##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K/A
 Amendment No. 1
 (Mark one)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE YEAR ENDED DECEMBER 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number 1-12317
 NATIONAL OILWELL VARCO, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    76-0475815(State or other jurisdiction
    
    (IRS Employerof incorporation or organization)
    
    Identification No.)
 7909 Parkwood Circle Drive, Houston, Texas 77036-6565  (Address of principal executive offices)
 (713) 346-7500  (Registrants telephone number, including area code)
  Common Stock, par value $.01
    
    New York Stock Exchange(Title of Class)
    
    (Exchange on which registered)
 None
  þ o
  o þ
  þ o
 o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller Reporting Company o(Do not check if a smaller reporting company)
 o þ
  Documents Incorporated by Reference




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##### 



EXPLANATORY NOTE
    TABLE OF CONTENTS
 PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    
    
    1ITEM 11. EXECUTIVE COMPENSATION
    
    
    6ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
    
    
    29ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
    
    
    31ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    32PART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
    
    33CERTIFICATIONS PURSUANT TO RULE 13A-14A AND RULE 15D-14(A)
    
    
    36Certification Pursuant to Rule 13a-14(a) and Rule 15d-14(a)Certification Pursuant to Rule 13a-14(a) and Rule 15d-14(a)




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PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 Directors
  Expiration Date
    
    
    
    Year Firstof Current
    
    
    
    BecameName
    
    Age
    
    Term
    
    Biography
    
    DirectorMerrill A. Miller, Jr.
    
    
    57
    
    
    
    2009
    
    
    Mr. Miller has been
a Director of the
Company since May
2001 and Chairman
of the Board since
July 22, 2005. He
also served as
Chairman of the
Board from May 2002
through March 11,
2005. He served as
the Companys Chief
Operating Officer
from November 2000
through March 11,
2005. He has
served as President
since November 2000
and as Chief
Executive Officer
since May 2001. He
has served in
various senior
executive positions
with National
Oilwell since
February 1996. Mr.
Miller also serves
as a director of
Chesapeake Energy
Corporation, a
company engaged in
the development,
acquisition,
production,
exploration, and
marketing of
onshore oil and
natural gas
properties in the
United States.
    
    
    2001Greg L. Armstrong
    
    
    49
    
    
    
    2009
    
    
    Mr. Armstrong has
been a Director of
the Company since
March 2005. Mr.
Armstrong served as
a Director of Varco
from May 20, 2004
until its merger
with the Company on
March 11, 2005.
Since 1998, he has
been the Chairman
of the Board and
Chief Executive
Officer of Plains
All American GP
LLC, the general
partner and
controlling entity
of Plains All
American Pipeline,
L.P., a publicly
traded master
limited partnership
engaged in the
business of
marketing,
gathering,
transporting,
terminalling and
storing crude oil.
Mr. Armstrong is a
member of the
National Petroleum
Council and a
member of the Board
of BreitBurn Energy
Partners.
    
    
    2005Robert E. Beauchamp
    
    
    48
    
    
    
    2008
    
    
    Mr. Beauchamp has
been a Director of
the Company since
August 2002. Since
1988, he has served
in various
capacities at BMC
Software, Inc., a
leading provider of
enterprise
management
solutions, most
recently as
President and Chief
Executive Officer
and as a director.
During his career
with BMC, he also
served as senior
vice president of
research &
development, vice
president of
strategic marketing
and corporate
development, and
director of
strategic
marketing.
    
    
    2002Ben A. Guill
    
    
    57
    
    
    
    2010
    
    
    Mr. Guill has
served as a
Director of the
Company since 1999.
Until April 2007,
he was President of
First Reserve
Corporation, a
corporate manager
of private
investments
focusing on the
energy and
energy-related
sectors, which he
joined in September
1998. Prior to
joining First
Reserve, Mr. Guill
was the Managing
Director and
Co-head of
Investment Banking
of Simmons &
Company
International, an
investment-banking
firm specializing
in the oil service
industry. Mr.
Guill also serves
as a director of
the general partner
of Cheniere Energy
Partners, L.P. and
as a director of
Trico Marine
Services, Inc.
    
    
    1999
 1




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Expiration Date
    
    
    
    Year Firstof Current
    
    
    
    BecameName
    
    Age
    
    Term
    
    Biography
    
    DirectorDavid D. Harrison
    
    
    60
    
    
    
    2009
    
    
    Mr. Harrison has
been a Director of
the Company since
August 2003. He has
served as Executive
Vice President and
Chief Financial
Officer of Pentair,
Inc., a diversified
manufacturer in
water technologies
and enclosures
businesses, since
February 2000 until
his retirement in
February 2007. He
also served as
Executive Vice
President and Chief
Financial Officer
of Pentair, Inc.
from 1994 to 1996.
From 1972 through
1994, Mr. Harrison
held various
domestic and
international
finance positions
with a combination
of General Electric
and Borg-Warner
Chemicals. Mr.
Harrison serves as
a director of
Navistar
International
Corporation, a
holding company
whose wholly owned
subsidiaries
produce
International® brand
commercial trucks,
MaxxForce brand
diesel engines, IC
brand school buses,
and Workhorse brand
chassis for motor
homes and step
vans.
    
    
    2003Roger L. Jarvis
    
    
    54
    
    
    
    2010
    
    
    Mr. Jarvis has been
a Director of the
Company since
February 2002.
Since 2007, he has
served as Chairman,
Chief Executive
Officer and
President of Common
Resources LLC, a
privately held
company engaged in
the business of
exploration for and
production of
hydrocarbons in the
United States. He
served as
President, Chief
Executive Officer
and Director of
Spinnaker
Exploration
Company, a natural
gas and oil
exploration and
production company,
from 1996 and as
its Chairman of the
Board from 1998,
until its
acquisition by
Norsk Hydro ASA in
December 2005.
    
    
    2002Eric L. Mattson
    
    
    56
    
    
    
    2010
    
    
    Mr. Mattson has
been a Director of
the Company since
March 2005. Mr.
Mattson served as a
Director of Varco
(and its
predecessor,
Tuboscope Inc.)
from January 1994
until its merger
with the Company on
March 11, 2005.
Mr. Mattson has
served as Senior
Vice President and
Chief Financial
Officer of
VeriCenter, Inc., a
private provider of
managed hosting
services, since
2003, until its
acquisition in
August 2007. From
November 2002 until
October 2003,
Mr. Mattson worked
as an independent
consultant.
Mr. Mattson was the
Chief Financial
Officer of Netrail,
Inc., a private
Internet backbone
and broadband
service provider,
from September 1999
until November
2002. From July
1993 until May
1999, Mr. Mattson
served as Senior
Vice President and
Chief Financial
Officer of Baker
Hughes
Incorporated, a
provider of
products and
services to the
oil, gas and
process industries.
    
    
    2005Jeffery A. Smisek
    
    
    53
    
    
    
    2008
    
    
    Mr. Smisek has been
a Director of the
Company since March
2005. Mr. Smisek
served as a
Director of Varco
(and its
predecessor,
Tuboscope Inc.)
from February 1998
until its merger
with the Company on
March 11, 2005.
Since December 30,
2004, Mr. Smisek
has served as
President and a
director of
Continental
Airlines, Inc.
Mr. Smisek
previously served
Continental
Airlines, Inc. as: Executive Vice
President from
March 2003 until
December 2004; and
Executive Vice
President 
Corporate from May
2001 until March
2003.
    
    
    2005
 2




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Executive Officers
  Name
    
    Age
    
    Position
    
    BiographyMerrill A. Miller, Jr.
    
    
    57
    
    
    President and Chief
Executive Officer
    
    Mr. Miller has
served as the
Companys President
since November
2000, Chief
Executive Officer
since May 2001 and
Chairman of the
Board since July
22, 2005. Mr.
Miller also served
as Chairman of the
Board from May 2002
through March 11,
2005. He served as
the Companys Chief
Operating Officer
from November 2000
through March 11,
2005. He has
served in various
senior executive
positions with the
Company since
February 1996. Mr.
Miller also serves
as a director of
Chesapeake Energy
Corporation, a
company engaged in
the development,
acquisition,
production,
exploration, and
marketing of
onshore oil and
natural gas
properties in the
United States.Robert W. Blanchard
    
    
    46
    
    
    Vice President, Corporate
Controller and Chief
Accounting Officer
    
    Mr. Blanchard has
served as the
Companys Vice
President,
Corporate
Controller and
Chief Accounting
Officer since May
2005. Mr.
Blanchard served as
Controller of Varco
from 1999 and as
its Vice President
from 2002 until its
merger with the
Company on March
11, 2005.Mark A. Reese
    
    
    49
    
    
    President  Rig Technology
    
    Mr. Reese has
served as President
 Rig Technology
since August 2007.
Mr. Reese served as
President 
Expendable Products
from January 2004
to August 2007. He
served as President
of the Companys
Mission Products
Group from August
2000 to January
2004. From May
1997 to August 2000
he was Vice
President of
Operations for the
Companys
Distribution
Services Group.Dwight W. Rettig
    
    
    47
    
    
    Vice President, General
Counsel and Secretary
    
    Mr. Rettig has
served as the
Companys Vice
President and
General Counsel
since February
1999, and from
February 1998 to
February 1999 as
General Counsel of
the Companys
Distribution
Services Group.Clay C. Williams
    
    
    45
    
    
    Senior Vice President and
Chief Financial Officer
    
    Mr. Williams has
served as the
Companys Senior
Vice President and
Chief Financial
Officer since March
2005. He served as
Varcos Vice
President and Chief
Financial Officer
from January 2003
until its merger
with the Company on
March 11, 2005.
From May 2002 until
January 2003, Mr.
Williams served as
Varcos Vice
President Finance
and Corporate
Development. From
February 2001 until
May 2002, and from
February 1997 until
February 2000, he
served as Varcos
Vice
PresidentCorporate
Development.
 3




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Section 16(a) Beneficial Owner Reporting Compliance
  Policies on Business Ethics and Conduct
  4




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Standing Audit Committee
  5




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ITEM 11. EXECUTIVE COMPENSATION
 Compensation Discussion and Analysis
 General Overview
   Compensation Philosophy
       Competitive Positioning
  6




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th th th th th th
 Components of Compensation
  Base Salary
  7




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th
 Annual Incentive Award
     8




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(1)
    
    100% (performance result) x $800,000 (base salary) x 100% (participation level) =
$800,000(2)
    
    200% (performance result) x $800,000 (base salary) x 100% (participation level) =
$1,600,000
    Long-Term Incentive Compensation
  9




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10




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Name
    
    Securities Underlying Options (#) (1)Clay C. Williams
    
    
    50,000Mark A. Reese
    
    
    30,000Haynes B. Smith
    
    
    30,000Dwight W. Rettig
    
    
    30,000
 
 (1)
    
    Number of shares has been adjusted to reflect the two-for-one stock split in the form of a
stock dividend to the Companys stockholders of record on September 7, 2007 with a distribution of
shares on September 28, 2007.   Shares of Restricted Stock (18
    
    Shares of Restricted Stock (36Name
    
    Months) (#) (1)
    
    Months) (#) (1)Clay C. Williams
    
    
    12,500
    
    
    
    25,000Mark A. Reese
    
    
    7,500
    
    
    
    15,000Haynes B. Smith
    
    
    7,500
    
    
    
    15,000Dwight W. Rettig
    
    
    7,500
    
    
    
    15,000
 
 (1)
    
    Number of shares has been adjusted to reflect the two-for-one stock split in the form
of a stock dividend to the Companys stockholders of record on September 7, 2007 with a
distribution of shares on September 28, 2007.    11




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Retirement, Health and Welfare Benefits
        Compensation of the Chief Executive Officer
    12




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
    
    deliver the Companys annual operating plan;
    
    deliver quality equipment on a timely basis;
    
    optimize capacity and capital expenditures for near-term opportunities and long-term
cyclicality;
    
    develop new technologies and products for customers;
    
    identify and execute on strategic growth opportunities;
    
    execute Sarbanes-Oxley 404 compliance;
    
    enhance board member education on the Company and its businesses;
    
    enhance senior management effectiveness through education and exposure to different
opportunities; and
    
    develop different programs for employee development.
   U.S. Income Tax Limits on Deductibility
  Option Grant Practices
   Recent Developments
  13




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Name
    

Securities Underlying Options (#)Merrill A. Miller, Jr.
    
    
    125,000Clay C. Williams
    
    
    40,000Mark A. Reese
    
    
    20,000Dwight W. Rettig
    
    
    20,000Robert W. Blanchard
    
    
    20,000
   Shares of Restricted Stock (36Name
    
    Months) (#)Merrill A. Miller, Jr.
    
    
    65,000Clay C. Williams
    
    
    20,000Mark A. Reese
    
    
    10,000Dwight W. Rettig
    
    
    10,000Robert W. Blanchard
    
    
    10,000
   Employment Contracts and Termination of Employment and Change-in-Control Arrangements
 Miller, Reese and Rettig
  14




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
    
    voluntary termination;
    
    termination for cause (as defined);
    
    death; or
    
    long-term disability;
   
    
    the assignment to him of any duties inconsistent with his current position or any
action by the Company that results in a diminution in his position, authority, duties or
responsibilities;
    
    a failure by the Company to comply with the terms of the agreement; or
    
    requiring Mr. Miller to relocate or to travel to a substantially greater extent than
required at the date of the agreement.
   
    
    voluntary termination;
    
    termination for cause (as defined);
    
    death; or
    
    long-term disability;
   Williams and Smith
  15




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Varco Supplemental Executive Retirement Plan
  Amendment and Restatement of the Varco Executive Retiree Medical Plan.
  Varco Change in Control Severance Plan.
  
    
    a lump sum payment equal to three times base salary;
    
    a lump sum cash payment equal to the participants annual bonus at the higher of
Expected Value (as defined) or actual results during the year of termination, which is
pro-rated to the date of termination;
    
    a lump sum payment equal to three times bonus at expected value;
    
    full vesting of all accrued benefits under the Companys 401(k) Plan, SERP,
Supplemental Plan and Medical Plan, as applicable;
    
    a lump sum payment equal to three years of expected Company contributions under the
Companys 401(k) Plan and Supplemental Plan;
    
    full vesting of any restricted stock awards and payment of awards earned under any
intermediate or long-term bonus plan;
    
    an extended option exercise period; and
    
    the gross-up of certain payments, subject to excise taxes under the Internal Revenue
Code as parachute payments, so that the participant receives the same amount he would
have received had there been no applicable excise taxes.
   
    
    executives conviction of a felony involving moral turpitude, dishonesty or a breach
of trust towards the Company;
    
    executives commission of any act of theft, fraud, embezzlement or misappropriation
against the Company that is materially injurious to the Company regardless of whether a
criminal conviction is obtained;
    
    executives willful and continued failure to devote substantially all of his business
time to the Companys business affairs (excluding failures due to illness, incapacity,
vacations, incidental civic activities and incidental personal time) which failure is
not remedied within a reasonable time after a written demand by the Company specifically
identifying executives failure is delivered by the Company;
    
    executives unauthorized disclosure of confidential information of the Company that
is materially injurious to the Company; or
    
    executives knowing or willful material violation of federal or state securities
laws, as determined in good faith by the Companys board of directors.
 16




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
    
    failure to re-elect or appoint the executive to any corporate office or directorship
held at the time of the change of control or a material reduction in executives
authority, duties or responsibilities (including status, offices, titles and reporting
requirements) or if executive is assigned duties or responsibilities inconsistent in any
material respect from those of executive at the time of the relevant change of control
all on the basis of which executive makes a good faith determination that the terms of
his employment have been detrimentally and materially affected;
    
    a material reduction of executives compensation, benefits or perquisites, including
annual base salary, annual bonus, intermediate or long-term cash or equity incentive
opportunities or plans from those in effect prior to the change of control;
    
    The Company fails to obtain a written agreement satisfactory to executive from any
successor or assigns of the Company to assume and perform the amended and restated
executive agreement; or
    
    The Company requires executive to be based at any office located more than fifty
(50) miles from the Companys current offices without executives consent.
 Potential Payments Upon Termination or Change in Control
     Executive Benefits and Payments Upon Termination (1)
    
    Involuntary Not for Cause Termination (2)Base Salary (3 times base of $800,000)
    
    $
    2,400,000Highest Bonus (times 3)
    
    $
    4,800,000Continuing welfare and medical benefits
    
    $
    50,000Retirement Contribution and Matching
    
    $
    111,000Value of Unvested Stock Options
    
    $
    11,071,168Value of Unvested Restricted Stock
    
    $
    10,798,620Estimated Tax Gross Up
    
    $
    9,742,622Total:
    
    $
    38,973,410
 
 (1)
    
    For purposes of this analysis, we assumed the Executives compensation is
as follows: base salary as of December 31, 2007 of $800,000 and 2007 bonus payment
as highest bonus earned. Unvested stock options include 42,667 options from 2005
grant at $29.125/share, 133,334 options from 2006 grant at $33.29/share, and 100,000
options from 2007 grant at $35.225. Unvested restricted stock includes 72,000 shares
from 2005 grant and 75,000 shares from 2007 grant. Value of unvested stock options
and restricted stock based on a share price of $73.46, the Companys closing stock
price on December 31, 2007.(2)
    
    Assumes the employment relationship is terminated by the Company for any
reason other than voluntary termination, termination for cause, death, or
disability, or if the employment relationship is terminated by the executive for
Good Reason, as of December 31, 2007. Termination by the executive for Good
Reason means the assignment to the employee of any duties inconsistent with his
current position or any action by the Company that results in a diminution in the
executives position, authority, duties or responsibilities; a failure by the
Company to comply with the terms of the executives employment agreement; or the
requirement of the executive to relocate or to travel to a substantially greater
extent than required at the date of the employment agreement. 17




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Executive Benefits and Payments Upon Termination (1)
    
    Involuntary Not for Cause Termination (2)Base Salary (3 times)
    
    $
    1,500,000Expected Value Bonus (times 3)
    
    $
    600,000Continuing welfare and medical benefits
    
    $
    50,000Retirement Contribution and Matching
    
    $
    112,069Value of Unvested Stock Options
    
    $
    5,560,766Value of Unvested Restricted Stock
    
    $
    2,754,750Car Allowance and Fuel Card
    
    $
    39,198Outplacement Services (3)
    
    $
    75,000Estimated Tax Gross Up
    
    $
    3,538,574Total:
    
    $
    14,230,357
 
 (1)
    
    For purposes of this analysis, we assumed the Executives compensation is
as follows: base salary as of December 31, 2007 of $500,000. Unvested stock options
include 17,562 options from 2005 grant at $18.17/share, 66,667 options from 2006
grant at $33.29/share, and 50,000 options from 2007 grant at $35.225/share.
Unvested restricted stock includes 37,500 shares from 2007 grant. Value of unvested
stock options and restricted stock based on a share price of $73.46, the Companys
closing stock price on December 31, 2007.(2)
    
    Assumes the employment relationship is terminated by the Company for
other than cause or if the executive terminates his employment for good reason, as
of December 31, 2007, as further described under the caption Williams and Smith
above.(3)
    
    Executive also entitled to outplacement services valued at not more than
15% of base salary. For purposes of this analysis, we valued the outplacement
services at 15% of base salary. 18




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Executive Benefits and Payments Upon Termination (1)
    
    Involuntary Not for Cause Termination (2)Base Salary
    
    $
    385,000Highest Bonus
    
    $
    577,500Continuing welfare and medical benefits
    
    $
    16,666Retirement Contribution and Matching
    
    $
    28,250Value of Unvested Stock Options
    
    $
    3,847,050Value of Unvested Restricted Stock
    
    $
    1,652,850Total:
    
    $
    6,507,316
 
 (1)
    
    For purposes of this analysis, we assumed the Executives compensation is
as follows: base salary as of December 31, 2007 of $385,000 and 2007 bonus payment
as highest bonus earned. Unvested stock options include 20,000 options from 2005
grant at $18.80/share, 40,000 options from 2006 grant at $33.29/share, and 30,000
options from 2007 grant at $35.225/share. Unvested restricted stock includes 22,500
shares from 2007 grant. Value of unvested stock options and restricted stock based
on a share price of $73.46, the Companys closing stock price on December 31, 2007.(2)
    
    Assumes the employment relationship is terminated by the Company for any
reason other than voluntary termination, termination for cause, death, or
disability, or if the employment relationship is terminated by the executive for
Good Reason, as of December 31, 2007. Termination by the executive for Good
Reason means the assignment to the employee of any duties inconsistent with his
current position or any action by the Company that results in a diminution in the
executives position, authority, duties or responsibilities; a failure by the
Company to comply with the terms of the executives employment agreement; or the
requirement of the executive to relocate or to travel to a substantially greater
extent than required at the date of the employment agreement.  Executive Benefits and Payments Upon Termination (1)
    
    Involuntary Not for Cause Termination (2)Base Salary (3 times)
    
    $
    1,155,000Expected Value Bonus (times 3)
    
    $
    577,500Continuing welfare and medical benefits
    
    $
    50,000Retirement Contribution and Matching
    
    $
    109,725Value of Unvested Stock Options
    
    $
    3,863,520Value of Unvested Restricted Stock
    
    $
    1,652,850Car Allowance and Fuel Card
    
    $
    39,198Outplacement Services (3)
    
    $
    57,750Estimated Tax Gross Up
    
    $
    2,482,350Total:
    
    $
    9,987,893
 
 (1)
    
    For purposes of this analysis, we assumed the Executives compensation is
as follows: base salary as of December 31, 2007 of $385,000. Unvested stock options
include 20,070 options from 2005 grant at $18.17/share, 40,000 options from 2006
grant at $33.29/share, and 30,000 options from 2007 grant at $35.225/share.
Unvested restricted stock includes 22,500 shares from 2007 grant. Value of
unvested stock options based on a share price of $73.46, the Companys closing stock
price on December 31, 2007.(2)
    
    Assumes the employment relationship is terminated by the Company for
other than cause or if the executive terminates his employment for good reason, as
of December 31, 2007, as further described under the caption Williams and Smith
above.(3)
    
    Executive also entitled to outplacement services valued at not more than
15% of base salary. For purposes of this analysis, we valued the outplacement
services at 15% of base salary. 19




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Executive Benefits and Payments Upon Termination (1)
    
    Involuntary Not for Cause Termination (2)Base Salary
    
    $
    350,000Highest Bonus
    
    $
    525,000Continuing welfare and medical benefits
    
    $
    16,666Retirement Contribution and Matching
    
    $
    23,000Value of Unvested Stock Options
    
    $
    3,847,050Value of Unvested Restricted Stock
    
    $
    1,652,850Total:
    
    $
    6,414,566
 
 (1)
    
    For purposes of this analysis, we assumed the Executives compensation is
as follows: base salary as of December 31, 2007 of $350,000 and 2007 bonus payment
as highest bonus earned. Unvested stock options include 20,000 options from 2005
grant at $18.80/share, 40,000 options from 2006 grant at $33.29/share, and 30,000
options from 2007 grant at $35.225/share. Unvested restricted stock includes 22,500
shares from 2007 grant. Value of unvested stock options and restricted stock based
on a share price of $73.46, the Companys closing stock price on December 31, 2007.(2)
    
    Assumes the employment relationship is terminated by the Company for any
reason other than voluntary termination, termination for cause, death, or
disability, or if the employment relationship is terminated by the executive for
Good Reason, as of December 31, 2007. Termination by the executive for Good
Reason means the assignment to the employee of any duties inconsistent with his
current position or any action by the Company that results in a diminution in the
executives position, authority, duties or responsibilities; a failure by the
Company to comply with the terms of the executives employment agreement; or the
requirement of the executive to relocate or to travel to a substantially greater
extent than required at the date of the employment agreement. 20




---



##### Table of Contents



Executive Compensation
  Summary Compensation Table
 ChangeinPensionValueandNonqual-ifiedDeferred
    
    AllNon-Equity
    
    Compen
    
    OtherName and
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock
    
    Option
    
    Incentive Plan
    
    -sation
    
    CompenPrincipal
    
    
    
    
    
    Salary
    
    Bonus
    
    Awards
    
    Awards
    
    Compensation
    
    Earnings
    
    -sationPosition
    
    Year
    
    ($)
    
    ($)
    
    ($)(1)
    
    ($)(2)
    
    ($)
    
    ($)
    
    ($)(3)
    
    Total ($)(a)
    
    (b)
    
    (c)
    
    (d)
    
    (e)
    
    (f)
    
    (g)
    
    (h)
    
    (i)
    
    (j)Merrill A.
Miller, Jr.
    
  2007
    
    
    $
    800,000
    
    
    
    
    
    
    $
    1,693,921
    
    
    $
    1,556,722
    
    
    $
    1,600,000
    
    
    
    
    
    
    $
    37,000
    
    
    $
    5,687,643President and CEO
    
  2006
    
    
    $
    800,000
    
    
    
    
    
    
    
    
    
    
    $
    2,495,264
    
    
$
    1,600,000
    
    
    
    
    
    
    $
    36,800
    
    
    $
    4,932,064Clay C. Williams
    
  2007
    
    
    $
    500,000
    
    
    
    
    
    
    $
    497,779
    
    
    $
    681,819
    
    
$
    800,000
    
    
    
    
    
    
    $
    37,357
    
    
    $
    2,516,955Sr. Vice
President and CFO
    
  2006
    
    
    $
    474,800
    
    
    
    
    
    
    
    
    
    
    $
    454,894
    
    
$
    800,000
    
    
    
    
    
    
    $
    35,057
    
    
    $
    1,764,751Mark A. Reese
    
  2007
    
    
    $
    385,000
    
    
    
    
    
    
    $
    269,351
    
    
    $
    503,554
    
    
$
    577,500
    
    
    
    
    
    
    $
    28,250
    
    
    $
    1,763,655Group President Rig
    
  2006
    
    
    $
    373,231
    
    
    
    
    
    
    
    
    
    
    $
    499,260
    
    
$
    577,500
    
    
    
    
    
    
    $
    27,667
    
    
    $
    1,477,658TechnologyHaynes B. Smith
    
  2007
    
    
    $
    385,000
    
    
    
    
    
    
    $
    269,351
    
    
    $
    473,632
    
    
$
    577,500
    
    
    
    
    
    
    $
    36,575
    
    
    $
    1,742,058Group President
    
  2006
    
    
    $
    377,484
    
    
    
    
    
    
    
    
    
    
    $
    337,438
    
    
$
    577,500
    
    
    
    
    
    
    $
    35,594
    
    
    $
    1,328,016ServicesDwight W. Rettig
    
  2007
    
    
    $
    350,000
    
    
    
    
    
    
    $
    269,351
    
    
    $
    503,554
    
    
$
    525,000
    
    
    
    
    
    
    $
    23,000
    
    
    $
    1,670,905VP, General Counsel
    
  2006
    
    
    $
    336,154
    
    
    
    
    
    
    
    
    
    
    $
    499,260
    
    
$
    525,000
    
    
    
    
    
    
    $
    22,246
    
    
    $
    1,382,660& Secretary
 
 (1)
    
    Assumptions made in calculating the value of the restricted stock awards
are further discussed in Item 15. Exhibits and Financial Statement Schedules  Notes
to Consolidated Financial Statements, Note 13, of the Companys Original Form 10-K
for the fiscal year ended December 31, 2007.(2)
    
    Assumptions made in calculating the value of option awards are further
discussed in Item 15. Exhibits and Financial Statement Schedules  Notes to
Consolidated Financial Statements, Note 13, of the Companys Original Form 10-K for
the fiscal year ended December 31, 2007.(3)
    
    The amounts include: (a)
    
    The Companys cash contributions for 2007 under the
National Oilwell Varco 401(k) and Retirement Savings Plan, a defined
contribution plan, on behalf of Mr. Miller  $16,875; Mr. Williams 
$15,145; Mr. Reese  $20,250; Mr. Smith  $20,475; and Mr. Rettig 
$18,000.(b)
    
    The Companys cash contributions for 2007 under the
National Oilwell Varco Supplemental Savings Plan, a defined contribution
plan, on behalf of Mr. Miller  $20,125; Mr. Williams  $22,212; Mr. Reese
  $8,000; Mr. Smith  $16,100; and Mr. Rettig  $5,000.
 21




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##### Table of Contents



Grants of Plan Based Awards
  Grants of Plan-Based Awards
 AllOtherStock
    
    All OtherAwards:
    
    OptionNumber
    
    Awards:
    
    ExerciseEstimated Possible Payouts
    
    Estimated Future Payouts
    
    of
    
    Number of
    
    or Base
    
    Grant DateUnder Non-Equity Incentive
    
    Under Equity Incentive
    
    Shares
    
    Securities
    
    Price of
    
    Fair ValuePlan Awards
    
    Plan Awards
    
    of Stock
    
    Underlying
    
    Option
    
    of StockGrant
    
    Threshold
    
    Target
    
    Maximum
    
    Threshold
    
    Target
    
    Maximum
    
    or Units
    
    Options
    
    Awards
    
    and OptionName
    
    Date
    
    ($)(1)
    
    ($)(1)
    
    ($)(1)
    
    (#)(2)
    
    (#)(2)
    
    (#)(2)
    
    (#)
    
    (#)
    
    ($/Sh)
    
    Awards (3)(a)
    
    (b)
    
    (c)
    
    (d)
    
    (e)
    
    (f)
    
    (g)
    
    (h)
    
    (i)
    
    (j)
    
    (k)
    
    (l)Merrill A. Miller, Jr.
    
  2007
    
    
    $
    80,000
    
    
    $
    800,000
    
    
    $
    1,600,000
    
    

    75,000
    
    

    75,000
    
    

75,000
    
    
    
    
    
    

    100,000
    
    
    $
    35.225
    
    
    $
    4,126,670Clay C. Williams
    
  2007
    
    
    $
    40,000
    
    
    $
    400,000
    
    
    $
    800,000
    
    

    37,500
    
    

    37,500
    
    

    37,500
    
    
    
    
    
    

    50,000
    
    
    $
    35.225
    
    
    $
    2,063,335Mark A. Reese
    
  2007
    
    
    $
    28,875
    
    
    $
    288,750
    
    
    $
    577,500
    
    

    22,500
    
    

    22,500
    
    

    22,500
    
    
    
    
    
    

    30,000
    
    
    $
    35.225
    
    
    $
    1,238,001Haynes B. Smith
    
  2007
    
    
    $
    28,875
    
    
    $
    288,750
    
    
    $
    577,500
    
    

    22,500
    
    

    22,500
    
    

 22,500
    
    
    
    
    
    

    30,000
    
    
    $
    35.225
    
    
    $
    1,238,001Dwight W. Rettig
    
  2007
    
    
    $
    26,250
    
    
    $
    262,500
    
    
    $
    525,000
    
    

    22,500
    
    

    22,500
    
    

    22,500
    
    
    
    
    
    

    30,000
    
    
    $
    35.225
    
    
    $
    1,238,001
 
 (1)
    
    Represents possible payouts under our annual incentive compensation plan.(2)
    
    On March 26, 2007, each of the Named Executive Officers was granted
shares of performance-based restricted stock awards, which are reflected in the
Estimated Future Payouts Under Equity Incentive Plan Awards column in the table
above. One set of grants vest 100% on the eighteen month anniversary of the date of
grant (18 Month Grant), and one set of grants vest 100% on the third anniversary
of the date of grant (36 Month Grant), with the 18 Month Grant contingent on the
Companys operating income growth, measured on a percentage basis, from January 1,
2007 to June 30, 2008 exceeding the median operating income growth for a designated
peer group over the same period, and with the 36 Month Grant contingent on the
Companys average operating income growth, measured on a percentage basis, from
January 1, 2007 to December 31, 2009 exceeding the median average operating income
growth for a designated peer group over the same period. One-time, non-recurring,
non-operational gains or charges to income taken by the Company or any member of the
designated peer group that are publicly reported would be excluded from the income
calculation and comparison set forth above. If the Companys operating income
growth does not exceed the median operating income growth of the designated peer
group over the designated period, the applicable restricted stock award grant for
the executives will not vest and would be forfeited.(3)
    
    Assumptions made in calculating the value of option and restricted stock
awards are further discussed in Item 15. Exhibits and Financial Statement Schedules
 Notes to Consolidated Financial Statements, Note 13, of the Companys Original
Form 10-K for the fiscal year ended December 31, 2007. The grant date fair value of
the restricted stock awards are as follows: Mr. Miller  $2,928,000; Mr. Williams -
$1,464,000; Mr. Reese  $878,400; Mr. Smith  $878,400; and Mr. Rettig  $878,400.
The grant date fair value of the option awards are as follows: Mr.
Miller  $1,198,670; Mr. Williams  $599,335; Mr. Reese  $359,601; Mr. Smith -
$359,601; and Mr. Rettig  $359,601. 22




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##### Table of Contents



Exercises and Holdings of Previously-Awarded Equity Disclosure
  Outstanding Equity Awards at Fiscal Year-End
 Option Awards
    
    Stock AwardsEquityIncentivePlanAwards:Equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Number
    
    EquityIncentive
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    of
    
    Incentive PlanPlan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unearned
    
    Awards:Number
    
    
    
    
    
    Awards:
    
    
    
    
    
    
    
    
    
    Number
    
    Market
    
    Shares,
    
    Market orof
    
    Number of
    
    Number of
    
    
    
    
    
    
    
    
    
    of Shares
    
    Value of
    
    Units or
    
    Payout ValueSecurities
    
    Securities
    
    Securities
    
    
    
    
    
    
    
    
    
    or Units
    
    Shares or
    
    Other
    
    of UnearnedUnderlying
    
    Underlying
    
    Underlying
    
    
    
    
    
    
    
    
    
    of Stock
    
    Units of
    
    Rights
    
    Shares, UnitsUnexercised
    
    Unexercised
    
    Unexercised
    
    Option
    
    
    
    
    
    That Have
    
    Stock That
    
    That
    
    or Other RightsOptions
    
    Options
    
    Unearned
    
    Exercise
    
    Option
    
    Not
    
    Have Not
    
    Have Not
    
    That Have Not(#)
    
    (#)
    
    Options
    
    Price
    
    Expiration
    
    Vested
    
    Vested
    
    Vested
    
    VestedName
    
    Exercisable
    
    Unexercisable
    
    (#)
    
    ($)
    
    Date
    
    (#)
    
    ($) (1)
    
    (#) (2)
    
    ($) (1)(a)
    
    (b)
    
    (c)
    
    (d)
    
    (e)
    
    (f)
    
    (g)
    
    (h)
    
    (i)
    
    (j)Merrill A. Miller, Jr.
    
    
    
    
    

    100,000
    (3)
    
    
    
    
    
    $
    35.225
    
    
    
    3/2/17
    
    

    72,000(4)
    
    
    $
    5,289,120133,334
    (5)
    
    
    
    
    
    $
    33.29
    
    
    
    2/22/1642,667
    (6)
    
    
    
    
    
    $
    29.125
    
    
    
    10/13/1575,000
    
    
    $
    5,509,500Clay C. Williams
    
    
    
    
    

    50,000
    (3)
    
    
    
    
    
    $
    35.225
    
    
    
    3/2/1733,333
    
    

    66,667
    (5)
    
    
    
    
    
    $
    33.29
    
    
    
    2/22/1657,370
    
    
    
    
    
    
    
    
    
    
    $
    13.085
    
    
    
    1/28/1435,124
    
    
17,562
    (7)
    
    
    
    
    
    $
    18.17
    
    
    
    1/26/1537,500
    
    
    $
    2,754,750Mark A. Reese
    
    
    
    
    
  30,000
    (3)
    
    
    
    
    
    $
    35.225
    
    
    3/2/1740,000
    (5)
    
    
    
    
    
    $
    33.29
    
    
    2/22/1620,000
    (8)
    
    
    
    
    
    $
    18.80
    
    
    2/8/1522,500
    
    
    $
    1,652,850Haynes B. Smith
    
    
    
    
    
  30,000
    (3)
    
    
    
    
    
    $
    35.225
    
    
    3/2/1740,000
    (5)
    
    
    
    
    
    $
    33.29
    
    
    2/22/1620,070
    (7)
    
    
    
    
    
    $
    18.17
    
    
    1/26/1522,500
    
    
    $
    1,652,850Dwight W. Rettig
    
    
    
    
    
  30,000
    (3)
    
    
    
    
    
    $
    35.225
    
    
    3/2/1720,000
    
    
  40,000
    (5)
    
    
    
    
    
    $
    33.29
    
    
    2/22/1620,000
    (8)
    
    
    
    
    
    $
    18.80
    
    
    2/8/1522,500
    
    
    $
    1,652,850
 
 (1)
    
    Calculations based upon the closing price ($73.46) of the Companys
common stock on December 31, 2007, the last trading day of the year.(2)
    
    On March 26, 2007, each of the Named Executive Officers was granted
shares of performance-based restricted stock awards, which are reflected in this
column in the table above. One set of grants vest 100% on the eighteen month
anniversary of the date of grant (18 Month Grant), and one set of grants vest 100%
on the third anniversary of the date of grant (36 Month Grant), with the 18 Month
Grant contingent on the Companys operating income growth, measured on a percentage
basis, from January 1, 2007 to June 30, 2008 exceeding the median operating income
growth for a designated peer group over the same period, and with the 36 Month Grant
contingent on the Companys average operating income growth, measured on a
percentage basis, from January 1, 2007 to December 31, 2009 exceeding the median
average operating income growth for a designated peer group over the same period.
One-time, non-recurring, non-operational gains or charges to income taken by the
Company or any member of the designated peer group that are publicly reported would
be excluded from the income calculation and comparison set forth above. If the
Companys operating income growth does not exceed the median operating income growth
of the designated peer group over the designated period, the applicable restricted
stock award grant for the executives will not vest and would be forfeited.(3)
    
    2007 Stock Option Grant  Stock options vest at the rate of 33 1/3%/year,
with vesting dates of 3/1/08, 3/1/09 and 3/1/10.(4)
    
    The restricted stock award shall vest commencing on October 12, 2008, the
third anniversary of the date of grant.(5)
    
    2006 Stock Option grant  Stock options vest at the rate of 33 1/3%/year,
with vesting dates of 2/21/07, 2/21/08 and 2/21/09.(6)
    
    2005 Stock Option grant  Stock options vest at the rate of 33 1/3%/year,
with vesting dates of 10/12/06, 10/12/07 and 10/12/08.(7)
    
    2005 Stock Option Grant  Stock options vest at the rate of 33 1/3%/year,
with vesting dates of 1/26/06, 1/26/07 and 1/26/08.(8)
    
    2005 Stock Option Grant  Stock options vest at the rate of 33 1/3%/year,
with vesting dates of 2/7/06, 2/7/07 and 2/7/08. 23




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##### Table of Contents



Option Exercises and Stock Vested
 Option Awards
    
    Stock AwardsNumber of
    
    
    
    
    
    Number ofShares
    
    
    
    
    
    SharesAcquired
    
    Value Realized
    
    Acquired
    
    Value Realizedon Exercise
    
    on Exercise
    
    on Vesting
    
    on VestingName
    
    (#)
    
    ($)
    
    (#)
    
    ($)(a)
    
    (b)
    
    (c)
    
    (d)
    
    (e)Merrill A. Miller, Jr.
    
      218,667
    
    
    $
    8,679,976Clay C. Williams
    
      0
    
    
    $
    0Mark A. Reese
    
      60,000
    
    
    $
    1,085,836Haynes B. Smith
    
      40,070
    
    
    $
    1,264,397Dwight W. Rettig
    
      100,000
    
    
    $
    2,056,232
 Post-Employment Compensation
  Nonqualifed Deferred Compensation
 AggregateExecutive
    
    Registrant
    
    Aggregate
    
    Aggregate
    
    BalanceContributions in
    
    Contributions in
    
    Earnings in Last
    
    Withdrawals/
    
    at LastLast FY
    
    Last FY
    
    FY
    
    Distributions
    
    FYEName
    
    ($)(1)
    
    ($)(2)
    
    ($)(3)
    
    ($)
    
    ($)(a)
    
    (b)
    
    (c)
    
    (d)
    
    (e)
    
    (f)Merrill A. Miller, Jr.
    
    $
    0
    
    
    $
    20,125
    
    
    $
    5,335
    
    
  
    
    
    $
    82,387Clay C. Williams
    
    $
    135,000
    
    
    $
    22,212
    
    
    $
    26,590
    
    
  
    
    
    $
    594,178Mark A. Reese
    
    $
    0
    
    
    $
    8,000
    
    
    $
    910
    
    
  
    
    
    $
    16,953Haynes B. Smith
    
    $
    15,400
    
    
    $
    16,100
    
    
    $
    83,185
    
    
  
    
    
    $
    930,989Dwight W. Rettig
    
    $
    0
    
    
    $
    5,000
    
    
    $
    241
    
    
  
    
    
    $
    4,912
 
 (1)
    
    Executive contributions were from the executives salary and are included
in the Summary Compensation Table under the Salary column.(2)
    
    Registrant contributions are included in the Summary Compensation Table
under the All Other Compensation column.(3)
    
    Aggregate earnings reflect the returns of the investment funds selected
by the executives and are not included in the Summary Compensation Table. 24




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##### Table of Contents



Compensation Committee Report
   Members of the Compensation Committee
 
 Compensation Committee Interlocks and Insider Participation
 
  Director Compensation
  Director Compensation
 Change inPensionFees Earned
    
    
    
    
    
    
    
    
    
    
    
    
    
    Value andor
    
    
    
    
    
    
    
    
    
    Non-Equity
    
    NonqualifiedPaid in
    
    Stock
    
    Option
    
    Incentive Plan
    
    Deferred
    
    All OtherCash
    
    Awards
    
    Awards
    
    Compensation
    
    Compensation
    
    Compensation
    
    TotalName
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    Earnings
    
    ($)
    
    ($)(a)
    
    (b)
    
    (c)(1)
    
    (d)(2)
    
    (e)
    
    (f)
    
    (g) (3)
    
    (h)Greg L. Armstrong
    
    $
    73,500
    
    
    $
    17,648
    
    
    $
    128,564
    
    

    
    
    

    
    
    
    $
    10,935
    
    
    $
    230,647Robert E. Beauchamp
    
    $
    85,500
    
    
    $
    17,648
    
    
    $
    128,564
    
    

    
    

    
    

    
    
    $
    231,712Ben A. Guill
    
    $
    84,500
    
    
    $
    17,648
    
    
    $
    128,564
    
    

    
    

    
    
    $
    12,329
    
    
    $
    243,041David D. Harrison
    
    $
    84,750
    
    
    $
    17,648
    
    
    $
    128,564
    
    

    
    

    
    
    $
    424
    
    
    $
    231,386Roger L. Jarvis
    
    $
    69,500
    
    
    $
    17,648
    
    
    $
    128,564
    
    

    
    

    
    
    $
    12,649
    
    
    $
    228,361Eric L. Mattson
    
    $
    73,500
    
    
    $
    17,648
    
    
    $
    128,564
    
    

    
    

    
    
    $
    12,038
    
    
    $
    231,750Jeffery A. Smisek
    
    $
    84,250
    
    
    $
    17,648
    
    
    $
    128,564
    
    

    
    

    
    

    
    
    $
    230,462
 
 (1)
    
    Assumptions made in calculating the value of the restricted stock awards are
further discussed in Item 15. Exhibits and Financial Statement Schedules  Notes to
Consolidated Financial Statements, Note 13, of the Companys Original Form 10-K for
the fiscal year ended December 31, 2007. The grant date fair value of the restricted
stock awards granted to the directors in 2007 are as follows: Mr. Armstrong  $92,546;
Mr. Beauchamp  $92,546; Mr. Guill  $92,546; Mr. Harrison  $92,546; Mr. Jarvis 
$92,546; Mr. Mattson  $92,546; and Mr. Smisek  $92,546. The aggregate number of
outstanding shares of restricted stock awards as of December 31, 2007 for each
director are as follows: Mr. Armstrong  1,886;
Mr. Beauchamp  1,886; Mr. Guill 
1,886; Mr. Harrison  1,886; Mr. Jarvis  1,886;
Mr. Mattson  1,886; and Mr. Smisek 
1,886.(2)
    
    Assumptions made in calculating the value of the option awards are further
discussed in Item 15. Exhibits and Financial Statement Schedules  Notes to
Consolidated Financial Statements, Note 13, of the Companys Original Form 10-K for
the fiscal year ended December 31, 2007. The grant date fair value of the option
awards granted to the directors in 2007 are as follows: Mr. Armstrong  $127,809; Mr.
Beauchamp  $127,809; Mr. Guill  $127,809; Mr. Harrison  $127,809; Mr. Jarvis -
$127,809; Mr. Mattson  $127,809; and Mr. Smisek  $127,809. The aggregate number of
outstanding stock options as of December 31, 2007 for each director are as follows:
Mr. Armstrong  39,000; Mr. Beauchamp  34,000;
Mr. Guill  39,000; Mr. Harrison 
54,000; Mr. Jarvis  79,000; Mr. Mattson  72,450; and Mr. Smisek  30,342.(3)
    
    Expenses for non-business related activities associated with the Companys
board meeting in Beijing, China, comprised mainly of air travel and sightseeing
expenses for spouses of directors, paid by the Company on behalf of Mr. Armstrong 
$10,935; Mr. Guill  $12,329; Mr. Harrison  $424; Mr. Jarvis  $12,649; and Mr.
Mattson  $12,038. 25




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Board Compensation
  
    
    For service on the Board of Directors  an annual retainer of $55,000, paid
quarterly;
    
    For service as chairman of the audit committee of the Board of Directors  an annual
retainer of $20,000, paid quarterly;
    
    For service as chairman of each of the compensation committee and the
nominating/corporate governance committee of the Board of Directors  an annual retainer
of $10,000, paid quarterly;
    
    For service as a member of the audit committee of the Board of Directors  an annual
retainer of $7,500, paid quarterly;
    
    For service as a member of each of the compensation committee and the
nominating/corporate governance committee of the Board of Directors  an annual retainer
of $5,000, paid quarterly; and
    
    $1,500 for each Board meeting and each committee meeting attended.
 Directors of the Board who are also employees of the Company do not receive any compensation for
their service as directors.
   26




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Stock Ownership Guidelines
  27




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##### Table of Contents



ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
 Securities Authorized for Issuance Under Equity Compensation Plans
  Number of securitiesremaining available forfuture issuance underNumber of securities to be
    
    
    Weighted-average
    
    
    equityissued upon exercise of
    
    
    exercise
    
    
    compensation plansoutstanding options,
    
    
    price of outstanding
    
    
    (excluding securitieswarrants
    
    
    options, warrant
    
    
    reflected in column (a)and rights
    
    
    and rights
    
    
    (c))Plan Category
    
    (a)
    
    
    (b)
    
    
    (1)Equity compensation
plans approved by
security holders
    
    
    8,409,702
    
    
    $
    29.12
    
    
    
    7,014,404Equity compensation
plans not approved by
security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    8,409,702
    
    
    $
    29.12
    
    
    
    7,014,404
 
 (1)
    
    Shares could be issued other than upon the exercise of stock options, warrants or rights;
however, none are anticipated during 2008. Security Ownership of Certain Beneficial Owners
  Percent of5% Owner
    
    Number of Shares
    
    ClassFMR LLC (1)
82 Devonshire Street
Boston, MA 02109
    
    
    51,108,189
    
    
    
    14.32
    %Barclays Global Investors, NA(2)
45 Freemont St.
San Francisco, CA 94105
    
    
    20,979,862
    
    
    
    5.88
    %
 
 (1)
    
    Shares owned at December 31, 2007, as reflected in Amendment No. 9 to
Schedule 13G filed with the SEC on February 14, 2008. Fidelity Management &
Research Company (Fidelity), a wholly-owned subsidiary of FMR LLC (FMR), is the
beneficial owner of 46,273,126 shares as a result of acting as investment adviser to
various investment companies (the Funds). Edward C. Johnson 3d and FMR, through
its control of Fidelity, and the Funds each has sole power to dispose of the
46,273,126 shares owned by the Funds. Members of the family of Edward C. Johnson 3d,
Chairman of FMR, are the predominant owners, directly or through trusts, of Series B
shares of common stock of FMR, representing 49% of the voting power of FMR. The
Johnson family group and all other Series B Shareholders have entered into a
shareholders voting agreement under which all Series B shares will be voted in
accordance with the majority vote of Series B Shares. Accordingly, through their
ownership of voting common stock and the execution of the shareholders voting
agreement, members of the Johnson family may be deemed, under the Investment Company
Act of 1940, to form a controlling group with respect to FMR. Neither FMR nor
Edward C. Johnson 3d has the sole power to vote or direct the voting of the shares
owned directly by the Funds, which power resides with the Funds Boards of Trustees.
Fidelity carries out the voting of the shares under written guidelines established
by the Funds Boards of Trustees. Strategic Advisers, Inc., a wholly-owned
subsidiary of FMR, provides investment advisory services to individuals. As such,
FMRs beneficial ownership includes 97,866 shares beneficially owned through
Strategic Advisers, Inc. Pyramis Global Advisors, LLC (PGALLC), an indirect
wholly-owned subsidiary of FMR, is the beneficial owner of 220,938 shares as a
result of its serving as investment adviser to institutional accounts, non-U.S.
mutual funds, or investment companies registered under 28




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##### Table of Contents



Section 8 of the Investment Company Act of 1940 owning such shares. Edward C. Johnson
3d and FMR, through its control of PGALLC, each has sole dispositive power over
220,938 shares and sole power to vote or to direct the voting of 220,938 shares owned
by the institutional accounts or funds advised by PGALLC. Pyramis Global Advisors
Trust Company (PGATC), an indirect wholly-owned subsidiary of FMR, is the beneficial
owner of 1,864,097 shares as a result of its serving as investment manager of
institutional accounts owning such shares. Edward C. Johnson 3d and FMR, through its
control of PGATC, each has sole dispositive power over 1,864,097 shares and sole power
to vote or to direct the voting of 1,475,559 shares owned by the institutional
accounts managed by PGATC. Fidelity International Limited and various foreign-based
subsidiaries provide investment advisory and management services to a number of
non-U.S. investment companies (the International Funds) and certain institutional
investors. Fidelity International Limited is the beneficial owner of 2,652,162 shares.
Fidelity International Limited has sole dispositive power over 2,652,162 shares owned
by the International Funds. Fidelity International Limited has sole power to vote or
direct the voting of 2,546,262 shares and no power to vote or direct the voting of
105,900 shares held by the International Funds as reported above.(2)
    
    Shares owned at December 31, 2007, as reflected in Schedule 13G jointly
filed with the SEC on February 5, 2008 by Barclays Global Investors, NA, Barclays
Global Fund Advisors, Barclays Global Investors, Ltd., Barclays Global Investors
Japan Trust and Banking Company Limited, Barclays Global Investors Japan Limited,
Barclays Global Investors Canada Limited, Barclays Global Investors Australia
Limited and Barclays Global Investors (Deutschland) AG. Within this group, (a)
Barclays Global Investors, NA has sole voting power over 11,283,342 shares of common
stock and sole dispositive power over 13,593,609 shares of common stock, (b)
Barclays Global Fund Advisors has sole voting and dispositive power over 3,771,862
shares of common stock, (c) Barclays Global Investors, Ltd. has sole voting power
over 2,299,354 shares of common stock and sole dispositive power over 2,657,898
shares of common stock, (d) Barclays Global Investors Japan Limited has sole voting
and dispositive power over 720,932 shares of common stock, and (e) Barclays Global
Investors Canada Limited has sole voting and dispositive power over 235,561 shares
of common stock. Security Ownership of Management
  Shares Beneficially OwnedOutstandingOptionsNumber of
    
    ExercisableCommon
    
    Within 60
    
    PercentName of Individual
    
    Shares(1)
    
    Days
    
    of Class*Greg L. Armstrong
    
  5,230
    
    
  20,666
    
    
  *Robert E. Beauchamp
    
  4,586
    
    
  15,666
    
    
  *Robert W. Blanchard
    
  35,000
    
    
  53,790
    
    
  *Ben A. Guill
    
  24,200
    
    
  20,666
    
    
  *David D. Harrison
    
  7,886
    
    
  35,666
    
    
  *Roger L. Jarvis
    
  2,624
    
    
  60,666
    
    
  *Eric L. Mattson
    
  18,706
    
    
  54,116
    
    
  *Merrill A. Miller, Jr.
    
  475,178
    
    
  100,000
    
    
  *Mark A. Reese
    
  32,500
    
    
  10,000
    
    
  *Dwight W. Rettig
    
  32,500
    
    
  70,000
    
    
  *Jeffery A. Smisek
    
  16,164
    
    
  12,008
    
    
  *Clay C. Williams
    
  93,246
    
    
  193,388
    
    
  *All current directors and executive officers as a group
(12 persons)
    
  747,820
    
    
  646,632
    
    
  *
 
 *
    
    Less than 1 percent.(1)
    
    Includes shares deemed held by executive officers and directors in the Companys 401(k) plans and
deferred compensation plans. 29




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##### Table of Contents



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 Certain Relationships and Related Transactions
    Director Independence
  30




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##### Table of Contents



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
 Audit Committee Pre-Approval Policies
  Audit Fees
  2007
    
    
    2006(in thousands)Audit Fees
    
    $
    4,941
    
    
    $
    4,635Audit Related Fees(1)
    
    
    90
    
    
    
    261Tax Fees(2)
    
    
    1,704
    
    
    
    653All Other Fees
    
    
    
    
    
    
    Total
    
    $
    6,735
    
    
    $
    5,549
 
 (1)
    
    Consists primarily of fees for employee benefit plans, due diligence related
to acquisition transactions, and accounting consultations.(2)
    
    Consists primarily of fees for compliance, planning and advice with respect
to various domestic and foreign corporate tax matters. 31




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    PageConsolidated Balance Sheets
    
    
    58Consolidated Statements of Income
    
    
    59Consolidated Statements of Cash Flows
    
    
    60Consolidated Statements of Stockholders Equity and Comprehensive Income
    
    
    61Notes to Consolidated Financial Statements
    
    
    62
  Schedule II  Valuation and Qualifying Accounts
    
    
    87
    2.1
    
    Amended and Restated Agreement and Plan of Merger, effective as of August 11, between National-Oilwell, Inc.
and Varco International, Inc. (4).2.2
    
    Agreement and Plan of Merger, effective as of December 16, 2007, between National Oilwell Varco, Inc., NOV
Sub, Inc., and Grant Prideco, Inc. (9)3.1
    
    Amended and Restated Certificate of Incorporation of National-Oilwell, Inc. (Exhibit 3.1) (1).3.2
    
    Amended and Restated By-laws of National Oilwell Varco, Inc. (Exhibit 3.1) (10).10.1
    
    Employment Agreement dated as of January 1, 2002 between Merrill A. Miller, Jr. and National Oilwell.
(Exhibit 10.1) (2).10.2
    
    Employment Agreement dated as of January 1, 2002 between Dwight W. Rettig and National Oilwell, with similar
agreement with Mark A. Reese. (Exhibit 10.2) (2).10.3
    
    Form of Amended and Restated Executive Agreement of Clay C. Williams. (Exhibit 10.12) (3).10.4
    
    National Oilwell Varco Long-Term Incentive Plan (5)*.10.5
    
    Form of Employee Stock Option Agreement (Exhibit 10.1) (7)10.6
    
    Form of Non-Employee Director Stock Option Agreement (Exhibit 10.2) (7).10.7
    
    Amended and Restated Credit Agreement, dated as of June 21, 2005, among National Oilwell Varco, Inc., the
financial institutions signatory thereto, including Wells Fargo Bank, National Association, in their
capacities as lenders thereunder, as US administrative agent for the lenders, as Lead Arranger and Sole Book
Runner, DnB NOR Bank ASA, as Norwegian Administrative Agent, DnB NOR Bank ASA and the Bank of Nova Scotia as
Co-Documentation Agents, and Comerica Bank and JPMorgan Chase Bank, N.A. as Co-Syndication Agents. (Exhibit
10.1) (6).10.8
    
    Form of Performance-Based Restricted Stock (18 Month) Agreement (Exhibit 10.1) (8).10.9
    
    Form of Performance-Based Restricted Stock (36 Month) Agreement (Exhibit 10.2) (8).21.1
    
    Subsidiaries of the Registrant (11)23.1
    
    Consent of Ernst & Young LLP (11)24.1
    
    Power of Attorney (included on signature page hereto). (11)31.1
    
    Certification pursuant to Rule 13a-14a and Rule 15d-14(a) of the Securities and Exchange Act, as amended (12)
 32




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##### Table of Contents



31.2
    
    Certification pursuant to Rule 13a-14a and Rule 15d-14(a) of the Securities and Exchange Act, as amended (12)32.1
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (11)32.2
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (11)
 
 *
    
    Compensatory plan or arrangement for management or others(1)
    
    Filed as an Exhibit to our Quarterly Report on Form 10-Q filed on August 11, 2000.(2)
    
    Filed as an Exhibit to our Annual Report on Form 10-K filed on March 28, 2002.(3)
    
    Filed as an Exhibit to Varco International, Inc.s Quarterly Report on Form 10-Q filed on May
6, 2004.(4)
    
    Filed as Annex A to our Registration Statement on Form S-4 filed on September 16, 2004.(5)
    
    Filed as Annex D to our Amendment No. 1 to Registration Statement on Form S-4 filed on
January 31, 2005.(6)
    
    Filed as an Exhibit to our Current Report on Form 8-K filed on June 23, 2005.(7)
    
    Filed as an Exhibit to our Current Report on Form 8-K filed on February 23, 2006.(8)
    
    Filed as an Exhibit to our Current Report on Form 8-K filed on March 27, 2007.(9)
    
    Filed as Annex A to our Registration Statement on Form S-4 filed on January 28, 2008.(10)
    
    Filed as an Exhibit to our Current Report on Form 8-K filed on February 21, 2008.(11)
    
    Filed or furnished as an Exhibit to our Original Form 10-K filed on February 29, 2008.(12)
    
    Our original certifications pursuant to Rule 13a-14a and Rule 14d-14(a) are filed with our
Original Form 10-K filed on February 29, 2008. The certifications filed with this Amendment
are limited to the matters addressed herein. 33




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##### Table of Contents



SIGNATURES
  NATIONAL OILWELL VARCO, INC.Dated: March 13, 2008
    
    By:
    
    /s/ Clay C. Williams

Clay C. WilliamsSenior Vice President and Chief Financial Officer




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##### Table of Contents



Exhibit Index
 2.1
    
    Amended and Restated Agreement and Plan of Merger, effective as of August 11, between National-Oilwell, Inc.
and Varco International, Inc. (4).2.2
    
    Agreement and Plan of Merger, effective as of December 16, 2007, between National Oilwell Varco, Inc., NOV
Sub, Inc., and Grant Prideco, Inc. (9)3.1
    
    Amended and Restated Certificate of Incorporation of National-Oilwell, Inc. (Exhibit 3.1) (1).3.2
    
    Amended and Restated By-laws of National Oilwell Varco, Inc. (Exhibit 3.1) (10).10.1
    
    Employment Agreement dated as of January 1, 2002 between Merrill A. Miller, Jr. and National Oilwell.
(Exhibit 10.1) (2).10.2
    
    Employment Agreement dated as of January 1, 2002 between Dwight W. Rettig and National Oilwell, with similar
agreement with Mark A. Reese. (Exhibit 10.2) (2).10.3
    
    Form of Amended and Restated Executive Agreement of Clay C. Williams. (Exhibit 10.12) (3).10.4
    
    National Oilwell Varco Long-Term Incentive Plan (5)*.10.5
    
    Form of Employee Stock Option Agreement (Exhibit 10.1) (7)10.6
    
    Form of Non-Employee Director Stock Option Agreement (Exhibit 10.2) (7).10.7
    
    Amended and Restated Credit Agreement, dated as of June 21, 2005, among National Oilwell Varco, Inc., the
financial institutions signatory thereto, including Wells Fargo Bank, National Association, in their
capacities as lenders thereunder, as US administrative agent for the lenders, as Lead Arranger and Sole Book
Runner, DnB NOR Bank ASA, as Norwegian Administrative Agent, DnB NOR Bank ASA and the Bank of Nova Scotia as
Co-Documentation Agents, and Comerica Bank and JPMorgan Chase Bank, N.A. as Co-Syndication Agents. (Exhibit
10.1) (6).10.8
    
    Form of Performance-Based Restricted Stock (18 Month) Agreement (Exhibit 10.1) (8).10.9
    
    Form of Performance-Based Restricted Stock (36 Month) Agreement (Exhibit 10.2) (8).21.1
    
    Subsidiaries of the Registrant (11)23.1
    
    Consent of Ernst & Young LLP (11)24.1
    
    Power of Attorney (included on signature page hereto). (11)31.1
    
    Certification pursuant to Rule 13a-14a and Rule 15d-14(a) of the Securities and Exchange Act, as amended (12)31.2
    
    Certification pursuant to Rule 13a-14a and Rule 15d-14(a) of the Securities and Exchange Act, as amended (12)32.1
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (11)32.2
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (11)
 
 *
    
    Compensatory plan or arrangement for management or others(1)
    
    Filed as an Exhibit to our Quarterly Report on Form 10-Q filed on August 11, 2000.(2)
    
    Filed as an Exhibit to our Annual Report on Form 10-K filed on March 28, 2002.(3)
    
    Filed as an Exhibit to Varco International, Inc.s Quarterly Report on Form 10-Q filed on May
6, 2004.(4)
    
    Filed as Annex A to our Registration Statement on Form S-4 filed on September 16, 2004.(5)
    
    Filed as Annex D to our Amendment No. 1 to Registration Statement on Form S-4 filed on
January 31, 2005.(6)
    
    Filed as an Exhibit to our Current Report on Form 8-K filed on June 23, 2005.(7)
    
    Filed as an Exhibit to our Current Report on Form 8-K filed on February 23, 2006.(8)
    
    Filed as an Exhibit to our Current Report on Form 8-K filed on March 27, 2007.(9)
    
    Filed as Annex A to our Registration Statement on Form S-4 filed on January 28, 2008.(10)
    
    Filed as an Exhibit to our Current Report on Form 8-K filed on February 21, 2008.(11)
    
    Filed or furnished as an Exhibit to our Original Form 10-K filed on February 29, 2008.(12)
    
    Our original certifications pursuant to Rule 13a-14a and Rule 14d-14(a) are filed with our
Original Form 10-K filed on February 29, 2008. The certifications filed with this Amendment
are limited to the matters addressed herein.