Document:

Richard FitzPatrick Employment Agreement

 Exhibit 10.8 
 EMPLOYMENT AGREEMENT 
  
 THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into this 29th day of October, 2003 by and among Prime Group Realty Trust, a Maryland real estate investment trust (the “Trust”), Prime Group Realty, L.P.,
a Delaware limited partnership and the operating partnership for PGRT (“Prime”) (Prime and the Trust are hereinafter sometimes collectively referred to as “Employer”), and Richard M. FitzPatrick, an individual domiciled in the
State of Texas (“Executive”). 
  
 W I T N E S S E T
H 
  
 A. Employer is engaged primarily in the ownership,
management, leasing, marketing, acquisition, sale, development and construction of office and industrial real estate facilities throughout the United States. 
  
 B. Employer believes that it would benefit from the application of Executive’s particular and unique skill, experience, and background in the
position of Executive Vice President and Chief Financial Officer of the Trust in connection with the (i) acquisition, disposition, financing, leasing and development of office and industrial properties and the management thereof, (ii) the
negotiation and consummation of joint venture transactions relating to office and other properties, and (iii) the management oversight relating to the foregoing. 
  
 C. Executive wishes to commit to serve Employer in the position set forth herein on the terms herein provided. 

 
 D. The parties wish to enter into this Agreement on the terms and
conditions hereinafter set forth. 
  
 NOW, THEREFORE, in
consideration of the foregoing and the mutual covenants herein set forth, and for other good and valuable consideration, Employer and Executive hereby agree as follows: 
  
 1. Employment and Duties. During the Employment Term (as defined in Section 2 hereof), Employer agrees to employ
Executive, and Executive agrees to be employed by Employer, as Executive Vice President and Chief Financial Officer of the Trust on the terms and conditions provided in this Agreement. Executive shall promote the business and business concept of
Employer. The Executive shall report directly to, and shall work under the direction and supervision of the Chairman and/or Chief Executive Officer of Employer, either of whom may from time to time further define and clarify Executive’s duties
and services hereunder as Executive Vice President and Chief Financial Officer of the Trust. Executive agrees to devote Executive’s best efforts and all of Executive’s business time, attention, energy and skill to perform Executive’s
duties as Executive Vice President and Chief Financial Officer of the Trust. 
  

 2. Term. The term of this Agreement shall commence on the date hereof and expire one year after
the date of this Agreement on October 29, 2004 (the “Initial Term”), provided, however, that this Agreement shall automatically be renewed for successive one year terms following the Initial Term (each a “Renewal Term” and
together with the Initial Term, the “Employment Term”), unless at least six (6) months prior to, in the case of a non-renewal by Employer, or at least thirty (30) days prior to, in the case of a non-renewal by Executive, the end of the
Initial Term or any Renewal Term, as applicable, either party shall give the other written notice of its intention to terminate this Agreement. 
  
 3. Compensation and Related Matters. (a) Base Salary. As compensation for performing the services required by this Agreement during the
Employment Term, Employer shall pay to Executive an annual salary of no less than Two Hundred and Twenty-Five Thousand Dollars ($225,000.00) (“Base Compensation”), payable in accordance with the general policies and procedures for payment
of salaries to its executive personnel maintained, from time to time, by Employer (but no less frequently than monthly), subject to withholding for applicable federal, state, and local taxes. Increases in Base Compensation, if any, shall be
determined by the Compensation Committee (the “Committee”) of the Board of Trustees of PGRT (the “Board”) or the Board, based on periodic reviews of Executive’s performance conducted on at least an annual basis. 

 
 (b) Bonus. In addition to Base Compensation, the Board and/or the
Committee, in their sole and absolute discretion, may, but in no event shall be obligated to, authorize the payment of an annual bonus, which may be pro-rated for partial calendar years (a “Performance Bonus Distribution”), payable at the
discretion of the Committee in cash, common shares in PGRT and/or options for PGRT shares to Executive based upon achievement of such corporate and individual performance goals and objectives as may be established or determined by the Board or the
Committee from time to time. 
  
 (c) Benefits. During the
Employment Term and subject to the limitations and alternative rights set forth in this Section 3(c), Executive and Executive’s eligible dependents shall have the right to participate in the medical and dental benefit plan sponsored by Employer
(which may include contributions by Executive) and in any other retirement, pension, insurance, health or other benefit plan or program that has been or is hereafter adopted by Employer (or in which Employer participates), as such plans and programs
may be amended or modified from time to time by Employer, according to the terms of such plan or program with all the benefits, rights and privileges as are enjoyed by any other executive officers of Employer. If the participation of Executive would
adversely affect the qualification of a plan intended to be qualified under Section 401(a) of the Internal Revenue Code as the same may be amended from time to time (the “Code”), Employer shall have the right to exclude Executive from that
plan in return for Executive’s participation in (i) a nonqualified deferred compensation plan or (ii) an arrangement providing substantially comparable benefits under a plan that is either qualified or nonqualified under the Code at
Employer’s option. 
  
 (d) Expenses. Executive shall
be reimbursed, subject to Employer’s receipt of invoices or similar records as Employer may reasonably request in accordance with its policies and procedures, as such policies and procedures may be amended or modified from time to time by
Employer, for all reasonable and necessary expenses incurred by Executive in the 

  

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performance of Executive’s duties hereunder, including expenses for (i) business related travel and entertainment costs, and (ii) for travel and housing
expenses in amounts and pursuant to such parameters as shall be reasonably approved by the Employer in connection with Executive’s commute from his Texas domocile. 
  
 (e) Vacations. During the Employment Term, Executive shall be entitled to vacation in accordance with Employer’s
practices, as such practices may be amended or modified from time to time by Employer, provided that Executive shall be entitled to at least three (3) weeks paid vacation in each full calendar year. Executive may not accrue unused vacation time if
not used in any calendar year or years. Executive shall not be entitled to a payment for any vacation time which has accrued but has not been used as of the date of the termination of Executive’s employment with Employer. 
  
 4. Termination and Termination Benefits. (a) Termination by
Employer. (i) Without Cause. Employer may terminate this Agreement and Executive’s employment at any time (other than for Cause, as that term is defined in Section 4(a)(ii) hereof) upon thirty (30) days’ prior written notice to
Executive. In connection with the termination of Executive’s employment pursuant to this Section 4(a)(i), (A) Employer shall pay to Executive Executive’s Base Compensation in accordance with Section 3(a) hereof up to the effective date of
such termination, (B) Employer shall provide to Executive the benefits set forth in Sections 3(c), 3(d) and 3(e) hereof up to the effective date of such termination and (C) Employer shall pay to Executive the Termination Compensation specified in
Section 4(d) hereof. 
  
 (ii) With Cause. Employer may
terminate this Agreement for Cause immediately upon written notice to Executive. Employer may elect to require Executive to continue to perform Executive’s duties under this Agreement for an additional thirty (30) days following notice of
termination. In connection with the termination of Executive’s employment pursuant to this Section 4(a)(ii), (A) Employer shall pay to Executive Executive’s Base Compensation in accordance with Section 3(a) hereof up to the effective date
of such termination, and (B) Employer shall provide to Executive the benefits set forth in Sections 3(c), 3(d) and 3(e) hereof up to the effective date of such termination. For purposes of this Section 4(a)(ii), “Cause” shall mean (1) a
finding by the Board that Executive has materially harmed Employer, its business, assets or employees through an act of dishonesty, material conflict of interest, gross misconduct or willful malfeasance, (2) Executive’s conviction of (or plea
of nolo contendere to) a felony involving acts of dishonesty, financial untrustworthiness or adversely impacting Executive’s ability to perform Executive’s duties hereunder, (3) Executive’s failure to perform (which shall not include
inability to perform due to disability) in any material respect Executive’s material duties under this Agreement after written notice specifying the failure and a reasonable opportunity to cure (it being understood that if Executive’s
failure to perform is not of a type requiring a single action to fully cure, then Executive may commence the cure promptly after such written notice and thereafter diligently prosecute such cure to completion), (4) the breach by Executive of any of
Executive’s material obligations hereunder (other than those covered by clause (3) above) and the failure of Executive to cure such breach within thirty (30) days after receipt by Executive of a written notice of Employer specifying in
reasonable detail the nature of the breach, or (5) Executive’s sanction (including restrictions, prohibitions and limitations agreed to under a consent decree or agreed order) under, or conviction for violation of, any federal or state
securities law, rule or regulation (provided that in the case of a sanction, 

  

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such sanction materially impedes or impairs the ability of Executive to perform Executive’s duties and exercise Executive’s responsibilities
hereunder in a satisfactory manner). 
  
 (b) Termination by
Executive. (i) Without Good Reason. Executive may terminate this Agreement and Executive’s employment at any time for any reason or for no reason upon thirty (30) days’ written notice to Employer, during which period Executive
shall continue to perform Executive’s duties under this Agreement if Employer so elects. In connection with the termination of Executive’s employment pursuant to this Section 4(b)(i), (A) Employer shall pay to Executive Executive’s
Base Compensation in accordance with Section 3(a) hereof up to the effective date of such termination, and (B) Employer shall provide to Executive the benefits set forth in Sections 3(c), 3(d) and 3(e) hereof up to the effective date of such
termination. 
  
 (ii) For Good Reason. Executive may
terminate this Agreement (a) for Good Reason (as defined below) upon thirty (30) days’ written notice to Employer or (b) in the event of a Change of Control (as defined below), upon written notice to Employer within thirty (30) days after the
occurrence of such Change of Control. In connection with the termination of Executive’s employment pursuant to this Section 4(b)(ii), (A) Employer shall pay to Executive Executive’s Base Compensation in accordance with Section 3(a) hereof
up to the effective date of such termination, (B) Employer shall provide to Executive the benefits set forth in Sections 3(c), 3(d) and 3(e) hereof up to the effective date of such termination and (C) Employer shall pay to Executive the Termination
Compensation specified in Section 4(d) hereof. 
  
 “Good
Reason” shall mean any material breach by Employer of the terms of this Agreement which is not cured within thirty (30) days after receipt by Employer of a written notice from Executive specifying in reasonable detail the nature of the breach,
except for a failure to pay earned Base Compensation, which shall be cured as soon as reasonably practicable. 
  
 A “Change of Control” of Employer shall be deemed to have occurred if: (1) any person (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), including a “group” as defined in Section 13(d)(3) of the Exchange Act (but excluding a trustee or other fiduciary holding securities under an employee benefit
plan of Employer), becomes the beneficial owner of shares of beneficial interests or limited partnership interests, as applicable, of Employer having at least fifty percent (50%) of the total number of votes that may be cast for the election of
trustees of Employer; (2) the merger or other business combination of Employer, sale of all or substantially all of Employer’s assets or combination of the foregoing transactions (a “Transaction”), other than a Transaction immediately
following which the shareholders of Employer immediately prior to the Transaction continue to have a majority of the voting power in the resulting entity (excluding for this purpose any shareholder owning directly or indirectly more than ten percent
(10%) of the shares of the other company involved in the Transaction); or (3) within any twenty-four (24) month period beginning on or after the date hereof, the persons who were trustees of Employer immediately before the beginning of such period
(the “Incumbent Directors”) shall cease to constitute at least a majority of the Board or a majority of the board of trustees of any successor to Employer, provided that, any trustee who was not a trustee as of the date hereof shall be
deemed to be an Incumbent Director if such trustee was elected to the Board by, or on the recommendation of or with the approval of, at least two-thirds of the trustees who then qualified 

  

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as Incumbent Directors either actually or by prior operation of this provision, unless such election, recommendation or approval was the result of an actual
or threatened election contest of the type contemplated by Regulation 14a-11 promulgated under the Exchange Act or any successor provision. 
  
 (c) Death or Disability. Notwithstanding any other provision of this Agreement, this Agreement shall terminate on the date of Executive’s
death or a disability preventing Executive from performing his duties for more than three (3) months (a “Disability”). In such event, (A) Employer shall pay to Executive Executive’s Base Compensation in accordance with Section 3(a)
hereof up to the date of such death or Disability, (B) Employer shall provide to Executive the benefits set forth in Sections 3(c) (or the after-tax cash equivalent), 3(d) and 3(e) hereof up to the date of such death or disability, and (C) Employer
shall pay to Executive the Termination Compensation specified in Section 4(d) hereof, but only if and to the extent that Employer actually obtained insurance coverage for Executive at commercially reasonable rates in Employer’s discretion which
reimburses Employer for such amounts. As an alternative to the foregoing and notwithstanding anything in this Agreement to the contrary, Employer may elect that any such insurance be payable directly to Executive or a beneficiary of Executive and
Employer shall be relieved from making any payments in connection with the death or disability of Executive pursuant to this Section 4(c). 
  
 (d) Termination Compensation. In the event of a termination of this Agreement pursuant to Section 4(a)(i) (by Employer without cause) or 4(b)(ii)
(by Executive for good reason) hereof, Employer shall pay to Executive, within thirty (30) days of termination, an amount in one lump sum (“Termination Compensation”) equal to fifty percent (50%) of Executive’s then current annual
Base Compensation; provided, however, that the Employer’s obligations to make such payments shall be subject to the execution, enforceability and effectiveness of a general release and waiver of all claims by the Employee with respect to the
Employer and its subsidiaries, and their respective affiliates, officers, directors, trustees, employees and agents, pursuant to a Separation Agreement in form and substance reasonably specified by the Employer. 
  
 5. Covenants of Executive. 
  
 (a) No Conflicts. Executive represents and warrants that Executive is
not personally subject to any agreement, order or decree which restricts Executive’s acceptance of this Agreement and the performance of Executive’s duties with Employer hereunder. 
  
 (b) Non-Competition. During the Employment Term and, in the event of
the termination of this Agreement pursuant to the provisions of Section 4(a)(ii) (by Employer with cause) or 4(b)(i) (by Executive without good reason) hereof, for a period of two years thereafter, Executive shall not, directly or indirectly, in any
capacity whatsoever, either on Executive’s own behalf or on behalf of any other person or entity with whom Executive may be employed or associated, own any interest in, participate or engage in the day-to-day supervision, management,
development, marketing or operation of any office or industrial real estate facilities or such other business as Employer may be engaged in during the Employment Term (the “Business”) which is competitive with any of Employer’s
facilities. For purposes hereof, a facility will be deemed competitive with one of Employer’s facilities if such facility is located within ten (10) miles of a 

  

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facility owned, operated or managed by Employer or within ten (10) miles of a facility which Employer is developing or with respect to which Employer has
signed a letter of intent or term sheet or binding contract for the acquisition, development or management thereof dated on or prior to the date of such termination. Furthermore, for a period of two years after any applicable Section 4 termination
event, Executive shall not solicit, attempt to hire or hire any employee or client of Employer or solicit or attempt to lease space to or lease space to any tenant of Employer (collectively, the Non-Solicitation Provisions). Notwithstanding the
foregoing, nothing herein shall prohibit Executive from owning 5% or less of any securities of a competitor engaged in the same Business if such securities are listed on a nationally recognized securities exchange or traded over-the-counter on the
National Association of Securities Dealers Automated Quotation System or otherwise. 
  
 (c) Non-Disclosure. During the Employment Term and for a period of two years after the expiration or termination of this Agreement for any reason, Executive shall not disclose or use, except in the pursuit of
the Business for or on behalf of Employer, any Trade Secret (as hereinafter defined) of Employer, whether such Trade Secret is in Executive’s memory or embodied in writing or other physical form. For purposes of this Section 5(c), “Trade
Secret” means any information which derives independent economic value, actual or potential, with respect to Employer from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use and is the subject of efforts to maintain its secrecy that are reasonable under the circumstances, including, but not limited to, trade secrets, customer lists, sales records and other proprietary commercial
information. Said term, however, shall not include general “know-how” information acquired by Executive prior to or during the course of Executive’s service which could have been obtained by him from public sources without the
expenditure of significant time, effort and expense which does not relate to Employer. 
  
 (d) Business Opportunities. During the Employment Term, Executive agrees to bring to Employer any and all business opportunities which come to Executive’s attention for the acquisition, development,
management, leasing or marketing of real estate for industrial or office use. 
  
 (e) Return of Documents. Upon termination of Executive’s services with Employer, Executive shall return all originals and copies of books, records, documents, customer lists, sales materials, tapes, keys,
credit cards and other tangible property of Employer within Executive’s possession or under Executive’s control. 
  
 (f) Equitable Relief. In the event of any breach by Executive of any of the covenants contained in this Section 5, it is specifically understood
and agreed that Employer shall be entitled, in addition to any other remedy which it may have, to equitable relief by way of injunction, an accounting or otherwise and to notify any employer or prospective employer of Executive as to the terms and
conditions hereof. 
  
 (g) Acknowledgment. Executive
acknowledges that Executive will be directly and materially involved as a senior executive in important policy and operational decisions of Employer. Executive further acknowledges that the scope of the foregoing restrictions has been specifically
bargained between Employer and Executive, each being fully informed of all 
  

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relevant facts. Accordingly, Executive acknowledges that the foregoing restrictions of Section 5 are fair and reasonable, are minimally necessary to protect
Employer, its other partners and the public from the unfair competition of Executive who, as a result of Executive’s performance of services on behalf of Employer, will have had unlimited access to the most confidential and important
information of Employer, its business and future plans. Executive furthermore acknowledges that no unreasonable harm or injury will be suffered by him from enforcement of the covenants contained herein and that Executive will be able to earn a
reasonable livelihood following termination of Executive’s services notwithstanding enforcement of the covenants contained herein. 
  
 (h) Nondisparagement. The parties further agree that during and after the termination of their employment relationship, each party shall refrain
from making any disparaging remarks or comments with respect to any party hereto, and such remarks or comments shall be deemed a breach of the Agreement. The parties shall direct their respective attorneys, affiliates and investment bankers to
refrain from making any disparaging remarks or comments with respect to any party hereto. Notwithstanding the foregoing, either party shall be permitted to make statements as reasonably necessary to enforce his or its claims under the Agreement in a
legal proceeding. 
  
 6. Prior Agreements. This Agreement
supersedes and is in lieu of any and all other employment arrangements between Executive and Employer or its predecessor or any subsidiary, and any and all such employment agreements and arrangements are hereby terminated and deemed of no further
force or effect. 
  
 7. Assignment. Neither this Agreement
nor any rights or duties of Executive hereunder shall be assignable by Executive and any such purported assignment by him shall be void. Subject to the provisions of Section 8 below, Employer may assign all or any of its rights hereunder provided
that substantially all of the assets of Employer are also transferred to the same party. 
  
 8. Successor to Employer. Employer will require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all the business and/or assets of
Employer, as the case may be, by agreement in form and substance reasonably satisfactory to Executive, expressly, absolutely and unconditionally to assume and agree to perform this Agreement in the same manner and to the same extent that Employer
would be required to perform it if no such succession or assignment had taken place. Any failure of Employer to obtain such agreement prior to the effectiveness of any such succession or assignment shall be a material breach of this Agreement giving
Executive the right to terminate this Agreement, in which case Executive shall be entitled to receive the compensation specified in Section 4(b)(ii) hereof. This Agreement shall inure to the benefit of and be enforceable by Executive’s personal
and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive should die while any amounts are still payable to Executive hereunder, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to Executive’s devisee, legatee or other designee or, if there be no such designee, to Executive’s estate. 
  

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 9. Notices. Any notice required or permitted to be given under this Agreement shall be sufficient
if in writing and if personally delivered, sent by courier or by certified mail, postage or delivery charges prepaid, to the following addresses: 
  
 if to Executive, to: 
  
 Richard M. FitzPatrick 
 c/o Prime Group Realty Trust 
 77 W. Wacker Dr. 
 Suite 3900 
 Chicago, IL 60613 
  
 with a copy to:

  
 Richard M. FitzPatrick 
 5616 Templin Way 
 Plano, TX 75093 
  
 (b) if to Employer, to: 

 
 Prime Group Realty Trust 
 77 West Wacker Drive 
 Suite 3900 
 Chicago, IL 60601 
 Attention: Stephen J. Nardi 
  
 With a copy to: 
  
 Prime Group Realty Trust 
 Suite 3900 
 77 West Wacker Drive 
 Chicago, IL 60601 
 Attn: James F. Hoffman 
  
 Any notice, claim, demand, request or other
communication given as provided in this Section 10, if delivered personally, shall be effective upon delivery; and if given by courier, shall be effective one (1) business day after deposit with the courier if next day delivery is guaranteed; and if
given by certified mail, shall be effective three (3) business days after deposit in the mail. Either party may change the address at which it is to be given notice by giving written notice to the other party as provided in this Section 9.

  
 10. Amendment. This Agreement may not be changed,
modified or amended except in writing signed by both parties hereto. 
  

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 11. Waiver of Breach. The waiver by either party of the breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach by either party. 
  
 12. Severability. Employer and Executive each expressly agree and contract that it is not the intention of either party to violate any public policy, statutory or common law, and that if any covenant, sentence,
paragraph, clause or combination of the same of this Agreement (a “Contractual Provision”) is in violation of the law of any state where applicable, such Contractual Provision shall be void in the jurisdictions where it is unlawful, and
the remainder of such Contractual Provision, if any, and the remainder of this Agreement shall remain binding on the parties such that such Contractual Provision shall be binding only to the extent that such Contractual Provision is lawful or may be
lawfully performed under then applicable laws. In the event that any part of any Contractual Provision of this Agreement is determined by a court of competent jurisdiction to be overly broad thereby making the Contractual Provision unenforceable,
the parties hereto agree, and it is their desire, that such court shall substitute a judicially enforceable limitation in its place, and that the Contractual Provision, as so modified, shall be binding upon the parties as if originally set forth
herein. 
  
 13. Governing Law. This Agreement shall be
governed by, and construed, interpreted and enforced in accordance with the laws of the State of Illinois, exclusive of the conflict of laws provisions of the State of Illinois. 
  
 [signature page follows] 
  

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 IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Employment Agreement as of
the date first written above. 
  
  

			
	 EMPLOYER:
  
 PRIME GROUP REALTY TRUST

		
	By:	 	/S/    STEPHEN J. NARDI
	 	 	 
	  
 PRIME GROUP REALTY,
L.P.

		
	By:	 	 Prime Group Realty Trust,
 its General
Partner

		
	By:	 	/S/    STEPHEN J. NARDI
	 	 	 

	
	EXECUTIVE:
	
	/S/    RICHARD M. FITZPATRICK
	 Richard M. FitzPatrick

  

 - 10 -Standard Non-Qualified Stock Option Agreement.

 Exhibit 10.1 
  
 2004 INCENTIVE PLAN 
 OF 
 DRIL-QUIP, INC. 
  
 STANDARD 
 NON-QUALIFIED STOCK OPTION AGREEMENT 
  
 THIS
AGREEMENT (“Agreement”) is made as of the      day of             , 20     (the “Grant Date”), by and
between Dril-Quip, Inc., a Delaware corporation (the “Company”), and
                                     (the
“Grantee”). 
  
 The Company has adopted the 2004
Incentive Plan of Dril-Quip, Inc. (the “Plan”) for the benefit of eligible employees of the Company and its Subsidiaries. Capitalized terms used and not otherwise defined herein shall have the meaning ascribed thereto in the Plan.

  
 Pursuant to the Plan, the Committee, which has generally been
assigned responsibility for administering the Plan, has determined that it would be in the interest of the Company and its stockholders to grant the options provided herein in order to encourage the Grantee to remain in the employ of the Company or
its Subsidiaries, to encourage the sense of proprietorship of the Grantee in the Company and to stimulate the active interest of the Grantee in the development and financial success of the Company. 
  
 The Company and the Grantee therefore agree as follows: 
  
 1. Grant of Option. Subject to the terms and conditions herein, the
Company grants to the Grantee during the period commencing on                     , 20     and expiring at 5 p.m.
Houston, Texas time (“Close of Business”) on                     , 20     (the “Option Term”),
subject to earlier termination pursuant to paragraph 6 below, an option to purchase from the Company, at the price of $             per share (the “Option Price”),
                     shares (the “Option Shares”) of Company Common Stock (“Common Stock”). [The Grantee agrees that
the Option Price complies with the provisions of the Grantee’s written employment agreement with the Company dated
                                .] The Option Price and Option Shares are
subject to adjustment pursuant to paragraph 9 below. This option is a “Nonqualified Stock Option” and is hereinafter referred to as the “Option.” 
  
 2. Conditions of Exercise. The Option is exercisable only in accordance with the conditions stated in this paragraph.

  
 (a) Except as otherwise provided in this
paragraph 2, this Option shall become exercisable in four installments, with one-fourth of the Option Shares becoming exercisable on
                    , 20     and an additional one-fourth becoming exercisable on
                     of each of 20    , 20     and 20    ;
provided, however, that subject to paragraph 2(c), the right to purchase Option Shares is cumulative, so that the Grantee may purchase after any such anniversary and during the remainder of the Option Term those quantities of Option
Shares which the Grantee was entitled to purchase but did not purchase during any preceding 

 period or periods. Notwithstanding the foregoing, subject to the provisions of any applicable written
employment agreement between the Grantee and the Company or any Subsidiary, no additional Option Shares shall become available for purchase if the Grantee has not remained in continuous Employment through the applicable date. “Employment”
for purposes of this Agreement means employment with the Company or any of its Subsidiaries. 
  
 (b) Notwithstanding the limitations set forth in paragraph 2(a), the Option shall become fully exercisable, provided that the Grantee has
been in continuous Employment since the commencement of the Option Term, upon the occurrence of a Change of Control. 
  
 For the purposes of this Agreement, “Change of Control” shall mean a change in control of the Company after the commencement of
the Option Term, which shall be deemed to have occurred in any one of the following circumstances occurring after such date: (i) there shall have occurred an event required to be reported with respect to the Company in response to Item 6(e) of
Schedule 14A of Regulation 14A (or in response to any similar item or any similar schedule or form) promulgated under the Exchange Act, whether or not the Company is then subject to such reporting requirement; (ii) any “person” (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act) other than the Stockholder Group shall have become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 30% or more of the combined voting power of the Corporation’s then outstanding voting securities; (iii) the Company is a party to a merger, consolidation, sale of assets or other reorganization, or a proxy contest, as a
consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iv) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors (including, for this purpose, any new director whose election or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors. For the purposes of this Agreement, “Stockholder Group” shall mean, to the
extent such group is deemed to be a “person” under Section 13(d) of the Exchange Act, collectively, but not individually, J. Mike Walker, Larry E. Reimert, Reimert Family Partners, Ltd., Gary D. Smith and Four Smith’s Company, Ltd.

  
 (c) To the extent the Option becomes
exercisable, such Option may be exercised only in whole or in increments of one-fourth, one-half or three-quarters of the total number of Option Shares (at any time or from time to time, except as otherwise provided herein) until expiration of the
Option Term or earlier termination thereof. 

 3. Manner of Exercise. The Option shall be considered exercised (as to the number of Option Shares
specified in the notice referred to in subparagraph (a) below) on the latest of (i) the date of exercise designated in the written notice referred to in subparagraph (a) below, (ii) if the date so designated is not a business day, the first business
day following such date or (iii) the earliest business day by which the Company has received all of the following: 
  
 (a) Written notice, in the form attached hereto as Exhibit A, designating, among other things, the date of exercise and the number of
Option Shares to be purchased; 
  
 (b) If the
Option is to be exercised, payment of the Option Price for each Option Share to be purchased in cash, Common Stock or in such other form (or combination of forms) of payment contemplated by paragraph 10 of the Plan as the Committee may permit;
provided, however, that any shares of Common Stock delivered in payment of the Option Price that are or were the subject of an Employee Award must be shares that the Grantee has owned for a period of at least six months prior to the
date of exercise; and 
  
 (c) Any other
documentation that the Committee may reasonably require. 
  
 4.
Mandatory Withholding for Taxes. The Grantee acknowledges and agrees that no certificates representing shares of Common Stock purchased hereunder shall be delivered to or in respect of the Grantee unless the amount of all federal, state and
other governmental withholding tax requirements imposed upon the Company with respect to the issuance of such shares of Common Stock has been remitted to the Company or unless provisions to pay such withholding requirements have been made to the
satisfaction of the Committee pursuant to paragraph 11 of the Plan. The Committee may make such provisions as it may deem appropriate for the withholding of any taxes which it determines is required in connection with this Option. The Grantee may
pay all or any portion of the taxes required to be withheld by the Company or paid by the Grantee in connection with the exercise of all or any portion of this Option by delivering cash, or, with the Committee’s approval, by electing to have
the Company withhold shares of Common Stock, or by delivering previously owned shares of Common Stock, having a Fair Market Value determined in accordance with paragraph 11 of the Plan, equal to the amount required to be withheld or paid.

  
 5. Delivery by the Company. As soon as practicable
after receipt of all items referred to in paragraph 3, and subject to the withholding referred to in paragraph 4, the Company shall deliver to the Grantee certificates issued in the Grantee’s name for the number of Option Shares purchased by
exercise of the Option. If delivery is by mail, delivery of shares of Common Stock shall be deemed effected for all purposes when a stock transfer agent of the Company shall have deposited the certificates in the United States mail, addressed to the
Grantee. 

 6. Termination of Option: The Option hereby granted shall terminate and be of no force and effect
with respect to any shares of Common Stock not previously purchased by the Grantee upon the first to occur of: 
  
 (a) the expiration of the Option Term; or 
  
 (b) with respect to 
  
 (i) the portion of the Option exercisable upon termination, the expiration of (A) 90 days following the Grantee’s termination of
Employment for reasons other than death or Disability (as defined below), or (B) one year following the Grantee’s termination of Employment by reason of death or Disability; and 
  
 (ii) the portion of the Option not exercisable upon termination, the date of the Grantee’s termination
of Employment. 
  
 “Disability” for purposes of the
Agreement means illness or other incapacity which continues for a period of more than six months. 
  
 7. Nontransferability of Option. During the Grantee’s lifetime, the Option is not transferable (voluntarily or involuntarily) other than
pursuant to a qualified domestic relations order and, except as otherwise required pursuant to a qualified domestic relations order, is exercisable only by the Grantee or the Grantee’s court-appointed legal representative. The Grantee may
designate a beneficiary or beneficiaries to whom the Option shall pass upon the Grantee’s death and may change such designation from time to time by filing a written designation of beneficiary or beneficiaries with the Committee on the form
annexed hereto as Exhibit B or such other form as may be prescribed by the Committee, provided that no such designation shall be effective unless so filed prior to the death of the Grantee. If no such designation is made or if the designated
beneficiary does not survive the Grantee’s death, the Option shall pass by will or the laws of descent and distribution. Following the Grantee’s death, the Option, to the extent it was exercisable on the date of the Grantee’s death,
may be exercised in accordance with the terms of this Agreement by the person to whom such Option passes. 
  
 8. No Stockholder Rights. The Grantee shall not be deemed for any purpose to be, or to have any of the rights of, a stockholder of the Company with
respect to any shares of Common Stock as to which this Agreement relates until such shares shall have been issued to the Grantee by the Company. Furthermore, the existence of this Agreement shall not affect in any way the right or power of the
Company or its stockholders to accomplish any corporate act, including, without limitation, the acts referred to in paragraph 14 of the Plan. 
  
 9. Adjustments. As provided in paragraph 14 of the Plan, certain adjustments may be made to the Option upon the occurrence of events or
circumstances described in paragraph 14 of the Plan. The Grantee agrees that, upon a merger or other similar business combination transaction relating to the Company wherein all of the outstanding Common Stock of the Company is exchanged for shares
of capital stock of another company (an “Acquiror”), the Board may, in its sole discretion, provide that this Option shall be exchanged for (a) a similar option to purchase shares of capital stock of such Acquiror, the specific terms of
which shall be determined by the Committee or (b) cash in an amount equal to the Fair Market Value of the Option Shares on a date determined by the Committee less the aggregate exercise price of the Option Shares. 

 10. Restrictions Imposed by Law. Without limiting the generality of paragraph 15 of the Plan, the
Grantee agrees that the Grantee will not exercise the Option and that the Company will not be obligated to deliver any shares of Common Stock, if counsel to the Company determines that such exercise or delivery would violate any applicable law or
any rule or regulation of any governmental authority or any rule or regulation of, or agreement of the Company with, any securities exchange or association upon which the Common Stock is listed or quoted. The Company shall in no event be obligated
to take any affirmative action in order to cause the exercise of the Option or the resulting delivery of shares of Common Stock to comply with any such law, rule, regulation or agreement. 
  
 11. Notice. Unless the Company notifies the Grantee in writing of a different procedure, any notice or other
communication to the Company with respect to this Agreement shall be in writing and shall be delivered personally or sent by first class mail, postage prepaid to the following address: 
  

	
	 Dril-Quip, Inc.

	 13550 Hempstead Hwy.

	 Houston, Texas 77040

	 Attn: Corporate Secretary

  
 Any notice or other communication to
the Grantee with respect to this Agreement shall be in writing and shall be delivered personally, or shall be sent by first class mail, postage prepaid, to the Grantee’s address as listed in the records of the Company on the Grant Date, unless
the Company has received written notification from the Grantee of a change of address. 
  
 12. Amendment. Notwithstanding any other provisions hereof, this Agreement may be supplemented or amended from time to time as approved by the Committee as contemplated by paragraph 6 of the Plan. Without
limiting the generality of the foregoing, without the consent of the Grantee, 
  
 (a) this Agreement may be amended or supplemented to (i) cure any ambiguity or to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or (ii) add to the
covenants and agreements of the Company for the benefit of the Grantee or to surrender any right or power reserved to or conferred upon the Company in this Agreement, subject, however, to any required approval of the Company’s
stockholders and, provided that, in each case, subject to paragraph 9, such changes or corrections shall not adversely affect the rights of the Grantee with respect to the Award evidenced hereby without the Grantee’s consent, or (iii)
make such other changes as the Company, upon advice of counsel, determines are necessary or advisable because of the adoption or promulgation of, or change in or of the interpretation of, any law or governmental rule or regulation, including any
applicable federal or state securities laws; and 

 (b) subject to paragraph 6 of the Plan and any required approval of the Company’s
stockholders, the Award evidenced by this Agreement may be canceled by the Committee and a new Award made in substitution therefor, provided that, subject to paragraph 9, the Award so substituted shall satisfy all of the requirements of the
Plan as of the date such new Award is made and no such action shall adversely affect the Option to the extent then exercisable without the Grantee’s consent. 
  
 13. Grantee Employment. Nothing contained in this Agreement, and no action of the Company or the Committee with
respect hereto, shall confer or be construed to confer on the Grantee any right to continue in the employ of the Company or any of its Subsidiaries or interfere in any way with the right of the Company or any employing Subsidiary to terminate the
Grantee’s employment at any time for any reason. 
  
 14.
Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without regard to principles of conflicts of law. 
  
 15. Construction. References in this Agreement to “this Agreement” and the words “herein,”
“hereof,” “hereunder” and similar terms include all Exhibits appended hereto. This Agreement is entered into, and the Award evidenced hereby is granted, pursuant to the Plan and shall be governed by and construed in accordance
with the Plan and the administrative interpretations adopted by the Committee thereunder. All decisions of the Committee upon questions regarding the Plan or this Agreement shall be conclusive. Unless otherwise expressly stated herein, in the event
of any inconsistency between the terms of the Plan and this Agreement, the terms of the Plan shall control. The headings of the paragraphs of this Agreement have been included for convenience of reference only, are not to be considered a part hereof
and shall in no way modify or restrict any of the terms or provisions hereof. 
  
 16. Duplicate Originals. The Company and the Grantee may sign any number of copies of this Agreement. Each signed copy shall be an original, but all of them together represent the same agreement. 
  
 17. Rules by Committee. The rights of the Grantee and obligations of
the Company hereunder shall be subject to such reasonable rules and regulations as the Committee may adopt from time to time hereafter. 
  
 18. Entire Agreement. Subject to the provisions of any applicable written employment agreement between the Grantee and the Company or any
Subsidiary, the Grantee and the Company hereby declare and represent that no promise or agreement not herein expressed has been made and that this Agreement contains the entire agreement between the parties hereto with respect to the Option and
replaces and makes null and void any prior agreements, oral or written, between the Grantee and the Company regarding the Option. 
  
 19. Grantee Acceptance. The Grantee shall signify acceptance of this Agreement, subject to the terms and conditions of this Agreement and of the
Plan and of the administrative interpretations thereof referred to above, by signing in the space provided at the end hereof and returning a signed copy to the Company. 

											
	 DRIL-QUIP, INC.
	 	 DRIL-QUIP, INC.
	 	 DRIL-QUIP, INC.

						
	 By:
	 	  

	 	 By:
	 	  

	 	 By:
	 	  

	 	 	 Gary D. Smith
	 	 	 	 J. Mike Walker
	 	 	 	 Larry E. Reimert

	 	 	 Co-Chairman of the Board
	 	 	 	 Co-Chairman of the Board
	 	 	 	 Co-Chairman of the Board

  

	
	 ACCEPTED:
  

	  

	Grantee

 Exhibit A to Non-Qualified Stock Option 
 Agreement dated as of                 , 20     
  
 2004 Incentive Plan of Dril-Quip, Inc. 
  
 Notice of Option Exercise 
  
 Dril-Quip, Inc. 
 13660 Hempstead Hwy. 
 Houston, Texas 77040 
  
 Attention: Secretary 
  
 I refer to the Stock Option Agreement dated as of
                    , 20     (the “Option Agreement”) between Dril-Quip, Inc. (the “Company”)
and the undersigned (the “Grantee”) in which the Company granted the Grantee a nonqualified stock option (the “Option”) to purchase from the Company up to
                     shares of the Common Stock, par value $.01 per share, of the Company (the “Option Shares”) at a price per
Option Share equal to $             (the “Exercise Price”). Words and terms used herein which are defined in the Option Agreement or the 2004 Incentive Plan of Dril-Quip,
Inc. (the “Plan”) are used herein as defined therein. 
  
 1. Exercise of Option. The Grantee hereby elects to exercise the Option to purchase the following number of vested Option Shares: 
  
 [check one] 
  

	 ̈	One-fourth of the total number of Option Shares [on or after
                    , 20    ] 

  

	 ̈	One-half of the total number of Option Shares [on or after
                    , 20    ] 

  

	 ̈	Three-quarters of the total number of Option Shares [on or after
                    , 20    ] 

  

	 ̈	All of the Option Shares [on or after                     ,
20    ] 

  
 2.
Representations of Grantee. The Grantee hereby acknowledges, represents and warrants that the Grantee has received, read and understood the Option Agreement and the Plan and will abide by and be bound by their terms and conditions. The
Grantee understands that the Grantee may incur tax liability as a result of the Grantee’s purchase or disposition of the Option Shares. The Grantee represents that the Grantee has consulted with a tax advisor in connection with the purchase or
disposition of the Option Shares and that the Grantee is not relying on the Company for any tax advice. 
  
 3. Delivery of Payment. The Grantee herewith delivers to the Company the aggregate Exercise Price for the Option Shares that the Grantee has
elected to purchase, as follows: 
  

			
	                In cash:	  	$            ; and

 In shares of Common Stock:
                     shares having an aggregate Fair Market Value on the date hereof of
$            . 
  
 4. Withholding. The Grantee has made provision for the payment of any federal or state withholding taxes required to be paid or withheld by the Company. 
  

			
	 SUBMITTED BY:

		
	 Grantee:
	 	  

		
	     Name:
	 	  

	     Address:
	 	  

	 	 	  

		
	 Date:
	 	  

 Exhibit B to Non-Qualified Stock Option 
 Agreement dated as of                 , 20     
  
 2004 Incentive Plan of Dril-Quip, Inc. 
  
 Designation of Beneficiary 
  

							
	I,
                                        
                                        
                                        
                         (the “Grantee”), hereby declare
	
	that upon my death
                                        
                                        
                                        
             (the “Beneficiary”) of
	 Name
	  	 	  	 	  	 
	_________________________________________________________________________________________________________,
	Street Address	  	City	  	State                                Zip Code
	who is my
                                        
                                        
                                        
                            , shall be entitled to the
	 Relationship to Grantee

  
 Option granted the Grantee by the
above-referenced agreement (the “Agreement”). 
  
 It is
understood that this Designation of Beneficiary is made pursuant to the Agreement and is subject to the conditions stated herein, including the Beneficiary’s survival of the Grantee’s death. If any such condition is not satisfied, such
rights shall devolve according to the Grantee’s will or the laws of descent and distribution. 
  
 It is further understood that all prior designations of beneficiary under the Agreement are hereby revoked and that this Designation of Beneficiary may
only be revoked in writing, signed by the Grantee, and filed with the Company prior to the Grantee’s death. 
  

			
	  

	 	  

	Date                                      
                      	 	Grantee

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