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-Transferability.  The Option may not be transferred by
Optionee separately or otherwise than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined in
the Internal Revenue Code of 1986, as amended.

 6.            Termination.  (a) If the Optionee gives notice of his resignation
from the Board of Directors of the Company, the Option shall be exercisable by
him, subject to Section 3(c) above, only within three months after such date of
resignation.

(b)            If, however, Optionee gives notice that he does not intend to
stand for reelection, is given notice that he will be asked to retire from the
Board of Directors or becomes disabled and is unable to serve while a member of
the Board of Directors, the Option shall be exercisable by the Optionee at any
time within twelve months after the effective date of such retirement or
termination of service, subject to Section 3(c) above.

(c)            If the Optionee shall die while entitled to exercise the Option,
the Optionee's estate, personal representative or beneficiary, as the case may
be, shall have the right subject to the provisions of Section 3(c) above, to
exercise the Option at any time within 12 months after the date of the
Optionee's death, to the extent that the Optionee was entitled to exercise the
same on the day immediately prior to the Optionee's death.

 7.            Withholding of Tax. Any issuance of Stock pursuant to the
exercise of the Option under this Agreement shall not be made until appropriate
arrangements have been made for the payment of any amounts that may be required
to be withheld or paid with respect thereto.  Such arrangements may be paid in
cash or by check payable and acceptable to the Company.  Payment instruments
will be received subject to collection.

 8.            Securities Matters.  The Option granted herein shall be subject
to the requirement that, if at any time the Board of Directors shall determine,
in its discretion, that the listing, registration or qualification of the shares
subject to such Option upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the issue of
purchase of shares hereunder, such Option may not be exercised in whole or in
part unless such listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not reasonably acceptable
to the Board of Directors.

 9.            Relationship. Any question as to whether and when there has been
a termination of Optionee's services on the Board of Directors, for purposes of
this Agreement, and the cause of such termination, for purposes of this
Agreement, shall be determined by the Board of Directors, and its determination
shall be final.  Nothing herein shall give the Optionee any right to continued
service or affect in any manner the right of the Company to terminate the
service of the Optionee.

10.            Binding Effect.  This Agreement shall be binding upon and inure
to the benefit of any successors to the Company and all persons lawfully
claiming under the Optionee. This Agreement and all actions taken shall be
governed by and constructed in accordance with the laws of the State of
Texas.  In the event of conflict between this Agreement and the Plan, the terms
of the Plan shall control.  All undefined capitalized terms used herein shall
have the meaning assigned to them in the Plan.  The Board of Directors shall
have authority to construe the terms of this Agreement, and the Board of
Directors' determinations shall be final and binding on the Optionee and the
Company.

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
and the Optionee has executed this Agreement as of the day and year first above
written.

 

 
LUFKIN INDUSTRIES, INC.
 
By:
   
Its:
President and CEO
 
OPTIONEE:
     
(Name)