Summary of Executive Officer and Non-employee Director Compensation



 Exhibit 10.5 
  
 Summary of Executive Officer and Non-employee Director Compensation 
  
 Set forth below is a summary of the compensation paid by Dril-Quip, Inc. (the “Company”) to its executive officers
and non-employee directors as of the date of filing of the Company’s Annual Report on Form 10-K. For more information regarding executive officer and director compensation, please read “Election of Directors—Director
Compensation,” “—Executive Compensation,” and
 “—Employment Agreements” contained in the Company’s proxy statement for its 2005 Annual Meeting of Stockholders to be filed with the SEC pursuant to Regulation
14A. 
  
 Executive Officers. 
  
 Each of the Company’s Co-Chief Executive Officers (the
“Co-CEOs”) are compensated in accordance with the employment agreements entered into with the Company prior to the closing of the Company’s initial public offering. Each of these agreements provides for an annual base salary, as well
as an annual performance bonus for each 12-month period based on (i) the Company’s performance in the 12-month period ending December 31 against the Company’s annual budget and (ii) the Company’s return on capital compared to that of
a peer group of companies for the 12-month period ending September 30. In addition, each agreement provides for an annual grant of a number of options under the Company’s incentive plan equal to the employee’s base salary multiplied by
three and divided by the market price of the Company’s Common Stock on the grant date. Each agreement also requires the Company to maintain a flexible perquisites spending account in the amount of $25,000 each year for each of the Co-CEOs for
use in paying for membership dues, costs associated with purchasing or leasing an automobile, financial counseling, tax return preparation and mobile phones. The Company is required to pay the unused and remaining balances of such accounts annually
to the Co-CEOs. 
  
 Each Co-CEO currently receives a base salary
of $469,000. For the 2004 bonus period, each Co-CEO received a bonus of $269,000. On October 28, 2004, the Company entered into letter agreements with each of the Co-CEOs pursuant to which the Co-CEOs waived their rights to receive stock option
awards in 2004 under their respective employment agreements in light of the current uncertainty surrounding stock option expensing. 
  
 The Company’s Chief Financial Officer (the “CFO”) is compensated with a base salary and annual bonus as determined by the Co-CEOs and
approved by the Company’s Compensation Committee. The CFO currently receives a base salary of $177,000. For 2004, the CFO received a bonus of $50,000. 
  
 Non-Employee Directors. 
  
 The Company’s non-employee directors receive an annual fee of $50,000, plus a fee of $1,000 for attendance at each Board of Directors meeting and
$1,000 for each committee meeting, unless the committee meeting is held on the same day as the Board of Directors meeting. All directors are reimbursed for their out-of-pocket expenses and other expenses incurred in attending meetings of the Board
or committees thereof and for other expenses incurred in their capacity as directors.