LUFKIN
INDUSTIES, INC.
NONEMPLOYEE
DIRECTOR STOCK OPTION AGREEMENT
Agreement
made effective the _____ day of ____, 2008, (the "Grant
Date") between Lufkin Industries, Inc., a Texas corporation
(the "Company"), and
___________ ("Optionee").
To
carry out the decision of the Lufkin Industries, Inc.’s
Board of Directors and in accordance with the Lufkin
Industries, Inc.’s Incentive Stock Option Plan 2000, to
which this Agreement is expressly subject and a copy of which
is attached hereto as Exhibit A, by affording Optionee the
opportunity to purchase shares of Common Stock, par value
$1.00 per share, of the Company ("Stock"), and in
consideration of the mutual agreements and other matters set
forth herein and in the Plan, the Company and Optionee hereby
agree as follows:
1.
Grant of
Option . The Company hereby grants to the
Optionee the right and option (the "Option") to purchase all
or any part of an aggregate of 2,000 shares of Stock, on the
terms and conditions set forth herein and in the
Plan.
2.
Exercise
Price . The exercise price of the Option
shall be $75.10 per share.
3.
Exercise of
Option . (a) Subject to the further
provisions of this Agreement, the Option granted pursuant to
this Agreement may be exercised immediately on the date of
grant.
(b) Subject
to the earlier expiration of the Option as herein provided and
subject to the terms and conditions contained herein, the
Option may be exercised by written notice (which complies in
all respects with the provisions of this Agreement) to the
Company at its principal executive office addressed to the
attention of the Secretary of the Company, identifying the
Option and specifying the number of shares that the Optionee
decides to purchase, such exercise to be effective at the time
of receipt of such written notice at the Company's principal
executive office during normal business hours. The
notice shall not be considered to be properly given unless
accompanied by all documentation deemed appropriate by the
Company to reflect exercise of the Option and compliance with
all applicable laws, rules and regulations.
(c) Notwithstanding
anything herein to the contrary, in no event shall the Option,
or any part thereof, be exercisable after the tenth
anniversary of the Grant Date.
4.
Payment of
Option Exercise Price . Upon exercise of an
Option, the full option exercise price for the shares with
respect to which the Option is being exercised shall be
payable to the Company in cash or by check payable and
acceptable to the Company. Payment instructions will be
received subject to collection.
5.
Non
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