclassify any of
    its capital stock or issue or authorize the issuance of any
    other securities in respect of, in lieu of or in substitution
    for shares of its capital stock, or purchase or otherwise
    acquire, directly or indirectly, any shares of its capital stock
    except from former employees, directors and consultants at a
    price not greater than the then current fair market value in
    accordance with agreements providing for the repurchase of
    shares in connection with any termination of service to such
    party;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Grant, issue, deliver or sell, or authorize or propose
    the issuance, delivery or sale of, any shares of its capital
    stock (including Company Common Stock held in treasury) or
    securities convertible into shares of its capital stock, or
    subscriptions, rights, warrants or options to acquire, or other
    agreements or commitments of any character obligating it to
    issue, any such shares or other convertible securities, other
    than (i)&#160;the issuance of shares of Company Common Stock
    pursuant to the exercise of options, stock purchase rights,
    restricted stock or other stock awards outstanding on the date
    of this Agreement, or granted, issued or awarded after the date
    of this Agreement in accordance with this subsection (c), or
    pursuant to the ESPP, (ii)&#160;as required to comply with
</DIV>

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    A-21
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    any Company Employee Plan or any other contractual arrangement
    as in effect on the date of this Agreement, (iii)&#160;the
    issuance of Company Stock Equivalents pursuant to the Deferred
    Compensation Plans and (iv)&#160;grants of Company Stock Options
    with an exercise price per share of Company Common Stock no less
    than the fair market value of a share of Company Common Stock as
    of the relevant date of grant and issuances of Company
    Restricted Shares under the Company Stock Plans (A)&#160;to any
    officer or employee of the Company or any of its Subsidiaries in
    connection with the assumption by such officer or employee of
    material new or additional responsibilities, (B)&#160;in
    connection with new hires, (C)&#160;to respond to offers of
    employment made by third parties and (D)&#160;to any officer or
    employee of the Company or any of its Subsidiaries in the
    ordinary course of business in accordance with past practice, in
    each case following consultation with Parent and provided that
    the amounts so granted shall not exceed the amounts granted to
    such persons (or persons similarly situated in the case of new
    or additional responsibilities or new hires) during 2007.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;Acquire or agree to acquire by merging or consolidating
    with, or by purchasing an equity interest in or any of the
    assets of, or by any other manner, any business or any
    corporation, partnership or other business organization or
    division, or otherwise acquire or agree to acquire any assets
    (other than inventory and other items in the ordinary course of
    business), except for all such acquisitions involving aggregate
    consideration of not more than $50&#160;million;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;Except for transactions among the Company and its
    Subsidiaries, redeem, purchase, acquire or offer to purchase or
    acquire any shares of its capital stock or any options, warrants
    or rights to acquire any of its capital stock or any security
    convertible into or exchangeable for its capital stock other
    than (i)&#160;the acquisition by the Company of shares of
    Company Common Stock in connection with the surrender of shares
    of Company Common Stock by holders of Company Stock Options in
    order to pay the exercise price of the Company Stock Options,
    (ii)&#160;the withholding of shares of Company Common Stock to
    satisfy Tax obligations with respect to awards granted pursuant
    to the Company Stock Plans, (iii)&#160;the acquisition by the
    Company of Company Stock Options, Company Restricted Shares and
    Company Stock Equivalents in connection with the forfeiture of
    such awards, (iv)&#160;the acquisition by the trustee of the
    Company 401(k) Plan of shares of Company Common Stock in order
    to satisfy participant investment elections under the Company
    401(k) Plan or (v)&#160;any acquisition, directly or indirectly,
    of any shares of its capital stock from any former employee,
    director or consultant at a price not greater than the then
    current fair market value in accordance with agreements in
    effect on the date of this Agreement providing for the
    repurchase of shares in connection with any termination of
    service to such party;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;Sell, lease, license or otherwise dispose of any of its
    properties or assets, other than (i)&#160;sales or dispositions
    of assets in the ordinary course of business or as may be
    required by applicable Law, (ii)&#160;sales of inventory and
    other current assets in the ordinary course of business,
    (iii)&#160;sales or dispositions of assets in one or a series of
    related transactions having an aggregate value of
    $25&#160;million or less or (iv)&#160;divestitures pursuant to
    Section&#160;6.05;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (g)&#160;(i)&#160;Increase or agree to increase the compensation
    or benefits payable or to become payable to the directors,
    officers or employees of the Company or any of its Subsidiaries,
    except (A)&#160;for increases in cash compensation (including
    bonuses) of such officers or employees in the ordinary course of
    business in accordance with past practices and following
    consultation with Parent, (B)&#160;as provided under any Company
    Employee Plan or any other contractual arrangement as in effect
    on the date of this Agreement, (C)&#160;in connection with the
    assumption by such officer or employee of material new or
    additional responsibilities and following consultation with
    Parent and provided that the amounts so granted, combined with
    such officer&#146;s or employee&#146;s existing compensation and
    benefits, shall not exceed the aggregate amount of compensation
    of the person similarly situated after taking into account such
    new or additional responsibilities, or (D)&#160;to respond to
    offers of employment made by third parties; (ii)&#160;other than
    as specifically set forth in Section&#160;5.01(g) of the Company
    Disclosure Letter, grant any additional severance or termination
    pay to, or enter into any employment or severance agreements
    with, any employees or officers, other than (A)&#160;payments or
    agreements paid to or entered into with employees (other than
    executive officers) in the ordinary course of business in
    accordance with past practices and following consultation with
    Parent or (B)&#160;as provided under any Company Employee Plan
    or any other contractual arrangement as in effect on the date of
    this Agreement, (iii)&#160;establish, adopt, enter into or
    materially and adversely amend any collective bargaining
    agreement (other than as required by Law) or
    (iv)&#160;establish, adopt, enter into, materially amend or
    terminate any Company Employee Plan (except for any
</DIV>

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    <BR>
    A-22
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    amendments in order to comply with applicable Law (including
    Section&#160;409A of the Code) or as expressly permitted by
    clause&#160;(i) or (ii)&#160;of this Section&#160;5.01(g));
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (h)&#160;Amend or propose to amend its charter or by-laws;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;Incur any indebtedness for borrowed money other than
    (i)&#160;borrowings pursuant to credit agreements in effect as
    of the date hereof or replacement credit agreements on
    substantially similar terms as the Company&#146;s credit
    agreements in effect as of the date hereof and having aggregate
    borrowing capacity not to exceed 150% of the Company&#146;s
    borrowing capacity under its existing credit agreements and
    (ii)&#160;seller financings in connection with acquisitions
    permitted by this Section&#160;5.01;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (j)&#160;Enter into any agreement or arrangement that limits or
    otherwise restricts the Company or any of its Subsidiaries or
    any of their respective affiliates or any successor thereto from
    engaging or competing in any line of business or in any
    geographic area;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (k)&#160;Change any method or principle of financial accounting
    in a manner that is inconsistent with past practice, except to
    the extent required by GAAP or change in Law as advised by the
    Company&#146;s regular independent accountants, make, change or
    revoke any material Tax election, settle or compromise any
    material Tax Liability or refund, enter into any closing
    agreement with respect to material Taxes, agree to any
    adjustment of any material Tax attribute, file or surrender any
    claim for a material refund of Taxes, execute or consent to any
    waivers extending the statutory period of limitations with
    respect to the collection or assessment of material Taxes, file
    any material amended Tax Return or obtain any material Tax
    ruling;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (l)&#160;Make or commit to make any capital expenditures other
    than in the ordinary course of business;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (m)&#160;Take any action that is intended or would reasonably be
    expected to result in any of the conditions to the Merger in
    Article&#160;VII not being satisfied;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (n)&#160;Take, or agree in writing or otherwise to take, any of
    the actions described in paragraphs (a)&#160;through
    (m)&#160;above;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (o)&#160;Take any action to exempt or make not subject to
    (1)&#160;the provisions of Section&#160;203 of the DGCL or
    (2)&#160;any other state takeover statute or state Law that
    purports to limit or restrict business combinations or the
    ability to acquire or vote shares, any person (other than Parent
    and its Subsidiaries) or any action taken thereby, which person
    or action would have otherwise been subject to the restrictive
    provisions thereof and not exempt therefrom;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (p)&#160;Repay indebtedness for borrowed money with the proceeds
    from any assets sold other than in the ordinary course of
    business.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Nothing contained in this Agreement shall give to Parent,
    directly or indirectly, rights to control or direct the
    Company&#146;s operations prior to the Effective Time. Prior to
    the Effective Time, the Company shall exercise, consistent with
    the terms and conditions of this Agreement, complete control and
    supervision of its operations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;5.02&#160;&#160;<U>Covenants of
    Parent.</U>&#160;&#160;Except as expressly contemplated by this
    Agreement or as set forth in Section&#160;5.02 of the Parent
    Disclosure Letter, Parent shall not (and shall not permit any of
    its Subsidiaries to), without the prior written consent of the
    Company (which consent shall not be unreasonably withheld or
    delayed):
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Solely in the case of Parent, declare or pay any
    dividends on or make any other distributions (whether in cash,
    stock or property) in respect of any of its capital stock, or
    split, combine or reclassify any of its capital stock or issue
    or authorize the issuance of any other securities in respect of,
    in lieu of or in substitution for shares of its capital stock;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Acquire or agree to acquire by merging or consolidating
    with, or by purchasing an equity interest in or any of the
    assets of, or by any other manner, any business or any
    corporation, partnership or other business organization or
    division, or otherwise acquire or agree to acquire any assets
    (other than inventory and other items in the ordinary course of
    business), or take any other action, in any such case that could
    reasonably be expected to delay, prevent or interfere with the
    consummation of the Merger;
</DIV>

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    <BR>
    A-23
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Amend or propose to amend its charter or by-laws in a
    manner that would reasonably be expected to adversely impact
    (i)&#160;the consummation of the Merger or (ii)&#160;the Company
    or its stockholders, other than in the same respect as all other
    holders of Parent Common Stock;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;Change any method or principle of financial accounting
    in a manner that is inconsistent with past practice, except to
    the extent required by GAAP or change in Law as advised by
    Parent&#146;s regular independent accountants, make or change
    any material tax election, or settle or compromise any material
    Tax Liability or refund;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;Take any action that is intended or would reasonably be
    expected to result in any of the conditions to the Merger in
    Article&#160;VII not being satisfied;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;Take, or agree in writing or otherwise to take, any of
    the actions described in paragraphs (a)&#160;through
    (e)&#160;above.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Nothing contained in this Agreement shall give the Company,
    directly or indirectly, rights to control or direct
    Parent&#146;s operations prior to the Effective Time. Prior to
    the Effective Time, Parent shall exercise, consistent with the
    terms and conditions of this Agreement, complete control and
    supervision of its operations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;5.03&#160;&#160;<U>Cooperation</U>.&#160;&#160;Subject
    to compliance with applicable Law, from the date hereof until
    the Effective Time, each of the Company and Parent shall confer
    on a regular and frequent basis with one or more Representatives
    of the other party to report on the general status of ongoing
    operations.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;VI.<BR>
    ADDITIONAL AGREEMENTS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;6.01&#160;&#160;<U>No Solicitation</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Neither the Company nor any of its Subsidiaries nor any
    of the officers, directors or employees of the Company or its
    Subsidiaries shall, and the Company shall use all reasonable
    best efforts to cause its and its Subsidiaries&#146; attorneys,
    accountants, investment bankers, financial advisors and other
    agents and representatives (collectively,
    &#147;Representatives&#148;) not to, and on becoming aware of it
    will use its best efforts to stop any such person from
    continuing to, directly or indirectly, (i)&#160;solicit,
    initiate, knowingly encourage, or facilitate (including by way
    of furnishing information) any inquiries, proposals or offers
    that constitute, or could reasonably be expected to lead to, an
    Acquisition Proposal, (ii)&#160;engage in any negotiations or
    discussions concerning, or provide any non-public information of
    the Company or its Subsidiaries to any person relating to, or
    take any other action to facilitate any inquiries or the making
    of any proposal or offer that constitutes, or could reasonably
    be expected to lead to, any Acquisition Proposal (other than
    informing persons of the existence of the provisions contained
    in this Section&#160;6.01), or (iii)&#160;enter into any
    agreement, arrangement or understanding (other than a
    confidentiality agreement entered into in accordance with this
    Section&#160;6.01(a)) contemplating or relating to any
    Acquisition Proposal or requiring the Company to abandon,
    terminate or fail to consummate the Merger or any other
    transaction contemplated by this Agreement; <I>provided,
    however</I>, that, prior to receipt of the Company Stockholder
    Approval, nothing contained in this Agreement shall prevent the
    Company, or its Board of Directors, from (A)&#160;furnishing
    non-public information to, or entering into discussions or
    negotiations with, any person in connection with a bona fide
    written Acquisition Proposal by such person, if and only to the
    extent that (1)&#160;such Acquisition Proposal was made after
    the date of this Agreement and shall not have been withdrawn,
    (2)&#160;such Acquisition Proposal was not solicited, initiated,
    knowingly encouraged or facilitated after the date of this
    Agreement in breach of, and did not otherwise result from a
    breach of, this Section&#160;6.01(a), (3)&#160;the Board of
    Directors of the Company determines in good faith, after
    consultation with its outside counsel and financial advisors,
    that such Acquisition Proposal is, or is reasonably likely to
    lead to, a Superior Proposal, (4)&#160;prior to furnishing such
    non-public information to, or entering into discussions or
    negotiations with, such person, the Company receives from such
    person an executed confidentiality agreement with terms as to
    confidentiality no less favorable in all material respects to
    the Company than those contained in the Confidentiality
    Agreement dated April&#160;25, 2007 between the Company and
    Parent (the &#147;Confidentiality Agreement&#148;), and
    (5)&#160;prior to furnishing such non-public information or
    providing access to its properties, books or records, the
    Company has complied with the provisions of
    Section&#160;6.01(b); (B)&#160;complying with
    <FONT style="white-space: nowrap">Rule&#160;14e-2</FONT>
    or
    <FONT style="white-space: nowrap">Rule&#160;14d-9</FONT>
    promulgated under the Exchange Act with regard to an Acquisition
    Proposal; <I>provided </I>that, with respect
</DIV>

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    <BR>
    A-24
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    to this clause&#160;(B), any Change of Recommendation is made in
    compliance with Section&#160;6.01(e); or (C)&#160;taking any
    action permitted to be taken pursuant to the last sentence of
    Section&#160;6.01(c). The Company agrees that, in the event that
    it receives a Superior Proposal, for the four Business Day
    period commencing on the date on which it delivers notice of
    such Superior Proposal to Parent in accordance with
    Section&#160;6.01(b), it shall, if requested by Parent,
    negotiate in good faith with, and cause its financial and legal
    advisors to negotiate in good faith with, Parent to attempt to
    make such adjustments in the terms and conditions of this
    Agreement as would enable the Company to proceed with the
    transactions contemplated herein (it being understood and agreed
    that any amendment to the financial terms or any other material
    term of any such Superior Proposal shall require a new notice to
    Parent regarding such Superior Proposal and a new four Business
    Day period and related negotiation obligation).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;The Company shall notify Parent promptly in writing
    after receipt (and in any event within one Business Day) by the
    Company (or its Representatives) of any Acquisition Proposal,
    any inquiries or contacts that are reasonably likely to lead to
    an Acquisition Proposal, or any request for non-public
    information or access to the properties, books or records of the
    Company relating to or which could reasonably be expected to
    lead to an Acquisition Proposal. Such notice shall be made
    orally and in writing and shall indicate in reasonable detail
    the identity of the offeror and the terms and conditions of such
    proposal, inquiry or contact. The Company shall
    (i)&#160;continue to keep Parent informed, on a prompt basis
    (and in any event within two Business Days), of the status of
    any material developments (including any changes or adjustments
    made to or proposed to be made to the terms of any such
    Acquisition Proposal), (ii)&#160;provide to Parent promptly (and
    in any event within two Business Days) after receipt or delivery
    thereof with copies of the Acquisition Proposal (including any
    amendments or supplements thereto); <I>provided </I>that the
    Company shall not be required to disclose its internal analyses
    relating to any such Acquisition Proposal, and
    (iii)&#160;provide to Parent a list of, and copies of, the due
    diligence information provided to the person making such
    inquiry, contact, proposal, offer or request concurrently with
    delivery to such person and immediately provide Parent with
    access to all due diligence information to which the person
    making such inquiry, contact, proposal, offer or request was
    provided access (except for any such information previously
    provided to Parent). The Company shall promptly provide to
    Parent reasonable advance written notice of any scheduled
    meeting of the Board of Directors of the Company to make a
    determination that an Acquisition Proposal is a Superior
    Proposal.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;The Company shall immediately cease and cause to be
    terminated all existing activities, discussions or negotiations
    by it, its Subsidiaries and their respective Representatives
    with any person other than Parent conducted heretofore with
    respect to any Acquisition Proposal. The Company also agrees, if
    it has not already done so, to promptly request each person, if
    any, that has heretofore executed a confidentiality agreement
    within 12&#160;months prior to the date hereof in connection
    with any Acquisition Proposal to return or destroy all
    confidential information heretofore furnished to such person by
    or on behalf of it or its Subsidiaries. The Company shall not
    modify, amend or terminate, or waive, assign or release any
    material rights or claims, or grant any consent under, any
    confidentiality agreement relating to any Acquisition Proposal
    or otherwise under any standstill or similar agreement or fail
    to fully enforce any such agreement upon the request of Parent.
    Notwithstanding the foregoing, the Company may grant a consent
    or waiver under, or otherwise fail to enforce, any such
    agreement in order to permit a person to make an unsolicited
    (after the date of this Agreement) Acquisition Proposal to the
    Company provided that the Company has otherwise complied with
    this Section&#160;6.01, that upon any grant of waiver or
    consent, Parent is promptly notified of such waiver or consent
    and that the Company shall have similarly waived or modified any
    similar provision in the Confidentiality Agreement as it relates
    to Parent.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;The Company shall take such action as is necessary to
    inform promptly its Representatives of the provisions of this
    Section&#160;6.01. The Company agrees that any violation of
    Section&#160;6.01 by any of the Company&#146;s Subsidiaries or
    any of the Representatives shall be deemed to be a breach of
    Section&#160;6.01 by the Company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;Neither the Board of Directors of the Company nor any
    committee thereof shall (i)&#160;fail to make, withdraw or
    modify in a manner adverse to Parent, or publicly propose to
    withdraw or modify in a manner adverse to Parent, the Company
    Recommendation, (ii)&#160;approve any letter of intent,
    agreement in principle, acquisition agreement or similar
    agreement relating to any Acquisition Proposal or
    (iii)&#160;approve, endorse or recommend, or publicly propose to
    approve, endorse or recommend, any Acquisition Proposal.
    Notwithstanding the foregoing provisions of Section&#160;6.01(a)
    and this Section&#160;6.01(e), if, prior to receipt of the
    Company Stockholder Approval, (w)&#160;the Company&#146;s Board
    of Directors shall have determined in good faith, after
    consultation with outside counsel, that the
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    failure to take the actions described in clauses&#160;(A) and/or
    (B)&#160;below would be inconsistent with its fiduciary duties
    under applicable Law, (x)&#160;the Company&#146;s Board of
    Directors has notified Parent in writing of the determination
    described in clause&#160;(w), which notice shall specify in
    reasonable detail the material events giving rise thereto,
    (y)&#160;at least four Business Days following receipt by Parent
    of the notice referred to in clause&#160;(x) above, and taking
    into account any revised proposal made by Parent since receipt
    of the notice referred to in clause&#160;(x) above, the
    Company&#146;s Board of Directors maintains its determination
    described in clause&#160;(w) above, <I>provided, that</I>,
    during such period after receipt by Parent of such notice, the
    Company has, if requested by Parent, negotiated in good faith
    with, and caused the Company&#146;s financial and legal advisors
    to negotiate in good faith with, Parent to attempt to make such
    adjustments in the terms and conditions of this Agreement as
    would enable the Company to proceed with the transactions
    contemplated herein, and (z)&#160;the Company is in compliance
    with this Section&#160;6.01, the Company&#146;s Board of
    Directors may (A)&#160;fail to make, withdraw or modify the
    Company Recommendation (a &#147;Change of Recommendation&#148;)
    <FONT style="white-space: nowrap">and/or</FONT>
    (B)&#160;upon termination of this Agreement in accordance with
    Section&#160;8.01(h) and concurrent payment of the termination
    fee in accordance with Section&#160;8.03, approve and enter into
    an agreement relating to an Acquisition Transaction that
    constitutes a Superior Proposal. Nothing in this
    Section&#160;6.01 shall permit the Company to terminate this
    Agreement except as specifically provided in Article&#160;VIII
    or affect any other obligation of the Company under this
    Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;Nothing contained in Section&#160;6.01 or otherwise in
    this Agreement shall prohibit the Company from making any
    disclosure to its stockholders if, in the good faith judgment of
    its Board of Directors, after consultation with outside legal
    counsel, failure so to disclose would result in a breach of
    applicable Law (including Delaware Law and the federal
    securities Laws).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;6.02&#160;&#160;<U>Proxy Statement/Prospectus;
    Registration Statement</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;As promptly as practical after the date of this
    Agreement, the Company and Parent shall prepare and file with
    the SEC the Proxy Statement, and Parent shall prepare and file
    with the SEC the Registration Statement, in which the Proxy
    Statement will be included as a prospectus. The Company and
    Parent shall use all reasonable efforts to cause the
    Registration Statement to become effective as soon after such
    filing as practical. The Proxy Statement, and any amendment or
    supplement thereto, shall include the Company Recommendation,
    subject to Section&#160;6.01(e). The parties shall notify each
    other promptly of the receipt of any comments from the SEC or
    its staff and of any request by the SEC or its staff for
    amendments or supplements to the Proxy Statement or the
    Registration Statement or for additional information and shall
    supply each other with copies of all correspondence between such
    or any of its Representatives, on the one hand, and the SEC or
    its staff, on the other hand, with respect to the Proxy
    Statement, the Registration Statement or the Merger. If, at any
    time prior to the receipt of the Company Stockholder Approval,
    any event occurs with respect to the Company, Parent or any of
    their respective Subsidiaries, or any change occurs with respect
    to other information supplied by a party for inclusion in the
    Proxy Statement or the Registration Statement, which is required
    to be described in an amendment of, or a supplement to, the
    Proxy Statement or the Registration Statement, such party shall
    promptly notify the other party of such event, and the Company
    and Parent shall cooperate in the prompt filing with the SEC of
    any necessary amendment or supplement to the Proxy Statement and
    the Registration Statement and, as required by Law, in
    disseminating the information contained in such amendment or
    supplement to the Company&#146;s stockholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;The Company and Parent shall make all necessary filings
    with respect to the Merger under the Securities Act, the
    Exchange Act, applicable state blue sky Laws and the rules and
    regulations thereunder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;6.03&#160;&#160;<U>Access to
    Information</U>.&#160;&#160;Upon reasonable notice, Parent and
    the Company shall each (and shall cause each of their respective
    Subsidiaries to) afford to the Representatives of the other
    reasonable access, during normal business hours during the
    period prior to the Effective Time or the termination of this
    Agreement, to its properties, books, contracts, commitments and
    records and, during such period, each of Parent and the Company
    shall (and shall cause each of their respective Subsidiaries to)
    furnish promptly to the other (a)&#160;a copy of each report,
    schedule, registration statement and other document filed or
    received by it during such period pursuant to the requirements
    of federal securities Laws and (b)&#160;all other information
    concerning its business, properties and personnel as such other
    party may reasonably request. Unless otherwise required by Law,
    the parties will hold any information obtained pursuant to this
    Section&#160;6.03 in confidence in accordance with the
    Confidentiality Agreement. No information or knowledge obtained
    in any investigation pursuant to this Section&#160;6.03 shall
    affect or be deemed to
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    modify any representation or warranty contained in this
    Agreement or the conditions to the obligations of the parties to
    consummate the Merger. Notwithstanding the foregoing or
    Section&#160;6.05, neither the Company nor Parent shall be
    required to (a)&#160;provide any information which it reasonably
    believes it may not provide to the other party by reason of
    contractual or legal restrictions, including applicable Law (and
    in such circumstances, the parties shall use their reasonable
    best efforts to make reasonable and appropriate substitute
    disclosure arrangements), or which it believes is competitively
    sensitive information, or (b)&#160;take any action that would
    jeopardize any attorney-client privilege of such party or its
    Subsidiaries (and in such circumstances, the parties shall use
    their reasonable best efforts to make reasonable and appropriate
    substitute disclosure arrangements). In addition, the Company
    and Parent may designate any competitively sensitive information
    provided to the other under this Agreement as &#147;outside
    counsel only&#148; and such information shall be given only to
    outside counsel of the recipient. Each party will use reasonable
    efforts to minimize any disruption to the businesses of the
    other party and its Subsidiaries which may result from the
    requests for access, data and information hereunder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;6.04&#160;&#160;<U>Stockholders
    Meeting</U>.&#160;&#160;(a)&#160;The Company shall, as promptly
    as practicable after the date hereof, take all actions necessary
    in accordance with federal securities laws, the DGCL and its
    certificate of incorporation and by-laws to call, give notice
    of, convene and hold the Company Stockholders&#146; Meeting to
    be held on the earliest practicable date determined in
    consultation with Parent for the purpose of voting upon this
    Agreement and the Merger. Subject to Section&#160;6.01(a) and
    Section&#160;6.01(e) and unless there has been a Change of
    Recommendation, the Company shall use all reasonable efforts to
    solicit from stockholders of the Company proxies in favor of the
    adoption of this Agreement and the Merger. Notwithstanding any
    Change of Recommendation, the Company shall nevertheless submit
    this Agreement and the Merger to the stockholders of the Company
    for the purpose of obtaining the Company Stockholder Approval at
    the Company Stockholders&#146; Meeting and nothing contained
    herein shall be deemed to relieve the Company of such
    obligation, unless this Agreement shall have been terminated in
    accordance with its terms prior to the Company
    Stockholders&#146; Meeting. Other than a Superior Proposal that
    the Board of Directors of the Company has resolved to accept and
    given notice to Parent of in accordance with
    Section&#160;8.01(h), the Company shall not submit to the vote
    of its stockholders any Acquisition Proposal; <I>provided</I>,
    that the foregoing shall not affect any rights set forth in
    Section&#160;6.01.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;6.05&#160;&#160;<U>Appropriate Actions; Consents;
    Filings</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The Company and Parent shall each use their reasonable
    best efforts to (i)&#160;take, or cause to be taken, all
    appropriate action, and do, or cause to be done, all things
    necessary and proper under applicable Law to consummate and make
    effective the transactions contemplated hereby as promptly as
    practicable, (ii)&#160;obtain from any Governmental Entity or
    any other third party any consents, licenses, permits, waivers,
    approvals, authorizations, or orders required to be obtained or
    made by the Company or Parent or any of their Subsidiaries in
    connection with the authorization, execution and delivery of
    this Agreement and the consummation of the transactions
    contemplated hereby including the Merger, and (iii)&#160;as
    promptly as practicable, make all necessary filings, and
    thereafter make any other required submissions, with respect to
    this Agreement and the Merger required under (A)&#160;the
    Securities Act and the Exchange Act, and any other applicable
    federal or state securities Laws, (B)&#160;the HSR Act and any
    related governmental request thereunder, and (C)&#160;any other
    applicable Law. The Company and Parent shall cooperate with each
    other in connection with the making of all such filings,
    including providing copies of all such documents to the
    non-filing party and its advisors prior to filing and, if
    requested, to accept all reasonable additions, deletions or
    changes suggested in connection therewith. Subject to
    Section&#160;6.03, Parent and the Company shall use their
    reasonable best efforts to furnish to each other all information
    required for any application or other filing to be made pursuant
    to the rules and regulations of any applicable Law (including
    all information required to be included in the Proxy Statement
    and the Registration Statement) in connection with the
    transactions contemplated by this Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;The Company and Parent agree, and shall cause each of
    their respective Subsidiaries, to cooperate and to use their
    reasonable best efforts to obtain any government clearances or
    approvals required for Closing under the HSR Act, the Sherman
    Act, as amended, the Clayton Act, as amended, the Federal Trade
    Commission Act, as amended, and any other Federal, state or
    foreign Law or, decree designed to prohibit, restrict or
    regulate actions for the purpose or effect of monopolization or
    restraint of trade (collectively &#147;Antitrust Laws&#148;), to
    obtain the expiration of any applicable waiting period under any
    Antitrust Laws, to respond to any government requests for
    information under any Antitrust Law, and to contest and resist
    any action, including any legislative, administrative or
    judicial
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    action, and to have vacated, lifted, reversed or overturned any
    decree, judgment, injunction or other order (whether temporary,
    preliminary or permanent) (an &#147;Order&#148;) that restricts,
    prevents or prohibits the consummation of the Merger or any
    other transactions contemplated by this Agreement under any
    Antitrust Law. The parties hereto will consult and cooperate
    with one another, and consider in good faith the views of one
    another, in connection with any analyses, appearances,
    presentations, memoranda, briefs, arguments, opinions and
    proposals made or submitted by or on behalf of any party hereto
    in connection with proceedings under or relating to any
    Antitrust Law. Notwithstanding anything to the contrary in this
    Section&#160;6.05, neither the Company nor Parent nor any of
    their respective Subsidiaries shall be required (i)&#160;to
    divest or hold separate any of their respective businesses,
    product lines or assets, or to take or agree to take any other
    action or agree to any limitation, that, in any such case, would
    reasonably be expected to have a material adverse effect on the
    financial condition, results of operations or prospects of
    either Parent and its Subsidiaries, taken as a whole, or the
    Company and its Subsidiaries, taken as a whole, or (ii)&#160;to
    agree to or effect any divestiture, hold separate any business
    or take any other action that is not conditioned on the
    consummation of the Merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Each of Parent and the Company shall give (or shall
    cause their respective Subsidiaries to give) any notices to
    third parties, and use, and cause their respective Subsidiaries
    to use, their reasonable efforts to obtain any third party
    consents related to or required in connection with the Merger
    that are (i)&#160;necessary to consummate the transactions
    contemplated hereby, (ii)&#160;disclosed or required to be
    disclosed in the Parent Disclosure Letter or the Company
    Disclosure Letter, as the case may be, or (iii)&#160;required to
    prevent a Parent Material Adverse Effect or a Company Material
    Adverse Effect from occurring prior to or after the Effective
    Time. If any party shall fail to obtain any consent from a third
    person described in this subsection (c), such party shall use
    its reasonable efforts, and shall take any such actions
    reasonably requested by the other party hereto, to limit the
    adverse effect upon the Company and Parent, their respective
    Subsidiaries, and their respective businesses resulting, or that
    could reasonably be expected to result after the Effective Time,
    from the failure to obtain such consent.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;Each of the Company and Parent shall give prompt notice
    to the other of (i)&#160;any notice or other communication from
    any person alleging that the consent of such person is or may be
    required in connection with the Merger, (ii)&#160;any notice or
    other communication from any Governmental Entity in connection
    with the Merger (including any filings, correspondence or other
    communication with the SEC), (iii)&#160;any actions, suits,
    claims, investigations or proceedings commenced or threatened in
    writing against, relating to or involving or otherwise affecting
    the Company, Parent, Merger Sub or their respective Subsidiaries
    that relate to the consummation of the Merger and (iv)&#160;if
    there has been a material change in its current or future
    business, financial condition or results of operations or any
    event or condition that might reasonably be expected to cause or
    result in any of its representations or warranties contained
    herein to be untrue or inaccurate in any material respect or to
    materially delay or impede the ability of any of the Company,
    Parent or Merger Sub, respectively, to consummate the
    transactions contemplated by this Agreement or to fulfill their
    respective obligations set forth herein. In furtherance and not
    in limitation of the covenants of the Company herein, the
    Company shall promptly advise Parent orally and in writing of
    any litigation, arbitration, suit, claim, action, charge or
    proceeding brought by any stockholder of the Company against the
    Company
    <FONT style="white-space: nowrap">and/or</FONT> its
    directors relating to this Agreement, including the Merger, and
    shall keep Parent reasonably informed regarding any such
    matters. The Company shall give Parent the opportunity to
    participate in the defense or settlement of any such matter,
    shall consider in good faith Parent&#146;s advice with respect
    to such matter and shall not settle any such matter without the
    prior written consent of Parent (which consent shall not be
    unreasonably delayed or withheld). In addition, prior to the
    termination of this Agreement pursuant to Article&#160;VIII,
    except as required by Law, the Company shall not voluntarily
    cooperate with any third party that may hereafter seek to
    restrain or prohibit or otherwise oppose the transactions
    contemplated by this Agreement, including the Merger, and shall
    cooperate with Parent to resist any such effort to restrain or
    prohibit or otherwise oppose the transactions contemplated by
    this Agreement, including the Merger; <I>provided, however</I>,
    that this sentence shall in no way restrict the rights of the
    Company and its Board of Directors under Section&#160;6.01.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-variant: SMALL-CAPS">Section&#160;</FONT>6.06&#160;&#160;<U>Public
    Disclosure</U>.&#160;&#160;The Company and Parent shall agree on
    the form and content of the initial joint press release
    regarding the transactions contemplated hereby, and thereafter
    shall consult with each other before issuing any press release
    or otherwise making any public statement with respect to the
    Merger or this Agreement and shall not issue any such press
    release or make any such public statement prior to such
    consultation, except as may be required by Law or the rules and
    regulations of the NYSE.
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;6.07&#160;&#160;<U>Rule&#160;145</U>.&#160;&#160;Prior
    to the filing of the Joint Proxy Statement with the SEC, the
    Company will provide to Parent a list of those persons who are,
    in the Company&#146;s reasonable judgment,
    &#147;affiliates&#148; of the Company within the meaning of
    Rule&#160;145 promulgated under the Securities Act
    (&#147;Rule&#160;145&#148;). The Company shall provide such
    information and documents as Parent shall reasonably request for
    purposes of reviewing such list and shall notify Parent in
    writing regarding any change in the identity of its
    &#147;affiliates&#148; for purposes of Rule&#160;145 prior to
    the Closing Date. The Company shall use its reasonable efforts
    to deliver or cause to be delivered to Parent by the Effective
    Time from each person identified as an &#147;affiliate&#148; for
    purposes of Rule&#160;145 an executed affiliate agreement in
    substantially a form as mutually agreed to by the Company and
    Parent, by which each such person agrees to comply with the
    applicable requirements of Rule&#160;145 (an &#147;Affiliate
    Agreement&#148;). Parent will not be required to maintain the
    effectiveness of the Registration Statement for the purpose of
    resales by stockholders of the Company who may be affiliates of
    the Company pursuant to Rule&#160;145 and shall be entitled to
    place appropriate legends on the certificates evidencing any
    Parent Common Stock to be received by such affiliates of the
    Company pursuant to the terms of this Agreement, and to issue
    appropriate stop transfer instructions to the transfer agent for
    the Parent Common Stock, consistent with the terms of the
    Affiliate Agreements (provided that such legends or stop
    transfer instructions shall be removed, two years after the
    Closing Date, upon the request of any stockholder that is not
    then an Affiliate of Parent). This Section&#160;6.07 shall
    automatically become inoperative at such time as and to the
    extent the amendments to Rule&#160;145 set forth in the
    SEC&#146;s Release
    <FONT style="white-space: nowrap">No.&#160;33-8869</FONT>
    make the current provisions of Rule&#160;145 no longer
    applicable with respect to transactions contemplated in this
    Section&#160;6.07.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;6.08&#160;&#160;<U>Section&#160;16
    Matters</U>.&#160;&#160;Prior to the Effective Time, Parent,
    Merger Sub and the Company shall take all steps as may be
    required to cause (i)&#160;any disposition of shares of Company
    Common Stock (including derivative securities with respect to
    Company Common stock) resulting from the Merger or the other
    transactions contemplated by this Agreement by each individual
    who will be immediately prior to the Effective Time subject to
    the reporting requirements of Section&#160;16(a) of the Exchange
    Act (&#147;Section&#160;16&#148;) with respect to the Company,
    to be exempt under
    <FONT style="white-space: nowrap">Rule&#160;16b-3</FONT>
    under the Exchange Act and (ii)&#160;any acquisition of shares
    of Parent Common Stock (including derivative securities with
    respect to Parent Common Stock) resulting from the Merger or the
    other transactions contemplated by this Agreement by each
    individual who may become subject to the reporting requirements
    of Section&#160;16 with respect to Parent, to be exempt under
    <FONT style="white-space: nowrap">Rule&#160;16b-3</FONT>
    under the Exchange Act.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;6.09&#160;&#160;<U>NYSE
    Listing</U>.&#160;&#160;Parent shall use its reasonable best
    efforts to cause the shares of Parent Common Stock to be issued
    (i)&#160;in the Merger, (ii)&#160;upon the exercise of the
    outstanding Company Stock Options, as assumed and converted,
    pursuant to Section&#160;6.10(a) and (iii)&#160;pursuant to the
    New Stock Purchase Rights as set forth in Section&#160;6.10(b),
    to be approved for listing on the NYSE, subject to official
    notice of issuance, prior to the Closing Date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;6.10&#160;&#160;<U>Stock Plans</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;(i)&#160;At the Effective Time, each Company Stock
    Option, whether vested or unvested, outstanding immediately
    prior to the Effective Time shall be assumed by Parent and
    converted into an option to purchase shares of Parent Common
    Stock in accordance with this Section&#160;6.10(a). Each Company
    Stock Option as so assumed and converted shall continue to have,
    and be subject to, the same terms and conditions as set forth in
    the applicable Company Stock Plan and any agreements thereunder
    immediately prior to the Effective Time, except that, as of the
    Effective Time, each Company Stock Option as so assumed and
    converted shall be exercisable for that number of whole shares
    of Parent Common Stock (rounded down to the nearest whole share)
    equal to the product of (x)&#160;the number of shares of Company
    Common Stock subject to such Company Stock Option multiplied by
    (y)&#160;the Option Exchange Ratio, with a per share exercise
    price of Parent Common Stock (rounded up to the nearest whole
    cent) equal to the quotient of (a)&#160;the per share exercise
    price of such Company Stock Option divided by (b)&#160;the
    Option Exchange Ratio. For purposes of this Agreement,
    &#147;Option Exchange Ratio&#148; means the sum of (A)&#160;the
    Exchange Ratio and (B)&#160;the quotient of (i)&#160;the Cash
    Consideration per share of Company Common Stock divided by
    (ii)&#160;the average of the last reported sales prices of
    Parent Common Stock, as reported on the NYSE Composite
    Transactions Tape (as reported in <U>The Wall Street Journal</U>
    or, if not reported therein, in another authoritative source
    mutually selected by Parent and the Company), on each of the ten
    consecutive trading days immediately preceding the date of the
    Effective Time. It is intended that Company Stock Options
    assumed and converted into options to acquire Parent Common
    Stock in accordance with the foregoing shall qualify following
    the Effective Time as incentive stock options as defined in
    Section&#160;422 of the Code to the extent such Company Stock
    Options qualified as
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    incentive stock options immediately prior to the Effective Time
    and that the assumption and conversion be consistent with
    Section&#160;424(a) of the Code and the Treasury regulations
    thereunder, and, if reasonably practicable, the provisions of
    this Section&#160;6.10 shall be applied consistent with such
    intent.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;As soon as practicable after the Effective Time,
    Parent shall deliver to the participants in Company Stock Plans
    appropriate notice setting forth such participants&#146; rights
    pursuant thereto and the grants pursuant to Company Stock Plans
    shall continue in effect on the same terms and conditions
    (subject to the adjustments required by this Section&#160;6.10
    after giving effect to the Merger).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;The Board of Directors of the Company (or appropriate
    committee thereof) shall, prior to or as of the Effective Time,
    take all necessary actions, if any, pursuant to and in
    accordance with the terms of the Company Stock Plans and the
    instruments evidencing Company Stock Options, to provide for the
    assumption and conversion of Company Stock Options into options
    to acquire Parent Common Stock in accordance with this
    Section&#160;6.10 without the consent of the holders of the
    Company Stock Options.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;With respect to the ESPP, each participant&#146;s
    accumulated payroll deductions shall be used to purchase shares
    of Company Common Stock immediately prior to the Effective Time
    in accordance with the terms of the ESPP, and the shares of
    Company Common Stock purchased thereunder shall be canceled at
    the Effective Time and converted into the right to receive the
    Merger Consideration pursuant to Section&#160;2.01(b). The
    Company shall cause the ESPP to terminate at the Effective Time,
    and no further purchase rights shall be granted or exercised
    under the ESPP thereafter.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Parent shall take all corporate action necessary to
    reserve for issuance a sufficient number of shares of Parent
    Common Stock for delivery upon exercise of the Company Stock
    Options assumed in accordance with this Section&#160;6.10. As
    soon as reasonably practicable after the Effective Time, Parent
    shall file a registration statement on
    <FONT style="white-space: nowrap">Form&#160;S-8</FONT>
    (or any successor or other appropriate form) with respect to the
    shares of Parent Common Stock subject to such Company Stock
    Options and shall use its reasonable best efforts to maintain
    the effectiveness of such registration statement or registration
    statements (and maintain the current status of the prospectus or
    prospectuses contained therein) for so long as such Company
    Stock Options remain outstanding.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;The Company Restricted Shares shall continue to vest
    and have the rights and be subject to the conditions as set
    forth in the respective Company Stock Plan and the award
    agreements governing such Company Restricted Shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;6.11&#160;&#160;<U>Indemnification</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;From and after the Effective Time, Parent and Merger
    Sub agree that they will indemnify and hold harmless each
    present and former director and officer of the Company and its
    Subsidiaries (the &#147;Indemnified Parties&#148;) against any
    costs or expenses (including reasonable attorneys&#146; fees),
    judgments, fines, losses, claims, damages, Liabilities or
    amounts paid in settlement (collectively, &#147;Costs&#148;)
    incurred in connection with any claim, action, suit, proceeding
    or investigation, whether civil, criminal, administrative or
    investigative, arising out of or pertaining to any act or
    omission in their capacity as a director or officer occurring at
    or prior to the Effective Time (including for acts and omissions
    occurring in connection with the approval of this Agreement and
    the consummation of the transactions contemplated hereby),
    whether asserted or claimed prior to, at or after the Effective
    Time, to the fullest extent permitted under Delaware Law (and
    Parent shall also advance expenses as incurred to the fullest
    extent permitted under applicable Law; <I>provided </I>that, if
    required by Law, the Indemnified Party to whom expenses are
    advanced provides an undertaking to repay such advances if it is
    ultimately determined that such Indemnified Party is not
    entitled to indemnification).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;For six years from the Effective Time, Parent shall
    cause to be maintained in effect for the benefit of the
    Company&#146;s directors and officers an insurance and
    indemnification policy that provides coverage for acts or
    omissions occurring prior to the Effective Time (the
    &#147;D&#038;O Insurance&#148;) covering each person currently
    covered by the officers&#146; and directors&#146; liability
    insurance policies of the Company on terms with respect to
    coverage and in amounts no less favorable than those of the
    Company&#146;s policies in effect on the date hereof with the
    same or comparable quality insurance carriers; <I>provided,
    however</I>, that Parent shall not be required to pay an annual
    premium for the D&#038;O Insurance in excess of 300% of the
    premium for the 2007 fiscal year (the &#147;Maximum
    Premium&#148;); <I>provided, further</I>, if such D&#038;O
    Insurance coverage cannot be obtained at all, or can only be
    obtained at
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    an annual premium in excess of the Maximum Premium, Parent shall
    obtain the most advantageous policies of directors&#146; and
    officers&#146; insurance obtainable for an annual premium equal
    to the Maximum Premium. If requested to do so by the Company,
    Parent shall effect the foregoing by purchasing a
    &#147;tail&#148; directors&#146; and officers&#146; liability
    insurance policy for the Company and its directors and officers
    if such a &#147;tail&#148; policy is available.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;The provisions of this Section&#160;6.11 are intended
    to be in addition to the rights otherwise available to the
    current and former officers and directors of the Company by Law,
    charter or by-law. In the event that Parent or the Survivor or
    any of their successors or assigns (i)&#160;consolidates with or
    merges into any other person and is not the continuing or
    surviving corporation or entity of such consolidation or merger
    or (ii)&#160;transfers or conveys all or substantially all its
    properties and assets to any person, then, and in each such
    case, Parent or the Survivor, as the case may be, shall cause
    proper provisions to be made so that the successors and assigns
    of Parent or the Survivor assume the obligations set forth in
    this Section&#160;6.11. The obligations of Parent and the
    Survivor under this Section&#160;6.11 shall not be terminated or
    modified in such a manner as to adversely affect any indemnitee
    to whom this Section&#160;6.11 applies without the express
    written consent of such affected indemnitee (it being expressly
    agreed that the indemnitees to whom this Section&#160;6.11
    applies shall be third-party beneficiaries of this
    Section&#160;6.11).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;6.12&#160;&#160;<U>Letter of the Company&#146;s
    Accountants</U>.&#160;&#160;The Company shall use its reasonable
    best efforts to cause to be delivered to Parent two letters of
    each of Deloitte&#160;&#038; Touche LLP, the Company&#146;s
    independent registered public accountants, and Ernst&#160;&#038;
    Young LLP, the Company&#146;s former independent registered
    public accountants, one dated a date within two Business Days
    before the date on which the Registration Statement shall become
    effective and one dated a date within two Business Days of the
    Closing Date, each addressed to Parent, in form reasonably
    satisfactory to Parent and customary in scope and substance for
    letters delivered by independent registered public accountants
    in connection with registration statements similar to the
    Registration Statement. In connection with Parent&#146;s efforts
    to obtain such letter, if requested by Deloitte&#160;&#038;
    Touche LLP or Ernst&#160;&#038; Young LLP, the Company shall
    provide a representation letter to such accounting firm
    complying with SAS 72, if then required.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;6.13&#160;&#160;<U>Letter of Parent&#146;s
    Accountants</U>.&#160;&#160;Parent shall use its reasonable best
    efforts to cause to be delivered to the Company two letters of
    Ernst&#160;&#038; Young LLP, Parent&#146;s independent
    registered public accountants, one dated a date within two
    Business Days before the date on which the Registration
    Statement shall become effective and one dated a date within two
    Business Days of the Closing Date, each addressed to the
    Company, in form reasonably satisfactory to the Company and
    customary in scope and substance for letters delivered by
    independent registered public accountants in connection with
    registration statements similar to the Registration Statement.
    In connection with the Company&#146;s efforts to obtain such
    letter, if requested by Ernst&#160;&#038; Young LLP, Parent
    shall provide a representation letter to Ernst&#160;&#038; Young
    LLP complying with SAS 72, if then required.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;6.14&#160;&#160;<U>State Takeover
    Statutes</U>.&#160;&#160;If any state takeover statute or state
    Law that purports to limit or restrict business combinations or
    the ability to acquire or vote shares is or may become
    applicable to the Merger or the other transactions contemplated
    by this Agreement, each of the Company and its Board of
    Directors and the Parent and its Board of Directors shall grant
    such approvals and take such other actions as are necessary so
    that such transactions may be consummated as promptly as
    practicable on the terms contemplated hereby and otherwise act
    to eliminate or minimize the effects of such statute or Law on
    this Agreement and such transactions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;6.15&#160;&#160;<U>Tax-Free Reorganization
    Treatment</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The Company, Parent and Merger Sub shall use their
    reasonable best efforts, and shall cause their respective
    Subsidiaries to use their reasonable best efforts, to take or
    cause to be taken any action necessary for the Merger to qualify
    as a reorganization within the meaning of Section&#160;368(a) of
    the Code. Neither the Company nor Parent shall, nor shall they
    permit any of their respective Subsidiaries to, take or cause to
    be taken any action that would prevent the Merger from
    qualifying as a reorganization within the meaning of
    Section&#160;368(a) of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;This Agreement is intended to constitute, and the
    parties hereto hereby adopt this Agreement as, a &#147;plan of
    reorganization&#148; within the meaning Treasury
    <FONT style="white-space: nowrap">Regulation&#160;Sections&#160;1.368-2(g)</FONT>
    and 1.368-3(a). Each of the Company, Merger Sub and Parent shall
    report the Merger as a reorganization within the meaning of
    Section&#160;368(a) of the Code, unless otherwise required
    pursuant to a &#147;determination&#148; within the meaning of
    Section&#160;1313(a) of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;The parties hereto shall cooperate and use their
    reasonable efforts in order for the Company to obtain the
    opinion of Cravath, Swaine&#160;&#038; Moore LLP described in
    Section&#160;7.02(c) and for Parent to obtain the opinion of
</DIV>

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    A-31
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Andrews Kurth LLP described in Section&#160;7.03(c). In
    connection therewith, Parent<B>,</B> Merger Sub and the Company
    shall deliver to Cravath, Swaine&#160;&#038; Moore LLP and
    Andrews Kurth LLP representation letters, dated and executed as
    of the dates of such opinions, containing customary factual
    statements, representations and covenants.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;6.16&#160;&#160;<U>Parent
    Guarantee</U>.&#160;&#160;Parent agrees to take all action
    necessary to cause Merger Sub to perform all of Merger
    Sub&#146;s agreements, covenants and obligations under this
    Agreement and to consummate the Merger on the terms and subject
    to the conditions set forth in this Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;6.17&#160;&#160;<U>Consent to Use of Financial
    Statements; Financing Cooperation</U>.&#160;&#160;The Company
    will consent to Parent&#146;s inclusion of any audited or
    unaudited financial statements, including those contained in any
    Company SEC Reports, relating to and prepared by the Company
    reasonably requested by Parent to be used in any financing or
    any filings that Parent desires to make with the SEC. In
    addition, the Company shall use reasonable best efforts, at
    Parent&#146;s sole cost and expense, to obtain customary comfort
    letters from Deloitte&#160;&#038; Touche LLP and
    Ernst&#160;&#038; Young LLP regarding financial statements of
    the Company as reasonably requested by the lead underwriter(s)
    or initial purchaser(s) in connection with any registered or
    private offering or otherwise and to obtain the consent of
    Deloitte&#160;&#038; Touche LLP and Ernst&#160;&#038; Young LLP
    to the inclusion of the financial statements referenced above in
    appropriate filings with the SEC. Prior to the Closing, the
    Company shall provide Parent such information regarding the
    Company&#146;s business, and make available such personnel, as
    Parent may reasonably request in order to assist Parent in
    connection with financing activities, including any public
    offerings to be registered under the Securities Act or private
    offerings.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;6.18&#160;&#160;<U>Employee Matters</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;From the Effective Time, and subject to
    Section&#160;6.18(b), the employees of the Company and its
    Subsidiaries who remain in the employment of Parent, the
    Surviving Corporation or their Subsidiaries (the
    &#147;Continuing Employees&#148;) shall (i)&#160;be eligible to
    participate in all benefit plans and programs provided by Parent
    and its Subsidiaries as are provided to similarly situated
    employees of Parent and its Subsidiaries, (ii)&#160;be subject
    to the compensation plans, policies and practices of Parent and
    its Subsidiaries and (iii)&#160;not have their compensation
    (taken as a whole) reduced solely on account of the transaction
    contemplated by this Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;To the extent that any employee benefit plan of Parent
    or its Subsidiaries is made available to any Continuing
    Employee, on or following the Effective Time, Parent shall cause
    to be granted to such Continuing Employee credit for all service
    with the Company and its Subsidiaries prior to the Effective
    Time (as well as service with any predecessor employer of the
    Company or any such Subsidiary, to the extent service with the
    predecessor employer is recognized by the Company or such
    Subsidiary) (such service, &#147;Pre-Closing Service&#148;) for
    all purposes, including determining eligibility to participate,
    level of benefits, vesting and benefit accruals (other than for
    benefit accrual purposes under any employee pension benefit plan
    (as defined in Section&#160;3(2) of ERISA) that is a defined
    benefit pension plan); <I>provided, however</I>, that
    Pre-Closing Service need not be recognized to the extent that
    such recognition would result in any duplication of benefits for
    the same period of service.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;With respect to any welfare plan maintained by Parent
    or any of its Subsidiaries in which any Continuing Employee is
    eligible to participate after the Effective Time, Parent shall,
    and shall cause the Survivor to, use commercially reasonable
    efforts to (i)&#160;waive all limitations as to preexisting
    conditions and exclusions with respect to participation and
    coverage requirements applicable to such employees to the extent
    such conditions and exclusions were satisfied or did not apply
    to such employees under the welfare plans of the Company and its
    Subsidiaries prior to the Effective Time and (ii)&#160;provide
    each Continuing Employee with credit for any co-payments and
    deductibles paid prior to the Effective Time in satisfying any
    analogous deductible or out-of-pocket maximum requirements to
    the extent applicable under any such plan.
</DIV>

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    <BR>
    A-32
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;VII.<BR>
    CONDITIONS TO MERGER</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;7.01&#160;&#160;<U>Conditions to Each Party&#146;s
    Obligation To Effect the Merger</U>.&#160;&#160;The respective
    obligations of each party to this Agreement to effect the Merger
    shall be subject to the satisfaction or waiver prior to the
    Closing Date of the following conditions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<U>Stockholder Approval</U>.&#160;&#160;The Company
    Stockholder Approval shall have been obtained.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<U>Regulatory Approvals</U>.&#160;&#160;The waiting
    period applicable to the consummation of the Merger under the
    HSR Act shall have expired or been terminated.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<U>Approvals</U>.&#160;&#160;Other than the filings
    provided for by Section&#160;1.02 and Section&#160;7.01(b), all
    authorizations, consents, orders or approvals of, or
    declarations or filings with, or expirations of waiting periods
    imposed by, any Governmental Entity the failure of which to
    file, obtain or occur is reasonably likely to have a Company
    Material Adverse Effect or a Parent Material Adverse Effect
    shall have been filed, been obtained or occurred.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;<U>Registration Statement</U>.&#160;&#160;The
    Registration Statement shall have become effective under the
    Securities Act and shall not be the subject of any stop order or
    proceedings seeking a stop order.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;<U>No Injunctions</U>.&#160;&#160;No Governmental
    Entity or federal, state or foreign court of competent
    jurisdiction shall have enacted, issued, promulgated, enforced
    or entered any Order or statute, rule, regulation which is in
    effect and which has the effect of making the Merger illegal or
    otherwise prohibiting consummation of the Merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;<U>NYSE</U>.&#160;&#160;The shares of Parent Common
    Stock to be issued in the Merger shall have been approved for
    listing on the NYSE, subject to official notice of issuance.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (g)&#160;<U>Litigation</U>.&#160;&#160;There shall not be
    pending or threatened any suit, action or proceeding by any
    Governmental Entity, in each case that has a reasonable
    likelihood of success, (i)&#160;challenging the acquisition by
    Parent of any Company Common Stock, seeking to restrain or
    prohibit the consummation of the Merger or any other transaction
    contemplated hereby or seeking to obtain from the Company,
    Parent or Merger Sub any damages that are material in relation
    to the Company or Parent, (ii)&#160;seeking to prohibit or limit
    the ownership or operation by the Company, Parent or any of
    their respective Subsidiaries of any portion of the business or
    assets of the Company, Parent or any of their respective
    Subsidiaries, or to compel the Company, Parent or any of their
    respective Subsidiaries to dispose of or hold separate any
    portion of the business or assets of the Company, Parent or any
    of their respective Subsidiaries, as a result of the Merger or
    any other transaction contemplated hereby, and, in each case, if
    such business or assets relate to the Company or any of its
    Subsidiaries, such business or assets are material to the
    financial condition, results of operations or prospects of the
    Company and its Subsidiaries, taken as a whole, and if such
    business or assets relate to Parent or any of its Subsidiaries,
    such business or assets are material to the financial condition,
    results of operations or prospects of Parent and its
    Subsidiaries, taken as a whole, (iii)&#160;seeking to impose
    limitations on the ability of Parent to acquire or hold, or
    exercise full rights of ownership of, any shares of Company
    Common Stock, including the right to vote the Company Common
    Stock purchased by it on all matters properly presented to the
    stockholders of the Company, (iv)&#160;seeking to prohibit
    Parent or any of its Subsidiaries from effectively controlling
    in any material respect the business or operations of the
    Company and its Subsidiaries or (v)&#160;which otherwise is
    reasonably likely to have a Company Material Adverse Effect or a
    Parent Material Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;7.02&#160;&#160;<U>Additional Conditions to
    Obligations of the Company</U>.&#160;&#160;The obligation of the
    Company to effect the Merger is subject to the satisfaction of
    each of the following conditions, any of which may be waived in
    writing exclusively by the Company:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<U>Representations and Warranties</U>.&#160;&#160;The
    representations and warranties of Parent and Merger Sub
    contained in this Agreement (except for the representations and
    warranties contained in Sections&#160;4.02 and 4.03(a)) shall be
    true and correct (without giving effect to any limitation as to
    &#147;materiality&#148; or &#147;Parent Material Adverse
    Effect&#148; set forth therein) at and as of the date of this
    Agreement and at and as of the Closing Date as if made at and as
    of such time (except to the extent expressly made as of an
    earlier date, in which case as of such
</DIV>

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    <BR>
    A-33
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    earlier date), except where the failure of such representations
    and warranties to be true and correct (without giving effect to
    any limitation as to &#147;materiality&#148; or &#147;Parent
    Material Adverse Effect&#148; set forth therein), individually
    or in the aggregate, has not had and would not reasonably be
    expected to have a Parent Material Adverse Effect and the
    representations and warranties of Parent and Merger Sub
    contained in Sections&#160;4.02 and 4.03(a) shall be true and
    correct in all material respects at and as of the date of this
    Agreement and at and as of the Closing Date as if made at and as
    of such time (except to the extent expressly made as of an
    earlier date, in which case as of such earlier date). The
    Company shall have received a certificate signed on behalf of
    Parent by an executive officer of Parent to such effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<U>Performance of Obligations of Parent and Merger
    Sub</U>.&#160;&#160;Each of Parent and Merger Sub shall have
    performed in all material respects all obligations required to
    be performed by it under this Agreement at or prior to the
    Closing Date; and the Company shall have received a certificate
    signed on behalf of Parent by an executive officer of Parent to
    such effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<U>Tax Opinion</U>.&#160;&#160;The Company shall have
    received a written opinion dated as of the Closing Date based
    upon the representations of the parties contained in this
    Agreement and the representation letters described in
    Section&#160;6.15 from Cravath, Swaine&#160;&#038; Moore LLP,
    counsel to the Company, to the effect that, for federal income
    Tax purposes, the Merger will qualify as a reorganization within
    the meaning of Section&#160;368(a) of the Code and that each of
    Parent, Merger Sub and the Company will be a party to such
    reorganization within the meaning of Section&#160;368(b) of the
    Code, and such opinion shall not have been withdrawn, revoked or
    modified. The opinion referred to in this Section&#160;7.02(c)
    shall not be waivable after receipt of the Company Stockholder
    Approval, unless further approval from the Company&#146;s
    stockholders is obtained with appropriate disclosure.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;<U>Absence of Parent Material Adverse
    Effect</U>.&#160;&#160;Since the date of this Agreement, there
    shall not have been any state of facts, event, change, effect,
    development, condition or occurrence that, individually or in
    the aggregate, has had or would reasonably be expected to have a
    Parent Material Adverse Effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;7.03&#160;&#160;<U>Additional Conditions to
    Obligations of Parent and Merger Sub</U>.&#160;&#160;The
    obligations of Parent and Merger Sub to effect the Merger are
    subject to the satisfaction of each of the following conditions,
    any of which may be waived, in writing, exclusively by Parent:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<U>Representations and Warranties</U>.&#160;&#160;The
    representations and warranties of the Company contained in this
    Agreement (except for the representations and warranties
    contained in Sections&#160;3.02 and 3.03(a)) shall be true and
    correct (without giving effect to any limitation as to
    &#147;materiality&#148; or &#147;Company Material Adverse
    Effect&#148; set forth therein) at and as of the date of this
    Agreement and at and as of the Closing Date as if made at and as
    of such time (except to the extent expressly made as of an
    earlier date, in which case as of such earlier date), except
    where the failure of such representations and warranties to be
    true and correct (without giving effect to any limitation as to
    &#147;materiality&#148; or &#147;Company Material Adverse
    Effect&#148; set forth therein), individually or in the
    aggregate, has not had and would not reasonably be expected to
    have a Company Material Adverse Effect and the representations
    and warranties of the Company contained in Sections&#160;3.02
    and 3.03(a) shall be true and correct in all material respects
    at and as of the date of this Agreement and at and as of the
    Closing Date as if made at and as of such time (except to the
    extent expressly made as of an earlier date, in which case as of
    such earlier date). Parent shall have received a certificate
    signed on behalf of the Company by an executive officer of the
    Company to such effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<U>Performance of Obligations of the
    Company</U>.&#160;&#160;The Company shall have performed in all
    material respects all obligations required to be performed by it
    under this Agreement at or prior to the Closing Date; and Parent
    shall have received a certificate signed on behalf of the
    Company by an executive officer of the Company to such effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<U>Tax Opinion</U>.&#160;&#160;Parent shall have
    received a written opinion dated as of the Closing Date based
    upon the representations of the parties contained in this
    Agreement and the representation letters described in
    Section&#160;6.15 from Andrews Kurth LLP, counsel to Parent, to
    the effect that, for federal income Tax purposes, the Merger
    will be qualify as a reorganization within the meaning of
    Section&#160;368(a) of the Code and that each
</DIV>

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    <BR>
    A-34
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    of Parent, Merger Sub and the Company will be a party to such
    reorganization within the meaning of Section&#160;368(b) of the
    Code, and such opinion shall not have been withdrawn, revoked or
    modified.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;<U>Absence of Company Material Adverse
    Effect</U>.&#160;&#160;Since the date of this Agreement, there
    shall not have been any state of facts, event, change, effect,
    development, condition or occurrence that, individually or in
    the aggregate, has had or would reasonably be expected to have a
    Company Material Adverse Effect.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;VIII.<BR>
    TERMINATION AND AMENDMENT</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;8.01&#160;&#160;<U>Termination</U>.&#160;&#160;This
    Agreement may be terminated at any time prior to the Effective
    Time (with respect to Sections&#160;8.01(b) through 8.01(h), by
    written notice by the terminating party to the other party),
    whether before or after approval of the matters presented in
    connection with the Merger by the stockholders of the Company:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;by mutual written consent of the Company, Parent and
    Merger Sub;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;by either the Company or Parent, if the Merger is not
    consummated on or before August&#160;31, 2008;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;by either the Company or Parent, if a court of
    competent jurisdiction or other Governmental Entity shall have
    issued a nonappealable final Order or taken any other
    nonappealable final action, in each case having the effect of
    permanently restraining, enjoining or otherwise prohibiting the
    Merger;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;by either the Company or Parent, if, at the Company
    Stockholders&#146; Meeting (including any adjournment or
    postponement thereof) at which the Company Stockholder Approval
    is voted upon, the Company Stockholder Approval shall not have
    been obtained;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;by Parent, if (i)&#160;the Board of Directors of the
    Company shall have withdrawn or modified the Company
    Recommendation; or (ii)&#160;the Board of Directors of the
    Company shall have recommended to the stockholders of the
    Company an Acquisition Transaction;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;by the Company, if there has been a breach of any
    representation, warranty, covenant or agreement on the part of
    Parent or Merger Sub set forth in this Agreement, which breach
    (i)&#160;would cause the conditions set forth in
    Sections&#160;7.02(a) or 7.02(b) not to be satisfied and
    (ii)&#160;is incapable of being cured, or is not reasonably
    expected to be able to be cured on or before the date set forth
    in Section&#160;8.01(b), or if so curable, Parent has not
    initiated action to cure such breach within 10 Business Days
    following receipt by Parent of written notice of such breach, or
    is not thereafter continuing to take reasonable actions to cure
    such breach;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (g)&#160;by Parent, if there has been a breach of any
    representation, warranty, covenant or agreement on the part of
    the Company set forth in this Agreement, which breach
    (i)&#160;would cause the conditions set forth in
    Sections&#160;7.03(a) or 7.03(b) not to be satisfied and
    (ii)&#160;is incapable of being cured, or is not reasonably
    expected to be able to be cured on or before the date set forth
    in Section&#160;8.01(b), or if so curable, the Company has not
    initiated action to cure such breach within 10 Business Days
    following receipt by the Company of written notice of such
    breach, or is not thereafter continuing to take reasonable
    actions to cure such breach;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (h)&#160;by the Company, if prior to receipt of the Company
    Stockholder Approval, (i)&#160;the Company receives an
    Acquisition Proposal that is a Superior Proposal, (ii)&#160;the
    Board of Directors of the Company determines to approve and
    enter into an agreement relating to an Acquisition Proposal
    (other than a confidentiality agreement entered into pursuant
    to, and in accordance with, Section&#160;6.1(a)) that
    constitutes a Superior Proposal, (iii)&#160;the Company shall
    have given Parent four Business Days&#146; prior written notice
    of its determination described in clause&#160;(ii) above,
    (iv)&#160;such Acquisition Proposal continues to constitute a
    Superior Proposal after taking into account any revised proposal
    made by Parent during such period of time and (v)&#160;the Board
    of Directors of the Company determines in good faith, after
    consultation with outside counsel, that the failure to accept
    such Superior Proposal would be inconsistent with its fiduciary
    duties under applicable Law; <I>provided, however, </I>that such
    termination shall not be effective until such time as payment of
    the Company Termination Fee required by Section&#160;8.03(d)(i)
    shall have been made by the Company; <I>provided further</I>,
    that the Company&#146;s right to terminate this Agreement under
    this Section&#160;8.01(h) shall not be available if the Company
    breached Section&#160;6.01 in any material respect in connection
    with such Superior Proposal.
</DIV>

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    <BR>
    A-35
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Notwithstanding the foregoing, none of Parent, Merger Sub or the
    Company may terminate this Agreement under this
    Section&#160;8.01 if the reason Closing has not occurred is the
    breach of any representation, warranty, covenant or agreement of
    such Person under this Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;8.02&#160;&#160;<U>Effect of
    Termination</U>.&#160;&#160;In the event of termination of this
    Agreement as provided in Section&#160;8.01, this Agreement shall
    immediately become void and there shall be no liability or
    obligation on the part of the Company, Parent or Merger Sub or
    their respective officers, directors, stockholders or
    Affiliates, except as set forth in Sections&#160;3.24, 4.16,
    8.02, 8.03 and 9.06 and the second sentence of
    Section&#160;6.03; <I>provided </I>that the provisions of the
    Confidentiality Agreement and Sections&#160;6.03, 8.02, 8.03,
    9.02, 9.04, 9.06, 9.07, 9.08 and 9.09 of this Agreement shall
    remain in full force and effect and survive any termination of
    this Agreement. Nothing in this Section&#160;8.02 shall relieve
    any party from liability for any knowing or willful
    misrepresentation or inaccuracy in any of its representations or
    warranties contained in this Agreement or any knowing or willful
    breach of any of its covenants or agreements contained in this
    Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;8.03&#160;&#160;<U>Fees and Expenses</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Except as set forth in this Section&#160;8.03, all fees
    and expenses incurred in connection with this Agreement and the
    transactions contemplated hereby shall be paid by the party
    incurring such expenses, whether or not the Merger is
    consummated, except that each of the Company and Parent will
    bear and pay one-half of the costs and expenses incurred in
    connection with the filing, printing and mailing of the Proxy
    Statement (including SEC filing fees).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Parent shall pay the Company up to $5,000,000 as
    reimbursement for expenses of the Company actually incurred
    relating to the transactions contemplated by this Agreement
    prior to termination (including, but not limited to, reasonable
    fees and expenses of the Company&#146;s Representatives, but
    excluding any discretionary fees paid to such Representatives),
    upon the termination of this Agreement by the Company pursuant
    to Section&#160;8.01(f).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;The Company shall pay Parent up to $5,000,000 as
    reimbursement for expenses of Parent and Merger Sub actually
    incurred relating to the transactions contemplated by this
    Agreement prior to termination (including, but not limited to,
    reasonable fees and expenses of Parent&#146;s Representatives,
    but excluding any discretionary fees paid to such
    Representatives), upon the termination of this Agreement by
    Parent pursuant to Section&#160;8.01(g).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;Upon the earlier to occur of the events described in
    (i)&#160;or all the events described in (ii)&#160;below:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;the termination of this Agreement pursuant to
    (A)&#160;Section 8.01(e) or
    (B)&#160;Section&#160;8.01(h);&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;if (1)&#160;after the date of this Agreement, any
    person has made an Acquisition Proposal that has been publicly
    disclosed or any person publicly announces an intention to make
    an Acquisition Proposal, in each case, involving the Company
    which has not been publicly withdrawn, (2)&#160;this Agreement
    is terminated pursuant to Section&#160;8.01(d), and (3)
    (A)&#160;within 12&#160;months after the date of such
    termination, the Company enters into an agreement for any
    Acquisition Transaction and such Acquisition Transaction is
    thereafter consummated (whether before or after such
    12&#160;month period) or (B)&#160;within 12&#160;months after
    the date of such termination, any Acquisition Transaction
    involving the Company is consummated (for the purposes of this
    Section&#160;8.03(d)(ii)(3), the term &#147;Acquisition
    Transaction&#148; shall have the meaning assigned to such term
    in Section&#160;9.03, except that all references to
    &#147;20%&#148; shall be changed to &#147;50%&#148;);
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    the Company shall pay to Parent a fee of $185.0&#160;million
    (the &#147;Company Termination Fee&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company&#146;s payment of the Company Termination Fee
    pursuant to this subsection shall be the sole and exclusive
    remedy of Parent and Merger Sub against the Company and any of
    its Subsidiaries and their respective Representatives with
    respect to the occurrences giving rise to such payment.
    Notwithstanding the foregoing sentence, nothing in this
    Section&#160;8.03(d) shall relieve the Company from liability
    for any knowing or willful misrepresentation or inaccuracy in
    any of its representations or warranties contained in this
    Agreement or any knowing or willful breach of any of its
    covenants or agreements contained in this Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;The expenses and fees, if applicable, payable pursuant
    to Sections&#160;8.03(b), 8.03(c), 8.03(d)(i)(A) or 8.03(d)(ii)
    shall be paid within one Business Day after the first to occur
    of all of the events described in Sections&#160;8.03(b),
    8.03(c), 8.03(d)(i)(A) or 8.03(d)(ii), respectively. The fees,
    if applicable, payable pursuant to
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-36
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;8.03(d)(i)(B) shall be paid concurrently with the
    termination of this Agreement. To the extent any expenses and
    fees shall become payable to a party hereunder, such expense and
    fees shall be paid by transfer of
    <FONT style="white-space: nowrap">same-day</FONT>
    funds to an account designated by the receiving party.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;The parties each agree that the agreements contained in
    Section&#160;8.03 are integral parts of the transaction
    contemplated by this Agreement and that, without these
    agreements, neither the Company nor Parent would enter into this
    Agreement. Accordingly, if a party fails to promptly pay the
    other party an amount due under this Section&#160;8.03, such
    failing party shall pay the costs and expenses of such other
    party (including reasonable legal fees and expenses) in
    connection with any action, including the filing of any lawsuit
    or legal action, taken to collect payment, together with
    interest on the amount of the payment at the prime rate of
    Citibank, N.A. in effect on the date such payment was required
    to be made.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;8.04&#160;&#160;<U>Amendment</U>.&#160;&#160;This
    Agreement may be amended by the parties hereto, by action taken
    or authorized by their respective Boards of Directors, at any
    time before or after approval of the matters presented in
    connection with the Merger by the stockholders of the Company or
    the stockholders of Parent, but, after any such approval, no
    amendment shall be made which by Law requires further approval
    by such stockholders without such further approval. This
    Agreement may not be amended except by an instrument in writing
    signed on behalf of each of the parties hereto.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;8.05&#160;&#160;<U>Extension;
    Waiver</U>.&#160;&#160;At any time prior to the Effective Time,
    the parties hereto, by action taken or authorized by their
    respective Boards of Directors, may, to the extent legally
    allowed, (i)&#160;extend the time for the performance of any of
    the obligations or other acts of the other parties hereto,
    (ii)&#160;waive any inaccuracies in the representations and
    warranties contained herein or in any document delivered
    pursuant hereto and (iii)&#160;waive compliance with any of the
    agreements or conditions contained herein. Any agreement on the
    part of a party hereto to any such extension or waiver shall be
    valid only if set forth in a written instrument signed on behalf
    of such party.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;IX.<BR>
    MISCELLANEOUS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;9.01&#160;&#160;<U>Nonsurvival of Representations,
    Warranties and Agreements</U>.&#160;&#160;None of the
    representations, warranties and agreements in this Agreement or
    in any instrument delivered pursuant to this Agreement shall
    survive the Effective Time. This Section&#160;9.01 shall not
    limit any covenant or agreement of the parties which by its
    terms contemplates performance after the Effective Time,
    including the agreements set forth in Article&#160;II.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;9.02&#160;&#160;<U>Notices</U>.&#160;&#160;All
    notices and other communications hereunder shall be in writing
    and shall be deemed given if delivered personally, telecopied
    (which is confirmed) or mailed by registered or certified mail
    (return receipt requested) to the parties at the following
    addresses (or at such other address for a party as shall be
    specified by like notice):
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="margin-left: 3%; margin-right: 0%">
<TABLE border="0" width="97%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="3%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="95%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    (a)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    if to Parent or Merger Sub, to
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    National Oilwell Varco, Inc.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    7909 Parkwood Circle Drive
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Houston, Texas 77036
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Attn: General Counsel
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Telecopy:
    <FONT style="white-space: nowrap">(713)&#160;346-7995</FONT>
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    with a copy to:
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Andrews Kurth LLP
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    600 Travis Street,
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Suite&#160;4200
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Houston, Texas 77002
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Attn: David C. Buck,&#160;Esq.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Telecopy:
    <FONT style="white-space: nowrap">(713)&#160;220-4285</FONT>
</TD>
</TR>
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-37
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="margin-left: 3%; margin-right: 0%">
<TABLE border="0" width="97%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="3%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="95%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    (b)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    if to the Company, to
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Grant Prideco, Inc.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    400&#160;N.&#160;Sam Houston Pkwy. East
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Suite&#160;900
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Houston, Texas 77060
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Attn: General Counsel
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Telecopy:
    <FONT style="white-space: nowrap">(281)&#160;878-5732</FONT>
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    with copies to:
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Cravath, Swaine&#160;&#038; Moore LLP
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Worldwide Plaza
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    825 Eighth Avenue
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    New York, NY 10019
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Attn: Scott A. Barshay,&#160;Esq.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Telecopy:
    <FONT style="white-space: nowrap">(212)&#160;474-3700</FONT>
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Fulbright&#160;&#038; Jaworski L.L.P.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Fulbright Tower
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    1301 McKinney St., Suite&#160;5100
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Houston, TX
    <FONT style="white-space: nowrap">77010-3095</FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Attn: Charles Henry Still,&#160;Esq.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Telecopy:
    <FONT style="white-space: nowrap">(713)&#160;651-5246</FONT>
</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;9.03&#160;&#160;<U>Definitions</U>.&#160;&#160;(a)&#160;For
    purposes of this Agreement:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>Acquisition Proposal</U>&#148; means any contract,
    offer or proposal (whether or not in writing and whether or not
    delivered to the stockholders of the Company) with respect to a
    potential or proposed Acquisition Transaction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>Acquisition Transaction</U>&#148; means any
    (a)&#160;merger, consolidation, business combination, or similar
    transaction involving the Company or its Subsidiaries (which
    Subsidiaries collectively represent 20% or more of the
    consolidated revenues, net income or assets of the Company and
    its Subsidiaries), (b)&#160;sale, lease or other disposition
    directly or indirectly by merger, consolidation, business
    combination, share exchange, joint venture, or otherwise of any
    business or assets of the Company or its Subsidiaries
    representing 20% or more of the consolidated revenues, net
    income or assets of the Company and its Subsidiaries,
    (c)&#160;issuance, sale, or other disposition of (including by
    way of merger, consolidation, business combination, share
    exchange, joint venture, or any similar transaction) securities
    (or options, rights or warrants to purchase, or securities
    convertible into or exchangeable for, such securities)
    representing 20% or more of the voting power of the Company,
    (d)&#160;transaction in which any person shall acquire
    beneficial ownership, or the right to acquire beneficial
    ownership or any group shall have been formed which beneficially
    owns or has the right to acquire beneficial ownership, of 20% or
    more of the outstanding voting capital stock of the Company or
    (e)&#160;any combination of the foregoing (in each case, other
    than the Merger).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An &#147;<U>Affiliate</U>&#148; of any person means another
    person that directly or indirectly, through one or more
    intermediaries, controls, is controlled by, or is under common
    control with, such first person.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>Business Day</U>&#148; means any day, other than
    (i)&#160;a Saturday or a Sunday or (ii)&#160;a day on which
    banking and savings and loan institutions in the State of Texas
    are authorized or required by Law to be closed.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>Company Material Adverse Effect</U>&#148; means a
    Material Adverse Effect on the Company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>Environmental Law</U>&#148; means any federal, state,
    local or foreign Law, order, decree, permit, authorization,
    opinion, common law or agency requirement relating to:
    (A)&#160;the protection, preservation, investigation,
    remediation or restoration of environmental quality, health and
    safety, or natural resources, or (B)&#160;noise, odor, wetlands,
    pollution, contamination or any injury or threat of injury to
    persons or property.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-38
</DIV><!-- END PAGE WIDTH -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>Environmental Permits</U>&#148; means any material
    permit, license, authorization or approval required under
    applicable Environmental Law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>GAAP</U>&#148; means generally accepted accounting
    principles and practices in effect from time to time within the
    United States applied consistently throughout the period
    involved.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>Hazardous Substance</U>&#148; means: (A)&#160;any
    substance that is listed, classified or regulated pursuant to or
    that could result in liability under any Environmental Law;
    (B)&#160;any petroleum product or by-product,
    asbestos-containing material, lead-containing paint or plumbing,
    polychlorinated biphenyls, radioactive materials or radon; or
    (C)&#160;any other substance which is the subject of regulatory
    action by any Governmental Entity pursuant to any Environmental
    Law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>knowledge</U>&#148; of a person means, with respect to
    any matter in question, the actual knowledge of any executive
    officer of such person after inquiry of their respective direct
    reports.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>Law</U>&#148; means any statute, law (including common
    law), ordinance, rule or regulation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>Liabilities</U>&#148; mean any direct or indirect
    liability, indebtedness, obligation, commitment, expense, claim,
    deficiency, guaranty or endorsement of or by any person of any
    type, whether accrued, absolute, contingent, matured, unmatured,
    liquidated, unliquidated, known or unknown.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>Liens</U>&#148; means any mortgage, deed of trust, deed
    to secure debt, title retention agreement, pledge, lien,
    encumbrance, security interest, conditional or installment sale
    agreement, charge or other claims of third parties of any kind.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>Material Adverse Effect</U>&#148; on a person means a
    material adverse effect on (i)&#160;the business, assets,
    liabilities or obligations, financial condition or results of
    operations of such person and its Subsidiaries, taken as a
    whole, (ii)&#160;the ability of such person to perform its
    obligations under this Agreement or (iii)&#160;the ability of
    such person to consummate the Merger and the other transactions
    to be performed or consummated by such person hereunder, other
    than in the case of (i), (ii)&#160;or (iii)&#160;any state of
    facts, event, change, effect, development, condition or
    occurrence relating to (A)&#160;the economy, or financial or
    capital markets, in the U.S.&#160;or in any other country in
    which such person or any of its Subsidiaries has significant
    operations or sales, which facts, events, changes, effects,
    developments, conditions or occurrences do not
    disproportionately affect such person relative to the other
    participants in the oilfield services industry, (B)&#160;the
    oilfield services industry in general in the U.S.&#160;or in any
    other country in which such person or any of its Subsidiaries
    has significant operations or sales, which facts, events,
    changes, effects, developments, conditions or occurrences do not
    disproportionately affect such person relative to the other
    participants in the oilfield services industry, (C)&#160;any
    change in such person&#146;s stock price or trading volume, in
    and of itself (for the avoidance of doubt, this clause&#160;(C)
    shall not preclude either party from asserting that the
    underlying cause of any such change in stock price or trading
    volume is a Material Adverse Effect), (D)&#160;any change (after
    the date of this Agreement) in Law or in GAAP, (E)&#160;the
    announcement or pendency of this Agreement or the anticipated
    consummation of the Merger, including the impact thereof on such
    person&#146;s relationships, contractual or otherwise, with
    employees, customers, suppliers, distributors or partners,
    (F)&#160;acts of war, sabotage or terrorism, or any escalation
    or worsening of any such acts of war, sabotage or terrorism
    threatened or underway as of the date of this Agreement,
    (G)&#160;earthquakes, hurricanes, tornados or other natural
    disasters, which facts, events, changes, effects, developments,
    conditions or occurrences do not disproportionately affect such
    person relative to the other participants in the oilfield
    services industry, (H)&#160;the Company&#146;s failure in and of
    itself to meet any internal or published projections, forecasts
    or other predictions or published industry analyst expectations
    of financial performance (for the avoidance of doubt, this
    clause&#160;(H) shall not preclude either party from asserting
    that any underlying cause or causes of any such failure is a
    Material Adverse Effect), (I)&#160;any change in the price of
    oil or natural gas or the number of active drilling rigs
    operating in the geographic areas in which such person and its
    Subsidiaries have significant operations or sales or
    (J)&#160;any change in price of steel or other raw materials of
    the type and grade customarily purchased by such person and its
    Subsidiaries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>Parent Material Adverse Effect</U>&#148; means a
    Material Adverse Effect on Parent.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A &#147;<U>person</U>&#148; means any individual, firm,
    corporation, partnership, company, limited liability company,
    trust, joint venture, association, Governmental Entity or other
    entity.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>Subsidiary</U>&#148; means, with respect to any party,
    any corporation or other organization, whether incorporated or
    unincorporated, of which (i)&#160;such party or any other
    Subsidiary of such party is a general partner (excluding
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-39
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    partnerships, the general partnership interests of which held by
    such party or any Subsidiary of such party do not have a
    majority of the voting interest in such partnership) or
    (ii)&#160;at least a majority of the securities or other
    interests having by their terms ordinary voting power to elect a
    majority of the Board of Directors or others performing similar
    functions with respect to such corporation or other organization
    is directly or indirectly owned or controlled by such party or
    by any one or more of its Subsidiaries, or by such party and one
    or more of its Subsidiaries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>Superior Proposal</U>&#148; means any bona fide written
    proposal made by a third party to acquire substantially all the
    equity securities or assets of the Company (including
    substantially all of the assets of the Company&#146;s
    Subsidiaries), pursuant to a tender or exchange offer, a merger,
    a consolidation, a liquidation or dissolution, a
    recapitalization, a sale of all or substantially all of its and
    its Subsidiaries&#146; assets or otherwise, on terms which the
    Board of Directors of the Company determines in good faith,
    after consultation with the Company&#146;s outside legal counsel
    and financial advisors and after taking into account all
    material legal, financial, strategic, regulatory and other
    aspects of such proposal and the party making such proposal,
    (i)&#160;to be more favorable from a financial point of view to
    the holders of Company Common Stock than the Merger, taking into
    account all the terms and conditions of this Agreement
    (including any proposal by Parent to amend the terms of the
    Merger or this Agreement) and (ii)&#160;is reasonably likely to
    be consummated.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>Tax</U>&#148; or, collectively,
    &#147;<U>Taxes</U>,&#148; means any and all federal, state,
    local or foreign gross receipts, income, profits, sales, use,
    value added, ad valorem, transfer, gains, franchise,
    withholding, payroll, recapture, employment, excise,
    unemployment, social security, license, occupation, business
    organization, stamp, environmental, property, severance,
    premium, custom duties, capital stock, disability, registration,
    alternative or add-on minimum, estimated, or other tax of any
    kind whatsoever, including any interest, penalty or addition
    thereto, whether disputed or not.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;<U>Tax Return</U>&#148; means any return, declaration,
    report, claim for refund, or information return or statement,
    including any schedule or attachment thereto, and including any
    amendment thereof, relating to Taxes or filed or to be filed
    with any Tax authority.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The following are defined elsewhere in this Agreement,
    as indicated below:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="84%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="14%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Agreement
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Preamble
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Antitrust Laws
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 6.05(b)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Bankruptcy and Equity Exception
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.03(a)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cash Consideration
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Preamble
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Certificate of Merger
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 1.02
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Certificates
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 2.02(b)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Change of Recommendation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 6.01(e)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Closing
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 1.03
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Closing Date
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 1.03
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Code
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Preamble
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Preamble
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company 401(k) Plan
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.02(a)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company Balance Sheet
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.04(b)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company Common Stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Preamble
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company Disclosure Letter
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Article&#160;III
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company Employee Plans
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.13(a)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company Material Contract
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.10(a)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company Material Leases
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.08(a)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company Intellectual Property
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.09
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company Preferred Stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.02(a)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company Recommendation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.03(a)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company Restricted Shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.02(a)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company SEC Reports
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Section 3.04(a)
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-40
</DIV><!-- END PAGE WIDTH -->
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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="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="84%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="14%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company Stock Equivalent
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.02(a)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company Stock Options
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.02(a)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company Stock Plans
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.02(a)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company Stock Purchase Right
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 6.09(b)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company Stockholder Approval
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.03(a)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company Stockholders&#146; Meeting
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.03(a)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Company Termination Fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 8.03(d)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Confidentiality Agreement
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 6.01(a)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Deferred Compensation Plans
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.02(a)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    D&#038;O Insurance
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 6.10(b)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    DGCL
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Preamble
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Dissenting Share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 2.03
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Effective Time
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 1.02
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    ERISA
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.13(a)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    ESPP
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.02(a)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Exchange Act
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.03(c)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Exchange Agent
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 2.02(a)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Exchange Fund
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 2.02(a)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Exchange Ratio
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 2.01(b)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Governmental Entity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.03(c)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    HSR Act
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.03(c)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Indemnified Parties
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 6.11(a)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    IRS
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.07(c)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Proxy Statement
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.16
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Maximum Premium
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 6.11(b)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Merger
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Preamble
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Merger Consideration
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Preamble
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Merger Sub
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Preamble
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    New Stock Purchase Right
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 6.09(b)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    NYSE
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 2.02(e)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Option Exchange Ratio
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 6.09(a)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Order
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 6.05(b)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Parent
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Preamble
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Parent Balance Sheet
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 4.04(b)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Parent Common Stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Preamble
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Parent Disclosure Letter
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Article&#160;IV
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Parent Material Contract
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 4.08(a)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Parent Preferred Stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 4.02(a)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Parent SEC Reports
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 4.04(a)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Parent Stock Plans
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 4.02(a)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Registration Statement
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.16
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Representatives
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 6.01(a)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Rule&#160;145
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 6.07
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Sarbanes-Oxley Act
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.23
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    SEC
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Section 3.03(c)
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A-41
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="84%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="14%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Section&#160;16
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 6.07
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Securities Act
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Section 3.04(a)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Survivor
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Section 1.01
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;9.04&#160;&#160;<U>Interpretation</U>.&#160;&#160;When
    a reference is made in this Agreement to Sections, such
    reference shall be to a Section of this Agreement unless
    otherwise indicated. The table of contents and headings
    contained in this Agreement are for reference purposes only and
    shall not affect in any way the meaning or interpretation of
    this Agreement. Whenever the words &#147;include,&#148;
    &#147;includes&#148; or &#147;including&#148; are used in this
    Agreement they shall be deemed to be followed by the words
    &#147;without limitation.&#148; The phrase &#147;made
    available&#148; in this Agreement shall mean that the
    information referred to has been made available if requested by
    the party to whom such information is to be made available. The
    phrases &#147;the date of this Agreement&#148;, &#147;the date
    hereof,&#148; and terms of similar import, unless the context
    otherwise requires, shall be deemed to refer to
    December&#160;16, 2007. The parties to this Agreement have
    participated jointly in negotiating and drafting this Agreement.
    In the event an ambiguity or a question of intent or
    interpretation arises, this Agreement shall be construed as if
    drafted jointly by the parties, and no presumption of burden of
    proof shall arise favoring or disfavoring any party to this
    Agreement by virtue of the authorship of any provision(s) of
    this Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;9.05&#160;&#160;<U>Counterparts</U>.&#160;&#160;This
    Agreement may be executed in two or more counterparts, all of
    which shall be considered one and the same agreement and shall
    become effective when two or more counterparts have been signed
    by each of the parties and delivered to the other parties, it
    being understood that all parties need not sign the same
    counterpart.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;9.06&#160;&#160;<U>Entire Agreement; No Third Party
    Beneficiaries</U>.&#160;&#160;This Agreement (including the
    documents and the instruments referred to herein)
    (a)&#160;constitutes the entire agreement and supersedes all
    prior agreements and understandings, both written and oral,
    among the parties with respect to the subject matter hereof, and
    (b)&#160;except as provided in Section&#160;6.11 are not
    intended to confer upon any person other than the parties hereto
    any rights or remedies hereunder. Each party hereto agrees that,
    except for the representations and warranties contained in this
    Agreement, none of Parent, Merger Sub or the Company makes any
    other representations or warranties, and each hereby disclaims
    any other representations and warranties made by itself or any
    of its officers, directors, employees, agents, financial and
    legal advisors or other Representatives, with respect to the
    execution and delivery of this Agreement, the documents and the
    instruments referred to herein, or the transactions contemplated
    hereby or thereby, notwithstanding the delivery or disclosure to
    the other or the other&#146;s Representatives of any
    documentation or other information with respect to any one or
    more of the foregoing.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;9.07&#160;&#160;<U>Governing
    Law</U>.&#160;&#160;This Agreement shall be governed and
    construed in accordance with the Laws of the State of Delaware,
    without regard to the Laws that might be applicable under
    conflicts of Laws principles.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;9.08&#160;&#160;<U>Assignment</U>.&#160;&#160;Neither
    this Agreement nor any of the rights, interests or obligations
    hereunder shall be assigned by any of the parties hereto
    (whether by operation of Law or otherwise) without the prior
    written consent of the other parties, except that Merger Sub may
    assign, in its sole discretion, any of or all its rights,
    interests and obligations under this Agreement to Parent or to
    any direct or indirect wholly owned Subsidiary of Parent, but no
    such assignment shall relieve Merger Sub of any of its
    obligations under this Agreement. Subject to the preceding
    sentence, this Agreement will be binding upon, inure to the
    benefit of and be enforceable by the parties and their
    respective successors and assigns.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;9.09&#160;&#160;<U>Enforcement; Waiver of Jury
    Trial</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The parties agree that irreparable damage would occur
    in the event that any of the provisions of this Agreement were
    not performed in accordance with their specific terms or were
    otherwise breached. It is accordingly agreed that the parties
    shall be entitled to the fullest extent permitted by Law to an
    injunction or injunctions to prevent or restrain breaches,
    violations, defaults or threatened breaches, violations or
    defaults of this Agreement and to enforce specifically the terms
    and provisions of this Agreement in the Court of Chancery of
    Delaware in the State of Delaware, this being in addition to any
    other remedy to which they are entitled at Law or in equity. In
    addition, each of the parties hereto (a)&#160;consents to submit
    itself to the personal jurisdiction of the state court located
    in the State of Delaware, and that the Court of Chancery shall
    be the exclusive jurisdiction in the event any dispute
</DIV>

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    A-42
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    arises out of this Agreement or the Merger, (b)&#160;agrees that
    it will not attempt to deny or defeat such personal jurisdiction
    by motion or other request for leave from any such court and
    (c)&#160;agrees that it will not bring any action relating to
    this Agreement or the Merger in any court other than the Court
    of Chancery of Delaware in the State of Delaware. Each of the
    parties agrees that a final non-appealable judgment in any
    action or proceeding shall be conclusive and may be enforced in
    other jurisdictions by suit on the judgment or in any other
    manner permitted by Law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>(b)&#160;EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
    CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
    INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT
    HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY
    HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
    INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY
    OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE
    TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY
    CERTIFIES AND ACKNOWLEDGES THAT (A)&#160;NO REPRESENTATIVE,
    AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
    OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
    LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B)&#160;IT
    UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS,
    (C)&#160;IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D)&#160;IT HAS
    BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
    THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
    SECTION&#160;9.09(b).</B>
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-43
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    IN WITNESS WHEREOF, Parent, Merger Sub and the Company have
    caused this Agreement to be signed by their respective officers
    thereunto duly authorized as of the date first written above.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    NATIONAL OILWELL VARCO, INC.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    By:
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Merrill
    A. Miller, Jr.</DIV>
</DIV>

<DIV style="font-size: 2pt; margin-left: 49%; width: 100%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=0 -->

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Name:&#160;&#160;&#160;&#160;&#160;Merrill A. Miller, Jr.
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="49%"></TD>
    <TD width="8%"></TD>
    <TD width="43%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    Title:&#160;
</TD>
    <TD align="left">
    Chairman, President and
</TD>
</TR>

</TABLE>

<DIV align="left" style="margin-left: 57%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Chief Executive Officer
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    NOV SUB, INC.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    By:
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Merrill
    A. Miller, Jr.</DIV>
</DIV>

<DIV style="font-size: 2pt; margin-left: 49%; width: 100%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=0 -->

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Name:&#160;&#160;&#160;&#160;&#160;Merrill A. Miller, Jr.
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="49%"></TD>
    <TD width="8%"></TD>
    <TD width="43%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    Title:&#160;
</TD>
    <TD align="left">
    Chief Executive Officer
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    GRANT PRIDECO, INC.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    By:
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Michael
    McShane</DIV>
</DIV>

<DIV style="font-size: 2pt; margin-left: 49%; width: 100%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=0 -->

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Name:&#160;&#160;&#160;&#160;&#160;Michael McShane
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="49%"></TD>
    <TD width="8%"></TD>
    <TD width="43%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    Title:&#160;
</TD>
    <TD align="left">
    Chairman of the Board, President and
</TD>
</TR>

</TABLE>

<DIV align="left" style="margin-left: 57%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Chief Executive Officer
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-44
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ANNEX&#160;B</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
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    <TD width="49%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
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<!-- Table Width Row END -->
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <IMG src="h53191a2h5319102.jpg" alt="(Credit Suisse Logo)">
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    <B>CREDIT SUISSE SECURITIES (USA) LLC<BR>
    </B>1100 Louisiana
    Street&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    Tel&#160;&#160;&#160;&#160;&#160;1 713 890 1400<BR>
    Suite 4600 www.credit-suisse.com<BR>
    Houston, TX 77002
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    December&#160;16, 2007
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Board of Directors<BR>
    Grant Prideco, Inc.<BR>
    400&#160;N.&#160;Sam Houston Pkwy. East<BR>
    Suite&#160;#900<BR>
    Houston, TX 77060
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Members of the Board:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You have asked us to advise you with respect to the fairness,
    from a financial point of view, to the holders of common stock,
    par value $0.01 per share (&#147;Company Common Stock&#148;), of
    Grant Prideco, Inc. (the &#147;Company&#148;) of the
    Consideration (as defined below) to be received by such holders
    pursuant to the Agreement and Plan of Merger, dated as of
    December&#160;16, 2007 (the &#147;Merger Agreement&#148;), by
    and among National Oilwell Varco, Inc. (the
    &#147;Acquiror&#148;), NOV Sub, Inc., a wholly owned subsidiary
    of the Acquiror (&#147;Merger Sub&#148;) and the Company. The
    Merger Agreement provides for, among other things, the merger
    (the &#147;Merger&#148;) of the Company with Merger Sub pursuant
    to which the Company will become a wholly owned subsidiary of
    the Acquiror and each outstanding share of Company Common Stock
    will be converted into the right to receive 0.4498 of a share,
    par value $.01 per share (&#147;Acquiror Common Stock&#148;), of
    the Acquiror and $23.20 in cash (together, the
    &#147;Consideration&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In arriving at our opinion, we have reviewed the Merger
    Agreement and certain publicly available business and financial
    information relating to the Company and the Acquiror. We have
    also reviewed certain other information relating to the Company
    and the Acquiror, including certain financial projections
    relating to the future financial performance of the Company
    prepared by its management and certain publicly available
    research analyst estimates relating to the future financial
    performance of the Acquiror, provided to or discussed with us by
    the Company and the Acquiror, and have met with the managements
    of the Company and the Acquiror to discuss the business and
    prospects of the Company and the Acquiror, respectively. We have
    also considered certain financial and stock market data of the
    Company and the Acquiror, and we have compared that data with
    similar data for other publicly held companies in businesses we
    deemed similar to those of the Company and the Acquiror and we
    have considered, to the extent publicly available, the financial
    terms of certain other business combinations and other
    transactions which have recently been effected or announced. We
    also considered such other information, financial studies,
    analyses and investigations and financial, economic and market
    criteria which we deemed relevant.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with our review, we have not independently
    verified any of the foregoing information and we have assumed
    and relied upon such information being complete and accurate in
    all material respects. With respect to the financial projections
    for the Company referred to above, we have been advised, and
    with your consent have assumed, that such projections have been
    reasonably prepared on bases reflecting the best currently
    available estimates and judgments of the Company&#146;s
    management with respect to the future financial performance of
    the Company. With respect to the publicly available research
    analyst estimates for the Acquiror referred to above, we have
    been advised by the Acquiror&#146;s management, and with your
    consent have assumed, that such estimates represent reasonable
    estimates and judgments with respect to the future financial
    performance of the Acquiror. We have assumed, with your consent,
    that the Merger will be treated as a tax-free reorganization for
    federal income tax purposes. We also have assumed, with your
    consent, that, in the course of obtaining any regulatory or
    third party consents, approvals or agreements in connection with
    the Merger, no delay, limitation, restriction or condition will
    be imposed that would have an adverse effect on the Company, the
    Acquiror or the contemplated benefits of the
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    B-1
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Merger and that the Merger will be consummated in accordance
    with the terms of the Merger Agreement without waiver,
    modification or amendment of any material term, condition or
    agreement thereof. In addition, we have not been requested to
    make, and have not made, an independent evaluation or appraisal
    of the assets or liabilities (contingent or otherwise) of the
    Company or the Acquiror, nor have we been furnished with any
    such evaluations or appraisals.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our opinion addresses only the fairness, from a financial point
    of view, to the holders of Company Common Stock of the
    Consideration and does not address any other aspect or
    implication of the Merger or any other agreement, arrangement or
    understanding entered into in connection with the Merger or
    otherwise, including, without limitation, the fairness of the
    amount or nature of, or any other aspect relating to, any
    compensation to any officers, directors or employees of any
    party to the Merger, or class of such persons, relative to the
    Consideration or otherwise. The issuance of this opinion was
    approved by our authorized internal committee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our opinion is necessarily based upon information made available
    to us as of the date hereof and financial, economic, market and
    other conditions as they exist and can be evaluated on the date
    hereof. As you are aware, the financial projections and
    estimates that we have reviewed relating to the future financial
    performance of the Company and the Acquiror reflect certain
    assumptions regarding the oil and gas services industry which
    are subject to significant volatility and which, if different
    than assumed, could have a material impact on our analyses. We
    are not expressing any opinion as to what the value of shares of
    Acquiror Common Stock actually will be when issued to the
    holders of Company Common Stock pursuant to the Merger or the
    prices at which shares of Acquiror Common Stock will trade at
    any time. Our opinion does not address the relative merits of
    the Merger as compared to alternative transactions or strategies
    that might be available to the Company, nor does it address the
    underlying business decision of the Company to proceed with the
    Merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have acted as financial advisor to the Company in connection
    with the Merger and will receive a fee for our services, a
    significant portion of which is contingent upon the consummation
    of the Merger. We also became entitled to receive a fee upon the
    rendering of our opinion. In addition, the Company has agreed to
    indemnify us and certain related parties for certain liabilities
    and other items arising out of or related to our engagement. We
    and our affiliates have in the past provided, and may in the
    future provide, investment banking and financial services, to
    the Company, the Acquiror
    <FONT style="white-space: nowrap">and/or</FONT> their
    respective affiliates for which we and our affiliates have
    received, and would expect to receive, compensation, including
    during the past two years having acted as (i)&#160;financial
    advisor to the Company in connection with its pending sale of
    certain tubular technologies and services businesses,
    (ii)&#160;a lender in a credit facility of the Company and
    (iii)&#160;a lender in a credit facility of the Acquiror. In the
    ordinary course of business, we and our affiliates may acquire,
    hold or sell, for our and our affiliates own accounts and the
    accounts of customers, equity, debt and other securities and
    financial instruments (including bank loans and other
    obligations) of the Company, the Acquiror and any other company
    that may be involved in the Merger, as well as provide
    investment banking and other financial services to such
    companies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is understood that this letter is for the information of the
    Board of Directors of the Company in connection with its
    consideration of the Merger and does not constitute advice or a
    recommendation to any stockholder as to how such stockholder
    should vote or act on any matter relating to the proposed Merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Based upon and subject to the foregoing, it is our opinion that,
    as of the date hereof, the Consideration to be received by the
    holders of Company Common Stock pursuant to the Merger Agreement
    is fair, from a financial point of view, to such holders.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Very truly yours,
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    CREDIT SUISSE SECURITIES (USA) LLC
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    B-2
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ANNEX&#160;C</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SECTION&#160;262
    OF THE GENERAL CORPORATION LAW<BR>
    OF THE STATE OF DELAWARE</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">&#167;
    262. Appraisal</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Any stockholder of a corporation of this State who
    holds shares of stock on the date of the making of a demand
    pursuant to subsection&#160;(d) of this section with respect to
    such shares, who continuously holds such shares through the
    effective date of the merger or consolidation, who has otherwise
    complied with subsection&#160;(d) of this section and who has
    neither voted in favor of the merger or consolidation nor
    consented thereto in writing pursuant to &#167;&#160;228 of this
    title shall be entitled to an appraisal by the Court of Chancery
    of the fair value of the stockholder&#146;s shares of stock
    under the circumstances described in subsections&#160;(b) and
    (c)&#160;of this section. As used in this section, the word
    &#147;stockholder&#148; means a holder of record of stock in a
    stock corporation and also a member of record of a nonstock
    corporation; the words &#147;stock&#148; and &#147;share&#148;
    mean and include what is ordinarily meant by those words and
    also membership or membership interest of a member of a nonstock
    corporation; and the words &#147;depository receipt&#148; mean a
    receipt or other instrument issued by a depository representing
    an interest in one or more shares, or fractions thereof, solely
    of stock of a corporation, which stock is deposited with the
    depository.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Appraisal rights shall be available for the shares of
    any class or series of stock of a constituent corporation in a
    merger or consolidation to be effected pursuant to
    &#167;&#160;251 (other than a merger effected pursuant to
    &#167;&#160;251(g) of this title), &#167;&#160;252,
    &#167;&#160;254, &#167;&#160;257, &#167;&#160;258,
    &#167;&#160;263 or &#167;&#160;264 of this title:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;Provided, however, that no appraisal rights under this
    section shall be available for the shares of any class or series
    of stock, which stock, or depository receipts in respect
    thereof, at the record date fixed to determine the stockholders
    entitled to receive notice of and to vote at the meeting of
    stockholders to act upon the agreement of merger or
    consolidation, were either (i)&#160;listed on a national
    securities exchange or (ii)&#160;held of record by more than
    2,000 holders; and further provided that no appraisal rights
    shall be available for any shares of stock of the constituent
    corporation surviving a merger if the merger did not require for
    its approval the vote of the stockholders of the surviving
    corporation as provided in subsection&#160;(f) of
    &#167;&#160;251 of this title.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;Notwithstanding paragraph (1)&#160;of this subsection,
    appraisal rights under this section shall be available for the
    shares of any class or series of stock of a constituent
    corporation if the holders thereof are required by the terms of
    an agreement of merger or consolidation pursuant to
    &#167;&#167;&#160;251, 252, 254, 257, 258, 263 and 264 of this
    title to accept for such stock anything except:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    a.&#160;Shares of stock of the corporation surviving or
    resulting from such merger or consolidation, or depository
    receipts in respect thereof;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    b.&#160;Shares of stock of any other corporation, or depository
    receipts in respect thereof, which shares of stock (or
    depository receipts in respect thereof) or depository receipts
    at the effective date of the merger or consolidation will be
    either listed on a national securities exchange or held of
    record by more than 2,000 holders;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    c.&#160;Cash in lieu of fractional shares or fractional
    depository receipts described in the foregoing subparagraphs a.
    and b. of this paragraph;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    d.&#160;Any combination of the shares of stock, depository
    receipts and cash in lieu of fractional shares or fractional
    depository receipts described in the foregoing subparagraphs a.,
    b. and c. of this paragraph.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;In the event all of the stock of a subsidiary Delaware
    corporation party to a merger effected under &#167;&#160;253 of
    this title is not owned by the parent corporation immediately
    prior to the merger, appraisal rights shall be available for the
    shares of the subsidiary Delaware corporation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Any corporation may provide in its certificate of
    incorporation that appraisal rights under this section shall be
    available for the shares of any class or series of its stock as
    a result of an amendment to its certificate of incorporation,
    any merger or consolidation in which the corporation is a
    constituent corporation or the sale of all or substantially all
    of the assets of the corporation. If the certificate of
    incorporation contains such a provision, the
</DIV>

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    <BR>
    C-1
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    procedures of this section, including those set forth in
    subsections&#160;(d) and (e)&#160;of this section, shall apply
    as nearly as is practicable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;Appraisal rights shall be perfected as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;If a proposed merger or consolidation for which
    appraisal rights are provided under this section is to be
    submitted for approval at a meeting of stockholders, the
    corporation, not less than 20&#160;days prior to the meeting,
    shall notify each of its stockholders who was such on the record
    date for such meeting with respect to shares for which appraisal
    rights are available pursuant to subsection&#160;(b) or
    (c)&#160;hereof that appraisal rights are available for any or
    all of the shares of the constituent corporations, and shall
    include in such notice a copy of this section. Each stockholder
    electing to demand the appraisal of such stockholder&#146;s
    shares shall deliver to the corporation, before the taking of
    the vote on the merger or consolidation, a written demand for
    appraisal of such stockholder&#146;s shares. Such demand will be
    sufficient if it reasonably informs the corporation of the
    identity of the stockholder and that the stockholder intends
    thereby to demand the appraisal of such stockholder&#146;s
    shares. A proxy or vote against the merger or consolidation
    shall not constitute such a demand. A stockholder electing to
    take such action must do so by a separate written demand as
    herein provided. Within 10&#160;days after the effective date of
    such merger or consolidation, the surviving or resulting
    corporation shall notify each stockholder of each constituent
    corporation who has complied with this subsection and has not
    voted in favor of or consented to the merger or consolidation of
    the date that the merger or consolidation has become
    effective;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;If the merger or consolidation was approved pursuant to
    &#167;&#160;228 or &#167;&#160;253 of this title, then either a
    constituent corporation before the effective date of the merger
    or consolidation or the surviving or resulting corporation
    within 10&#160;days thereafter shall notify each of the holders
    of any class or series of stock of such constituent corporation
    who are entitled to appraisal rights of the approval of the
    merger or consolidation and that appraisal rights are available
    for any or all shares of such class or series of stock of such
    constituent corporation, and shall include in such notice a copy
    of this section. Such notice may, and, if given on or after the
    effective date of the merger or consolidation, shall, also
    notify such stockholders of the effective date of the merger or
    consolidation. Any stockholder entitled to appraisal rights may,
    within 20&#160;days after the date of mailing of such notice,
    demand in writing from the surviving or resulting corporation
    the appraisal of such holder&#146;s shares. Such demand will be
    sufficient if it reasonably informs the corporation of the
    identity of the stockholder and that the stockholder intends
    thereby to demand the appraisal of such holder&#146;s shares. If
    such notice did not notify stockholders of the effective date of
    the merger or consolidation, either (i)&#160;each such
    constituent corporation shall send a second notice before the
    effective date of the merger or consolidation notifying each of
    the holders of any class or series of stock of such constituent
    corporation that are entitled to appraisal rights of the
    effective date of the merger or consolidation or (ii)&#160;the
    surviving or resulting corporation shall send such a second
    notice to all such holders on or within 10&#160;days after such
    effective date; provided, however, that if such second notice is
    sent more than 20&#160;days following the sending of the first
    notice, such second notice need only be sent to each stockholder
    who is entitled to appraisal rights and who has demanded
    appraisal of such holder&#146;s shares in accordance with this
    subsection. An affidavit of the secretary or assistant secretary
    or of the transfer agent of the corporation that is required to
    give either notice that such notice has been given shall, in the
    absence of fraud, be prima facie evidence of the facts stated
    therein. For purposes of determining the stockholders entitled
    to receive either notice, each constituent corporation may fix,
    in advance, a record date that shall be not more than
    10&#160;days prior to the date the notice is given, provided,
    that if the notice is given on or after the effective date of
    the merger or consolidation, the record date shall be such
    effective date. If no record date is fixed and the notice is
    given prior to the effective date, the record date shall be the
    close of business on the day next preceding the day on which the
    notice is given.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (e)&#160;Within 120&#160;days after the effective date of the
    merger or consolidation, the surviving or resulting corporation
    or any stockholder who has complied with subsections&#160;(a)
    and (d)&#160;of this section hereof and who is otherwise
    entitled to appraisal rights, may commence an appraisal
    proceeding by filing a petition in the Court of Chancery
    demanding a determination of the value of the stock of all such
    stockholders. Notwithstanding the foregoing, at any time within
    60&#160;days after the effective date of the merger or
    consolidation, any stockholder who has not commenced an
    appraisal proceeding or joined that proceeding as a named party
    shall have the right to withdraw such stockholder&#146;s demand
    for appraisal and to accept the terms offered upon the merger or
    consolidation.
</DIV>

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    <BR>
    C-2
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Within 120&#160;days after the effective date of the merger or
    consolidation, any stockholder who has complied with the
    requirements of subsections&#160;(a) and (d)&#160;of this
    section hereof, upon written request, shall be entitled to
    receive from the corporation surviving the merger or resulting
    from the consolidation a statement setting forth the aggregate
    number of shares not voted in favor of the merger or
    consolidation and with respect to which demands for appraisal
    have been received and the aggregate number of holders of such
    shares. Such written statement shall be mailed to the
    stockholder within 10&#160;days after such stockholder&#146;s
    written request for such a statement is received by the
    surviving or resulting corporation or within 10&#160;days after
    expiration of the period for delivery of demands for appraisal
    under subsection&#160;(d) of this section hereof, whichever is
    later. Notwithstanding subsection&#160;(a) of this section, a
    person who is the beneficial owner of shares of such stock held
    either in a voting trust or by a nominee on behalf of such
    person may, in such person&#146;s own name, file a petition or
    request from the corporation the statement described in this
    subsection.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (f)&#160;Upon the filing of any such petition by a stockholder,
    service of a copy thereof shall be made upon the surviving or
    resulting corporation, which shall within 20&#160;days after
    such service file in the office of the Register in Chancery in
    which the petition was filed a duly verified list containing the
    names and addresses of all stockholders who have demanded
    payment for their shares and with whom agreements as to the
    value of their shares have not been reached by the surviving or
    resulting corporation. If the petition shall be filed by the
    surviving or resulting corporation, the petition shall be
    accompanied by such a duly verified list. The Register in
    Chancery, if so ordered by the Court, shall give notice of the
    time and place fixed for the hearing of such petition by
    registered or certified mail to the surviving or resulting
    corporation and to the stockholders shown on the list at the
    addresses therein stated. Such notice shall also be given by 1
    or more publications at least 1&#160;week before the day of the
    hearing, in a newspaper of general circulation published in the
    City of Wilmington, Delaware or such publication as the Court
    deems advisable. The forms of the notices by mail and by
    publication shall be approved by the Court, and the costs
    thereof shall be borne by the surviving or resulting corporation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (g)&#160;At the hearing on such petition, the Court shall
    determine the stockholders who have complied with this section
    and who have become entitled to appraisal rights. The Court may
    require the stockholders who have demanded an appraisal for
    their shares and who hold stock represented by certificates to
    submit their certificates of stock to the Register in Chancery
    for notation thereon of the pendency of the appraisal
    proceedings; and if any stockholder fails to comply with such
    direction, the Court may dismiss the proceedings as to such
    stockholder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (h)&#160;After the Court determines the stockholders entitled to
    an appraisal, the appraisal proceeding shall be conducted in
    accordance with the rules of the Court of Chancery, including
    any rules specifically governing appraisal proceedings. Through
    such proceeding the Court shall determine the fair value of the
    shares exclusive of any element of value arising from the
    accomplishment or expectation of the merger or consolidation,
    together with interest, if any, to be paid upon the amount
    determined to be the fair value. In determining such fair value,
    the Court shall take into account all relevant factors. Unless
    the Court in its discretion determines otherwise for good cause
    shown, interest from the effective date of the merger through
    the date of payment of the judgment shall be compounded
    quarterly and shall accrue at 5% over the Federal Reserve
    discount rate (including any surcharge) as established from time
    to time during the period between the effective date of the
    merger and the date of payment of the judgment. Upon application
    by the surviving or resulting corporation or by any stockholder
    entitled to participate in the appraisal proceeding, the Court
    may, in its discretion, proceed to trial upon the appraisal
    prior to the final determination of the stockholders entitled to
    an appraisal. Any stockholder whose name appears on the list
    filed by the surviving or resulting corporation pursuant to
    subsection&#160;(f) of this section and who has submitted such
    stockholder&#146;s certificates of stock to the Register in
    Chancery, if such is required, may participate fully in all
    proceedings until it is finally determined that such stockholder
    is not entitled to appraisal rights under this section.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;The Court shall direct the payment of the fair value of
    the shares, together with interest, if any, by the surviving or
    resulting corporation to the stockholders entitled thereto.
    Payment shall be so made to each such stockholder, in the case
    of holders of uncertificated stock forthwith, and the case of
    holders of shares represented by certificates upon the surrender
    to the corporation of the certificates representing such stock.
    The Court&#146;s decree may be enforced as other decrees in the
    Court of Chancery may be enforced, whether such surviving or
    resulting corporation be a corporation of this State or of any
    state.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    C-3
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (j)&#160;The costs of the proceeding may be determined by the
    Court and taxed upon the parties as the Court deems equitable in
    the circumstances. Upon application of a stockholder, the Court
    may order all or a portion of the expenses incurred by any
    stockholder in connection with the appraisal proceeding,
    including, without limitation, reasonable attorney&#146;s fees
    and the fees and expenses of experts, to be charged pro rata
    against the value of all the shares entitled to an appraisal.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (k)&#160;From and after the effective date of the merger or
    consolidation, no stockholder who has demanded appraisal rights
    as provided in subsection&#160;(d) of this section shall be
    entitled to vote such stock for any purpose or to receive
    payment of dividends or other distributions on the stock (except
    dividends or other distributions payable to stockholders of
    record at a date which is prior to the effective date of the
    merger or consolidation); provided, however, that if no petition
    for an appraisal shall be filed within the time provided in
    subsection&#160;(e) of this section, or if such stockholder
    shall deliver to the surviving or resulting corporation a
    written withdrawal of such stockholder&#146;s demand for an
    appraisal and an acceptance of the merger or consolidation,
    either within 60&#160;days after the effective date of the
    merger or consolidation as provided in subsection&#160;(e) of
    this section or thereafter with the written approval of the
    corporation, then the right of such stockholder to an appraisal
    shall cease. Notwithstanding the foregoing, no appraisal
    proceeding in the Court of Chancery shall be dismissed as to any
    stockholder without the approval of the Court, and such approval
    may be conditioned upon such terms as the Court deems just;
    provided, however that this provision shall not affect the right
    of any stockholder who has not commenced an appraisal proceeding
    or joined that proceeding as a named party to withdraw such
    stockholder&#146;s demand for appraisal and to accept the terms
    offered upon the merger or consolidation within 60&#160;days
    after the effective date of the merger or consolidation, as set
    forth in subsection&#160;(e) of this section.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (l)&#160;The shares of the surviving or resulting corporation to
    which the shares of such objecting stockholders would have been
    converted had they assented to the merger or consolidation shall
    have the status of authorized and unissued shares of the
    surviving or resulting corporation. (8 Del. C. 1953,
    &#167;&#160;262; 56 Del. Laws, c. 50; 56 Del. Laws, c. 186,
    &#167;&#160;24; 57 Del. Laws, c. 148,
    <FONT style="white-space: nowrap">&#167;&#167;&#160;27-29;</FONT>
    59 Del. Laws, c. 106, &#167;&#160;12; 60 Del. Laws, c. 371,
    &#167;&#167;&#160;3-12; 63 Del. Laws, c. 25, &#167;&#160;14; 63
    Del. Laws, c. 152, &#167;&#167;&#160;1, 2; 64 Del. Laws, c. 112,
    <FONT style="white-space: nowrap">&#167;&#167;&#160;46-54;</FONT>
    66 Del. Laws, c. 136,
    <FONT style="white-space: nowrap">&#167;&#167;&#160;30-32;</FONT>
    66 Del. Laws, c. 352, &#167;&#160;9; 67 Del. Laws, c. 376,
    &#167;&#167;&#160;19, 20; 68 Del. Laws, c. 337,
    &#167;&#167;&#160;3, 4; 69 Del. Laws, c. 61, &#167;&#160;10; 69
    Del. Laws, c. 262, &#167;&#167;&#160;1-9; 70 Del. Laws, c. 79,
    &#167;&#160;16; 70 Del. Laws, c. 186, &#167;&#160;1; 70 Del.
    Laws, c. 299, &#167;&#167;&#160;2, 3; 70 Del. Laws, c. 349,
    &#167;&#160;22; 71 Del. Laws, c. 120, &#167;&#160;15; 71 Del.
    Laws, c. 339,
    <FONT style="white-space: nowrap">&#167;&#167;&#160;49-52;</FONT>
    73 Del. Laws, c. 82, &#167;&#160;21; 76 Del. Laws, c. 145,
    <FONT style="white-space: nowrap">&#167;&#167;&#160;11-16.)</FONT>
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    C-4
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PART&#160;II.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">INFORMATION
    NOT REQUIRED IN PROSPECTUS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;20.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Indemnification
    of Directors and Officers</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except to the extent indicated below, there is no charter
    provision, bylaw, contract, arrangement or statute under which
    any director or officer of National Oilwell Varco is insured or
    indemnified in any manner against any liability that he or she
    may incur in his or her capacity as such.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;145 of the Delaware General Corporation Law (the
    &#147;DGCL&#148;) authorizes, inter alia, a corporation to
    indemnify any person who was or is a party or is threatened to
    be made a party to any threatened, pending or completed action,
    suit or proceeding, whether civil, criminal, administrative or
    investigative (other than an action by or in the right of the
    corporation), by reason of the fact that such person is or was
    an officer or director of such corporation, or is or was serving
    at the request of such corporation as a director, officer,
    employee or agent of another corporation, partnership, joint
    venture, trust or other enterprise. The indemnity may include
    expenses (including attorney&#146;s fees), judgments, fines and
    amounts paid in settlement actually and reasonably incurred by
    such person in connection with such action, suit or proceeding,
    provided that he acted in good faith and in a manner he
    reasonably believed to be in or not opposed to the best
    interests of the corporation and, with respect to any criminal
    action or proceeding, had no reasonable cause to believe his
    conduct was unlawful. A Delaware corporation may indemnify past
    or present officers and directors of such corporation or of
    another corporation or other enterprise at the former
    corporation&#146;s request, in an action by or in the right of
    the corporation to procure a judgment in its favor under the
    same conditions, except that no indemnification is permitted
    without judicial approval if such person is adjudged to be
    liable to the corporation. Where an officer or director is
    successful on the merits or otherwise in defense of any action
    referred to above, or in defense of any claim, issue or matter
    therein, the corporation must indemnify him against the expenses
    (including attorney&#146;s fees) which he actually and
    reasonably incurred in connection therewith.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;145 further provides that any indemnification shall
    be made by the corporation only as authorized in each specific
    case upon a determination by the (i)&#160;stockholders,
    (ii)&#160;board of directors by a majority vote or a quorum
    consisting of directors who were not parties to such action,
    suit or proceeding or (iii)&#160;independent counsel if a quorum
    of disinterested directors so directs. Section&#160;145 provides
    that indemnification pursuant to its provisions is not exclusive
    of other rights of indemnification to which a person may be
    entitled under any bylaw, agreement, vote of stockholders or
    disinterested directors or otherwise. Section&#160;145 of the
    DGCL also empowers National Oilwell Varco to purchase and
    maintain insurance on behalf of any person who is or was an
    officer or director of National Oilwell Varco against liability
    asserted against or incurred by him in any such capacity,
    whether or not National Oilwell Varco would have the power to
    indemnify such officer or director against such liability under
    the provisions of Section&#160;145. National Oilwell Varco
    maintains a liability policy for directors and officers for such
    purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Article&#160;Sixth, Part&#160;II, Section&#160;1 of National
    Oilwell Varco&#146;s Amended and Restated Certificate of
    Incorporation and Article&#160;VI of National Oilwell
    Varco&#146;s Amended and Restated Bylaws each provide that
    directors and officers shall be indemnified, and employees and
    agents may be indemnified, to the fullest extent permitted by
    Section&#160;145 of the DGCL.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement, dated as of December&#160;16, 2007,
    between National Oilwell Varco, Inc., NOV Sub, Inc. and Grant
    Prideco, Inc. provides that for six years after the effective
    time of the merger contemplated by that agreement, National
    Oilwell Varco will indemnify and hold harmless each person who
    was a director or officer of Grant Prideco, Inc. prior to the
    effective time of that merger from their acts or omissions in
    those capacities occurring prior to the effective time of that
    merger to the fullest extent permitted by applicable law.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

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    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;21.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Exhibits
    and Financial Statement Schedules</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<I>Exhibits</I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See Index to Exhibits, which is incorporated by reference in
    this item.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<I>Financial Statement Schedule</I>
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-1
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Not applicable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;<I>See Exhibit&#160;Index</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;22.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Undertakings</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The undersigned registrant hereby undertakes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;That, for the purpose of determining any liability
    under the Securities Act of 1933, each filing of an annual
    report by National Oilwell Varco pursuant to Section&#160;13(a)
    or 15(d) of the Securities Exchange Act of 1934 (and, where
    applicable, each filing of an annual report of an employee
    benefit plan pursuant to Section&#160;15(d) of the Securities
    Exchange Act of 1934)&#160;that is incorporated by reference in
    the registration statement shall be deemed to be a new
    registration statement relating to the securities offered
    therein, and the offering of such securities at that time shall
    be deemed to be the initial bona fide offering thereof.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;That, prior to any public reoffering of the securities
    registered hereunder through use of a prospectus which is a part
    of this registration statement, by any person or party who is
    deemed to be an underwriter within the meaning of
    Rule&#160;145(c), the issuer undertakes that such reoffering
    prospectus will contain the information called for by the
    applicable registration form with respect to reofferings by
    persons who may be deemed underwriters, in addition to the
    information called for by the other items of the applicable form.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;That every prospectus: (i)&#160;that is filed pursuant
    to paragraph (2)&#160;immediately preceding, or (ii)&#160;that
    purports to meet the requirements of Section&#160;10(a)(3) of
    the Securities Act of 1933 and is used in connection with an
    offering of securities subject to Rule&#160;415, will be filed
    as a part of an amendment to the registration statement and will
    not be used until such amendment is effective, and that, for
    purposes of determining any liability under the Securities Act
    of 1933, each such post-effective amendment shall be deemed to
    be a new registration statement relating to the securities
    offered therein, and the offering of such securities at that
    time shall be deemed to be the initial bona fide offering
    thereof.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (4)&#160;To respond to requests for information that is
    incorporated by reference into the prospectus pursuant to
    Items&#160;4, 10(b), 11, or 13 of this form, within one business
    day of receipt of such request, and to send the incorporated
    documents by first class mail or other equally prompt means.
    This includes information contained in documents filed
    subsequent to the effective date of the registration statement
    through the date of responding to the request.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (5)&#160;To supply by means of a post-effective amendment all
    information concerning a transaction, and the company being
    acquired involved therein, that was not the subject of and
    included in the registration statement when it became effective.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Insofar as indemnification for liabilities arising under the
    Securities Act of 1933&#160;may be permitted to directors,
    officers and controlling persons of the registrant pursuant to
    the provisions described under Item&#160;20, or otherwise, the
    registrant has been advised that in the opinion of the
    Securities and Exchange Commission such indemnification is
    against public policy as expressed in the Securities Act of 1933
    and is, therefore, unenforceable. In the event that a claim for
    indemnification against such liabilities (other than the payment
    by a registrant of expenses incurred or paid by a director,
    officer or controlling person of such registrant in the
    successful defense of any action, suit or proceeding) is
    asserted by such director, officer or controlling person in
    connection with the securities being registered, the registrant
    will, unless in the opinion of its counsel the matter has been
    settled by controlling precedent, submit to a court of
    appropriate jurisdiction the question whether such
    indemnification by it is against public policy as expressed in
    the Securities Act of 1933 and will be governed by the final
    adjudication of such issue.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SIGNATURES</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the requirements of the Securities Act of 1933, the
    registrant has duly caused this Amendment No.&#160;2 to the
    Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;S-4</FONT>
    to be signed on its behalf by the undersigned, thereunto duly
    authorized, in the city of Houston, state of Texas, on
    March&#160;17, 2008.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    NATIONAL OILWELL VARCO, INC.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="49%"></TD>
    <TD width="4%"></TD>
    <TD width="47%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    By:&#160;
</TD>
    <TD align="center">
    <DIV style="display:inline; text-align:center; width:90%">/s/&#160;&#160;<FONT style="font-variant: SMALL-CAPS">Merrill
    A. Miller, Jr.</FONT></DIV>
</TD>
</TR>

</TABLE>

<DIV align="center" style="margin-left: 53%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=128 iwidth=211 length=0 -->Merrill
    A. Miller, Jr.
</DIV>

<DIV align="center" style="margin-left: 53%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Chairman, President and Chief Executive Officer
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the requirements of the Securities Act of 1933, this
    registration statement has been signed by the following persons
    in the capacities indicated below on March&#160;17, 2008.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="3%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="37%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="51%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Signature</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Title</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="line-height: 12pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%">/s/&#160;&#160;<FONT style="font-variant: SMALL-CAPS">Merrill
    A. Miller, Jr.</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=189 length=0 -->Merrill
    A. Miller, Jr.
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Chairman, President and Chief Executive Officer<BR>
    (Principal Executive Officer)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-variant: SMALL-CAPS">*</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=189 length=0 -->Clay
    C. Williams
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Senior Vice President and Chief Financial Officer<BR>
    (Principal Financial and Accounting Officer)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-variant: SMALL-CAPS">*</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=189 length=0 -->Greg
    L. Armstrong
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-variant: SMALL-CAPS">*</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=189 length=0 -->Robert
    E. Beauchamp
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-variant: SMALL-CAPS">*</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=189 length=0 -->Ben
    A. Guill
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-variant: SMALL-CAPS">*</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=189 length=0 -->David
    D. Harrison
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-variant: SMALL-CAPS">*</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=189 length=0 -->Roger
    L. Jarvis
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 8pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-variant: SMALL-CAPS">*</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=189 length=0 -->Eric
    L. Mattson
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-variant: SMALL-CAPS">*</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=189 length=0 -->Jeffery
    A. Smisek
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The undersigned by signing his name hereto does hereby sign and
    execute this Amendment No. 2 to this registration statement on
    behalf of the above named officers and directors of the Company
    pursuant to the Power of Attorney executed by such officers and
    directors previously filed with the Securities and Exchange
    Commission.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="36%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    *By:
</TD>
    <TD align="center">
    <DIV style="display:inline; text-align:center; width:90%">/s/&#160;&#160;<FONT style="font-variant: SMALL-CAPS">Dwight
    W. Rettig</FONT></DIV>
</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center" style="margin-left: 4%; margin-right: 60%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

    <CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=128 iwidth=163 length=0 -->Dwight
    W. Rettig
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center" style="margin-left: 4%; margin-right: 60%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
     Attorney-in-Fact
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">INDEX TO
    EXHIBITS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=01 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=01 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=01 type=align1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="91%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Exhibit<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Number</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Description</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    2
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Agreement and Plan of Merger, dated as of December 16, 2007,
    between National Oilwell Varco, Inc., NOV Sub, Inc. and Varco
    International, Inc. (attached as Annex A to the proxy
    statement/prospectus forming a part of this Registration
    Statement).
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .1
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amended and Restated Certificate of Incorporation of
    National-Oilwell, Inc. (incorporated by reference to Exhibit 3.1
    to National Oilwell Varco&#146;s Quarterly Report on Form 10-Q
    filed for the period ending June 30, 2000 (filed on August 11,
    2000)).
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .2
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Amended and Restated Bylaws of National Oilwell Varco, Inc.
    (incorporated by reference to Exhibit 3.1 to National Oilwell
    Varco&#146;s Current Report on Form 8-K filed February&#160;21,
    2008).
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    5
</TD>
<TD nowrap align="left" valign="top">
    .1+
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Opinion of Andrews Kurth LLP.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    8
</TD>
<TD nowrap align="left" valign="top">
    .1+
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Opinion of Andrews Kurth LLP regarding tax matters.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    8
</TD>
<TD nowrap align="left" valign="top">
    .2+
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Opinion of Cravath, Swaine &#038; Moore LLP regarding tax
    matters.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .1+
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Andrews Kurth LLP (included in the opinions filed as
    Exhibits 5.1 and 8.1).
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .2+
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Cravath, Swaine &#038; Moore LLP (included in its
    opinion filed as Exhibit 8.2).
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .3*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Ernst &#038; Young LLP (as to its report on the
    consolidated financial statements of National Oilwell Varco,
    Inc.).
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .4*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Deloitte &#038; Touche LLP (as to its report on the
    consolidated financial statements of Grant Prideco, Inc.).
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    24
</TD>
<TD nowrap align="left" valign="top">
    .1+
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Powers of Attorney of the directors of National Oilwell Varco,
    Inc. (included on the signature page of this Registration
    Statement).
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .1*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Proxy Card for holders of Grant Prideco, Inc. common
    stock.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="right" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .2*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Credit Suisse Securities (USA) LLC.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    Filed herewith.</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    + </TD>
    <TD></TD>
    <TD valign="bottom">
    Previously filed.</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.3
<SEQUENCE>2
<FILENAME>h53191a2exv23w3.htm
<DESCRIPTION>CONSENT OF ERNST & YOUNG LLP
<TEXT>
<HTML>
<HEAD>
<TITLE>exv23w3</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;23.3</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt">Consent of Independent Registered Public Accounting Firm
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We consent
to the reference to our firm under the caption &#147;Experts&#148; in
this Amendment No.&nbsp;2 to the Registration Statement (No.&nbsp;333-148885)
on Form&nbsp;S-4 and related Prospectus of National Oilwell Varco, Inc.,
for the registration of 57,408,083 shares of its common stock and to
the incorporation by reference therein of our reports dated
February&nbsp;28, 2008, with respect to the consolidated financial
statements and schedule of National Oilwell Varco, Inc., and the
effectiveness of internal control over financial reporting of
National Oilwell Varco, Inc., included in its Annual Report
(Form&nbsp;10-K) for the year ended December&nbsp;31, 2007, filed
with the Securities and Exchange Commission.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">/s/ Ernst &#038; Young LLP
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Houston, Texas<BR>
March&nbsp;14, 2008
</DIV>



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


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.4
<SEQUENCE>3
<FILENAME>h53191a2exv23w4.htm
<DESCRIPTION>CONSENT OF DELOITTE & TOUCHE LLP
<TEXT>
<HTML>
<HEAD>
<TITLE>exv23w4</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

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

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;23.4</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We consent
to the incorporation by reference in this Amendment No.&nbsp;2 to the Registration Statement
(No.&nbsp;133-148885) on Form S-4 of our report dated February&nbsp;28, 2008, relating to the consolidated financial
statements and financial statement schedule of Grant Prideco, Inc. (which report expresses an
unqualified opinion on those financial statements and financial statement schedule and includes an
explanatory paragraph regarding the Company&#146;s adoption of Statement of Financial Accounting
Standards No.&nbsp;123(R), <I>Share-based Payment, </I>on January&nbsp;1, 2006), and our report dated February&nbsp;28,
2008, relating to the effectiveness of Grant Prideco&#146;s internal control over financial reporting,
appearing in the Annual Report on Form 10-K of Grant Prideco, Inc. for the year ended December&nbsp;31,
2007, and to the reference to us under the heading &#147;Experts&#148; in the Prospectus, which is part of
this Registration Statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">/s/ Deloitte &#38; Touche LLP
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Houston, Texas<BR>
March&nbsp;17, 2008
</DIV>



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




</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>4
<FILENAME>h53191a2exv99w1.htm
<DESCRIPTION>FORM OF PROXY CARD
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;99.1</B>
</DIV>


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


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


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>APRIL&nbsp;21, 2008</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Please date, sign and mail<BR>
your proxy card in the<BR>
envelope provided as soon<BR>
as possible.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><FONT face="Wingdings">&#234;</FONT>  Please detach along perforated line and mail in the envelope provided. <FONT face="Wingdings">&#234;</FONT>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THE BOARD OF DIRECTORS RECOMMENDS A VOTE &#147;FOR&#148; PROPOSAL 1.<BR>
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.<BR>PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE <FONT style="font-family: Wingdings">&#253;</FONT></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="25%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>YOUR VOTE IS IMPORTANT</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>PROPOSAL 1.
ADOPTION OF MERGER
AGREEMENT:</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">FOR
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">AGAINST
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">ABSTAIN</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Please take a moment now to vote your shares
of Grant Prideco, Inc. common stock for the
upcoming Special Meeting of Stockholders.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">To approve and
adopt the Agreement
and Plan of Merger,
dated as of
December&nbsp;16, 2007,
among National
Oilwell Varco, Inc.
(&#147;National Oilwell
Varco&#148;), NOV Sub,
Inc. (&#147;NOV Sub&#148;), a
wholly owned
subsidiary of
National Oilwell
Varco, and Grant
Prideco, Inc.
(&#147;Grant Prideco&#148;),
and to approve the
merger and the
other transactions
contemplated by the
merger agreement,
pursuant to which
Grant Prideco will
be merged with and
into NOV Sub and
each outstanding
share of common
stock of Grant
Prideco will be
converted into the
right to receive
0.4498 of a share
of common stock of
National Oilwell
Varco and $23.20 in
cash, plus cash in
lieu of fractional
shares.
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#168;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#168;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#168;</FONT></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="20%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="69%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">To change the
address on your
account, please
check the box at
right and indicate
your new address in
the address space
above. Please note
that changes to the
registered name(s)
on the account may
not be submitted
via this method.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="middle"><FONT style="font-family: Wingdings">&#168;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="middle">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS<BR>
GIVEN, WILL BE VOTED &#147;<u>FOR</u>&#148; PROPOSAL 1.</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="21%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="19%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="21%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="white-space: nowrap">Signature of Stockholder</FONT>
</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>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="white-space: nowrap">Signature of Stockholder</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:</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"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Note:</B></TD>
    <TD>&nbsp;</TD>
    <TD>Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by the
authorized person.</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="center" style="font-size: 10pt; margin-top: 18pt"><B>GRANT PRIDECO, INC.</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>400 N. Sam Houston Parkway East, Suite&nbsp;900<BR>
Houston, TX 77060</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undersigned hereby appoints Philip Choyce and Michael McShane, and each of them, as proxies,
each with full power of substitution, to represent and vote as designated on the reverse side, all
the shares of Common Stock of Grant Prideco, Inc. held of record by
the undersigned on March&nbsp;14,
2008, at the Special Meeting of Stockholders to be held at the Crowne
Plaza Hotel Houston North-Greenspoint, 425&nbsp;North Sam Houston
Pkwy. East, Houston, Texas 77060, on April&nbsp;21, 2008,
or any adjournment or postponement thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If no choice is specified, the proxy will be voted &#147;FOR&#148; Item&nbsp;1.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><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">&nbsp;</H5><P>

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




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


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


<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>MONDAY, APRIL 21, 2008</B>
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROXY VOTING INSTRUCTIONS</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="50%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B><u>MAIL</u> </B>- Date, sign and mail your proxy card in
the envelope provided as soon as possible.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>COMPANY NUMBER</B></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 align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">- OR -</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B><u>TELEPHONE</u> </B>- Call toll-free <B>1-800-PROXIES</B>
(1-800-776-9437) from any touch-tone telephone
and follow the instructions. Have your proxy
card available when you call.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>ACCOUNT NUMBER</B></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 align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">- OR -</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B><u>INTERNET</u> </B>- Access <B>www.voteproxy.com </B>and follow
the on-screen instructions. Have your proxy
card available when you access the web page.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>










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

<tr><td><DIV align="left"><FONT size="1">

</FONT></DIV></td></tr>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">- OR -</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<tr><td><DIV align="left"><FONT size="1">

</FONT></DIV></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><td><DIV align="left"><FONT size="1">

</FONT></DIV></td></tr>




<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B><u>IN PERSON</u> </B>- You may vote your shares in
person by attending the Special Meeting.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<tr><td><DIV align="left"><FONT size="1">

</FONT></DIV></td></tr>












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

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You may enter your voting instructions at 1-800-PROXIES or www.voteproxy.com up until 11:59 PM
Eastern Time the day before the cut-off or meeting date.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><FONT face="Wingdings">&#234;</FONT> Please detach
along perforated line and mail in the envelope provided <U>IF</U> you are not voting via <FONT face="Wingdings">&#234;</FONT><BR>
telephone or the Internet.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THE BOARD OF DIRECTORS RECOMMENDS A VOTE &#147;FOR&#148; PROPOSAL 1.<BR>
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.<BR>
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE <FONT style="font-family: Wingdings">&#253;</FONT></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="25%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>YOUR VOTE IS IMPORTANT</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>PROPOSAL 1.
ADOPTION OF MERGER
AGREEMENT:</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">FOR
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">AGAINST
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">ABSTAIN</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Please take a moment now to vote your shares
of Grant Prideco, Inc. common stock for the
upcoming Special Meeting of Stockholders.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">To approve and
adopt the Agreement
and Plan of Merger,
dated as of
December&nbsp;16, 2007,
among National
Oilwell Varco, Inc.
(&#147;National Oilwell
Varco&#148;), NOV Sub,
Inc. (&#147;NOV Sub&#148;), a
wholly owned
subsidiary of
National Oilwell
Varco, and Grant
Prideco, Inc.
(&#147;Grant Prideco&#148;),
and to approve the
merger and the
other transactions
contemplated by the
merger agreement,
pursuant to which
Grant Prideco will
be merged with and
into NOV Sub and
each outstanding
share of common
stock of Grant
Prideco will be
converted into the
right to receive
0.4498 of a share
of common stock of
National Oilwell
Varco and $23.20 in
cash, plus cash in
lieu of fractional
shares.
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#168;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#168;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="font-family: Wingdings">&#168;</FONT></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="20%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="69%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">To change the
address on your
account, please
check the box at
right and indicate
your new address in
the address space
above. Please note
that changes to the
registered name(s)
on the account may
not be submitted
via this method.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="middle"><FONT style="font-family: Wingdings">&#168;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="middle">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED &#147;<U>FOR</U>&#148; PROPOSAL 1.</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="21%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="19%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="21%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="white-space: nowrap">Signature of Stockholder</FONT>
</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>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="white-space: nowrap">Signature of Stockholder</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:</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"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Note:</B></TD>
    <TD>&nbsp;</TD>
    <TD>Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by the
authorized person.</TD>
</TR>
</TABLE>
</DIV>


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



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>5
<FILENAME>h53191a2exv99w2.htm
<DESCRIPTION>CONSENT OF CREDIT SUISSE SECURITIES (USA) LLC
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;99.2</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><IMG src="h53191a2h5319160.gif" alt="(CREDIT SUISSE LETTERHEAD)">
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>CONSENT OF CREDIT SUISSE SECURITIES (USA)&nbsp;LLC</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Board of Directors<BR>
Grant Prideco, Inc.<BR>
400 N. Sam Houston Pkwy East<BR>
Suite #900<BR>
Houston, Texas 77060

</DIV>

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


<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We hereby consent to the inclusion of our opinion letter, dated December&nbsp;16,
2007, to the Board of Directors of Grant Prideco, Inc. included as Annex B to the Proxy
Statement/Prospectus which forms a part of the Registration Statement on Form S-4 of
National Oilwell Varco, Inc. (the &#147;Registration Statement&#148;) and the references to our firm
and our opinion in such Proxy Statement/Prospectus under the headings <I>&#147;Summary &#151; Recommendation
of the Board of Directors of Grant Prideco and Reasons for the
Merger &#151; Opinion of Credit Suisse,&#148; &#147;The Merger &#151; Background of the Merger,&#148; &#147;The
Merger &#151; Grant Prideco&#146;s Reasons for the Merger and Recommendation of Grant
Prideco&#146;s Board of Directors&#148; </I>and <I>&#147;The Merger &#151; Opinion of Credit Suisse Securities
(USA)&nbsp;LLC &#151; Financial Advisor to Grant Prideco.&#148; </I>The foregoing consent applies only
to Amendment No. 2 to the Registration Statement being filed with the Securities and Exchange Commission
and not to any amendments or supplements thereto and our opinion is not to be used,
circulated, quoted or otherwise referred to for any other purpose, nor is it to be filed with,
included in or referred to in whole or in part in any other registration statement (including
any subsequent amendments to the above-mentioned Registration Statement), proxy
statement or any other document, except in accordance with our prior written consent.
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In giving our consent, we do not admit that we come within the category of
persons whose consent is required under Section&nbsp;7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder, nor do we admit that we are experts with respect to any part of such
Registration Statement within the meaning of the term &#147;experts&#148; as used in the Securities
Act of 1933, as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder.
</DIV>


<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 18pt; margin-left: 46%">Dated:
March&nbsp;17, 2008
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 18pt; margin-left: 46%">CREDIT SUISSE SECURITIES (USA)&nbsp;LLC
</DIV>




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

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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
