Exhibit 10.14


    

      


      Exhibit
        10.14

      


      


      


      RETIREMENT
        PLAN RESTORATION PLAN

      


      FOR
        SALARIED EMPLOYEES OF LUFKIN INDUSTRIES, INC.

       

      

        1. Introduction

         

        The
          following are the provisions of the RETIREMENT PLAN RESTORATION PLAN FOR
          SALARIED EMPLOYEES OF LUFKIN INDUSTRIES, INC. (hereinafter referred to
          as the
“Restoration Plan”) which is being established by Lufkin Industries, Inc.
          (hereinafter referred to as the “Company”), effective as of January 1, 1991, in
          order to provide for the payment of retirement and retirement related benefits
          to a certain select group of highly compensated employees who are participants
          in the RETIREMENT PLAN FOR SALARIED EMPLOYEES OF LUFKIN INDUSTRIES, INC.
          (hereinafter referred to as the “Basic Plan”) as in effect from time to time on
          and after the effective date hereof and whose benefits under the Basic
          Plan are
          restricted because of the application of the limitations of either Section
          401(a)(17) or Section 415 of the Internal Revenue Code of 1986, as amended
          (hereinafter referred to as the “Code”) or because of the deferral of the
          employee’s compensation under certain nonqualified deferred compensation
          agreements. The Company intends and desires by the adoption of this Restoration
          Plan to recognize the value to the Company of the past and present services
          of
          its employees covered by the Restoration Plan and to encourage and assure
          their
          continued service to the Company by making more adequate provision for
          their
          future retirement security.

         

        2. Definitions

         

        As
          used
          herein, the term “Participant” means an individual who has become a participant
          in this Restoration Plan in accordance with the provisions of Section 4
          hereof
          and whose interest hereunder has not been fully paid. The term “Employer” shall
          include the Company and any other incorporated or unincorporated trade
          or
          business which may adopt this Restoration Plan in accordance with the provisions
          of Section 13 hereof. All other terms used in this Restoration Plan shall
          have
          the same meaning assigned to them under the provisions of the Basic Plan
          unless
          otherwise qualified by the context.

         

        3. Administration

         

        This
          Restoration Plan shall be administered by a committee appointed by the
          Board of
          Directors of the Company from time to time (hereinafter referred to as
          the
“Committee”). The Committee shall administer the Restoration Plan in a manner
          consistent with the administration of the Basic Plan, as from time to time
          amended and in effect, except that this Restoration Plan shall be administered
          as an unfunded plan that is not intended to meet the qualification requirements
          of Section 401 of the Code. The Committee shall have full power and authority
          to
          interpret, construe, and administer this Restoration Plan and the Committee’s
          interpretations and construction thereof, and actions thereunder, including
          the
          amount or recipient
          of the
          payment to be made therefrom, shall be binding and conclusive on all persons
          for
          all purposes, subject to any rights of the Participant to make a claim
          under
          Title I of the Employee Retirement Income Security Act of 1974.

         

        4. Eligibility

         

        A
          Salaried Employee of an Employer that has adopted this Restoration Plan,
          (a) who
          is a “highly compensated employee” (within the meaning of Section 414(q) of the
          Code) on January 1, 1991 or who subsequently becomes a “highly compensated
          employee,” (b) who is a Participant in the Basic Plan and (c) whose retirement
          or retirement-related benefits under the Basic Plan are limited or reduced
          at
          date of termination of service because of (i) the application of the limitations
          on the maximum amount of retirement income imposed by Section 415 of the
          Code,
          (ii) the application of the limitations imposed by Section 401(a)(17) of
          the
          Code on the amount of Compensation that may be taken into account under
          the
          Basic Plan or (iii) the elective deferral of compensation by the Employee
          under
          a deferred compensation agreement with the Employer pursuant to a nonqualified
          restoration plan maintained by the Employer shall be a Participant in this
          Restoration Plan. In no event shall an Employee who is not a Participant
          in the
          Basic Plan be eligible to participate under this Restoration Plan.

         

        5. Amount
          of Benefit Provided Under Restoration Plan

         

        The
          monthly benefit payable to or on behalf of a Participant under this Restoration
          Plan shall be an amount equal to the excess, if any, of:

      

      


      
        	 	
                (a)

              	
                the
                  monthly benefit that would have been paid to such Participant,
                  or on his
                  behalf to his Beneficiary or Beneficiaries, as of his date of termination
                  of employment with the Employer, under the Basic Plan as in effect
                  on the
                  date of termination of his employment with the Employer, if the
                  provisions
                  of the Basic Plan had been administered without regard to the limitations
                  imposed by Section 415 of the Code and without the limitation imposed
                  by
                  Section 401(a)(17) of the Code on the amount of his Compensation
                  under the
                  Basic Plan and if the Participant’s Compensation under the Basic Plan had
                  not been reduced by any deferrals of his Compensation which he
                  elected to
                  make under a deferred compensation agreement with the Employer
                  pursuant to
                  a nonqualified defined contribution plan restoration plan maintained
                  by
                  the Employer;

              
	 	 	 
	 	 	
                over

              
	 	 	 
	 	
                (b)

              	
                the
                  monthly benefit that is actually payable to such Participant, or
                  on his
                  behalf to his Beneficiary or Beneficiaries, as of his date of termination
                  of employment with the Employer, under the Basic Plan as in effect
                  on the
                  date of his termination of employment with the
                  Employer.

              


      

      6. Payment
        of Restoration Plan Benefit

       

      The
        benefit payable to a Participant, or on his behalf to his Beneficiary, under
        this Restoration Plan shall be payable coincident with and in the same manner
        as
        the payment of the benefits to such Participant or Beneficiary under the
        Basic
        Plan. The Beneficiary or Beneficiaries of a Participant under the Basic Plan
        shall be the Beneficiary or Beneficiaries of such Participant under this
        Restoration Plan. For the purposes of this Restoration Plan, a Participant’s
        service with an Employer shall not be considered to have terminated so long
        as
        such Participant is in the employment of a Controlled Group Member.

       

      A
        Participant’s rights under this Restoration Plan, including his rights to vested
        benefits, shall be the same as his rights under the Basic Plan, except that
        he
        shall not be entitled to any payments from the trust fund maintained under
        the
        Basic Plan on the basis of any benefits to which he may be entitled under
        this
        Restoration Plan. All benefits payable under this Restoration Plan to or
        on
        behalf of Participants who are Employees of a particular Employer shall be
        paid
        from the general assets of that Employer. An Employer shall not be required
        to
        set aside any funds to discharge its obligations hereunder, but the Employer
        may
        set aside such funds if it chooses to do so. Any and all funds so set aside
        shall remain subject to the claims of the general creditors of the Employer,
        present and future. No Employee, his Beneficiary or Beneficiaries, or any
        other
        person shall have, under any circumstances, any interest whatever in any
        particular property or assets of the Employer by virtue of this Restoration
        Plan, and the rights of the Employee, his Beneficiary or Beneficiaries, or
        any
        other person who may claim a right to receive benefits under this Restoration
        Plan shall be no greater than the rights of an unsecured general creditor
        of the
        Employer.

       

      7. Merger,
        Consolidation, or Acquisition

       

      In
        the
        event of a merger, consolidation, or acquisition where the Employer is not
        the
        surviving corporation, unless the successor or acquiring corporation shall
        elect
        to continue and carry on this Restoration Plan, this Restoration Plan shall
        terminate with respect to that Employer.

       

      8. Amendment
        and Termination

       

      The
        Board
        of Directors of the Company may at any time amend or terminate this Restoration
        Plan. If this Restoration Plan should be amended or terminated, each Employer
        shall remain liable for any benefits accrued by its Employees under this
        Restoration Plan (determined in the case of a Participant in the active service
        of the Employer on the basis of such Participant’s presumed termination of
        employment as of the date of such amendment or termination) as of the date
        of
        such action.

       

      9. Restrictions
        on Assignment

       

      The
        benefits provided hereunder are intended for the personal security of persons
        entitled to payment under this Restoration Plan and are not subject in any
        manner to the debts or other obligations of the persons to whom they are
        payable. The interest of a Participant or his Beneficiary or Beneficiaries
        may
        not be sold, transferred, assigned, or encumbered in any manner, either
        voluntarily or involuntarily, and any attempt so to anticipate, alienate,
        sell,
        transfer, assign, pledge, encumber, or charge the same shall be null and
        void;
        neither shall the benefits hereunder be liable for or subject to the debts,
        contracts, liabilities, engagements, or torts of any person to whom such
        benefits or funds are payable, nor shall they be subject to garnishment,
        attachment, or other legal or equitable process nor shall they be an asset
        in
        bankruptcy, except that no amount shall be payable hereunder until and unless
        any and all amounts representing debts or other obligations owed to any Employer
        or any affiliate of any Employer by the Employee with respect to whom such
        amount would otherwise be payable shall have been fully paid and
        satisfied.

       

      10. Continued
        Employment

       

      Nothing
        contained in this Restoration Plan shall be construed as conferring upon
        any
        employee the right to continue in the employment of the Employer in any
        capacity.

       

      11. Liability
        of Committee

       

      Unless
        resulting from his own fraud or willful misconduct, no member of the Committee
        shall be liable for any loss arising out of any action taken or failure to
        act
        by the Committee or a member thereof in connection with this Restoration
        Plan.
        The Committee and any individual member of the Committee and any agent thereof
        shall be fully protected in relying upon the advice of the following
        professional consultants or advisors employed by the Employer or the Committee:
        any attorney insofar as legal matters are concerned, any accountant insofar
        as
        accounting matters are concerned, and any actuary insofar as actuarial matters
        are concerned

       

      12. Indemnification

       

      The
        Employers hereby jointly and severally indemnify and agree to hold harmless
        the
        members of the Committee and all directors, officers and employees of an
        Employer against any loss, claim, cost, expense (including attorneys’ fees),
        judgment or liability arising out of any action taken or failure to act by
        the
        Committee or such individual in connection with this Restoration Plan; provided,
        however, that this indemnity shall not apply to an individual if such loss,
        claim, cost, expense, judgment or liability is due to such individual’s fraud or
        willful misconduct.

       

      13. 
        Rights of Other Employers to Participate

       

      The
        Company has adopted this Restoration Plan effective as of January 1, 1991
        on
        behalf of the Company. Any other Employer which may be a participating Employer
        in the Basic Plan may, in the future, adopt this Restoration Plan by formal
        action on its part and with the approval of the Board of Directors of the
        Company. The administrative powers and control of the Company, as provided
        in
        this Restoration Plan, shall not be deemed diminished under this Restoration
        Plan by reason of the participation of any other Employer and the administrative
        powers and control granted hereunder to the Company and to the Committee
        shall
        be binding upon any Employer adopting this Restoration Plan. Each Employer
        adopting this Restoration Plan shall have the obligation to pay the benefits
        to
        its employees hereunder and no other Employer shall have such obligation
        and any
        failure by a particular Employer to live up to its obligations under this
        Restoration Plan shall have no effect on any other Employer. Any Employer
        may
        terminate this Restoration Plan at any time by formal action on its part
        subject
        to the provisions of Section 8 hereof.

       

      14. Change
        in Employment Status

       

      Notwithstanding
        any provision herein to the contrary, in the event that the Company, in its
        sole
        discretion, determines that any Participant in this Restoration Plan is,
        at any
        time prior to his date of termination of employment, no longer eligible for
        participation in this Restoration Plan because of a change in his employment
        classification, such Participant shall cease to be a Participant in this
        Restoration Plan as of the date such determination is made by the Company
        and no
        contributions shall be made by him or on his behalf to this Restoration Plan
        during such period while he is an ineligible status and prior to the date,
        if
        any, on which he subsequently becomes eligible for participation in this
        Restoration Plan. In the event his employment is terminated while he is in
        an
        ineligible status, his benefit under Section 5 hereof shall be determined
        as of
        the date of his termination and paid in accordance with the provisions of
        Section 6 hereof.

       

      15. Law
        Governing

       

      This
        Restoration Plan shall be construed in accordance with and governed by the
        laws
        of the State of Texas.

       

      16. Effective
        Date

       

      This
        Restoration Plan shall be effective as of January 1, 1991.

       

      IN
        WITNESS WHEREOF, LUFKIN INDUSTRIES, INC. has caused this instrument to be
        executed by its duly authorized officers on the 16th day of November, 1990,
        to
        be effective as of January 1, 1991.

      


      


      
        	
                 

                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                (CORPORATE
                  SEAL)

              	
                 

              	 
	
                 

              	
                 

              
	
                ATTEST:

              	
                 

              	
                LUFKIN
                  INDUSTRIES, INC.

              
	
                 

              	
                 

              	
                 

              
	
                /s/
                  C.J. Haley, Jr.

              	
                 

              	
                By

              	
                 

              	
                /s/
                  F.B. Stevenson

              
	
                Secretary

              	
                 

              	
                Title:

              	
                 

              	
                President

              


      

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      AMENDMENT
        ONE

      


      RETIREMENT
        PLAN RESTORATION PLAN FOR SALARIED EMPLOYEES OF LUFKIN INDUSTRIES,
        INC.

      


      

        WHEREAS,
          effective as of January 1, 1991, Lufkin Industries, Inc. (the “Company”)
          established the Retirement Plan Restoration Plan for Salaried Employees
          of
          Lufkin Industries, Inc. (the “Restoration Plan”) for the benefit of certain of
          its key employees;

         

        WHEREAS,
          by the
          terms of Section 8 of the Restoration Plan, the Restoration Plan may be
          amended
          by the Board of Directors of the Company;

         

        WHEREAS,
          the
          Company wishes to amend the Restoration Plan effective as of January 1,
          2005,
          the to comply with the requirements of section 409A of the Internal Revenue
          Code
          as amended with respect to accruals under the Restoration Plan occurring
          after
          December 31, 2004, the effective date of such section; 

         

        NOW,
          THEREFORE,
          the
          Restoration Plan is hereby amended as follows:

         

        1.
          Effective
          as of January 1, 2005, Section 6 of the Restoration Plan shall be amended
          to
          read as follows:

         

        6.
          Payment
          of Restoration Plan Benefits

      

      


      
        	 	
                (a)

              	
                Pre-2005
                  Accruals. The present value as of December 31, 2004 of the monthly
                  retirement benefit that would be payable to a Participant (or Beneficiary)
                  if the Participant voluntarily terminated service without cause
                  on
                  December 31, 2004 and received a payment of the benefits with the
                  maximum
                  value available from the Restoration Plan on the earliest possible
                  date
                  allowed under the Plan to receive a payment of benefits following
                  the
                  termination of services within the meaning of applicable guidance
                  relating
                  to the provisions of Section 409A of the Internal Revenue Code
                  shall
                  herein be referred to as the “Pre-2005 Accruals”. Increases in the present
                  value of the future payments to which the Participant or Beneficiary
                  are
                  entitled as of December 31, 2004, due solely to the passage of
                  time
                  determined using the same interest rate used to determine the amounts
                  under the Restoration Plan before January 1, 2005 resulting from
                  the
                  shortening of the discount period before the future payments are
                  made,
                  plus, if applicable an increase in the present value resulting
                  from the
                  Participant’s survivorship during the year shall also be included in the
                  “Pre-2005 Accruals”, however, an increase in the potential benefits under
                  the Restoration Plan due to an application of an increase in compensation
                  after December 31, 2004 to prior years or service or subsequent
                  eligibility for an early retirement subsidy shall not constitute
“Pre-2005
                  Accruals”. The payment of Pre-2005 Accruals shall be coincident with and
                  in the same manner as the payment of the benefits to such Participant
                  or
                  Beneficiary under the Basic Plan

              
	 	
                (b)

              	
                Post-2004
                  Accruals. The monthly retirement benefit payable to a Participant
                  (or
                  Beneficiary) which is accrued under the Restoration Plan in excess
                  of the
                  Pre-2005 Accruals shall be referred to herein as the “Post-2004 Accruals”.
                  The benefit payable to a Participant (or Beneficiary) under this
                  Restoration Plan attributable to Post-2004 Accruals shall be paid
                  or
                  commence as soon as administratively feasible following the participant’s
                  Benefit Distribution Date (as defined below) and the Participant
                  shall be
                  entitled to make the following elections as to the form and timing
                  of the
                  payment:

              
	 	 	
                (i)

              	
                At
                  any time prior to the date the Participant first becomes eligible
                  to
                  participate in the Restoration Plan and subject to such requirements
                  as
                  may be imposed by the Committee, Participant may elect to receive
                  the
                  Actuarial Equivalent of his benefits under the Restoration Plan
                  in a lump
                  sum or in any form of benefit offered under the Basic Plan commencing
                  on
                  his or her Benefit Distribution Date;

              
	 	 	
                (ii)

              	
                At
                  any time prior to January 1, 2006, subject to such requirements
                  as may be
                  imposed by the Committee, a Participant may elect to receive benefits
                  under the Restoration Plan in a lump sum or in any form of benefit
                  offered
                  under the Basic Plan commencing on his or her Benefit Distribution
                  Date;

              
	 	 	
                (iii)

              	
                At
                  any time prior to Participant’s Benefit Distribution Date, Participant may
                  elect to change his form of benefit to a lump sum or any of the
                  forms of
                  distribution permitted under the Basic Plan, provided that such
                  change
                  complies with each of the following requirements:

              
	 	 	 	
                1.

              	
                Such
                  payment change must be submitted to and accepted by the Committee
                  in its
                  sole discretion at least twelve (12) months prior to the Participant’s
                  previously designated scheduled Benefit Distribution Date;
                  and

              
	 	 	 	
                2.

              	
                The
                  new scheduled Benefit Distribution Date selected by the Participant
                  must
                  be at least five years after the previously designated Benefit
                  Distribution Date; and

              
	 	 	 	
                3.

              	
                The
                  election of the new scheduled Benefit Distribution Date shall have
                  no
                  effect until at least twelve (12) months after the date on which
                  the
                  election is made

              
	 	 	
                (iv)

              	
                Absent
                  an election by the Participant in accordance with (i), (ii) or
                  (iii)
                  above, all Post-2004 Accruals shall be paid in one lump sum as
                  soon as
                  administratively feasible following the Participant’s Benefit Distribution
                  Date.

              
	 	
                (c)

              	
                “Benefit
                  Distribution Date” shall mean the date that is as soon as administratively
                  feasible following a participant’s separation from service (within the
                  meaning of section 409A of the Code) with the Company and each
                  member of
                  its controlled group; provided, however, that in the event that
                  a
                  participant is determined by the Committee to be a “key employee” (as
                  defined in section 416(i) of the Code without regard to paragraph
                  (5)
                  thereof) as of the last day of the calendar year prior to the
                  Participant’s separation from service, such participant’s Benefit
                  Distribution Date shall be the date that is the earlier of (i)
                  participant’s date of death or (ii) six (6) months following such
                  separation from service. If a participant would have received payments
                  during such six-month period but for the fact that participant
                  is a “key
                  employee”, participant’s installment payments shall be accumulated during
                  such six-month period and paid as soon as administratively feasible
                  after
                  such six-month period.

              
	 	
                (d)

              	
                The
                  Beneficiary or Beneficiaries of a Participant under the Basic Plan
                  shall
                  be the Beneficiary or Beneficiaries of such Participant under this
                  Restoration Plan. For the purposes of this Restoration Plan, a
                  Participant’s service with an Employer shall not be considered to have
                  terminated so long as such Participant is in the employee of a
                  Controlled
                  Group Member.

              
	 	
                (e)

              	
                Subject
                  to the foregoing and other provisions of the Restoration Plan,
                  a
                  Participant’s rights under this Restoration Plan, including his rights to
                  vested benefits, shall be the same as his rights under the Basic
                  Plan,
                  except that he shall not be entitled to any payments from the trust
                  fund
                  maintained under the Basic Plan on the basis of any benefits to
                  which he
                  may be entitled under this Restoration Plan. All benefits payable
                  under
                  this Restoration Plan to or on behalf of Participants who are Employees
                  of
                  a particular Employer shall be paid from the general assets of
                  that
                  Employer. An Employer shall not be required to set aside any funds
                  to
                  discharge its obligations hereunder, but the Employer may set aside
                  such
                  funds if it chooses to do so. Any and all funds so set aside shall
                  remain
                  subject to the claims of the general creditors of the Employer,
                  present
                  and future. No Employee, his Beneficiary or Beneficiaries, or any
                  other
                  person shall have, under any circumstances, any interest whatever
                  in any
                  particular property or assets of the Employer by virtue of this
                  Restoration Plan, and the rights of the Employee, his Beneficiary
                  or
                  Beneficiaries, or any other person who may claim a right to receive
                  benefits under this Restoration Plan shall be no greater than the
                  rights
                  of an unsecured general creditor of the
                  Employer.

              


      

       

       

      2.
        To the
        extent that any provision of any amendments herein or in any previous or
        subsequent amendment shall be construed as a “material modification” (within the
        meaning of the grandfathering provisions of section 409A of the Code and
        applicable guidance) of the Restoration Plan provisions as in effect prior
        to
        January 1, 2005 with respect to the Pre-2005 Accruals, such provisions shall
        be
        void ab initio and of no effect.
        Except
        as hereinabove amended, the provisions of the Restoration Plan as previously
        stated shall remain in full force and effect.

       

      IN
        WITNESS WHEREOF, the Company has caused this instrument to be executed by
        its
        duly authorized officer on this 1st day of November,
        2006.

       

      


      
        	
                ATTEST:

              	
                COMPANY

              
	 	
                LUFKIN
                  INDUSTRIES, INC.

              
	
                /s/
                  P G Perez

              	
                By:

              	
                /s/
                  R D Leslie

              
	
                Secretary

              	
                Title:

              	
                Vice
                  President/Treasurer/Chief Financial
                  Officer