**Exhibit
      10.13**


**THRIFT
      PLAN RESTORATION PLAN**





**FOR
      SALARIED EMPLOYEES OF LUFKIN INDUSTRIES, INC.**




**1.**  **Introduction**




The
      following are the provisions of the **THRIFT
      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 THRIFT 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
      contributions and benefits under the Basic Plan are restricted by application
      of
      the limitations of any of the following sections of the Internal Revenue Code
      of
      1986, as amended (hereinafter referred to as the “Code”): Section 401(a)(l7),
      Section 401(k)(3), Section 401(m), Section 402(g) or Section 415. 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 17 hereof. The term “Compensation” shall have the meaning assigned in
      the Basic Plan except that it shall be determined without regard to the dollar
      limit required by Section 401(a)(l7) of the Code and before any deferred cash
      contributions under this Restoration Plan. 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) for the applicable Plan Year, (b) who is a Participant in the Basic Plan
      and (c) whose Salary Deferral Contributions and/or allocated portion of the
      Employer Contributions under the Basic Plan are limited for such Plan Year
      due
      to the provisions of either Section 401(a)(17), Section 40l(k)(3), Section
      401(m), Section 402(g) or Section 415 of the Code, shall be eligible to
      participate in this Restoration Plan for such Plan Year. In no event shall
      an
      Employee who is not a Participant in the Basic Plan be eligible to participate
      under this Restoration Plan.




**5.**  **Participant’s
      Salary Deferral Contributions**




Each
      eligible Employee may become a Participant by electing to defer a portion of
      his
      Compensation under this Restoration Plan for the Plan Year by entering into
      a
      salary deferral agreement with his Employer under which he agrees to defer
      a
      portion of his future Compensation. The amount of Compensation that is deferred
      by the Participant pursuant to such agreement (herein referred to as the
      Participant’s “Restoration Salary Deferral Contributions”) shall be subject to a
      maximum equal to the excess, if any, of (i) 12% of his Compensation for the
      applicable month of the Plan Year over (ii) the maximum Salary Deferral
      Contribution that he is entitled to make under the Basic Plan for such month
      of
      the Plan Year. A Participant may at any time change the specified amount of
      his
      future deferrals of Compensation under this Restoration Plan, subject to the
      above maximum rate, by entering into a new salary deferral agreement with his
      Employer with respect to such future deferrals.




**6.**  **Employer’s
      Matching Contribution Amount**




The
      Employer shall provide a matching contribution amount for each Participant
      in
      this Restoration Plan as of each Valuation Date subsequent to the effective
      date
      of the Restoration Plan in an amount equal to the excess of (a) the amount
      of
      the Employer Contributions that would have been credited to the Employer
      Contribution Account of the Participant under the Basic Plan as of such
      Valuation Date if (i) contributions to the Basic Plan were not restricted due
      to
      the limitations imposed by Sections 401(a)(17), 401(k)(3), 401(m), 402(g),
      and
      415 of the Internal Revenue
      Code and (ii) the Restoration Plan Salary Deferral Contributions of the
      Participant were added to his Salary Deferral Contributions under the Basic
      Plan
      for the valuation period just ended over (b) the amount of the Employer
      Contributions that are allocated to his Employer Contribution Account under
      the
      Basic Plan as of such Valuation Date.




**7.**  **Establishment
      of Reserve Accounts**




An
      Employer shall establish and maintain on its books and records for each of
      its
      Salaried Employees who is a Participant in this Restoration Plan two separate
      liability accounts, called the “Salary Deferral Contribution Reserve Account”
and the “Employer Contribution Reserve Account,” respectively. Such accounts
      shall be identified on the books and records of the Employer as a contingent
      liability of the Employer to the Participant. Each separate liability account
      shall be divided into separate investment fund reserve subaccounts as are
      required to reflect the applicable Interest Accumulation Factors described
      below.




The
      Employer shall credit the amount of the Restoration Plan Salary Deferral
      Contributions of a Participant to his Salary Deferral Contribution Reserve
      Account no later than the Valuation Date next following the applicable payroll
      period for which his Compensation was reduced. The Restoration Plan Salary
      Deferral Contributions shall be credited among the investment fund reserve
      subaccounts in accordance with the Participant’s current Investment Fund
      election for Salary Deferral Contributions under the Basic Plan. After crediting
      the amount of the Restoration Plan Salary Deferral Contributions for the
      valuation period just ended, the investment fund reserve subaccounts in the
      Salary Deferral Contribution Reserve Account shall also be credited as of such
      Valuation Date with an amount determined by multiplying the average account
      balance during the valuation period just ended by the applicable Interest
      Accumulation Factor that applies on the current Valuation Date.




The
      Interest Accumulation Factor (herein referred to as the “Interest Accumulation
      Factor”) that applies on any given Valuation Date to an investment fund reserve
      subaccount shall be equal to the rate of return that would have been earned
      by
      such contributions as of such Valuation Date for the valuation period just
      ended
      under the Investment Fund that would have applied under the Basic Plan if such
      contributions had been invested in the Investment Fund being maintained under
      the Basic Plan on the Valuation Date on which the contributions are credited
      under this Restoration Plan.




The
      Employer shall credit to the Employer Contribution Reserve Account of the
      Participant as of each Valuation Date an amount equal to the matching
      contribution amount to which he is entitled as determined under Section 6 hereof
      as of such Valuation Date. The Employer Contribution shall be credited among
      the investment fund reserve subaccounts in accordance with the Participant’s current
      Investment Fund election for Employer Contributions under the Basic Plan. After
      crediting the Employer Contribution Reserve Account with the matching
      contribution amount for the valuation period just ended, the Employer
      Contribution Reserve Account shall be credited as of such Valuation Date with
      an
      amount determined by multiplying the average account balance during the
      valuation period just ended by the applicable Interest Accumulation Factor
      that
      applies on the current Valuation Date.




**8.**  **Excess
      Contributions Refunded Under Basic Plan**




In
      the
      event that a Participant receives a distribution under the Basic Plan due to
      an
“excess contribution” (as such term is defined in the Code), the Participant may
      enter into a salary deferral agreement with his Employer under which he agrees
      to reduce his Compensation each payroll period by a specified amount until
      the
      total is equal to the amount of such distribution that he received from the
      Basic Plan. If the Participant makes such an election, an amount equal to such
      amount by which his Compensation is reduced shall be credited to his Salary
      Deferral Contribution Reserve Account under this Restoration Plan as of the
      Valuation Date following the applicable payroll period for which his
      Compensation was reduced but the salary reductions credited to such subaccount
      shall be ignored or excluded from Restoration Plan Salary Deferral Contributions
      for the purposes of determining the amount to be credited to the Employer
      Contribution Reserve Account under Section 6 above. The salary deferral
      contribution shall be credited among the investment fund reserve subaccounts
      in
      accordance with the Participant’s current Investment Fund election for Salary
      Deferral Contributions under the Basic Plan. After crediting the amount of
      the
      salary reductions attributable to “excess contributions” distributed to the
      Participant for the valuation period just ended, the investment fund reserve
      subaccounts in the Salary Deferral Contribution Reserve Account shall also
      be
      credited as of such Valuation Date with an amount determined by multiplying
      the
      average account balance during the valuation period just ended by the applicable
      Interest Accumulation Factor that applies on the current Valuation
      Date.




The
      maximum percentage of Compensation that may be deferred by the Participant
      pursuant to a salary deferral agreement described in Section 5 hereof shall
      be
      determined without regard to the percentage of Compensation that is deferred
      by
      the Participant pursuant to this Section 8.




**9.**  **Amount
      of Benefit**




The
      benefit payable to Participant or his Beneficiary or Beneficiaries under this
      Restoration Plan shall be an amount equal to the sum of:





(1)
            100%
                of the balance in his Salary Deferral Contribution Reserve Account
                as of
                the Valuation Date coincident with or next following the date of
                termination of his service; and(2)
            an
                amount equal to the vested interest, if any, of the balance in his
                Employer Contribution Reserve Account, determined as
                follows:(a)
            if
                the Participant had attained the age of 65 years as of the date of
                termination of his service or if his service is terminated as a result
                of
                his death or Total and Permanent Disability, his vested interest
                in his
                Employer Contribution Reserve Account shall be equal
                to:(i)
            100%;multiplied
                by(ii)
            the
                balance in his Employer Contribution Reserve Account as of the Valuation
                Date coincident with or next following the date of termination of
                his
                service; or(b)
            if
                the Participant had not attained the age of 65 years as of the date
                of
                termination of his service and his service is terminated for any
                reason
                other than his death or Total and Permanent Disability, his vested
                interest in his Employer Contribution Reserve Account shall be equal
                to
                the product of:(i)
            the
                Participant’s Vested Percentage as specified in the schedule below based
                upon his number of years of “Vesting Service” (as defined in the Basic
                Plan) as of the date of termination of his service;multiplied
                by(ii)
            the
                balance in his Employer Contribution Reserve Account as of the Valuation
                Date coincident with or next following the date of termination of
                his
                service:


**Number
                of Years of Vesting**
              **Service
                as of Date of**
              **Termination
                of Service**
            
            **Vested**
              **Percentage**Less
                than 3
            
            0
            %3
            
            20
            %4
            
            40
            %5
            
            60
            %6
            
            80
            %7
                or more
            
            100
            %






The
      noninvested interest, if any, in a Participant’s Employer Contribution Reserve
      Account to which he is not entitled as of the date of termination of his service
      because his Vested Percentage as determined above is less than 100% shall be
      debited from his Employer Contribution Reserve Account and forfeited. All
      forfeitures shall be considered as an advance upon the Employer’s obligations
      under Section 6 hereof, or if no further contributions are to be made thereunder
      by the Employer, shall be credited to the Employer.




**10.**  **Payment
      of Benefits**




The
      benefits payable to a Participant or, if the Participant is not living, to
      his
      Beneficiary, under this Restoration Plan shall be paid as soon as
      administratively feasible following the Valuation Date coincident with or next
      following the date of the Participant’s retirement or other termination of
      service and shall be paid in cash in accordance with the Participant’s
      irrevocable election made under such agreement either (i) in a single-sum amount
      or (ii) in quarterly or annual installments over a period not to exceed 10
      years. The Beneficiary or Beneficiaries of a Participant under the Basic Plan
      shall be the Beneficiary or Beneficiaries of such Participant under this
      Restoration Plan unless a specific designation of Beneficiary is made with
      respect to the benefits payable under this Restoration Plan in accordance with
      such procedures as may be specified by the Committee. 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.




No
      in-service withdrawals or Participant loans are available 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.




**11.**  **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.




**12.**  **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.




**13.**  **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.




**14.**  **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.




**15.**  **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.




**16.**  **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.




**17.**  **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
      12
      hereof.




**18.**  **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 in 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 9 hereof shall be determined as
      of
      the date of his termination and paid in accordance with the provisions of
      Section 10 hereof.




**19.**  **Law
      Governing**




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




**20.**  **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 l6th day of November, 1990, to be effective as of
      January 1, 1991.








**ATTEST:**
            **COMPANY****LUFKIN
                INDUSTRIES, INC.**/s/
                C J Haley Jr.
            By:
            /s/
                F B StevensonSecretary
            Title:
            President








**AMENDMENT
      ONE TO**





**THRIFT
      PLAN RESTORATION PLAN**





**FOR
      SALARIED EMPLOYEES OF LUFKIN INDUSTRIES, INC.**




**WHEREAS** ,
      effective as of January 1, 1991, the **THRIFT
      PLAN RESTORATION PLAN FOR SALARIED EMPLOYEES OF LUFKIN INDUSTRIES,
      INC** .
      (hereinafter referred to as the “Restoration Plan”) was adopted by Lufkin
      Industries, Inc. (hereinafter referred to as the “Company”), in order to provide
      for the payment of retirement and retirement related benefits to a certain
      select group of highly compensated employees; whose contributions and benefits
      under the Thrift Plan for Salaried Employees of Lufkin Industries, Inc. are
      restricted by application of the limitations of the Internal Revenue
      Code.




**WHEREAS** ,
      it is
      deemed desirable to amend the Restoration Plan in order to allow certain highly
      compensated employees of the Company to participate prior to the date they
      become eligible to participate in the Thrift Plan for Salaried Employee of
      Lufkin Industries, Inc.




**NOW** , **THEREFORE** ,
      the
      Restoration Plan is hereby amended effective as of January 1, 1993, as
      follows:




1.  A
      new
      paragraph shall be added to Section 1 of the Restoration Plan to read as
      follows:




“Effective
      as of January 1, 1993, the Restoration Plan has been extended to include a
      select group of highly compensated employees of the Company who have not met
      the
      service requirement for participation in the Basic Plan, but who would otherwise
      qualify for participation in the Restoration Plan.”




2.Section
      4
      of the Restoration Plan shall be amended in its entirety to read as
      follows:




“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) for the applicable Plan Year, (b) who either (i) is a Participant in
      the
      Basic Plan or (ii) is ineligible to participate in the Basic Plan but would
      be
      eligible to participate in the Basic Plan if the service requirement for such
      plan were to be waived, and (c) whose Salary Deferral Contributions and/or
      allocated portion of the Employer Contributions under the Basic Plan are
      limited, or would be limited if he were eligible to participate in the Basic
      Plan, for such Plan Year due to the provisions of either Section 40l(a)(17),
      Section 401(k)(3), Section 401(m), Section 402(g) or Section 415 of the Code,
      shall be eligible to participate in this Restoration Plan for such Plan Year.
      In
      no event shall an Employee who is eligible to participate in the Basic Plan,
      but
      has declined to participate, be eligible to participate under this Restoration
      Plan.”




3.  Section
      6
      of the Restoration Plan shall be amended in its entirety to read as
      follows:




“6.  Employer’s
      Matching Contribution Amount




The
      Employer shall provide a matching contribution amount for each Participant
      in
      this Restoration Plan as of each Valuation Date subsequent to the effective
      date
      of the Restoration Plan in an amount equal to the excess of (a) the amount
      of
      the Employer Contributions that would have been credited to the Employer
      Contribution Account of the Participant under the Basic Plan as of such
      Valuation Date if (i) contributions to the Basic Plan were not restricted due
      to
      the limitations imposed by Sections 401(a)(17), 401(k)(3), 401(m), 402(g),
      and
      415 of the Internal Revenue Code, (ii) in the case of a Participant who is
      ineligible to participate in the Basic Plan, the Participant had been a
      participant in the Basic Plan as of such Valuation Date, (iii) the Restoration
      Plan Salary Deferral Contributions of the Participant had been included as
      Salary Deferral Contributions under the Basic Plan for the valuation period
      just
      ended over (b) the amount
      of the Employer Contributions, if any, that are actually allocated to his
      Employer Contribution Account under the Basic Plan as of such Valuation
      Date.”




4.  The
      second paragraph of Section 7 of the Restoration Plan shall be amended in its
      entirety to read as follows




“The
      Employer shall credit the amount of the Restoration Plan Salary Deferral
      Contributions of a Participant to his Salary Deferral Contribution Reserve
      Account no later than the Valuation Date next following the applicable payroll
      period for which his Compensation was reduced. The Restoration Plan Salary
      Deferral Contributions shall be credited among the investment fund reserve
      subaccounts in accordance with either (i) the Participant’s current Investment
      Fund election for Salary Deferral Contributions under the Basic Plan or (ii)
      in
      the case of a Participant who is ineligible to participate in the Basic Plan,
      as
      he may elect in writing, among the Investment Funds available under the Basic
      Plan (and assuming for this purpose that the restrictions for Investment Fund
      election in the Basic Plan apply to such election). After crediting the amount
      of the Restoration Plan Salary Deferral Contributions for the valuation period
      just ended, the investment fund reserve subaccounts in the Salary Deferral
      Contribution Reserve Account shall also be credited as of such Valuation Date
      with an amount determined by multiplying the average account balance during
      the
      valuation period just ended by the applicable Interest Accumulation Factor
      that
      applies on the current Valuation Date.”




5.  The
      fourth paragraph of Section 7 of the Restoration Plan shall be amended in its
      entirety to read as follows:




“The
      Employer shall credit to the Employer Contribution Reserve Account of the
      Participant as of each Valuation Date an amount equal to the matching
      contribution amount to which he is entitled as determined under Section 6 hereof
      as of such Valuation Date. The Employer Contribution shall be credited among
      the
      investment fund reserve subaccounts in accordance with either (i) the
      Participant’s current Investment Fund election for Employer Contributions under
      the Basic Plan or (ii) in the case of a Participant who is ineligible to
      participate in the Basic Plan, as he may elect in writing, among the Investment
      Funds available under the Basic Plan (and assuming for this purpose that the
      restrictions for Investment Fund election in the Basic Plan apply to such
      election). After crediting the Employer Contribution Reserve
      Account with the matching contribution amount for the valuation period just
      ended, the Employer Contribution Reserve Account shall be credited as of such
      Valuation Date with an amount determined by multiplying the average account
      balance during the valuation period just ended by the applicable Interest
      Accumulation Factor that applies on the current Valuation
      Date.”




**IN
      WITNESS WHEREOF** ,
      LUFKIN
      INDUSTRIES, INC. has caused this instrument to be executed by its duly
      authorized officers on the 18th day of January, 1993, to be effective as of
      January 1, 1993.








**ATTEST:**
            **COMPANY****LUFKIN
                INDUSTRIES, INC.**/s/
                C J Haley Jr.
            By:
            /s/
                H J GreenSecretary
            Title:
            Executive
                Vice President

















**AMENDMENT
      TWO TO THE**





**THRIFT
      PLAN RESTORATION PLAN**





**FOR
      SALARIED EMPLOYEES OF LUFKIN INDUSTRIES, INC.**




**WHEREAS** ,
      effective as of January 1, 1991, the **THRIFT
      PLAN RESTORATION PLAN FOR SALARIED EMPLOYEES OF LUFKIN INDUSTRIES,
      INC** .
      (the
“Plan”) was adopted by Lufkin Industries, inc. (the “Company”) to provide for
      the payment of retirement and retirement related benefits to a certain select
      group of highly compensated employees whose contributions and benefits under
      The
      Thrift Plan for Salaried Employees of Lufkin Industries, Inc. are restricted
      by
      application of the limitations of the Internal Revenue Code; and




**WHEREAS** ,
      the
      Company desires to amend the Plan to clarity the manner in which participants
      may elect to defer compensation under the Plan and to change the procedure
      by
      which a participant may elect a form of distribution from the Plan;




**NOW,
      THEREFORE** ,
      the
      Plan is hereby amended as follows effective as of January 31, 2001:




1.  Section
      5
      of the Plan is hereby amended in its entirety to read as follows:




“5.  Participant’s
      Salary Deferral Contributions




Each
      eligible Employee may become a Participant by irrevocably electing to defer
      a
      portion of his Compensation under this Restoration Plan for the Plan Year by
      entering into a salary deferral agreement with his Employer under which he
      agrees to defer a portion of his future Compensation. Any such salary deferral
      agreement must be completed prior to the date specified by .the Committee,
      but
      in any event prior to the period of service for which the Compensation is
      payable. The amount of Compensation that is deferred by the Participant pursuant
      to such agreement (herein referred to as the Participant’s “Restoration Salary
      Deferral Contributions”) shall be subject to a maximum equal to the excess, if
      any,
      of (i) 12% of his Compensation (or such other amount as the Committee may
      authorize in its discretion) for the applicable month of the Plan
      Year over (ii) the maximum Salary Deferral Contribution that he is entitled
      to
      make under the Basic Plan for such month of the Plan Year. A Participant may,
      at
      the times and in the manner designated by the Committee, change the specified
      amount of his future deferrals of Compensation under this Restoration Plan,
      subject to the above maximum rate, by entering .into a new salary deferral
      agreement with his Employer with respect to such future deferrals; provided
      that
      any such new salary deferral agreement must be completed prior to the period
      of
      service for which the Compensation is payable.”




2.The
      first
      paragraph of Section 10 of the Plan is hereby amended in its entirety to read
      as
      follows:




The
      benefits payable to a Participant or, if the Participant is not living, to
      his
      Beneficiary, under this Restoration Plan shall commence to be paid as soon
      as
      administratively practicable following the Valuation Date coincident with or
      next following the date of the Participant’s retirement or other termination of
      service. For 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 may elect in accordance with procedures established by the Committee
      to receive his benefit under this Restoration Plan (i) in the form of a single
      cash lump sum payment or (ii) in the form of quarterly or annual cash
      installments over a period of five (5) or ten (10) years. In either case, to
      be
      effective, such election must be made prior to (x) the date a Participant
      becomes a Participant or (y) the beginning of the one-year period ending on
      the
      date the Participant (or his Beneficiary if the Participant is not living)
      first
      becomes entitled to receive such benefit hereunder (provided that in no event
      shall an election under this subparagraph (y) be effective in the same calendar
      year in which the election is made). If a Participant does not choose a method
      of payment in accordance with the Committee’s procedures, or fails to elect the
      payment option in accordance with the above time limitations, payment to the
      Participant (or his Beneficiary if the Participant is not living) shall be
      made
      in the form of a single cash lump sum. If a benefit is to be paid in
      installments, each installment payment shall equal the Participant’s total
      remaining benefit divided by the number of installment payments remaining to
      be
      paid in the installment payment period chosen by the Participant.
      The Participant’s death shall not affect any such installment payment election,
      and in such case any remaining installments shall be paid to
      the Participant’s Beneficiary. Notwithstanding the foregoing, the Committee may
      establish procedures by which a Participant may elect a form
      of
      benefit payment for the period beginning after January 31, 2001 and ending
      on
      the effective date of a new election made in accordance with the
      foregoing; provided that a Participant who fails to make an election in
      accordance with such interim procedures and who becomes (or whose Beneficiary
      becomes) entitled to receive a benefit during such period shall receive such
      benefit in the form of a single cash lump sum.




The
      Participant’s Beneficiary (or Beneficiaries) under this Restoration Plan shall
      be the Beneficiary (or Beneficiaries) of the Participant under the Basic Plan
      unless the Participant makes a specific designation of Beneficiary for purposes
      of this Restoration Plan in accordance with procedures established by the
      Committee.




3.  Except
      as
      hereinabove amended, the provisions of the Plan as previously amended shall
      remain in fall force and effect




**IN
      WITNESS WHEREOF** ,
      the
      Company has caused this instrument to be executed by its duly authorized officer
      on this 31 day of January, 2001.





**ATTEST:**
            **COMPANY****LUFKIN
                INDUSTRIES, INC.**/s/
                P G Perez
            By:
            /s/
                D V SmithSecretary
            Title:
            President
                & Chief Executive Officer











**AMENDMENT
      THREE**





**THRIFT
      PLAN RESTORATION PLAN**





**FOR
      SALARIED EMPLOYEES OF LUFKIN INDUSTRIES, INC.**




**WHEREAS** ,
        effective as of January 1, 1991, Lufkin Industries, Inc. (hereinafter referred
        to as the “Company”) heretofore established the Thrift Plan Restoration Plan for
        Salaried Employee so Lufkin Industries, Inc. (the “Plan”) for the benefit of
        certain highly compensated employees; and
  **WHEREAS** ,
        the
        Company desires to amend the Plan to comply with the requirements of section
        409A of the Internal Revenue Code of 1986 as amended (the “Code”);
  **NOW,
        THEREFORE** ,
        The
        Plan is hereby amended as follows effective as of January 1, 2005:
  1.  Section
        2
        of the Plan is hereby amended by adding the following at the end
        thereof:
  “The
        term
“Performance Pay” shall mean any Compensation that is determined to be
        performance-based compensation within the meaning of section 409A of the
        Code
        and which is attributable to services performed over a performance period
        of at
        least twelve months. The term “Plan Year” shall mean the calendar year in which
        Compensation deferred under the Plan is earned.”
  2.  Section
        5
        of the Plan is hereby amended in its entirety to read as follows:
  “5.  Participant’s
        Salary Deferral Contributions
  Each
        eligible Employee may become a Participant by irrevocably electing to defer
        a
        portion of his Compensation under this Restoration Plan for the Plan Year
        by
        entering into a salary deferral agreement with his Employer under which he
        agrees to defer a portion of his future Compensation. Any such salary deferral
        agreement must be completed prior to the date specified by the Committee,
        but in
        any event prior to the last day of the calendar year prior to the Plan Year
        in
        which the services are performed giving rise to the Compensation.
        Notwithstanding the foregoing, however, an Eligible Employee may elect to
        defer
        any Compensation which is determined by the Committee to be Performance Pay
        at
        any time prior to the date specified by the Committee but not later than
        six
        months prior to the end of the performance period over which such Performance
        Pay is earned. An Employee who first becomes an eligible Employee after the
        commencement of a Plan year, may make a deferral election with respect to
        the
        portion of Compensation earned in such Plan year after the date of the election,
        provided that such eligible Employee makes such deferral election prior to
        the
        date specified by the Committee but not later than thirty days after first
        becoming eligible to participate. The amount of compensation that may be
        deferred by the Participant pursuant to such agreement (herein referred to
        as
        the Participant’s “Restoration Salary Deferral Contributions”) shall be subject
        to a maximum equal to the excess, if any , of (12% of his Compensation (or
        such
        other amount as the Committee may authorize in its discretion) for the
        applicable Plan Year over (ii) the maximum Salary Deferral Contribution that
        he
        is entitled to make under the Basic Plan for such Plan Year. The salary deferral
        election made pursuant to this section shall be irrevocable as of the last
        day
        of the calendar year prior to the Plan Year for which it is made. A Participant
        may, at the times and in the manner designated by the Committee, change or
        terminate a salary deferral election to be effective as of the next following
        Plan Year.”
  3.  The
        first
        and second paragraphs of Section 10 of the Plan (as amended by Amendment
        Two)
        are hereby amended in their entirety to read as follows:
  “The
        benefits payable to a Participant or, if the Participant is not living, to
        his
        Beneficiary, under this Restoration Plan shall be paid or commence to be
        paid as
        soon as administratively practicable following the Valuation Date coincident
        with or next following the date of the Participant’s retirement or other
        termination of service. For 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.
        Notwithstanding the foregoing, however, 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
        Plan Year prior to the year Participant’s distributions under this Restoration
        Plan would be paid or commence, Participant’s distributions shall not be paid or
        commence until the date that is the earlier of (i) Participant’s date of death
        or (ii) six (6) months following such separation from service. If such
        Participant would have received installment payments during such six-month
        period but for the immediately preceding sentence, Participant’s installment
        payments shall be accumulated during such six-month period and paid as soon
        as
        administratively feasible after such six-month period.
  A
        Participant may elect at the time of his or her initial deferral election
        in
        accordance with procedures established by the Committee to receive his benefit
        under this Restoration Plan (i) in the form of a single cash lump sum payment
        or
        (ii) in the form of quarterly or annual cash installments over a period of
        five
        (5) or ten (10) years. In either case, to be effective, such election must
        be
        made prior to the effective date of the Participant’s first deferral election
        and except as provided below shall be irrevocable. If a Participant does
        not
        choose a method of payment in accordance with the Committee’s procedures,
        payment to the Participant (or his Beneficiary if the Participant is not
        living)
        shall be made in the form of a single cash lump sum. If a Participant is
        to be
        paid in installments, each installment payment shall equal the Participant’s
        total remaining benefit divided by the number of installments payments remaining
        to be paid in the installment payment period chosen by the Participant. The
        Participant’s death shall not affect any such installment payment election, and
        in such case any remaining installments shall be paid to the Participant’s
        Beneficiary. Notwithstanding the foregoing, the Participant may elect to
        postpone a scheduled distribution and have such amount paid out during a
        sixty
        (60) day period commencing immediately after an allowable alternative
        distribution date designated by the Participant in accordance with this Section
        provided that such payment election change complies with the requirements
        imposed by the Committee and each of the following
        requirements:








(a)
            Such
                payment election change must be submitted to and accepted by the
                Committee
                in its sole discretion at least twelve (12) months prior to the
                Participant’s previouslydesignated
                scheduled
                distribution commencement date; and(b)
            The
                new scheduled distribution commencement date selected by the Participant
                must be at least five years after thepreviously
                designated scheduled distribution date; and(c)
            The
                election of the new scheduled distribution commencement date shall
                have no
                effect until at least twelve (12) months after the date on which
                the
                election is made.”






4.  Except
      as
      hereinabove amended, the provision of the Plan as previously amended 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 2nd day of November, 2005.











**ATTEST:**
            **COMPANY****LUFKIN
                INDUSTRIES, INC.**/s/
                P G Perez
            By:
            /s/
                R D LeslieSecretary
            Title:
            Vice
                President/Treasurer/Chief Financial
                Officer











**AMENDMENT
      FOUR**





**THRIFT
      PLAN RESTORATION PLAN**





**FOR
      SALARIED EMPLOYEES OF LUFKIN INDUSTRIES, INC.**





**WHEREAS** ,
        effective as of January 1, 1991, Lufkin Industries, Inc. (hereinafter referred
        to as the “Company”) heretofore established the Thrift Plan Restoration Plan for
        Salaried Employee so Lufkin Industries, Inc. (the “Plan”) for the benefit of
        certain highly compensated employees; and
  **WHEREAS** ,
        the
        Company amended the Plan by the Amendment Three to comply with the requirements
        of section 409A of the Internal Revenue Code of 1986 as amended (the “Code”)
        effective as of January 1, 2005; and
  **WHEREAS** ,
        the
        Company wishes to clarify that the amendments of the first and second paragraphs
        of Section 10 of the Plan are intended to apply effective as of January 1,
        2005
        only to the portion of the Participants’ accounts accrued on or after January 1,
        2005;
  **NOW,
        THEREFORE** ,
        the
        Plan is hereby amended as follows:
  1.  *Effective
        as of January 1, 2005, Section 10 of the Plan (as amended by Amendment Three)
        is
        hereby amended by adding the following paragraph prior to the first paragraph
        thereof:*
  “With
        respect to only the portion of the Participant’s benefit, if any, attributable
        to Salary Deferrals which were credited to the Participant’s Salary Deferral
        Contribution Reserve Account and Employer Contributions which were credited
        to
        the Employer Contribution Reserve Account and vested on or before December
        31,
        2004, as well as any earnings, gains or losses attributable to such amounts
        (the
“Pre-2005 Accounts”), the first two paragraphs of Section 10 of the Restoration
        Plan as amended by Amendment Two shall continue to apply. With respect to
        all
        other benefits to which the Participant may be entitled under the Restoration
        Plan (the “Post-2004 Accounts”), the first two paragraphs of Section 10 of the
        Restoration Plan as amended by Amendment Three shall apply. The Employer
        shall
        establish and maintain on its books and records for each of its Salaried
        Employees who is a Participant in this Restoration Plan, separate accounts
        to
        establish a separate liability for the Pre-2005 Accounts and Post 2004
        Accounts.”
  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 Plan provisions as in effect prior to January
        1,
        2005 with respect to the Pre-2005 Accounts, such provisions shall be void
        ab
        initio and of no effect.* *Except as hereinabove amended, the provision of the Plan as previously amended
        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 LeslieSecretary
            Title:
            Vice
                President/Treasurer/Chief Financial
                Officer