10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

R ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009

OR

£ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-13884

CAMERON INTERNATIONAL CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware	76-0451843
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1333 West Loop South
Suite 1700
Houston, Texas	77027
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (713) 513-3300

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, Par Value $0.01 Per Share	New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes R                      No £

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes £                      No R

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YesR                      No £

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YesR                      No £

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  No R

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer R                                                                      Accelerated filer £                                       Non-accelerated filer £Smaller reporting company £

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes £No R

The aggregate market value of the Common Stock, par value $0.01 per share, held by non-affiliates of the registrant as of June 30, 2009, our most recently completed second fiscal quarter, was approximately $5,041,455,418.  For the purposes of the determination of the above statement amount only, all the directors and executive officers of the registrant are presumed to be affiliates. The number of shares of Common Stock, par value $.01 per share, outstanding as of February 12, 2010, was 244,456,688.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of registrant’s Annual Report to Stockholders for the year ended December 31, 2009 are incorporated by reference into Parts I and II. Portions of the registrant’s 2010 Proxy Statement for the Annual Meeting of Stockholders to be held May 12, 2010 are incorporated by reference into Part III.

TABLE OF CONTENTS

	ITEM	PAGE
	PART I
1.	Business	3
	Markets and Products	4
	Market Issues	7
	New Product Development	8
	Competition	9
	Manufacturing	9
	Backlog	10
	Patents, Trademarks and Other Intellectual Property	10
	Employees	10
	Executive Officers of the Registrant	11
	Glossary of Terms	12
1A.	Risk Factors	12
1B.	Unresolved Staff Comments	12
2.	Properties	13
3.	Legal Proceedings	13
4.	Submission of Matters to a Vote of Security Holders	14
	PART II
5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	15
6.	Selected Financial Data	16
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
7A.	Quantitative and Qualitative Disclosures about Market Risk	16
8.	Financial Statements and Supplementary Data	16
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	17
9A.	Controls and Procedures	17
9B.	Other Information	17
	PART III
10	Directors, Executive Officers and Corporate Governance	17
11.	Executive Compensation	18
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	18
13.	Certain Relationships and Related Transactions, and Director Independence	18
14.	Principal Accountant Fees and Services	18
	PART IV
15.	Exhibits and Financial Statement Schedules	18
	Signatures	24

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PART I

ITEM 1. BUSINESS

Cameron International Corporation (Cameron or the Company) is a leading provider of flow equipment products, systems and services to worldwide oil, gas and process industries.  See “Glossary of Terms” at the end of Item 1 for definitions of certain terms used in this section. Any reference to Cameron, its divisions or business units within this paragraph or elsewhere within this Form 10-K as being a leader, leading provider, leading manufacturer, or having a leading position is based on the amount of equipment installed worldwide and available industry data.

The Company’s operations are organized into three business segments – Drilling & Production Systems (DPS), Valves & Measurement (V&M) and Compression Systems (CS).  For additional business segment information for each of the three years in the period ended December 31, 2009, see Note 15 of the Notes to Consolidated Financial Statements, which Notes are incorporated herein by reference in Part II, Item 8 of this Annual Report on Form 10-K.

Cameron’s origin dates back to the mid-1800s with the manufacture of steam engines that provided power for plants and textile or rolling mills. By 1900, with the discovery of oil and gas, Cameron’s predecessor businesses over time became more focused on serving those companies involved in the exploration and production of oil and gas.  This focus grew with the acquisition of various businesses including Cameron Iron Works (blowout preventers, ball valves, control equipment and McEvoy-Willis wellhead equipment and choke valves), The Bessemer Gas Engine Company (gas engines and compressors); Ajax Iron Works (compressors); Superior (engines and compressors); Joy Petroleum Equipment Group (valves, couplings and wellheads); and Joy Industrial Compressor Group (compressors).

Cameron is a Delaware corporation and was incorporated in its current form on November 10, 1994. The Company operated as a wholly-owned subsidiary of Cooper Industries, Inc. until June 30, 1995, when it was spun-off as a separate stand-alone company.  Since then, Cameron has continued its acquisition strategy having made numerous acquisitions including the 1996 acquisition of Ingram Cactus Company, the 1998 acquisition of Orbit Valve International, Inc., 2004’s acquisition of Petreco International, Inc., the purchase of substantially all of the businesses within the Flow Control segment of Dresser, Inc. in 2005 and the acquisition of NATCO Group, Inc. (NATCO) in 2009.

The common stock of Cameron trades on the New York Stock Exchange under the symbol “CAM”.  The Company’s Internet address is www.c-a-m.com. General information about Cameron, including its Corporate Governance Principles, charters for the committees of the Company’s board of directors, Standards of Conduct, and Codes of Ethics for Management Personnel, including Senior Financial Officers and Directors, can be found in the Ethics and Governance section of the Company’s website. The Company makes available on its website its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended (the Exchange Act) as soon as reasonably practicable after the Company electronically files or furnishes them to the United States Securities and Exchange Commission (the SEC).  Information filed by the Company with the SEC is also available at www.sec.gov or may be read and copied at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549.  Information regarding operations of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.

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Business Segments

Markets and Products

Drilling & Production Systems Segment

DPS is a leading provider of systems and equipment used to control pressures, direct flows of oil and gas wells and separate oil and gas from impurities. Its products are employed in a wide variety of operating environments including basic onshore fields, highly complex onshore and offshore environments, deepwater subsea applications and ultra-high temperature geothermal operations.

DPS’s products include surface and subsea production systems, blowout preventers (BOPs), drilling and production control systems, oil and gas separation equipment, gas conditioning units, membrane separation systems, water processing systems, block valves, gate valves, actuators, chokes, wellheads, drilling riser and aftermarket parts and services.  DPS also manufactures elastomers, which are used in pressure and flow control equipment and other petroleum industry applications, as well as in the petroleum, petrochemical, rubber molding and plastics industries.

DPS primarily markets its products directly to end-users through a worldwide network of sales and marketing employees, supported by agents in some international locations. Due to the technical nature of many of the products, the marketing effort is further supported by a staff of engineering employees.

DPS’s customers include oil and gas majors, national oil companies, independent producers, engineering and construction companies, drilling contractors, rental companies and geothermal energy producers.

Drilling Systems –

DPS is one of the leading global suppliers of integrated drilling systems for land, platform and subsea applications. Drilling equipment designed and manufactured by DPS includes ram and annular  BOPs, control systems, drilling riser, drilling valves, choke and kill manifolds, diverter systems and aftermarket parts and services. DPS markets its drilling systems products under the Cameron®, Guiberson®, H&H™, Melco™ and Townsend™ brand names.

Although the pace of orders for new deepwater drilling rigs declined in 2009 from the record order levels of 2006 – 2008, the Company continues to be a primary supplier of BOPs and related equipment to the drilling industry.  As a result of the high order levels in recent years, the Company has made significant investments at the Beziers, France BOP and riser manufacturing facility, the Houston Controls facility and the Berwick, Louisiana BOP stack-up yard which helped allow Cameron to ship a large number of drilling stacks to customers during 2009 and resulted in Drilling Systems being the second largest revenue contributor to the DPS segment for the year.  The Company had also taken steps in recent years to expand its product offerings and services to drilling customers with the November 2008 purchase of KB Industries, an Odessa, Texas-based manufacturer of surface BOPs and control systems and the September 2008 acquisition of Guiberson Well Service Systems, a market leader in well servicing equipment and replacement parts.  During 2009, Drilling Systems continued to expand its global repair and service capabilities, took steps to streamline and consolidate its elastomer operations and opened a new facility in Houston to serve as a “center of excellence” for certain of its manifold products and to provide repair and recertification of drilling-specific products.

Surface Systems –

DPS is a global market leader in supplying surface production equipment, from conventional to high-pressure, high temperature (HPHT) wellheads, production systems and controls, block valves, gate valves, mudline systems, dry completion systems and aftermarket parts and services.   DPS markets its surface systems products under the Cameron®, Camrod™, IC™, McEvoy®, Precision™, SBS™, Tundra™, Willis® and  WKM® brand names.

Cameron, which has a global base of installed equipment and an aftermarket presence in virtually every major hydrocarbon-producing region around the world, is the industry’s largest provider of surface production equipment.  The Company made investments in its artificial lift business during 2008 with the acquisition of SBS Oilfield Equipment GmbH, an Austrian-based manufacturer of in-well rod lift pumping and progressive cavity pumping systems, and the late December 2008 acquisition of Paramount Pumps and Supplies, Inc., a Kansas-based manufacturer of rod lift pumping systems.  During 2009, the Company opened a new surface manufacturing plant in Ploiesti, Romania in order to expand its offerings to customers in the European, North African and Russian markets.  Also, a new aftermarket facility was completed in 2009 in Baku, Azerbaijan and construction was initiated on a new aftermarket facility in Kazakhstan to address expected demand for surface products in the Caspian Sea region and North Africa.  As a result of growing interest by customers in extracting natural gas from shale in North America, the Company has also added sales and aftermarket facilities to serve selected shale gas regions and expanded product offerings for fracturing-related services to shale customers.

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Subsea Systems –

DPS continues to be a leading provider of subsea wellheads, production systems and controls, manifolds and aftermarket parts and services to customers worldwide, from basic subsea tree orders to integrated solutions that require systems engineering and project management as well as installation and aftermarket support.  DPS markets its subsea systems products under the Cameron®, Mars™, McEvoy® and Willis® brand names.

This business received more than 50 percent of the subsea tree awards for the industry during 2009 and was the DPS segment’s largest source of revenue for the year.  The 2009 awards were significantly impacted by an initial 111-subsea tree order from Petrobras under a $480 million frame agreement that calls for Cameron to ultimately deliver 138 subsea trees and multiple sets of running tools over a four-year period to the Brazilian market.  Other large awards in 2009 for projects in the Gulf of Mexico, Egypt, Australia, Equatorial Guinea and the Mediterranean were also received leading to a record high level of more than 250 subsea trees and associated equipment in backlog at the end of 2009.

In order to address subsea equipment manufacturing capacity needs, improve efficiency and lower manufacturing costs in the subsea product line, the Company completed a new state-of-the-art subsea manufacturing, assembly and test plant in Johor, Malaysia in 2007 and has spent an additional $65 million to further expand the facility.  In addition, the Company made various capital investments in its Leeds, England and Berwick, Louisiana facilities during 2008 and 2009 to further enhance its available capacity.

Process Systems –

The completion of the NATCO acquisition in late 2009, significantly expanded the size, product offerings and global reach of Cameron’s separation and processing business.  NATCO designed, manufactured and marketed oil and gas production equipment and separation systems.  NATCO products and services have been used onshore and offshore, upstream and downstream, in most major oil and gas producing regions of the world.  The Process Systems business provides custom-engineered process packages to operators worldwide for separation and treatment of oil, gas, water and solids.  Products offered include separators, heaters, dehydration and desalting units, gas conditioning units, membrane separation systems, water processing systems and aftermarket parts and services.  DPS markets its process systems products under the Cameron®, Consept™, Cynara®, Hydromation®, KCC™, Krebs™, Metrol®, Mozley™, NATCO®, Petreco®, Porta-test®, Unicel™, Vortoil® and Wemco® brand names.

During 2009, in order to expand its manufacturing and technology capabilities, Process Systems opened a facility in Saudi Arabia through a joint venture with a local partner and relocated its Technology Center from Tulsa, Oklahoma to Houston, Texas to better facilitate and support many industry partnerships and joint venture development programs with customers.

Flow Control –

DPS’s Flow Control business provides chokes, actuators, gears, valve accessories and automation solutions to other Cameron businesses, as well as to other industry manufacturers and directly to end users under such brand names as Cameron®, Dynatorque™, Ledeen®, Maxtorque™, Test™ and Willis®.

During 2008, Flow Control added to its product offerings with the acquisition of the Surface Safety Systems business that had previously been part of the Baker Hughes International Oil Tools division and the acquisition of Dyna-Torque, Inc., a Michigan-based manufacturer of gear operators that can be combined with the segment’s existing actuator products for use on valves around the world.  In 2009, the business was further expanded as a result of the mid-year acquisition of Maxtorque which added high performance quarter-turn and multi-turn gear operators for motorized and manual applications, overrides and engineered activation solutions.  The November 2009 acquisition of NATCO also added Test Automation to the division’s offerings of activation equipment and automation technology solutions.  Flow Control also entered the drilling manifold and gate valve repair business in 2009, operating in concert with Drilling Systems’ new “center of excellence” facility opened in Houston, Texas, as described above.

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Valves & Measurement Segment

V&M is a leading provider of valves and also supplies measurement systems primarily used to control, direct and measure the flow of oil and gas as they are moved from individual wellheads through flow lines, gathering lines and transmission systems to refineries, petrochemical plants and industrial centers for processing. Equipment used in these environments is generally required to meet demanding standards, including API 6D and the American Society of Mechanical Engineers (ASME).

V&M’s products include gate valves, ball valves, butterfly valves, Orbit® valves, double block & bleed valves, plug valves, globe valves, check valves, actuators, chokes and aftermarket parts and services. Measurement products include totalizers, turbine meters, flow computers, chart recorders, ultrasonic flow meters and sampling systems.

V&M markets its equipment and services through a worldwide network of combined sales and marketing employees, distributors and agents in selected international locations. Due to the technical nature of many of the products, the marketing effort is further supported by a staff of engineering employees.

V&M’s primary customers include oil and gas majors, independent producers, engineering and construction companies, pipeline operators, drilling contractors and major chemical, petrochemical and refining companies.

Distributed Valves –

V&M’s Distributed Valves group manufactures a wide variety of valves used in the exploration, production and transportation of oil and gas, with products sold through a network of wholesalers and distributors, primarily in North America.  These valves are marketed under the brand names Demco®, Navco®, Nutron®, Techno™, Thornhill Craver®, Wheatley® and WKM®.  Due to the decline in rig count and activity levels in North America during 2009, the Distributed Valves group has focused on growing its business through investment in international markets, expansion of strategic distributor relationships in North America and gaining efficiencies via consolidation of certain of its Canadian facilities during the year.

Engineered Valves –

The Engineered Valves group of V&M provides a full range of customized ball and gate valves for use in natural gas production and transmission, liquefied natural gas (LNG), crude oil and refined product movements and critical service applications. Products are marketed under the brand names Cameron®, Entech™, Grove®, Ring-O®, TK® and Tom Wheatley®.  During 2009, the Engineered Valves group has invested in new machining capabilities for its Italian operations and is in the process of expanding its facility in Ville Platte, Louisiana to improve its capacity and manufacturing efficiency.

Process Valves –

V&M’s Process Valves group provides valves under the brand names of General Valve®, Orbit®, TBV™ and WKM®  for use in critical service applications that are often subject to extreme temperature conditions, particularly in refinery, power generation (including nuclear), chemical, petrochemical and gas processing markets, including LNG.  The Process Valves group has continued its efforts during 2009 to expand its international exposure, particularly in selected emerging markets, as a result of weak demand for new refinery and petrochemical processing infrastructure projects in North America during the year.

Measurement Systems –

The Measurement Systems group of V&M designs, manufactures and distributes measurement products, systems and solutions to the global oil and gas, process and power industries. The group’s main product brand names include Barton®, Caldon®, Clif Mock™, Jiskoot™, Linco™, Nuflo™ and PAAI™.Cameron has recently enhanced its measurement product line offerings with the March 2008 acquisition of Jiskoot Holdings Limited, a U.K.-based company that engineers and manufactures hardware packages for crude oil sampling, blending and other related applications and the November 2009 acquisition of NATCO, which added the Linco and PAAI brands.  The Measurement Systems group has recently been expanding its international presence with sales offices in India, China, the Middle East and the Asia-Pacific region as an effort to offset current weakness in North American upstream markets.

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Aftermarket Services –

The V&M segment also provides aftermarket services including OEM parts, repair, field service, asset management and remanufactured product to customers, particularly in support of the installed base of equipment sold under the numerous brands within the V&M businesses.  The Aftermarket Services group has significantly expanded its capabilities for total valve management services for the Australian and Southeast Asia markets with the 2009 acquisition of Geographe.  In addition, the group also established operations in China and the Middle East during 2009 to support the installed valve base in those regions.

Compression Systems Segment

CS is a provider of compression equipment and aftermarket parts and services for the oil, gas and process industries. Integrally geared centrifugal compressors are used by customers around the world in a variety of industries, including air separation, petrochemical and chemical. CS’s products include integral engine-compressors, separable compressors, turbochargers, integrally geared centrifugal compressors, compressor systems and controls. Its aftermarket services include spare parts, technical services, repairs, overhauls and upgrades.

Reciprocating Compression –

Reciprocating compression equipment is used throughout the energy industry by gas transmission companies, compression leasing companies, oil and gas producers and independent power producers. The CS Reciprocating Compression group’s  products and services are marketed under the Ajax®, Cooper-Bessemer®, CSI™, Enterprise®, Superior®, Texcentric™ and TSI™ brand names. Ajax integral engine-compressors, which combine the engine and compressor on a single drive shaft, are used for gas re-injection and storage, as well as on smaller gathering and transmission lines. Superior-brand separable compressors are used primarily for natural gas applications, including production, storage, withdrawal, processing and transmission, as well as petrochemical processing. These high-speed separable compressor units can be matched with either natural gas engine drivers or electric motors.

CS also provides global support for its products and maintains sales and/or service offices in key international locations. For the year ended December 31, 2009, approximately 57% of the Reciprocating Compression revenues were generated by sales of aftermarket parts and services in support of the Company’s worldwide installed base of compression equipment.

Customers for Reciprocating Compression products include gas transmission companies, compression leasing companies, oil and gas producers and processors and independent power producers.

Centrifugal Compression –

The CS Centrifugal Compression Group manufactures and supplies integrally geared centrifugal compressors and provides aftermarket services to customers worldwide. Centrifugal air compressors, used primarily in manufacturing processes (plant air), are sold under the trade name of Turbo-Air®, with specific models including the TA-2000, TAC-2000, TA-3000, TA-6000 and TA-9000.

Engineered compressors are used in the process air and gas industries and are identified by the MSG® trade name. The process and plant air centrifugal compressors deliver oil-free compressed air and other gases to customers, thus preventing oil contamination of the finished products.

The CS Centrifugal Compression Group also provides installation and maintenance services, parts, repairs, overhauls and upgrades to its worldwide customers for plant air and process gas compressors. It also provides aftermarket service and repairs on all equipment it produces through a worldwide network of distributors, service centers and field service technicians utilizing an extensive inventory of parts marketed under the Joy™ brand name.

Centrifugal Compression customers include petrochemical and refining companies, natural gas processing companies, durable goods manufacturers, utilities, air separation and chemical companies.

Market Issues

Cameron is one of the leaders in the global market for the supply of petroleum production equipment. Cameron believes that it is well-positioned to serve these markets. Plant and service center facilities around the world in major oil- and gas-producing regions provide a broad market coverage. Information relating to revenues generated from shipments to various geographic regions of the world is set forth on page 29 of “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Cameron International Corporation” incorporated by reference in Part II, Item 7 of this Annual Report on Form 10-K and incorporated herein by reference.

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The market beyond North America continues to be of greater importance to Cameron accounting for more than 60% of Cameron’s revenues for each of the three years in the period ended December 31, 2009.   The desire to expand oil and gas resources and transmission capacity in developed and developing countries, for both economic and political reasons, continues to be a major factor affecting market demand. Additionally, establishment of industrial infrastructure in the developing countries will necessitate the growth of basic industries that require plant air and process compression equipment. Production and service facilities in North and South America, Europe, the Far and Middle East and West Africa provide the Company with the ability to serve the global marketplace.

In recent years, DPS has been expanding into the deepwater subsea systems market. This market is significantly different from the Company’s other markets since deepwater subsea systems projects are significantly larger in scope and complexity, in terms of both technical and logistical requirements. Subsea projects (i) typically involve long lead times, (ii) typically are larger in financial scope, (iii) typically require substantial engineering resources to meet the technical requirements of the project and (iv) often involve the application of existing technology to new environments and in some cases, the application of new technology. These projects accounted for approximately 16% of the Company’s consolidated revenues for the year ended December 31, 2009. To the extent the Company experiences unplanned efficiencies or difficulties in meeting the technical and/or delivery requirements of the projects, the Company’s earnings or liquidity could be positively or negatively impacted. As of December 31, 2009, the Company had a subsea systems project backlog of approximately $2.0 billion.

The public and private credit markets in the United States and around the world became severely constricted in late 2008 due to economic concerns about various world economies.  This uncertainty and turmoil in the credit markets negatively impacted, in certain cases, the ability of customers to finance purchases of the Company’s equipment which may have contributed to a decline in sales, profitability and operating cash flows of the Company during a portion of 2009.  While economic conditions have shown some improvement in recent months, significant uncertainty still exists over future economic conditions and lenders in many cases continue to exercise tighter lending standards than in recent previous years.  Oil prices, which averaged $100 per barrel during 2008, declined from over $140 per barrel in mid-2008 to nearly $40 per barrel by the end of 2008.  Prices recovered somewhat during 2009 moving back up to the $70 - $80 range for most of the second half of 2009.  Additionally, natural gas prices which averaged around $9.00 per Mcf in 2008 fell to the $5.00 to $6.00 per Mcf range by the end of 2008 and have since stabilized in that range for much of 2009 reflecting currently high storage levels.  Also, rig count levels have shown modest improvement in recent months.  The significant declines in oil and natural gas prices and activity levels around the world negatively impacted the Company’s 2009 orders and results of operations compared to 2008.  The decline in orders during 2009 has resulted in a decrease in backlog levels in the Company’s V&M and CS segments as of the end of 2009 as compared to the end of 2008 which may negatively impact 2010 revenues for those segments when compared to revenues reported for those segments in 2009.  For additional information, see the Company’s “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Cameron International Corporation” incorporated by reference in Part II, Item 7 of this Annual Report on Form 10-K and incorporated herein by reference.

Also, see Part I, Item 1A for a discussion of other risk factors, some of which are market related, that could affect the Company’s financial condition and future results.

New Product Development

For the years ended December 31, 2009, 2008 and 2007, the Company incurred research and product development costs, including costs incurred on projects designed to enhance or add to its existing product offerings, totaling approximately $78,115,000, $68,665,000 and $59,585,000, respectively.  DPS accounted for 70%, 69% and 68% of each respective year’s total costs.

During 2009, Cameron’s Drilling Systems group introduced the world’s first 18¾” 20,000-psi BOP with significantly enhanced capability for high-pressure well drilling and completion.  This new offering provides the characteristics of reduced height and weight found in the EVO™ BOP that was introduced in 2007 as a compact, lighter version of Cameron’s traditional subsea BOP.  Also during 2008, the Company introduced the Sea Pressure Accumulator™ (SPA), a complement to the EVO BOP, which uses seawater pressure instead of traditional nitrogen-charged accumulator bottles to power the BOP rams.

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The Drilling Systems group also introduced Cameron’s RoboSpider in 2009, the world’s first fully automated hydraulic drilling riser torque system and the NASMUX System, an acoustic controls system for subsea BOP’s that offers an alternative to traditional multiplexed control systems.

New 2009 offerings from Cameron’s Surface Systems group includes the EXACT-10™ (10,000-psi) and EXACT-15™ (15,000-psi) Adjustable Wellhead Systems suitable for both exploration and production drilling applications and a new DF-PA (Diver-Friendly Plug & Abandonment) System designed specifically for installation on hurricane-damaged wells in the Gulf of Mexico.

Cameron’s Subsea Systems group made the initial deployment of its new all-electric subsea production system, CameronDC™ in late 2008 in Total’s K5F field in the Dutch North Sea.  The system has performed as expected and modifications are currently being made to extend its range of possible applications.  One of the latest offerings from the Subsea Systems group is the Multiple Application Reinjection System (MARS™), a unique well intervention system that serves as an interface between subsea production trees and a variety of processing equipment.

With the November 2009 acquisition of NATCO, Cameron’s Process Systems group has added NATCO’s unique CO2 membrane separation technology to its current product offerings.

Competition

Cameron competes in all areas of its operations with a number of other companies, some of which have financial and other resources comparable to or greater than those of Cameron.

Cameron has a leading position in the petroleum production equipment markets. In these markets, Cameron competes principally with Aker Solutions, the Centralift division of Baker Hughes, Inc., Balon Corporation, Circor International, Inc., Dover Corporation, Dril-Quip, Inc., Emerson Process Management, FlowServ Corp., FMC Technologies, Inc., GE Oil & Gas Group (including Vetco Gray and Hydril Company), Masterflo (a division of Stream-Flo Industries Ltd. (i.e. Stream), National Oilwell Varco Inc., PBV-USA, Inc. (a Zy-Tech Global Industries company), Petrovalve (a Flotek Industries, Inc. company), Pibiviese, SPX Corporation’s Flow Technology Segment, T3 Energy Services Inc., Tyco International Ltd., the artificial lift business of Weatherford, Inc. and Wood Group.

The principal competitive factors in the petroleum production equipment markets are technology, quality, service and price. Cameron believes several factors give it a strong competitive position in these markets. Most significant are Cameron’s broad product offering, its worldwide presence and reputation, its service and repair capabilities, its expertise in high-pressure technology and its experience in alliance and partnership arrangements with customers and other suppliers.

Cameron also has a strong position in the compression equipment markets. In these markets, Cameron competes principally with the Ariel Corporation, Atlas-Copco AB, CECO (a Compressor Engineering Corporation company), Demag, Dresser-Rand Company, FS-Elliott Company LLC, Endyn Energy Dynamics, Hoerbiger Group and IR Air Solutions. The principal competitive factors in the compression equipment markets are engineering and design capabilities, product performance, reliability, quality, service and price. Cameron has a competent engineering staff and skilled technical and service representatives.

Manufacturing

Cameron has manufacturing facilities worldwide that conduct a broad variety of processes, including machining, fabrication, assembly and testing, using a variety of forged and cast alloyed steels and stainless steel as the primary raw materials. In previous years, Cameron has rationalized plants and products, closed various manufacturing facilities, moved product lines to achieve economies of scale, and upgraded other facilities.  In more recent times, the Company has constructed or begun construction on new facilities mainly in certain locations outside of North America in order to meet current and expected future demand, particularly with regard to its surface and subsea product offerings.  This is an ongoing process as the Company seeks ways to improve delivery performance and reduce costs.  Cameron maintains advanced manufacturing, quality assurance and testing equipment geared to the specific products that it manufactures and uses process automation in its manufacturing operations.  Manufacturing facilities typically utilize computer-aided, numeric-controlled tools and manufacturing techniques that concentrate the equipment necessary to produce similar products in one area of the plant in a configuration commonly known as a manufacturing cell.  One operator in a manufacturing cell can monitor and operate several machines, as well as assemble and test products made by such machines, thereby improving operating efficiency and product quality.

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Cameron’s test capabilities are critical to its overall processes. The Company has the capability to test most equipment at rated operating conditions, measuring all operating parameters, efficiency and emissions. All process compressors for air separation and all plant air compressors are given a mechanical and aerodynamic test in a dedicated test center prior to shipment.

All of Cameron’s Asian, European and Latin American manufacturing plants are ISO certified and API licensed, and most of the U.S. plants are ISO certified. ISO is an internationally recognized verification system for quality management.

Backlog

Cameron’s backlog was approximately $5.2 billion at December 31, 2009 (approximately 63% of which is expected to be shipped during 2010), as compared to $5.6 billion at December 31, 2008, and $4.3 billion at December 31, 2007.  Backlog consists of customer orders for which a purchase order has been received, satisfactory credit or financing arrangements exist and delivery is scheduled.

Patents, Trademarks and Other Intellectual Property

As part of its ongoing research, development and manufacturing activities, Cameron has a policy of seeking patents when appropriate on inventions involving new products and product improvements. Cameron owns 338 unexpired United States patents and 711 unexpired foreign patents. During 2009, 49 new U.S. and 68 new foreign patent applications were filed.

Although in the aggregate these patents are of considerable importance to the manufacturing of many of its products, Cameron does not consider any single patent or group of patents to be material to its business as a whole.

Trademarks are also of considerable importance to the marketing of Cameron’s products. Cameron considers the following trade names to be material to its business as a whole: CAMERON, COOPER-BESSEMER, AJAX, WILLIS and W-K-M. Other important trademarks used by Cameron are included under “Markets and Products” above.  Cameron has registered trademarks in countries where such registration is deemed important.

Cameron has the right to use the trademark Joy on aftermarket parts until November 2027.

Cameron also relies on trade secret protection for its confidential and proprietary information. Cameron routinely enters into confidentiality agreements with its employees, partners and suppliers. There can be no assurance, however, that others will not independently obtain similar information or otherwise gain access to Cameron’s trade secrets.

Employees

As of December 31, 2009, Cameron had approximately 18,100 employees, of which approximately 21% were represented by labor unions. Over 736 of these employees are covered by contracts expiring in 2010.   In Romania, the Company has approximately 574 employees at its facilities with contracts expiring on various dates in the second half of 2010.

The Company entered into a number of new agreements during 2009, five of which cover a large number of employees.  Two agreements renewed in 2009 cover approximately 700 employees at the Company’s facilities in Italy and expire December 31, 2012.  A third agreement covers approximately 297 employees at the Company’s Buffalo, New York location and expires August 6, 2012.  New agreements were also signed for the Company’s Leeds and Singapore facilities covering approximately 385 and 330 employees expiring October 2010 and June 2011, respectively.

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Executive Officers of the Registrant

Name and Age	Present Principal Position and Other Material Positions Held During Last Five Years
Jack B. Moore (56)	President and Chief Executive Officer since April 2008.  President and Chief Operating Officer from January 2007 to March 2008. Senior Vice President from July 2005 to December 2006.  Vice President from May 2003 to July 2005.  President, Drilling and Production Systems from July 2002 to December 2006.  Vice President and General Manager, Cameron Western Hemisphere from July 1999 to July 2002.  Vice President Western Hemisphere Operations, Vice President Eastern Hemisphere, Vice President Latin American Operations, Director Human Resources, Director Market Research and Director Materials of Baker Hughes Incorporated from 1976 to July 1999.
John D. Carne (61)	Senior Vice President since February 2006. Vice President from May 2003 to February 2006. President, Drilling and Production Systems since January 2007. President, Valves and Measurement from April 2002 to December 2006. Director of Operations, Eastern Hemisphere, Cameron Division from 1999 to March 2002. Plant Manager, Leeds, England, Cameron Division from 1996 to 1999. Director of Operations, U.K. & Norway, Cooper Energy Services (U.K.) Ltd. from 1988 to 1996.
William C. Lemmer (65)	Senior Vice President and General Counsel since May 2008, Senior Vice President, General Counsel and Secretary from July 2007 to May 2008. Vice President, General Counsel and Secretary from July 1999 to July 2007. Vice President, General Counsel and Secretary of Oryx Energy Company from 1994 to March 1999.
Charles M. Sledge (44)	Senior Vice President and Chief Financial Officer since November 2008.  Vice President and Chief Financial Officer from April 2008 to November 2008.  Vice President and Corporate Controller from July 2001 to March 2008. Senior Vice President, Finance and Treasurer from 1999 to June 2001, and Vice President, Controller from 1996 to 1999, of Stage Stores, Inc., a chain of family apparel stores.
Joseph H. Mongrain (52)	Vice President, Human Resources since June 2006. Director Human Resources, Schlumberger, Data and Consulting from May 2004 to May 2006 and Director, Human Resources, Schlumberger, North and South America from January 2001 to April 2004.
Robert J. Rajeski (64)	Vice President since July 2000. President, Compression Systems since October 2002. President, Cooper Turbocompressor division from July 1999 to October 2002 and President, Cooper Energy Services division from July 2001 to October 2002. Vice President and General Manager of Ingersoll-Dresser Pump Co., Engineered Pump division from 1994 to July 1999.
James E. Wright (56)	Vice President and President, Valves and Measurement group since January 2007. President, Distributed and Process Valves divisions from December 2005 to December 2006. Vice President and General Manager, Distributed Products from August 2002 to December 2005. Vice President and General Manager, North America Pipeline and Distributor Products from June 2001 to August 2002 and Vice President Marketing and North American Sales for V&M from August 1998 to June 2001.
Christopher A. Krummel (41)	Vice President, Controller and Chief Accounting Officer since April 2008.  Assistant Controller from October 2007 to March 2008.   Chief Financial Officer from October 2003 to October 2007 of Enventure Global Technology, a joint venture of Royal Dutch Shell and Halliburton.  Vice President of Capital Planning and Allocation, Vice President of Mergers and Acquisitions and Division Financial Controller for Petroleum Geo-Services from 1995 to 2003.
Stuart Taylor (48)	Vice President, Tax since December 2008.  Tax Director, General Electric from September 2000 to December 2008.  Tax Director, International, Baker Hughes, Inc. from May 1993 to June 2000.
H. Keith Jennings (40)	Vice President & Treasurer since June 2009.  Corporate Treasurer, Alghanim Industries from August 2007 to January 2009.  Sr. Treasury Manager PepsiCo Inc. July 2005 to August 2007.  Capital Markets Manager for Ingersoll Rand Company March 2004 to July 2005.  Business Unit Controller at Ingersoll Rand Company from May 2002 to March 2004.  Senior Finance Manager, Pharmacia Corporation May 1995 to May 2002.

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Glossary of Terms

Actuator. A hydraulic or electric motor used to open or close valves.

Blowout Preventer. A hydraulically operated system of safety valves installed at the wellhead during drilling and completion operations for the purpose of preventing an increase of high-pressure formation fluids — oil, gas or water — in the wellbore from turning into a “blowout” of the well.

Centrifugal compressor. A compressor with an impeller or rotor, a rotor shaft and a casing which discharges gases under pressure by centrifugal force.

Choke. A type of valve used to control the rate and pressure of the flow of production from a well or through flowlines.

Christmas tree. An assembly of valves, pipes and fittings used to control the flow of oil and gas from a well.

Compressor. A device used to create a pressure differential in order to move or compress a vapor or a gas.

Controls. A device which allows the remote triggering of an actuator to open or close a valve.

Drilling stack. A vertical arrangement of blowout prevention equipment installed at the top of the casing at a wellhead to provide maximum pressure integrity in the event of a well control incident for drilling and completion operations.

Elastomer. A rubberized pressure control sealing element used in drilling and wellhead applications.

Integral reciprocating engine-compressor. A compressor in which the crankshaft is shared by the engine and compressor, each having its own piston rods driven by the shared crankshaft.

Integrally geared centrifugal compressor. A compressor in which the motor is geared so that the compressor runs at higher rpms than the motor itself to gain efficiency.

Reciprocating compressor. A compressor in which the compression effect is produced by the reciprocating motion of pistons and plungers operating in cylinders.

Riser. Pipe used to connect the wellbore of offshore wells to drilling or production equipment on the surface, and through which drilling fluids or hydrocarbons travel.

Subsea tree. An assembly of valves, actuators and ancillary equipment connected to the top of the casing of a well located on the sea floor to direct and control the flow of oil and gas from the well.

Valve. A device used to control the rate of flow in a line, to open or shut off a line completely, or to serve as an automatic or semi-automatic safety device.

Wellhead. The equipment installed at the surface of a wellbore to maintain control of a well and including equipment such as the casing head, tubing head and Christmas tree.

ITEM 1A. RISK FACTORS

The information set forth under the caption “Factors That May Affect Financial Condition and Future Results” on pages 41 to 45 in the 2009 Annual Report to Stockholders is incorporated herein by reference.

ITEM 1B. UNRESOLVED STAFF COMMENTS

There were no unresolved comments from the SEC staff at the time of filing of this Form 10-K.

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ITEM 2. PROPERTIES

The Company currently operates facilities ranging in size from approximately 600 square feet to approximately 1,243,000 square feet. In addition to its manufacturing facilities, the Company also owns and leases warehouses, distribution centers, aftermarket and storage facilities, sales and administrative offices. The Company leases its corporate headquarters office space and space for the DPS, V&M and CS division headquarters in Houston, Texas.

 The Company manufactures, markets and sells its products and provides services throughout the world, operating facilities in numerous countries. At December 31, 2009, the significant facilities used by Cameron throughout the world for manufacturing, distribution, aftermarket services, machining, storage, warehousing, sales and administration contained an aggregate of approximately 15,879,000 square feet of space, of which approximately 9,999,000 square feet (63%) was owned and 5,880,000 (37%) was leased.  Of this total, approximately 9,894,000 square feet of space (62%) is located in the Western Hemisphere, 4,008,000 square feet of space (25%) is located in the Eastern Hemisphere, 1,598,000 square feet of space (10%) is located in Asia Pacific and the Middle East and 379,000 square feet of space (2%) is located in West Africa. The table below shows the number of significant operating manufacturing, warehouse, distribution and aftermarket facilities and sales and administrative offices by business segment and geographic area. DPS and V&M share space in certain facilities and, thus, are being reported together.

	Western Hemisphere		Eastern Hemisphere		Asia/Pacific and Middle East		West Africa		Total
DPS and V&M		186		36		52		11		285
CS		17		2		2		−		21
Corporate		1		2		−		−		3
		204		40		54		11		309

Cameron believes its facilities are suitable for their present and intended purposes and are adequate for the Company’s current and anticipated level of operations.

ITEM 3. LEGAL PROCEEDINGS

The Company is subject to a number of contingencies, including environmental matters, litigation and tax contingencies.

Environmental Matters

The Company’s worldwide operations are subject to regulations with regard to air, soil and water quality as well as other environmental matters. The Company, through its environmental management system and active third-party audit program, believes it is in substantial compliance with these regulations.

The Company is currently identified as a potentially responsible party (PRP) with respect to two sites designated for cleanup under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) or similar state laws. One of these sites is Osborne, Pennsylvania (a landfill into which a predecessor of the CS operation in Grove City, Pennsylvania deposited waste), where remediation is complete and remaining costs relate to ongoing ground water treatment and monitoring. The other is believed to be a de minimis exposure. The Company is also engaged in site cleanup under the Voluntary Cleanup Plan of the Texas Commission on Environmental Quality at former manufacturing locations in Houston and Missouri City, Texas. Additionally, the Company has discontinued operations at a number of other sites which had been active for many years. The Company does not believe, based upon information currently available, that there are any material environmental liabilities existing at these locations. At December 31, 2009, the Company’s consolidated balance sheet included a noncurrent liability of approximately $7.3 million for environmental matters.

Legal Matters

In 2001, the Company discovered that contaminated underground water from the former manufacturing site in Houston referenced above had migrated under an adjacent residential area. Pursuant to applicable state regulations, the Company notified the affected homeowners. Concerns over the impact on property values of the underground water contamination and its public disclosure led to a number of claims by homeowners.  The Company has settled these claims, primarily as a result of a settlement of a class action lawsuit, and is obligated to reimburse 197 homeowners for any diminution in value of their property due to contamination concerns at the time of any sale.

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Recent testing results of monitoring wells on the southeastern border of the plume have caused the Company to notify 33 homeowners whose property is adjacent to the class area that their property may be affected. The Company is taking remedial measures to prevent these properties from being affected.

The Company believes, based on its review of the facts and law, that any potential exposure from existing agreements as well as any possible new claims that may be filed with respect to this underground water contamination will not have a material adverse effect on its financial position or results of operations. The Company’s consolidated balance sheet included a liability of approximately $13.7 million for these matters as of December 31, 2009.

The Company has been named as a defendant in a number of multi-defendant, multi-plaintiff tort lawsuits since 1995. At December 31, 2009, the Company’s consolidated balance sheet included a liability of approximately $5.1 million for such cases, including estimated legal costs. The Company believes, based on its review of the facts and law, that the potential exposure from these suits will not have a material adverse effect on its consolidated results of operations, financial condition or liquidity.

Regulatory Contingencies

In January 2007, the Company underwent a Pre-Assessment Survey as part of a Focused Assessment Audit initiated by the Regulatory Audit Division of the U.S. Customs and Border Protection, Department of Homeland Security.  The Pre-Assessment Survey of the period September 2001 through September 2007 resulted in a finding that the Company had deficiencies in its U.S. customs compliance process and had underpaid customs duties.  The Company has since paid these duties and taken corrective action with respect to the deficiencies.  The sufficiency of these corrective actions is currently undergoing a Follow-Up Compliance Improvement Plan Review which is expected to be completed by the end of the third quarter of 2010.

In July 2007, the Company was one of a number of companies to receive a letter from the Criminal Division of the U.S. Department of Justice (DOJ) requesting information on activities undertaken on their behalf by a customs clearance broker. The DOJ is inquiring into whether certain of the services provided to the Company by the customs clearance broker may have involved violations of the U.S. Foreign Corrupt Practices Act (FCPA).  In response, the Company engaged special counsel reporting to the Audit Committee of the Board of Directors to conduct an investigation into its dealings with the customs clearance broker in Nigeria and Angola to determine if any payment made to or by the customs clearance broker on the Company’s behalf constituted a violation of the FCPA. Special counsel also reviewed the extent, if any, of the Company’s knowledge and involvement in the performance of these services and activities and whether the Company fulfilled its obligations under the FCPA.  In addition, the U.S. Securities and Exchange Commission (SEC) is conducting an informal inquiry into the same matters.  The investigation by special counsel has been completed and the Company is waiting for the agencies to commence discussions regarding the ultimate disposition of this matter.  The current tolling agreement between the Company and the agencies expires on April 30, 2010.  At this stage, the Company cannot predict what the disposition will entail. The Company undertook enhanced compliance training efforts for its personnel, including foreign operations personnel dealing with customs clearance regulations and hired a Chief Compliance Officer in September 2008 to oversee and direct all legal compliance matters for the Company.

The Company completed its acquisition of NATCO in November 2009, and at that time NATCO had a pending SEC enforcement action under the FCPA.  In January 2010, without admitting or denying the underlying allegations, it settled the action and agreed to a civil penalty of $65,000, and, in a related proceeding, agreed to an order requiring it to cease and desist from future violations of the FCPA.

Tax Contingencies

The Company has legal entities in over 35 countries. As a result, the Company is subject to various tax filing requirements in these countries. The Company prepares its tax filings in a manner which it believes is consistent with such filing requirements. However, some of the tax laws and regulations which the Company is subject to are subject to interpretation and/or judgment. Although the Company believes that the tax liabilities for periods ending on or before the balance sheet date have been adequately provided for in the financial statements, to the extent that a taxing authority believes that the Company has not prepared its tax filings in accordance with the authority’s interpretation of the tax laws/regulations, the Company could be exposed to additional taxes.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The common stock of Cameron International Corporation, par value $.01 per share, is traded on the New York Stock Exchange (“NYSE”) under the symbol CAM. No dividends were paid during 2009 or 2008.

The trading activity during 2009 and 2008 was as follows:

	Price Range ($)
	High		Low		Last
2009
First Quarter	$	25.74	$	17.19	$	21.93
Second Quarter		33.07		21.01		28.30
Third Quarter		39.72		24.63		37.82
Fourth Quarter		42.49		35.37		41.80

	Price Range ($)
	High		Low		Last
2008
First Quarter	$	52.79	$	37.00	$	41.64
Second Quarter		57.47		40.80		55.35
Third Quarter		58.53		35.06		38.54
Fourth Quarter		38.54		16.15		20.50

As of February 12, 2010, the approximate number of stockholders of record of Cameron common stock was 1,114.

Information concerning securities authorized for issuance under stock-based compensation plans is included in Note 9 of the Notes to Consolidated Financial Statements, which notes are incorporated herein by reference in Part II, Item 8 hereof.

In February 2006, the Company’s Board of Directors changed the number of shares of the Company’s common stock authorized for repurchase from the 5,000,000 shares authorized in August 2004 to 10,000,000 shares in order to reflect the 2-for-1 stock split effective December 15, 2005. This authorization was subsequently increased to 20,000,000 in connection with the 2-for-1 stock split effective December 28, 2007 and eventually to 30,000,000 by a resolution adopted by the Board of Directors on February 21, 2008. Additionally, on May 22, 2006, the Company’s Board of Directors approved repurchasing shares of the Company’s common stock with the proceeds remaining from the Company’s 2.5% Convertible Debenture offering, after taking into account a planned repayment of $200,000,000 principal amount of the Company’s outstanding 2.65% senior notes due 2007. This authorization was in addition to the 30,000,000 shares described above.

15

Purchases pursuant to the 30,000,000-share Board authorization may be made by way of open market purchases, directly or indirectly, for the Company’s own account or through commercial banks or financial institutions and by the use of derivatives such as a sale or put on the Company’s common stock or by forward or economically equivalent transactions. Shares of common stock purchased and placed in treasury during the three months ended December 31, 2009 under the Board’s two authorization programs described above were as follows:

Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of all repurchase programs (a)		Maximum number of shares that may yet be purchased under all repurchase programs (b)
10/1/09 - 10/31/09		−	$	−		25,894,668		6,760,102
11/1/09 - 11/30/09		340,200	$	38.15		26,234,868		6,419,902
12/1/09 - 12/31/09		247,300	$	36.97		26,482,168		6,172,602
Total		587,500	$	37.65		26,482,168		6,172,602

(a)   All share purchases during the three months ended December 31, 2009 were done through open market transactions.

(b)  As of December 31, 2009, there were no remaining shares available for purchase under the May 22, 2006 Board authorization.

ITEM 6. SELECTED FINANCIAL DATA

The information set forth under the caption “Selected Consolidated Historical Financial Data of Cameron International Corporation” on page 81 in the 2009 Annual Report to Stockholders is incorporated herein by reference.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information set forth under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Cameron International Corporation” on pages 29 to 47 in the 2009 Annual Report to Stockholders is incorporated herein by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information for this item is set forth in the section entitled “Market Risk Information” on pages 46 to 47 in the 2009 Annual Report to Stockholders and is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following consolidated financial statements of the Company and the independent registered public accounting firm’s reports set forth on pages 48 to 80 in the 2009 Annual Report to Stockholders are incorporated herein by reference:

Management’s Report on Internal Control Over Financial Reporting.

Report of Independent Registered Public Accounting Firm.

Report of Independent Registered Public Accounting Firm.

Consolidated Results of Operations for each of the three years in the period ended December 31, 2009.

Consolidated Balance Sheets as of December 31, 2009 and 2008.

Consolidated Cash Flows for each of the three years in the period ended December 31, 2009.

Consolidated Changes in Stockholders’ Equity for each of the three years in the period ended December 31, 2009.

Notes to Consolidated Financial Statements.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

(a) The Company carried out an evaluation, under the supervision and with the participation of the Company’s Disclosure Committee and the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as of December 31, 2009.  In conducting management’s evaluation of the effectiveness of the Company’s internal controls over financial reporting, NATCO Group, Inc. and two other businesses acquired during 2009 for a total purchase price of approximately $1,011.7 million were excluded.  These operations constituted less than 1.5% of the Company’s consolidated revenues and income before income taxes and approximately 17% and 26% of total and net assets, respectively, as of and for the year ended December 31, 2009.  Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2009 to ensure that information required to be disclosed by the Company that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

(b) Management’s Report on Internal Control over Financial Reporting - The report of management of the Company regarding internal control over financial reporting is set forth in Part II, Item 8 of this Annual Report on Form 10-K under the caption “Management’s Report on Internal Control over Financial Reporting” and incorporated herein by reference.

(c) Attestation Report of Independent Registered Public Accounting Firm - The attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting is set forth in Part II, Item 8 of this Annual Report on Form 10-K under the caption “Report of Independent Registered Public Accounting Firm” and incorporated herein by reference.

(d) Changes in Internal Control over Financial Reporting – There were no changes made in the Company’s internal control over financial reporting during the fourth quarter of 2009 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting, except for the acquisition of NATCO Group, Inc. on November 18, 2009 whose financial results have been included in the consolidated financial results of the Company for the period subsequent to the acquisition.

ITEM 9B. OTHER INFORMATION

None

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information regarding Section 16(a) compliance, the Audit Committee, the Company’s Code of Business Ethics and Ethics for Directors, shareholder nominating procedures and background of the directors appearing under the captions “Section 16(a) Beneficial Ownership Reporting Compliance”, “Corporate Governance and Board of Directors Matters”, and “Security Ownership of Management” in the Company’s Proxy Statement for the 2010 Annual Meeting of Stockholders is incorporated herein by reference.

The Registrant has adopted a code of ethics that applies to all employees, including its principal executive officer, principal financial officer, principal accounting officer and its Board of Directors. A copy of the code of ethics is available on the Registrant’s Internet website at www.c-a-m.com and is available in print to any shareholder free of charge upon request. The Registrant intends to satisfy the disclosure requirements under Item 10 of Form 8-K regarding an amendment to, or a waiver from, a provision of its code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or persons performing similar functions, by posting such information on its website at the address set forth above.

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The information under the heading “Executive Officers of the Registrant” in Part I, Item 1 of this Form 10-K is incorporated by reference in this section.

ITEM 11. EXECUTIVE COMPENSATION

The information concerning "Executive Compensation" required by Item 11 shall be included in the Proxy Statement to be filed relating to our 2010 Annual Meeting of Stockholders and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information concerning "Security Ownership of Certain Beneficial Owners" and "Security Ownership of Management" required by Item 12 shall be included in our Proxy Statement to be filed relating to the 2010 Annual Meeting of Stockholders and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information concerning the Company's "Policy on Related Person Transactions" and "Director Independence" required by Item 13 shall be included in our Proxy Statement to be filed relating to the 2010 Annual Meeting of Stockholders and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information concerning "Principal Accounting Firm Fees" required by Item 14 shall be included in the Proxy Statement to be filed relating to our 2010 Annual Meeting of Stockholders and is incorporated herein by reference.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)  The following documents are filed as part of this Report:

(1)  Financial Statements:

All financial statements of the Registrant as set forth under Part II, Item 8 of this Annual Report on Form 10-K.

(2)  Financial Statement Schedules:

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of

Cameron International Corporation

We have audited the consolidated financial statements of Cameron International Corporation (the Company) as of December 31, 2009 and 2008, and for each of the three years in the period ended December 31, 2009, and have issued our report thereon dated February 26, 2010 (incorporated by reference in this Form 10-K).  Our audits also included the financial statement schedule included in Item 15(a)(2) of this Form 10-K.  This schedule is the responsibility of the Company’s management.  Our responsibility is to express an opinion based on our audits.

In our opinion, the financial statement schedule referred to above, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ Ernst & Young LLP

Houston, Texas

February 26, 2010

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Schedule II - Valuation and Qualifying Accounts

(dollars in thousands)

			Additions
	Balance at beginning of period		Charged to costs and expenses		Charged to other accounts			Deductions (a)			Translation			Balance at end of period
YEAR ENDED DECEMBER 31, 2009:
Allowance for doubtful accounts	$	9,648	$	4,618	$	4,812		$	(3,818	)	$	559		$	15,819
Allowance for obsolete and excess inventory	$	49,640	$	15,204	$	(303	)	$	(7,306	)	$	1,718		$	58,953
YEAR ENDED DECEMBER 31, 2008:
Allowance for doubtful accounts	$	8,244	$	5,200	$	(843	)	$	(2,489	)	$	(464	)	$	9,648
Allowance for obsolete and excess inventory	$	50,055	$	7,874	$	3,762		$	(7,474	)	$	(4,577	)	$	49,640
YEAR ENDED DECEMBER 31, 2007:
Allowance for doubtful accounts	$	7,303	$	3,180	$	(1,562	)	$	(889	)	$	212		$	8,244
Allowance for obsolete and excess inventory	$	44,223	$	13,361	$	3,512		$	(13,396	)	$	2,355		$	50,055

___________

(a)   Write-offs of uncollectible receivables, deductions for collections of previously reserved receivables and write-offs of obsolete inventory.

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	(3) Exhibits:
3.1	Amended and Restated Certificate of Incorporation of Cameron International Corporation, dated June 30, 1995, filed as Exhibit 4.2 to the Registration Statement on Form S-8 filed on July 25, 2005 (Commission File No. 33-94948), and incorporated herein by reference.
3.2	Certificate of Amendment to the Restated Certificate of Incorporation of Cameron International Corporation, filed as Exhibit 4.3 to the Registration Statement on Form S-8 filed on May 19, 1998 (Commission File No. 333-57995), and incorporated herein by reference.
3.3	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Cameron International Corporation, dated May 5, 2006 (incorporated by reference, filed as Exhibit 3.1 to the Form 8-K filed on May 9, 2006).
3.4	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Cameron International Corporation, dated December 11, 2007, filed as Exhibit 3.1 to the Current Report on Form 8-K filed December 10, 2007, and incorporated herein by reference.
3.5*	Third Amended and Restated Bylaws of the Company.
3.6	First Amendment to Third Amended and Restated Bylaws of the Company, filed as Exhibit 3.1 to the Current Report on Form 8-K filed February 19, 2010, and incorporated herein by reference.
3.7	Certificate of Elimination with Respect to Series A Junior Participating Preferred Stock, filed as Exhibit 3.1 to the Current Report on Form 8-K filed December 18, 2007, and incorporated herein by reference.
3.8*	Certificate of Elimination with Respect to Series B Junior Participating Preferred Stock of Cameron International Corporation pursuant to Section 151(g).
4.1	Registration Statement on Form S-3 filed with the Securities and Exchange Commission on May 4, 1998 (Registration Statement No. 333-51705), and incorporated herein by reference.
4.2	Form of Indenture for senior debt securities filed as Exhibit 4.1 to the Registration Statement on Form S-3 filed with the Securities and Exchange Commission on June 23, 2008 (File No. 333-151838) and incorporated herein by reference.
10.1	The Company's Broad Based 2000 Incentive Plan, filed as Exhibit 4.6 to the Registration Statement on Form S-8 of the Company (Commission File No. 333-46638), and incorporated herein by reference.
10.2	First Amendment to the Company's Broad Based 2000 Incentive Plan, filed as Exhibit 4.7 to the Registration Statement on Form S-8 filed with the SEC on May 29, 2001 (File No. 333-61820), and incorporated herein by reference.
10.3	Second Amendment to the Company's Broad Based 2000 Incentive Plan, filed as Exhibit 4.8 to the Registration Statement on Form S-8 filed with the SEC on February 4, 2002 (File No. 333-82082), and incorporated herein by reference.
10.4	Third Amendment to the Company's Broad Based 2000 Incentive Plan, filed as Exhibit 4.9 to the Registration Statement on Form S-8 filed with the SEC on February 4, 2002 (File No. 333-82082), and incorporated herein by reference.

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10.5	Fourth Amendment to the Company's Broad Based 2000 Incentive Plan, filed as Exhibit 10.6 to the Annual Report on Form 10-K for 2002 of the Company, and incorporated herein by reference.
10.6*	Cameron International Corporation Retirement Savings Plan, as Amended and Restated, effective January 1, 2008.
10.7*	First through Third Amendments to the Cameron International Corporation Retirement Savings Plan, as Amended and Restated effective January 1, 2008.
10.8	Merger of the Petreco International, Inc. 401(k) Profit Sharing Plan with and into the Cameron International Corporation Retirement Savings Plan, filed as Exhibit 10.10 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
10.9	Merger of the Company's Savings-Investment Plan for Hourly Employees with and into the Cameron International Corporation Retirement Savings Plan, filed as Exhibit 10.11 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
10.10	Amendment to the NuFlo Technologies, Inc. 401(K) Plan and Merger of the NuFlo Technologies, Inc. 401(K) Plan with and into the Cameron International Corporation Retirement Savings Plan, filed as Exhibit 10.11 to the Annual Report on Form 10-K for 2005 of the Company, and incorporated herein by reference.
10.11	The Company's Amended and Restated 2005 Equity Incentive Plan, filed as an Appendix to the Company's Proxy Statement for the Annual Meeting of Stockholders held on May 5, 2006, and incorporated herein by reference.
10.12	Third Amendment to the Company's 2005 Equity Incentive Plan, filed as an Appendix to the Company’s Proxy Statement for the Annual Meeting of Stockholders held on May 5, 2006, and incorporated herein by reference.
10.13	Fourth Amendment to the Company's 2005 Equity Incentive Plan filed as Exhibit 10.49 to the Annual Report on Form 10-K for 2006 of the Company, and incorporated herein by reference.
10.14	Fifth Amendment to the Company’s 2005 Equity Incentive Plan filed as Exhibit 10.15 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.15	Sixth Amendment to the Company’s 2005 Equity Incentive Plan filed as Exhibit 10.16 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.16*	Seventh Amendment to the Company’s 2005 Equity Incentive Plan.
10.17*	Eighth Amendment to the Company’s 2005 Equity Incentive Plan.
10.18	Form of Change of Control Agreement, effective December 18, 2008, by and between the Company and R. Scott Amann, John D. Carne, John Bartos, Christopher A. Krummel, William C. Lemmer, Joseph H. Mongrain, Jack B. Moore, Robert J. Rajeski, Charles M. Sledge, Stuart Taylor, Stephen Tomlinson, and James E. Wright filed as Exhibit 10.17 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.19*	Form of Executive Severance Program of the Company, effective July 1, 2000, and reissued January 12, 2007 and November 5, 2009.

21

10.20	Credit Agreement, dated as of April 14, 2008, among the Company and certain of its subsidiaries and the banks named therein and JPMorgan Chase Bank, N.A., as agent, filed as Exhibit 10.1 to the Current Report on Form 8-K dated April 14, 2008, of the Company, and incorporated herein by reference.
10.21*	Individual Account Retirement Plan for Bargaining Unit Employees at the Company's Buffalo, New York Plant, as Amended and Restated effective January 1, 2008.
10.22*	First and Third Amendments to the Individual Account Retirement Plan for Bargaining Unit Employees at the Company's Buffalo, New York Plant, as Amended and Restated effective January 1, 2008.
10.23	Form of Indemnification Agreement, effective February 20, 2003, by and between the Company and Nathan M. Avery, C. Baker Cunningham, Sheldon R. Erikson, Michael E. Patrick, David Ross and Bruce W. Wilkinson, filed as Exhibit 10.32 to the Annual Report on Form 10-K/A for 2002 of the Company, and incorporated herein by reference.
10.24	Form of Indemnification Agreement, effective February 20, 2003, by and between the Company and Mr. Jeff Altamari, Mr. John Carne, Mr. Hal Goldie, Mr. William C. Lemmer, Mr. Jack B. Moore, Mr. Robert Rajeski, Mr. Charles M. Sledge, and Mr. Rick Steans, filed as Exhibit 10.36 to the Annual Report on Form 10-K for 2003 of the Company, and incorporated herein by reference.
10.25	Form of Stock Option Agreement for grants dated November 22, 2004, under the Company's Long-Term Incentive Plan, filed as an exhibit to a Form 8-K filed on January 18, 2005, and incorporated herein by reference.
10.26	Form of Indemnification Agreement, effective February 7, 2005, by and between the Company and Peter J. Fluor, filed as Exhibit 10.23 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.27	Form of Indemnification Agreement, effective July 1, 2008, by and between the Company and Douglas L. Foshee, filed as Exhibit 10.24 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.28*	Form of Indemnification Agreement, effective June 12, 2009, by and between the Company and Jon Erik Reinhardsen.
10.29	Form of Stock Option Agreement for stock options granted on November 10, 2005, filed as Exhibit 10.47 to the Annual Report on Form 10-K for 2005 of the Company, and incorporated herein by reference
10.30*	Form of Stock Option Agreement for stock options granted on after  April 1, 2009.
10.31	Form of Restricted Stock Agreement for Restricted Stock Units granted on or after November 13, 2008 filed as Exhibit 10.31 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.32*	Form of Restricted Stock Agreement for Restricted Stock Units granted on or after April 1, 2009.
10.33*	Form of Restricted Stock Agreement for Restricted Stock Units granted on or after November 19, 2009.

22

10.34	The Company's Deferred Compensation Plan for Non-Employee Directors, filed as Exhibit 10.41 to the Annual Report on Form 10-K for 2005 of the Company, and incorporated herein by reference.
10.35	The Company's Long-Term Incentive Plan, as Amended and Restated as of November 2002, incorporated by reference to the Company's Proxy Statement for the Annual Meeting of Stockholders held on May 8, 2003.
10.36	Sixth Amendment to the Company's Long-Term Incentive Plan, as Amended and Restated as of November 2002, incorporated by reference to the Company's Proxy Statement for the Annual meeting of Stockholders held on May 8, 2003.
10.37	Seventh Amendment to the Company's Long-Term Incentive Plan, filed as Exhibit 10.44 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
10.38	The Company's Second Amended and Restated 1995 Stock Option Plan for Non-Employee Directors (Registration Statement on Form S-8 No. 333-79787), incorporated herein by reference.
10.39	First Amendment to the Company's Second Amended and Restated 1995 Stock Option Plan for Non-Employee Directors, filed as Exhibit 10.43 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
10.4	The Company’s Non Qualified Deferred Compensation Plan, effective January 1, 2008, (Exhibit 4.2 to Registration Statement on Form S-8 No. 333-156712), incorporated herein by reference
10.41	Amended and Restated Management Incentive Compensation Plan of the Company, incorporated herein by reference to the Company’s 2005 Proxy Statement for the Annual Meeting of Stockholders held on May 5, 2005.
10.42	Change in Control Policy of the Company, approved February 19, 1996, filed as Exhibit 10.18 to the Annual Report on Form 10-K for 1996 of the Company, and incorporated herein by reference.
13.1*	Portions of the 2009 Annual Report to Stockholders are included as an exhibit to this report.
14.1	Code of Business Conduct and Ethics for Directors filed as Exhibit 14.1 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
14.2	Amendment to the Business Conduct and Ethics for Directors, filed as Exhibit ­­14.1 to the Current Report on Form 8-K filed July 14, 2009, and incorporated herein by reference.
14.3	Code of Ethics for Management Personnel, filed as Exhibit 14.2 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
14.4	Code of Conduct, filed as Exhibit 14.1 to the Current Report on Form 8-K filed August 19, 2009, and incorporated herein by reference.
21.1*	Subsidiaries of registrant.
23.1*	Consent of Independent Registered Public Accounting Firm.
31.1*	Certification.
31.2*	Certification.
32.1*	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRLTaxonomy Extension Schema Document
101.CAL*	XBRLTaxonomy Extension Calculation Linkbase Document
101.DEF*	XBRLTaxonomy Extension Definition Linkbase Document
101.LAB*	XBRLTaxonomy Extension Label Linkbase Document
101.PRE*	XBRLTaxonomy Extension Presentation Linkbase Document

____________

* Filed herewith

23

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CAMERON INTERNATIONAL CORPORATION
Registrant
By:	/s/ Christopher A. Krummel
	(Christopher A. Krummel)
	Vice President Controller and Chief Accounting Officer
	(principal accounting officer)
Date:   February 26, 2010

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on this 26th day of February, 2010, by the following persons on behalf of the Registrant and in the capacities indicated.

Signature	Title
/s/ C. Baker Cunningham
(C. Baker Cunningham)	Director
/s/ Sheldon R. Erikson
(Sheldon R. Erikson)	Chairman of the Board
/s/ Peter J. Fluor
(Peter J. Fluor)	Director
/s/ Douglas L. Foshee
(Douglas L. Foshee)	Director
/s/ Jack B. Moore
(Jack B. Moore)	President and Chief Executive Officer
	(principal executive officer)
/s/ Michael E. Patrick
(Michael E. Patrick)	Director
/s/ Jon Erik Reinhardsen
(Jon Erik Reinhardsen)	Director
/s/ David Ross
(David Ross)	Director
/s/ Bruce W. Wilkinson
(Bruce W. Wilkinson)	Director
/s/ Charles M. Sledge	Senior Vice President and Chief Financial Officer
(Charles M. Sledge)	( principal financial officer)

24

Exhibit Number	Exhibit Index Description	Sequential Page Number
3.1	Amended and Restated Certificate of Incorporation of Cameron International Corporation, dated June 30, 1995, filed as Exhibit 4.2 to the Registration Statement on Form S-8 filed on July 25, 2005 (Commission File No. 33-94948), and incorporated herein by reference.
3.2	Certificate of Amendment to the Restated Certificate of Incorporation of Cameron International Corporation, filed as Exhibit 4.3 to the Registration Statement on Form S-8 filed on May 19, 1998 (Commission File No. 333-57995), and incorporated herein by reference.
3.3	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Cameron International Corporation, dated May 5, 2006 (incorporated by reference, filed as Exhibit 3.1 to the Form 8-K filed on May 9, 2006).
3.4	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Cameron International Corporation, dated December 11, 2007, filed as Exhibit 3.1 to the Current Report on Form 8-K filed December 10, 2007, and incorporated herein by reference.
3.5*	Third Amended and Restated Bylaws of the Company.
3.6	First Amendment to Third Amended and Restated Bylaws of the Company, filed as Exhibit 3.1 to the Current Report on Form 8-K filed February 19, 2010, and incorporated herein by reference.
3.7	Certificate of Elimination with Respect to Series A Junior Participating Preferred Stock, filed as Exhibit 3.1 to the Current Report on Form 8-K filed December 18, 2007, and incorporated herein by reference.
3.8*	Certificate of Elimination with Respect to Series B Junior Participating Preferred Stock of Cameron International Corporation pursuant to Section 151(g).
4.1	Registration Statement on Form S-3 filed with the Securities and Exchange Commission on May 4, 1998 (Registration Statement No. 333-51705), and incorporated herein by reference.
4.2	Form of Indenture for senior debt securities filed as Exhibit 4.1 to the Registration Statement on Form S-3 filed with the Securities and Exchange Commission on June 23, 2008 (File No. 333-151838) and incorporated herein by reference.
10.1	The Company's Broad Based 2000 Incentive Plan, filed as Exhibit 4.6 to the Registration Statement on Form S-8 of the Company (Commission File No. 333-46638), and incorporated herein by reference.
10.2	First Amendment to the Company's Broad Based 2000 Incentive Plan, filed as Exhibit 4.7 to the Registration Statement on Form S-8 filed with the SEC on May 29, 2001 (File No. 333-61820), and incorporated herein by reference.
10.3	Second Amendment to the Company's Broad Based 2000 Incentive Plan, filed as Exhibit 4.8 to the Registration Statement on Form S-8 filed with the SEC on February 4, 2002 (File No. 333-82082), and incorporated herein by reference.
10.4	Third Amendment to the Company's Broad Based 2000 Incentive Plan, filed as Exhibit 4.9 to the Registration Statement on Form S-8 filed with the SEC on February 4, 2002 (File No. 333-82082), and incorporated herein by reference.

Exhibit Number	Exhibit Index Description	Sequential Page Number
10.5	Fourth Amendment to the Company's Broad Based 2000 Incentive Plan, filed as Exhibit 10.6 to the Annual Report on Form 10-K for 2002 of the Company, and incorporated herein by reference.
10.6*	Cameron International Corporation Retirement Savings Plan, as Amended and Restated, effective January 1, 2008.
10.7*	First through Third Amendments to the Cameron International Corporation Retirement Savings Plan, as Amended and Restated effective January 1, 2008.
10.8	Merger of the Petreco International, Inc. 401(k) Profit Sharing Plan with and into the Cameron International Corporation Retirement Savings Plan, filed as Exhibit 10.10 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
10.9	Merger of the Company's Savings-Investment Plan for Hourly Employees with and into the Cameron International Corporation Retirement Savings Plan, filed as Exhibit 10.11 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
10.10	Amendment to the NuFlo Technologies, Inc. 401(K) Plan and Merger of the NuFlo Technologies, Inc. 401(K) Plan with and into the Cameron International Corporation Retirement Savings Plan, filed as Exhibit 10.11 to the Annual Report on Form 10-K for 2005 of the Company, and incorporated herein by reference.
10.11	The Company's Amended and Restated 2005 Equity Incentive Plan, filed as an Appendix to the Company's Proxy Statement for the Annual Meeting of Stockholders held on May 5, 2006, and incorporated herein by reference.
10.12	Third Amendment to the Company's 2005 Equity Incentive Plan, filed as an Appendix to the Company’s Proxy Statement for the Annual Meeting of Stockholders held on May 5, 2006, and incorporated herein by reference.
10.13	Fourth Amendment to the Company's 2005 Equity Incentive Plan filed as Exhibit 10.49 to the Annual Report on Form 10-K for 2006 of the Company, and incorporated herein by reference.
10.14	Fifth Amendment to the Company’s 2005 Equity Incentive Plan filed as Exhibit 10.15 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.15	Sixth Amendment to the Company’s 2005 Equity Incentive Plan filed as Exhibit 10.16 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.16*	Seventh Amendment to the Company’s 2005 Equity Incentive Plan.
10.17*	Eighth Amendment to the Company’s 2005 Equity Incentive Plan.
10.18	Form of Change of Control Agreement, effective December 18, 2008, by and between the Company and R. Scott Amann, John D. Carne, John Bartos, Christopher A. Krummel, William C. Lemmer, Joseph H. Mongrain, Jack B. Moore, Robert J. Rajeski, Charles M. Sledge, Stuart Taylor, Stephen Tomlinson, and James E. Wright filed as Exhibit 10.17 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.19*	Form of Executive Severance Program of the Company, effective July 1, 2000, and reissued January 12, 2007 and November 5, 2009.

Exhibit Number	Exhibit Index Description	Sequential Page Number
10.20	Credit Agreement, dated as of April 14, 2008, among the Company and certain of its subsidiaries and the banks named therein and JPMorgan Chase Bank, N.A., as agent, filed as Exhibit 10.1 to the Current Report on Form 8-K dated April 14, 2008, of the Company, and incorporated herein by reference.
10.21*	Individual Account Retirement Plan for Bargaining Unit Employees at the Company's Buffalo, New York Plant, as Amended and Restated effective January 1, 2008.
10.22*	First and Third Amendments to the Individual Account Retirement Plan for Bargaining Unit Employees at the Company's Buffalo, New York Plant, as Amended and Restated effective January 1, 2008.
10.23	Form of Indemnification Agreement, effective February 20, 2003, by and between the Company and Nathan M. Avery, C. Baker Cunningham, Sheldon R. Erikson, Michael E. Patrick, David Ross and Bruce W. Wilkinson, filed as Exhibit 10.32 to the Annual Report on Form 10-K/A for 2002 of the Company, and incorporated herein by reference.
10.24	Form of Indemnification Agreement, effective February 20, 2003, by and between the Company and Mr. Jeff Altamari, Mr. John Carne, Mr. Hal Goldie, Mr. William C. Lemmer, Mr. Jack B. Moore, Mr. Robert Rajeski, Mr. Charles M. Sledge, and Mr. Rick Steans, filed as Exhibit 10.36 to the Annual Report on Form 10-K for 2003 of the Company, and incorporated herein by reference.
10.25	Form of Stock Option Agreement for grants dated November 22, 2004, under the Company's Long-Term Incentive Plan, filed as an exhibit to a Form 8-K filed on January 18, 2005, and incorporated herein by reference.
10.26	Form of Indemnification Agreement, effective February 7, 2005, by and between the Company and Peter J. Fluor, filed as Exhibit 10.23 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.27	Form of Indemnification Agreement, effective July 1, 2008, by and between the Company and Douglas L. Foshee, filed as Exhibit 10.24 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.28*	Form of Indemnification Agreement, effective June 12, 2009, by and between the Company and Jon Erik Reinhardsen.
10.29	Form of Stock Option Agreement for stock options granted on November 10, 2005, filed as Exhibit 10.47 to the Annual Report on Form 10-K for 2005 of the Company, and incorporated herein by reference
10.30*	Form of Stock Option Agreement for stock options granted on after  April 1, 2009.
10.31	Form of Restricted Stock Agreement for Restricted Stock Units granted on or after November 13, 2008 filed as Exhibit 10.31 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
10.32*	Form of Restricted Stock Agreement for Restricted Stock Units granted on or after April 1, 2009.
10.33*	Form of Restricted Stock Agreement for Restricted Stock Units granted on or after November 19, 2009.

Exhibit Number	Exhibit Index Description	Sequential Page Number
10.34	The Company's Deferred Compensation Plan for Non-Employee Directors, filed as Exhibit 10.41 to the Annual Report on Form 10-K for 2005 of the Company, and incorporated herein by reference.
10.35	The Company's Long-Term Incentive Plan, as Amended and Restated as of November 2002, incorporated by reference to the Company's Proxy Statement for the Annual Meeting of Stockholders held on May 8, 2003.
10.36	Sixth Amendment to the Company's Long-Term Incentive Plan, as Amended and Restated as of November 2002, incorporated by reference to the Company's Proxy Statement for the Annual meeting of Stockholders held on May 8, 2003.
10.37	Seventh Amendment to the Company's Long-Term Incentive Plan, filed as Exhibit 10.44 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
10.38	The Company's Second Amended and Restated 1995 Stock Option Plan for Non-Employee Directors (Registration Statement on Form S-8 No. 333-79787), incorporated herein by reference.
10.39	First Amendment to the Company's Second Amended and Restated 1995 Stock Option Plan for Non-Employee Directors, filed as Exhibit 10.43 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
10.40	The Company’s Non Qualified Deferred Compensation Plan, effective January 1, 2008, (Exhibit 4.2 to Registration Statement on Form S-8 No. 333-156712), incorporated herein by reference
10.41	Amended and Restated Management Incentive Compensation Plan of the Company, incorporated herein by reference to the Company’s 2005 Proxy Statement for the Annual Meeting of Stockholders held on May 5, 2005.
10.42	Change in Control Policy of the Company, approved February 19, 1996, filed as Exhibit 10.18 to the Annual Report on Form 10-K for 1996 of the Company, and incorporated herein by reference.
13.1*	Portions of the 2009 Annual Report to Stockholders are included as an exhibit to this report.
14.1	Code of Business Conduct and Ethics for Directors filed as Exhibit 14.1 to the Annual Report on Form 10-K for 2008 of the Company, and incorporated herein by reference.
14.2	Amendment to the Business Conduct and Ethics for Directors, filed as Exhibit ­­14.1 to the Current Report on Form 8-K filed July 14, 2009, and incorporated herein by reference.
14.3	Code of Ethics for Management Personnel, filed as Exhibit 14.2 to the Annual Report on Form 10-K for 2004 of the Company, and incorporated herein by reference.
14.4	Code of Conduct, filed as Exhibit 14.1 to the Current Report on Form 8-K filed August 19, 2009, and incorporated herein by reference.
21.1*	Subsidiaries of registrant.
23.1*	Consent of Independent Registered Public Accounting Firm.
31.1*	Certification.
31.2*	Certification.
32.1*	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRLTaxonomy Extension Schema Document
101.CAL*	XBRLTaxonomy Extension Calculation Linkbase Document
101.DEF*	XBRLTaxonomy Extension Definition Linkbase Document
101.LAB*	XBRLTaxonomy Extension Label Linkbase Document
101.PRE*	XBRLTaxonomy Extension Presentation Linkbase Document

_______

* Filed herewith

EX-3.5

Exhibit 3.5

Third

Amended and Restated

Bylaws

of

CAMERON INTERNATIONAL CORPORATION

 (hereinafter called the "Corporation")

ARTICLE I

OFFICES

Section 1.  Registered Office.  The registered office of the Corporation shall be in the City of Wilmington, County of New Castle, State of Delaware or at such other place within the State of Delaware as the Board of Directors of the Corporation (the “Board of Directors”) may at any time and from time to time designate.

Section 2.  Other Offices.  The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may at any time and from time to time determine.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1.  Place of Meetings.  Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2. Annual Meetings. The annual meetings of stockholders shall be held on such date and at such time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting, at which meetings the stockholders shall elect by a plurality vote a Board of Directors and transact such other business as may properly be brought before the meeting.  Except as otherwise required by law, written notice of the annual meeting stating the place, date and hour of the meeting shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting at such address as shall appear on the books of the Corporation.

Section 3.  Special Meetings.  Unless otherwise prescribed by law or by the Certificate of Incorporation of the Corporation (the "Certificate of Incorporation"), spe­cial meetings of stockholders, for any purpose or purposes, may be called by (i) the Chairman, (ii) the President, or (iii) a majority of the entire Board of Directors.  Special meetings of stockholders may not be called by any other person or persons.  Such request shall state the purpose or purposes of the proposed meeting, and the business transacted at a special meeting of stockholders shall be confined to the purpose or purposes specified in the notice therefor.  Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting at such address as shall appear on the books of the Corporation.

Section 4.  Quorum.  Except as otherwise provided by law or by the Certificate of Incorporation, the holders of a majority of the capital stock issued and outstanding and entitled to vote thereat, present in person or repre­sented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.  At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting.

Section 5. Voting.  Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, any question brought before any meeting of stockholders shall be decided by the vote of the holders of a majority of the stock represented and entitled to vote thereat. Except as otherwise provided pursuant to the Certificate of Incorporation as to any series or class of Preferred Stock, each stockholder represented at a meeting of stockholders shall be entitled to cast one vote for each share of the capital stock entitled to vote thereat held by such stockholder.  Such votes may be cast in person or by proxy, but no proxy shall be voted on or after three years from its date unless such proxy provides for a longer period. The Board of Directors, in its sole discretion, or the officer of the Corporation presiding at a meeting of stock­holders, in his discretion, may require that any votes cast at such meeting shall be cast by written ballot; provided, that, notwithstanding the foregoing, elections of directors at an annual or special meeting of stockholders shall be written ballot.

Section 6.  No Written Consent.  Except as otherwise provided by the Certificate of Incorporation, any action required or permitted to be taken at any annual or special meeting of stockholders may be taken only upon the vote of the stockholders at an annual or special meeting duly noticed and called as provided in these Bylaws, and may not be taken by written consent of stockholders pursuant to the General Corporation Law of the State of Delaware.

Section 7.  List of Stockholders Entitled to Vote.  The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder of the Corporation who is present.

Section 8.  Stock Ledger.  The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 7 of this Article II or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.

Section 9.  Advance Notice for Business at Annual Meeting.  No business may be transacted at an annual meet­ing of stockholders, other than business that is either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the annual meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (c) otherwise properly brought before the annual meeting by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 9 and on the record date for the determination of stockhold­ers entitled to vote at such annual meeting and (ii) who complies with the notice procedures set forth in this Section 9.

In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation.

To be timely, a stockholder's notice to the Secretary must be delivered to or mailed and received at the principal executive offices of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is called for a date that is not within thirty (30) days before or after such anniversa­ry date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which notice of the date of the annual meeting was mailed to stockholders or public disclosure of the date of the annual meeting was made, whichever first occurs.

To be in proper written form, a stockholder's notice to the Secretary must set forth as to each matter such stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and record address of such stockholder, (iii) a description of the full economic interest of such stockholder in the Corporation which would include, but is not limited to, the class or series and number of shares of capital stock of the Corporation which are owned beneficially and of record by such stockholder, and whether such interest is subject to or the result of any short position, synthetic swap, or forward shares, (iv)  an undertaking to provide an update on the information regarding economic interest required by the preceding part as of 10 days prior to the meeting and no later than 7 days prior to the meeting, (v) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names)  in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business, and (vi) an acknowledgment that such stockholder must appear in person at the annual meeting in order to bring such business before the meeting.

No business shall be conducted at the annual meeting of stockholders except business brought before the annual meeting in accordance with the procedures set forth in this Section 9; provided, however, that, once business has been properly brought before the annual meeting in accordance with such procedures, nothing in this Section 9 shall be deemed to preclude discussion by any stockholder of any such business.  If the Chairman of an annual meeting determines that business was not properly brought before the annual meeting in accordance with the foregoing procedures, the Chairman shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted.

ARTICLE III

DIRECTORS

Section 1.  Number and Election of Directors. The Board of Directors shall consist of not less than five nor more than fifteen members, the exact number of direc­tors to be determined from time to time by resolution adopted by a majority of the entire Board of Directors. The directors shall be divided into three classes, desig­nated Class I, Class II and Class III.  Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors.  The term of the initial Class I directors shall terminate on the date of the 1996 annual meeting of stockholders; the term of the initial Class II directors shall terminate on the date of the 1997 annual meeting of stockholders; and the term of the initial Class III direc­tors shall terminate on the date of the 1998 annual meeting of the stockholders.  At each annual meeting of stockhold­ers beginning in 1996, successors to the class of directors whose term expires at that annual meeting shall be elected for a three-year term.  If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any addi­tional directors of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of directors shorten the term of any incumbent director.  A director shall hold office until the annual meeting for the year in which his term expires and until his successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office.  Any vacancy on the Board of Directors, however resulting, may be filled by a majority of the directors then in office, even if less than a quorum, or by a sole remaining director.  Any director elected to fill a vacancy shall hold office for a term that shall coincide with the term of the class to which such director shall have been elected.  Any director may resign at any time upon notice to the Corporation.  Directors need not be stockholders.

Section 2.  Advance Notice of Director Nomina­tions.  Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided in the Certificate of Incorporation of the Corporation with respect to the right of holders of Preferred Stock of the Corporation to nominate and elect a specified number of directors in certain circumstances. Nominations of persons for election to the Board of Directors may be made at any annual meeting of stockholders (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (b) by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2 and on the record date for the determina­tion of stockholders entitled to vote at such annual meet­ing and (ii) who complies with the notice procedures set forth in this Section 2.

In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stock­holder must have given timely notice thereof in proper written form to the Secretary of the Corporation.

To be timely, a stockholder's notice to the Secretary must be delivered to or mailed and received at the principal executive offices of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, however,  that in the event that the annual meeting is called for a date that is not within thirty (30) days before or after such anniversa­ry date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which notice of the date of the annual meeting was mailed to stockholders or public disclosure of the date of the annual meeting was made, whichever first occurs.

To be in proper written form, a stockholder's notice to the Secretary must set forth  (a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of  shares  of  capital  stock of the Corporation which are owned beneficially and of record by the person and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connec­tion with solicitations of proxies for election of direc­tors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations promulgated thereunder; and (b) as to the stockholder giving the notice (i) the name and record address of such stockholder, (ii) a description of the full economic interest of such stockholder in the Corporation which would include, but is not limited to, the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such stockholder, and whether such interest is subject to or the result of any short position, synthetic swap, or forward shares, (iii)  an undertaking to provide an update on the information regarding economic interest required by the preceding part as of 10 days prior to the meeting and no later than 7 days prior to the meeting, (iv) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (v)  an acknowledgement that such stockholder must appear in  person at the annual meeting in order to to nominate the persons named in its notice and (v) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicita­tions of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regula­tions promulgated thereunder.  Such notice must be accom­panied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.

No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 2.  If the Chairman of the annual meeting determines that a nomination was not made in accordance with the foregoing procedures, the Chairman shall declare to the meeting that the nomina­tion was defective and such defective nomination shall be disregarded.

Section 3.  Duties and Powers.  The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders.

Section 4. Meetings.  The Board of Directors may hold meetings, both regular and special, either within or without the State of Delaware.  Regular meetings of the Board of Directors may be held without notice at such time and at such place as may from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the Chairman, if there be one, the President, or any director.  Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than forty-eight (48) hours before the date of the meeting,  by telephone, facsimile transmission or telegram on twenty-four  (24) hours' notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appro­priate in the circumstances.

Section 5.  Quorum.  Except as may be otherwise specifically provided by law, the Certificate of Incorpo­ration or these Bylaws, at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors.  If a quorum shall not be present at any meeting of  the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 6.  Actions of Board Unless otherwise provided by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.

Section 7.  Meetings by Means of Conference Telephone.  Unless otherwise provided by the Certificate of Incorporation or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors or such committee by means  of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 7 shall constitute presence in person at such meeting.

Section 8.  Committees.  The Board of Directors may, by resolution passed by a majority of the entire Board of Directors, designate one or more committees, each committee to consist of one or more of the directors of the Corporation.  Any committee, to the extent allowed by law and provided in the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation.  Each committee shall keep regular minutes and report to the Board of Directors when required.

Section 9.  Compensation.  The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director.  No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compen­sation for attending committee meetings.

Section 10.  Interested Directors.  No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or trans­action, or solely because his or their votes are counted for such purpose if (i) the material facts as to his or their relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or trans­action by the affirmative vote of  a majority of  the disinterested directors, even though the disinterested directors be less than a quorum; or (ii) the material facts as to his or their relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (iii) the contract or transaction is fair as to the Corporation as of the time it is autho­rized, approved or ratified, by the Board of Directors, a committee thereof or the stockholders.  Common or inter­ested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

Section 11.   Director Emeritus and Advisory Directors.  The Chairman of the Board of Directors may appoint one or more individuals to serve as Director Emeritus or as advisory directors to the Corporation for a term of one year or less, provided that there shall be no more than one person serving as Director Emeritus at any one time.  Any Director Emeritus or Advisory Director may be reappointed annually.  A Director Emeritus or Advisory Director appointed by the Chairman shall be paid the consideration paid to Directors unless otherwise agreed to between the Chairman and any such Director Emeritus or Advisory Director.  The Director Emeritus and Advisory Directors shall be invited to attend meetings of the Board of Directors, but shall not serve on any committee nor shall have the ability to vote on any action taken by the Board of Directors.  The Director Emeritus and Advisory Directors shall attend for purposes of advising and counseling the members of the Board of Directors on matters that come before the Board of Directors.

ARTICLE IV

OFFICERS

Section 1.  General.  The officers of the Corpo­ration shall be chosen by the Board of Directors and shall be a Chairman of the Board of Directors, a Chief Executive Officer, a President, a Secretary and a Treasurer.  The Board of Directors, in its discretion, may also choose one or more Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers.  Any number of offices may be held by the same person, unless otherwise prohibited by law, the Certificate of Incorporation or these Bylaws. The officers of the Corporation need not be stockholders of the Corporation.

Section 2.  Election.  The Board of Directors at its first meeting held after each Annual Meeting of Stockholders shall elect the officers of the Corporation who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and all officers of the Corporation shall hold office until their successors are chosen and qualified, or until their earlier resignation or removal. Any officer elected by the Board of Directors may be removed at any time by the affirmative vote of a majority of the entire Board of Directors.  Any vacancy occurring in any office of the Corporation shall be filled by a majority of the entire Board of Directors.  The salaries of all officers of the Corporation shall be fixed by the Board of Directors.

Section 3.  Voting Securities Owned by the Corporation.  Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the President or any Vice President,  the Treasurer or the Secretary and any such officer may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present.  The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.

Section 4.  Chairman of the Board of Directors. The Chairman of the Board of Directors shall preside at all meetings of the Board of Directors and shall be chairman of all meetings of stockholders, and shall do and perform such other duties and may exercise such other powers as from time to time may be assigned to him by these Bylaws or by the Board of Directors.  During the absence or disability of the President, the Chairman of the Board of Directors shall exercise all the powers and discharge all the duties of the President.

Section 5.  Chief Executive Officer.  The Chief Executive Officer of the Corporation, subject to the approval or direction or authorization of the Board of Directors, shall have general executive charge of the business and property of the Corporation, sign and execute, or delegate to the President or any Vice President the signing and execution of, all authorized contracts, certificates and other instruments of the Corporation, and do and perform such additional duties as shall be ordered by the Board of Directors.  Either the Chairman of the Board or the President of the Corporation shall be chosen Chief Executive Officer by the Board of Directors.

Section 6.  President.  The President shall, subject to the control of the Board of Directors, have general supervision of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect.  In the absence or disability of the Chairman of the Board of Directors, the President shall perform the duties of the Chairman of the Board of Directors and, when so acting, shall have all the powers of and be subject to all the restrictions of the Chairman of the Board of Directors.  The President shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him by these Bylaws or by the Board of Directors.

Section 7.  Vice Presidents.  At the request of the President or, subject to Section 4 of this Article IV, in the President's absence or inability or refusal to act, the Vice President or the Vice Presidents if there is more than one (in the order designated by the Board of Directors) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President.  Each Vice President shall perform such other duties and have such other powers as the Board of Directors from time to time may prescribe, including, in the absence of the President or in the event of the inability or refusal of the Presi­dent to act, the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President.

Section 8.  Secretary.  The Secretary shall attend all meetings of the Board of Directors and all meetings of stockholders and record all the proceedings thereat in a book or books to be kept for that purpose; the Secretary shall also perform like duties for the standing committees when required.  The Secretary shall give, or cause to be given, notice of all meetings of the stockhold­ers and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision he or she shall be.  If the Secretary shall be unable or shall refuse to cause to be given notice of all meetings of the stockholders and special meetings of the Board of Direc­tors, and if there be no Assistant Secretary, then either the Board of Directors or the President may choose another officer to cause such notice to be given.  The Secretary shall have custody of the seal of the Corporation and the Secretary or any Assistant Secretary,  if there be one, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary or by the signature of any such Assistant Secretary.   The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signa­ture.  The Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be.

Section 9.  Treasurer.  The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disburse­ments in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors.  The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all such officer's transactions as Treasurer and of the financial condition of the Corporation.  If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his or her office and for the restoration to the Corporation, in case of his or her death, resignation, retirement or  removal from office of all books, papers, vouchers, money and other property of whatever kind in his or her possession or under his or her control belonging to the Corporation.

Section 10.  Assistant Secretaries.  Except as may be otherwise provided in these Bylaws, Assistant Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice President, if there be one, or the Secretary, and in the absence of the Secretary or in the event of his or her disability or refusal to act, shall perform the duties of the Secretary,  and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary.

Section 11.   Assistant Treasurers.   Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors,  the President, any Vice President, if there be one, or the Treasurer, and in the absence of the Treasurer, or in the event of his or her disability or refusal to act, shall perform the duties of the Treasurer, and when so acting,  shall have all the powers of and be subject to all the restrictions upon the Treasurer.   If required by the Board of Directors, an Assistant Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his or her office and for the restoration to the Corporation, in case of his or her death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his or her possession or under his or her control belonging to the Corporation.

Section 12.  Other Officers  Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors.  The Board of Directors may delegate to any other officer of the Corpora­tion the power  to choose  such other officers and to prescribe their respective duties and powers.

ARTICLE V

STOCK

Section 1.   Certificates for Shares.  The shares of the Corporation’s capital stock may be certificated or uncertificated, as provided under the laws of the State of Delaware.  Except as otherwise provided by law, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates.  Each shareholder, upon written request to the Corporation or its transfer agent, shall be entitled to a certificate of the capital stock of the Corporation.  If certificated, certificates representing shares of the Corporation shall be in such form as shall be determined by the Board of Directors.  Such certificates shall be signed (i) by the Chairman of the Board of Directors, the Chief Executive Officer, the President, or a Vice President and (ii) by the Secretary or an Assistant Secretary.  All certificates for shares shall be consecutively numbered or otherwise identified.  The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the Corporation.  All certificates surrendered to the Corporation for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and cancelled, except that in the case of a lost, destroyed or mutilated certificate, a new one may be issued therefor upon such terms and indemnity to the Corporation as the Board of Directors may prescribe.”

Section 2.  Signatures.  Where a certificate is countersigned by  (i)  a transfer agent other than the Corporation or its employee or (ii) a registrar other than the Corporation or its employee, any other signature on a certificate may be a facsimile.  In case any officer, transfer agent or registrar who  has  signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued,  it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.

Section 3.  Lost Certificates.  The Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the Corpo­ration alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issue of a new certifi­cate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond in such sum as it may direct as indem­nity against any claim that may be made against  the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

Section 4.  Transfer of Shares.  The Board of Directors may appoint one or more transfer agents for the Corporation’s capital stock and may make, or authorize such agent or agents to make, all such rules and regulations as are expedient governing the issue, transfer and registration of shares of capital stock of the Corporation and any certificates representing such shares.  Transfer of the shares of the Corporation shall be made only on the stock transfer books of the Corporation by the holder of record thereof or by his legal representative, who shall furnish proper evidence of his authority to transfer, or by his attorney thereunder authorized by power of attorney, duly executed and filed with Secretary of the Corporation or its transfer agent, either (i) if such shares are certificated, on surrender for cancellation of the certificate of such shares to the Corporation or its transfer agent, or (ii) if such shares are uncertificated, upon proper instructions from the holder thereof, in each case with such proof of authenticity of signature as the Corporation or its transfer agent may reasonably require.  Prior to due presentment for registration of transfer of a security (whether certificate or uncertificated), the Corporation shall treat the registered owner of such security as the person exclusively entitled to vote, receive notifications and dividends, and otherwise to exercise all rights and powers of such security.

Section 5.  Record Date.  In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty days nor less than ten days before the date of such meeting,  nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

Section 6.  Beneficial Owners.  The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law.

ARTICLE VI

NOTICES

Section 1.  Notices.  Whenever written notice is required by law, the Certificate of Incorporation or these Bylaws, to be given to any director, member of a committee or stockholder, such notice may be given by mail, addressed to such director, member of a committee or stockholder, at his or her address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.  Written notice may also be given personally or by telegram, telex, facsimile transmission or cable, in which event notice shall be deemed given upon receipt.

Section 2.  Waivers of Notice.  Whenever any notice is required by law, the Certificate of Incorporation or these Bylaws, to be given to any director, member of a committee or stockholder, a waiver thereof in writing, signed, by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE VII

GENERAL PROVISIONS

Section  1.  Dividends.  Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, and may be paid in cash, in property, or in shares of the capital stock.  Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for re­pairing or maintaining any property of the Corporation, or for any proper purpose, and the Board of Directors may modify or abolish any such reserve.

Section 2.  Disbursements.  All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

Section 3.  Fiscal Year.  The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

Section 4.  Corporate Seal.  The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware."   The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5.  "Entire Board of Directors." As used in these Bylaws, the term "Entire Board of Directors" shall mean the total number of directors fixed by the Board of Directors from time to time which the Corporation would have if there were no vacancies.

ARTICLE VIII

INDEMNIFICATION

The power, right and obligation of the Corpora­tion to indemnify any director or officer of the Corpora­tion and employees and agents of the Corporation shall be as set forth in Article TWELFTH of the Certificate of Incorporation.  All directors and officers of the Corpo­ration shall be entitled to indemnification as set forth in the Certificate of Incorporation.

ARTICLE IX

AMENDMENTS

These Bylaws may be altered, amended or repealed, in whole or in part, or new Bylaws may be adopted by the stockholders or by the Board of Directors; provided, however, that notice of such alteration, amendment, repeal or adoption be contained in the notice of such meeting of stockholders or Board of Directors, as the case may be.  All such amendments must be approved by either the holders of two-thirds (2/3) of the outstanding voting stock of the Corporation thereon or by a majority of the entire Board of Directors then in office; provided, however, notwithstand­ing any other provisions of these Bylaws or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any vote of the holders of any particular class or series of stock required by law, the Certificate of Incorporation or these Bylaws, the favorable vote, at a meeting of stockholders of the Corporation, of the holders of at least eighty percent (80%) of the outstanding voting stock of the Corporation entitled to vote shall be required for any alteration, amendment or repeal of Article II, Sections 3 and 6; Article III, Section 1, Article VII, Section 5 and this Article IX.

First Adopted 6/28/95

Amended 12/2/96

Amended 5/9/2002

Amended 5/21/2008

Amended 5/13/2009

EX-3.8

Exhibit 3.8

CERTIFICATE OF ELIMINATION

WITH RESPECT TO

SERIES B JUNIOR PARTICIPATING PREFERRED STOCK

OF

CAMERON INTERNATIONAL CORPORATION

PURSUANT TO SECTION 151(g)

In accordance with Section 151(g) of the General Corporation Law of the State of Delaware (the “DGCL”), Cameron International Corporation, a Delaware corporation (the “Company”), does hereby certify:

FIRST:  That the following resolutions with respect to the proposed elimination of the Company’s Series B Junior Participating Preferred Stock, par value $0.01,  were duly adopted by the Board of Directors of the Company:

RESOLVED, that on and after August 31, 2009, no shares of the Company’s Series B Junior Participating Preferred Stock,  par value $0.01, will be outstanding and no shares of the Series B Preferred Junior Participating Stock will be issued pursuant to the Certificate of Designation, and that all matters set forth in the Certificate of Designation with respect to the Series B Preferred Junior Participating Stock be eliminated from the Company’s Amended and Restated Certificate of Incorporation; and

FURTHER RESOLVED, that the Designated Officers be, and each (acting alone) hereby is, authorized, empowered and directed to execute and file with the Secretary of State of the State of Delaware a certificate pursuant to Section 151(g) of the DGCL setting forth these resolutions in order to eliminate from the Company’s Amended and Restated Certificate of Incorporation, as amended, all reference to the Series B Junior Participating Preferred Stock.

SECOND:  None of the authorized shares of the Series B Junior Participating Preferred Stock are outstanding and none will be issued.

THIRD:  In accordance with the provisions of Section 151(g) of the DGCL, the Amended and Restated Certificate of Incorporation is hereby amended to eliminate all reference to the Series B Junior Participating Preferred Stock.

IN WITNESS WHEREOF, Cameron International Corporation has caused this Certificate to be signed by its Senior Vice President and General Counsel this ­­20th day of August, 2009.

By:	/s/ William C. Lemmer
Name:	William C. Lemmer
Title:	Senior Vice President and General Counsel

EX-10.6

Exhibit 10.6

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

As Amended and Restated

Effective January 1, 2008

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

TABLE OF CONTENTS

		Page
ARTICLE I   DEFINITIONS AND CONSTRUCTION
1.1	Definitions	1
1.2	Construction.	1
ARTICLE II  ELIGIBILTIY TO PARTICIPATE		11
2.1	Commencement of Participation.	11
2.2	Changes in Employment Status.	11
2.3	Election Form.	13
ARTICLE III  CONTRIBUTIONS		13
3.1	Basic Contributions.	13
3.2	Matching Contributions.	14
3.3	Rollover Contributions.	14
3.4	Transferred Contributions.	15
3.5	Company Retirement Contributions.	15
3.6	Catch-Up Contributions.	15
3.7	Profit Sharing Contributions.	15
3.8	Retirement Contributions.	16
3.9	Effect of Plan Termination or Withdrawal.	17
ARTICLE IV  ADMINISTRATION OF CONTRIBUTIONS		17
4.1	Limitations on Basic Contributions.	17
4.2	Excess Elective Deferrals.	17
4.3	Limitation on Matching Contributions.	17
4.4	Delivery of Contributions.	17
4.5	Allocation of Matching Contributions.	18
4.6	Allocation of Company Retirement Contributions.	18
4.7	Allocation of Profit Sharing Contributions.	18
4.8	Allocation of Retirement Contributions.	18
4.9	Crediting of Contributions.	18
4.1	Changes in Reduction and Deduction Authorizations.	18
ARTICLE V  DEPOSIT AND INVESTMENT OF CONTRIBUTIONS		19
5.1	Deposit of Contributions.	19
5.2	Investment of Accounts.	19
5.3	Elimination of Funds.	20
ARTICLE VI  ESTABLISHMENT OF FUNDS AND MEMBERS' ACCOUNTS		20
6.1	Investment Responsibility.	20
6.2	Establishment and Maintenance of Funds.	20
6.3	Company Stock Fund.	20
6.4	Income on Trust Funds.	20
6.5	Separate Accounts.	20
6.6	Voting of Company Stock in the Company Stock Fund.	20
ARTICLE VII  VESTING		21
7.1	Vesting in Basic, Supplemental, Matching, and Rollover/Transfer Accounts.	21
7.2	Vesting in Company Retirement and Profit Sharing and Retirement Contributions.	21
7.3	Forfeitures.	22
7.4	Election of Former Vesting Schedule.	24
7.5	Vesting Service.	24
7.6	Transfers.	25
7.7	Loss and Reinstatement of Years of Vesting Service.	25
7.8	Prior Plan Vesting Rights.	26
7.9	Finality of Determinations.	26
ARTICLE VIII  WITHDRAWALS WHILE EMPLOYED		26
8.1	Withdrawals Prior to Age 59½.	26
8.2	Withdrawals After Age 59½.	28
8.3	Form of Withdrawals.	28
8.4	Withdrawals of Prior Plan Amounts.	28
ARTICLE IX  LOANS		28
9.1	Eligibility for Loan.	28
9.2	Maximum Loan.	29
9.3	Operation of Article.	29
ARTICLE X  DISTRIBUTION ON RETIREMENT OR OTHER TERMINATION OF EMPLOYMENT		29
10.1	Eligibility for Distribution.	29
10.2	Distribution of Separate Accounts.	29
10.3	Form of Distribution.	32
10.4	Limitation on Commencement of Distribution.	33
10.5	Restriction on Alienation.	34
10.6	Payments to Incompetents or Minors.	34
10.7	Commercial Annuities.	34
10.8	Actuarial Equivalency.	34
10.9	Eligible Rollover Distributions.	34
10.1	Deferral of Payments.	35
10.11	Lost or Missing Members or Beneficiaries.	35
10.12	Minimum Distribution Requirements.	35
ARTICLE XI   BENEFICIARIES AND DEATH BENEFITS		38
11.1	Designation of Beneficiary.	38
11.2	Beneficiary in the Absence of Designated Beneficiary.	38
11.3	Spousal Consent to Beneficiary Designation.	38
11.4	Death Benefits from Non-IAR Accounts.	38
11.5	Death Benefits from IAR Accounts.	39
11.6	Commencement of Death Benefits.	40
ARTICLE XII   ADMINISTRATION		40
12.1	Plan Administrator.	40
12.2	Authority of the Company.	40
12.3	Action of the Company.	41
12.4	Claims Review Procedure.	41
12.5	Qualified Domestic Relations Orders.	41
12.6	Indemnification.	41
12.7	Temporary Restrictions.	42
ARTICLE XIII   AMENDMENT AND TERMINATION		42
13.1	Amendment.	42
13.2	Limitation of Amendment.	42
13.3	Termination.	42
13.4	Withdrawal of an Employer.	43
13.5	Corporate Reorganization.	43
ARTICLE XIV   ADOPTION BY SUBSIDIARIES: EXTENSION TO NEW BUSINESS OPERATIONS		43
ARTICLE XV   MISCELLANEOUS PROVISIONS		43
15.1	No Commitment as to Employment.	43
15.2	Benefits.	43
15.3	No Guarantees.	43
15.4	Exclusive Benefit.	44
15.5	Duty to Furnish Information.	44
15.6	Merger, Consolidation, or Transfer of Plan Assets.	44
15.7	Return of Contributions to Employers.	44
15.8	Addenda.	44
15.9	Validity of Agreement.	44
15.1	Uniformed Services Employment and Reemployment Rights Act Requirements.	44
ARTICLE XVI   SECTION 415 LIMITATIONS		45
16.1	Application.	45
16.2	Section 415 Definitions.	45
16.3	Limitations and Corrections.	46
16.4	Multiple Plans.	47
16.5	Contribution Adjustments.	47
ARTICLE XVII   TOP-HEAVY PLAN RULES		47
17.1	Application.	47
17.2	Top-Heavy Definitions.	47
17.3	Top-Heavy Minimum Allocation Rules.	50
17.4	Top-Heavy Compensation Limitation.	51
17.5	Top-Heavy Vesting Provisions.	51
17.6	Top-Heavy Plan/Benefit Limitations.	51

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

WHEREAS, Cameron International Corporation (the “Company”) has heretofore adopted the Cameron International Corporation Retirement Savings Plan, hereinafter referred to as the “Plan,” for the benefit of certain of its employees; and

WHEREAS, the Company desires to restate the Plan and to amend the Plan in several respects, intending thereby to provide an uninterrupted and continuing program of benefits;

NOW, THEREFORE, the Plan is hereby restated in its entirety as follows with no interruption in time, effective as of January 1, 2008, except as otherwise indicated herein.

ARTICLE I

DEFINITIONS AND CONSTRUCTION

1.1Definitions

The following words and phrases as used herein shall have the meanings hereinafter set forth, unless a different meaning is plainly required by the context:

(1)The term “Addendum” shall mean the overriding provisions which are applicable to certain Employees in accordance with the provisions of Section 15.8 and which shall constitute for all purposes a part of the Plan and in the event of conflict with any other provision of the Plan shall control.

(2)The term “Affiliate” shall mean any member of a controlled group of corporations (as determined under Section 414(b) of the Code) of which the Company is a member; any member of a group of trades or businesses under common control (as determined under Section 414(c) of the Code) with the Company; and any member of an affiliated service group (as determined under Section 414(m) of the Code) of which the Company is a member.

(3)The term “Allocation Month” shall mean each calendar month for which an Employer makes Company Retirement Contributions in accordance with the provisions of Section 3.5.

(4)The term “Allocation Year” shall mean each Plan Year.

(5)The term “Basic Account” shall mean the Separate Account of a Member to which Basic Contributions are credited in accordance with the provisions of Section 4.9.

(6)The term “Basic Contribution” shall mean any cash or deferred arrangement contribution made to the Plan by an Employer on behalf of a Member in accordance with the provisions of Sections 2.3 and 3.1.

(7)The term “Beneficiary” shall mean the person or persons who, in accordance with the provisions of Article XI hereof, shall be entitled to receive distribution hereunder in the event a Member or Inactive Member dies before his interest shall have been distributed to him in full.

(8)The term “Break in Service” shall mean any Plan Year during which an Employee completes not more than 500 Hours of Service; provided, however, that for purposes of Section 7.7, no Employee shall incur a Break in Service solely by reason of an absence due to (i) the birth of a child of the Employee, (ii) the pregnancy of the Employee, (iii) the placement of a child with the Employee on account of the adoption of such child by such Employee, or (iv) the caring for a child of an Employee for a period beginning following the birth or placement of such child, with respect to the Plan Year in which such absence begins, if the Employee otherwise would have incurred a Break in Service or, in any other case, in the immediately following Plan Year; and provided further, that although an Employee may not receive credit for vesting or benefit accrual purposes, a Break in Service shall not be deemed to occur with respect to any layoff or sick leave not in excess of the period of time during which his seniority is retained; and provided further, however, that no Member shall incur a Break in Service by reason of failure to complete more than 500 hours of service during the Plan Year beginning and ending on December 31, 2001.

(8A)           The term “Brookshire Union Employee” shall mean an Employee who is a member of the Local Lodge 15 and District Lodge 37, International Association of Machinists and Aerospace Workers.

(9)The term “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.  Reference to a section of the Code shall include such section and any comparable section or Sections of any future legislation that amends, supplements, or supersedes such section.

(10)The term “Company” shall mean Cameron International Corporation, its successors, and the surviving corporation resulting from any merger or consolidation of Cameron International Corporation with any other corporation or corporations.

(11)The term “Company Retirement Contributions” shall mean the contributions made to the Plan by an Employer in accordance with the provisions of Section 3.5.

(12)The term “Company Stock” shall mean the common stock of Cameron International Corporation.

(13)The term “Company Stock Fund” shall mean the investment fund established to invest in Company Stock and maintained pursuant to the provisions of Section 6.3.

(14)The term “Compensation” shall mean the total of all wages, salaries, fees for professional service and other amounts received in cash or in kind by a Member while a Member for services actually rendered or labor performed for the Employer to the extent such amounts are includable in gross income, subject to the following adjustments and limitations:

(A) The following shall be excluded:

(i) Accrued or unused vacation pay which is paid following termination of employment;

(ii) Reimbursements and other expense allowances (including but not limited to automobile expense allowances and foreign service premiums);

(iii) Cash and noncash fringe benefits;

(iv) Moving expense reimbursements;

(v) Employer contributions to or payments from this or any other deferred compensation program, whether such program is qualified under Section 401(a) of the Code or nonqualified, other than Basic Contributions;

(vi) Welfare benefits (including but not limited to severance benefits);

(vii) Amounts realized from the receipt or exercise of a stock option that is not an incentive stock option within the meaning of Section 422 of the Code;

(viii) Amounts realized at the time property described in Section 83 of the Code is freely transferable or no longer subject to a substantial risk of forfeiture;

(ix) Amounts realized as a result of an election described in Section 83(b) of the Code;

(x) Any amount realized as a result of a disqualifying disposition within the meaning of Section 421(a) of the Code; and

(xi) Any other amounts that receive special tax benefits under the Code but are not hereinafter included.

(B) Basic Contributions and any other elective contributions made on a Member’s behalf by the Employer that are not includable in income under Section 125, Section 402(e)(3), Section 402(h), or Section 403(b) of the Code and any amounts that are not includable in the gross income of a Member under a salary reduction agreement by reason of the application of Section 132(f) of the Code shall be included.

(C) The Compensation of any Member taken into account for purposes of the Plan shall be limited to $200,000 for any Plan Year with such limitation to be:

(i) Adjusted automatically to reflect any amendments to Section 401(a)(17) of the Code and any cost-of-living increases authorized by Section 401(a)(17) of the Code; and

(ii) Prorated for a Plan Year of less than twelve months and to the extent otherwise required by applicable law.”

(15)The term “Contribution Hour” shall mean an hour of employment in an hourly-rated employment classification while an IAR Member of the Plan for which such Member receives Compensation from an Employer, including overtime hours and any paid hours for vacation periods or holidays, but excluding any other paid hours for any other absences during which no duties are performed.

(16)The term “Contribution Rate” shall mean the following contribution rates, depending upon an IAR Member’s employment classification at the time such Contribution Hours are credited:

Employment Classification	Contribution Rate
Labor Grade 82, 83, or 84	$0.37
Labor Grade 85	$0.44
Labor Grade 86, 87, or 88	$0.48

Notwithstanding the foregoing, in no event shall an IAR Member’s Contribution Rate be a rate that is less than the Contribution Rate applicable for such IAR Member as of April 27, 2003; provided, however, that if an IAR Member’s Labor Grade changes on or after such date, such IAR Member’s Contribution Rate will be determined pursuant to the Schedule set forth above.

(17)The term “Controlled Entity” shall mean each corporation that is a member of a controlled group of corporations, within the meaning of Section 1563(a) of the Code determined without regard to Section 1563(a)(4) and Section 1563(e)(3)(C), of which the Company is a member, each trade or business (whether or not incorporated) with which the Company is under  common control and each corporation that is a member of an affiliated service group, within the meaning of Section 414(m) of the Code, of which the Company is a member.

(18)The term “Cooper Savings Plan” shall mean the Cooper Industries, Inc. Retirement and Savings Plan, the Cooper Industries, Inc. Savings Plan, and Cooper Industries, Inc. Stock Ownership Plan.

(19)The term “Effective Date” shall mean January 1, 2008 as to this restatement of the Plan, except (A) as otherwise indicated in specific provisions of the Plan, and (B) that provisions of the Plan required to have an earlier effective date by applicable statute and/or regulation and shall apply, as of such required effective date, to any plan merged into this Plan.  The original effective date of the Plan was April 1, 1995.

(20)The term “Eligible Employee” shall mean any salaried or hourly Employee of the Employer who is (i) a common law employee who is paid in United States dollars from a payroll maintained in the United States, (ii) a non-United States citizen who is a lawful, permanent resident of the United States and who is subject to United States federal income taxes on his worldwide income, or (iii) an Eligible Foreign Employee.  In no event shall the term “Eligible Employee” mean (i) any person who is rendering service to an Employer solely as a director or an independent contractor, (ii) any person who is covered by a collective bargaining agreement unless such agreement specifically provides for coverage by the Plan, or (iii) any person who is a nonresident alien and who receives no earned income within the meaning of Section 911(b) of the Code from an Employer which constitutes income from sources within the United States as defined in Section 861(a)(3) of the Code, or (iv) an Employee who is a Leased Employee or who is designated, compensated, or otherwise classified by the Employer as a Leased Employee.  Notwithstanding any provision of the Plan to the contrary, no individual who is designated, compensated, or otherwise classified or treated by the Employer as an independent contractor shall be eligible to become a Member of the Plan.

(21)The term “Eligible Foreign Employee” shall mean any individual who (i) is a citizen of the United States or a permanent, lawful resident of the United States, (ii) is an employee of an Included Foreign Affiliate, and (iii) is not covered by any other funded plan of deferred compensation under which contributions are provided by any other person, firm, or corporation with respect to the remuneration paid to such individual by the Included Foreign Affiliate.

(22)The term “Eligible Retirement Plan” shall mean, with respect to distributions made from the Plan after December 31, 2001, any of:  an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code, a qualified plan described in Section 401(a) of the Code, that, under its provisions does, and under applicable law may, accept an Eligible Rollover Distribution, an annuity contract described in Section 403(b) of the Code, and an eligible plan under Section 457(b) of the Code that is maintained by a state, political subdivision of a state, or agency or instrumentality of a state or political subdivision of a state and that agrees to separately account for the amounts transferred into such plan from this Plan.  The definition of Eligible Retirement Plan shall also apply in the case of a distribution to a surviving spouse or to a spouse or former spouse who is an alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code.

(23)The term “Eligible Rollover Distribution” shall mean all or any portion of a Plan distribution to a Member or a Beneficiary who is a deceased Member’s surviving spouse or an alternate payee under a qualified domestic relations order who is a Member’s spouse or former spouse; provided, however, that such distribution is not (i) one of a series of substantially equal periodic payments made at  least annually for over a specified period of ten or more years or the life of the Member or Beneficiary or the joint lives of the Member and a designated beneficiary, (ii) a distribution to the extent such distribution is required under Section 401(a)(9) of the Code; or (iii) the portion of any distribution which is not includable in gross income (determined without regard to any exclusion of net unrealized appreciation with respect to employer securities).  Further, a distribution pursuant to Section 8.1 from the Separate Account of a Member attributable to Basic Contributions who has not attained age 59 ½ shall not constitute an Eligible Rollover Distribution.  Notwithstanding the foregoing or any other provision of the Plan, (A) any amount that is distributed from the Plan on account of hardship pursuant to Section 8.1 shall not be an Eligible Rollover Distribution and no election may be made to have any portion of such a distribution paid directly to an Eligible Retirement Plan and (B) a portion of a distribution shall not fail to be an Eligible Rollover Distribution merely because the portion consists of after-tax employee contributions which are not includable in gross income; provided, however, that such portion may be transferred only to an individual retirement account or annuity described in Section 408(a) or (b) of the Code or to a qualified defined contribution plan described in Section 401(a) or 403(a) of the Code that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includable in gross income and the portion of such distribution which is not so includable.

(24)The term “Employee” shall mean each (A) individual employed by the Employer or a Controlled Entity and (B) Leased Worker.

(25)The term “Employer” shall mean the Company or any Affiliate of the Company which adopts the Plan as herein provided so long as the Affiliate has not withdrawn from the Plan.

(26)The term “Employment Commencement Date” shall mean the first date on which an Employee completes an Hour of Service.

(27)The term “Entry Date” shall mean January 1 or July 1.

(28)The term “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.  Reference to a section of ERISA shall include such section and any comparable section or Sections of any future legislation that amends, supplements, or supersedes such section.

(29)The term “Foreign Affiliate” shall mean a “foreign affiliate” as defined in Section 3121(1)(8) of the Code.

(30)The term “Fund” shall mean any of the investment funds established and maintained in accordance with the provisions of Section 6.2.

(31)The term “Highly-Compensated Employee” shall mean each Employee who performs services during the Plan Year for which the determination of who is highly compensated is being made (the “Determination Year”) and who:

(a) is a fiver-percent owner of the Employer (within the meaning of section 416(i)(1)(A)(iii) of the Code) at any time during the Determination Year or the twelve-month period immediately preceding the Determination Year (the “Look-Back Year”); or

(b) for the Look-Back Year, receives compensation (within the meaning of section 414(q)(4) of the Code; “compensation” for purposes of this Paragraph) in excess of $80,000 (with such amount to be adjusted automatically to reflect any cost-of-living adjustments authorized by section 414(q)(1) of the Code) during the Look-Back Year.

For the purposes of the preceding sentence, (i) all employers aggregated with the Employer under section 414(b), (c), (m), or (o) of the Code shall be treated as a single employer and (ii) a former Employee who had a separation year (generally, the Determination Year such Employee separates from service) prior to the Determination Year and who was an active Highly Compensated Employee for either such separation year or any Determination Year ending on or after such Employee’s fifty-fifth birthday shall be deemed to be a Highly Compensated Employee.  To the extent that the provisions of this Paragraph are inconsistent or conflict with the definition of a “highly compensated employee” set forth in section 414(q) of the Code and the Treasury regulations thereunder, the relevant terms and provisions of section 414(q) of the Code and the Treasury regulations thereunder shall govern and control.

(32)The term “Hour of Service” shall mean an hour for which an employee is paid, or entitled to be paid, with respect to the performance of duties for an Employer or a Controlled Entity either as regular wages, salary or commissions, or pursuant to an award or agreement requiring an Employer or a Controlled Entity to pay back wages.  Hours under this paragraph shall be calculated and credited pursuant to Section 2530.200b-2(b) and (c) of the Department of Labor regulations which are incorporated herein by reference.

(33)The term “IAR Account” shall mean the Separate Account of a Member to which the Company Retirement Contributions are credited in accordance with the provisions of Section 4.8.

(34)The term “IAR Member” shall mean, except as provided in Section 2.1(c) with respect to certain Part Time Employees and Temporary Employees, each Eligible Employee who is a Brookshire Union Employee whose Employment Commencement Date occurred prior to January 1, 2005; provided, however, that, except as provided in Section 2.1(c) with respect to certain Part Time and Temporary Employees, an Eligible Employee who is a Brookshire Union Employee and whose Reemployment Date occurs on or after January 1, 2005 shall become a Profit Sharing Member and not an IAR Member, in accordance with the provisions of Section 2.1.  Notwithstanding the foregoing, solely for purposes of Article X (Distributions on Retirement or Other Termination of Employment) and Article XI (Beneficiaries and Death Benefits), the term “IAR Member” shall include each Member who was an IAR Member on or before December 31, 2007.

(35)The term “Inactive Member” shall mean any Member who ceases to be an Employee and whose Separate Accounts have not been distributed in accordance with the provisions of the Plan.

(36)The term “Included Foreign Affiliate” means a “Foreign Affiliate” with respect to which there shall be in effect between the Company and the Secretary of the Treasury or his delegate an agreement pursuant to Section 3121(1) of the Code, whereby coverage under Title II of the federal Social Security Act has been extended to service performed outside the United States by United States citizens employed by such “Foreign Affiliate.”

(37)The term “Leased Worker” shall be a person (other than a person who is an employee without regard to this paragraph (37)) engaged in performing services for a Controlled Entity (the “recipient”) pursuant to an agreement between the recipient and any other person (“Leasing Organization”) who meets the following requirements:

(a) he has performed services for one or more Controlled Entities (or for any other “related persons” determined in accordance with Section 414(n)(6) of the Code) on a substantially full-time basis for a period of at least one year;

(b) such services are of a type historically performed in the business field of the recipient, in the United States, by employees (or, from and after January 1, 1997, such services are performed under primary direction or control by the Employer or a Controlled Entity); and

(c) he is not participating in a “safe harbor plan” of the Leasing Organization.  (For this purpose, a “safe harbor plan” is a plan that satisfies the requirements of Section 414(n)(5) of the Code, which will generally be a money purchase pension plan with a non-integrated employer contribution rate of at least ten percent of compensation and which provides for immediate participation and full and immediate vesting).

A person who is a Leased Worker during any taxable year beginning after December 31, 1983, shall also be considered an employee of a Controlled Entity during such period (and solely for the purpose of determining length of service for participation and vesting purposes, and shall also be considered to have been an employee for any earlier period in which he was a Leased Worker) but shall not be a Member and shall not otherwise be eligible to become covered by the Plan during any period in which he is a Leased Worker.  Notwithstanding the foregoing, the sole purpose of this paragraph (37) is to define and apply the term “Leased Worker” strictly (and only) to the extent necessary to satisfy the minimum requirements of Section 414(n) of the Code relating to “leased employees.”  This paragraph (37) shall be interpreted, applied and, if and to the extent necessary, deemed modified without formal amendment of language, so as to satisfy solely the minimum requirements of Section 414(n) of the Code.

(38)The term “Matching Account” shall mean the Separate Account of a Member to which Matching Contributions are credited in accordance with the provisions of Section 4.9.

(39)The term “Matching Contribution” shall mean the contributions which an Employer contributes to the Plan in accordance with the provisions of Section 3.2.

(40)The term “Member” shall mean an Eligible Employee who participates in the Plan in accordance with the provisions of Article II.

(41)The term “Participation Service” shall mean the measure of service used in determining a Part Time Employee’s or Temporary Employee’s eligibility to participate in the Plan as determined pursuant to Section 2.1(b).

(42)The term “Part Time Employee” shall mean an Employee who is classified as a part time employee under the Employer’s regular payroll practices.

(43)The term “Pay Period” shall mean the periodic payroll period for which a Member receives compensation from an Employer.

(44)The term “Period of Service” shall mean each period of an individual’s Service commencing on his Employment Commencement Date or a Reemployment Date, if applicable, and ending on a Severance Date.  Notwithstanding the foregoing, a period during which an individual is absent from Service by reason of the individual’s pregnancy, the birth of a child of the individual, the placement of a child with the individual in connection with the adoption of such child by the individual, or for the purposes of caring for such child for the period immediately following such birth or placement shall not constitute a Period of Service between the first and second anniversary of the first date of such absence.  A Period of Service shall also include any period required to be credited as a Period of Service by federal law other than ERISA or the Code, but only under the conditions and to the extent so required by such federal law.  Further, to the extent required by section 414(n) of the Code and the applicable interpretative authority thereunder, an individual’s Period of Service shall include any period for which such individual was a Leased Worker (or would have been a Leased Worker but for the requirements of clause (a) of the definition of such term set forth in Section 1.1(37)).

(45)The term “Period of Severance” shall mean each period of time commencing on an individual’s Severance Date and ending on a Reemployment Date.

(46)The term “Permanent and Total Disability” shall mean a physical or mental condition which has resulted in an Employee being eligible for benefits under the Employer’s long-term disability income plan.  An Employee shall cease to be Permanently and Totally Disabled for purposes of the Plan as of the date he ceases to be eligible for benefits under the Employer’s long-term disability income plan.

(47)The term “Plan” shall mean the profit-sharing plan set forth herein, which is called the “Cameron International Corporation Retirement Savings Plan,” with all amendments, modifications, and supplements hereafter made.

(48)The term “Plan Year” shall mean the calendar year.

(49)The term “Profit Sharing Account” shall mean the Separate Account of a Member to which Profit Sharing Contributions are credited in accordance with the provisions of Section 4.9.

(50)The term “Profit Sharing Contribution” shall mean the contributions that an Employer contributes to the Plan in accordance with the provisions of Section 3.7.

(51)The term “Profit Sharing Member” shall mean, except as provided in Section 2.1(c) with respect to certain Part Time and Temporary Employees, each Eligible Employee who is a Brookshire Union Employee whose Employment Commencement Date occurs on or after January 1, 2005.  Notwithstanding anything to the contrary herein, from and after January 1, 2008, no Eligible Employee who is not a Brookshire Union Employee shall be or shall be eligible to become a Profit Sharing Member.  Further, no Eligible Employee shall be both a Profit Sharing Member and a Retirement Contributions Member at any time.

(52)The term “Reemployment Date” shall mean the first date on which an Employee completes an Hour of Service after a Severance Date.

(53)The term “Retirement Account” shall mean the Separate Account of a Member to which Retirement Contributions are credited in accordance with the provisions of Section 4.9.

(54)The term “Retirement Age” shall mean age 65 unless otherwise specified in an Addendum.

(55)The term “Retirement Contributions Member” shall mean, except as provided in Section 2.1(c) with respect to certain Part Time Employees and Temporary Employees, (a) an Eligible Employee whose Employment Commencement Date occurs on or after January 1, 2008, (b) each Member who first becomes a Member of the Plan on or after such date if his Employer first became an Affiliate of the Company on or after such date; and (c) each Member of the Plan who was an Eligible Employee on the Effective Date.  Notwithstanding anything to the contrary herein, no Brookshire Union Employee shall be or be eligible to become a Retirement Contributions Member unless his employment status changes and he becomes employed by an Employer as an Eligible Employee other than in a capacity as a Brookshire Union Employee.

(56)The term “Rollover/Transfer Account” shall mean the Separate Account of a Member to which Rollover Contributions or Transfer Contributions are credited in accordance with the provisions of Section 3.3 or 3.4.

(57)The term “Rollover Contribution” shall mean, effective January 1, 2003, a contribution to the Plan made in accordance with Section 3.3 by any Eligible Employee of amounts received by him as an “eligible rollover distribution” within the meaning of Section 402(f)(2)(a) of the Code from:

(a) a qualified plan described in Section 401(a) or 403(a) of the Code (excluding after-tax employee contributions);

(b) an annuity contract described in Section 403(b) of the Code (excluding after-tax employee contributions);

(c) an eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state (excluding after-tax employee contributions); or

(d) an individual retirement account or annuity described in Section 408(a) or (b) of the Code (excluding after-tax employee contributions), provided that the entire balance in or value of, as applicable, such individual retirement account or annuity is attributable to an ‘eligible rollover distribution’ within the meaning of Section 402(f)(2)(a) of the Code from a plan or contract described in clause (a) or (b) above that was contributed to such account or annuity, or a contribution to such account or annuity as a rollover from a plan described in paragraph (c) above pursuant to Section 457(e)(16), as adjusted for income or losses attributable thereto.

(58)The term “Separate Account” shall mean any of the accounts established and maintained in accordance with the provisions of Section 6.5 by the Company which reflects the interest of the Basic Account, Supplemental Account, Matching Account, IAR Account, Profit Sharing Account, Retirement Account and Rollover/Transfer Account, as applicable, of a Member.

(59)The term “Service” shall mean the period of an individual’s employment with the Employer or a Commonly Controlled Entity.  In no event shall Service include any period of service with a corporation or other entity prior to the date it became a Commonly Controlled Entity or after it ceases to be a Commonly Controlled Entity except to the extent required by law, or to the extent determined by the Company.  The Company, in its discretion, may credit individuals with Service for service with the Employer or a prior employer for periods before such individual has commenced or recommenced participation in the Plan, but only if (i) such service would not otherwise be credited as Service and (ii) such crediting of Service (A) has a legitimate business reason, (B) does not by design or operation discriminate significantly in favor of Highly Compensated Employees, and (C) is applied to all similarly situated employees.  In addition, the Company, in its discretion, may credit individuals with Service based on imputed service for periods after such individual has commenced participation in the Plan while such individual is not performing service for the Employer or while such individual is an Employee with a reduced work schedule, but only if (i) such service would not otherwise be credited as Service, (ii) such crediting of Service (A) has a legitimate business reason, (B) does not by design or operation discriminate significantly in favor of Highly Compensated Employees, and (C) is applied to all similarly situated employees, and (iii) the individual has not permanently ceased to perform service as an Employee, provided that the preceding clause (iii) of this sentence shall not apply if (x) the individual is not performing service for the Employer because of a disability, (y) the individual is performing service for another employer under an arrangement that provides some ongoing business benefit to the Employer, or (z) for purposes of vesting, the individual is performing service for another employer that is being treated under the Plan as actual service with the Employer.

(60)The term “Severance Date” shall mean the later of (a) the date on which contributions to the Plan on behalf of a person cease, or (b) the date on which an Employee retires, becomes totally and permanently disabled, dies, or otherwise terminates employment; provided, however, that if an Employee is absent from employment while in active service in the Armed Forces of the United States, his Severance Date shall be the date on which he terminated his employment, unless he returns to employment with an Employer or a Controlled Entity during the time period prescribed by federal law; and provided further, that no Employee shall incur a Severance Date until the second anniversary of the first date on which such Employee is absent from employment with an Employer or a Controlled Entity for maternity or paternity reasons.  For purposes of this paragraph, an absence for maternity or paternity reasons means an absence due to the pregnancy of the Employee, the birth of a child of the Employee, the placement of a child with the Employee in connection with the adoption of such child by the Employee, or the caring of such child for a period beginning immediately following such birth or placement.  Notwithstanding the foregoing, if an Employee retires or dies, or his employment otherwise is terminated during a period of absence from employment for any reason other than retirement or termination, his Severance Date shall be the date of such retirement, death, or other termination of employment.  In any case where an Employee receives severance pay upon his termination of active employment as an Employee, the Employee’s Severance Date shall be the date after his termination of active employment as an Employee and prior to any resumption of such active employment on which the earlier occurs:  (i) his death, or (ii) the date on which he is last paid severance pay.

(61)The term “Supplemental Account” shall mean the Separate Account for each Member which is credited with his Supplemental Contributions, if any.

(62)The term “Supplemental Contribution” shall mean any contribution made to the Plan prior to April 1, 1996, by a Member as a “Supplemental Contribution” in accordance with the provisions of the Plan in effect prior to April 1, 1996.

(63)The term “Temporary Employee” shall mean an Employee who is classified as a temporary employee under the Employer’s regular payroll practices.

(64)The term “Transferred Contributions” shall mean any assets which are transferred to the Trustee of the Plan in accordance with the provisions of Section 3.4.

(65)The term “Trust” shall mean the trust established under the Trust Agreement to hold and invest contributions made under the Plan.

(66)The term “Trust Agreement” shall mean the agreement between the Company and the Trustee establishing the Trust.

(67)The term “Trustee” shall mean the trustee or trustees qualified and acting under the Trust Agreement at any time.

(68)The term “Valuation Date” shall mean each business day for purposes of the New York Stock Exchange of each year.

(69)The term “Vesting Service” shall mean the period of employment used in determining a Member’s vested interest in his IAR Account, Profit Sharing Account or Retirement Account (as applicable) in accordance with the provisions of Sections 7.5, 7.6, and 7.7.

1.2Construction.

Where necessary or appropriate to the meaning hereof, the singular shall be deemed to include the plural and the masculine pronoun to include the feminine.

ARTICLE II

ELIGIBILITY TO PARTICIPATE

2.1Commencement of Participation.

(a) Each Eligible Employee who was a Member, IAR Member, and/or Profit Sharing Member of the Plan on the day prior to the Effective Date shall remain a Member, IAR Member, and/or Profit Sharing Member of the Plan as of the Effective Date.  Notwithstanding the foregoing, all Profit Sharing Members of the Plan on the day prior to the Effective Date (other than Profit Sharing Members who are Brookshire Union Employees) shall cease to be Profit Sharing Members and shall become Retirement Contributions Members on and effective as of the Effective Date.

(b) Each Eligible Employee who is a Part Time Employee or Temporary Employee and whose Employment Commencement Date occurs on or after January 1, 2002 but prior to May 1, 2003 shall become a Member and, if applicable, an IAR Member and participate in the Plan on the first Entry Date coincident with or next following the later of the date on which such Employee completes one year of Participation Service or the date on which such Employee attains the age of 21; provided, however, that any Part Time Employee or Temporary Employee who has not become an IAR Member before May 1, 2003 shall not become an IAR Member on or after such date notwithstanding any satisfaction by such employee of such participation requirements; and provided further, however, that any such Employee shall become a Profit Sharing Member on the first Entry Date coincident with or next following the later of the date such Employee completes One Year of Participation Service or the date on which such Employee attains the age of 21, notwithstanding that such Employee’s Employment Commencement Date preceded May 1, 2003.  An individual completes one year of Participation Service on the last day of the twelve-consecutive month period beginning with the individual’s Employment Commencement Date or beginning with anniversaries of such Employment Commencement Date during which such individual completes 1,000 Hours of Service.

(c) Each Eligible Employee (other than a Part Time Employee or Temporary Employee) whose Employment Commencement Date occurs on or after January 1, 2008 shall become a Member and, as applicable, a Profit Sharing Member or a Retirement Contributions Member and participate in the Plan as of his Employment Commencement Date.

(d) Each Eligible Employee who is a Part Time Employee or Temporary Employee and whose Employment Commencement Date occurs on or after May 1, 2003 shall become a Member and, as applicable, a Profit Sharing Member or a Retirement Contributions Member and participate in the Plan on the first Entry Date coincident with or next following the later of the date on which such Employee completes one year of Participation Service or the date on which such Employee attains the age of twenty-one.

(e) Notwithstanding the foregoing,

(i) A Temporary Employee or Part Time Employee who was a Member of the Plan prior to a termination of employment shall remain a Member and a Profit Sharing Member or Retirement Contributions Member, as applicable, upon his reemployment as an Eligible Employee; provided, however, that no such Employee who is reemployed on or after May 1, 2003 shall be an IAR Member upon his reemployment;

(ii) A Temporary Employee or Part Time Employee who has completed one year of Participation Service and has attained the age of twenty-one but who has not become a Member, and Profit Sharing Member or Retirement Contributions Member, as applicable, because he was not an Eligible Employee shall become a Member and Profit Sharing Member or Retirement Contributions Member, as applicable, upon the later of (A) the date he becomes an Eligible Employee as a result of a change in his employment status or (B) the first Entry Date upon which he would have become a Member if he had been an Eligible Employee; provided, however, that no such Employee shall become (x) an IAR Member on or after May 1, 2003 or (y) except for a Brookshire Union Employee, a Profit Sharing Member on or after January 1, 2008;

(iii) A Temporary Employee or Part Time Employee who was an Eligible Employee who had completed one year of Participation Service but who had not attained the age of twenty-one prior to a termination of his employment shall become a Member and a Profit Sharing Member or Retirement Contributions Member, as applicable, upon the later of (i) the date of his reemployment or (ii) the first Entry Date following his attainment of age twenty-one; provided, however, that no such Employee shall become (x) an IAR Member on or after May 1, 2003 or (y) except for a Brookshire Union Employee, a Profit Sharing Member on or after January 1, 2008; and

(iv) A Temporary Employee or Part Time Employee who was an Eligible Employee and who had met the age and service requirements of this Section to become a Member and a Profit Sharing Member or Retirement Contributions Member, as applicable, but who terminated employment prior to the Entry Date upon which he would have become a Member and a Profit Sharing Member or Retirement Contributions Member, as applicable, shall become a Member and a Profit Sharing Member or Retirement Contributions Member, as applicable, upon the later of (i) the date of his reemployment or (ii) the Entry Date upon which he would have become a Member and a Profit Sharing Member or Retirement Contributions Member, as applicable, if he had not terminated employment; provided, however, that no such Employee shall become (x) an IAR Member on or after May 1, 2003 or (y) except for a Brookshire Union Employee, a Profit Sharing Member on or after January 1, 2008.

2.2Changes in Employment Status.

If a Member ceases to be an Eligible Employee but continues in the employment of an Employer as an Employee he shall continue as a Member until his participation is otherwise terminated in accordance with the provisions of the Plan; provided, however, that such Member shall share in Matching Contributions for any month of such continued participation only to the extent and on the basis of his Basic Contributions made during such month; and provided further that each such Member who is an IAR Member shall share in Company Retirement Contributions for any month of such continued participation only to the extent and on the basis of his Contribution Hours during such month; provided further, however, that each such Member who is a Profit Sharing Member who is not an Eligible Employee on the last day of a Plan Year shall not receive a Profit Sharing Contribution for such Plan Year; and provided further, however, that each such Member who is a Retirement Contributions Member who is not an Eligible Employee on the last day of a Plan Year shall not receive a Retirement Contribution for such Plan Year.  If a Member ceases to be an Eligible Employee but continues in the employment of an Employer or a Controlled Entity, he shall become an Inactive Member until his participation in the Plan is otherwise terminated in accordance with the provisions of the Plan or he again becomes an Employee and an active Member.

2.3Election Form.

Each Member shall file with his Employer a written election in accordance with procedures established by the Company with respect to his participation in the Plan which shall contain his authorization for his Employer to reduce his Compensation in order to make Basic Contributions and, if eligible, catch-up contributions on his behalf pursuant to the provisions of Sections 3.1 and 3.6, respectively, and his election as to the investment of such contributions pursuant to the provisions of Section 5.2; provided, however, that such election must be filed with his Employer at least 20 days prior to the first day of the payroll period as of which he is eligible to make Basic Contributions (or at least 20 days prior to the first day of any subsequent payroll period for which he is eligible to make Basic Contributions), unless a shorter period of time is acceptable to the Company.  Notwithstanding the foregoing, any Member who is a Profit Sharing Member or a Retirement Contributions Member need not elect to make any Basic Contributions under the Plan in order to be eligible to receive Profit Sharing Contributions or Retirement Contributions, as applicable, and the election of any such Member who has not elected to make Basic Contributions under the Plan shall relate solely to the investment of his Profit Sharing Contributions or Retirement Contributions, as applicable, pursuant to Section 5.2.

ARTICLE III

CONTRIBUTIONS

3.1Basic Contributions.

Commencing with the date as of which he becomes a Member, each Member may elect to defer an integral percentage of from 1% to 50% (or such lesser percentage as may be prescribed from time to time by the Company) of his Compensation for a Plan Year by having his Employer contribute the amount so deferred to the Plan.  In restriction of the Members’ elections provided in Section 2.3, this Section, and Section 4.10, and except to the extent permitted under Section 3.6 and Section 414(v) of the Code, the Basic Contributions and the elective deferrals (within the meaning of Section 402(g)(3) of the Code) under all other plans, contracts and arrangements of the Employer on behalf of any Member for any calendar year shall not exceed the dollar limitation contained in Section 402(g) of the Code in effect for such calendar year.  If a Member elects to have such Basic Contributions made on his behalf, his Compensation shall be reduced by the percentage he elects pursuant to the terms of the Compensation reduction authorization described in Section 2.3 or 4.10.  Unless specifically provided otherwise in the Plan, each Member who is an Eligible Employee may elect to have Basic Contributions made on his behalf to the Plan.  Notwithstanding the foregoing provisions of this Section 3.1, Basic Contributions made with respect to a Plan Year on behalf of Highly Compensated Employees shall not exceed the limitations set forth in Section 4.1.

3.2Matching Contributions.

(a) For Members Other Than Brookshire Union Employees.  On behalf of each Member other than a Member who is a Brookshire Union Employee, such Member’s Employer shall cause to be paid to the Trustee as its Matching Contribution hereunder for each payroll period an amount which equals 100 percent of the Basic Contributions, including catch-up contributions made pursuant to Section 3.6, for such payroll period which are attributable to the first six percent of the Compensation of each such Member for such payroll period.  In addition to the Matching Contributions made pursuant to the preceding sentence, for each Plan Year, on behalf of each Member who made Basic Contributions during such Plan Year (other than a Member who is a Brookshire Union Employee), such Member’s Employer shall cause to be paid to the Trustee, as additional Matching Contributions hereunder, an amount equal to the difference, if any, between (1) the amount that is equal to 100% of the Basic Contributions, including catch-up contributions made pursuant to Section 3.6, for such Plan Year which are attributable to the first six percent of the Compensation of such Member and (2) the Matching Contributions for such Member for such Plan Year that were made pursuant to the preceding sentence.

(b) For Members Who Are Brookshire Union Employees.  On behalf of each Member who is a  Brookshire Union Employee, such Member’s Employer shall cause to be paid to the Trustee as its Matching Contribution hereunder for each payroll period an amount which equals the sum of (i) 100 percent of the Basic Contributions, including catch-up contributions made pursuant to Section 3.6, for such payroll period which are attributable to the first three percent of the Compensation of each such Member for such payroll period, and (ii) 50 percent of the Basic Contributions, including catch-up contributions made pursuant to Section 3.6, for such payroll period which are attributable to amounts in excess of three percent, but not in excess of six percent, of the Compensation of each such Member for such payroll period.  In addition to the Matching Contributions made pursuant to the preceding sentence, for each Plan Year, on behalf of each Member who is a Brookshire Union Employee who made Basic Contributions during such Plan Year, such Member’s Employer shall cause to be paid to the Trustee, as additional Matching Contributions hereunder, an amount equal to the difference, if any, between (1) the amount that is equal to the sum of (A) 100% of the Basic Contributions, including catch-up contributions made pursuant to Section 3.6, for such Plan Year which are attributable to the first three percent of the Compensation of such Member and (B) 50 percent of the Basic Contributions, including catch-up contributions made pursuant to Section 3.6, for such Plan Year which are attributable to amounts in excess of three percent, but not in excess of six percent, of the Compensation of such Member, and (2) the Matching Contributions for such Member for such Plan Year that were made pursuant to the preceding sentence.

3.3Rollover Contributions.

With the approval of the Company and in accordance with procedures established by the Company, a Member may elect to make a Rollover Contribution to the Plan by delivering, or causing to be delivered, to the Trustee the assets in cash which constitute such Rollover Contribution at such time or times and in such manner as shall be specified by the Company.  All Rollover Contributions shall be made in cash; provided, however, that in connection with a merger or acquisition by an Employer, the Company may permit, in its sole discretion, in accordance with procedures established by the Company, that Rollover Contributions of outstanding plan loans that are not in default may be made in kind.  Upon receipt by the Trustee, such assets shall be credited to a Rollover/Transfer Account established on behalf of such Member and shall be deposited in the Fund or Funds selected by the Member as indicated on his investment election filed with the Company by the Member.  Such election shall specify a combination of investment selections among such Funds, in increments of integral percentages which, in the aggregate, equal 100 percent.  A Rollover Contribution by a Member pursuant to this Section 3.3 shall not be deemed to be a contribution of such Member for any purpose of the Plan and shall be fully vested in the Member at all times.

3.4Transferred Contributions.

The Company may cause the transfer to the Trustee of funds representing the vested account balances (hereinafter referred to as “Transferred Contributions”) of Members held by a funding agent of a tax-qualified plan (hereinafter referred to as a “transferor plan”) in which such Members previously participated; provided, however, that (i) such transfer shall be made at such time or times and in such manner as shall be specified by the Company in accordance with procedures established by the Company; (ii) no such transfer shall be permitted from a transferor plan on behalf of a Member who was at any time a five percent owner of the employer maintaining such transferor plan; and (iii) no portion of such transfer shall be composed of assets attributable to deductible employee contributions.  The Trustee shall credit the Rollover/Transfer Account of any Member on whose behalf such funds were transferred and shall deposit such funds in the Fund or Funds selected by the Member as indicated on his investment election filed with his Employer by such Member.  Such election shall specify a combination of investment selections among the Funds, in increments of integral percentages which, in the aggregate, equal 100 percent.  The portion of the Rollover/Transfer Account of a Member attributable to Transferred Contributions shall be fully vested in such Member at all times.

3.5Company Retirement Contributions.

Each Employer shall cause to be paid to the Trustee as its Company Retirement Contribution hereunder for each month an amount equal to the  sum of the product of each IAR Member’s Contribution Hours during each Pay Period that ends within such month multiplied by the applicable Contribution Rate minus the forfeitures applicable to such Employer pursuant to Section 7.3.

3.6Catch-Up Contributions.

All Eligible Employees who are eligible to make Basic Contributions to the Plan pursuant to Section 3.1 above for a Plan Year and who will have attained age 50 before the close of such Plan Year shall be eligible to make catch-up contributions to the Plan for such Plan Year in accordance with, and subject to the limitations of, Section 414(v) of the Code.  Such catch-up contributions shall not be taken into account for purposes of the provisions of the Plan implementing the required limitations of Sections 402(g) and 415 of the Code, as described, respectively, in Sections 3.1 and 16.3 of the Plan.  The Plan shall not be treated as failing to satisfy the provisions of the Plan implementing the requirements of Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b) or 416 of the Code, as applicable, by reason of the making of such catch-up contributions.  Catch-up contributions made by a Member pursuant to this Section 3.6 shall be treated as Basic Contributions for all purposes of the Plan except as otherwise specifically provided; provided, however, that catch-up contributions shall not be subject to the maximum percentage deferral limit that applies to Basic Contributions pursuant to Section 3.1.

3.7Profit Sharing Contributions.

Each Employer shall cause to be paid to the Trustee as its Profit Sharing Contribution hereunder for each Plan Year in which the Company meets or exceeds its financial objectives for such Plan Year, as established and determined in the sole discretion of the Board of Directors of the Company, an amount which equals 2% of the Compensation received by each Profit Sharing Member for such Plan Year; provided, however, that a Profit Sharing Member must be employed by such Employer as of the last day of such Plan Year as a condition of the Employer’s obligation to make and the Member’s entitlement to receive such Profit Sharing Contribution for such Plan Year; and provided, further, however, that any Profit Sharing Member whose employment with the Employer terminates during such Plan Year on account of such Member’s Retirement, death or Permanent and Total Disability shall be entitled to receive a Profit Sharing Contribution (if any) for such Plan Year, determined as provided above.  Profit Sharing Contributions shall be made without regard to current or accumulated profits of the Employer.  Notwithstanding the foregoing, the Plan is intended to qualify as a profit sharing plan for purposes of sections 401(a), 402, 412, and 417 of the Code.  Notwithstanding anything to the contrary in this restatement of the Plan, Profit Sharing Contributions, if any, with respect to the Plan Year beginning January 1, 2007 (“2007 Profit Sharing Contributions”) shall be made on behalf of “Profit Sharing Members” as determined in accordance with the provisions of the Plan as in effect on the day preceding the Effective Date.  Whether 2007 Profit Sharing Contributions shall be made shall be determined by the Board of Directors in 2008 and any 2007 Profit Sharing Contributions shall be allocated and credited in accordance with the provisions of the Plan as in effect on the day preceding the Effective Date.

3.8Retirement Contributions.

Each Employer shall cause to be paid to the Trustee as its Retirement Contributions hereunder for each payroll period an amount which equals 3% of the Compensation received by each Retirement Contributions Member for such payroll period.  Retirement Contributions shall be made without regard to current or accumulated profits of the Employer.  Notwithstanding the foregoing, the Plan is intended to qualify as a profit sharing plan for purposes of sections 401(a), 402, 412, and 417 of the Code.

3.9Effect of Plan Termination or Withdrawal.

Notwithstanding any other provision of the Plan to the contrary, the termination of the Plan or the withdrawal of an Employer from the Plan shall terminate the liability of the Employer or such Employer, respectively, to make further Matching Contributions, Profit Sharing Contributions and Company Retirement Contributions hereunder.

ARTICLE IV

ADMINISTRATION OF CONTRIBUTIONS

4.1Limitations on Basic Contributions.

The Plan shall utilize the safe harbor method of satisfying the “actual deferral percentage” test set forth in Section 401(k)(3) of the Code pursuant to Section 401(k)(12) of the Code and Section 1.401(k)-3 of the Treasury regulations by making Matching Contributions which satisfy the matching safe harbor contributions requirements of Section 401(k)(12)(B) of the Code.

4.2Excess Elective Deferrals.

If a Member who had Basic Contributions made on his behalf for a Plan Year files with the Company, within the time limit prescribed by the Company after the end of such Plan Year, a written statement, on a form acceptable to the Company, that he has elective deferrals within the meaning of Section 402(g) of the Code for the taxable year in excess of the dollar limitation on elective deferrals in effect for such taxable year, and specifying the amount of such excess the Member claims as allocable to the Plan, the amount of such excess, adjusted for income or loss attributable to such excess elective deferral, shall be distributed to the Member by April 15 of the year following the year of the excess elective deferral and Matching Contributions thereon shall be forfeited.  Distributions pursuant to this Section 4.2 shall be made proportionately from the Separate Accounts to which Basic Contributions were made for such Plan Year.

4.3Limitation on Matching Contributions.

The Plan shall utilize the safe harbor method of satisfying the “actual contribution percentage” test set forth in Section 401(m)(2) of the Code pursuant to Section 401(m)(11) of the Code and Section 1.401(m)-3 of the Treasury regulations.

4.4Delivery of Contributions.

Each Employer shall cause to be delivered to the Trustee all Basic, Matching, Company Retirement, Profit Sharing, Retirement, Rollover, and Transferred Contributions made in accordance with the provisions of Article III as soon as reasonably practicable; provided, however, that Basic Contributions elected by each Member shall be deducted from his Compensation for each payroll period and shall be paid by the Employer to the Trust as of the earliest date on which such contributions can reasonably be segregated from the Employer’s general assets; and further provided, however, that in no event shall such date occur later than the fifteenth (15th) business day of the month following the month in which such contribution amounts would otherwise have been payable to the Member in cash; and further provided, however, that Matching Contributions with respect to Basic Contributions made in accordance with Section 3.2 during a Plan Year quarter shall be delivered to the Trustee no later than the last day of the Plan Year quarter following the Plan Year quarter during which such Basic Contributions were made.

4.5Allocation of Matching Contributions.

The Matching Contributions of an Employer for any month shall be considered allocated to the Members’ Matching Accounts for whom such contributions are made no later than the last day of the Plan Year for which they are made, as determined pursuant to Section 3.2, except as provided in Section 4.9.

4.6Allocation of Company Retirement Contributions.

The Company Retirement Contributions of an Employer for any month shall be allocated as of the date such contribution is received by the Trust to the IAR Accounts of the Members for whom such contribution is made.

4.7Allocation of Profit Sharing Contributions.

The Profit Sharing Contribution of an Employer for any Plan Year shall be allocated as of the date such contribution is received by the Trust to the Profit Sharing Accounts of the Profit Sharing Members for whom such contribution is made.

4.8Allocation of Retirement Contributions.

The Retirement Contribution of an Employer for any payroll period shall be allocated as of the date such contribution is received by the Trust to the Retirement Accounts of the Retirement Contributions Members for whom such contribution is made.

4.9Crediting of Contributions.

Subject to the provisions of Article VII, contributions made to the Plan shall be credited to the Separate Accounts of a Member in the following manner:

(a) The amount of Basic Contributions made on behalf of a Member shall be credited to such Member’s Basic Account as of the date such contribution is received by the Trust and shall be invested in the Fund or Funds selected by the Member in accordance with the provisions of Section 5.2.

(b) The amount of Matching Contributions allocated to a Member shall be credited to such Member’s Matching Account as of the date such contribution is received by the Trust and shall be invested in the Fund or Funds selected by the Member in accordance with the provisions of Section 5.2.

(c) The amount of Company Retirement Contributions allocated to an IAR Member shall be credited to such Member’s IAR Account as of the date such contribution is received by the Trust and shall be invested in the Fund or Funds selected by the Member in accordance with the provisions of Section 5.2.

(d) The amount of Profit Sharing Contributions allocated to a Profit Sharing Member shall be credited to such Member’s Profit Sharing Account as of the date such contribution is received by the Trust and shall be invested in the Fund or Funds selected by the Member in accordance with the provisions of Section 5.2.

(d) The amount of Retirement Contributions allocated to a Retirement Contributions Member shall be credited to such Member’s Retirement Account as of the date such contribution is received by the Trust and shall be invested in the Fund or Funds selected by the Member in accordance with the provisions of Section 5.2.

4.10Changes in Reduction and Deduction Authorizations.

Effective as of any payroll period, any Member may suspend his Basic Contributions or change the percentage of his Compensation which is contributed as Basic Contributions in accordance with the procedures and within the time period prescribed by the Plan Administrator.  Notwithstanding the foregoing, any Member who changes the percentage of his Basic Contributions shall be limited to the percentage of his Compensation which does not exceed the applicable limitations set forth in Section 3.1, and, if applicable, Section 3.6.  If the Company determines that a reduction of Compensation deferral elections made pursuant to Sections 2.3, 3.1, and this Section 4.10 is necessary to insure that the restrictions set forth in Sections 3.1 or 16.3 are met for any Plan Year, the Company may reduce the elections of affected Members on a temporary and prospective basis in such manner as the Company shall determine.

ARTICLE V

DEPOSIT AND INVESTMENT OF CONTRIBUTIONS

5.1Deposit of Contributions.

Any Basic Contributions of a Member which are credited to a Member’s Basic Account, any Matching Contributions which are credited to a Member’s Matching Account, any Company Retirement Contributions which are credited to an IAR Member’s IAR Account, any Profit Sharing Contributions which are credited to a Profit Sharing Member’s Profit Sharing Account, and any Retirement Contributions which are credited to a Retirement Contributions Member’s Retirement Account shall be deposited by the Trustee in such Fund or Funds selected by such Member in accordance with the provisions of Section 5.2.  The Trustee shall have no duty to collect or enforce payment of contributions or inquire into the amount or method used in determining the amount of contributions, and shall be accountable only for contributions received by it.

5.2Investment of Accounts.

(a) Each Member shall designate, in accordance with the procedures established by the Company, the manner in the amounts allocated to his Separate Accounts shall be invested from among the Funds made available from time to time by the Company pursuant to Section 6.2.  A Member may designate one of such Funds for all of the contributions to his Separate Accounts, or he may split the investment of the amounts allocated to such Accounts among such Funds in such increments as the Company may prescribe.  If permitted under and in accordance with the procedures established by the Company from time to time, a Member may make designate that certain of his Separate Accounts be invested in different Funds than he has designated for the investment of his other Separate Accounts.  If a Member fails to make a designation of 100% of the contributions to his Separate Accounts, such nondesignated contributions shall be invested in the Fund or Funds designated by the Company from time to time in a uniform and nondiscriminatory manner.

(b) A Member may change his investment designation for future contributions to be allocated to his Separate Accounts.  Any such change shall be made in accordance with the procedures established by the Company, and the frequency of such changes may be limited by the Company.

(c) A Member or Inactive Member may convert his investment designation with respect to amounts already allocated to any of his Separate Accounts that are invested in one of the Funds; provided, however, that such conversion may be made only to one or more of those Funds made available by the Company pursuant to Section 6.2.  Any such conversion shall be made in accordance with the procedures established by the Company, and the frequency of such conversions may be limited by the Company.

5.3Elimination of Funds.

Notwithstanding any provision in this Article V to the contrary, in the event any one or more of the Funds is eliminated as an investment fund by the Company, each Member and Inactive Member who has an investment election in effect which designates such investment fund for the investment of amounts allocated to such individual’s Separate Accounts, shall designate a continuing Fund or Funds made available by the Company pursuant to Section 6.2 for the investment of such amounts; provided, however, that in the event such individual fails to make such a designation, such contributions or amounts shall be invested in a the Fund or Funds designated by the Company in a uniform and nondiscriminatory manner.

ARTICLE VI

ESTABLISHMENT OF FUNDS AND MEMBERS’ ACCOUNTS

6.1Investment Responsibility.

The Plan is intended to constitute a plan described in Section 404(c) of ERISA and DOL Regs. Section 2550.404c-1 and insofar as the Plan complies with said Section 404(c), Plan fiduciaries shall be relieved of liability for any losses which are the direct result of investment instructions given by Members, Inactive Members, and Beneficiaries.

6.2Establishment and Maintenance of Funds.

The Company shall cause at least three Funds, other than the Company Stock Fund, to be established and maintained at all times.  Each such Fund shall be diversified and shall have different risk and return characteristics from the other Funds.  Any Fund which invests primarily in investments with restrictions regarding Funds to which investment transfers may be made or to which a minimum investment period is applicable shall not be considered as one of such requisite three Funds.

6.3Company Stock Fund.

Except as specifically provided otherwise in the Plan or the Trust Agreement, the assets of the Company Stock Fund shall be invested by the Trustee solely in Company Stock; provided, however, that the Company Stock Fund may hold an amount of cash to the extent required in lieu of holding fractional shares of Company Stock.  The Trustee shall receive Company Stock from the Company or purchase Company Stock in the market; provided, however, that any such purchase shall be made only in exchange for fair market value as determined by the Trustee.

6.4Income on Trust Funds.

Unless specifically provided otherwise in the Plan or the Trust Agreement, any dividends, interest, distributions, or other income received by the Trustee in respect of a Fund shall be reinvested by the Trustee in the Fund with respect to which such income was received by it.

6.5Separate Accounts.

Each Member shall have established in his name Separate Accounts which shall be dependent upon the manner in which the assets of his Basic, Supplemental, Matching, IAR, Profit Sharing, Retirement and Rollover/Transfer Accounts are invested.

6.6Voting of Company Stock in the Company Stock Fund.

Each Member or Beneficiary who has shares of Company Stock allocated to his Separate Accounts shall be a named fiduciary with respect to the voting of Company Stock held thereunder and shall have the following powers and responsibilities:

(a) Prior to each annual or special meeting of the shareholders of the Company, the Company shall cause to be sent to each Member and Beneficiary who has Company Stock allocated to his Separate Accounts and invested in the Company Stock Fund under the Plan a copy of the proxy solicitation material therefor, together with a form requesting confidential voting instructions, with respect to the voting of such Company Stock as well as the voting of Company Stock for which the Trustee does not receive instructions.  Each such Member and/or Beneficiary shall instruct the Trustee to vote the number of such uninstructed shares of Company Stock equal to the proportion that the number of shares of Company Stock allocated to his Separate Accounts and invested in the Company Stock Fund bears to the total number of shares of Company Stock in the Plan for which instructions are received.  Upon receipt of such a Member’s or Beneficiary’s instructions, the Trustee shall then vote in person, or by proxy, such shares of Company Stock as so instructed.

(b) The Company shall cause the Trustee to furnish to each Member and Beneficiary who has Company Stock allocated to his Separate Accounts and invested in the Company Stock Fund under the Plan notice of any tender or exchange offer for, or a request or invitation for tenders or exchanges  of, Company Stock made to the Trustee.  The Trustee shall request from each such Member and Beneficiary instructions as to the tendering or exchanging of Company Stock allocated to his Separate Accounts and invested in the Company Stock Fund and the tendering or exchanging of Company Stock for which the Trustee does not receive instructions.  Each such Member shall instruct the Trustee with respect to the tendering or exchanging of Company Stock for which the Trustee does not receive instructions.  Each such Member shall instruct the Trustee with respect to the tendering or exchanging of the number of such uninstructed shares of Company Stock equal to the proportion that the number of the shares of Company Stock allocated to his Separate Accounts and invested in the Company Stock Fund bears to the total number of shares of Company Stock in the Plan for which instructions are received.  The Trustee shall provide Members and Beneficiaries with a reasonable period of time in which they may consider any such tender or exchange offer for, or request or invitation for tenders or exchanges of, Company Stock made to the Trustee.  Within the time specified by the Trustee, the Trustee shall tender or exchange such Company Stock as to which the Trustee has received instructions to tender or exchange from Members and Beneficiaries.

(c) Instructions received from Members and Beneficiaries by the Trustee regarding the voting, tendering, or exchanging of Company Stock shall be held in strictest confidence and shall not be divulged to any other person, including officers or employees of the Company, except as otherwise required by law, regulation or lawful process.

ARTICLE VII

VESTING

7.1Vesting in Basic, Supplemental, Matching, and Rollover/Transfer Accounts.

A Member shall be 100 percent vested in the balance of his Basic, Supplemental, Matching, and Rollover/Transfer Accounts.

7.2Vesting in Company Retirement and Profit Sharing and Retirement Contributions.

Effective as of January 1, 2007 and except as specified in an otherwise applicable Addendum with respect to an IAR Member’s vested interest in the balance of his IAR Account, each Member who is credited with an Hour of Service on or after such date shall be vested in the balance of his IAR Account, Profit Sharing Account and/or Retirement Account, as applicable, in accordance with the following schedule:

Years of Vesting Service                                                                Vested Percentage

  Less than 3                                                                     0%

     3 or more                                                                      100%

Effective except as specified in an otherwise applicable Addendum with respect to an IAR Member’s vested interest in the balance of his IAR Account, a Member other than a Member who was credited with an Hour of Service on or after January 1, 2007 shall be vested in the balance of his IAR Account and/or Profit Sharing Account in accordance with the following schedule:

Years of Vesting Service                                                                Vested Percentage

Less than 5                                                                                0%

5 or more                                                                                100%

Notwithstanding the foregoing, except as specified otherwise in an applicable Addendum, any IAR Member who was credited with three or more Years of Vesting Service as of May 1, 2003 (or, in the case of any Brookshire Union Employee who is an IAR Member, any such employee who was credited with three or more Years of Vesting Service as of December 31, 2004) but who was not credited with an Hour of Service on or after January 1, 2007 shall be vested in the balance of his IAR Account in accordance with the following vesting schedule:

Years of Vesting Service                                                                Vested Percentage

3 years but less than 4 years                                                                       33%

4 years but less than 5 years                                                                        67%

5 years or more                                                                                             100%

Notwithstanding the foregoing, upon the occurrence of one of the events hereinafter listed while a Member is an Employee, such Member shall be 100% vested in the balance of his IAR Account, Profit Sharing Account and/or Retirement Account, as applicable:

(i)           attainment of Retirement Age;

(ii)           death; or

(iii)           Permanent and Total Disability.

7.3Forfeitures.

At the time a Member or Inactive Member terminates employment with the Company and its Controlled Entities prior to attaining Retirement Age for any reason other than Permanent and Total Disability or death, only his vested interest in his IAR Account, Profit Sharing Account and/or Retirement Account (as applicable) shall be distributable pursuant to the provisions of Sections 10.2, 10.3, and 10.4 and his unvested interest shall be governed by the following provisions.

(a) The unvested portion of such a Member’s IAR Account, Profit Sharing Account and/or Retirement Account (as applicable) shall be forfeited at the earliest of the following:

(i) the date on which the Member’s entire vested interest in his IAR Account, Profit Sharing Account and/or Retirement Account (as applicable) is distributed in a single sum or is considered distributed under paragraph (c) below; or

(ii) with respect to the unvested portion of the Member’s IAR Account, the end of the fifth consecutive Break in Service, or, with respect to the unvested portion of the Member’s Profit Sharing Account and/or Retirement Account (as applicable), the date such Member completes a Period of Severance of five consecutive years; or

(iii) the date of the Member’s death.

(b) Forfeitures from IAR Accounts shall be applied against the Employer’s next contribution obligation with respect to Company Retirement Contributions under the Plan.  Forfeitures from Profit Sharing Accounts shall be applied against the Employer’s next contribution obligation (if any) with respect to Profit Sharing Contributions or, if none, against the Employer’s next contribution obligation with respect to Retirement Contributions under the Plan.  Forfeitures from Retirement Accounts shall be applied against the Employer’s next contribution obligation with respect to Retirement Contributions under the Plan.

(c) A zero vested balance of a Member or Inactive Member shall be treated as though it were distributed immediately when employment terminates.

(d) If a Member or Inactive Member is reemployed prior to five consecutive Breaks in Service but after a forfeiture under paragraph (a) above because of an imputed or full distribution, the forfeited amount(s), unadjusted for interim gains or losses, shall be subject to restoration under paragraphs (f) and (g).  No restoration shall occur, if reemployment occurs after five consecutive Breaks in Service (in the case of amounts forfeited from such Member’s IAR Account) or if reemployment occurs after the Member completes a Period of Severance of five consecutive years (in the case of amounts forfeited from such Member’s Profit Sharing Account and/or Retirement Account, as applicable).  Further, no restoration shall occur if repayment does not occur under paragraph (g).

(e) If a Member or Inactive Member who is not 100% vested in his IAR Account receives a distribution of the vested portion of his IAR Account prior to incurring five consecutive Breaks in Service with the exception of distributions under paragraph (a)(i), (a)(iii), or (c) above, the vested portion of his IAR Account at any time prior to five consecutive Breaks in Service shall not be less than an amount (X) determined in the following manner:  X = P(AB + D) - D.  For purposes hereof, P is the vested percentage applicable to such Account at the relevant time; AB is the balance of such Account at the relevant time; and D is the amount of distributions from such Account.

(f) Amount(s) subject to restoration under paragraph (d) shall be credited to the Member’s IAR Account, Profit Sharing Account and/or Retirement Account (as applicable) upon reemployment and shall be made from the assets of a special contribution of the Company which shall not constitute an “annual addition” within the meaning of Section 415 of the Code.

(g) A reemployed Member who is rehired under the conditions set forth in paragraph (d) may repay the full amount previously distributed from his partially vested IAR Account, Profit Sharing Account and/or Retirement Account (as applicable) as follows:

(1) Repayment shall be made in a single sum.

(2) Repayment may only be made while the Member remains employed and may not be made later than five years after reemployment.

(3) Repayment cannot be made in whole or in part by rollover from another plan or individual retirement account.

7.4Election of Former Vesting Schedule.

In the event the Company adopts an amendment to the Plan that directly or indirectly affects the computation of a Member’s nonforfeitable interest in his Matching Account, IAR Account, Profit Sharing Account and/or Retirement Account (as applicable), any Member who is credited with three or more years of Vesting Service shall have a right to have his nonforfeitable interest in such account as of the effective date of the amendment continue to be determined under the vesting schedule in effect prior to such amendment rather than under the new vesting schedule, unless the nonforfeitable interest of such Member in such account under the Plan, as amended, at any time is not less than such account interest determined without regard to such amendment.  A Member shall exercise such right by giving written notice of his exercise thereof to the Company within 60 days after the latest of (i) the date he received notice of such amendment from the Company, (ii) the effective date of the amendment, or (iii) the date the amendment is adopted.  Notwithstanding the foregoing provisions of this Section 7.4, the vested interest of each Member on the effective date of such amendment shall not be less than his vested interest under the Plan through the later of the effective date or the date the Plan amendment is adopted.

7.5Vesting Service.

Vesting Service shall be credited to a Member in accordance with the following provisions:

(a) Vesting Service Prior to the Effective Date.  For the period preceding the Effective Date, an individual shall be credited with Vesting Service in an amount equal to all service credited to him for vesting purposes under the Plan as it existed on the day prior to the Effective Date.

(b) Vesting Service on and after the Effective Date.  Subject to the provisions of Sections 7.7 and 7.8, for each Plan Year beginning on or after the Effective Date, for purposes of determining an IAR Member’s Vested Interest in his IAR Account, an IAR Member shall be credited with a year of Vesting Service for each Plan Year on and after such date for which he is credited with at least 1,000 Hours of Service; provided, however, that if he is credited with less than 1,000 Hours of Service for any such Plan Year, he shall not be credited with a partial year of Vesting Service or such Plan Year.  Subject to the provisions of Sections 7.7 and 7.8, for each Plan Year beginning on or after the Effective Date, for purposes of determining a Profit Sharing Member’s vested interest in his Profit Sharing Account and a Retirement Contributions Member’s vested interest in his Retirement Account, each such Member shall be credited with Vesting Service in an amount equal to his aggregate Periods of Service whether or not such Periods of Service are completed consecutively and regardless of when completed.  Notwithstanding anything to the contrary in the preceding sentence, (1) if a Member terminates his Service (at a time other than during a leave of absence) and subsequently resumes his Service, if his Reemployment Date is within twelve months of his Severance Date, such Period of Severance shall be treated as a Period of Service for purposes of this Section, and (2) if a Member terminates his Service during a leave of absence and subsequently resumes his Service, if his Reemployment Date is within twelve months of the beginning of such leave of absence, such Period of Severance shall be treated as a Period of Service for purposes of the preceding sentence.

(c) Vesting Service With Petreco Affiliates.  For the period preceding March 20, 2004, each Eligible Employee who was employed by Petreco International, Inc. prior to such date shall be credited with years of Vesting Service for purposes of the Plan equal to the Periods of Service he would have been credited under the Plan as if Petreco International, Inc. and its affiliates and predecessors were Employers under the Plan during such period and as if the Plan counted Vesting Service based on Periods of Service (rather than Hours of Service) during such entire period.

7.6Transfers.

Notwithstanding the provisions of Section 7.1, years of Vesting Service credited to a person shall be subject to the following:

(a) Any person who transfers or re-transfers to employment with an Employer as an Eligible Employee directly from other employment (i) with the Employer in a capacity other than as an Employee or (ii) with a Controlled Entity, shall be credited with years of Vesting Service, for such other employment as if such other employment were employment with an Employer as an Eligible Employee for the entire period of employment.

(b) Any person who transfers from employment with an Employer as an Eligible Employee directly to other employment (i) with an Employer in a capacity other than as an Eligible Employee or (ii) with a Controlled Entity, shall be deemed by such transfer not to lose his credited years of Vesting Service, and shall be deemed not to retire or otherwise terminate his employment until such time as he is no longer in the employment of a Controlled Entity, at which time he shall become entitled to benefits, if he is otherwise eligible therefor under the provisions of the Plan; provided, however, that up to such time he shall receive credit for years of Vesting Service for such other employment as if such other employment were employment with the Employer as an Eligible Employee.

7.7Loss and Reinstatement of Years of Vesting Service.

Except as otherwise specifically provided in this Section 7.7, an IAR Member’s years of Vesting Service to be taken into account in determining his vested interest in his IAR Account shall be lost if he retires or if his employment with an Employer and its Controlled Entities terminates for any other reason and, if he thereafter returns to employment as an Eligible Employee, he shall be treated for Plan purposes as a new Eligible Employee.  Notwithstanding the foregoing provisions, a retired or former IAR Member who returns to employment with an Employer or a Controlled Entity shall be reinstated with the years of Vesting Service with which he was credited at the time of his prior retirement or other termination of employment if:

(a) he was eligible for a benefit from his IAR Account or he had an amount greater than zero credited to his Basic Account, his Matching Account, or his Supplemental Account at the time of his previous retirement or other termination of employment, or

(b) he terminated his employment before satisfying the conditions of eligibility for a benefit from his IAR Account and with no amount then credited to his Basic Account, his Matching Account, or his Supplemental Account and the number of his consecutive one-year Breaks in Service is less than five or the aggregate number of his years of Vesting Service at the time of such prior termination of employment was greater than the number of his consecutive one-year Breaks in Service (the aggregate number of years of Vesting Service not to include any years of Vesting Service not required to be taken into account due to previous Breaks in Service); provided, however, that if he should return to employment with an Employer or a Controlled Entity in a capacity other than as an Eligible Employee, his period of employment shall be treated for purposes of the Plan in accordance with the provisions of Section 7.6(b).

Except as otherwise specifically provided in this Section 7.7, a Profit Sharing Member’s and Retirement Contributions Member’s years of Vesting Service to be taken into account in determining his vested interest in his Profit Sharing Account and/or Retirement Account shall be lost if he retires or if his employment with an Employer and its Controlled Entities terminates for any other reason and, if he thereafter returns to employment as an Eligible Employee, he shall be treated for Plan purposes as a new Eligible Employee.  Notwithstanding the foregoing provisions, a retired or former Profit Sharing Member or Retirement Contributions Member who returns to employment with an Employer or a Controlled Entity shall be reinstated with the years of Vesting Service with which he was credited at the time of his prior retirement or other termination of employment if:

(a) he was eligible for a benefit from his Profit Sharing Account or Retirement Account, as applicable, or he had an amount greater than zero credited to his Basic Account, his Matching Account, or his Supplemental Accounts at the time of his previous retirement or other termination of employment, or

(b) he terminated his employment before satisfying the conditions of eligibility for a benefit from his Profit Sharing Account or Retirement Account, as applicable, and with no amount then credited to his Basic Account, his Matching Account, or his Supplemental Account and he is reemployed by an Employer or a Controlled Entity before he incurs a Period of Severance that equals or exceeds the greater of five years or his aggregate Period of Service completed before such Period of Severance.

Years of Vesting Service which are reinstated under this Section 7.7 shall be reinstated in accordance with and subject to all applicable provisions of the Plan with respect to reemployment.

7.8Prior Plan Vesting Rights.

A Member or an Inactive Member whose Separate Account includes amounts that were transferred to the Plan in connection with a plan merger or plan-to-plan transfer shall have the additional vesting rights, if any, as specified in an Addendum.

7.9Finality of Determinations.

Notwithstanding anything to the contrary contained in this Article VII, there shall be no duplication of years of Vesting Service credited to an Employee for any one period of his employment with an Employer or a Controlled Entity.  All determinations with respect to the crediting of years of Vesting Service under the Plan shall be made on the basis of the records of the Employers, and all determinations so made shall be final and conclusive upon Eligible Employees, former Eligible Employees, and all other persons claiming a benefit interest under the Plan.  In addition, the Company shall have the exclusive responsibility with respect to determining the amount of Basic, Matching, Company Retirement, Retirement and Profit Sharing Contributions, and any adjustment thereto to comply with the terms of the Plan or the Code.  A determination so made shall be final and conclusive upon the Employer, all Members, and Beneficiaries.

ARTICLE VIII

WITHDRAWALS WHILE EMPLOYED

8.1Withdrawals Prior to Age 59½.

Subject to the provisions in this Section 8.1, a Member or an Inactive Member who is receiving compensation from a Controlled Entity and who has not attained age 59½, may:

(a) file a written request with the Company in the form and within the time period prescribed by the Company for a withdrawal of an amount credited to his Separate Accounts attributable to Basic, Rollover, Supplemental and Transferred Contributions.  Such withdrawal shall be permitted only if (i) the reason for the withdrawal is to enable the Member to meet an immediate and heavy financial need which meets the requirements of Section 401(k) of the Code and regulations thereunder and which cannot be reasonably relieved from other sources, including but not limited to sources outside the Plan and all other accounts and available nontaxable loans under the Plan; provided, however, that a Member shall not be required to take actions that would have the effect of increasing the amount of the need or to take commercial loans that are not available on reasonable commercial terms, and (ii) would not exceed the lesser of the balance of such Separate Accounts or the amount required to meet the need for which the withdrawal is requested.  The amount required to meet the immediate and heavy financial need may include any amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution.  If the Company approves such request, such withdrawal shall be made from a Member’s Separate Accounts in accordance with procedures established by the Company.  A withdrawal shall be deemed to be made on account of an immediate and heavy financial need of a Member if the withdrawal is for:

(1) Expenses for medical care described in Section 213(d) of the Code previously incurred by the Member, the Member’s spouse, or any dependents of the Member (as defined in Section 152 of the Code and, for taxable years beginning on or after January 1, 2005, determined without regard to Section 152(b)(1), (b)(2), or (d)(1)(B) of the Code) or necessary for those persons to obtain medical care described in Section 213(d) of the Code and not reimbursed or reimbursable by insurance, determined without regard to whether such expenses exceed 7.5% of adjusted gross income;

(2) Costs directly related to the purchase of a principal residence of the Member (excluding mortgage payments);

(3) Payment of tuition and related educational fees, and room and board expenses, for the next twelve months of post-secondary education for the Member or the Member’s spouse, children, or dependents (as defined in Section 152 of the Code and, for taxable years beginning on or after January 1, 2005, determined without regard to Section 152(b)(1), (b)(2), or (d)(1)(B) of the Code);

(4) Payments necessary to prevent the eviction of the Member from his principal residence or foreclosure on the mortgage of the Member’s principal residence; or

(5) Payments for burial or funeral expenses for the Member’s deceased parent, spouse, children or dependents (as defined in Section 152 of the Code and, for taxable years beginning on or after January 1, 2005, without regard to Section 152(d)(1)(B) of the Code);

(6) Expenses for the repair of damage to the Member’s principal residence that would qualify for the casualty deduction under Section 165 of the Code (determined without regard to whether the loss exceed 10% of the Member’s adjusted gross income); or

(7) Such other financial needs that the Commissioner of Internal Revenue may deem to be immediate and heavy financial needs through the publication of revenue rulings, notices, and other documents of general applicability.

The above notwithstanding, withdrawals under this Paragraph from a Member’s Basic Account shall be limited to the sum of the Member’s Basic Contributions to the Plan, plus income allocable thereto and credited to the Member’s Basic Account as of the Valuation Date coincident with or next preceding December 31, 1988, less any previous withdrawals of such amounts.

(b) file a written request with the Company in the form and within the time period prescribed by the Company for a withdrawal of an amount credited to his Supplemental Account.

8.2Withdrawals After Age 59½.

Subject to the provisions of this Section 8.2, a Member or an Inactive Member who is receiving compensation from a Controlled Entity and who has attained  at least age 59½, may file a written request with his Employer in the form and within the time period prescribed by the Company for a withdrawal of an amount credited to his Separate Accounts; provided, however, that such a Member may request a withdrawal of amounts credited to his Separate Accounts only to the extent of his vested interest in such amounts, as determined in accordance with Section 7.2.  A withdrawal made pursuant to this Section 8.2 shall be made from a Member’s or Inactive Member’s Separate Accounts as elected by such Member or Inactive Member.

8.3Form of Withdrawals.

All withdrawals made from Separate Accounts invested in the Funds, other than the Company Stock Fund, shall be in the form of cash.  All withdrawals made from Separate Accounts invested in the Company Stock Fund shall be in the form of Company Stock or  cash, as elected by the Member; provided, however, that the value of any fractional shares of Company Stock shall be distributed in the form of cash.  Any withdrawal hereunder which constitutes an Eligible Rollover Distribution shall be subject to the direct rollover election described in Section 10.9.

8.4Withdrawals of Prior Plan Amounts.

In addition to all other withdrawal rights available pursuant to this Article VIII, a Member or an Inactive Member whose Separate Account includes amounts that were transferred to the Plan in connection with a plan merger or plan-to-plan transfer and who is receiving compensation from a Controlled Entity and shall have the additional withdrawal rights, if any, as specified in an Addendum.

ARTICLE IX

LOANS

9.1Eligibility for Loan.

Upon application by (1) any Member who (a) is on the United States payroll of the Employer and (b) is receiving compensation other than severance pay from a Controlled Entity, or (2) any Member (x) who is a party-in-interest, as that term is defined in section 3(14) of ERISA, as to the Plan, (y) who is no longer employed by the Employer, who is a beneficiary of a deceased Member, or who is an alternate payee under a qualified domestic relations order, as that term is defined in section 414(p)(8) of the Code, and (z) who retains a balance in his Separate Account under the Plan (an individual who is eligible to apply for a loan under this Article being hereinafter referred to as a “Member”), the Company may in its discretion direct the Trustee to make a loan or loans to such Member provided that such Member has not had an outstanding loan from the Plan for at least one month and provided further that a loan from the Plan to such Member is not prohibited by applicable law.  Such loans shall be made pursuant to the provisions of the Company’s written loan procedure, which procedure is hereby incorporated by reference as a part of the Plan.

9.2Maximum Loan.

(a) A loan to a Member may not exceed 50% of the nonforfeitable balance of such Member’s Separate Accounts (excluding his IAR Account, Profit Sharing Account and/or Retirement Account).

(b) Paragraph (a) above to the contrary notwithstanding, the amount of a loan made to a Member under this Article shall not exceed an amount equal to the difference between:

(i) The lesser of $50,000 (reduced by the excess, if any, of (A) the highest outstanding balance of loans from the Plan during the one-year period ending on the day before the date on which the loan is made over (B) the outstanding balance of loans from the Plan on the date on which the loan is made) or one-half of the present value of the Member’s total nonforfeitable accrued benefit under all qualified plans of the Employer or a Controlled Entity; minus

(ii) The total outstanding loan balance of the Member under all other loans from all qualified plans of the Employer or a Controlled Entity.

(c) A Member may not pledge his IAR Account as security for a loan pursuant to this Article.

Operation of Article.

The provisions of this Article shall be applicable to loans granted on or renewed on or after the Effective Date.  Loans granted or renewed on or prior to such date shall be governed by the provisions of the Plan as in effect prior to such date.

ARTICLE X

DISTRIBUTION ON RETIREMENT OR OTHER TERMINATION OF EMPLOYMENT

10.1Eligibility for Distribution.

Upon termination of employment with the Controlled Entities, each Member and Inactive Member shall be entitled to receive the entire interest of his Basic, Supplemental, Matching, and Rollover/Transfer Accounts and the vested interest of his IAR Account, Profit Sharing Account, and/or Retirement Account, if any, in accordance with his provisions of Sections 10.2 and 10.3.  Notwithstanding the provisions of the Plan regarding availability of distributions from the Plan upon “termination of employment,” a Member’s vested interest in his Separate Accounts shall be distributed on account of the Member’s “severance from employment” as such term is used in Section 401(k)(2)(B)(i)(I) of the Code.  If a Member’s employment status changes from that of a common law employee of the Employer to a Leased Employee, such Participant shall not be deemed to have a “severance from employment” and, therefore, will not be eligible for a distribution under the Plan as a result of such employment status change.

10.2Distribution of Separate Accounts.

Subject to the provisions of Section 10.3, the Company shall direct the Trustee to make distribution to a Member or Inactive Member, who becomes eligible to receive the vested interest of his Separate Accounts pursuant to the provisions of Section 10.1 in the manner hereinafter set forth.

(a.1) Distributions of $1,000 or Less.  If the value of the vested interest of a Member or Inactive Member in his Separate Accounts is $1,000 or less (or $5,000 or less in the case of a distribution after a Member’s death), distribution thereof shall be made to such a Member (or his Beneficiary, as applicable) as soon as practicable in a single sum payment.

(a.2) Distributions of More than $1,000 But Not More Than $5,000.  If the value of the vested interest of a Member or Inactive Member in his Separate Accounts is more than $1,000 but not more than $5,000, such Member may elect to receive distribution of such Accounts as soon as practicable in a single sum payment at any time prior to attainment of age 70½; provided, however, distribution after a Member’s death may be made without consent pursuant to Section 10.2(a.1) if the value of the vested interest in his Account(s) is $5,000 or less.  Such election may be made without the consent of such Member’s spouse, if any.  In the event of a distribution pursuant to this Section 10.2(a.2), if the Member does not elect to have such distribution paid directly to an Eligible Retirement Plan specified by the Participant in a direct rollover in accordance with Section 10.9 or to receive the distribution directly in accordance with this Section 10.2(a.2), then the Plan Administrator will direct the Trustee to pay the distribution in a direct rollover to an individual retirement plan designated by the Plan Administrator.

(b) Distributions of Over $5,000.  If the value of the vested interest of a Member or Inactive Member in his Separate Accounts is in excess of $5,000 such Member may elect to receive distribution of his Separate Accounts in a single sum payment at any time prior to attainment of age 70½.  Notwithstanding the foregoing, no such distribution may be made to a Member or Inactive Member prior to Retirement Age, unless such Member and, in the case of an IAR Member (or Member who was at any time an IAR Member), his spouse consent in writing to such distribution.  In the event that the vested interest of an IAR Member in his IAR Account is in excess of $5,000, such IAR Member may elect to receive distribution of his IAR Account in a single sum payment at any time prior to attainment of age 70½; provided, however, that such IAR Member waives distribution of the standard form of benefit set forth below in paragraphs (1) and (2) of this Section 10.2(b) and if such Member is married, his spouse consents in writing to such election and waiver and such consent acknowledges the effect of such action and is witnessed by a notary public or a Plan representative, unless a Plan representative finds that such consent cannot be obtained because the spouse cannot be located or because of other circumstances set forth in Section 401(a)(11) of the Code and regulations issued thereunder.  If the Separate Accounts of such a Member are not distributed pursuant to the foregoing provisions, such Separate Accounts shall be distributed with his IAR Account in the following manner:

(1) Married IAR Members.  The standard form of benefit payment of an IAR Account for any IAR Member who is married on the date his Plan interest is to be distributable to him under the provisions of Section 10.1 and the foregoing provisions of Section 10.2(b) shall be a 50 percent joint and survivor annuity.  Such joint and survivor annuity shall be a commercial annuity which is payable for the life of the IAR Member with a survivor annuity for the life of the IAR Member’s surviving spouse equal to 50 percent of the amount of the annuity payable during the joint lives of the IAR Member and such IAR Member’s surviving spouse.  The standard joint and survivor annuity shall be paid automatically as provided hereunder unless the IAR Member elects to receive his benefit payments in another form during the election period described in Section 10.2(b)(4)(iii); provided, however, that if distribution is to be made prior to Retirement Age, it shall be made only with the consent of the IAR Member and his spouse, if any; provided further that the IAR Member’s spouse consents in writing to such election and the time of benefit commencement thereof pursuant to the provisions of Section 10.2(b)(5).  Any such election may be revoked and subsequent elections may be made, or revoked, at any time during such election period.  If the IAR Member has elected not to receive the standard joint and survivor annuity as provided herein, such IAR Member’s benefit shall be paid in one of the benefit payment forms under Section 10.2(b)(3), as selected by such IAR Member.

(2) Unmarried IAR Members.  The standard form of benefit payment of an IAR Account for any IAR Member who is not married on the date his Plan interest is to be distributable to him under the provisions of Section 10.1 and the foregoing provisions of Section 10.2(b), shall be a single life annuity under Section 10.2(b)(3)(i), unless such IAR Member selects another benefit payment form provided in Section 10.2(b)(3); provided, however, that if distribution is to be made prior to Retirement Age, it shall be made only with the consent of the IAR Member.

(3) Optional Forms.  Subject to the provisions of paragraphs (a) and (b) of this Section 10.2(b), an IAR Member may elect to receive his Separate Account in one of the following forms:

(i) A commercial annuity in the form of a single life annuity for the life of such IAR Member;

(ii) A commercial annuity in the form of a single life cash refund annuity;

(iii) A commercial annuity for a term certain of ten years and continuous for the life of the IAR Member if he survives such term certain;

(iv) A commercial annuity payable for the life of such Member with a survivor annuity for the life of his Beneficiary which shall be equal to 50 percent, 75 percent, or 100 percent of the annuity payable during the joint lives of the IAR Member and such IAR Member’s Beneficiary;

(v) A lump sum payment regardless of age; or

(vi) A single life annuity commencing prior to the earliest age as of which such IAR Member will become eligible for an “old-age insurance benefit” under the federal Social Security Act, adjusted so that an increased amount will be paid prior to such age and a reduced amount thereafter; the purpose of this adjustment is to enable the IAR Member to receive, from this Plan and under the federal Social Security Act, an aggregate income in approximately a level amount for life.  Moreover, in the event the IAR Member so elects, if such IAR Member dies before receiving payments aggregating the vested amount of his Separate Accounts at his benefit commencement date, the difference shall be paid in a single lump sum to his Beneficiary or if there is none, to the executor or administrator of his estate.

(4) Notwithstanding the foregoing provisions of this Section 10.2(b), the following additional requirements must be satisfied in order for a benefit to be paid pursuant to Section 10.2(b)(3):

(i) The benefit payment form described in Section 10.2(b)(3) above shall only be available if the present value of the total payments actuarially expected to be made to the IAR Member shall be more than 50 percent of the present value of the total payments actuarially expected to be made to the IAR Member and his Beneficiary.

(ii) The form of payment to the IAR Member or to the IAR Member and his Beneficiary must be payable over a period of time which does not exceed the longer of the life expectancy of the IAR Member, or the joint and last survivor life expectancy of the IAR Member and his Beneficiary.

(iii) Subject to the provisions of Section 10.2(b)(5) with respect to any election described in Section 10.2(b)(3), the Company shall furnish certain information, pertinent to such election, to each IAR Member no less than thirty days (unless such thirty-day period is waived by an affirmative election in accordance with applicable Treasury regulations) and no more than ninety days before his Annuity Starting Date.  The furnished information shall include an explanation of (1) the terms and conditions of the joint and survivor annuity, (2) the IAR Member’s right to waive the standard joint and survivor annuity and the effect of such election, (3) the rights of the IAR Member’s spouse, if any, (4) the right to revoke such election and the effect of such revocation, (5) a general description of the eligibility conditions and other material features of the alternative forms of benefit available pursuant to Section 10.2(b)(3), and (6) sufficient additional information to explain the relative values of such alternative forms of benefit.  The period during which an IAR Member may make or revoke such election shall be the ninety day period ending on such IAR Member’s Annuity Starting Date provided that such Election may also be revoked at any time prior to the expiration of the seven-day period that begins the day after the information required to be furnished to the IAR Member.

(5) In the event a benefit is subject to payment under the standard joint and survivor annuity form set forth in Section 10.2(b)(1) and such IAR Member elects another form of benefit payment which will not provide his spouse with a lifetime survivor annuity which is at least 50 percent of the amount of the annuity payable during the joint lives of the IAR Member and the spouse, such benefit shall be paid in such form only if such IAR Member’s spouse consents the form and time thereof in writing.  Any spousal consent given pursuant to this provision shall acknowledge the effect of such form and time of payment and shall be witnessed by a Plan representative or a notary public, unless a Plan representative finds that such consent cannot be obtained because the spouse cannot be located or because of other circumstances set forth in Section 401(a)(11) of the Code and regulations issued thereunder.

(c) Disregard of Rollover Contributions for Valuation of Involuntary Cash Outs in Certain Cases.  For purposes of application of the $5,000 threshold of Sections 10.2(a.1), 10.2(a.2), 10.2(b), 11.5(f), and 12.5, the value of a Member’s vested interest in his Separate Accounts shall be determined without regard to that portion of such accounts which is attributable to Rollover Contributions (and earnings allocable thereto) within the meaning of Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii) and 457(e)(16) of the Code.  If the value of a Member’s Separate Accounts as so determined is $5,000 or less, the Member’s entire nonforfeitable account balance (including amounts attributable to such Rollover Contributions) shall be distributable pursuant to an election under Section 10.2(a.2) or distributed pursuant to Section 10.2(a.1), 11.5(f) or 12.5, as applicable.

10.3Form of Distribution.

Unless the Member or Inactive Member otherwise elects (or is deemed to elect otherwise because the present value of such Member’s nonforfeitable benefit exceeds $5,000 and he fails to consent to a distribution while his benefit is immediately distributable within the  meaning of Treasury Regulations), the payment of benefits under the Plan to such Member shall begin no later than the 60th day after the close of the Plan Year in which the latest of the following events occurs:

(i) The date on which such Member attains age 65;

(ii) The tenth anniversary of the date on which such Member commenced participation in the Plan; and

(iii) The date on which such Member terminates service with the Controlled entities.

All single sum distributions shall be made in cash; provided, however, a Member (or, if authorized by the Member, his designated beneficiary or legal representative in the case of a deceased Member), may elect to have the portion of his Accounts that is then invested in the Company Stock Fund distributed in whole shares of Company Stock, with any partial shares to be distributed in cash.

10.4Limitation on Commencement of Distribution.

Notwithstanding any provision in the Plan to the contrary, all distributions required under this Article X shall be determined and made in accordance with the regulations under Section 401(a)(9) of the Code, including the minimum distribution incidental benefit requirements of Section 1.401(a)(9)-2 of the regulations.  Accordingly, the entire interest of a Member or Inactive Member in his Separate Accounts must be distributed, or must begin to be distributed, no later than such Member’s Mandatory Distribution Date.  The Mandatory Distribution Date of a Member or Inactive Member shall be determined as follows:

(i) The Mandatory Distribution Date of such a Member who attains age 70½ on or after January 1, 1988, but prior to January 1, 1999, shall be April 1, 1990, or the first day of April following the calendar year in which such Member attains age 70½, whichever is later.

(ii) The Mandatory Distribution Date of such a Member who attains age 70½ on or after January 1, 1999, shall be the first day of April of the calendar year following the later of (A) the calendar year in which such Member attains age 70½ or (B) the calendar year in which such Member terminates his employment with the Employer (provided, however, that Clause (B) of this sentence shall not apply in the case of a Member who is a “five-percent Owner” (as defined in section 416 of the Code) with respect to the Plan Year ending in the calendar year in which such Member attains age 70½).

(iii) The Mandatory Distribution Date of such a Member who has attained age 70½ before January 1, 1988, shall be the first day of April of the calendar year following the calendar year in which the later of such Member’s termination of employment or attainment of age 70½ occurs.

(iv) The Mandatory Distribution Date of a Member who dies before another Mandatory Distribution Date shall be (A) if payable to other than the Member’s spouse, the last day of the one-year period following the death of such Member or (B) if payable to the Member’s spouse, after the date upon which such Member would have attained age 70-1/2, unless such surviving spouse dies before payments commence, in which case the Mandatory Distribution Date may not be deferred beyond the last day of the one-year period following the death of such surviving spouse.

A Member (other than a Member who is a “five-percent owner” (as defined in section 416 of the Code) with respect to the Plan Year ending in the calendar year in which such Member attains the age 70½) who attains age 70½ in calendar year 1998 or 1999 may elect to defer his Mandatory Disbursement Date until no later than April 1 of the calendar year following the later of (A) the calendar year in which such Member attains the age 70½ or (B) the calendar year in which such Member terminates his employment with the Company, provided, that such election is made by the end of the calendar year in which such Member attains age 70½.

Minimum distributions shall be determined in accordance with Section 10.12.

10.5Restriction on Alienation.

Except as provided in Sections 401(a)(13)(B) and 414(p) of the Code relating to qualified domestic relations orders, no benefit under the Plan at any time shall be subject in any manner to anticipation, alienation, assignment (either at law or in equity), encumbrance, garnishment, levy, execution, or other legal or equitable process.  No person shall have power in any manner to anticipate, transfer, assign (either at law or in equity), alienate, or subject to attachment, garnishment, levy, execution, or other legal or equitable process, or in any way encumber his benefits under the Plan, or any part thereof, and any attempt to do so shall be void.

10.6Payments to Incompetents or Minors.

In the event that it shall be found that any individual to whom an amount is payable hereunder is incapable of attending to his financial affairs because of any mental or physical condition, including the infirmities of advanced age, or is a minor, such amount (unless prior claim therefor shall have been made a duly qualified guardian or other legal representative) may, in the discretion of the Company, be paid to a duly appointed guardian or to another person for the use or benefit of the individual found incapable of attending to his financial affairs or in satisfaction of legal obligations incurred by or on behalf of such individual.  The Trustee shall make such payment only upon receipt of written instructions to such effect from the Company.  Any such payment shall be charged to the Separate Accounts from which any such payment would otherwise have been paid to the individual found to be a minor or incapable of attending to his financial affairs and shall be a complete discharge or any liability therefor under the Plan.

10.7Commercial Annuities.

In any case where a benefit payable under the Plan is to be paid in the form of a commercial annuity, a commercial annuity contract shall be purchased and distributed to the Member, Inactive Member, or Beneficiary, as the case may be.  Upon the distribution of any such contract, the Plan shall have no further liability with respect to the amount used to purchase the annuity contract and the company issuing such contract shall be solely responsible to the recipient of the contract for the annuity payments thereunder.  All certificates for commercial annuity benefits shall be non-transferable, and no benefit thereunder may be sold, assigned, discounted, or pledged.  Any commercial annuity purchased under the Plan shall contain such terms and provisions as may be necessary to satisfy the requirements under the Plan.

10.8Actuarial Equivalency.

With respect to any benefit payment pursuant to the Plan, whichever form of payment is selected, the value of such benefit shall be the actuarial equivalent of the value of the vested balance of the Separate Accounts to which the particular Member, Inactive Member, or Beneficiary, as the case may be, is entitled.

10.9Eligible Rollover Distributions.

Each Member and Beneficiary who receives an Eligible Rollover Distribution may elect in the time and in a manner prescribed by the Company to have all or any portion of such Eligible Rollover Distribution transferred to an Eligible Retirement Plan; provided, however, that only one such transfer may be made with respect to an Eligible Rollover distribution to an Eligible Retirement Plan.  Notwithstanding the foregoing, the Member may elect, after receiving the notice required under Section 402(f) of the Code, to receive such Eligible Rollover Distribution prior to the expiration of the 30-day period beginning on the date such Member is issued such notice; provided that the Member or Beneficiary is permitted to consider his decision for at least 30 days and is advised of such right in writing.

10.10Deferral of Payments.

Subject to the provisions of Section 10.4, but notwithstanding the provisions of any other Section of the Plan to the contrary, a Member whose Plan interest is determined to have a present value more than $1,000 (or more than $5,000 in the case of a deceased Member) shall not receive payment of such interest prior to the later of normal retirement age or age 62, unless consented to by the Member in writing.

10.11Lost or Missing Members or Beneficiaries.

In the case of a benefit payable on behalf of a Member, if the Company is unable to locate the Member or beneficiary to whom such benefit is payable, upon the Company’s determination thereof, such benefit shall be forfeited.  Notwithstanding the foregoing, if subsequent to any such forfeiture the Member or beneficiary to whom such benefit is payable makes a valid claim for such benefit, such forfeited benefit shall be restored to the Plan in the manner provided in Section 7.3.

10.12Minimum Distribution Requirements.

(a) The provisions of this Section 10.12 will take precedence over any inconsistent provisions of the Plan.

(b) All distributions required under this Section 10.12 will be determined and made in accordance with the Treasury regulations under Section 401(a)(9) of the Code.

(c) Notwithstanding the other provisions of this Section 10.12, distributions may be made under a designation made before January 1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the Plan that relate to Section 242(b)(2) of TEFRA.

(d) The Member’s entire interest will be distributed, or begin to be distributed, to the Member no later than the Member’s Required Beginning Date.  If the Member dies before distributions begin, the Member’s entire interest will be distributed, or begin to be distributed, no later than as follows:

(1) If the Member’s surviving spouse is the Member’s sole Designated Beneficiary, then distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Member died, or by December 31 of the calendar year in which the Member would have attained age 70½, if later.

(2) If the Member’s surviving spouse is not the Member’s sole Designated Beneficiary, then distributions to the Designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Member died.

(3) If there is no Designated Beneficiary as of September 30 of the year following the year of the Member’s death, the Member’s entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Member’s death.

(4) If the Member’s surviving spouse is the Member’s sole Designated Beneficiary and the surviving spouse dies after the Member but before distributions to the surviving spouse begin, this Paragraph (disregarding item (1) above), will apply as if the surviving spouse were the Member.

For purposes of this Paragraph (d) and Paragraph (f) below, unless item (4) above applies, distributions are considered to begin on the Member’s Required Beginning Date. If item (4) above applies, distributions are considered to begin on the date distributions are required to begin to the surviving spouse under item (1) above. If distributions under an annuity purchased from an insurance company irrevocably commence to the Member before the Member’s Required Beginning Date (or to the Member’s surviving spouse before the date distributions are required to begin to the surviving spouse under item (1) above), the date distributions are considered to begin is the date distributions actually commence.  Unless the Member’s interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the Required Beginning Date, as of the first Distribution Calendar Year distributions will be made in accordance with Paragraphs (e) and (f) of this Section 10.12, whichever is applicable. If the Member’s interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Section 401(a)(9) of the Code and the Treasury regulations.

(e) During the Member’s lifetime, the minimum amount that will be distributed for each Distribution Calendar Year is the lesser of:

(1) the quotient obtained by dividing the Member’s Account Balance by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations, using the Member’s age as of the Member’s birthday in the Distribution Calendar Year; or

(2) if the Member’s sole Designated Beneficiary for the Distribution Calendar Year is the Member’s spouse, the quotient obtained by dividing the Member’s Account Balance by the number in the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations, using the Member’s and spouse’s attained ages as of the Member’s and spouse’s birthdays in the Distribution Calendar Year.

Required minimum distributions will be determined under this Paragraph (e) beginning with the first Distribution Calendar Year and up to and including the Distribution Calendar Year that includes the Member’s date of death.

(f) If the Member dies on or after the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Member’s death is the quotient obtained by dividing the Member’s Account Balance by the longer of the remaining Life Expectancy of the Member or the remaining Life Expectancy of the Member’s Designated Beneficiary, determined as follows:

(1) The Member’s remaining Life Expectancy is calculated using the age of the Member in the year of death, reduced by one for each subsequent year.

(2) If the Member’s surviving spouse is the Member’s sole Designated Beneficiary, the remaining Life Expectancy of the surviving spouse is calculated for each Distribution Calendar Year after the year of the Member’s death using the surviving spouse’s age as of the spouse’s birthday in that year.  For Distribution Calendar Years after the year of the surviving spouse’s death, the remaining Life Expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse’s birthday in the calendar year of the spouse’s death, reduced by one for each subsequent calendar year.

(3) If the Member’s surviving spouse is not the Member’s sole Designated Beneficiary, the Designated Beneficiary’s remaining Life Expectancy is calculated using the age of the Designated Beneficiary in the year following the year of the Member’s death, reduced by one for each subsequent year.

If the Member dies on or after the date distributions begin and there is no Designated Beneficiary as of September 30 of the year after the year of the Member’s death, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Member’s death is the quotient obtained by dividing the Member’s Account Balance by the Member’s remaining Life Expectancy calculated using the age of the Member in the year of death, reduced by one for each subsequent year.

(g) If the Member dies before the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Member’s death is the quotient obtained by dividing the Member’s Account Balance by the remaining Life Expectancy of the Member’s Designated Beneficiary, determined as provided in item (1), (2) or (3) of Paragraph (f), whichever is applicable.  If the Member dies before the date distributions begin and there is no Designated Beneficiary as of September 30 of the year following the year of the Member’s death, distribution of the Member’s entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Member’s death.  If the Member dies before the date distributions begin, the Member’s surviving spouse is the Member’s sole Designated Beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under item (1) of Paragraph (d), this Paragraph (g) will apply as if the surviving spouse were the Member.  Notwithstanding the foregoing, if the Member dies before distributions begin and there is a Designated Beneficiary, distribution to the Designated Beneficiary is not required to begin by the date specified in Paragraph (d) above but the Member’s entire interest will be distributed to the Designated Beneficiary by December 31 of the calendar year containing the fifth anniversary of the Member’s death. If the Member’s surviving spouse is the Member’s sole Designated Beneficiary and the surviving spouse dies after the Member but before distributions to either the Member or the surviving spouse begin, this Paragraph will apply as if the surviving spouse were the Member.

(h) For purposes of this Section 10.12, the following terms and phrases shall have these respective meanings:

(1) Designated Beneficiary:  The individual who is designated as a Member’s beneficiary under Section 11.1 of the Plan and is a Designated Beneficiary under Section 401(a)(9) of the Code and Section 1.401(a)(9)-1, Q&A-4,of the Treasury regulations.

(2) Distribution Calendar Year:  A calendar year for which a minimum distribution is required. For distributions beginning before the Member’s death, the first Distribution Calendar Year is the calendar year immediately preceding the calendar year which contains the Member’s Required Beginning Date. For distributions beginning after the Member’s death, the first Distribution Calendar Year is the calendar year in which distributions are required to begin under Paragraph (d).  The required minimum distribution for the Member’s first Distribution Calendar Year will be made on or before the Member’s Required Beginning Date. The required minimum distribution for other Distribution Calendar Years, including the required minimum distribution for the Distribution Calendar Year in which the Member’s Required Beginning Date occurs, will be made on or before December 31 of that Distribution Calendar Year.

(3) Life Expectancy.  Life Expectancy as computed by use of the Single Life Table in Section 1.401(a)(9)-9 of the Treasury regulations.

(4) Member’s Account Balance.  The balance in a Member’s Accounts as of the last Valuation Date in the calendar year immediately preceding the Distribution Calendar Year (valuation calendar year) increased by the amount of any contributions made and allocated or forfeitures allocated to the Member’s Accounts as of dates in the valuation calendar year after the Valuation Date and decreased by distributions made in the valuation calendar year after the Valuation Date. A Member’s Account Balance for the valuation calendar year includes any amounts rolled over or transferred to the Plan either in the valuation calendar year or in the Distribution Calendar Year if distributed or transferred in the valuation calendar year.

(5) Requiring Beginning Date.  With respect to a Member or beneficiary, the date described in Section 10.4 of the Plan.

ARTICLE XI

BENEFICIARIES AND DEATH BENEFITS

11.1Designation of Beneficiary.

In the event of the death of a Member or Inactive Member prior to distribution in full of his interest under the Plan, the spouse, if any, of such Member shall be his Beneficiary and receive distribution of his remaining interest in accordance with the provisions of Section 11.4; provided, however, that a Member or Inactive Member, may designate a person or persons other than his spouse as his Beneficiary if the requirements of Section 11.3 are met.

11.2Beneficiary in the Absence of Designated Beneficiary.

If a Member or Inactive Member who dies does not have a surviving spouse and if no Beneficiary has been designated pursuant to the provisions of Section 11.1, or if no Beneficiary survives such Member, then the Beneficiary shall be the estate of such Member.  If any Beneficiary designated pursuant to Section 11.1 dies after becoming entitled to receive distribution hereunder and before such distributions are made in full, and if no other person or persons have been designated to receive the balance of such distributions upon the happening of such contingency, the estate of such deceased Beneficiary shall become the Beneficiary as to such balance.

11.3Spousal Consent to Beneficiary Designation.

An election to designate a Beneficiary other than the spouse of such Member or Inactive Member shall not be effective unless (A) such spouse has consented thereto in writing and such consent (i) acknowledges the effect of such election, (ii) either consents to the specific designated beneficiary (which designation may not be subsequently changed by the Member or Inactive Member without spousal consent) or expressly permits such designation by the Member or Inactive Member without the requirement of further consent by the spouse, and (iii) is witnessed by a Plan representative (other than the Member, or Inactive Member, as applicable) or a notary public, or (B) the consent of such spouse cannot be obtained because the spouse cannot be located or because of other circumstances described by applicable Treasury regulations.  Any such consent by such spouse shall be irrevocable.

11.4Death Benefits from Non-IAR Accounts.

In the event of the death of a Member or Inactive Member prior to distribution in full of his interest in the Plan, the Beneficiary of such Member shall receive distribution of such Member’s remaining interest in his Separate Accounts other than his IAR Account in a single sum to such Member’s Beneficiary, unless such Beneficiary elects to receive such interest with his IAR Account interest, if any, in the form of a single life annuity.

11.5Death Benefits from IAR Accounts.

(a) The interest in the IAR Account of any deceased IAR Member or Inactive Member whose surviving spouse is his Beneficiary shall be a survivor annuity.  Such survivor annuity shall be a commercial annuity which is payable for the life of such surviving spouse.

(b) Any Member or Inactive Member who would otherwise have his death benefit from his IAR Account paid in the form of a survivor annuity payable to his surviving spouse may elect not to have his benefit paid in such form by electing to receive such death benefit in a single sum or by designating a person other than his spouse as his Beneficiary.  Any election may be revoked and subsequent elections may be made or revoked at any time prior to the death of the Member or Inactive Member.

(c) Paragraph (b) above to the contrary notwithstanding, an election not to have the death benefit paid in the form of a survivor annuity payable to the surviving spouse may be made before the first day of the Plan Year in which a Member or Inactive Member attains the age of thirty-five only (A) after the Member or Inactive Member separated from service and only with respect to benefits accrued under the Plan before the date of such separation or (B) in the case of a Member who has not separated from service, if the Member has been furnished the information in Paragraph (c) below, with such election to become invalid upon the first day of the Plan Year in which the Member attains the age of thirty-five, whereupon a new election may be made by such Member.

(d) The Company shall furnish certain information, pertinent to the Paragraph (b) election to each Member within the period beginning with the first day of the Plan Year in which he attains the age of thirty-two (but not earlier than the date such Member begins participation in the Plan) and ending with the later of (1) the last day of the Plan Year preceding the Plan Year in which the Member attains the age of thirty-five, or (2) a reasonable time after the Employee becomes a Member.  If a Member separated from service before attaining the age of thirty-five, such information shall be furnished to such Member within the period beginning one year before the Member separates from service and ending one year after such separation.  Such information shall also be furnished to a Member who has not attained the age  of thrifty-five or terminated employment, within a reasonable time after written request by such Member.  The furnished information shall include an explanation of (1) the terms and conditions of the survivor annuity, (2) the Member’s right to elect to waive the survivor annuity and the effect of such election, (3) the rights of the Member’s surviving spouse, (4) the right to revoke such election and the effect of such revocation, (5) a general description of the eligibility conditions and other material features of the alternative forms of benefit available pursuant to Paragraph (f) below, and (6) sufficient additional information to explain the relative value of such alternative forms of benefit.

(e) For purposes of this Section 11.5 the IAR Account death benefit of a deceased Member or Inactive Member who is not survived by his spouse or who has elected not to have his IAR Account death benefit paid in the survivor annuity form set forth in Section 11.5(a) shall be paid to his Beneficiary in one of the following alternative forms to be selected by such Member or Inactive Member (or his Beneficiary if authorized by such Member or Inactive Member) or, in the absence of such selection, in a single sum payment; provided, however, that the period and the methods of payment of any such form shall be in compliance with the provisions of section 401(a)(9) of the Code and applicable Treasury regulations thereunder:

(i) A single lump payment; or

(ii) A commercial annuity in the form of a single life annuity.

(f) Notwithstanding any other provisions of the Plan to the contrary, payment of a survivor annuity pursuant to this Section 11.5 shall not be made without the consent of the surviving spouse prior to the time the deceased Member or Inactive Member would have attained Retirement Age except that if the entire interest payable hereunder to a Beneficiary is $5,000 or less, such interest shall be paid in a single lump-sum payment form within a reasonable period of time after the death of the Member or Inactive Member.

11.6Commencement of Death Benefits.

A survivor benefit shall be paid to the surviving spouse of a deceased Member or deceased former Member upon termination of employment thereafter regardless of the age at which such Member’s death occurs, and shall be payable monthly thereafter during the life of the surviving spouse, the last payment being for the month in which the death of the surviving spouse occurs.  Notwithstanding the foregoing, in no event  shall a survivor benefit be paid to the surviving spouse of a deceased Member or deceased former Member prior to the later of the date on which such deceased Member or deceased former Member would have attained normal retirement age or age 62, unless such surviving spouse consents thereto not more than 90 days before the annuity starting date of such survivor benefit.  In the event of the death of the surviving spouse prior to the commencement of the payment of the survivor benefit, no survivor benefit shall be payable pursuant to the provisions of this Article XI with respect to such deceased Member or deceased former Member.

ARTICLE XII

ADMINISTRATION

12.1Plan Administrator.

For purposes of ERISA, the Company shall be the Plan Administrator and, as such, shall be responsible for the compliance of the Plan with the reporting and disclosure provisions of ERISA.

12.2Authority of the Company.

The Company shall have all the powers and authority expressly conferred upon it herein and, further, shall have the sole right to interpret and construe the Plan, and to determine any disputes arising thereunder, subject to the provisions of Section 7.8.  In exercising such powers and authority, the Company at all times shall exercise good faith, apply standards of uniform application, and refrain from arbitrary action.  Any decision of the Company in such exercise of its powers, authorities and duties shall be final and binding upon all affected parties.  The Company may employ such attorneys, agents, and accountants as it may deem necessary or advisable to assist it in carrying out its duties hereunder.  The Company shall be a “named fiduciary” as that term is defined in Section 402(a)(2) of ERISA.  The Company may:

(a) allocate any of the powers, authorities, or responsibilities for the operation and administration of the Plan, which are retained by it or granted to it by this Article XII, to the Trustee; and

(b) designate a person or persons other than itself to carry out any of such powers, authorities, or responsibilities;

provided, however, that no powers, authorities, or responsibilities of the Trustee shall be subject to the provisions of paragraph (b) of this Section 12.2; and provided further, that no allocation or delegation by the Company of any of its powers, authorities, or responsibilities to the Trustee shall become effective unless such allocation or delegation first shall be accepted by the Trustee in a writing signed by it and delivered to the Company.

12.3Action of the Company.

Any act authorized, permitted, or required to be taken by the Company under the Plan, which has not been delegated in accordance with Section 12.2, may be taken by a majority of the members of the Board of Directors of the Company, either by vote at a meeting, or in writing without a meeting.  All notices, advices, directions, certifications, approvals, and instructions required or authorized to  be given by the Company under the Plan shall be in writing and signed by either (i) a majority of the members of the Board of Directors of the Company, or by such member or members as may be designated by an instrument in writing, signed by all the members thereof, as having authority to execute such documents on its behalf, or (ii) a person who becomes authorized to act for the Company in accordance with the provisions of paragraph (b) of Section 12.2.  Subject to the provisions of Section 12.4, any action taken by the Company which is authorized, permitted, or required under the Plan shall be final and binding upon the Company and the Trustees, all persons who have or who claim an interest under the Plan, and all third parties dealing with any Trustee or the Company.

12.4Claims Review Procedure.

Claims for Plan benefits and reviews of Plan benefit claims which have been denied or modified will be processed in accordance with the written Plan claims procedures established by the Cameron International Corporation Plans Administration Committee, which procedures are hereby incorporated by reference as a part of the Plan and may be amended from time to time by such committee.

12.5Qualified Domestic Relations Orders.

Except as otherwise provided with respect to “qualified domestic relations orders” and certain judgments and settlements pursuant to section 206(d) of the Act and sections 401(a)(13) and 414(p) of the Code, and, except as otherwise provided under other applicable law, no right or interest of any kind in any benefit shall be transferable or assignable by any Member or any beneficiary or be subject to anticipation, adjustment, alienation, encumbrance, garnishment, attachment, execution, or levy of any kind.  Plan provisions to the contrary notwithstanding, the Company shall comply with the terms and provisions of any “qualified domestic relations order,” including an order that requires distributions to an alternate payee prior to a Member’s “earliest retirement age” as such term is defined in section 206(d)(3)(E)(ii) of the Act and section 414(p)(4)(B) of the Code, and shall establish appropriate procedures to effect the same.  In the event that the total value of an amount directed to be paid pursuant to a qualified domestic relations order is not in excess of $5,000, such amount shall be paid to the recipient or recipients identified in such order in one lump sum payment as soon as practicable after such order has been determined to be a qualified domestic relations order.

12.6Indemnification.

In addition to whatever rights of indemnification the members of the Board of Directors of the Company, or any other person or persons (other than the Trustees) to whom any power, authority, or responsibility of the Company is allocated or delegated pursuant to paragraph (b) of Section 12.2, may be entitled under the articles of incorporation, regulations, or bylaws of the Company, under any provision of law, or under any other agreement, the Company shall satisfy such liability actually and reasonably incurred by any such member or such other person or persons, including expenses, attorneys’ fees, judgments, fines, and amounts paid in settlement, in connection with any threatened, pending, or completed action, suit, or proceeding which is related to the exercise, or failure to exercise, by such member or such other person or persons of any of the powers, authorities, responsibilities, or discretion of the Company as provided under the Plan and the Trust Agreement, or reasonably believed by such member or such other person or persons to be provided thereunder, and any action taken by such member or such other person or persons in connection therewith.

12.7Temporary Restrictions.

In order to ensure an orderly transition in the transfer of assets to the Trust from another trust fund maintained under the Plan or from the trust fund of a plan that is merging into the Plan or transferring assets to the Plan or to ensure an orderly transition of recordkeeping, valuation, or other administrative activities from one service provider to another service provider, the Plan Administrator may, in its discretion, temporarily prohibit or restrict withdrawals, loans, changes to contribution elections, changes of investment designation of future contributions, transfers of amounts from one Fund to another Fund, or such other activity as the Plan Administrator deems appropriate, provided that any such temporary cessation or restriction of such activity shall be in compliance with all applicable law and the Plan Administrator shall have provided to Members, their beneficiaries, and alternate payees the notices and information required to be provided with respect to such temporary cessation or restriction of such activity by applicable law and regulations.

ARTICLE XIII

AMENDMENT AND TERMINATION

13.1Amendment.

Subject to the provisions of Section 13.2, the Company may at any time and from time to time, amend the Plan.

13.2Limitation of Amendment.

The Company shall make no amendment to the Plan which shall result in the forfeiture or reduction of the interest of any Member, Inactive Member, Beneficiary, or person claiming under or through any one or more of them pursuant to the Plan; provided, however, that nothing herein contained shall restrict the right to amend the provisions hereof relating to the administration of the Plan and Trust.  Moreover, no amendment shall be made hereunder which shall permit any part of the Trust property to revert to any Employer or be used for or be diverted to purposes other than the exclusive benefit of Members, Inactive Members, Beneficiaries, and persons claiming under or through them pursuant to the Plan.

13.3Termination.

The Company reserves the right, by action of its Board of Directors, to terminate the Plan as to all Employers at any time.  The Plan shall terminate automatically if there shall be a complete discontinuance of contributions hereunder by all Employers.  In the event of the termination of the Plan, written notice thereof shall be given to all Members and Beneficiaries having an interest under the Plan, and to the Trustee.  Upon any such termination of the Plan, the Trustee and the Company shall take the following actions for the benefit of Members and Beneficiaries:

(a) As of the termination date, the Trustee shall value the Funds hereunder and the Company shall adjust all accounts accordingly.  The termination date shall become a Valuation Date. In determining the net worth of the Funds hereunder, the Trustee shall include as a liability such amounts as in its judgment shall be necessary to pay all expenses in connection with the termination of the Trust and the liquidation and distribution of the Trust property, as well as other expenses, whether or not accrued, and shall include as an asset all accrued income.

(b) The Trustee, upon instructions from the Company, shall then segregate and distribute an amount equal to the entire interest of each Member, Inactive Member, and Beneficiary in the Funds to  or for the benefit of each Member, Inactive Member, or Beneficiary in accordance with the provisions of Sections 10.2 and 10.3.

Notwithstanding anything to the contrary contained in the Plan, upon any such Plan termination or discontinuance of contributions by the Employers, the interest of each Member, Inactive Member, and Beneficiary shall become fully vested and nonforfeitable; and, if there is a partial termination of the Plan, the interest of each Member, Inactive Member, and Beneficiary who is affected by such partial termination shall become fully vested and nonforfeitable.

13.4Withdrawal of an Employer.

An Employer other than the Company may, by action of its Board of Directors, withdraw from the Plan, such withdrawal to be effective upon notice in writing to the Company (the effective date of such withdrawal being hereinafter referred to as the “withdrawal date”), and shall thereupon cease to be an Employer for all purposes of the Plan.  An Employer shall be deemed automatically to withdraw from the Plan in the event of its complete discontinuance of contributions, or in the event it ceases to be a Subsidiary.

13.5Corporate Reorganization.

The merger, consolidation, or liquidation of the Company or any Employer with or into the Company or any other Employer shall not constitute a termination of the Plan as to the Company or such Employer.

ARTICLE XIV

ADOPTION BY SUBSIDIARIES:  EXTENSION

TO NEW BUSINESS OPERATIONS

Any Subsidiary of the Company which at the time is not an Employer may, with the consent of the Cameron International Corporation Plans Administration Committee, adopt the Plan and become an Employer hereunder by causing an appropriate written instrument evidencing such adoption to be executed pursuant to the authority of its Board of Directors and to be filed with the Company.

ARTICLE XV

MISCELLANEOUS PROVISIONS

15.1No Commitment as to Employment.

Nothing herein contained shall be construed as a commitment or agreement upon the part of any Employee hereunder to continue his employment with an Employer, and nothing  herein contained shall be construed as a commitment on the part of any Employer to continue the employment or rate of compensation of any Employee hereunder for any period.

15.2Benefits.

Nothing in the Plan shall be construed to confer any right or claim upon any person other than the parties hereto, Members and Beneficiaries.

15.3No Guarantees.

Neither any Employer, including the Company, nor the Trustee guarantees the Trust from loss or depreciation, nor the payment of any amount which may become due to any person hereunder.  All benefits payable under the Plan shall be paid or provided for solely from the Plan assets and neither the Company nor the Trustee assumes any liability or responsibility for the adequacy thereof.

15.4Exclusive Benefit.

No part of the Plan assets shall be used for any purpose other than the exclusive purpose of providing benefits which Members and Beneficiaries are entitled to under the Plan, and for the purpose of defraying the reasonable expenses of administering the Plan.

15.5Duty to Furnish Information.

Each of the Employers, the Company, or the Trustee shall furnish to any of the others any documents, reports, returns, statements, or other information that any other reasonably deems necessary to perform its duties imposed hereunder or otherwise imposed by law.

15.6Merger, Consolidation, or Transfer of Plan Assets.

The Plan shall not be merged or consolidated with any other plan, nor shall any of its assets or liabilities be transferred to another plan, unless, immediately after such merger, consolidation, or transfer of assets or liabilities, each Member, Inactive Member, and Beneficiary in the Plan would receive a benefit under the Plan which is at least equal to the benefit he would have received immediately prior to such merger, consolidation, or transfer of assets or liabilities (assuming in each instance that the Plan had then terminated).  Further, this Plan and Trust may not transfer its assets or liabilities to any other plan, unless the Plan Administrator reasonably concludes that such other plan provides that the transferred amounts may not be distributed before the times specified in Treasury regulation section 1.401(k)-1(d).

15.7Return of Contributions to Employers.

Notwithstanding any other provision of the Plan to the contrary, Basic, Matching, Company Retirement, Profit Sharing and Retirement Contributions are contingent upon the deductibility of such contributions under Section 404 of the Code.  In the event a Basic, Matching, Company Retirement, Profit Sharing or Retirement Contribution (or any portion thereof) is made under a mistake of fact, such a contribution shall be returned to the Employers within one year after the payment of the contribution.  Since Basic, Matching, Company Retirement, Profit Sharing and Retirement Contributions (or any portion thereof) are conditioned upon the deductibility of the contribution under Section 404 of the Code as set forth above, in the event such deduction is disallowed, any such contribution shall be returned to the Employers within one year after the disallowance of the deduction.

15.8Addenda.

In the event that it is deemed necessary to accommodate any transition of coverage under other benefit plans to coverage under the Plan with respect to certain groups of Employees, an Addendum setting forth special overriding provisions applicable to such Employees may be added to the Plan.  Each Addendum shall for all purposes constitute a part of the Plan and in the event of conflict with any other provision of the Plan, shall control.  The provisions of the Plan, together with the provisions specified in each Addendum shall constitute the terms of the Plan applicable to the Employees employed at the location or facility specified in the Addendum.

15.9Validity of Agreement.

Except as provided under federal law, the provisions of the Plan shall be governed by and construed in accordance with the laws of the State of Texas.

15.10Uniformed Services Employment and Reemployment Rights Act Requirements.

Notwithstanding any provision of the Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with section 414(u) of the Code.

ARTICLE XVI

SECTION 415 LIMITATIONS

16.1Application.

The provisions set forth in this Article XVI are intended solely to comply with the requirements of Section 415 of the Code, as amended, and shall be interpreted, applied, and if and to the extent necessary, deemed modified without further formal language so as to satisfy solely the minimum requirements of said Section.  For such purposes, the limitations of Section 415 of the Code, as amended, are hereby incorporated by reference and made part hereof as though fully set forth herein, but shall be applied only to particular Plan benefits in accordance with the provisions of this Article XVI, to the extent such provisions are not consistent with Section 415 of the Code.  If there is any discrepancy between the provisions in this Article XVI and the provisions of Section 415 of the Code, such discrepancy shall be resolved in such a way as to give full effect to the provisions of Section 415 of the Code.

16.2Section 415 Definitions.

For purposes of this Article XVI, the following terms and phrases shall have these respective meanings:

(a) “Annual Additions” of a Member for any Limitation Year shall mean the total of (A) the Basic Contributions, Matching Contributions, Company Retirement Contributions, Retirement Contributions and forfeitures, if any, allocated to such Member’s Separate Accounts for such year, (B) Member’s contributions, if any, (excluding any Rollover Contributions) for such year, and (C) amounts referred to in Sections 415(l)(1) and 419A(d)(2) of the Code.  The Annual Additions of a Member for any Limitation Year shall not include Member catch-up contributions made pursuant to Section 3.6 and Section 414(v) of the Code.

(b) “415 Compensation” shall mean the total of all amounts paid by the Employer to or for the benefit of a Member for services rendered or labor performed for the Employer which are required to be reported on the Member’s federal income tax withholding statement or statements (Form W-2 or its subsequent equivalent), subject to the following adjustments and limitations:

(1) The following shall be included:

(A) From and after December 31, 1998, elective deferrals (as defined in Section 402(g)(3) of the Code) from compensation to be paid by the Employer to the Member;

(B) Any amount which is contributed or deferred by the Employer at the election of the Member and which is not includible in the gross income of the Member by reason of Section 125 or 457 of the Code; and

(C) Any amounts that are not includable in the gross income of a Member under a salary reduction agreement by reason of the application of Section 132(f) of the Code.

(2) The 415 Compensation of any Member taken into account for purposes of the Plan shall be limited to $200,000 for any Plan Year with such limitation to be:

(A) Adjusted automatically to reflect any amendments to Section 401(a)(17) of the Code and any cost-of-living increases authorized by Section 401(a)(17) of the Code; and

(B) Prorated for a Plan Year of less than twelve months and to the extent otherwise required by applicable law.

(c) “Limitation Year” shall mean the calendar year.

(d) “Maximum Annual Additions” of a Member for any Limitation Year shall mean the lesser of (a) $40,000 (with such amount to be adjusted automatically to reflect any cost-of-living adjustment authorized by Section 415(d) of the Code) or (B) 100% of such Member’s 415 Compensation during such Limitation Year, except that the limitation in this Clause (B) shall not apply to any contribution for medical benefits (within the meaning of Section 419A(f)(2) of the Code) after separation from service with the Employer or a Controlled Entity that is otherwise treated as an Annual Addition or to any amount otherwise treated as an Annual Addition under Section 415(l)(1) of the Code.

16.3Limitations and Corrections.

Contrary Plan provisions notwithstanding, in no event shall the Annual Additions credited to a Member’s Separate Accounts for any Limitation Year exceed the Maximum Annual Additions for such Member’s for such year.  If as a result of allocation of forfeitures, a reasonable error in estimating a Member’s compensation, a reasonable error in determining the amount of elective deferrals (within the meaning of Section 402(g)(3) of the Code) that may be made with respect to any individual under the limits of Section 415 of the Code, or because of other limited facts and circumstances, the Annual Additions that would be credited to a Member’s Separate Accounts for a Limitation Year would nonetheless exceed the Maximum Annual Additions for such Member for such year, the excess Annual Additions which, but for this Article XVI, would have been allocated to such Member’s Separate Accounts shall be disposed of as follows:

(a) First, any such excess Annual Additions in the form of Basic Contributions on behalf of such Member that would not have been considered in determining the amount of Matching Contributions shall be distributed to such Member, adjusted for income or loss allocated thereto;

(b) Next, any such excess Annual Additions in the form of Basic Contributions on behalf of such Member that would have been considered in determining the amount of Matching Contributions shall be distributed to such Member, adjusted for income or loss allocated thereto, and the Matching Contributions that would have been allocated to such Member’s Separate Account based upon such distributed Basic Contributions shall be treated as a forfeiture;

(c) Next, any such excess Annual Additions in the form of Company Retirement Contributions, to the extent such amounts would otherwise have been allocated to such Member’s Separate Account, shall be treated as a forfeiture;

(d) Next, any such excess Annual Additions in the form of Profit Sharing Contributions, to the extent such amounts would otherwise have been allocated to such Member’s Separate Account, shall be treated as a forfeiture; and

(e) Finally, any such excess Annual Additions in the form of Retirement Contributions, to the extent such amounts would otherwise have been allocated to such Member’s Separate Account, shall be treated as a forfeiture.

16.4Multiple Plans.

For purposes of determining whether the Annual Additions under this Plan exceed the limitations herein provided, all defined contribution plans of the Employer are to be treated as one defined contribution plan.  In addition, all defined contribution plans of Controlled Entities shall be aggregated for this purpose.  For purposes of this Article XVI only, a “Controlled Entity” (other than an affiliated service group member within the meaning of Section 414(m) of the Code) shall be determined by application of a more than 50% control standard in lieu of an 80% control standard.  If the Annual Additions credited to a Member’s Separate Accounts for any Limitation Year under this Plan plus the additions credited on his behalf under other defined contribution plans required to be aggregated pursuant to this Section would exceed the Maximum Annual Additions for such Member for such Limitation Year, the Annual Additions under this Plan and the additions under such other plans shall be reduced on a pro rata basis and allocated, reallocated, or returned in accordance with applicable plan provisions regarding Annual Additions in excess of Maximum Annual Additions.

16.5Contribution Adjustments.

If the limitations set forth in this Article XVI would not otherwise be met for any Limitation Year, the Basic Contributions elections of affected Members may be reduced by the Employer on a temporary and prospective basis in such manner as the Employer shall determine.

ARTICLE XVII

TOP-HEAVY PLAN RULES

17.1Application.

For any Plan Year in which the Plan is a Top-Heavy Plan (as defined in Section 17.2), the provisions set forth in this Article XVII shall be applied in accordance with Section 416 of the Code.

17.2Top-Heavy Definitions.

The following definitions shall be applicable to this Article XVII:

(a) The term “Compensation” shall mean 415 Compensation, as defined in Section 16.2(b).

(b) The term “Determination Date” shall mean for any Plan Year subsequent to the first Plan Year, the last day of the preceding Plan Year and for the first Plan Year of the Plan, the last day of that Year.

(c) The term “Employer” shall mean the Company and each Controlled Entity.

(d) The term “Key Employee” means any Employee or former Employee (including any deceased Employee) who at any time during the Plan Year that includes the Determination Date was an officer of the Employer having annual compensation greater than $130,000 (as adjusted under Section 416(i)(1) of the Code for plan years beginning after December 31, 2002), a 5-percent owner of the Employer, or a 1-percent owner of the Employer having annual compensation of more than $150,000.  For this purpose, annual compensation means compensation within the meaning of Section 415(c)(3) of the Code.  The determination of who is a Key Employee will be made in accordance with Section 416(i)(1) of the Code and the applicable regulations and other guidance of general applicability issued thereunder.

(e) The term “Permissive Aggregation Group” shall mean the Required Aggregation Group of plans plus any other plan or plans of the Employer which, when considered as a group with the Required Aggregation Group, would continue to satisfy the requirements of Section 401(a)(4) and 410 of the Code.

(f) The term “Present Value” shall mean for purposes of computing present value calculations in determining the Top-Heavy Ratio, present value calculations based on the actuarial assumptions as stated in the applicable plan.

(g) The term “Required Aggregation Group” shall mean (a) each tax qualified plan of the Employer in which at least one Key Employee participates or participated at any time during the determination period (regardless of whether the plan terminated), and (b) any other tax qualified plan of the Employer which enables a plan described in clause (a) to meet the requirements of Section 401(a)(4) or 410 of the Code.

(h) The term “Super Top-Heavy Group” with respect to a particular Plan Year shall mean a Required or Permissive Aggregation Group that, as of the Determination Date, would qualify as a Top-Heavy Group under the definition in Paragraph (j) of this Article XVII with “90 percent” substituted for “60 percent” each place where “60 percent” appears in such definition.

(i) The term “Super Top-Heavy Plan” with respect to a particular Plan Year shall mean a plan that, as of the Determination Date, would qualify as a Top-Heavy Plan under the definition in Paragraph (k) of this Article XVII with “90 percent” substituted for “60 percent” each place where “60 percent” appears in such definition.  A plan is also a “Super Top-Heavy Plan” if it is part of a Super Top-Heavy Group.

(j) The term “Top-Heavy Group” with respect to a particular Plan Year shall mean a Required or Permissive Aggregation Group if the sum, as of the Determination Date, of the present value of the cumulative accrued benefits for Key Employees under all defined benefit plans included in such group and the aggregate of the account balances of Key Employees under all defined contribution plans included in such group exceeds 60 percent of a similar sum determined for all employees covered by the plans included in such group.

(k) The term “Top-Heavy Plan” for any Plan Year beginning after December 31, 1983, the Plan shall be a Top-Heavy Plan if any of the following conditions exist:

(i) If the Top-Heavy Ratio for the Plan exceeds 60 percent and the Plan is not part of any Required Aggregation Group or Permissive Aggregation Group of plans.

(ii) If the Plan is a part of a Required Aggregation Group of plans but not part of a Permissive Aggregation Group and the Top-Heavy Ratio for the group of plans exceeds 60 percent.

(iii) If the Plan is a part of a Required Aggregation Group and part of a Permissive Aggregation Group of plans and the Top-Heavy Ratio for the Permissive Aggregation Group exceeds 60 percent.

(l) The term “Top-Heavy Ratio” shall mean:

(i) While the Employer maintains one or more defined contribution plans (including any simplified employee pension plan) and the Employer has not maintained any defined benefit plan which during the 5-year period ending on the Determination Date(s) has or has had accrued benefits, the Top-Heavy Ratio for the Plan alone or for the Required or Permissive Aggregation Group, as appropriate, is a fraction, the numerator of which is the sum of the account balances of all Key Employees as of the Determination Date(s) (including any part of any account balance distributed during a one-year period (or, in the case of a distribution made for a reason other than separation from service, death or disability, a five-year period) ending on the Determination Date(s)) and including distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under Section 416(g)(2)(A)(i) of the Code, and the denominator of which is the sum of all account balances (including any part of any account balance distributed in the one-year period (or, in the case of a distribution made for a reason other than separation from service, death or disability, a five-year period) ending on the Determination Date(s)) and including distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under Section 416(g)(2)(A)(i) of the Code, both computed in accordance with Section 416 of the Code.  Both the numerator and denominator of the Top-Heavy Ratio are adjusted to reflect any contribution not actually made as of the Determination Date, but which is required to be taken into account on that date under Section 416 of the Code.

(ii) While the Employer maintains one or more defined contribution plans (including any simplified employee pension plans) and the Employer maintains or has maintained one or more defined benefit plans which during the 5-year period ending on the Determination Date(s) has or has had any accrued benefits, the Top-Heavy Ratio for any Required or Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of account balances under the aggregated defined contribution plan or plans for all Key Employees, determined in accordance with Subparagraph (i) above, and the present value of accrued benefits under the aggregated defined benefit plan or plans for all Key Employees as of the Determination Date(s), and the denominator of which is the sum of the account balances under the aggregated defined contribution plan or plans for all participants, determined in accordance with Subparagraph (i) above, and the present value of accrued benefits under the defined benefit plan or plans for all participants as of the Determination Date(s), all determined in accordance with Section 416 of the Code.  The accrued benefits under a defined benefit plan in both the numerator and denominator of the Top-Heavy Ratio are adjusted for any distribution of an accrued benefit made in the five-year period ending on the Determination Date.

(iii) For purposes of subparagraphs (i) and (ii) above, the value of account balances and the present value of accrued benefits will be determined as of the most recent valuation date that falls within or ends with the 12-month period ending on the Determination Date, except as provided in Section 416 of the Code for the first and second plan years of a defined benefit plan.  Notwithstanding the foregoing, the account balances and accrued benefits of individuals who have not performed services for the Employer or any Controlled Entity at any time during the one-year period ending on the applicable Determination Date shall not be considered.  The calculation of the Top-Heavy Ratio, and the extent to which distributions, rollovers and transfers are taken into account will be made in accordance with Section 416 of the Code.  Deductible employee contributions shall not be taken into account for purposes of computing the Top-Heavy Ratio.  When aggregating plans the value of account balances and accrued benefits will be calculated with reference to the Determination Date that falls within the same calendar year.

(m) The term “Valuation Date” shall mean for purposes of computing the Top-Heavy Ratio, the Determination Date.

(n) The term “Non-Key Employee” shall mean any Employee who is not a Key Employee.

17.3Top-Heavy Minimum Allocation Rules.

The following Top-Heavy Plan minimum allocation rules shall apply:

(a) Except as otherwise provided in Paragraphs (b) and (c) below, the Employer contributions and forfeitures allocated on behalf of any Member who is not a Key Employee shall be the lesser of three percent of the non-Key Employee’s compensation or in the case where the Employer has no defined benefit plan which designates the Plan to satisfy Section 401 of the Code, the largest percentage of the first $150,000 of the Key Employee’s compensation, allocated on behalf of any Key Employee for the Plan Year.  Basic Contributions cannot be used to satisfy the minimum Section 416 contributions for non-key employees.  Further, in making the determination of the percentage at which contributions are made for the Key Employee with the highest percentage, Basic Contributions on behalf of Key Employees are taken into account.  Matching Contributions shall be taken into account for purposes of satisfying the minimum contribution requirements of this Section 17.3(a) and Section 416(c)(2) of the Code.  The preceding sentence shall apply with respect to Matching Contributions under the Plan or, if the Plan provides that the minimum contribution shall be met in another plan, such other plan.  Matching Contributions that are used to satisfy the minimum contribution requirements of this Section 17.3(a) shall be treated as matching contributions for purposes of the actual contribution percentage test described in Section 4.3 and other requirements of Section 401(m) of the Code.

(b) The provisions in Paragraph (a) shall not apply to any Member who is not actively employed as an Eligible Employee by the Employer on the last day of the Plan Year for which the minimum allocation is to be made.

(c) The provisions in Paragraph (a) shall not apply to any Member to the extent the Member is covered under any other plan or plans of the Employer, and by the terms of such plan or plans it is provided that the minimum allocation or benefit requirements applicable to Top-Heavy Plans shall be met in such other plan or plans.  If such other plan is, or if one of such other plans is, a defined benefit plan maintained by the Employer, and such plan is a Top-Heavy Plan, the minimum benefit requirements applicable to Top-Heavy Plans shall be met under such defined benefit plan as provided therein, to the extent such benefit can be provided under such plan or plans.  If such other plan is, or if one of such other plans is, a defined contribution plan maintained by the Employer, and such plan is a Top-Heavy Plan, the minimum allocation requirements shall be met under such plan, except as may be otherwise provided in such other plan.  The application and administration of the minimum allocation or benefit requirements for Top-Heavy Plans shall be satisfied in a manner so as to only satisfy the minimum allocation/benefit requirements as permissible and so as to avoid any duplication of minimum allocation/benefits for non-Key Employees, as provided under Section 416 of the Code.  Specifically, if any Member in this Plan is a Member in the Cameron International Corporation Retirement Plan, the minimum contribution required under this Article XVII shall be satisfied by applying the rules of this Section 17.3 to such plan.  Further, the top heavy requirements of Section 416 of the Code and this Article XVII of the Plan shall not apply in any year beginning after December 31, 2001, in which the Plan consists solely of a cash or deferred arrangement which meets the requirement of Section 401(k)(12) of the Code and matching contributions with respect to which the requirements of Section 401(m)(11) of the Code are met.

17.4Top-Heavy Compensation Limitation.

The annual compensation of any Member to be taken into account under the Plan during any Plan Year in which the Plan is determined to be a Top-Heavy Plan shall not exceed $150,000 (or such adjusted amount determined by the Secretary of the Treasury pursuant to Section 416(d)(2) of the Code).

17.5Top-Heavy Vesting Provisions.

In the event that the Plan is determined to be a Top-Heavy Plan with respect to any Plan Year, a Member who is eligible to receive the vested interest of his IAR Account, Profit Sharing Account and/or Retirement Account (as applicable) in accordance with the provisions of Section 7.2 shall be vested in a portion of his IAR Account, Profit Sharing Account and/or Retirement Account as applicable, which shall be no less than it would be under following vesting schedule:

Years of Service                                           Vested Percentage

Less than two years                                                         0%

Two but less than three years                                       20%

Three but less than four years                                      40%

Four but less than five years                                         60%

Five years                                                                        100%

17.6Top-Heavy Plan/Benefit Limitations.

In any Plan Year in which the Plan is a Top-Heavy Plan, the denominators of the defined benefit fraction and the defined contribution fraction (as such terms are used in applying the benefit limitation provisions of Section 415 of the Code) shall be computed using 100 percent of the dollar limitation instead of 125 percent.

[Signature Page to Follow]

Executed this ___21st____ day of December, 2007, effective for all purposes as provided above.

CAMERON INTERNATIONAL

CORPORATION

By:    /s/   Joseph H. Mongrain                        

Name:       Joesph H. Mongrain      

Title:         Vice President, Human Resources   

ADDENDA

TABLE OF CONTENTS

Addendum	Page
Cameron Division Plant in Liberty, TX	AD-3
Cameron Division Plant in Patterson, LA	AD-4
Cooper Cameron Valves Plant in Ville Platte, LA	AD-5
Cooper Energy Services Division Plant in Houston, TX (Texcentric)	AD-6
Cameron Division Plant in Oklahoma City, OK (Demco)	AD-7
Wheeling Machine Products Division Facility in Pine Bluff, AR	AD-9
Cooper Cameron Valves Division Plant in Little Rock, AR	AD-10
Cooper Energy Services Division Plant at Ponca City, OK (Nickles)	AD-12
Certain Members Eligible for Additional Contributions	AD-13
Withdrawals of and Special Rights Pertaining to Prior Plan Amounts	AD-15

GEOGRAPHICAL INDEX TO ADDENDA

Location	Page
Houston, TX
Cooper Energy Services Division Plant in Houston, TX (Texcentric)	AD-6
Liberty, TX
Cameron Division Plant in Liberty, TX	AD-3
Little Rock, AR
Cooper Cameron Valves Division Plant in Little Rock, AR	AD-10
Oklahoma City, OK
Cameron Division Plant in Oklahoma City, OK (Demco)	AD-7
Patterson, LA
Cameron Division Plant in Patterson, LA	AD-4
Pine Bluff, AR
Wheeling Machine Division Facility Company in Pine Bluff, AR	AD-9
Ponca City, OK
Cooper Energy Services Division Plant in Ponca City, OK (Nickles)	AD-12
Ville Platte, LA
Cooper Cameron Valves Plant in Ville Platte, LA	AD-5

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

ADDENDUM

FOR EMPLOYEES OF

CAMERON DIVISION PLANT AT LIBERTY, TEXAS

Pursuant to Section 15.8 of the Cameron International Corporation Retirement Savings Plan (“Plan”), this Addendum relates to the Liberty, Texas plant at the Cameron Division of the Company.

A.           SPECIAL ACCOUNT FOR PRIOR PLAN BENEFITS:

A separate subaccount shall be maintained with respect to benefits of a Member that were transferred to the Plan (formerly the Cooper Savings Plan) from the Cameron Salaried and Non-Bargaining Hourly Employees’ Retirement Plan and then to the Plan.  Such separate subaccount shall be 100% vested in such Member.

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

ADDENDUM

FOR EMPLOYEES OF

CAMERON DIVISION PLANT AT PATTERSON, LOUISIANA

Pursuant to Section 15.8 of the Cameron International Corporation Retirement Savings Plan (“Plan”), this Addendum relates to the Patterson, Louisiana plant at the Cameron Division of the Company.

A.           SECTION 3.5 - COMPANY RETIREMENT CONTRIBUTIONS:

In addition to the Company Retirement Contribution otherwise set forth in Section 3.5, the Company shall make the additional monthly Company Retirement Contribution set forth below with respect to the following Members:

Member	SSN	Monthly Additional Company Retirement Contribution
1.  Crouch, Anthony J.	###-##-####	$72.31
2.  Gant, Charles	###-##-####	72.97
3.  Riley, Ronald	###-##-####	86.56
4.  Trahen, Wilfred	###-##-####	71.61

B.           SPECIAL ACCOUNT FOR PRIOR PLAN BENEFITS:

A separate subaccount shall be maintained with respect to benefits of a Member that were transferred to the Plan (formerly the Cooper Savings Plan) from the Cameron Salaried and Non-Bargaining Hourly Employees’ Retirement Plan and then to the Plan.  Such separate subaccount shall be 100% vested in such Member.

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

ADDENDUM

FOR EMPLOYEES OF COOPER CAMERON VALVES PLANT

IN VILLE PLATTE, LOUISIANA

Pursuant to Section 15.8 of the Cameron International Corporation Retirement Savings Plan (“Plan”), this Addendum relates to the Ville Platte, Louisiana plant of the Cooper Cameron Valves Division of the Company.

A.           SPECIAL ACCOUNT FOR PRIOR PLAN BENEFITS:

A separate subaccount shall be maintained with respect to benefits of a Member that were transferred to the Plan (formerly the Cooper Savings Plan) from the Cameron Salaried and Non-Bargaining Hourly Employees’ Retirement Plan and then to the Plan.  Such separate subaccount shall be 100% vested in such Member.

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

ADDENDUM

FOR EMPLOYEES OF THE COOPER ENERGY SERVICES

DIVISION AT THE HOUSTON, TEXAS PLANT

(TEXCENTRIC)

Pursuant to Section 15.8 of the Cameron International Corporation Retirement Savings Plan (“Plan”), this Addendum relates to the Houston, Texas plant at the Cooper Energy Services Division (formerly Texcentric) of the Company.

A.           SECTION 3.5 - COMPANY RETIREMENT CONTRIBUTIONS:

In addition to the Company Retirement Contribution otherwise set forth in Section 3.5, the Company shall make the additional monthly Company Retirement Contribution set forth below with respect to the following Members:

Member	SSN	Monthly Additional Company Retirement Contribution
1.  Lee, Willie A.	###-##-####	$130.00
2.  Kor, Jack	###-##-####	$54.00
3.  Shuck, Roger	###-##-####	$25.00
4.  Cunningham, George	###-##-####	$75.00

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

ADDENDUM

FOR EMPLOYEES OF

CAMERON DIVISION PLANT AT OKLAHOMA CITY, OKLAHOMA

(DEMCO)

Pursuant to Section 15.8 of the Cameron International Corporation Retirement Savings Plan (“Plan”), this Addendum relates to the Oklahoma City, Oklahoma facility of the Cameron Division of the Company (formerly Demco).

A.           SECTION 3.5 - COMPANY RETIREMENT CONTRIBUTIONS:

In addition to the Company Retirement Contribution otherwise set forth in Section 3.5, the Company shall make the additional monthly Company Retirement Contribution with respect to each Member who was employed on September 30, 1989 at a Cooper Cameron (formerly a Cooper Industries, Inc.) facility and in an employment classification set forth on the Additional Retiree Medical Credit Eligibility list as set forth below; provided, however, that such amount shall be prorated and credited to such Member’s IAR Account based upon the number of pay periods applicable to such Member in such month during which the Member was employed at a facility and in an employment classification set forth on the Additional Retiree Medical Credit Eligibility List.

(1)   Active members on October 1, 1989 in the Plan (formerly the Cooper Savings Plan), who became Members on April 1, 1995, who attained at least age 50 on December 31, 1989 and who elected retiree medical coverage.

Year of Birth	Monthly Additional Credit Amount
1939	$60.00
1938	$60.00
1937	$65.00
1936	$65.00
1935	$70.00
1934 or earlier	$75.00

(2)   Active Members on October 1, 1989 in the Plan (formerly the Cooper Savings Plan), who became Members on April 1, 1995, who attained at least age 50 on December 31, 1989 and who did not elect retiree medical coverage.

Year of Birth	Monthly Additional Credit Amount
1939	$105.00
1938	$110.00
1937	$115.00
1936	$120.00
1935	$125.00
1934 or earlier	$130.00

(3)   Active members on October 1, 1989 in the Plan (formerly the Cooper Savings Plan), who became Members on April 1, 1995, and who had not attained age 50 on December 31, 1989.

Year of Birth	Monthly Additional Credit Amount
1964 or later	$10.00
1963	$11.00
1962	$13.00
1961	$15.00
1960	$17.00
1959	$19.00
1958	$21.00
1957	$23.00
1956	$25.00
1955	$27.00
1954	$29.00
1953	$31.00
1952	$34.00
1951	$37.00
1950	$40.00
1949	$44.00
1948	$48.00
1947	$52.00
1946	$54.00
1945	$60.00
1944	$65.00
1943	$70.00
1942	$75.00
1941	$80.00
1940	$90.00

B.           SPECIAL ACCOUNT FOR PRIOR PLAN BENEFITS:

A separate subaccount shall be maintained with respect to benefits of a Member that were transferred to the Plan (formerly the Cooper Savings Plan) from the Demco Pension Plan for Hourly and  Non-Exempt Salaried Employees and then to the Plan.  Such separate subaccount shall be 100% vested in such Member.

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

ADDENDUM

FOR EMPLOYEES OF THE WHEELING MACHINE PRODUCTS DIVISION FACILITY

AT PINE BLUFF, ARKANSAS

Pursuant to Section 15.8 of the Cameron International Corporation Retirement Savings Plan (“Plan”), this Addendum relates to the Pine Bluff, Arkansas facility of the Wheeling Machine Products Division of the Company.

A.           SPECIAL ACCOUNT FOR PRIOR PLAN BENEFITS:

A separate subaccount shall be maintained with respect to benefits of a Member that were transferred to the Cooper Savings Plan from the Pension Plan for Hourly Employees in the Pine bluff, Arkansas Facilities and then to the Plan.  Such separate subaccount shall be 100% vested in such Member.

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

ADDENDUM

FOR EMPLOYEES OF COOPER CAMERON VALVES DIVISION PLANT AT LITTLE ROCK, ARKANSAS

Pursuant to Section 15.8 of the Cameron International Corporation Retirement Savings Plan (“Plan”), this Addendum relates to the Cooper Cameron Valves Plant of the Company in Little Rock, Arkansas (formerly Orbit Valve).

A.           SPECIAL ACCOUNT FOR PRIOR PLAN BENEFITS:

Separate sub-accounts shall be maintained with respect to benefits of a Member (an “Orbit Member”) that were transferred to the Plan from the Orbit Valve Company Profit Sharing Plan (the “Orbit Profit Sharing Plan”) and the Orbit Valve Company Employee Savings Plan (the “Orbit Savings Plan”).  Amounts in such separate sub-accounts that are attributable to a Member’s Matching and Profit Sharing Contribution Accounts under the Orbit Savings Plan and a Member’s Account under the Orbit Profit Sharing Plan shall respectively vest in accordance with the vesting schedule contained in the plans from which such amounts were transferred, which is set forth below:

YEARS OF SERVICE NONFORFEITABLE PERCENTAGE

0-4    0%

5 or more 100%

In addition to the lump sum method of distribution of benefits set forth in Section 10.2 of the Plan, an Orbit Member may elect to receive his such separate sub-accounts in periodic installment payments for any term not extending beyond the life expectancy of such Member or the joint and last survivor expectancy of such Member and a designated beneficiary.  An Orbit Member may make such an election only if the method of payment of any such form is in compliance with Section 401(a)(9) of the Code and applicable Treasury regulations thereunder.

In addition to the lump sum method of distribution of benefits set forth in Section 11.4 of the Plan, the beneficiary of an Orbit Member may elect to receive payment of the separate sub-accounts of the deceased Orbit Member in periodic installments for any term not extending beyond the life expectancy of such beneficiary so long as the method of payment of such form is compliance with Section 401(a)(9) of the Code and applicable treasury regulations thereunder.  A beneficiary’s election as to the method of distribution of such separate sub-accounts must be made within the 90-day period ending on the first day of the first period for which an amount is payable to such beneficiary.  If a beneficiary fails to make an election within such 90-day period, the separate sub-accounts of the deceased Orbit Member will be paid to such beneficiary in one lump sum.  If a beneficiary properly elects to receive payments in periodic installments, after such installment payments commence, the beneficiary will have the option to reduce the period over which such installments shall be made with the payments being adjusted accordingly.  Upon the death of such beneficiary, the remaining balance in the separate sub-account will be paid as soon as administratively possible in one lump sum cash payment, to the beneficiary’s executor or to his heirs at law if there is no administration of such beneficiary’s estate.

In addition to the withdrawal rights contained in Section 8.2 of the Plan, Orbit Members who participated in the Orbit Profit Sharing Plan may withdraw all or any part of the vested amount of their Employer profit sharing contributions credited to their Matching Account after attaining age 59½; provided, however, that such Members may only exercise such withdrawal rights once during every six-month period of a calendar year.  Furthermore, an Orbit Member who participated in the Orbit Profit Sharing Plan with less than five years of Vesting Service may not withdraw amounts which would reduce the Matching Account balance below the aggregate Employer profit sharing contribution amounts allocated to such Member’s Participation Account during the two Plan Years preceding the Plan merger date.

In addition to the withdrawal rights contained in Section 8.2 of the Plan, an Orbit Member who participated in the Orbit Savings Plan may withdraw all or any part of his sub-accounts attributable to his Elective Contribution Account under such plan after attaining age 59½; provided, however, that such a Member may only exercise such withdrawal rights once during every six-month period of a calendar year.

Additional rights and restrictions that apply with respect to such separate sub-accounts are described in the instruments entitled “Merged Orbit Valve Company Employee Savings Plan With and Into Cooper Cameron Retirement Savings Plan” and “Merger of Orbit Valve Company Profit Sharing Plan With and Into Cameron International Corporation Retirement Savings Plan.

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

ADDENDUM

FOR EMPLOYEES OF

COOPER ENERGY SERVICES DIVISION PLANT AT PONCA CITY, OKLAHOMA (NICKLES)

Pursuant to Section 15.8 of the Cameron International Corporation Retirement Savings Plan (“Plan”), this Addendum relates to the Ponca City, Oklahoma plant at the Cooper Energy Services Division (formerly Nickles) of the Company.

A.           SPECIAL ACCOUNT FOR PRIOR PLAN BENEFITS:

A separate sub-account shall be maintained under each Plan Account, with respect to the benefits of a Member that was transferred to the Plan from the Nickles Machine Corporation Defined Contribution Matching Plan and Trust (the “Nickles Plan”).

In addition to the in service withdrawal rights contained in Section 8.2 of the Plan, such a Member shall be permitted to withdraw all or any part of the separate sub-account portion of his Supplemental Account under the Plan at any time.  Further, after he attains age 59½, such a Member shall be permitted to withdraw any amount credited to such separate sub-accounts; provided, however, that a withdrawal made pursuant to this sentence may be in any amount and may be made up to two times in any 12 month period.  Additional forms for distribution of benefits to such Members and their beneficiaries, which were initially preserved in connection with the transfer of account balances from the Nickles Plan to the Plan, were eliminated in accordance with Treasury Regulation § 1.411(d)-4 Q & A2(e).

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

ADDENDUM

FOR CERTAIN MEMBERS ELIGIBLE FOR ADDITIONAL CONTRIBUTIONS

Pursuant to Section 15.8 of the Cameron International Corporation Retirement Savings Plan (“Plan”), this Addendum relates to certain Members (the “Eligible Members”) who shall be eligible to receive additional contributions determined as follows:

In addition to the contributions otherwise made pursuant to Article III, the Additional Contributions Account (as defined below) of each Member who was employed by Cooper Industries, Inc. on September 30, 1989, at a facility and in an employment classification set forth on the Cooper Industries, Inc. Additional Retiree Medical Credit Eligibility List, shall be credited with the applicable monthly amount set forth below with respect to such Member; provided, however, that such amount shall be prorated and credited to such Member’s Account based upon the number of pay periods applicable to such Member in such month during which the Member was employed at a facility and in an employment classification set forth on the Cooper Industries, Inc. Additional Retiree Medical Credit Eligibility List.

A. Active members in the Cooper Industries, Inc. Salaried Employees’ Retirement Plan (the “Prior Plan”) on October 1, 1989, who became Members of the Cooper Cameron Corporation Retirement Plan (the “Retirement Plan”) on January 1, 1995, who attained at least age 50 on December 31, 1989 and who elected retiree medical coverage

Year of Birth	Monthly Additional Contribution Amount
1939	$60.00
1938	$60.00
1937	$65.00
1936	$65.00
1935	$70.00
1935 or earlier	$75.00

B. Active members in the Prior Plan on October 1, 1989, who became Members of the Retirement Plan on January 1, 1995, who attained at least age 50 on December 31, 1989 and who did not elect retiree medical coverage

Year of Birth	Monthly Additional Contribution Amount
1939	$105.00
1938	$110.00
1937	$115.00
1936	$120.00
1935	$125.00
1934 or earlier	$130.00

C. Active members in the Prior Plan on October 1, 1989, who became members on January 1, 1995, and who had not attained age 50 on December 31, 1989

Year of Birth	Monthly Additional Contribution Amount
1964 or later	$10.00
1963	$11.00
1962	$13.00
1961	$15.00
1960	$17.00
1959	$19.00
1958	$21.00
1957	$23.00
1956	$25.00
1955	$27.00
1954	$29.00
1953	$31.00
1952	$34.00
1951	$37.00
1950	$40.00
1949	$44.00
1948	$48.00
1947	$52.00
1946	$54.00
1945	$60.00
1944	$65.00
1943	$70.00
1942	$75.00
1941	$80.00
1940	$90.00

Such additional contributions shall be referred to herein as the “Additional Contributions.”  The Additional Contributions of an Employer for any month shall be considered allocated to the Eligible Members’ Accounts for whom such contributions are made no later than the last day of the Plan Year for which they are made, as determined pursuant to this Addendum.  The Additional Contributions shall be credited to an eligible Member’s Additional Contributions Account (as defined below) on the date such Additional Contributions are received by the Trust and shall be invested in the Fund or Funds selected by the Eligible Member in accordance with the provisions of Section 5.2.  The term “Additional Contributions Account” shall mean the Separate Account established on behalf of each Eligible Member, to which Additional Contributions are credited in accordance with this Addendum.  An Eligible Member shall be 100 percent vested in the balance of his Additional Contributions Account.  In the case of an Eligible Member, references in the Plan to a Member’s or Inactive Member’s “Separate Accounts” shall be deemed to include such Member’s Additional Contributions Account.  Additional Contributions shall be considered “Annual Additions” under and subject to the limitations of Article XVI.  Additional Contributions shall be distributed under the provisions of Articles X and XI in the same manner as an Eligible Member’s Retirement Contributions Account.

Notwithstanding anything to the contrary provided in this Addendum, if any Eligible Member is entitled to receive additional Company Retirement Contributions in an equal monthly amount pursuant to any other Addendum to the Plan, such Eligible Member shall not be eligible to receive Additional Contributions pursuant to this Addendum.

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

ADDENDUM

WITHDRAWALS OF AND SPECIAL RIGHTS PERTAINING TO PRIOR PLAN AMOUNTS

Pursuant to Sections 8.4 and 15.8 of the Cameron International Corporation Retirement Savings Plan (“Plan”), this Addendum sets forth additional withdrawal rights available to certain Members or Inactive Members whose Separate Accounts include amounts that were transferred to the Plan in a plan merger or plan-to-plan transfer.  For purposes of this Addendum, the term “Grandfathered Subaccounts” shall mean the subaccounts under the respective Plan accounts that were created at the time of the applicable plan merger or plan-to-plan transfer for the transferred amounts and earnings thereon in order to preserve optional forms of benefit and rights described in this Addendum.

Petreco International, Inc. 401(k) Profit Sharing Plan

A.           Withdrawals.  A Member or Inactive Member who was a participant in the Petreco International, Inc. 401(k) Profit Sharing Plan (the “Petreco Plan”), who had amounts transferred to the Plan in connection with the merger of the Petreco Plan with and into the Plan, and who is receiving compensation from a Controlled Entity may withdraw any or all of his Grandfathered Subaccount (to the extent vested) under his Rollover/Transfer Account under the Plan at any time.

B.           Vesting.  Notwithstanding anything to the contrary in the Plan, each Petreco Participant who was employed by Petreco International, Inc. or a member of its controlled group on January 1, 2002 shall have a 100% fully vested and nonforfeitable interest in his Profit Sharing Account under the Plan.

Cooper Cameron Corporation Savings-Investment Plan for Hourly Employees

A.           Withdrawals.  A Member or Inactive Member a who was a participant in the Cooper Cameron Corporation Savings-Investment Plan for Hourly Employees (the “Brookshire Plan”), who had amounts transferred to the Plan in connection with the merger of the Brookshire Plan with and into the Plan, and who is receiving compensation from a Controlled Entity may withdraw all (but not less than all) of the balances of his Grandfathered Subaccount(s) (to the extent vested) under his Matching and/or Supplemental Accounts under the Plan at any time.  A Member or Inactive Member who makes such a withdrawal shall be suspended from making contributions to the Plan for a period of at least six months after the date of such withdrawal and shall not be permitted to make another withdrawal pursuant to Article VIII of the Plan until he has resumed making Basic Contributions for at least 12 months.

AOP Industries, Inc. 401(k) Plan

A.           Withdrawals.  A Member or Inactive Member who was a participant in the AOP Industries, Inc. 401(k) Plan (the “AOP Plan”), who had amounts transferred to the Plan in connection with the merger of the AOP Plan with and into the Plan, and who is receiving compensation from a Controlled Entity may withdraw all or any part of his Grandfathered Subaccount (to the extent vested) under his Rollover/Transfer Account under the Plan at any time.

B.           Vesting.  A Member or Inactive Member a who was a participant in the AOP Plan and who had amounts transferred to the Plan in connection with the merger of the AOP Plan with and into the Plan shall be vested in his Profit Sharing Account under the Plan in accordance with the vesting schedule set forth in Section 6.4(b) of the AOP Plan provided that such AOP Participant had three or more Years of Vesting Service under the AOP Plan as of the April 8, 2005.  In the case of an AOP Participant who did not have three or more Years of Vesting Service under the AOP Plan as of the April 8, 2005, notwithstanding anything in Section 7.2 of the Plan to the contrary, as of April 8, 2005, such participant shall have a Vested Interest in his Profit Sharing Account under the Plan equal to the Vested portion of such participant’s Discretionary Contributions Subaccount under the AOP Plan immediately prior to April 8, 2005 and thereafter his Vested Interest shall increase (but never decrease, except in the case of a loss of Vesting Service pursuant to Section 7.7 of the Plan) in accordance with Section 7.2 of the Plan based on additional years of Vesting Service (if any) earned by such participant after April 8, 2005.

Dresser, Inc. Retirement and Savings Plan

A.           Withdrawals.  A Member or Inactive Member who was a participant in the Dresser, Inc. Retirement and Savings Plan (the “Dresser Plan”), who had amounts transferred to the Plan in connection with a direct plan-to-plan of certain accounts under the Dresser Plan into the Plan, and who is receiving compensation from a Controlled Entity may withdraw all or any part of the Grandfathered Subaccount portion of his Rollover/Transfer Account, to the extent then vested, at any time.

B.           Vesting.  A Member or Inactive Member a who was a participant in the Dresser Plan, who had amounts transferred to the Plan in connection with the direct plan-to-plan transfer of certain accounts under the Dresser Plan into the Plan (a “Dresser Transferee”), and who had any amount credited to his Profit Sharing Account under the Dresser Plan as of January 1, 2006 shall be vested in his Profit Sharing Account under the Plan in accordance with the vesting schedule set forth in Sections 8.3(b) and 8.3(c) of the Dresser Plan as of January 1, 2006.   The Vested Interest of each Dresser Transferree in all other amounts transferred from the Dresser Plan to the Plan in connection with such plan-to-plan transfer shall be 100%.

NuFlo Technologies, Inc. 401(k) Plan

A.           Withdrawals.  A Member or Inactive Member a who was a participant in the NuFlo Technologies, Inc. 401(k) (the “NuFlo Plan”), who had amounts transferred to the Plan in connection with the merger of the NuFlo Plan with and into the Plan, and who is receiving compensation from a Controlled Entity may withdraw all or any part of his Grandfathered Subaccount (to the extent vested) under his Rollover/Transfer Account under the Plan at any time.

B.           Vesting.  A Member or Inactive Member a who was a participant in the NuFlo Plan and who had amounts transferred to the Plan in connection with the merger of the NuFlo Plan with and into the Plan shall be vested in his Nonelective Account under the Plan in accordance with the vesting schedule set forth in Section 1.15(b) of the NuFlo Plan Adoption Agreement provided that such participant had three or more Years of Vesting Service under the NuFlo Plan as of January 1, 2006.  In the case of a NuFlo Participant who did not have three or more Years of Vesting Service under the NuFlo Plan as of January 1, 2006, then, as of January 1, 2006, such participant shall have a Vested Interest in his Nonelective Account under the Plan equal to the Vested portion of such participant’s Nonelective Employer Contributions subaccount under the NuFlo Plan immediately prior to January 1, 2006, and thereafter his Vested Interest shall increase (but never decrease, except in the case of a loss of Vesting Service pursuant to Section 7.7 of the Plan) in accordance with the vesting schedule in Section 7.2 of the Plan based on additional years of Vesting Service (if any) earned by such participant after January 1, 2006.

EX-10.7

Exhibit 10.7

FIRST AMENDMENT TO THE

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

(As Amended Effective January 1, 2008)

WHEREAS, Cameron International Corporation (the “Company”) and other Employers have heretofore adopted the Cameron International Corporation Retirement Savings Plan (As Amended and Restated Effective January 1, 2008) (the “Plan”);

WHEREAS, the Company desires to amend the Plan on behalf of itself and all Employers to include certain employees hired in connection with the Company’s acquisition of certain assets of Prime Measurement Products, L.L.C. as Profit Sharing Members of the Plan, in accordance with the collective bargaining agreement covering such employees; and

WHEREAS, the Company desires to amend the Plan on behalf of itself and all Employers to reflect the final regulations under Section 415 of the Internal Revenue Code of 1986, as amended (the “Code”);

NOW, THEREFORE, the Plan shall be amended as follows and such amendments shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions of such amendments:

I.Effective as of March 21, 2007:

1.The following new Section 1.1(9A) shall be added to the Plan:

“(9A)           The term “COI Union Employee” shall mean an Employee who is a member of the Local Lodge 1980 and District Lodge 725, International Association of Machinists and Aerospace Workers.”

2.Section 1.1(51) of the Plan shall be deleted and the following shall be substituted therefor:

“(51)           The term “Profit Sharing Member” shall mean, except as provided in Section 2.1(b) with respect to certain Part Time and Temporary Employees, each Eligible Employee who is a Brookshire Union Employee whose Employment Commencement Date occurs on or after January 1, 2005 and each Eligible Employee who is a COI Union Employee.  Notwithstanding anything to the contrary herein, from and after January 1, 2008, no Eligible Employee who is not a Brookshire Union Employee or a COI Union Employee shall be or shall be eligible to become a Profit Sharing Member.  Further, no Eligible Employee shall be both a Profit Sharing Member and a Retirement Contributions Member at any time.”

3.The last sentence of Section 1.1(55) shall be deleted and the following shall be substituted therefor:

“Notwithstanding anything to the contrary herein, no Brookshire Union Employee or COI Union Employee shall be or be eligible to become a Retirement Contributions Member unless his employment status changes and he becomes employed by an Employer as an Eligible Employee other than in a capacity as a Brookshire Union Employee or a COI Union Employee.”

4.The parenthetical phrase “(other than Profit Sharing Members who are Brookshire Union Employees)” shall be deleted from Section 2.1(a) of the Plan and the phrase “(other than Profit Sharing Members who are Brookshire Union Employees or COI Union Employees)” shall be substituted therefor.

5.The phrase “(y) except for a Brookshire Union Employee, a Profit Sharing Member on or after January 1, 2008” shall be deleted from the end of subparagraphs (ii), (iii) and (iv) of Section 2.1(e) of the Plan and the following phrase shall be substituted therefor:

“(y) except for a Brookshire Union Employee or a COI Union Employee, a Profit Sharing Member on or after January 1, 2008”

6.Section 2.3 of the Plan shall be deleted and the following shall be substituted therefor:

“2.3           Election Form.

Each Member shall file with his Employer a written election in accordance with procedures established by the Company with respect to his participation in the Plan.  For each Member who is eligible to make Basic Contributions and, if applicable, catch-up contributions pursuant to Section 3.1 and 3.6 of the Plan, respectively, such written election shall contain his authorization for his Employer to reduce his Compensation in order to make Basic Contributions and, if applicable, catch-up contributions on his behalf pursuant to such provisions. A Member’s written election pursuant to this Section 2.3 shall also contain his election as to the investment of all amounts allocated to his Separate Accounts pursuant to the provisions of Section 5.2.  A Member who is eligible to make Basic Contributions and, if applicable, catch-up contributions must file such written election with his Employer at least 20 days prior to the first day of the payroll period as of which he is eligible to make Basic Contributions (or at least 20 days prior to the first day of any subsequent payroll period for which he is eligible to make Basic Contributions), unless a shorter period of time is acceptable to the Company.  Notwithstanding the foregoing, any Member who is a Profit Sharing Member or a Retirement Contributions Member need not elect to make any Basic Contributions under the Plan or be eligible to make such contributions in order to be eligible to receive Profit Sharing Contributions or Retirement Contributions, as applicable, and the election of any such Member who has not elected to make Basic Contributions under the Plan, or is not eligible to make such contributions, shall relate solely to the investment of his Profit Sharing Contributions or Retirement Contributions, as applicable, pursuant to Section 5.2.”

7.The following shall be added at the end of Section 3.1 of the Plan:

“Further, notwithstanding the foregoing provisions of this Section 3.1, no Member who is a COI Union Employee shall be eligible to have Basic Contributions made on his behalf under the Plan.”

8.The first sentence of Section 4.10 of the Plan shall be deleted and the following shall be substituted therefor:

“Effective as of any payroll period, any Member who is eligible to make Basic Contributions under the Plan may suspend his Basic Contributions or change the percentage of his Compensation which is contributed as Basic Contributions in accordance with the procedures and within the time period prescribed by the Plan Administrator.”

9.Section 7.5(d) shall be added to the Plan as follows:

“(d)           Vesting Service With Prime Measurement Affiliates.  For the period preceding March 21, 2007, each Eligible Employee who was employed by Prime Measurement Products, L.L.C. prior to such date shall be credited with years of Vesting Service for purposes of the Plan equal to the Periods of Service he would have been credited under the Plan as if Prime Measurement Products, L.L.C. and its affiliates and predecessors were Employers under the Plan during such period and as if the Plan counted Vesting Service based on Periods of Service (rather than Hours of Service) during such entire period.”

II.Effective as of January 1, 2008:

1.Section 2.2 of the Plan shall be amended by deleting the fourth proviso of the first sentence thereof (which reads “; and provided further, however, that each such Member who is a Retirement Contributions Member who is not an Eligible Employee on the last day of a Plan Year shall not receive a Retirement Contribution for such Plan Year”).

2. Article XVI of the Plan shall be deleted and the following shall be substituted therefor:

“ARTICLE XVI

SECTION 415 LIMITATIONS

16.1           Application.

The provisions set forth in this Article XVI are intended solely to comply with the requirements of Section 415 of the Code, as amended, and shall be interpreted, applied, and if and to the extent necessary, deemed modified without further formal language so as to satisfy solely the minimum requirements of said Section.  For such purposes, the limitations of Section 415 of the Code and the Treasury regulations promulgated thereunder, as amended from time to time, are hereby incorporated by reference and made part hereof as though fully set forth herein, but shall be applied only to particular Plan benefits in accordance with the provisions of this Article XVI, to the extent such provisions are not consistent with Section 415 of the Code and such Treasury regulations.  If there is any discrepancy between the provisions in this Article XVI and the provisions of Section 415 of the Code and such Treasury regulations, such discrepancy shall be resolved in such a way as to give full effect to the provisions of Section 415 of the Code and such Treasury regulations.  This Article shall also include reference to the applicable provisions of any successor regulation promulgated under Section 415 of the Code.

16.2           Section 415 Definitions.

For purposes of this Article XVI, the following terms and phrases shall have these respective meanings:

(a)           “Annual Additions” of a Member for any Limitation Year shall mean all amounts that are annual additions (as defined under Treasury Regulation § 1.415(c)-1(b)), including, without limitation, the Basic Contributions, Matching Contributions, Company Retirement Contributions, Retirement Contributions and forfeitures, if any, allocated to such Member’s Separate Accounts for such year.

(b)           “415 Compensation” of a Member for any Limitation Year shall mean the total of all amounts of compensation (within the meaning of Treasury Regulation § 1.415(c)-2(d)(4)), paid by the Employer to or for the benefit of a Member in such Limitation Year, including all compensation for services rendered or labor performed for the Employer which are required to be reported on the Member’s federal income tax withholding statement or statements (Form W-2 or its subsequent equivalent), plus amounts that would be so reported but for an election under Section(s) 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k) or 457(b) of the Code.  The 415 Compensation of a Member for any Limitation Year shall include payments of regular compensation for services during the Member’s regular working hours, compensation for services outside the Member’s regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar payments that are paid to the Member following his Severance Date but which would have been paid to the Member prior to such date if he had continued in employment with the Employer, provided that such payments are paid by the later of two and one-half  months following the Member’s Severance Date or the end of the Limitation Year that includes the Severance Date.  The 415 Compensation of any Member taken into account for purposes of the Plan shall be limited to $200,000 for any Plan Year with such limitation to be adjusted automatically to reflect any amendments to Section 401(a)(17) of the Code and any cost-of-living increases authorized by Section 401(a)(17) of the Code and prorated for a Plan Year of less than twelve months and to the extent otherwise required by applicable law.

(c)           “Limitation Year” shall mean the calendar year.

(d)           “Maximum Annual Additions” of a Member for any Limitation Year shall mean the lesser of (a) $40,000 (with such amount to be adjusted automatically to reflect any cost-of-living adjustment authorized by Section 415(d) of the Code and Treasury Regulation § 1.415(d)-1(b)) or (b) 100% of such Member’s 415 Compensation during such Limitation Year, as determined in accordance with the requirements of Treasury Regulation § 1.415(c)-2.

16.3           Limitations.

Contrary Plan provisions notwithstanding, in no event shall the Annual Additions credited to a Member’s Separate Accounts for any Limitation Year exceed the Maximum Annual Additions for such Member for such year.

16.4           Multiple Plans.

For purposes of determining whether the Annual Additions under this Plan exceed the limitations herein provided, all defined contribution plans of the Employer are to be treated as one defined contribution plan.  In addition, all defined contribution plans of Controlled Entities shall be aggregated for this purpose.  For purposes of this Article XVI only, a “Controlled Entity” shall be determined in accordance with Treasury Regulation § 1.415(a)-1(f)(1).  If the Annual Additions credited to a Member’s Separate Accounts for any Limitation Year under this Plan plus the additions credited on his behalf under other defined contribution plans required to be aggregated pursuant to this Section would exceed the Maximum Annual Additions for such Member for such Limitation Year, the Annual Additions this Plan and under such other plans shall be reduced on a pro rata basis and allocated, reallocated, or returned in accordance with the provisions of applicable law.

16.5           Contribution Adjustments.

If the limitations set forth in this Article XVI with respect to Annual Additions credited to a Member’s Separate Accounts under this Plan would not otherwise be met for any Limitation Year, the Basic Contributions elections of affected Members may be reduced by the Employer on a temporary and prospective basis in such manner as the Employer shall determine; provided, however, that no such reduction shall be effected in a way that adversely affects the catch-up contribution rights of such Members.”

III.As amended hereby, the Plan is specifically ratified and reaffirmed.

IN WITNESS WHEREOF, the parties have caused these presents to be executed this _28st___ day of __August_____________, 2008, effective for all purposes as provided above.

	CAMERON INTERNATIONAL CORPORATION
By:	/s/ Joseph H. Mongrain
Name:	Joseph H. Mongrain
Title:	Vice President, Human Resources

SECOND AMENDMENT TO THE

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

(As Amended Effective January 1, 2008)

WHEREAS, Cameron International Corporation (the “Company”) and other Employers have heretofore adopted the Cameron International Corporation Retirement Savings Plan (As Amended and Restated Effective January 1, 2008) (the “Plan”); and

WHEREAS, the Company desires to amend the Plan on behalf of itself and all Employers;

NOW, THEREFORE, the Plan shall be amended as follows, effective as of August 28, 2008:

1.The fifth and sixth sentences of Section 3.10 of the Plan shall be deleted and the following shall be substituted therefor:

“At the end of December of each Plan Year following the date of transfer of assets from the Retirement Plan into the Reversion Suspense Account and for so long as assets remain credited to the Reversion Suspense Account, the Company shall determine the minimum amount required to be allocated from the Reversion Suspense Account for such Plan Year in order to satisfy the seven-plan-year ratable allocation rule described in Section 4980(d)(2)(C) of the Code and if the transfers previously made during such Plan Year from the Reversion Suspense Account to Members’ Retirement Contribution Accounts was not, in the aggregate, at least equal to such minimum amount, the shortfall amount will be allocated as of the December 31 of such Plan Year to Members’ Retirement Contribution Accounts on a Compensation ratio basis pursuant to which each Member’s Retirement Contribution Account will be allocated a portion of the shortfall amount determined by multiplying the shortfall amount by a fraction, the numerator of which is that Member’s Compensation for such Plan Year and the denominator of which is the sum of all Members’ Compensation for such Plan Year.”

2.As amended hereby, the Plan is specifically ratified and reaffirmed.

IN WITNESS WHEREOF, the parties have caused these presents to be executed this __2nd____ day of __December________________, 2008.

	CAMERON INTERNATIONAL CORPORATION
By:	/s/ Joseph H. Mongrain
Name:	Joseph H. Mongrain
Title:	Vice President, Human Resources

THIRD AMENDMENT TO THE

CAMERON INTERNATIONAL CORPORATION

RETIREMENT SAVINGS PLAN

(As Amended and Restated Effective January 1, 2008)

WHEREAS, Cameron International Corporation (the “Company”) and other Employers have heretofore adopted the Cameron International Corporation Retirement Savings Plan (As Amended and Restated Effective January 1, 2008) (the “Plan”); and

WHEREAS, the Company desires to amend the Plan on behalf of itself and all Employers to reflect recent changes made to the law by the Pension Protection Act of 2006;

NOW, THEREFORE, the Plan shall be amended as follows:

I.           Effective as of January 1, 2007:

1.The last sentence of Section 1.1(23) of the Plan shall be deleted and the following shall be substituted therefor:

“Notwithstanding the foregoing or any other provision of the Plan, (A) any amount that is distributed from the Plan on account of hardship pursuant to Section 8.1 shall not be an Eligible Rollover Distribution and no election may be made to have any portion of such a distribution paid directly to an Eligible Retirement Plan and (B) a portion of a distribution shall not fail to be an Eligible Rollover Distribution merely because the portion consists of after-tax employee contributions which are not includable in gross income; provided, however, that such portion may be transferred only to an individual retirement account or annuity described in section 408(a) or (b) of the Code or to a qualified plan described in section 401(a) of the Code, an annuity plan described in section 403(a) of the Code or an annuity contract described in section 403(b) of the Code that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includable in gross income and the portion of such distribution which is not so includable.”

2.           The last sentence of Section 4.2 of the Plan shall be deleted and the following shall be substituted therefor:

“Notwithstanding the foregoing or any other provision of the Plan, distributions pursuant to this Section 4.2 shall be (i) adjusted for income or loss allocated thereto up to the date of distribution (or such earlier date as permitted by applicable law) in the manner determined by the Company in accordance with any method permissible under applicable Treasury regulations and (ii) made proportionately from the Separate Accounts to which Basic Contributions were made for the applicable Plan Year.”

3.           The following provision shall be added after the first sentence of the first paragraph of Section 10.2(b) of the Plan:

“No less than thirty days (unless such thirty-day period is waived by an affirmative election in accordance with applicable Treasury regulations) and no more than 180 days before the date a Member’s Plan interest is to be distributable to him, the Company shall inform the Member of his right to defer the distribution of his benefit and shall describe the Member’s Eligible Rollover Distribution election rights pursuant to Section 10.9.  Such information shall also describe for the Member the consequences of failing to defer the distribution of his Plan interest.”

4.           Section 10.2(b)(4)(iii) of the Plan shall be amended by replacing each reference to “ninety days” therein with a reference to “180 days.”

5.           Section 15.10 of the Plan shall be amended by deleting the phrase “section 414(u) of the Code” and replacing it with the phrase “section 414(u) and 401(a)(37) of the Code”.

6.           The last sentence of Section 17.3(c) of the Plan shall be deleted and the following shall be substituted therefor:

“Further, the top heavy requirements of Section 416 of the Code and this Article XVII of the Plan shall not apply in any Plan Year in which the Plan consists solely of a cash or deferred arrangement which meets the requirement of Section 401(k)(12) or 401(k)(13) of the Code and matching contributions with respect to which the requirements of Section 401(m)(11) or 401(m)(12) of the Code are met.  The Plan will only be deemed to consist solely of a cash or deferred arrangement which meets the requirements of Section 401(k)(12) or 401(k)(13) of the Code and matching contributions with respect to which the requirements of Section 401(m)(11) or 401(m)(12) of the Code are met for a Plan Year if the only contributions which are made to the Plan satisfy the requirements of such sections, as applicable, and the Plan does not by operation as a result of allocation of forfeitures, imposition of contribution allocation service requirements or other operational features ceases to be a plan consisting solely of a cash or deferred arrangement which meets the requirements of Section 401(k)(12) or 401(k)(13) of the Code and matching contributions with respect to which the requirements of Section 401(m)(11) or 401(m)(12) of the Code are met for a Plan Year.”

7.           References in the Addendum to the Plan for Employees Of Cooper Cameron Valves Division Plant At Little Rock, Arkansas to a “90-day period” shall be deleted and the phrase “180-day period” shall be substituted therefor.

II.           Effective as of January 1, 2008, Section 1.1(22) of the Plan shall be amended by adding the following new sentence at the end thereof:

“Notwithstanding the foregoing, for purposes of Section 10.9, an “Eligible Retirement Plan” shall also mean a Roth IRA as provided in section 408A(e) of the Code; provided, however, that a rollover to a Roth IRA (other than a qualified rollover contribution from a Roth IRA or a designated Roth account) will be limited to Members whose adjusted gross income is equal to or less than $100,000 and who are not married individuals filing a separate return in Plan Years beginning January 1, 2008 and January 1, 2009.”

III.           Effective as of January 1, 2010, Section 1.1(23) of the Plan shall be amended by adding the following two new sentences at the end of such Section:

“Further, notwithstanding the foregoing or any other provision of the Plan, with respect to a Beneficiary who is a designated beneficiary (as defined in section 401(a)(9)(E) of the Code) other than a Member’s surviving spouse, an Eligible Rollover Distribution includes any distribution of all or any portion of the Separate Accounts of a deceased Member in a direct trustee-to-trustee transfer to (i) an individual retirement account described in section 408(a) of the Code or (ii) an individual retirement annuity described in section 408(b) of the Code, in each case that is (x) established for the purpose of receiving the distribution of such Beneficiary and (y) treated as an inherited individual retirement account or individual retirement annuity within the meaning of section 408(d)(3)(C) of the Code.  Further, section 401(a)(9)(B) of the Code (other than clause (iv) thereof) shall apply to an individual retirement account or individual retirement annuity described in the preceding sentence.”

IV.           As amended hereby, the Plan is specifically ratified and reaffirmed.

IN WITNESS WHEREOF, the parties have caused these presents to be executed this _21st_____ day of ___December____________, 2009.

	CAMERON INTERNATIONAL CORPORATION
By:	/s/ Joseph H. Mongrain
Name:	Joseph H. Mongrain
Title:	Vice President, Human Resources

EX-10.16

Exhibit 10.16

CAMERON INTERNATIONAL CORPORATION

SEVENTH AMENDMENT

TO THE

2005 EQUITY INCENTIVE PLAN

WHEREAS, CAMERON INTERNATIONAL CORPORATION (the “Company”) has heretofore adopted the 2005 EQUITY INCENTIVE PLAN (the “Plan”); and

WHEREAS, the Company desires to amend the Plan in certain respects:

NOW, THEREFORE, the Plan shall be amended as follows, effective May 13, 2009:

1.    The number “23,804,100” shall be substituted for the number “15,054,100” in the first sentence of Section 3.1 of the Plan.

2.   As amended hereby, the Plan is specifically ratified and reaffirmed.

 APPROVED:

/s/ William C. Lemmer                                  

 William C. Lemmer

 Senior Vice President, General Counsel

     and Secretary

 Date:  May 13, 2009

EX-10.17

Exhibit 10.17

CAMERON INTERNATIONAL CORPORATION

EIGHTH AMENDMENT

TO THE

2005 EQUITY INCENTIVE PLAN

WHEREAS, CAMERON INTERNATIONAL CORPORATION (the “Company”) has heretofore adopted the 2005 EQUITY INCENTIVE PLAN (the “Plan”); and

WHEREAS, the Company desires to amend the Plan in certain respects:

NOW, THEREFORE, the Plan shall be amended as follows, effective February 18, 2010:

1.    The number “24,574,350” shall be substituted for the number “23,804,100” in the first sentence of Section 3.1 of the Plan.

2.   The words “or special circumstances determined by the Committee including the achievement of performance objectives,” shall be deleted from Sections 5.5 and 7.4 of the Plan.

3.   As amended hereby, the Plan is specifically ratified and reaffirmed.

 APPROVED:

/s/ William C. Lemmer                               

 William C. Lemmer

 Senior Vice President, General Counsel

      and Secretary

Date:  February 18, 2010

EX-10.19

Exhibit 10.19

POLICY BULLETIN

SUBJECT:   EXECUTIVE SEVERANCE PROGRAM 

                                                                                      < /font>Effective July 1, 2000

Reissued January 12, 2007

Reissued November 5, 2009

I.           PURPOSE

To establish a severance program for senior level executives of the Company that recognizes (i) the relatively more difficult employment transition that occurs upon the termination of employment of higher paid individuals; and (ii) that most senior level executive employees serve at the pleasure of the Company and are decidedly “at will” – meaning that the Company may terminate the employment relationship at any time for any reason without liability to the employee.

II.           SCOPE

This Program applies to corporate officers, group presidents, management level direct reports to group presidents and such other employees, as may be designated by the Chief Executive Officer of Cameron.

III. SEPARATION ALLOWANCE PAYMENTS

Following the termination of employment by the Company for reasons other than cause, as determined in its sole discretion by the Company, the covered executive will receive separation allowance payments in the form of salary continuation for a period of twelve (12) months following termination of employment by the Company. These payments will be based on the covered executive’s base salary rate at the time of termination and will be paid through the Company’s normal payroll cycle.  Separation allowance payments will begin on the Company’s first payroll cycle that occurs after the expiration of the 35 day period following termination of employment (or 60 day period in the case of a group layoff), provided that the covered executive complies with the waiver and release requirement and other conditions of this Program, which are described below, during such period.

Under the requirements of Section 409A of the Internal Revenue Code, because the Company is publicly traded, if a covered executive is a “specified employee” and the total amount of separation allowance payments payable in the first six months following the covered executive’s termination of employment under this and any other program, policy, plan or agreement with the Company and/or any of its affiliates exceeds an applicable limit and all payments will not be made within 2½ months following the end of the calendar year in which the covered executive’s employment was terminated, then the Company will delay any payment that would cause the applicable limit to be exceeded and the payments will resume, without interest, beginning with the first regular payroll cycle that is six months following termination of employment.  The applicable limit under Section 409A is an amount equal to the lesser of (A) two times the covered executive’s base annual rate of salary during the calendar year immediately preceding the year of his or her employment termination and (B) $490,000 (for 2009), subject to adjustment for later years under the Internal Revenue Code.  The Plans Administration Committee will identify the covered executives who are specified employees in accordance with any method permitted under Section 409A and it will advise a covered executive if the specified employee delay applies to him or her.

Payment of the separation allowance payments is contingent upon signing a full and complete waiver and release in a form acceptable to the Company, returning it to the Company in a timely manner, and not revoking the release in the time provided to do so.  (Please see attached waiver and release.)  If the covered executive elects not to sign the waiver and release, or elects to revoke the waiver and release, no salary continuation benefits will be payable.

IV. BENEFITS

Participation in all employee benefits ends on the last day of active employment including, but not limited to:

·   Healthcare Coverage

·   Dental Coverage

·   Vision Coverage

·   CC-SAVE/CC-SHARE

·   Non Qualified Deferred Compensation Plan

·   Basic and Supplemental Life Insurance

·   Basic and Voluntary AD&D

·   Business Travel Accident Insurance

·   Short Term Disability

·   Long Term Disability

·   Vacation Policy

A covered executive may elect to continue to receive the medical, dental and vision coverage in effect on the last day of active employment.  If the covered executive chooses to continue coverage, he or she must file election forms with the Company’s COBRA administrator.  Continuation coverage is subject to the terms of the plans and at the level of coverage in effect before termination.  The covered executive will pay the premiums due to continue these benefits directly to the Company’s COBRA Administrator.  Detailed information regarding election of these benefits will be provided at termination of employment.

Information regarding conversion privileges or portability of the Supplemental Life Insurance will be communicated at the time of separation.  Eligibility for distributions under any Cameron sponsored retirement plan will be pursuant to and made in accordance with the provisions of the specific plan.  The separation payment and the payment for unused vacation are not subject to deferral under the Cameron Retirement Savings Plan or the Cameron Nonqualified Deferred Compensation Plan, nor are they considered for purposes of employer contributions or accruals under such plans or any other similar plan sponsored by the Company.

Management Incentive Compensation Plan

Participation in MICP will be prorated through the last day of employment and determined on the basis of the goals and objectives established for the applicable plan year.  Payment of the MICP bonus for the final year of participation will be made at the same time as payments for that year are made for active employeeswith respect to such year, provided that such payment will be made prior to March 15th of the year following termination of employment.  No further bonus entitlements will be earned during the severance period.

Long-Term Incentive Plan

The terms of the Company’s Long-Term Incentive Plans and the specific provisions of the award agreement(s) will govern awards granted to the covered executive. The length of time to exercise any vested long-term incentive award is defined in the individual agreement(s).

Non-Compete/No Solicitation Commitment

As part of the waiver and release, the covered executive will recognize a commitment that his or her receipt of some of the severance benefits under this Plan will be contingent upon his or her decision not to: (1) directly or indirectly engage in any competition with the Company in any markets or product lines with which the covered executive was involved for a period of 12 months following termination; or (2) directly or indirectly participate in the solicitation or recruitment of any Company employees.  If the covered executive chooses not to accept either of these restrictions, then he or she will be entitled to receive only three months’ worth of separation payments under this Plan.

All Company property, documents and computer records, and any related materials that the covered executive may possess must be returned immediately.

Other Provisions

In addition to salary continuation as provided above, outplacement services for a period of up to 12 months will be made available through a provider chosen by the Company.

If the group in which the executive is employed is sold, merged or consolidated with another entity or business, any executive who continues employment or is offered continued employment with a new owner of a former Cameron operation in the same or reasonably comparable position, will not be eligible for benefits under this Program.  Similarly, if Cameron establishes a joint venture and the executive continues or is offered the same or a reasonably comparable position with the joint venture, the executive will not be eligible for benefits under this Program.  The Plans Administration Committee will make the determination, in its discretion, as to the comparability of any such position.

V.           OTHER SEVERANCE RIGHTS

To the extent any covered executive under this Program is entitled to receive benefits for severance pursuant to statutory or regulatory requirements or an employment contract or arrangement, the benefits hereunder, which are not intended to duplicate such benefits, will be reduced automatically to avoid any such duplication.  The determination of the reduction is the responsibility of the Plans Administration Committee whose decision will be final and binding on both the Company and the covered executive.

VI.           PROGRAM AMENDMENT AND TERMINATION

Cameron reserves the right to amend, modify, suspend or terminate this Program, in whole or in part, at any time.  Cameron does not promise the continuation of any program.  Circumstances which might cause Cameron to amend or terminate the Executive Severance Program include, but are not limited to, changes in law mandating that this Program be revised in certain respects, a determination by Cameron that the Program’s provisions or some of them may no longer be suitable as a result of changes in the circumstances of Cameron or of its employees or changes in financial circumstances or significant adverse changes in Cameron's financial circumstances.

VII.           RESPONSIBILITIES

The general administration of this Program is the responsibility of the Plans Administration Committee, which has final and binding authority to administer this Program in accordance with its stated terms.  The corporate vice-president responsible for human resources will have overall responsibility to effectuate the terms and conditions of this Program and for the day-to-day administration of this Program. These responsibilities may be delegated to other person or persons including group personnel where appropriate.

VIII. SECTION 409A COMPLIANCE

Notwithstanding anything to the contrary in this Program, if any payment of separation allowance payments under this Program would subject the covered executiveto additional taxes and interest under Section 409A of the Internal Revenue Code because the timing of such payments is not delayed for the first six months following a covered executive’s termination of employment with the Company, then any such payments will be accumulated and paid in equal monthly installments, without interest, beginning on the first business day that is six months following termination of employment.

Under this Program, a termination of employment will have the same meaning as a “separation from service” under Section 409A of the Internal Revenue Code.  For example, if a covered executive will be providing significant post-termination consulting services to the Companyor any of its affiliates, his termination of employment may not be considered to occur for purposes of this Program until the consulting arrangement ends.  Further, for purposes of Section 409A of the Internal Revenue Code, installments of separation allowance payments will be treated as separate payments.

WAIVER AND RELEASE AND

ACCEPTANCE OF ADDITIONAL SEPARATION ALLOWANCE BENEFITS

In consideration of CAMERON INTERNATIONAL CORPORATION'S (the “Company’s”) agreement to provide me with severance benefits under its Executive Severance Program (the “Plan”), and subject to the terms and conditions of the Plan, I hereby waive and release Cameron International Corporation, its past, present, and future owners, parents, subsidiaries, and affiliates, and their respective past, present, and future directors, shareholders, officers, employees, agents, insurance carriers, administrators, legal representatives and all benefit plans sponsored by any of them (except for benefits under the Plan and any pension plan), past or present (individually and collectively, the “Released Parties”), from liability for any and all claims, damages, actions, rights, demands and causes of action of any kind that I now have or may have against the Released Parties, including without limitation all claims related to my employment or the termination of my employment by the Company, whether known or unknown, arising under any federal, state or local fair employment or discrimination laws, including but not limited to, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act, the Family Medical Leave Act, the Americans With Disabilities Act, the Worker Adjustment and Retraining Notification Act, and any applicable state’s or locality’s fair employment statutes, any other local, state or federal wage and hour law.  I further waive and release any claims or demands arising under any other federal, state or local law, including but not limited to, common law claims relating to breach of contract, wrongful or constructive discharge, violation of public policy, and common law tort.  This Waiver and Release (also referred to as this “Agreement”) excludes any claims for medical or income replacement benefits for work-related injuries currently pending or permitted by law and further excludes any pension or unemployment compensation benefits to which I may be otherwise entitled.  This Agreement does not apply to any rights or claims that may arise after its effective date.  In addition, nothing in this Agreement prevents me from filing any non-legally waivable claim (including a challenge to the validity of this agreement) with the Equal Employment Opportunity Commission (“EEOC”) or comparable state or local agencies or participating in any investigation or proceeding conducted by the EEOC or comparable state or local agencies; however, I understand and agree that I am waiving any and all rights to recover any monetary or personal relief or recovery as a result of such EEOC or comparable state or local agency proceeding or subsequent legal actions.

I acknowledge that this Agreement is not intended to indicate that such claims exist or that, if they do exist, they are meritorious.  Rather, it is simply an agreement that, in return for the severance benefits as stated in the Plan, any and all potential claims of this nature that I may have against any of the Released Parties, regardless of whether they actually exist, regardless of whether they are known or unknown to me at this time, are expressly settled, compromised, and waived.

By signing this agreement, I am, and I understand and agree that I am, bound by it.  Anyone who succeeds to my rights and responsibilities, such as heirs or the executor of my estate, is also bound by this agreement.  This release also applies to any claims brought by any person or agency or class action under which I may have a right or benefit.  I represent and warrant that no other person or entity has any interest in or been assigned any interest in claims or causes of action, if any, I may have against any of the Released Parties and which I am now releasing in their entirety.

I agree and acknowledge that the only benefits to which I am entitled in association with the termination of my employment with the Company and any of its affiliates are the benefits stated in the Plan and that I am not entitled to any additional benefits under any other policy, plan or agreement of the Company or any Released Party in connection with my termination, including but not limited to any employment or severance agreement between me and any Released Party or any other benefits under any other severance, retention, bonus or incentive plan of the Company or any of its affiliates, shareholders or predecessors (except for benefits under the Plan and any Company pension plan).  I further acknowledge that I have received reimbursement for all reimbursable business expenses I incurred on behalf of the Company or any of its affiliates.  I also acknowledge that I have been paid all wages owed to me by any Released Party up until the day that I signed this Agreement and that I have been provided all leaves (paid and unpaid) to which I was entitled during the term of my employment.

I have signed this agreement voluntarily and without coercion or duress.  I understand the final and binding effect of this agreement and agree to each of its terms.  I acknowledge that the only promises made to me to sign this agreement are those stated in the Plan and that no other understanding concerning the subject matter of this agreement, whether oral or written, exists.  I have been advised to consult with an attorney prior to executing this agreement and I have been given at least twenty-one (21) days to consider this agreement before signing (or forty-five (45) days in the case of any employment termination program offered to a group or class of employees).  If I sign this agreement, I understand that I have seven (7) days after the date I sign to revoke, in writing, this agreement.  Any such revocation must be delivered to my Human Resources Representative to be effective.  This agreement will not become effective or enforceable until this seven (7) day period has expired.  I further acknowledge that I have carefully read the Plan and this agreement, understand their terms, and I am voluntarily accepting the Company’s offer of benefits under that Plan.  I understand that the severance benefits provided under the Plan are valuable consideration to which I would not otherwise be entitled, but are solely in return for the waiver of rights and claims stated in this agreement.

I further agree that my entitlement to any more than three months’ worth of  severance benefits provided under the Plan is contingent on my choice to not: (1) become engaged in any employment or other enterprise that involves being in competition with the Company in any of the markets or product lines with which I was involved while employed by the Company for a period of 12 months following termination; and (2) directly or indirectly, participate in the solicitation or recruitment of any Company employees for the 12-month period following termination.  I expressly acknowledge and agree that if I choose not to follow either or both of these restrictions, I will be entitled to receive only three (3) months’ worth of separation benefits.

Based upon the signing of this agreement, I further agree not to commence any lawsuit against any Released Party for matters covered by this agreement, nor to participate in any such action other than as required by law (except as necessary to protect my rights under this agreement).  I represent that, as of the effective date of this agreement, I have not brought or joined any lawsuit or filed any charge or claim against any Released Party in any court or before any government agency.  Should any provision of this agreement be declared invalid by a court of competent jurisdiction, the remaining provisions will remain in full force and effect.  The Company and I agree that the noncompetition restrictions provided above is reasonable and necessary to protect the proprietary information of Company and its affiliates.  Nevertheless, if that restriction is found by a court of competent jurisdiction to be unreasonable, or overly broad as to geographic area or time, or otherwise unenforceable, the court will modify the restrictions so as to be reasonable and enforceable and, as so modified by the court, to be fully enforced.

This agreement will be governed by and construed in accordance with the laws of the State of Texas, without regard to conflicts of law principles thereof.

Signed by:                                            ______________________________________________

Printed Employee Name:                     ______________________________________________

Dated:                                                    ______________________________________________

Company Representative:                  _______________________________________________

Dated:                                                    _______________________________________________

EX-10.21

Exhibit 10.21

______________________________________________________

INDIVIDUAL ACCOUNT RETIREMENT PLAN

FOR

BARGAINING UNIT EMPLOYEES

AT THE CAMERON INTERNATIONAL CORPORATION

BUFFALO, NEW YORK PLANT

(As Amended and Restated Effective as of January 1, 2008)

______________________________________________________

TABLE OF CONTENTS

		PAGE
I.	DEFINITIONS AND CONSTRUCTION	2
II.	MEMBERSHIP	7
III.	CONTRIBUTIONS	8
IV.	ALLOCATIONS AND ADJUSTMENTS TO ACCOUNTS	11
V.	RETIREMENT BENEFITS	12
VI.	DEATH BENEFITS	13
VII.	DISABILITY BENEFITS	14
VIII.	BENEFITS FOR OTHER TERMINATION OF EMPLOYMENT; VESTING	15
IX.	TIME AND MANNER OF BENEFIT PAYMENT	17
X.	PLAN ADMINISTRATION	29
XI.	FUNDING AGENT; ADMINISTRATION OF PLAN ASSETS	31
XII.	FIDUCIARY RESPONSIBILITIES	34
XIII.	AMENDMENTS TO THE PLAN	35
XIV.	PLAN TERMINATION; PLAN MERGER OR CONSOLIDATION	36
XV.	VESTING SERVICE; HOUR OF SERVICE	37
XVI.	MISCELLANEOUS	39
XVII.	TAX DEFERRED SAVINGS CONTRIBUTIONS	41

TABLE OF CONTENTS
		PAGE
I.  DEFINITIONS AND CONSTRUCTION
1.0 Definitions		2
	(1) Account	2
	(2)  Account Balance	2
	(3)  Allocation Date	2
	(4)  Allocation Month	2
	(5)  Allocation Year	2
	(6)  Benefit Disbursement Date	2
	(7)  Code	2
	(8)  Company	2
	(9)  Company Contribution	2
	(10)  Company Stock	2
	(11)  Company Stock Fund	2
	(12)  Contribution Amount	2
	(13)  Contribution Hour	3
	(14)  Controlled Entity	3
	(15)  Effective Date	3
	(16)  Eligible Employee	3
	(17)  Eligible Retirement Plan	3
	(18)  Eligible Rollover Distribution	3
	(19)  Eligible Surviving Spouse	4
	(20)  Employee	4
	(21)  Employer	4
	(22)  ERISA	4
	(23)  Funding Agent	4
	(24)  Hour of Service	4
	(25)  Leased Worker	4
	(26)  Leave of Absence	5
	(27)  Member	5
	(28)  One-Year Break-In-Service	5
	(29)  Plan	5
	(30)  Plan Year	5
	(31)  Retirement Age	5
	(32)  Retirement Date	6
	(33)  Rollover Contributions	6
	(34)  Service	6
	(35)  Tax Deferred Savings Contributions	6
	(36)  Total and Permanent Disability	6
	(37)  Vested Interest	6
	(38)  Vesting Service	6
1.02	Number and Gender	6
1.03	Headings	6
II.  MEMBERSHIP		7
2.01	Initial Membership	7
2.02	Membership Classification	7
2.03	Reemployment Membership	7
III.  CONTRIBUTIONS		8
3.01	Plan Contributions	8
3.02	Amount of Company Contributions	8
3.03	Payment of Company Contributions	8
3.04	Reinstatement Contributions	8
3.05	Return of Company Contributions	9
3.06	Rollover Contributions	9
IV.  ALLOCATIONS AND ADJUSTMENTS TO ACCOUNTS		11
4.01	Allocations of Contributions	11
4.02	Valuation of Accounts	11
4.03	Statutory Limitations on Certain Allocations	11
V.  RETIREMENT BENEFITS		12
VI.  DEATH BENEFITS		13
6.01	Death Benefits	13
6.02	Designation of Beneficiaries	13
6.03	Beneficiary in Absence of a Designated Beneficiary	13
6.04	Spousal Consent to Beneficiary Designation	13
VII.  DISABILITY BENEFITS		14
7.01	Amount of Disability Benefit	14
VIII. BENEFITS FOR OTHER TERMINATION OF EMPLOYMENT; VESTING		15
8.01	Benefits for Other Termination of Employment	15
8.02	Vested Interest	15
8.03	Forfeitures	15
8.04	Restoration of Forfeitures	16
IX.  TIME AND MANNER OF BENEFIT PAYMENT		17
9.01	Benefit Commencement	17
9.02	Minimum Distribution Requirements	19
9.03	Benefit Payment Forms	22
9.04	Payment of Death Benefits	25
9.05	Lump Sum Cash-Out	27
9.06	Commercial Annuities	28
9.07	Actuarial Equivalency	28
9.08	Eligible Rollover Distributions	28
X.  PLAN ADMINISTRATION		29
10.01	Plan Administrator	29
10.02	Authority of the Company	29
10.03	Action by the Company	29
10.04	Claims Review Procedure	29
10.05	Qualified Domestic Relations Order	30
10.06	Indemnification	30
XI.  FUNDING AGENT; ADMINISTRATION OF PLAN ASSETS		31
11.01	Funding Agent	31
11.02	Company Stock Fund	31
11.03	Administration of Plan Assets	31
11.04	Authorization of Benefit Payments and Distributions	32
11.05	Voting of Company Stock in the Company Stock Fund	32
XII.  FIDUCIARY RESPONSIBILITIES		34
12.01	General Allocation of Duties	34
12.02	Fiduciary Liability	34
12.03	Delegation and Allocation	34
XIII.  AMENDMENTS TO THE PLAN		35
13.01	Plan Amendments	35
13.02	Limitations on Plan Amendment	35
13.03	Election of Former Schedule	35
XIV.  PLAN TERMINATION; PLAN MERGER OR CONSOLIDATION		36
14.01	Right to Terminate or Discontinue	36
14.02	Plan Termination or Discontinuance of Contributions	36
14.03	Merger, Consolidation or Transfer of Assets	36
XV.  VESTING SERVICE; HOUR OF SERVICE		37
15.01	Vesting Service	37
15.02	Hour of Service	37
XVI.  MISCELLANEOUS		39
16.01	Non-Guarantee of Employment	39
16.02	Payments Solely from Plan Assets	39
16.03	Facility of Payment	39
16.04	Non-Alienation of Benefits	39
16.05	Exclusive Benefit	39
16.06	Transferred Employment	39
16.07	Severability	40
16.08	Applicable Law	40
16.09	Internal Revenue Service Approval	40
16.01	Uniformed Services Employment and Reemployment Rights Act Requirements	40
XVII.  TAX DEFERRED SAVINGS CONTRIBUTIONS
17.01	Tax Deferred Savings Contribution Election	41
17.02	Change of Tax Deferred Savings Contribution Election	41
17.03	Limitation on Tax Deferred Savings Contributions	41
17.04	Excess Tax Deferred Savings Contributions	42
17.05	Investment and Administration of Tax Deferred Savings Contributions	42
17.06	Vesting	42
17.07	Distribution of Tax Deferred Savings Contributions	42
APPENDIX A  Section 415 LIMITATIONS		A-1
APPENDIX B  HISTORICAL COLLECTIVELY BARGAINED
CONTRIBUTION RATES		B-1

INDIVIDUAL ACCOUNT RETIREMENT PLAN

FOR

BARGAINING UNIT EMPLOYEES

AT THE CAMERON INTERNATIONAL CORPORATION

BUFFALO, NEW YORK PLANT

(January 1, 2008 Restatement)

PREAMBLE

WHEREAS, Cooper Industries, Inc. established the Individual Account Retirement Plan for Bargaining Unit Employees at the Buffalo, New York Plant (the “Plan”), effective as of January 1, 1988, for the benefit of hourly employees represented by the International Association of Machinists and Aerospace Workers, Local Lodge No. 330, District No. 65 (formerly District No. 76), at its Buffalo, New York facility;

WHEREAS, Cameron International Corporation (the “Company”), which was formerly named Cooper Cameron Corporation, assumed the Plan as of January 1, 1995;

WHEREAS, the Plan has been renamed the Individual Account Retirement Plan for Bargaining Unit Employees at the Cameron International Corporation Buffalo, New York Plant; and

WHEREAS, the Company desires to restate the Plan and to amend the Plan in several respects, intending thereby to provide an uninterrupted and continuing program of benefits;

NOW, THEREFORE, the Plan is hereby amended and restated in its entirety as follows with no interruption in time, effective as of January 1, 2008, except as otherwise indicated herein.

I.           DEFINITIONS AND CONSTRUCTION

1.01Definitions

.  Where the following words and phrases appear in the Plan, they shall have the respective meanings set forth below, unless their context clearly indicates to the contrary.

(1)   Account

An individual account established for each Eligible Employee who becomes a Member.  Such account shall be established, maintained, and administered as provided in Article IV.

(2)   Account Balance

The balance credited to the Account of a Member as of any relevant date, to be determined as provided in Article IV.

(3)   Allocation Date

Any date within an Allocation Year on which Contribution Amounts are allocated as provided in Section 4.02.  An “Annual Allocation Date” shall be the last day of an Allocation Year.

(4)   Allocation Month

A period of time which coincides with a calendar month and for which the Company makes contributions pursuant to Section 3.02.

(5)   Allocation Year

A period of time which coincides with a Plan Year and for which the Company makes contributions pursuant to Section 3.02.

(6)   Benefit Disbursement Date

With respect to each Member, the date the first payment is made pursuant to the Plan to provide a benefit for such Member or his Beneficiary.  In the case of an annuity, the Benefit Disbursement Date shall be the first day of the first period for which a payment is payable as an annuity and in the case of a benefit payable in a form other than an annuity, the Benefit Disbursement Date shall be the first day on which all events have occurred which entitle a Member to such benefit.

(7)   Code

The Internal Revenue Code of 1986, and the regulations issued thereunder, as amended from time to time.

(8)   Company

Cameron International Corporation, which as of January 1, 1995, shall be the plan sponsor of the Plan.

(9)   Company Contribution

The contributions made to the Plan by the Company in accordance with the provisions of Section 3.02.

(10)   Company Stock

The common stock of Cameron International Corporation.

(11)   Company Stock Fund

The investment fund established to invest in Company Stock and maintained pursuant to the provisions of Section 11.01(a).

(12)   Contribution Amount

The amount of Company Contribution made with respect to each Member as provided in Section 3.02.

(13)   Contribution Hour

An hour of active employment while an active Member of the Plan for which such Member receives pay from the Company, including overtime, holidays, personal days and vacation hours.  A Contribution Hour shall not include any paid hours for any other absence or other periods during which no duties are performed for the Company.

(14)   Controlled Entity

Each corporation that is a member of a controlled group of corporations, within the meaning of Section 1563(a) (determined without regard to Sections 1563(a)(4) and 1563(e)(3)(C)) of the Code), of which the Company is a member, each trade or business (whether or not incorporated) with which the Company is under common control, and each organization that is a member of an affiliated service group, within the meaning of Section 414(m) of the Code, of which the Company is a member.

(15)   Effective Date

January 1, 2008, as to this restatement of the Plan, except (A) as otherwise indicated in specific provisions of the Plan and (B) that provisions of the Plan required to have an earlier effective date by applicable statute and/or regulations shall be effective as of the required effective date in such statute and/or regulation and shall apply, as of such required effective date, to any plan merged into this Plan.  The original effective date of the Plan was January 1, 1998.

(16)   Eligible Employee

An Employee who is employed by the Employer and who is represented by International Association of Machinists and Aerospace Workers, Local Lodge No. 330, District No. 65, at the Buffalo, New York facility of the Employer.

(17)   Eligible Retirement Plan

Any of:  an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code, a qualified plan described in Section 401(a) of the Code, which, under its provisions does, and under applicable law may, accept an Eligible Rollover Distribution, an annuity contract described in Section 403(b) of the Code and an eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for the amounts transferred into such plan from this Plan.  The definition of Eligible Retirement Plan shall also apply in the case of a distribution to a surviving spouse or to a spouse or former spouse who is an alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code and, with respect to an Eligible Rollover Distribution to be made to an individual retirement account described in Section 408(a) of the Code or an individual retirement annuity described in Section 408(b) of the Code in either case which was established for purposes of receiving such distribution, a designated beneficiary other than a Member’s spouse.

(18)   Eligible Rollover Distribution

All or any portion of a Plan distribution to a Member or a beneficiary who is a deceased Member’s surviving spouse or an alternate payee under a qualified domestic relations order who is a Member’s spouse or former spouse; provided, however, that such distribution is not (i) one of a series of substantially equal periodic payments made at least annually for over a specified period of ten or more years or the life of the Member or beneficiary or the joint lives of the Member and a designated beneficiary, (ii) a distribution to the extent such distribution is required under Section 401(a)(9) of the Code, or (iii) the portion of any distribution which is not includible in gross income (determined without regard to any exclusion of net unrealized appreciation with respect to employer securities).

Notwithstanding the foregoing or any other provision of the Plan, (A) any amount that is distributed from the Plan on account of hardship shall not be an Eligible Rollover Distribution and the distributee may not elect to have any portion of such a distribution paid directly to an Eligible Retirement Plan and (B) a portion of a distribution shall not fail to be an Eligible Rollover Distribution merely because the portion consists of after-tax employee contributions which are not includable in gross income; provided, however, that such portion may be transferred only to an individual retirement account or annuity described in Section 408(a) or (b) of the Code or to a qualified defined contribution plan described in Section 401(a) or 403(a) of the Code that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includable in gross income and the portion of such distribution which is not so includable.

(19)   Eligible Surviving Spouse

For purposes of Section 9.03(a), the spouse to whom a Member is married on his Benefit Disbursement Date.  For purposes of Section 9.04(a), the spouse to whom a Member was married on the date of his death.  For purposes of Section 9.04(d), the spouse to whom a former Member was married on the date of his death.

(20)   Employee

Any individual employed by the Company or a Controlled Entity.

(21)   Employer

The Turbocompressor Division of the Company.

(22)   ERISA

The Employee Retirement Income Security Act of 1974, and the regulations issued thereunder, as amended from time to time.

(23)   Funding Agent

The legal reserve life insurance company or corporate trustee selected to hold and/or invest assets of the Plan, and if and when directed, to pay benefits provided under the Plan.  Where there is more than one Funding Agent, the term “Funding Agent” shall refer to all such Funding Agents.

(24)   Hour of Service

The measure of service credited to an Employee pursuant to the provisions of Section 15.02.

(25)   Leased Worker

Any person (other than a person who is an employee without regard to this Paragraph 1.01(25)) engaged in performing services for a Controlled Entity (the “recipient”) pursuant to an agreement between the recipient and any other person (“Leasing Organization”) who meets the following requirements:

(a)           he has performed services for one or more Controlled Entities (or for any other “related persons” determined in accordance with Section 414(n)(6) of the Code) on a substantially full-time basis for a period of at least one year;

(b)           such services are performed under primary direction or control by the Company or a Controlled Entity; and

(c)           he is not participating in a “safe harbor plan” of the Leasing Organization.  (For this purpose a “safe harbor plan” is a plan that satisfies the requirements of Section 414(n)(5) of the Code, which will generally be a money purchase pension plan with a nonintegrated company contribution rate of at least 10% of compensation and which provides for immediate participation and full and immediate vesting).

A person who is a Leased Worker during any taxable year beginning after December 31, 1983, shall also be considered an employee of a Controlled Entity during such period (and solely for the purpose of determining length of service for vesting purposes, and shall also be considered to have been an employee for any earlier period in which he was a Leased Worker) but shall not be a Member and shall not otherwise be eligible to become covered by the Plan during any period in which he is a Leased Worker.  Notwithstanding the foregoing, the sole purpose of this Paragraph 1.01(25) is to define and apply the term “Leased Worker” strictly (and only) to the extent necessary to satisfy the minimum requirements of Section 414(n) of the Code relating to “leased employees.”  This Section 1.01(25) shall be interpreted, applied and, if and to the extent necessary, deemed modified without formal amendment of language, so as to satisfy solely the minimum requirements of Section 414(n) of the Code.

(26)   Leave of Absence

Any absence authorized by the Company under the Company’s standard personnel practices.

(27)   Member

An Eligible Employee who has met the eligibility requirement for participation in the Plan as set forth in Article II.

(28)   One-Year Break-In-Service

Any Plan Year during which an Employee is credited with less than 501 Hours of Service as defined in Article XV; provided, however, that no Employee shall incur a One-Year Break-In-Service solely by reason of an absence due to the birth of a child of the Employee, the pregnancy of the Employee, the placement of a child with the Employee on account of the adoption of such child by such employee, or the caring for a child by the Employee for a period beginning following the birth or placement of such child, with respect to the Plan Year in which such absence begins, if the Employee otherwise would have incurred a One-Year Break-In-Service or, in any other case, in the immediately following Plan Year.

(29)   Plan

Individual Account Retirement Plan for Bargaining Unit Employees at the Cameron International Corporation Buffalo, New York Plant, a profit-sharing plan, as set forth herein and as amended hereafter from time to time.

(30)   Plan Year

Each twelve-consecutive month period commencing January 1 and terminating on the subsequent December 31.

(31)   Retirement Age

Age 65.

(32)   Retirement Date

The date on which an active or inactive Member terminates employment with the Company upon or after attaining his Retirement Age.

(33)   Rollover Contributions

The rollover contributions made to the Plan in accordance with the provisions of Section 3.06.

(34)   Service

A Member’s Service for purposes of the Plan shall be determined in accordance with the rules set forth in Article XV.

(35)   Tax Deferred Savings Contributions

The cash or deferred arrangements contributions made to the Plan in accordance with the provisions of Article XVII.

(36)   Total and Permanent Disability

A Member shall be considered totally and permanently disabled if such Member has been determined to be disabled under any Company-sponsored long-term disability plan, or if such Member is not eligible for coverage under any such plan, then such Member shall be considered totally and permanently disabled if such Member has been determined eligible to receive Social Security disability benefits under the federal Social Security Act.  A Member shall cease to be Permanently and Totally Disabled for purposes of the Plan as of the date he ceases to be eligible for such benefits.

(37)   Vested Interest

The percentage of a Member’s Account which, pursuant to the Plan, is nonforfeitable.

(38)   Vesting Service

As defined in Article XV, the measure of service used in determining a Member’s Vested Interest.

1.02Number and Gender

  Wherever appropriate herein, words used in the singular shall be considered to include the plural and the plural to include the singular.  The masculine gender, where appearing in the Plan, shall be deemed to include the feminine gender.

1.03Headings

  The headings of Articles and Sections herein are included solely for convenience and if there is any conflict between such headings and the text of the Plan, the text shall control.

II.           MEMBERSHIP

2.01Initial Membership

  An Eligible Employee shall become a Member as of the later of (i) the Effective Date, or (ii) the date on which he becomes an Eligible Employee.

2.02Membership Classification

  A Member shall be either an “active”, an “inactive”, or a “former” Member.  A Member while actively employed as an Eligible Employee shall be an active Member.  A Member who ceases to be an Eligible Employee and (i) who remains employed by the Company or (ii) who is on Leave of Absence or layoff, shall be an inactive Member.  An active or inactive Member who terminates employment with the Company, or an inactive Member described in clause (ii) of the next preceding sentence who has terminated employment with the Company and whose Leave of Absence or layoff has expired, shall be a former Member so long as he retains an Account Balance in his Account.

2.03Reemployment Membership

  A former Employee who was a Member prior to a termination of his employment shall become an active Member again on the date of his reemployment as an Eligible Employee.  A former Employee who was a Member prior to a termination of his employment shall become an inactive Member on the date of his reemployment by the Company or a Controlled Entity in an employment status other than as an Eligible Employee.

III.           CONTRIBUTIONS

3.01Plan Contributions

  Unless specifically provided otherwise, all contributions to the Plan shall be made by the Company and Members shall not be required or permitted to make contributions to the Plan.

3.02Amount of Company Contributions

  For each Allocation Month, the Company shall contribute an amount equal to the total of the Contribution Amounts for all active Members of the Plan for the Allocation Month minus the Section 8.03 forfeitures applicable to the Plan for such Allocation Month.  The monthly Contribution Amount for each Member of the Plan shall be the total of each “pay period contribution” for the Member for each “pay period” during the “Member’s contribution period” ending within the Allocation Month, with each “pay period contribution” for the Member being determined by multiplying the Member’s Contribution Hours for the “pay period” by the contribution rate listed in the table below:

Effective Date of Contribution Rate	Contribution Rate
On and after July 30, 2007	$1.20

A “Member’s contribution period” is the period beginning as of the first day of the Member’s first “pay period” ending within an Allocation Month and ending on the last day of the Member’s final pay period ending within the same Allocation Month.  A Member’s “pay period” is the periodic payroll period for which the Member is compensated by the Company.  Any Company contributions allocated for the benefit of a Member, together with any net income (or net loss) allocated thereto, shall be held in the Member’s Account.

In addition to the Company Contributions set forth above which are allocated to Members’ Accounts pursuant to Article IV, each Member who elected to transfer the value of his benefits under the Pension Plan for Employees in the Machinists Bargaining Unit, District No. 76 at the Cheektowaga, New York Plant (“Prior Plan Benefits”) shall have a separate subaccount in which he is 100% vested maintained, adjusted and distributed in accordance with the provisions of the Plan relating to the rest of his Account.

3.03Payment of Company Contributions

  The Company may make payment of the Company Contributions for any Allocation Year and/or Allocation Month on any date or dates it elects; provided, however, that the total amount of the Company Contributions to the Plan for any Allocation Year shall be paid in full not later than the last day for filing the Company’s federal income tax return for such Allocation Year (including extensions thereof).  Company Contributions shall be paid directly to the Funding Agent.

3.04Reinstatement Contributions

  In any case where a reemployed former Member becomes entitled to the reinstatement of the “forfeitable portion of his Account” as provided in Section 8.04, the Company shall contribute to the Funding Agent such forfeitable portion of his Account.  Any such contribution shall be made as soon as practicable following the date of the reemployment of the former Member.  Such contribution and the allocation thereof under Section 4.01 shall be made in such manner as is necessary to avoid a violation of the limitations referred to in Section 4.03.

3.05Return of Company Contributions

  In the event any Company Contribution to the Plan made by the Company or its Controlled Entities:

(a)is made under a mistake of fact, or

(b)is conditioned upon deduction of the contribution under Section 404 of the Code and such deduction is disallowed, or

(c)is conditioned upon qualification of the Plan under Section 401(a) of the Code and the Plan does not so qualify,

such a contribution may be returned by the Funding Agent to the Company or its Controlled Entities within one year after the payment of the contribution, the disallowance of the deduction to the extent disallowed, or the date of denial of the qualification of the Plan, whichever is applicable, if demand therefor is made by the Company or its Controlled Entities within the time allowed by law.

3.06Rollover Contributions

(a)Rollover Contributions may be made to the Plan by any Eligible Employee of amounts received by such Eligible Employee from an individual retirement account or annuity or from an employees’ trust described in section 401(a) of the Code, which is exempt from tax under section 501(a) of the Code, but only if any such Rollover Contribution is made pursuant to and in accordance with applicable provisions of the Code and Treasury regulations promulgated thereunder.  A Rollover Contribution of amounts that are “eligible rollover distributions” within the meaning of section 402(f)(2)(A) of the Code may be made to the Plan irrespective of whether such eligible rollover distribution was paid to the Eligible Employee or paid to the Plan as a “direct” Rollover Contribution.  A direct Rollover Contribution to the Plan may be effectuated only by wire transfer directed to the Funding Agent or by issuance of a check made payable to the Funding Agent, which is negotiable only by the Funding Agent and which identifies the Eligible Employee for whose benefit the Rollover Contribution is being made.  Any Eligible Employee desiring to effect a Rollover Contribution to the Plan must execute and file with the Company the form prescribed by the Company for such purpose.  The Company may require as a condition to accepting any Rollover Contribution that such Eligible Employee furnish any evidence that the Company in its discretion deems satisfactory to establish that the proposed Rollover Contribution is in fact eligible for rollover to the Plan and is made pursuant to and in accordance with applicable provisions of the Code and Treasury regulations.  All Rollover Contributions to the Plan must be made in cash.

(b)An Eligible Employee who has made a Rollover Contribution in accordance with this Section but who has not otherwise become a Member of the Plan in accordance with Article II, shall become a Member coincident with such Rollover Contribution; provided, however, that such Member shall not have a right to share in Company contributions hereunder until he has otherwise satisfied the requirements imposed by Article II.

(c)A Rollover Contribution shall be credited to the Account of the Eligible Employee for whose benefit such Rollover Contribution is being made as of the date such Rollover Contribution is made.  Any Rollover Contributions which are credited to a Member’s Account shall be commingled for investment purposes with other Plan assets.  The Funding Agent shall account for the Rollover Contributions (and the net income (or net loss) allocable thereto) of a Member separately in accordance with the procedures applicable to Accounts in general.  A Member shall be 100% vested at all times in the value of his Rollover Contributions.  Except as specifically provided in this Section 3.06, Rollover Contributions shall be held and administered in accordance with the procedures applicable to Company contributions credited to Accounts.

(d)Notwithstanding the preceding Paragraphs, this Section shall not be effective unless and until the Company, by appropriate action, elects to make this Section effective.

IV.           ALLOCATIONS AND ADJUSTMENTS TO ACCOUNTS

4.01Allocations of Contributions

  Each active Member shall have allocated to his Account (i) the Contribution Amount which is applicable to him for each Allocation Year or Allocation Month as provided in Section 3.02 and (ii) the Tax Deferred Savings Contributions (including catch-up contributions), if any, made on behalf of a Member by the Employer as provided in Section 17.01.

4.02Valuation of Accounts

 All amounts contributed to the Funding Agent shall be invested as soon as administratively feasible following their receipt by the Funding Agent, and the balance of each Account shall reflect the result of daily pricing of the assets in which such Account is invested from the time of receipt by the Funding Agent until the time of distribution.

4.03Statutory Limitations on Certain Allocations

  It is the intent of the Plan that allocations made under this Article IV shall be in compliance with the benefit limitations of Section 415 of the Code.  Accordingly, the limitations set forth in Appendix A to the Plan shall apply to the allocations made under this Article IV.

V.           RETIREMENT BENEFITS

As of a Member’s Retirement Date, such Member shall be entitled to a retirement benefit payable at the time and in the form provided in Article IX, equal to his Account Balance on his Benefit Disbursement Date.  Any Contribution Amount allocable to a Member’s Account after his Benefit Disbursement Date shall be distributed, if his benefit was paid in a lump sum, or used to increase his payments, if his benefit is being paid on a periodic basis, as soon as administratively feasible after the date that such Contribution Amount is paid to the Funding Agent.

VI.           DEATH BENEFITS

6.01Death Benefits

  In the event of the death of an active or inactive Member (“deceased Member,” for purposes of this Section 6.01), the deceased Member’s designated beneficiary shall be entitled to a death benefit payable at the time and in the form provided in Section 9.04, equal to the deceased Member’s Account Balance on his Benefit Disbursement Date.  Any Contribution Amount allocable to a deceased Member’s Account after his Benefit Disbursement Date shall be distributed, if the death benefit was paid in a lump sum, or used to increase payments, if the death benefit is being paid on a periodic basis, as soon as administratively feasible after the date that such Contribution Amount is paid to the Funding Agent.

6.02Designation of Beneficiaries

  The spouse of each married Member shall be the Beneficiary of such Member to whom payment of a death benefit determined under Section 6.01 shall be made; provided, however, that a Member may designate a person or persons other than his spouse as his beneficiary if the requirements of Section 6.04 are met.  Each Member who is unmarried may designate any person or persons as his Beneficiary or Beneficiaries to whom payment of a death benefit determined under Section 6.01 shall be made in the event of the death of such Member.

6.03Beneficiary in Absence of a Designated Beneficiary

  If a deceased Member with respect to whom death benefits are payable as provided in Section 6.01 does not have a surviving spouse and if no Beneficiary has been designated pursuant to the provisions of Section 6.02, or if no Beneficiary survives such Member, then the Beneficiary of such Member shall be the Beneficiary established under the following priority listing:

(i) the beneficiary named under a group term life insurance program sponsored by the Company,

(ii) if there is no beneficiary under subparagraph (i) above, the beneficiary named under any other program sponsored by the Company which provides for a death benefit,

(iii) if there is no beneficiary under subparagraph (i) or (ii) above, the children of the deceased Member, and

(iv) if there is no beneficiary under subparagraph (i), (ii) or (iii) above, the executor or administrator of the deceased Member’s estate, as the case may be.

6.04Spousal Consent to Beneficiary Designation

  In the event a Member is married, any election to designate a beneficiary other than his spouse as Beneficiary or to change the form of payment applicable to such Member, shall be effective and may be changed only if the Member’s spouse consents in writing thereto and such consent acknowledges the effect of such action and is witnessed by a Plan representative or a notary public, unless a Plan representative finds that such consent cannot be obtained because the spouse cannot be located or because of other circumstances set forth in Section 401(a)(11) of the Code and regulations issued thereunder.

VII.           DISABILITY BENEFITS

7.01Amount of Disability Benefit

  In the event of the Total and Permanent Disability of an active Member such Member shall be entitled to a disability benefit, payable at the time and in the form provided in Article IX, equal to his Account Balance on his Benefit Disbursement Date.  Any Contribution Amount allocable to a Member’s Account after his Benefit Disbursement Date shall be distributed, if his benefit was paid in a lump sum, or used to increase his payments, if his benefit is being paid on a periodic basis, as soon as administratively feasible after the date that such Contribution Amount is paid to the Funding Agent.

VIII.           BENEFITS FOR OTHER TERMINATION OF EMPLOYMENT; VESTING

8.01Benefits for Other Termination of Employment

  Each active or inactive Member whose employment is terminated prior to attaining his Retirement Age for any reason other than Total and Permanent Disability or death shall be entitled to a termination benefit, payable at the time and in the form provided in Article IX, equal to his Vested Interest in his Account Balance on his Benefit Disbursement Date.  A Member’s Vested Interest in any Contribution Amount allocable to his Account after his Benefit Disbursement Date shall be distributed, if his benefit was paid in a lump sum, or used to increase his payments, if his benefit is being paid on a periodic basis, as soon as administratively feasible after the date that such Contribution Amount is paid to the Funding Agent.

8.02Vested Interest

  (a) Except as provided in paragraph (b) or (c) of this Section 8.02, a Member’s Vested Interest in his Account (other than the value of Tax Deferred Savings Contributions, including catch-up contributions, and Rollover Contributions) on any determination date shall be determined by reference to such Member’s full years of Vesting Service as of such date in accordance with the following vesting schedule:

Full Years of Vesting  Service	Vested Interest
Less than 3 years	0%
3 years	33%
4 years	67%
5 or more years	100%

(b)In any case where the forfeitable portion of a former Member’s Account is forfeited upon a Forfeitable Event as provided in Section 8.03, the nonforfeitable portion of such Account upon such forfeiture shall then become the former Member’s entire Account and the former Member’s Vested Interest therein shall be 100%.  In the event such former Member shall once again become an active or inactive Member on a subsequent date, such Member’s existing Account with a Vested Interest of 100% shall become a separate account within the Member’s new Account under the plan, and such separate account shall continue to have a Vested Interest of 100%.  Any such separate account shall be maintained until such time as the Member’s Vested Interest in his entire Account shall become 100%.

(c)Upon the occurrence of one of the events listed in (i), (ii), or (iii) below, the Vested Interest of a Member or former Member, as the case may be, in his Account shall become 100%:

(i)An active or inactive Member’s Retirement Date (See Article V);

(ii)The death of an active or inactive Member (See Article VI); or

(iii)An active Member’s Total and Permanent Disability (see Article VII).

8.03Forfeitures

  At the time a Member terminates employment with the Company and its Controlled Entities prior to attaining Retirement Age for any reason other than Total and Permanent Disability or death, a “Forfeitable Event” occurs which is either (i) distribution of the non-forfeitable portion of the Member’s Account or (ii) five (5) consecutive One-Year Breaks-In-Service.  Upon the occurrence of a Forfeitable Event, the forfeitable portion of his Account shall be forfeited and such forfeited amount shall be applied against the Company’s next contribution obligation under the Plan.  Upon the forfeiture of the forfeitable portion of a Member’s Account, such forfeited amount shall cease to be a part of such Member’s Account.

8.04Restoration of Forfeitures

  If a Member who has a Vested Interest of less than 100% in his Account incurs a forfeiture pursuant to Section 8.03, such forfeited amount shall be restored to his Account upon reemployment covered by the Plan, if such reemployment occurs prior to the date on which he would have incurred five consecutive One-Year Breaks-In-Service or the number of consecutive One Year Breaks-In-Service equal to his years of Vesting Service prior to his termination of employment or five (5) years after reemployment.  Any restoration shall be made from the assets of the special contribution of the Company which shall not constitute an “annual addition” within the meaning of Section 415 of the Code.  The repayment period will be the earlier of five consecutive One-Year Breaks-In-Service or five years from the date of reemployment with the Employer.

IX.           TIME AND MANNER OF BENEFIT PAYMENT

9.01Benefit Commencement

    (a) Subject to the provisions of paragraphs (c) and (d) of this Section 9.01 and Section 9.05, with respect to a benefit payable to or with respect to a Member pursuant to Article V (retirement), Article VI (death) or Article VII (disability), the Benefit Disbursement Date shall be within the 90 day period following the date the Member or his Beneficiary becomes entitled to such benefit.

 (b)Subject to the provisions of paragraphs (c) and (d) of this Section 9.01, with respect to a benefit payable to a Member pursuant to Article VIII (other termination of employment), the Benefit Disbursement Date shall be within the 90 day period following the date such Member attains his Retirement Age; provided, however, that such Member may elect a Benefit Disbursement Date which is after his termination of employment and prior to attainment of Retirement Age.

(c)Notwithstanding the foregoing provisions of this Section 9.01, the Company for the Plan from which a benefit is to be paid may designate a later Benefit Disbursement Date and, upon notification thereof to such Member or Beneficiary, as the case may be, such designated date shall become the Benefit Disbursement Date; provided, however, that in no event shall a Benefit Disbursement Date be later than the 60th day following the close of the Plan Year during which the Member attains, or would have attained, age 65 or, if later, the date he terminated employment with the Company.  If the amount of benefit payment required to commence by a certain date in accordance with the Plan cannot be ascertained by such date, or if it is not possible to commence benefit payments on such date because the Company has been unable to locate the Member or Beneficiary, as the case may be, after making reasonable efforts to do so, a payment retroactive to such date may be made no later than 60 days after the earliest date on which the amount of such benefit payment can be ascertained under the Plan, or the date on which the Member or Beneficiary, as the case may be, is located, whichever is applicable.

(d)Notwithstanding any provision in the Plan to the contrary, all distributions required under this Article IX shall be determined and made in accordance with the regulations under Section 401(a)(9) of the Code, including the minimum distribution incidental benefit requirements of Section 1.401(a)(9)-2 of the regulations.  The entire interest of a Member in his Account must be distributed or must begin to be distributed no later than the Member’s Mandatory Distribution Date.  A Member’s Mandatory Distribution Date will be determined as follows:

(i)The Mandatory Distribution Date of a Member who has attained age 70½ before January 1, 2001, shall be April 1 of the calendar year following the calendar year in which such Member attains the age 70½.

(ii)The Mandatory Distribution Date of a Member who attains age 70½ after  December 31, 2000, shall be April 1 of the calendar year following the later of (A) the calendar year in which such Member attains the age 70½ or (B) the calendar year in which such Member terminates his employment with the Company (provided, however, that clause (B) of this sentence shall not apply in the case of a Member who is a “five-percent owner” (as defined in section 416 of the Code) with respect to the Plan Year ending in the calendar year in which such Member attains the age 70½).

(iii)In the case of a benefit payable pursuant to Article VI, the Mandatory Distribution Date shall be (A) if payable to other than the Member’s spouse, the last day of the one-year period following the death of such Member or (B) if payable to the Member’s spouse, after the date upon which such Member would have attained the age 70½, unless such surviving spouse dies before payments commence, in which case the Mandatory Distribution Date may not be deferred beyond the last day of the one-year period following the death of such surviving spouse.

The preceding provisions of this Section notwithstanding, a Member may not elect to defer the receipt of his benefit hereunder to the extent that such deferral creates a death benefit that is more than incidental within the meaning of section 401(a)(9)(G) of the Code and applicable Treasury regulations thereunder.  Further, a Member (other than a Member who is a “five-percent owner” (as defined in section 416 of the Code) with respect to the Plan Year ending in the calendar year in which such Member attains the age 70½) who attains age 70½ in calendar year 1998, 1999 or 2000 may elect to defer his Mandatory Disbursement Date until no later than April 1 of the calendar year following the later of (A) the calendar year in which such Member attains the age 70½ or (B) the calendar year in which such Member terminates his employment with the Company, provided, that such election is made by the end of the calendar year in which such Member attains age 70½.

(e)Notwithstanding any provision to the Plan to the contrary, distributions to a Member, if not made in a single lump sum, may only be made over one of the following periods (or a combination thereof):

(1)           The life of the Member,

(2)           The life of the Member and his Beneficiary,

(3) A period certain not extending beyond the life expectancy of the Member, or

(4) A period certain not extending beyond the joint and last survivor expectancy of the Member and his Beneficiary.

(f)If the Member dies on or after the Member’s Mandatory Distribution Date, the remaining portion of the Member’s Account must continue to be distributed at least as rapidly as under the method of distribution in effect at the Member’s death.

(g)Notwithstanding the provisions of the Plan regarding availability of distributions from the Plan upon ‘termination of employment,’ a Member’s Accounts shall be distributed on account of the Member’s ‘severance from employment’ as such term is used in Section 401(k)(2)(B)(i)(I) of the Code.

9.02Minimum Distribution Requirements

   (a)           The provisions of this Section 9.02 will take precedence over any inconsistent provisions of the Plan.

(b)           All distributions required under this Section 9.02 will be determined and made in accordance with the Treasury regulations under  Section 401(a)(9) of the Code.

(c)           Notwithstanding the other provisions of this Section 9.02, distributions may be made under a designation made before January 1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the Plan that relate to Section 242(b)(2) of TEFRA.

(d)           The Member’s entire interest will be distributed, or begin to be distributed, to the Member no later than the Member’s Required Beginning Date.  If the Member dies before distributions begin, the Member’s entire interest will be distributed, or begin to be distributed, no later than as follows:

1.If the Member’s surviving spouse is the Member’s sole Designated Beneficiary, then distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Member died, or by December 31 of the calendar year in which the Member would have attained age 70½, if later.

2.If the Member’s surviving spouse is not the Member’s sole Designated Beneficiary, then distributions to the Designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Member died.

3.If there is no Designated Beneficiary as of September 30 of the year following the year of the Member’s death, the Member’s entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Member’s death.

4.If the Member’s surviving spouse is the Member’s sole Designated Beneficiary and the surviving spouse dies after the Member but before distributions to the surviving spouse begin, this Paragraph (disregarding item (1) above), will apply as if the surviving spouse were the Member.

For purposes of this Paragraph (d) and Paragraph (f) below, unless item (4) above applies, distributions are considered to begin on the Member’s Required Beginning Date. If item (4) above applies, distributions are considered to begin on the date distributions are required to begin to the surviving spouse under item (1) above. If distributions under an annuity purchased from an insurance company irrevocably commence to the Member before the Member’s Required Beginning Date (or to the Member’s surviving spouse before the date distributions are required to begin to the surviving spouse under item (1) above), the date distributions are considered to begin is the date distributions actually commence.  Unless the Member’s interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the Required Beginning Date, as of the first Distribution Calendar Year distributions will be made in accordance with Paragraphs (e) and (f) of this Section 9.02, whichever is applicable. If the Member’s interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Section 401(a)(9) of the Code and the Treasury regulations.

(e)           During the Member’s lifetime, the minimum amount that will be distributed for each Distribution Calendar Year is the lesser of:

1.the quotient obtained by dividing the Member’s Account Balance by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations, using the Member’s age as of the Member’s birthday in the Distribution Calendar Year; or

2.if the Member’s sole Designated Beneficiary for the Distribution Calendar Year is the Member’s spouse, the quotient obtained by dividing the Member’s Account Balance by the number in the Joint and Last Survivor Table set forth in  Section 1.401(a)(9)-9 of the Treasury regulations, using the Member’s and spouse’s attained ages as of the Member’s and spouse’s birthdays in the Distribution Calendar Year.

Required minimum distributions will be determined under this Paragraph (e) beginning with the first Distribution Calendar Year and up to and including the Distribution Calendar Year that includes the Member’s date of death.

(f)           If the Member dies on or after the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Member’s death is the quotient obtained by dividing the Member’s Account Balance by the longer of the remaining Life Expectancy of the Member or the remaining Life Expectancy of the Member’s Designated Beneficiary, determined as follows:

1.The Member’s remaining Life Expectancy is calculated using the age of the Member in the year of death, reduced by one for each subsequent year.

2.If the Member’s surviving spouse is the Member’s sole Designated Beneficiary, the remaining Life Expectancy of the surviving spouse is calculated for each Distribution Calendar Year after the year of the Member’s death using the surviving spouse’s age as of the spouse’s birthday in that year.  For Distribution Calendar Years after the year of the surviving spouse’s death, the remaining Life Expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse’s birthday in the calendar year of the spouse’s death, reduced by one for each subsequent calendar year.

3.If the Member’s surviving spouse is not the Member’s sole Designated Beneficiary, the Designated Beneficiary’s remaining Life Expectancy is calculated using the age of the Designated Beneficiary in the year following the year of the Member’s death, reduced by one for each subsequent year.

If the Member dies on or after the date distributions begin and there is no Designated Beneficiary as of September 30 of the year after the year of the Member’s death, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Member’s death is the quotient obtained by dividing the Member’s Account Balance by the Member’s remaining Life Expectancy calculated using the age of the Member in the year of death, reduced by one for each subsequent year.

(g)If the Member dies before the date distributions begin and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Member’s death is the quotient obtained by dividing the Member’s Account Balance by the remaining Life Expectancy of the Member’s Designated Beneficiary, determined as provided in item (1), (2) or (3) of Paragraph (f), whichever is applicable.  If the Member dies before the date distributions begin and there is no Designated Beneficiary as of September 30 of the year following the year of the Member’s death, distribution of the Member’s entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Member’s death.  If the Member dies before the date distributions begin, the Member’s surviving spouse is the Member’s sole Designated Beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under item (1) of Paragraph (d), this Paragraph (g) will apply as if the surviving spouse were the Member.  Notwithstanding the foregoing, if the Member dies before distributions begin and there is a Designated Beneficiary, distribution to the Designated Beneficiary is not required to begin by the date specified in Paragraph (d) above but the Member’s entire interest will be distributed to the Designated Beneficiary by December 31 of the calendar year containing the fifth anniversary of the Member’s death. If the Member’s surviving spouse is the Member’s sole Designated Beneficiary and the surviving spouse dies after the Member but before distributions to either the Member or the surviving spouse begin, this Paragraph will apply as if the surviving spouse were the Member.

(h)For purposes of this Section 9.02, the following terms and phrases shall have these respective meanings:

1.Designated Beneficiary:  The individual who is designated as a Member’s Beneficiary under Section 6.02 of the Plan and is a Designated Beneficiary under Section 401(a)(9) of the Code and Section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations.

2.Distribution Calendar Year:  A calendar year for which a minimum distribution is required. For distributions beginning before the Member’s death, the first Distribution Calendar Year is the calendar year immediately preceding the calendar year which contains the Member’s Required Beginning Date. For distributions beginning after the Member’s death, the first Distribution Calendar Year is the calendar year in which distributions are required to begin under Paragraph (d).  The required minimum distribution for the Member’s first Distribution Calendar Year will be made on or before the Member’s Required Beginning Date. The required minimum distribution for other Distribution Calendar Years, including the required minimum distribution for the Distribution Calendar Year in which the Member’s Required Beginning Date occurs, will be made on or before December 31 of that Distribution Calendar Year.

3.Life Expectancy.  Life Expectancy as computed by use of the Single Life Table in Section 1.401(a)(9)-9 of the Treasury regulations.

4.Member’s Account Balance.  The balance in a Member’s Accounts as of the last Valuation Date in the calendar year immediately preceding the Distribution Calendar Year (valuation calendar year) increased by the amount of any contributions made and allocated or forfeitures allocated to the Member’s Accounts as of dates in the valuation calendar year after the Valuation Date and decreased by distributions made in the valuation calendar year after the Valuation Date. A Member’s Account Balance for the valuation calendar year includes any amounts rolled over or transferred to the Plan either in the valuation calendar year or in the Distribution Calendar Year if distributed or transferred in the valuation calendar year.

5.Requiring Beginning Date.  With respect to a Member or Beneficiary, the date described in Section 9.01(d) of the Plan.

9.03Benefit Payment Forms

  (a) With respect to a benefit payable to a Member pursuant to Article V (retirement), Article VII (disability), or Article VIII (other termination of employment), the standard form of benefit for any Member who does not die prior to his Benefit Disbursement Date and who is unmarried on his Benefit Disbursement Date shall be an immediate single life annuity and the standard form of benefit for any Member who does not die before his Benefit Disbursement Date and who is married on his Benefit Disbursement Date shall be an immediate 50% joint and survivor annuity.  Any such single life annuity shall be a commercial annuity for the life of the Member.  Any such joint and survivor annuity shall be a commercial annuity which is payable for the life of the Member with a survivor annuity for the life of the Member’s Eligible Surviving Spouse equal to 50% of the amount of the annuity payable during the joint lives of the Member and such Member’s Eligible Surviving Spouse.  The standard form of benefit will be automatically paid as provided in this Section 9.03(a) unless the Member has elected not to receive his benefit payments in such form by executing an “Application for Retirement Benefits Form” during the election period described in Section 9.03(d); provided, however, that the spouse of any married Member consents in writing to such election pursuant to the provisions of Section 9.03(e).  Any election may be revoked and subsequent elections may be made, or revoked, at any time any number of times during such election period.  If the Member has elected not to receive the standard form of benefit as provided herein, such Member’s benefit shall be paid in one of the benefit payment forms under Section 9.03(c), as selected by such Member.

(b)With respect to a benefit payable to a Member pursuant to Article V (retirement), Article VII (disability), or Article VIII (other termination of employment), who is not married on his Benefit Disbursement Date the form of benefit payment shall be a single life annuity under Section 9.03(c)(i), unless such Member selects another benefit payment form provided in Section 9.03(c).

(c)Subject to the provisions of paragraphs (a) and (b) of this Section 9.03, the Member may select to receive his benefit in one of the following forms:

(i)A commercial annuity in the form of a single life annuity for the life of such Member;

(ii)A commercial annuity in the form of a cash refund annuity;

(iii)A commercial annuity for a term certain of ten (10) years and continuous for the life of the Member if he survives such term certain;

(iv)A commercial annuity payable for the life of such Member with a survivor annuity for the life of his Beneficiary which shall be equal to 50%, 75%, or 100% of the annuity payable during the joint lives of the Member and such Member’s Beneficiary;

(v)A lump sum payment (provided, however, that such Member may elect to receive the Vested Interest in his Account which is invested in the common stock of the Company distributed in the form of whole shares of such stock with the value of any fractional shares to be paid in cash); or

(vi)A single life annuity commencing prior to the earliest age as of which such Member will become eligible for an “old-age insurance benefit” under the federal Social Security Act, adjusted so that an increased amount will be paid prior to such age and a reduced amount thereafter; the purpose of this adjustment is to enable the Member to receive, from this Plan and under the federal Social Security Act, an aggregate income in approximately a level amount for life.  Moreover, in the event the Member so elects, if such Member dies before receiving payments aggregating the amount of the Account at his Benefit Disbursement Date, the difference shall be paid in a single lump sum to his designated beneficiary or if there is none, to the executor or administrator of his estate.

Notwithstanding the foregoing provisions of this Section 9.03(c), the following additional requirements must be satisfied:

(1) The benefit payment form described in Section 9.03(c) (iii) above shall only be available if the present value of the total payments actuarially expected to be made to the Member shall be more than 50% of the present value of the total payments actuarially expected to be made to the Member and his Beneficiary.

(2) Any payment under a benefit payment form described in this Section 9.03(c) must satisfy the distribution requirement described in Section 9.01(d).

(3) The form of payment to the Member or to the Member and his Beneficiary must be payable over a period of time which does not exceed the longer of:  (i) the life expectancy of the Member, or (ii) the joint and last survivor life expectancy of the Member and his Beneficiary.

(4) Distributions due to the termination of the Plan will be made in accordance with the modes of distributions provided for in the Plan in Section 9.03(c)(i), (ii), (iii), (iv), (v) and (vi) above.

(5) Annuity starting date is defined as (i) the first day of the first period for which an amount is payable as an annuity, or (ii) in the case of a benefit not payable in the form of an annuity, the first day on which all events have occurred which entitle the Member to such benefit.

(d)Subject to the provisions of Section 9.03(e) with respect to any election described in Section 9.03(a), the Company shall furnish, or shall cause to be furnished, certain information, pertinent to such election, to each Member no less than thirty days (unless such thirty-day period is waived by an affirmative election in accordance with the Code and applicable Treasury regulations) and no more than one hundred eighty days before his Benefit Disbursement Date.  The furnished information shall be written in nontechnical language in a manner calculated to be understood by the average Member and shall include the following specific information relating to each of the standard and optional forms of benefits available under the Plan (for purposes of this paragraph, “form of benefit”) to the Member with a Benefit Disbursement Date for which the explanation applies: (1) a description of the form of benefit, (2) a description of the eligibility conditions for the form of benefit, (3) a description of the financial effect of electing the form of benefit, (4) a description of any other material features of, and an explanation of the relative values of, the form of benefit and (5) such other information and statements as may be required under applicable Treasury regulations.  The period of time during which a Member may make or revoke such election shall be the one-hundred-eighty-day period ending on such Member’s Benefit Disbursement Date provided that such election may also be revoked at any time prior to the expiration of the seven-day period that begins the day after the information described in this Section 9.03(d) is furnished to the Member.

(e)In the event a benefit under the Plan is to be paid to a Member in the standard joint and survivor annuity form under Section 9.03(a) and such Member elects another form of benefit payment which will not provide his spouse with a lifetime survivor annuity which is at least 50% of the amount of the annuity payable during the joint lives of the Member and the spouse, such benefit shall be paid in such form only if such Member’s spouse consents thereto in writing.  Any spousal consent given pursuant to this provision shall acknowledge the effect of such form of payment and shall be witnessed by a Plan representative or a notary public, unless a Plan representative finds that such consent cannot be obtained because the spouse cannot be located or because of other circumstances set forth in Section 401(a)(11) of the Code and regulations issued thereunder.  A vested Member (i) may elect, with the written consent of his or her spouse, not to take the qualified preretirement survivor annuity, and (ii) may revoke an election not to take the preretirement survivor annuity, or choose again to take a preretirement survivor annuity at any time, and any number of times, within the applicable election period.  This period is defined in Section 417(a)(6)(B) of the Code as from the first day of the first Plan Year in which the Member attains age thirty-five (but in the case of a Member who is separated from service, with respect to benefits accrued under the Plan before the date of such separation, no later than the date of such separation from service) until the Member’s death.

(f)Notwithstanding any other provision of the Plan to the contrary, in no event shall any provision of the Plan restrict the availability of an alternate form of benefit to a certain select group or classification of Members or Beneficiaries.

9.04Payment of Death Benefits

(a)The standard form of death benefit payable with respect to a Member who dies while employed by the Employer and who leaves an Eligible Surviving Spouse shall be an immediate survivor annuity.  Such survivor annuity shall be a commercial annuity payable for the life of the Eligible Surviving Spouse.  Such a Member may elect not to have the standard form of death benefit payable to his Eligible Surviving Spouse by designating a person other than his Eligible Spouse as his Beneficiary pursuant to the provisions of Sections 6.02 and 6.04.  Any such election may be made before the first day of the Plan Year in which a Member attains the age of thirty-five only (A) after the Member separated from service and only with respect to benefits accrued under the Plan before the date of such separation or (B) in the case of a Member who has not separated from service, if the Member has been furnished the information described below, with such election to become invalid upon the first day of the Plan Year in which the Member attains the age of thirty-five, whereupon a new election may be made by such Member. The Company shall furnish, or shall cause to be furnished to each Member, a written explanation regarding the survivor annuity death benefit within the period beginning with the first day of the Plan Year in which he attains the age of thirty-two (but no earlier than the date such Member begins participation in the Plan) and ending with the latest of (1) the last day of the Plan Year preceding the Plan Year in which the Member attains the age of thirty-five or (2) the one-year period immediately following the date the Employee becomes a Member.  If a Member separates from service before attaining the age of thirty-five, such explanation shall be furnished to such Member within the period beginning one year before the Member separates from service and ending one year after such separation.  Such information shall also be furnished to a Member who has not attained the age of thirty-five or terminated employment within a reasonable period after written request by such Member.  The furnished explanation shall be written in nontechnical language in a manner calculated to be understood by the average Member and shall include (1) a general description of the survivor annuity, (2) a description of the circumstances under which it will be paid if elected, (3) a description of the availability of the election of the survivor annuity, (4) a description of the financial effect of the election of the survivor annuity on the Member’s Plan benefits, and (5) such other information and statements as may be required under applicable Treasury regulations.

(b)The form of death benefit payable with respect to a Member who is not married at the time of his death while employed by the Company, or who is married at such time and who has elected out of the standard form of death benefit provided in Section 9.04(a), shall be the form provided for in Section 9.04(c)(i), unless the Member’s Beneficiary selects another benefit payment form set forth in Section 9.04(c).

(c)With respect to the selection of a form of death benefit payment as provided in paragraphs (b) and (e) of this Section 9.04, the Member’s Beneficiary may select one of the following forms:

(i)A lump sum payment (provided, however, that such Member’s Beneficiary may elect to receive the portion of such Member’s Account which is invested in the common stock of the Company distributed in the form of whole shares of such stock with the value of any fractional shares to be paid in cash); or

(ii)A commercial annuity in the form of a single life annuity.

(d)If a former Member who is entitled to a benefit pursuant to Article V (retirement), Article VII (disability), or Article VIII (other termination of employment) shall die after his termination of employment with the Company but prior to his Benefit Disbursement Date, his Vested Interest in the benefit to which he was entitled shall be paid pursuant to Article VI, and Section 9.04(a), or 9.04(b), whichever is applicable, as if such Member had died while employed by the Company; provided, however, that the application of the provisions of this Section 9.04(d) as if the Member had died while employed by the Company shall not result in a Member entitled to a benefit under Article VIII (other termination of employment) having a greater Vested Interest in his Account than his Vested Interest as of the date of his termination of employment.

(e)In the event a survivor annuity is to be paid to a Member’s Eligible Surviving Spouse, as provided in Section 9.04(a) or 9.04(d), such Eligible Surviving Spouse may request in writing to receive the survivor benefit in one of the forms provided for in Section 9.04(c).  Within a reasonable time after any such written request by such Eligible Surviving Spouse, the applicable Local Administrative Committee shall provide, or shall cause to be provided, to such Spouse a written explanation, in non-technical language of such survivor annuity form and the alternative forms of payment which may be selected along with the financial effect of each such form.

(f)Unless the Member otherwise elects, the payment of benefits under the Plan to the Member shall begin not later than the 60th day after the close of the Plan Year in which the latest of the following events occurs:

(i)The date on which the Member attains age 65;

(ii)The date on which the Member terminates service with the Company or a Controlled Entity.

Notwithstanding any provision in the Plan to the contrary, a Member’s Vested Interest in his Account under the Plan must be distributed, or begun to be distributed, to him not later than the April 1 following the calendar year in which the Member attains age 70-1/2.  In the event a Member dies after commencement of the distribution of his interest, any remaining portion of such interest shall be distributed to his Beneficiary in the method which is at least as rapid as the method being used at the date of his death.  In the event a Member dies prior to commencement of the distribution of his interest, the entire interest attributable to such Member shall be distributed within five years after the date of his death, unless such interest is payable to his Beneficiary for a period which does not exceed the life or life expectancy of such Beneficiary, in which event distribution of such interest shall commence no later than the date such Member would have attained age 70-1/2, if the beneficiary is the surviving spouse or, under certain circumstances set forth in Section 401(a) (9) of the Code or regulations thereunder, a child of such former Member, or the date which is one year after the date of the Member’s death, if the Beneficiary is not the surviving spouse or child of such former Member.

(g)In any case where a former Member dies after his Benefit Disbursement Date, payment of the benefit payable with respect to such former Member shall continue, if applicable, in accordance with the benefit payment form in effect as provided in Section 9.03.

9.05Lump Sum Cash-Out

  Notwithstanding the foregoing provisions of this Article IX, with respect to any benefit payable pursuant to Article V (retirement), Article VI (death), Article VII (disability) or Article VIII (other termination of employment):

(a)If the amount of the Member’s Vested Interest in his Account Balance is not in excess of $1,000 (or not in excess of $5,000 with respect to a benefit payable after a Member’s death), such benefit shall be paid to such Member or Beneficiary, as the case may be, in one lump sum in lieu of any other benefit payment form herein provided.

(b)Except in the case of a benefit payable after a Member’s death, if the amount of the Member’s Vested Interest in his Account Balance exceeds $1,000 but does not exceed $5,000, the Member may elect to receive the Vested Interest in his Account Balance in one lump sum in lieu of any other benefit payment form herein; provided that any such election may be made without the consent of the Member’s spouse, if any.  In the event of a distribution pursuant to this Section 9.05(b), if the Member does not elect to have such distribution paid directly to an Eligible Retirement Plan specified by the Member in a direct rollover in accordance with Section 9.08 or to receive the distribution directly in accordance with this Section 9.05(b), then the Plan Administrator shall pay the distribution in a direct rollover to an individual retirement plan designated by the Plan Administrator.  This Section 9.05(b) shall be effective with respect to distributions made on or after January 1, 2006 regardless of whether the event that caused a Member’s Account to become distributable occurred before or after January 1, 2006.

(c)No distribution may be made pursuant to this Section 9.05 after the annuity commencement date when the accrued benefit is in excess of $5,000 unless the Member and his eligible spouse (or where the Member has died, the Eligible Surviving Spouse) consent in writing to such distribution.  An accrued benefit is immediately distributable if any part of the benefit may be distributed to the Member before the later of normal retirement or age 62.  This does not apply after the death of the Member.  For purposes hereunder, present value shall be determined by using an interest rate not greater than the interest rate which would be used (as of the date of distribution) by the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination.  For purposes of application of the $5,000 threshold of this Section and Sections 16.04 and 17.07 (but not the $1,000 threshold of this Section), the value of a Member’s Vested Interest in his Account Balance shall be determined without regard to that portion of his Account Balance that is attributable to Rollover Contributions (and earnings allocable thereto) within the meaning of Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii) and 457(e)(16) of the Code.  If the value of a Member’s Vested Interest in his Account Balance as so determined is $5,000 or less, the Member’s entire nonforfeitable Account Balance (including amounts attributable to such Rollover Contributions) may be distributed pursuant to this Section 9.05 and Section 17.07.

9.06Commercial Annuities

  In any case where a benefit payable under the Plan is to be paid in the form of a commercial annuity, a commercial annuity contract shall be purchased and distributed to the Member or Beneficiary, as the case may be.  Upon the distribution of any such contract, the Plan shall have no further liability with respect to the amount used to purchase the annuity contract and the company issuing such contract shall be solely responsible to the recipient of the contract for the annuity payments thereunder.  All certificates for commercial annuity benefits shall be non-transferable, and no benefit thereunder may be sold, assigned, discounted, or pledged.  Any commercial annuity purchased under the Plan shall contain such terms and provisions as may be necessary to satisfy the requirements under the Plan.

9.07Actuarial Equivalency

  With respect to any benefit payable pursuant to the Plan, whichever form of payment is selected, the value of such benefit shall be the actuarial equivalent of the value of the Account Balance to which the particular Member or Beneficiary, as the case may be, is entitled.

9.08Eligible Rollover Distributions

  Each Member and beneficiary who receives an Eligible Rollover Distribution may elect in the time and in a manner prescribed by the Company to have all or any portion of such Eligible Rollover Distribution transferred to an Eligible Retirement Plan; provided, however, that only one such transfer may be made with respect to an Eligible Rollover Distribution to an Eligible Retirement Plan.  Notwithstanding the foregoing, the Member may elect, after receiving the notice required under Section 402(f) of the Code, to receive such Eligible Rollover Distribution prior to the expiration of the 30-day period beginning on the date such Member is issued such notice, provided that the Member or beneficiary is permitted to consider his decision for at least 30 days and is advised of such right in writing.

X.           PLAN ADMINISTRATION

10.01Plan Administrator

  For purposes of ERISA, the Company shall be the Plan Administrator and, as such, shall be responsible for the compliance of the Plan with the reporting and disclosure provisions of ERISA.

10.02Authority of the Company

  The Company shall have all the powers and authority expressly conferred upon it herein and, further, shall have the sole right to interpret and construe the Plan, and to determine any disputes arising thereunder, subject to the provisions of Section 10.04.  In exercising such powers and authority, the Company at all times shall exercise good faith, apply standards of uniform application, and refrain from arbitrary action.  Any decision of the Company in such exercise of its powers, authorities and duties shall be final and binding upon all affected parties.  The Company may employ such attorneys, agents, and accountants as it may deem necessary or advisable to assist it in carrying out its duties hereunder.  The Company shall be a “named fiduciary” as that term is defined in Section 402(a)(2) of ERISA.  The Company may:

(a)           allocate any of the powers, authorities, or responsibilities for the operation and administration of the Plan, which are retained by it or granted to it by this Article X, to the Trustee; and

(b)           designate a person or persons other than itself to carry out any of such powers, authorities, or responsibilities;

provided, however, that no powers, authorities, or responsibilities of the Trustee shall be subject to the provisions of paragraph (b) of this Section 10.02; and provided further, that no allocation or delegation by the Company of any of its powers, authorities, responsibilities to the Trustee shall become effective unless such allocation or delegation first shall be accepted by the Trustee in a writing signed by it and delivered to the Company.

10.03Action by the Company

  Any act authorized, permitted, or required to be taken by the Company under the Plan, which has not been delegated in accordance with Section 10.02, may be taken by a majority of the members of the Board of Directors of the Company, either by vote at a meeting, or in writing without a meeting.  All notices, advices, directions, certifications, approvals, and instructions required or authorized to be given by the Company under the Plan shall be in writing and signed by either (i) a majority of the members of the Board of Directors of the Company, or by such member or members as may be designated by an instrument in writing, signed by all the members thereof, as having authority to execute such documents on its behalf, or (ii) a person who become authorized to act for the Company in accordance with the provisions of paragraph (b) of Section 10.02.  Subject to the provisions of Section 10.04, any action taken by the Company which is authorized, permitted, or required under the Plan shall be final and binding upon the Company and the Trustees, all persons who have or who claim an interest under the Plan, and all third parties dealing with any Trustee or the Company.

10.04Claims Review Procedure

  Claims for Plan benefits and reviews of Plan benefit claims which have been denied or modified will be processed in accordance with the written Plan claims procedures established by the Cameron International Corporation Plans Administration Committee, which procedures are hereby incorporated by reference as a part of the Plan and may be amended from time to time by such committee.

10.05Qualified Domestic Relations Order

  The Company shall establish reasonable procedures to determine the status of domestic relations orders and to administer distributions under domestic relations orders which are deemed to be qualified orders.  Such procedures shall be in writing and shall comply with the provisions of Section 414(p) of the Code and regulations issued thereunder.

10.06Indemnification

  In addition to whatever rights of indemnification the members of the Board of Directors of the Company, or any other person or persons (other than the Trustees) to whom any power, authority, or responsibility of the Company is allocated or delegated pursuant to paragraph (b) of Section 10.02, may be entitled under the articles of incorporation, regulations, or bylaws of the Company, under any provision of law, or under any other agreement, the Company shall satisfy such liability actually and reasonably incurred by any such member or such other person or persons, including expenses, attorneys’ fees, judgments, fines, and amounts paid in settlement, in connection with any threatened, pending, or completed action, suit, or proceeding which is related to the exercise, or failure to exercise, by such member or such other person or persons of any of the powers, authorities, responsibilities, or discretion of the Company as provided under the Plan and the Trust Agreement, or reasonably believed by such member or such other person or persons to be provided thereunder, and any action taken by such member or such other person or persons in connection therewith.

XI.           FUNDING AGENT; ADMINISTRATION

OF PLAN ASSETS

11.01Funding Agent

(a)The assets of the Plan shall be maintained by the Funding Agent in the investment fund or funds made available from time to time by the Company (the “Fund” or “Funds”) in accordance with the selection made by each Member with respect to the contributions in his Account pursuant to Section 11.03(a) below.

(b)The Funding Agent shall receive such compensation for its services as Funding Agent hereunder as may be agreed upon from time to time by the Company and the Funding Agent.  The Funding Agent shall be reimbursed for all reasonable expenses it incurs while acting as Funding Agent, as agreed upon by the Company and as provided in Section 11.03(b).

11.02Company Stock Fund

The Company shall cause the Company Stock Fund to be established and maintained at all times under the Plan pursuant to Section 11.01(a).  Except as specifically provided otherwise, the assets of the Company Stock Fund shall be invested by the Funding Agent solely in Company Stock; provided, however, that the Company Stock Fund may hold an amount of cash to the extent required in lieu of holding fractional shares of Company Stock.  The Funding Agent shall receive Company Stock from the Company or purchase Company Stock in the market; provided, however, that any such purchase shall be made only in exchange for fair market value as determined by the Funding Agent .

11.03Administration of Plan Assets

 (a)Any Tax Deferred Savings Contributions, including catch-up contributions, and any Company Contributions which are credited to a Member’s Account shall be deposited by the Funding Agent in such Fund or Funds selected by each Member in accordance with the provisions of this paragraph (a).  The Funding Agent shall have no duty to collect or enforce payment of contributions or inquire into the amount or method used in determining the amount of contributions, and shall be accountable only for contributions received by it.

Each Member shall designate, in accordance with the procedures established by the Company, the manner in which the amounts allocated to his Account shall be invested from among the Funds.  A Member may designate one of such Funds for all of the contributions to his Account, or he may split the investment of the amounts allocated to such Account among such Funds in such increments as the Company may prescribe.  If a Member fails to make a designation of 100% of the contributions to his Account, such nondesignated contributions shall be invested in the Fund or Funds designated by the Company from time to time in a uniform and nondiscriminatory manner.

A Member may change his investment designation for future contributions to be allocated to his Account.  Any such change shall be made in accordance with the procedures established by the Company, and the frequency of such changes may be limited by the Company.

A Member or inactive Member may convert his investment designation with respect to amounts already allocated to his Account that are invested in one of the Funds.  Any such conversion shall be made in accordance with the procedures established by the Company, and the frequency of such conversions may be limited by the Company.

Notwithstanding any provision in this Section 11.03(a) to the contrary, in the event any one or more of the Funds is eliminated as an investment fund by the Company, each Member and inactive Member who has an investment election in effect which designates such investment fund for the investment of amounts allocated to such individual’s Account, shall designate a continuing Fund or Funds made available by the Company for the investment of such amounts; provided, however, that in the event such individual fails to make such a designation, such contributions or amounts shall be invested in the Fund or Funds designated by the Company in a uniform and nondiscriminatory manner.

(b)Notwithstanding any other provision of the Plan, in the event any portion of a Member’s benefit under the Plan is satisfied by the purchase of an annuity, the benefit otherwise payable under the Plan to such Member shall be reduced by an amount equal to the benefit purchase under the annuity contract.

(c)Expenses incident to the administration of the Plan may be paid by the Company or the Employer and, if not paid by the Company or the Employer, shall be paid from the Plan assets, and, until paid, shall constitute a claim against the Plan assets which is paramount to the claims of Members and their Beneficiaries.

(d)The maintenance of an Account with respect to a Member shall not mean that such Member shall have a greater or lesser interest than that due him by operation of the Plan and shall not be considered as segregating any funds or property within the Plan’s assets from any other funds or property contained in the investment fund.  No Member or Beneficiary shall have any title to any specific asset of the Plan, nor shall any such individual have any right to, or interest in, any assets of the Plan upon termination or otherwise, except as provided from time to time under the Plan, and then only to the extent of the benefits payable to such individual out of Plan assets.

11.04Authorization of Benefit Payments and Distributions

  The Company shall issue directions to the Funding Agent concerning all benefits which are to be paid from the Plan assets pursuant to the provisions of the Plan.  Any distribution made with respect to a Member shall be debited to the Member’s Account.  The Funding Agent may make any payment required of the Funding Agent hereunder by mailing the Funding Agent’s check to the person to whom such payment is to be made.

11.05Voting of Company Stock in the Company Stock Fund

  Each Member or Beneficiary who has shares of Company Stock allocated to his Account shall be a named fiduciary with respect to the voting of Company Stock held thereunder and shall have the following powers and responsibilities:

(a)Prior to each annual or special meeting of the shareholders of the Company, the Company shall cause to be sent to each Member and Beneficiary who has Company Stock allocated to his Account and invested in the Company Stock Fund under the Plan a copy of the proxy solicitation material therefor, together with a form requesting confidential voting instructions, with respect to the voting of such Company Stock as well as the voting of Company Stock for which the Funding Agent does not receive instructions.  Each such Member and/or Beneficiary shall instruct the Funding Agent to vote the number of such uninstructed shares of Company Stock equal to the proportion that the number of shares of Company Stock allocated to his Account and invested in the Company Stock Fund bears to the total number of shares of Company Stock in the Plan for which instructions are received.  Upon receipt of such a Member’s or Beneficiary’s instructions, the Funding Agent shall then vote in person, or by proxy, such shares of Company Stock as so instructed.

(b)The Company shall cause the Funding Agent to furnish to each Member and Beneficiary who has Company Stock allocated to his Account and invested in the Company Stock Fund under the Plan notice of any tender or exchange offer for, or a request or invitation for tenders or exchanges of, Company Stock made to the Funding Agent.  The Funding Agent shall request from each such Member and Beneficiary instructions as to the tendering or exchanging of Company Stock allocated to his Account and invested in the Company Stock Fund and the tendering or exchanging of Company Stock for which the Funding Agent does not receive instructions.  Each such Member shall instruct the Funding Agent with respect to the tendering or exchanging of Company Stock for which the Funding Agent does not receive instructions.  Each such Member shall instruct the Funding Agent with respect to the tendering or exchanging of the number of such uninstructed shares of Company Stock equal to the proportion that the number of the shares of Company Stock allocated to his Account and invested in the Company Stock Fund bears to the total number of shares of Company Stock in the Plan for which instructions are received.  The Funding Agent shall provide Members and Beneficiaries with a reasonable period of time in which they may consider any such tender or exchange offer for, or request or invitation for tenders or exchanges of, Company Stock made to the Funding Agent.  Within the time specified by the Funding Agent, the Funding Agent shall tender or exchange such Company Stock as to which the Funding Agent has received instructions to tender or exchange from Members and Beneficiaries.

(c)Instructions received from Members and Beneficiaries by the Funding Agent regarding the voting, tendering, or exchanging of Company Stock shall be held in strictest confidence and shall not be divulged to any other person, including officers or employees of the Company, except as otherwise required by law, regulation or lawful process.

XII.           FIDUCIARY RESPONSIBILITIES

12.01General Allocation of Duties

  Each fiduciary with respect to the Plan shall have only those specific powers, duties, responsibilities and obligations as are specifically given him under the Plan.  It is intended under the Plan that each fiduciary shall be responsible for the proper exercise of his own powers, duties, responsibilities and obligations hereunder and shall not be responsible for any act or failure of another fiduciary except to the extent provided by law or as specifically provided herein.

12.02Fiduciary Liability

  A fiduciary shall not be liable in any way for any acts or omissions constituting a breach of fiduciary responsibility and occurring prior to the date he becomes a fiduciary or after the date he ceases to be a fiduciary.

12.03Delegation and Allocation

  The Company may appoint committees, individuals or any other agents as it deems advisable and may delegate to any of such appointees any or all of its powers and duties.  Such appointment and delegation must be in writing, specifying the powers or duties being delegated, and must be accepted in writing by the delegate.  Upon such appointment, delegation and acceptance, the delegating committee members shall have no liability for the acts or omissions of any such delegate, as long as the delegating committee members do not violate their fiduciary responsibility in making or continuing such delegation.

XIII.           AMENDMENTS TO THE PLAN

13.01Plan Amendments

.  Subject to the limitations set forth in Section 13.02, the Company may at any time, and from time to time, make any amendment to the Plan that it determines in its sole discretion to be appropriate.  Specifically, but not by way of limitation, the Company may make any amendment to the Plan which is necessary to obtain and maintain the tax-qualified status of the Plan, and its related fund, under the Code, whether or not such amendment is retroactive.

13.02Limitations on Plan Amendment

  No amendment to the Plan may be made which would vest in the Company, directly or indirectly, any interest in or control of the assets of the Plan.  No amendment may be made which would vary the Plan’s exclusive purpose of providing benefits to Members and their Beneficiaries, and defraying the reasonable expenses of administering the Plan, or which would permit the diversion of any part of the Plan’s assets from such exclusive purpose.  No amendment may be made which would reduce any existing nonforfeitable interest of a Member.

13.03Election of Former Schedule

.  In the event the Company adopts an amendment to the Plan that directly or indirectly affects the computation of a Member’s Vested Interest in his Account, any Member with three or more years of Vesting Service shall have a right to have his nonforfeitable interest in his Account continue to be determined under the vesting schedule in effect prior to such amendment rather than under the new vesting schedule, unless the Vested Interest of such Member in his Account under the Plan, as amended, at any time is not less than such interest determined without regard to such amendment.  Such Member shall exercise such right by giving written notice of his exercise thereof to the Company within 60 days after the latest of (i) the date he receives notice of such amendment from the Company, (ii) the effective date of the amendment, or (iii) the date the amendment is adopted.  Notwithstanding the foregoing provisions of this Section 13.03, the Vested Interest of each Member on the effective date of such amendment shall not be less than his Vested Interest under the Plan as in effect immediately prior to the effective date thereof.

XIV.           PLAN TERMINATION; PLAN MERGER OR CONSOLIDATION

14.01Right to Terminate or Discontinue

  The Company has established the Plan with the intention and expectation that it will be able to continue the Plan as an ongoing Plan from year to year.  However, the Company realizes that circumstances may arise that would make it advisable to discontinue the maintenance of the Plan.  Accordingly, the Company reserves the right and shall have the power to completely or partially terminate the Plan at any time after its establishment, or to discontinue making contributions to the Plan.

14.02Plan Termination or Discontinuance of Contributions

   (a) If the Plan is terminated or partially terminated, the Vested Interest of each Member directly affected by such termination shall become 100%, effective as of such termination date.

(b)If the Plan is amended so as to permanently discontinue Company contributions, or if the Company contributions are in fact permanently discontinued the Vested Interest of each Member directly affected by such discontinuance shall become 100%, effective as of the date of discontinuance.

(c)Upon a Plan termination or discontinuance, any previously unallocated Contribution Amounts and net income (or net loss) shall be allocated among the Accounts of the Members directly affected by such event as of the date of such termination or discontinuance according to the provisions of Article IV, as if such date of such event was an Allocation Date.  Thereafter, the net income (or net loss) shall continue to be allocated to such Accounts until the Account Balances are distributed.

(d)Following a Plan termination or discontinuance, the Plan shall continue to be administered in accordance with its terms until such time as the Company provides the Funding Agent with instructions as to the liquidation of the Plan’s assets.  The Company may amend the Plan to provide for the procedures to be followed in providing for the liquidation of the Plan’s assets upon a Plan termination or discontinuance; provided, however, that no such amendment or other procedure for the liquidation of the Plan’s assets shall permit (i) the Plan’s assets to be used for any purpose other than providing benefits to Members and their Beneficiaries, and defraying the reasonable expenses of administering the Plan, including the liquidation thereof, and (ii) distributions to or with respect to the Members directly affected by the Plan termination or discontinuance which are made at a time and are payable in a form and manner not in accordance with the provisions of the Plan.

14.03Merger, Consolidation or Transfer of Assets

  The Plan may not merge or consolidate with, or transfer its assets or liabilities to, any other plan, unless each Member or Beneficiary, would, in the event such other plan then terminated, be entitled to a benefit immediately following such event which is equal to or greater than the benefit to which he would have been entitled if the Plan were terminated immediately before the merger, consolidation or transfer.  Further, this Plan may not transfer its assets or liabilities to any other plan, unless the Plan Administrator reasonably concludes that such other plan provides that the transferred amounts may not be distributed before the times specified in Section 1.401(k)-1(d) of the Treasury regulations.

XV.           VESTING SERVICE; HOUR OF SERVICE

15.01Vesting Service

  (a) Subject to the provisions in paragraph (b) of this Section 15.01, a Member’s Vesting Service shall be determined on the following basis:

(1) For the period prior to January 1, 1989, a Member shall be credited with Vesting Service in an amount equal to the service, if any, for vesting purposes with which he was credited prior to the restatement of the Plan.

(2) For all periods from and after January 1, 1989, 1,000 or more Hours of Service during any Plan Year shall constitute one year of Vesting Service.

(b)A Member who has made no Tax Deferred Savings Contributions to the Plan, and who terminates employment and subsequently recommences participation in the Plan, shall be reinstated with the years of Vesting Service with which he was credited prior to his termination of employment, if (i) the number of his consecutive One-Year Breaks-In-Service is less than five, or (ii) he had a Vested Interest at the time of such termination.  A Member who has made Tax Deferred Savings Contributions to the Plan and who has not received a distribution of the nonforfeitable portion of his Account shall be reinstated with the years of Vesting Service with which he was credited prior to his termination of employment if he subsequently recommences participation in the Plan.  A Member who has made Tax Deferred Savings Contributions to the Plan but who has received distribution of the nonforfeitable portion of his Account will be reinstated to the years of Vesting Service with which he was credited prior to his termination of employment if he recommences participation in the Plan and repays any distributed Company Contributions within the time permitted under Section 8.04.

15.02Hour of Service

   (a) An Hour of Service is each hour during an applicable computation period for which an Employee is directly or indirectly paid, or entitled to payment, by the Company or a Controlled Entity for the performance of duties or for reasons other than the performance of duties, including, but not limited to, any Leave of Absence.  Such Hours of Service shall be credited to the Employee for the computation period in which such duties were performed or in which occurred the period during which no duties were performed.  An Hour of Service also includes each hour, not credited above, for which back pay, irrespective of mitigation of damages, has been either awarded or agreed to by the Company or a Controlled Entity.  These Hours of Service shall be credited to the Employee for the computation period in which the award, agreement or payment is made.  In determining an Employee’s total Hours of Service during a computation period, a fraction of an hour shall be deemed a full Hour of Service.

(b)The number of Hours of Service to be credited to an Employee for any computation period shall be governed by Section 2530.200b-2(b) and (c) of the Department of Labor Regulations under ERISA.

(c)Hours of Service during the period prior to the Effective Date shall be determined from whatever records may be reasonably accessible to the Company and, if such records are insufficient, the Company may make whatever calculations are necessary to approximate Hours of Service for the period in a manner uniformly applicable to all Employees similarly situated.  These provisions shall be construed by resolving any questions or ambiguities in favor of crediting Employees with Hours of Service.

(d)In determining an Employee’s Hours of Service, there shall be added to such Employee’s Hours of Service as calculated under the preceding provisions of this 15.02, the number of hours in his regularly-scheduled workday while absent from active Employment due to sickness, disability, or Leave of Absence following a period for which he is credited with Hours of Service under the preceding provisions of this Section 15.02.  An Hour of Service credited under the preceding sentence shall be known as a “Non-Paid Hour of Service” and shall be included in the employee’s Hours of Service for purposes of determining his Vesting Service.

XVI.           MISCELLANEOUS

16.01Non-Guarantee of Employment

  The adoption and maintenance of the Plan shall not be deemed to be a contract between the Company and any person or to be consideration for the Employment of any person.  Nothing herein contained shall be deemed to give any person the right to be retained in the employ of the Company or to restrict the right of the Company to discharge any person at any time nor shall the Plan be deemed to give the Company the right to require any person to remain in the employ of the Company or to restrict any person’s right to terminate his employment at any time.

16.02Payments Solely from Plan Assets

  All benefits payable under the Plan shall be paid or provided for solely from the Plan assets and neither the Company nor the Funding Agent assumes any liability or responsibility for the adequacy thereof.  The Company or the Funding Agent may require execution and delivery of such instruments as are deemed necessary to assure proper payment of any benefits.

16.03Facility of Payment

  Whenever the Company determines that a person entitled to a benefit from the Plan is under a legal disability or is incapacitated in any way so as to be unable to manage his financial affairs, the Company may direct the Funding Agent to make payments to such person or to his legal representative or to a relative or other person caring for such person with such payments shall be for the benefit of such person.  Any such payment of a benefit in accordance with the provisions of this Section 16.03 shall be in complete discharge of any liability for the making of such payment under the provisions of the Plan.

16.04Non-Alienation of Benefits

  Except as provided in Sections 401(a)(13)(B) and 414(p) of the Code relating to qualified domestic relations orders and certain judgments and settlements, benefits payable under the Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any kind, either voluntary or involuntary, including any such liability which is for alimony or other payments for the support of a spouse or former spouse or for any other relative of a Member or Beneficiary to actually being received by the person entitled to the benefit under the terms of the Plan; and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any right to benefits payable hereunder, shall be void.  The Plan and the Funding Agent shall not in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements or torts of any person entitled to benefits hereunder.  Notwithstanding the foregoing provisions of this Section 16.04, the Company may direct the Funding Agent to comply with a qualified domestic relations court order requiring deductions from a Member or Beneficiary’s benefit payments, but only if such deductions are specifically provided for in such order.  In the event that the total value of an amount directed to be paid pursuant to a qualified domestic relations order is not in excess of $5,000 (determined as provided in Section 9.05), such amount shall be paid to the recipient or recipients identified in such order in one lump sum payment as soon as practicable after such order has been determined to be a qualified domestic relations order.

16.05Exclusive Benefit

  No part of the Plan assets shall be used for any purpose other than the exclusive purpose of providing benefits which Members and Beneficiaries are entitled to under the Plan, and for the purpose of defraying the reasonable expenses of administering the Plan.

16.06Transferred Employment

  In any case where a Member transfers employment, directly or indirectly, from the Company to a Controlled Entity, such Member shall not be considered to have terminated employment with the Company for purposes of his eligibility to receive a retirement or other vested benefit under the Plan so long as he so remains employed by a Controlled Entity.

16.07Severability

  If any provisions of the Plan shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining provisions hereof; instead, each provision shall be fully severable and the Plan shall be construed and enforced as if said illegal or invalid provision had never been included herein.

16.08Applicable Law

  All provisions of the Plan shall be construed in accordance with the laws of Texas, except to the extent preempted by federal law.

16.09Internal Revenue Service Approval

  Notwithstanding any other provision of the Plan to the contrary, the contributions made under the Plan, are contingent upon the deductibility of such contributions under Section 404 of the Code.  To the extent that a deduction for such contributions is disallowed, such contributions may be returned within one year after the date of disallowance.  In addition, if Company contributions are made under a mistake of fact, such contributions may be returned to the Company within one year after the payment thereof.

16.010Uniformed Services Employment and Reemployment Rights Act Requirements

  Notwithstanding any provision of the Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with section 414(u) of the Code.

XVII.           TAX DEFERRED SAVINGS CONTRIBUTIONS

17.01Tax Deferred Savings Contribution Election

   (a)           A Member may elect, in accordance with the procedures and within the time period prescribed by the Plan Administrator, to have Tax Deferred Savings Contributions in $.10 increments, made on his behalf to the Plan by his Employer and credited to his Account; provided, however, that such amount shall not be less than $.10 per Contribution Hour nor more than $5.00 per Contribution hour and in no event shall such Tax Deferred Savings Contributions under the Plan and all other qualified plans maintained by the Employer or any Controlled Entity on behalf of any Member for any calendar year exceed the dollar limitation contained in Section 402(g) of the Code) in effect for such calendar year.  If a Member elects to have such Tax Deferred Savings Contributions made on his behalf, his compensation shall be reduced by the amount he elects pursuant to the terms of a compensation reduction authorization filed with the Employer.  Notwithstanding the foregoing provisions of this Section, Tax Deferred Savings Contributions made with respect to a Plan Year on behalf of Highly Compensated Employees (as described and defined in Section 414(q) of the Code) shall not exceed the limitations set forth in Section 17.03.

(b)           All employees who are eligible to make Tax Deferred Savings Contributions under this Plan, as described in the paragraph above, and who have attained age 50 before the close of the Plan Year shall be eligible to make catch-up contributions in accordance with, and subject to the limitations of, Section 414(v) of the Code.  Such catch-up contributions shall not be taken into account for purposes of the provisions of the Plan implementing the required limitations of Section 402(g) of the Code, as described in the paragraph above, and Section 415 of the Code, as described in Appendix A of the Plan.  The Plan shall not be treated as failing to satisfy the provisions of the Plan implementing the requirements of Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of the Code, as applicable, by reason of the making of such catch-up contributions.

17.02Change of Tax Deferred Savings Contribution Election

  Any Member may suspend or change the amount of the Tax Deferred Savings Contributions, including catch-up contributions, made on his behalf in accordance with the procedures and within the time period prescribed by the Plan Administrator; provided, however, that such Member may only select an amount of compensation to be so contributed which does not exceed the applicable limitations set forth in Sections 17.01 and 17.03.

17.03Limitation on Tax Deferred Savings Contributions

  Notwithstanding any other provisions of the Plan to the contrary, the Company shall take such action as it deems appropriate to limit the amount of Tax Deferred Savings Contributions under the Plan in each Plan Year to the extent necessary to insure that any average deferral percentage requirement under Section 401(k) of the Code is not exceeded.  Such Code section and regulations relating thereto are hereby incorporated in the Plan by reference.  Such testing shall utilize the current year testing method as such term is defined in Section 1.401(k)-6 of the Treasury regulations.  If, for any Plan Year, the aggregate Tax Deferred Savings Contributions made by the Company on behalf of Highly Compensated Employees (as described and defined in Section 414(q) of the Code) exceeds the maximum amount of Tax Deferred Savings Contributions permitted on behalf of such Highly Compensated Employees pursuant to this Section 17.03, an excess amount (hereinafter referred to as  “Excess Contributions”) shall be determined by reducing Tax Deferred Savings Contri­butions made on behalf of Highly Compensated Employees in order of their highest actual deferral percentages in accordance with Section 401(k)(8)(B)(ii) of the Code and the Treasury regulations thereunder. Once determined, such Excess Contributions shall be distributed to Highly Compensated Employees in order of the highest dollar amounts contributed on behalf of such Highly Compensated Employees in accordance with Section 401(k)(8)(C) of the Code and the Treasury regulations thereunder before the end of the next following Plan Year.  The income or loss allocable to Excess Contributions shall be determined by the Company in accordance with applicable rules and regulations.  For purposes of performing non-discrimination testing for the Plan pursuant to this Section, a Member’s compensation shall be his compensation as defined in Section 415(c)(3) of the Code.  Such compensation shall be limited to $200,000, with such limitation adjusted automatically to reflect any amendments to Section 401(a)(17) of the Code and any cost-of-living increases authorized by Section 401(a)(17) of the Code.

17.04Excess Tax Deferred Savings Contributions

  If a Member who had Tax Deferred Savings Contributions made on his behalf for a Plan Year files with the Employer, within the time limit prescribed by the Employer after the end of such Plan Year, a written statement, on a form acceptable to the Employer, that he has elective deferrals within the meaning of Section 402(g) of the Code for the taxable year in excess of the dollar limitation on elective deferrals to effect for such taxable year, and specifying the amount of such excess the Member claims as allocable to the Plan, the amount of such excess and any income allocable to such excess elective deferral shall be distributed to the Member by April 15 of the year following the year of the excess elective deferral.  The foregoing shall not apply to catch-up contributions made pursuant to Section 17.01 of the Plan and Section 414(v) of the Code.

17.05Investment and Administration of Tax Deferred Savings Contributions

  Any Tax Deferred Savings Contributions, including catch-up contributions, which are credited to a Member’s Account shall be deposited with the Funding Agent and commingled for investment purposes with other Plan Assets.  The Funding Agent shall account for the Tax Deferred Savings Contributions, including catch-up contributions, of a Member separately in accordance with the procedures applicable to Accounts in general.  Except as specifically provided in this Article XVII, Tax Deferred Savings Contributions, including catch-up contributions, shall be held and administered in accordance with the procedures applicable to contributions to credited Accounts.  Notwithstanding the foregoing, in no event shall the amount of a Member’s Account attributable to Tax Deferred Savings Contributions, including catch-up contributions, be distributable to such Member or his Beneficiary earlier than (i) separation from service, death, or disability; or (ii) attainment of age 59-1/2.

17.06Vesting

  A Member shall be 100% vested at all times in the value of his Tax Deferred Savings Contributions, including catch-up contributions.

17.07Distribution of Tax Deferred Savings Contributions

  Subject to the limitations set forth in this Section 17.07, each Member shall be entitled to receive the entire interest of his Account attributable to his Tax Deferred Savings Contributions in a single sum upon the termination of such Member’s employment with the Employer and the Controlled Entities; provided, however, that if such interest when added to any other Vested Interest of the Member under the Plan exceeds $5,000, such interest may not be distributed to such Member prior to Normal Retirement Age without his consent and if such interest when added to any other Vested Interest of the Member under the Plan exceeds $5,000 (disregarding any Rollover contributions and earnings allocable thereto, in accordance with Section 9.05), the consent of his spouse shall also be required.  Notwithstanding the foregoing, any such distribution of Tax Deferred Savings Contributions shall be made in the following manner unless the Member elects otherwise:

(1)           Married Members.  The standard form of benefit payment of Tax Deferred Savings Contributions, including catch-up contributions, for any Member who is married on the date such Contributions are to be distributable to him shall be an immediate 50% joint and survivor annuity.  Such joint and survivor annuity shall be a commercial annuity which is payable for the life of the Member with a survivor annuity for the life of the Member’s surviving spouse equal to 50% of the amount of the annuity payable during the joint lives of the Member and such Member’s surviving spouse.  The standard joint and survivor annuity shall be paid automatically as provided hereunder unless the Member elects to receive his benefit payments in another form during the election period described in Section 9.03(d); provided, however, that the Member’s spouse consents in writing to such election pursuant to the provisions of Section 9.03(e).  Any such election may be revoked and subsequent elections may be made, or revoked, at any time during such election period provided that the Member’s spouse consents thereto in writing and such consent acknowledges the effect of such action and is witnessed by a notary public or plan representative unless a Plan representative finds that such consent cannot be obtained because the spouse cannot be located or because of other circumstances set forth in Section 401(a)(11) of the Code and regulations issued thereunder.  In the event any Member receives his Vested Interest in such a single sum form, no other benefit shall be payable with respect to him under the Plan.  If the Member has elected not to receive the standard joint and survivor annuity as provided herein, such Member’s benefit shall be paid in a single sum.

(2)           Unmarried Members.  The standard form of benefit payment of Tax Deferred Savings Contributions, including catch-up contributions, for any Member who is not married on the date such Contributions are distributable to him, shall be a single life annuity, unless such Member selects to receive his benefit payments in another form during the election period described in Section 9.03(e).

(3)           Vested Amounts Not Exceeding $5,000.  Section 9.05 shall also apply to the distribution of a Member’s interest in his Account attributable to his Tax Deferred Savings Contributions.

In the event that a Member dies prior to receiving the entire interest of his Account attributable to his Tax Deferred Savings Contributions, including catch-up contributions, any such remaining interest shall be distributed to his Beneficiary in accordance with the provisions of Section 9.04.  If a Member’s employment status changes from that of a common law employee of the Employer to a Leased Worker, such Member shall not be deemed to have a “termination of employment” and, therefore, will not be eligible for a distribution under the Plan as a result of such employment status change.

EXECUTED at Houston, Texas this _2nd___ day of ______December___________, 2008.

	CAMERON INTERNATIONAL CORPORATION
By:	/s/ Joseph H. Mongrain
Name:	Joseph H.Mongrain
Title:	Vice President, Human Resources

APPENDIX A

SECTION 415 LIMITATIONS

Section 1.  Application.  The provisions set forth in this Appendix A are intended solely to comply with the requirements of Section 415 of the Code, as amended, and shall be interpreted, applied, and if and to the extent necessary, deemed modified without further formal language so as to satisfy solely the minimum requirements of said Section.  For such purposes, the limitations of Section 415 of the Code, as amended, and the Treasury regulations promulgated thereunder are hereby incorporated by reference and made part hereof as though fully set forth herein, but shall be applied only to particular Plan benefits in accordance with the provisions of this Appendix A, to the extent such provisions are not consistent with Section 415 of the Code and such Treasury regulations.  If there is any discrepancy between the provisions in this Appendix A and the provisions of Section 415 of the Code and such Treasury regulations, such discrepancy shall be resolved in such a way as to give full effect to the provisions of Section 415 of the Code and such Treasury regulations.  This Appendix shall also include reference to the applicable provisions of any successor regulation promulgated under Section 415 of the Code.

Section 2.  Definitions.  For purposes of this Appendix, the following terms and phrases shall have these respective meanings:

(a)           “Annual Additions” of a Member for any Limitation Year shall mean all amounts that are annual additions (as defined under Treasury Regulation § 1.415(c)-1(b)), including, without limitation, the Company Contributions, Tax Deferred Savings Contributions, and forfeitures, if any, allocated to such Member’s Account for such year.

(b)           “415 Compensation” of a Member for any Limitation Year shall mean the total of all amounts of compensation (within the meaning of Treasury Regulation § 1.415(c)-2(d)(4)), paid by the Employer to or for the benefit of a Member in such Limitation Year, including all compensation for services rendered or labor performed for the Employer which are required to be reported on the Member’s federal income tax withholding statement or statements (Form W-2 or its subsequent equivalent), plus amounts that would be so reported but for an election under Section(s) 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k) or 457(b) of the Code.  The 415 Compensation of a Member for any Limitation Year shall include payments of regular compensation for services during the Member’s regular working hours, compensation for services outside the Member’s regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar payments that are paid to the Member following his Severance Date but which would have been paid to the Member prior to such date if he had continued in employment with the Employer, provided that such payments are paid by the later of two and one-half  months following the Member’s Severance Date or the end of the Limitation Year that includes the Severance Date.  The 415 Compensation of any Member taken into account for purposes of the Plan shall be limited to $200,000 for any Plan Year with such limitation to be adjusted automatically to reflect any amendments to Section 401(a)(17) of the Code and any cost-of-living increases authorized by Section 401(a)(17) of the Code and prorated for a Plan Year of less than twelve months and to the extent otherwise required by applicable law.

(c)           “Limitation Year” shall mean the calendar year.

(d)           “Maximum Annual Additions” of a Member for any Limitation Year shall mean the lesser of (a) $40,000 (with such amount to be adjusted automatically to reflect any cost-of-living adjustment authorized by Section 415(d) of the Code and Treasury Regulation § 1.415(d)-1(b)) or (b) 100% of such Member’s 415 Compensation during such Limitation Year, as determined in accordance with the requirements of Treasury Regulation § 1.415(c)-2.

Section 3. Limitations and Corrections.  Contrary Plan provisions notwithstanding, in no event shall the Annual Additions credited to a Member’s Account for any Limitation Year exceed the Maximum Annual Additions for such Members for such year.

Section 4.  Multiple Plans.  For purposes of determining whether the Annual Additions under this Plan exceed the limitations herein provided, all defined contribution plans of the Company are to be treated as one defined contribution plan.  In addition, all defined contribution plans of Controlled Entities shall be aggregated for this purpose.  For purposes of this Appendix only, a “Controlled Entity” shall be determined in accordance with Treasury Regulation § 1.415(a)-1(f)(1).  If the Annual Additions credited to a Member’s Account for any Limitation Year under this Plan plus the additions credited on his behalf under other defined contribution plans required to be aggregated pursuant to this Appendix would exceed the Maximum Annual Additions for such Member for such Limitation Year, the Annual Additions under this Plan and the additions under such other plans shall be reduced on a pro rata basis and allocated, reallocated, or returned in accordance with applicable law.

Section 5.  Contribution Adjustments. If the limitations set forth in this Appendix would not otherwise be met for any Limitation Year, the Tax Deferred Savings Contributions elections of affected Members may be reduced by the Company on a temporary and prospective basis in such manner as the Company shall determine; provided, however, that no such reduction shall be effected in a way that adversely affects the catch-up contribution rights of such Members.

APPENDIX B

HISTORICAL COLLECTIVELY BARGAINED

CONTRIBUTION RATES

Pursuant to the collective bargaining agreement covering the Eligible Employees, effective January 1, 1995, Tax Deferred Savings Contributions made by Members pursuant to Section 17.01 of the Plan were limited to $1.50 per Contribution Hour.

Pursuant to the collective bargaining agreement covering the Eligible Employees:

1.           Effective as of November 4, 1996, the limitation on Tax Deferred Savings Contributions made by Members pursuant to Section 17.01 of the Plan was raised to $2.00 per Contribution Hour.  Effective as of January 1, 2002, the limitation on Tax Deferred Savings Contributions made by Members pursuant to Section 17.01 of the Plan were raised to $2.50 per Contribution Hour.  Effective as of July 31, 2006, the limitation on Tax Deferred Savings Contributions made by Members pursuant to Section 17.01 of the Plan was raised to $5.00 per Contribution Hour.

2.           The Company contribution rates contained in Section 3.02 of the Plan were changed to the following rates for the following effective dates:

Effective Date of Contribution Rate	Contribution Rate
On and after July 29, 1996 but before November 4, 1996	$.65
On and after November 4, 1996 but before July 27, 1998	$.75
On and after July 27, 1998 but before July 26, 1999	$.80
On and after July 26, 1999	$.85
On and after July 31, 2000 but before July 30, 2001	$.90
On and after July 30, 2001 but before July 29, 2002	$.95
On and after July 29, 2002 but before July 28, 2003	$1.00
On and after July 28, 2003 but before July 31, 2006	$1.10
On and after July 31, 2006 but before July 30, 2007	$1.15

EX-10.22

Exhibit 10.22

FIRST AMENDMENT TO THE

INDIVIDUAL ACCOUNT RETIREMENT PLAN

FOR

BARGAINING UNIT EMPLOYEES

AT THE CAMERON INTERNATIONAL CORPORATION

BUFFALO, NEW YORK PLANT

(As Amended and Restated Effective as of January 1, 2008)

WHEREAS, CAMERON INTERNATIONAL CORPORATION (the “Company”) has heretofore adopted the INDIVIDUAL ACCOUNT RETIREMENT PLAN FOR  BARGAINING UNIT EMPLOYEES AT THE CAMERON INTERNATIONAL CORPORATION BUFFALO, NEW YORK PLANT, as amended and restated effective as of January 1, 2008  (the “Plan”) for the benefit of its eligible employees;

WHEREAS, the Company desires to amend the Plan to reflect recent changes made to the law by the Pension Protection Act of 2006; and

WHEREAS, the Company desires to amend the Plan to provide for an increase in the rate of Company Contributions and an increase in the maximum rate of Tax Deferred Savings Contributions permitted under the Plan in accordance with negotiated changes in the collective bargaining agreement covering the eligible employees;

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

I.           Effective as of January 1, 2009:

1.           Section 8.02(a) of the Plan shall be deleted in its entirety and the following shall be substituted therefor:

“8.02           Vested Interest.  (a)  Except as provided in paragraph (b) or (c) of this Section 8.02, a Member’s Vested Interest in his Account (other than the value of Tax Deferred Savings Contributions, including catch-up contributions, and Rollover Contributions) on any determination date shall be determined by reference to such Member’s full years of Vesting Service as of such date in accordance with the following vesting schedules, as applicable:

(i)           With respect to the portion of a Member’s Account attributable to Company Contributions in respect of Plan Years beginning prior to January 1, 2009:

Full Years of Vesting Service	Vested Interest
Less than 3 years	0%
3 years	33%
4 years	67%
5 or more years	100%

(ii)           With respect to the portion of a Member’s Account attributable to Company Contributions in respect of Plan Years beginning on and after January 1, 2009:

Full Years of Vesting  Service	Vested Interest
Less than 2 years	0%
2 years	33 1/3%
3 years	66 2/3%
4 or more years	100%

(iii)           Any Company Contributions that are credited to a Member’s Account shall be deposited with the Funding Agent and commingled for investment purposes with other Plan Assets.  For each member, the Funding Agent shall account separately, in two subaccounts, for (i) any Company Contributions credited to the Member’s Account that are attributable to Plan Years beginning prior to January 1, 2009 and (ii) any Company Contributions credited to the Member’s Account that are attributable to Plan Years beginning on and after January 1, 2009.  Except as specifically provided in this Section 8.02, Company Contributions shall be held and administered in accordance with the procedures applicable to contributions credited to Accounts.”

II.           Effective as of January 1, 2010:

1.           The table containing Contribution Rates in Section 3.02 of the Plan shall be deleted and the following shall be substituted therefor:

“Effective Date of Contribution Rate                                                                                     Contribution Rate

On and after July 30, 2007 but before                                                                                                 $1.20

August 2, 2010

On and after August 2, 2010 but before                                                                                   $1.30

August 1, 2011

On and after August 1, 2011                                                                                               $1.35”

2.           Reference to “$5.00” in the first sentence of Section 17.01 of the Plan shall be deleted and reference to “$7.00” shall be substituted therefor.

III.           As amended hereby, the Plan is specifically ratified and reaffirmed.

EXECUTED, this _15th____ day of ____December__________, 2009, effective for all purposes as provided above.

	CAMERON INTERNATIONAL CORPORATION
By:	/s/ Joseph H. Mongrain
Name:	Joseph H.Mongrain
Title:	Vice President, Human Resources

THIRD AMENDMENT TO THE

INDIVIDUAL ACCOUNT RETIREMENT PLAN

FOR

BARGAINING UNIT EMPLOYEES

AT THE CAMERON INTERNATIONAL CORPORATION

BUFFALO, NEW YORK PLANT

(As Amended and Restated Effective as of January 1, 2008)

WHEREAS, CAMERON INTERNATIONAL CORPORATION (the “Company”) has heretofore adopted the INDIVIDUAL ACCOUNT RETIREMENT PLAN FOR  BARGAINING UNIT EMPLOYEES AT THE CAMERON INTERNATIONAL CORPORATION BUFFALO, NEW YORK PLANT, as amended and restated effective as of January 1, 2008  (the “Plan”) for the benefit of its eligible employees; and

WHEREAS, the Company desires to amend the Plan to reflect certain changes required under the Pension Protection Act of 2006  and the Heroes Earnings Assistance and Relief Tax Act.

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

I.           Effective as of January 1, 2007:

1.Section 1.01(18) of the Plan shall be amended by deleting the last sentence thereof and substituting the following sentence therefor:

“Notwithstanding the foregoing or any other provision of the Plan, (A) any amount that is distributed from the Plan on account of hardship to a Participant who has not attained age 59½ shall not be an Eligible Rollover Distribution and the distributee may not elect to have any portion of such a distribution paid directly to an Eligible Retirement Plan and (B) a portion of a distribution shall not fail to be an Eligible Rollover Distribution merely because the portion consists of after-tax employee contributions which are not includable in gross income; provided, however, that such portion may be transferred only to an individual retirement account or annuity described in section 408(a) or (b) of the Code or to a qualified plan described in section 401(a) of the Code, an annuity plan described in section 403(a) of the Code or an annuity contract described in section 403(b) of the Code that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includable in gross income and the portion of such distribution which is not so includable.”

2.Section 9.03(b) and  Section 9.04(a) shall be amended by adding the following sentence at the end thereof:

“The furnished information shall also describe for the Member the consequences of failing to defer his Benefit Disbursement Date.”

3.           Section 16.010 of the Plan shall be deleted and the following shall be substituted therefor:

“16.10           Uniformed Services Employment and Reemployment Rights Act Requirements.  Notwithstanding any provision of the Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with sections 414(u)  and 401(a)(37) of the Code.”

II.           Effective as of January 1, 2008, Section 1.01(17) of the Plan shall be amended by adding the following at the end of such section:

“Notwithstanding the foregoing, for purposes of Section 9.08, an Eligible Retirement Plan shall also mean a Roth IRA as provided in section 408A(e) of the Code; provided, however, that a rollover to a Roth IRA (other than a qualified rollover contribution from a Roth IRA or a designated Roth account) will be limited to Participants whose adjusted gross income is equal to or less than $100,000 and who are not married individuals filing a separate return in Plan Years beginning January 1, 2008 and January 1, 2009.”

III.           As amended hereby, the Plan is specifically ratified and reaffirmed.

EXECUTED, this _10th____ day of ____December________, 2009, effective for all purposes as provided above.

	CAMERON INTERNATIONAL CORPORATION
By:	/s/ Joseph H. Mongrain
Name:	Joseph H.Mongrain
Title:	Vice President, Human Resources

EX-10.28

Exhibit 10.28

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is effective as of June 12, 2009, by and among Cameron International Corporation, a Delaware corporation (“Cameron”), and Mr. Jon Erik Reinhardsen (the “Indemnitee”).

WHEREAS, the Indemnitee has been asked to serve on the Board of Directors of Cameron (the “Board”);

WHEREAS, it is reasonable, prudent and necessary for Cameron contractually to obligate itself to indemnify persons serving as directors of Cameron to the fullest extent permitted by applicable law so that they will serve or continue to serve as directors of Cameron free from undue concern that they will not be so indemnified;

WHEREAS, the Indemnitee is willing to serve and continue to serve on the Board on the condition that he be so indemnified; and

WHEREAS, to the extent permitted by law, this Agreement is a supplement to and in furtherance of the provisions of the Amended and Restated Certificate of Incorporation of Cameron (the “Certificate”) and the provisions of the Bylaws of Cameron (the “Bylaws”) or resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of the Indemnitee thereunder;

NOW THEREFORE, in consideration of the premises and the covenants contained herein, Cameron and the Indemnitee do hereby covenant and agree as follows:

Section 1.Services by the Indemnitee.  The Indemnitee agrees to continue to serve at the request of Cameron as a director of Cameron (including, without limitation, service on one or more committees of the Board).  Notwithstanding the foregoing, the Indemnitee may at any time and for any reason resign from any such position.

Section 2.Indemnification - General.  Cameron shall indemnify, and advance Expenses (as hereinafter defined) to, the Indemnitee as provided in this Agreement and to the fullest extent permitted by applicable law in effect on the date hereof and to such greater extent as applicable law may thereafter from time to time permit.  The rights of the Indemnitee provided under the preceding sentence shall include, but shall not be limited to, the rights set forth in the other Sections of this Agreement.

Section 3.Proceedings Other Than Proceedings by or in the Right of Cameron.  The Indemnitee shall be entitled to the rights of indemnification provided in this Section 3 if, by reason of his Corporate Status (as hereinafter defined), he is, or is threatened to be made, a party to or participant in any threatened, pending or completed Proceeding (as hereinafter defined), other than a Proceeding by or in the right of Cameron.  Pursuant to this Section 3, Cameron shall indemnify the Indemnitee against Expenses, judgments, penalties, fines and amounts paid in settlement (as and to the extent permitted hereunder) actually and reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of Cameron, and, with respect to any criminal Proceeding, if he also had no reasonable cause to believe his conduct was unlawful.

Proceedings by or in the Right of Cameron.  The Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any threatened, pending or completed Proceeding brought by or in the right of Cameron to procure a judgment in its favor.  Pursuant to this Section 4, Cameron shall indemnify the Indemnitee against Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of Cameron.  Notwithstanding the foregoing, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which the Indemnitee shall have been adjudged to be liable to Cameron or if applicable law prohibits such indemnification; provided, however, that if applicable law so permits, indemnification against Expenses shall nevertheless be made by Cameron in such event if and to the extent that the court in which such Proceeding shall have been brought or is pending, shall so determine.

Section 4.   Indemnification for Expenses of a Party Who is Wholly or Partly Successful.

(a)           To the extent that the Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, Cameron shall indemnify the Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.  If the Indemnitee is not wholly successful in defense of any Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, Cameron shall indemnify the Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each such claim, issue or matter as to which the Indemnitee is successful, on the merits or otherwise.  For purposes of this Section 5(a), the term “successful, on the merits or otherwise,” shall include, but shall not be limited to, (i) the termination of any claim, issue or matter in a Proceeding by withdrawal or dismissal, with or without prejudice, (ii) termination of any claim, issue or matter in a Proceeding by any other means without any express finding of liability or guilt against the Indemnitee, with or without prejudice, (iii) the expiration of 120 days after the making of a claim or threat of a Proceeding without the institution of the same and without any promise or payment made to induce a settlement or (iv) the settlement of any claim, issue or matter in a Proceeding pursuant to which the Indemnitee pays less than $200,000.  The provisions of this Section 5(a) are subject to Section 5(b) below.

(b)           In no event shall the Indemnitee be entitled to indemnification under Section 5(a) above with respect to a claim, issue or matter to the extent (i) applicable law prohibits such indemnification, or (ii) an admission is made by the Indemnitee in writing to Cameron or in such Proceeding or a final, nonappealable determination is made in such Proceeding that the standard of conduct required for indemnification under this Agreement has not been met with respect to such claim, issue or matter.

Section 5.Indemnification for Expenses as a Witness.  Notwithstanding any provisions herein to the contrary, to the extent that the Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding, Cameron shall indemnify the Indemnitee against all Expenses actually and reasonably incurred by or on behalf of the Indemnitee in connection therewith.

Section 6.Advancement of Expenses.  Cameron shall advance all reasonable Expenses incurred by or on behalf of the Indemnitee in connection with any Proceeding within 10 days after the receipt by Cameron of a statement or statements from the Indemnitee requesting such advance or advances from time to time, whether prior to or after the final disposition of such Proceeding.  Such statement or statements shall reasonably evidence the Expenses incurred by or on behalf of the Indemnitee.  The Indemnitee hereby expressly undertakes to repay such amounts advanced only if, and to the extent that, it shall ultimately be determined by a final, non-appealable adjudication or arbitration decision that the Indemnitee is not entitled to be indemnified against such Expenses.  All amounts advanced to the Indemnitee by Cameron pursuant to this Section 7 shall be without interest.  Cameron shall make all advances pursuant to this Section 7 without regard to the financial ability of the Indemnitee to make repayment, without bond or other security and without regard to the prospect of whether the Indemnitee may ultimately be found to be entitled to indemnification under the provisions of this Agreement.  Any required reimbursement of Expenses by the Indemnitee shall be made by the Indemnitee to Cameron within 10 days following the entry of the final, non-appealable adjudication or arbitration decision pursuant to which it is determined that the Indemnitee is not entitled to be indemnified against such Expenses.

Section 7.Procedure for Determination of Entitlement to Indemnification.

(a)To obtain indemnification under this Agreement, the Indemnitee shall submit to Cameron a written request therefor, along with such documentation and information as is reasonably available to the Indemnitee and reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification.  The Secretary of Cameron shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that the Indemnitee has requested indemnification.

(b)Upon written request by the Indemnitee for indemnification pursuant to the first sentence of Section 8(a) hereof, a determination, if required by applicable law, with respect to the Indemnitee’s entitlement thereto shall be made in the specific case: (i) by the Board by a majority vote of a quorum consisting of Disinterested Directors (as hereinafter defined); or (ii) if a quorum of the Board consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel (as hereinafter defined), as selected pursuant to Section 8(d), in a written opinion to the Board (which opinion may be a “more likely than not” opinion), a copy of which shall be delivered to the Indemnitee.  If it is so determined that the Indemnitee is entitled to indemnification, Cameron shall make payment to the Indemnitee within 10 days after such determination.  The Indemnitee shall cooperate with the Person or Persons making such determination with respect to the Indemnitee’s entitlement to indemnification, including providing to such Person or Persons upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such determination.  Subject to the provisions of Section 10 hereof, any costs or expenses (including reasonable attorneys’ fees and disbursements) incurred by the Indemnitee in so cooperating with the Person or Persons making such determination shall be borne by Cameron, and Cameron hereby agrees to indemnify and hold the Indemnitee harmless therefrom.

(c)Notwithstanding the foregoing, if a Change of Control has occurred, the Indemnitee may require a determination with respect to the Indemnitee’s entitlement to indemnification to be made by Independent Counsel, as selected pursuant to Section 8(d), in a written opinion to the Board (which opinion may be a “more likely than not” opinion), a copy of which shall be delivered to the Indemnitee.

(d)In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 8(b) or (c) hereof, the Independent Counsel shall be selected as provided in this Section 8(d).  If a Change of Control shall not have occurred, the Independent Counsel shall be selected by the Board (including a vote of a majority of the Disinterested Directors if obtainable), and Cameron shall give written notice to the Indemnitee advising him of the identity of the Independent Counsel so selected.  If a Change of Control shall have occurred, the Independent Counsel shall be selected by the Indemnitee (unless the Indemnitee shall request that such selection be made by the Board, in which event the preceding sentence shall apply), and approved by Cameron (which approval shall not be unreasonably withheld).  If (i) an Independent Counsel is to make the determination of entitlement pursuant to Section 8(b) or (c) hereof, and (ii) within 20 days after submission by the Indemnitee of a written request for indemnification pursuant to Section 8(a) hereof, no Independent Counsel shall have been selected, either Cameron or the Indemnitee may petition the appropriate court of the State (as hereafter defined) or other court of competent jurisdiction for the appointment as Independent Counsel of a Person selected by such court or by such other Person as such court shall designate.  Cameron shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 8(b) or (c) hereof, and Cameron shall pay all reasonable fees and expenses incident to the procedures of this Section 8(d), regardless of the manner in which such Independent Counsel was selected or appointed.  Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 10(a)(iv) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

Section 8.   Presumptions and Effect of Certain Proceedings; Construction of Certain Phrases.

(a)In making a determination with respect to whether the Indemnitee is entitled to indemnification hereunder, the Reviewing Party making such determination shall presume that the Indemnitee is entitled to indemnification under this Agreement if the Indemnitee has submitted a request for indemnification in accordance with Section 8(a) of this Agreement, and anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion, by clear and convincing evidence.

(b)Subject to the terms of Section 16 below, the termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of the Indemnitee to indemnification or create a presumption that the Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of Cameron or, with respect to any criminal Proceeding, that the Indemnitee had reasonable cause to believe that his conduct was unlawful.

(c)For purposes of any determination of the Indemnitee’s entitlement to indemnification under this Agreement or otherwise, the Indemnitee shall be deemed to have acted in good faith and in a manner he reasonably believe to be in or not opposed to the best interests of Cameron, and, with respect to a criminal Proceeding, to have also had no reasonable cause to believe his conduct was unlawful, if the Indemnitee’s action is based on the records or books of account of Cameron or another enterprise, including financial statements, or on information supplied to the Indemnitee by the officers of Cameron or another enterprise in the course of their duties, or on the advice of legal or financial counsel for Cameron or the Board (or any committee thereof) or for another enterprise or its board of directors (or any committee thereof), or on information or records given or reports made by an independent certified public accountant or by an appraiser or other expert selected by Cameron or the Board (or any committee thereof) or by another enterprise or its board of directors (or any committee thereof).  For purposes of this Section 9(c), the term “another enterprise” means any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise of which the Indemnitee is or was serving at the request of Cameron as a director, officer, employee or agent.  The provisions of this Section 9(c) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed or found to have met the applicable standard of conduct set forth in this Agreement.  In addition, the knowledge and/or actions, or failure to act, of any other director, trustee, partner, managing member, fiduciary, officer, agent or employee of Cameron shall not be imputed to the Indemnitee for purposes of determining the right to indemnification under this Agreement.  Whether or not the foregoing provisions of this Section 9(c) are satisfied, it shall in any event be presumed that the Indemnitee has acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of Cameron, and, with respect to a criminal Proceeding, that he also had no reasonable cause to believe his conduct was unlawful.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion, by clear and convincing evidence.

(d)For purposes of this Agreement, references to “fines” shall include any excise taxes assessed on the Indemnitee with respect to an employee benefit plan; references to “serving at the request of Cameron” shall include, but shall not be limited to, any service as a director, officer, employee or agent of Cameron which imposes duties on, or involves services by, the Indemnitee with respect to an employee benefit plan, its participants or its beneficiaries; and if the Indemnitee has acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan, he shall be deemed to have acted in a manner “not opposed to the best interests of Cameron” as used in this Agreement.  The provisions of this Section 9(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed or found to have met the applicable standard of conduct set forth in this Agreement.

Section 9.Remedies of the Indemnitee.

(a)In the event that (i) a determination is made pursuant to Section 8 of this Agreement that the Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 7 of this Agreement, (iii) the determination of entitlement to indemnification is to be made by the Board pursuant to Section 8(b) of this Agreement and such determination shall not have been made and delivered to the Indemnitee in writing within twenty (20) days after receipt by Cameron of the request for indemnification, (iv) the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 8(b) or (c) of this Agreement and such determination shall not have been made in a written opinion to the Board and a copy delivered to the Indemnitee within forty-five (45) days after receipt by Cameron of the request for indemnification, (v) payment of indemnification is not made pursuant to Section 6 of this Agreement within 10 days after receipt by Cameron of a written request therefor or (vi) payment of indemnification is not made within 10 days after a determination has been made that the Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 8 or 9 of this Agreement, the Indemnitee shall be entitled to an adjudication in an appropriate court of the State of his entitlement to such indemnification or advancement of Expenses.  Alternatively, the Indemnitee, at his sole option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the rules of the American Arbitration Association.  The Indemnitee shall commence such Proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which the Indemnitee first has the right to commence such Proceeding pursuant to this Section 10(a); provided, however, that the foregoing clause shall not apply in respect of a Proceeding brought by the Indemnitee to enforce his rights under Section 5 of this Agreement.

(b)In the event that a determination is made pursuant to Section 8 of this Agreement that the Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 10 shall be conducted in all respects as a de novo trial or a de novo arbitration (as applicable) on the merits, and the Indemnitee shall not be prejudiced by reason of that adverse determination.  In any judicial proceeding or arbitration commenced pursuant to this Section 10, Cameron shall have the burden of proving that the Indemnitee is not entitled to indemnification, and Cameron shall be precluded from referring to or offering into evidence a determination made pursuant to Section 8 of this Agreement that is adverse to the Indemnitee’s right to indemnification.  If the Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 10, the Indemnitee shall not be required to reimburse Cameron for any advances pursuant to Section 7 until a final determination is made with respect to the Indemnitee’s entitlement to indemnification (as to which rights of appeal have been exhausted or lapsed).

(c)If a determination is made or deemed to have been made pursuant to Section 8 or 9 of this Agreement that the Indemnitee is entitled to indemnification, Cameron shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 10, absent (i) a misstatement by the Indemnitee of a material fact, or an omission by the Indemnitee of a material fact necessary to make the Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(d)Cameron shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 10 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that Cameron is bound by all of the provisions of this Agreement.

(e)In the event that the Indemnitee, pursuant to this Section 10, seeks a judicial adjudication or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, the Indemnitee shall be entitled to recover from Cameron, and shall be indemnified by Cameron against, any and all Expenses actually and reasonably incurred by him in such judicial adjudication or arbitration, unless the court or arbitrator determines that each of the Indemnitee’s claims in such Proceeding were made in bad faith or were frivolous.  In the event that a Proceeding is commenced by or in the right of Cameron against the Indemnitee to enforce or interpret any of the terms of this Agreement, the Indemnitee shall be entitled to recover from Cameron, and shall be indemnified by Cameron against, any and all Expenses actually and reasonably incurred by him in such Proceeding (including with respect to any counter-claims or cross-claims made by the Indemnitee against Cameron in such Proceeding), unless the court or arbitrator determines that each of the Indemnitee’s material defenses in such Proceeding were made in bad faith or were frivolous.

(f)Any judicial adjudication or arbitration determined under this Section 10 shall be final and binding on the parties.

Section 10.Defense of Certain Proceedings.  In the event Cameron shall be obligated under this Agreement to pay the Expenses of any Proceeding against the Indemnitee in which Cameron is a co-defendant with the Indemnitee, Cameron shall be entitled to assume the defense of such Proceeding, with counsel approved by the Indemnitee, which approval shall not be unreasonably withheld, upon the delivery to the Indemnitee of written notice of its election to do so.  After delivery of such notice, approval of such counsel by the Indemnitee and the retention of such counsel by Cameron, the Indemnitee shall nevertheless be entitled to employ or continue to employ his own counsel in such Proceeding.  Employment of such counsel by the Indemnitee shall be at the cost and expense of Cameron unless and until Cameron shall have demonstrated to the reasonable satisfaction of the Indemnitee and the Indemnitee’s counsel that there is complete identity of issues and defenses and no conflict of interest between Cameron and the Indemnitee in such Proceeding, after which time further employment of such counsel by the Indemnitee shall be at the cost and expense of the Indemnitee.  In all events, if Cameron shall not, in fact, have timely employed counsel to assume the defense of such Proceeding, then the fees and Expenses of the Indemnitee’s counsel shall be at the cost and expense of Cameron.

Section 11.Exception to Right of Indemnification or Advancement of Expenses.  Notwithstanding any other provision of this Agreement, the Indemnitee shall not be entitled to indemnification or advancement of Expenses under this Agreement with respect to any Proceeding, or any claim therein, brought or made by the Indemnitee against:

(a)Cameron, except for (i) any claim or Proceeding in respect of this Agreement and/or the Indemnitee’s rights hereunder, (ii) any claim or Proceeding to establish or enforce a right to indemnification under any statute or law and (iii) any counter-claim or cross-claim brought or made by him against Cameron in any Proceeding brought by or in the right of Cameron against him; or

(b)any other Person, except for Proceedings or claims approved by the Board.

Section 12.Contribution.

(a)If, with respect to any Proceeding, the indemnification provided for in this Agreement is held by a court of competent jurisdiction to be unavailable to the Indemnitee for any reason other than that the Indemnitee did not act in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of Cameron or, with respect to a criminal Proceeding, that the Indemnitee had reasonable cause to believe his conduct was unlawful, Cameron shall contribute to the amount of Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by the Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein in such proportion as is appropriate to reflect the relative benefits received by the Indemnitee and the relative fault of the Indemnitee versus the other defendants or participants in connection with the action or inaction which resulted in such Expenses, judgments, penalties, fines and amounts paid in settlement, as well as any other relevant equitable considerations.

(b)Cameron and the Indemnitee agree that it would not be just and equitable if contribution pursuant to this Section 13 were determined by pro rata or per capita allocation or by any other method of allocation which does not take into account the equitable considerations referred to in Section 13(a) above.

(c)No Person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act of 1933) shall be entitled to contribution from any Person who was not found guilty of such fraudulent misrepresentation.

Section 13.Officer and Director Liability Insurance.

(a)Cameron shall use all commercially reasonable efforts to obtain and maintain in effect during the entire period for which Cameron is obligated to indemnify the Indemnitee under this Agreement, one or more policies of insurance with reputable insurance companies to provide the directors and officers of Cameron with coverage for losses from wrongful acts and omissions and to ensure Cameron’s performance of its indemnification obligations under this Agreement.  In all such insurance policies, the Indemnitee shall be named as an insured in such a manner as to provide the Indemnitee with the same rights and benefits as are accorded to the most favorably insured of Cameron’s directors and officers.  Notwithstanding the foregoing, Cameron shall have no obligation to obtain or maintain such insurance if Cameron determines in good faith that the Indemnitee is covered by such insurance maintained by a subsidiary or parent of Cameron.

(b)To the extent that Cameron maintains an insurance policy or policies providing liability insurance for directors or officers of any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise which the Indemnitee serves at the request of Cameron, the Indemnitee shall be named as an insured under and shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for the most favorably insured director or officer under such policy or policies.

(c)In the event that Cameron is a named insured under any policy or policies of insurance referenced in either Section 14(a) or (b) above, Cameron hereby covenants and agrees that it will not settle any claims or Proceedings that may be covered by such policy or policies of insurance and in which the Indemnitee has or may incur Expenses, judgments, penalties, fines or amounts paid in settlement without the prior written consent of the Indemnitee.

Section 14.Security.  Upon reasonable request by the Indemnitee, Cameron shall provide security to the Indemnitee for Cameron’s obligations hereunder through an irrevocable bank letter of credit, funded trust or other similar collateral.  Any such security, once provided to the Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee, which consent may be granted or withheld at the Indemnitee’s sole and absolute discretion.

Section 15.Settlement of Claims.  Cameron shall not be liable to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without Cameron’s written consent, which consent shall not be unreasonably withheld.

Section 16.Duration of Agreement.  This Agreement shall be unaffected by the termination of the Corporate Status of the Indemnitee and shall continue for so long as the Indemnitee may have any liability or potential liability by virtue of his Corporate Status, including, without limitation, the final termination of all pending Proceedings in respect of which the Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any Proceeding commenced by the Indemnitee pursuant to Section 10 of this Agreement relating thereto, whether or not he is acting or serving in such capacity at the time any liability or Expense is incurred for which indemnification can be provided under this Agreement.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of Cameron), assigns, spouses, heirs, executors and personal and legal representatives.

Section 17.Remedies of Cameron.  Cameron hereby covenants and agrees to submit any and all disputes relating to this Agreement that the parties are unable to resolve between themselves to binding arbitration pursuant to the rules of the American Arbitration Association and waives all rights to judicial adjudication of any matter or dispute relating to this Agreement except where judicial adjudication is requested or required by the Indemnitee.

Section 18.Covenant Not to Sue, Limitation of Actions and Release of Claims.  No legal action shall be brought and no cause of action shall be asserted by or on behalf of Cameron (or any of its subsidiaries) against the Indemnitee, his spouse, heirs, executors, personal representatives or administrators after the expiration of two (2) years from the date on which the Corporate Status of the Indemnitee is terminated (for any reason), and any claim or cause of action of Cameron (or any of its subsidiaries) shall be extinguished and deemed released unless asserted by filing of a legal action within such two-year period; provided, however, that the foregoing shall not apply to any action or cause of action brought or asserted by Cameron pursuant to or in respect of this Agreement and shall not constitute a waiver or release of any of Cameron’s rights under this Agreement.

Section 19.Limitation of Liability.  Notwithstanding any other provision of this Agreement, neither party shall have any liability to the other for, and neither party shall be entitled to recover from the other, any consequential, special, punitive, multiple or exemplary damages as a result of a breach of this Agreement.

Section 20.Subrogation.  In the event of any payment under this Agreement, Cameron shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable Cameron to bring suit to enforce such rights.

Section 21.No Multiple Recovery.  Cameron shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that the Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 22.Definitions.  For purposes of this Agreement:

(a)“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person.  For purposes hereof, “control” (including, with correlative meaning, the terms “controlling”, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of such Person, by contract or otherwise.

(b)“Change of Control” shall mean a change in control of Cameron occurring after the date of this Agreement of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Exchange Act, whether or not Cameron is then subject to such reporting requirement.  Without limiting the foregoing, such a Change in Control shall be deemed to have occurred if, after the date of this Agreement, (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of Cameron representing 20% or more of the combined voting power of Cameron’s then outstanding securities entitled to vote generally in the election of directors without the prior approval of at least two-thirds of the members of the Board in office immediately prior to such person attaining such percentage interest; (ii) Cameron 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 in office immediately prior to such transaction or event constitute less than a majority of the Board thereafter; (iii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board (including for this purpose any new director whose election or nomination for election by Cameron’s shareholders 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; or (iv) approval by the shareholders of Cameron of a liquidation or dissolution of Cameron.

(c)“Company” means Cooper Cameron Corporation, a Delaware corporation.

(d)“Corporate Status” describes the status of an individual who is or was an officer or director of Cameron, or is or was serving at the request of Cameron as an officer, director, employee or agent of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise.

(e)“Disinterested Director” means a director of Cameron who is not and was not a party to, or otherwise involved in, the Proceeding for which indemnification is sought by the Indemnitee.

(f)“Exchange Act” means the Securities Exchange Act of 1934, as amended.

(g)“Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating or being or preparing to be a witness in a Proceeding.

(h)“Independent Counsel” means a law firm or a member of a law firm that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent: (i) Cameron or the Indemnitee in any matter material to either such party or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent Counsel” shall not include any Person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either Cameron or the Indemnitee in an action to determine the Indemnitee’s rights under this Agreement.

(i)“Person” means a natural person, firm, partnership, joint venture, association, corporation, company, limited liability company, trust, business trust, estate or other entity.

(j)“Proceeding” includes any action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding whether civil, criminal, administrative or investigative.

(k)“State” means the State of Texas.

Section 23.Non-Exclusivity.  The Indemnitee’s rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which the Indemnitee may at any time be entitled under applicable law, the Certificate, the Bylaws, any agreement, a vote of stockholders, a resolution of directors or otherwise.

Section 24.Remedies Not Exclusive.  No right or remedy herein conferred upon the Indemnitee is intended to be exclusive of any other right or remedy, and every other right or remedy shall be cumulative of and in addition to the rights and remedies given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy of the Indemnitee hereunder or otherwise shall not be deemed an election of remedies on the part of the Indemnitee and shall not prevent the concurrent assertion or employment of any other right or remedy by the Indemnitee.

Section 25.Changes in Law.  In the event that a change in applicable law after the date of this Agreement, whether by statute, rule or judicial decision, expands or otherwise increases the right or ability of a Delaware corporation to indemnify a member of its board of directors or an officer, the Indemnitee shall, by this Agreement, enjoy the greater benefits so afforded by such change.  In the event that a change in applicable law after the date of this Agreement, whether by statute, rule or judicial decision, narrows or otherwise reduces the right or ability of a Delaware corporation to indemnify a member of its board of directors or an officer, such change shall have no effect on this Agreement or any of the Indemnitee’s rights hereunder, except and only to the extent required by law.

Section 26.Interpretation of Agreement.  Cameron and the Indemnitee acknowledge and agree that it is their intention that this Agreement be interpreted and enforced so as to provide indemnification to the Indemnitee to the fullest extent now or hereafter permitted by law.

Section 27.Severability.  If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; (b) such provision or provisions will be deemed reformed to the extent necessary to conform to applicable law and to give maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision or provisions held invalid, illegal or unenforceable.

Section 28.Governing Law; Jurisdiction and Venue; Specific Performance.

(a)The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

(b)ANY “ACTION OR PROCEEDING” (AS SUCH TERM IS DEFINED BELOW) ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE FILED IN AND LITIGATED OR ARBITRATED SOLELY BEFORE THE COURTS LOCATED IN OR ARBITRATORS SITTING IN HARRIS COUNTY IN THE STATE OF TEXAS, AND EACH PARTY TO THIS AGREEMENT:  (i) GENERALLY AND UNCONDITIONALLY ACCEPTS THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND ARBITRATORS AND VENUE THEREIN, AND WAIVES TO THE FULLEST EXTENT PROVIDED BY LAW ANY DEFENSE OR OBJECTION TO SUCH JURISDICTION AND VENUE BASED UPON THE DOCTRINE OF “FORUM NON CONVENIENS;” AND (ii) GENERALLY AND UNCONDITIONALLY CONSENTS TO SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING BY DELIVERY OF CERTIFIED OR REGISTERED MAILING OF THE SUMMONS AND COMPLAINT IN ACCORDANCE WITH THE NOTICE PROVISIONS OF THIS AGREEMENT.  FOR PURPOSES OF THIS SECTION, THE TERM “ACTION OR PROCEEDING” IS DEFINED AS ANY AND ALL CLAIMS, SUITS, ACTIONS, HEARINGS, ARBITRATIONS OR OTHER SIMILAR PROCEEDINGS, INCLUDING APPEALS AND PETITIONS THEREFROM, WHETHER FORMAL OR INFORMAL, GOVERNMENTAL OR NON-GOVERNMENTAL, OR CIVIL OR CRIMINAL.  THE FOREGOING CONSENT TO JURISDICTION SHALL NOT CONSTITUTE GENERAL CONSENT TO SERVICE OF PROCESS IN THE STATE FOR ANY PURPOSE EXCEPT AS PROVIDED ABOVE, AND SHALL NOT BE DEEMED TO CONFER RIGHTS ON ANY PERSON OTHER THAN THE PARTIES TO THIS AGREEMENT.

(c)Cameron acknowledges that the Indemnitee may, as a result of Cameron’s breach of its covenants and obligations under this Agreement, sustain immediate and long-term substantial and irreparable injury and damage which cannot be reasonably or adequately compensated by damages at law.  Consequently, Cameron agrees that the Indemnitee shall be entitled, in the event of Cameron’s breach or threatened breach of its covenants and obligations hereunder, to obtain equitable relief from a court of competent jurisdiction, including enforcement of each provision of this Agreement by specific performance and/or temporary, preliminary and/or permanent injunctions enforcing any of the Indemnitee’s rights, requiring performance by Cameron, or enjoining any breach by Cameron, all without proof of any actual damages that have been or may be caused to the Indemnitee by such breach or threatened breach and without the posting of bond or other security in connection therewith.  Cameron waives the claim or defense therein that the Indemnitee has an adequate remedy at law, and Cameron shall not allege or otherwise assert the legal position that any such remedy at law exists.  Cameron agrees and acknowledges that:  (i) the terms of this Section 29(c) are fair, reasonable and necessary to protect the legitimate interests of the Indemnitee; (ii) this waiver is a material inducement to the Indemnitee to enter into the transactions contemplated hereby; and (iii) the Indemnitee relied upon this waiver in entering into this Agreement and will continue to rely on this waiver in its future dealings with Cameron.  Cameron represents and warrants that it has reviewed this provision with its legal counsel, and that it has knowingly and voluntarily waived its rights referenced in this Section 29 following consultation with such legal counsel.

Section 29.Nondisclosure of Payments.  Except as expressly required by Federal securities laws, Cameron shall not disclose any payments under this Agreement without the prior written consent of the Indemnitee.  Any payments to the Indemnitee that must be disclosed shall, unless otherwise required by law, be described only in Cameron proxy or information statements relating to special and/or annual meetings of Cameron’s shareholders, and Cameron shall afford the Indemnitee a reasonable opportunity to review all such disclosures and, if requested by the Indemnitee, to explain in such statement any mitigating circumstances regarding the events reported.

Section 30.Notice by the Indemnitee.  The Indemnitee agrees to promptly notify Cameron in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder.

Section 31.Notices.  All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and received for by the party to whom said notice or other communication shall have been directed, or (b) mailed by U.S. certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:  (i) If to Cameron: Cooper Cameron Corporation, 1333 West Loop South, Suite 1700, Houston, Texas 77027, Attention:  President; and (ii) if to any other party hereto, including the Indemnitee, to the address of such party set forth on the signature page hereof; or to such other address as may have been furnished by any party to the other(s), in accordance with this Section 32.

Section 32.Modification and Waiver.  No supplement, modification or amendment of this Agreement or any provision hereof shall limit or restrict in any way any right of the Indemnitee under this Agreement with respect to any action taken or omitted by the Indemnitee in his Corporate Status prior to such supplement, modification or amendment.  No supplement, modification or amendment of this Agreement or any provision hereof shall be binding unless executed in writing by both of Cameron and the Indemnitee.  No waiver of any provision of this Agreement shall be deemed or shall constitute a wavier of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

Section 33.Headings.  The headings of the Sections or paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

Section 34.Gender.  Use of the masculine pronoun in this Agreement shall be deemed to include usage of the feminine pronoun where appropriate.

Section 35.Identical Counterparts.  This Agreement may be executed in one or more counterparts (whether by original, photocopy or facsimile signature), each of which shall for all purposes be deemed to be an original, but all of which together shall constitute one and the same Agreement.  Only one such counterpart executed by the party against whom enforcement is sought must be produced to evidence the existence of this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first above written.

 ATTEST:                                                                 CAMERON INTERNATIONAL CORPORATION

By:  /s/ William C. Lemmer	By:  /s/ Jack B. Moore
William C. Lemmer	Jack B. Moore
Senior Vice President & General Counsel	President & CEO

 INDEMNITEE

             /s/ Jon Erik Reinhardsen                    

Name:  Jon Erik Reinhardsen

Address:

       Petroleum Geo-Services ASA

       Strandveien 4

       P.O. Box 89

       1325 Lysaker

       Norway

EX-10.30

Exhibit 10.30

CAMERON INTERNATIONL CORPORATION

NON-QUALIFIED STOCK OPTION AGREEMENT

Effective Date:  _______________, 20____

1.           Purpose.  As an additional incentive and inducement to you to remain in the employment of Cameron International Corporation (the “Company”) or one of its direct or indirect subsidiaries and to acquire an ownership position in the Company, thereby aligning your interests with those of the Company and its stockholders, the Company hereby grants to you, the “Optionee”,  the option to purchase common stock of the Company from the Company at the times and upon the terms and conditions set forth on the attached Notice of Grant of Stock Options and Option Agreement (the “Agreement”).  If Optionee completes, signs, and returns one copy of this Agreement to the Company in Houston, Texas, U.S.A., this Agreement will become effective as of _______________, 20____ .

2.           Terms Subject to the Plan.  The Agreement is expressly subject to the terms and provisions of the Company's 2005 Equity Incentive Plan (the "Plan"), a copy of which is attached hereto, and in the event there is a conflict between the terms of the Plan and the Agreement, the terms of the Plan shall control.

3.           Purchase Price.  The purchase price of the Shares of the Company’s common stock subject to the Agreement shall be $_______ per Share.

4.           Vesting.  The Option granted pursuant to the Agreement (“Option”) may be exercised, in whole or in part, but only as to the number of Shares as to which the right to exercise has vested at the time of exercise, during the period beginning _______________, 20____ (one year from the date on which it was granted), and ending _______________, 20____ (seven years from the date on which Option was granted.

5.           Exercise of Option.  The Option granted herein may be exercised as to vested Shares, in whole or in part, from time to time by the Optionee by giving written notice to the Secretary of the Company on or prior to the date on which the Option terminates.  Such notice shall identify the Option and specify the number of whole Shares that the Optionee desires to purchase.  Any notice of exercise shall be in a form substantially similar to the form attached hereto.  Payment of the purchase price of the Shares that the Optionee desires to purchase shall be tendered in full at the time of giving notice by (i) cash, check, or bank draft payable and acceptable to the Company (or the equivalent thereof acceptable to the Company), (ii) Shares theretofore owned and held by the Optionee for more than six months, (iii) a combination of cash and Shares theretofore owned and held by the Optionee for more than six months,  or (iv)  the Optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company to pay the exercise price. The notice shall not be considered to be properly given unless accompanied by all documentation deemed appropriate by the Company to reflect exercise of the Option and compliance with all applicable laws, rules and regulations.  The notice shall state a requested delivery date for the Share certificate or certificates at least fifteen days after the delivery of such notice; provided, however, that if the Optionee is exercising any Option granted pursuant to this Agreement in connection with a broker's transaction described in 5(iv) above, such notice shall state a requested date of delivery to the broker of such Share certificate or certificates which shall be no later than five business days after delivery of such notice or such greater or lesser time as may be required or permitted by law.

6.           Shares Subject to Listing and Registration.   The Option granted herein shall be subject to the listing, registration or qualification of the Shares subject to such Option upon any securities exchange or under any applicable state or federal law.  This Option may not be exercised in whole or in part unless such listing, registration or qualification shall have been effected or obtained free of any conditions not reasonably acceptable to the Board of Directors.

7.           Changes in the Company's Capital Structure.The number of Shares subject to the Option and the price per Share payable upon exercise of the Option shall be subject to the provisions of the Plan relating to adjustments to corporate capitalization, provided, however, that in the event of any reorganization, recapitalization, dividend or distribution (whether in cash, shares or other property, other than a regular cash dividend), stock split, reverse stock split or other similar change in corporate structure affecting the Shares subject to the Option, the Option shall be appropriately adjusted to reflect such change, but only so far as is necessary to maintain the proportionate interest of the Participant and preserve, without exceeding, the value of such Option.

8.           Covenant Not To Compete, Solicit or Disclose Confidential Information.

(a)The Optionee acknowledges that the Optionee is in possession of and has access to confidential information, including material relating to the business, products or services of the Company and that he or she will continue to have such possession and access during employment by the Company.  The Optionee also acknowledges that the Company’s business, products and services are highly specialized and that it is essential that they be protected, and, accordingly, the Optionee agrees that as partial consideration for the Option granted herein that should the Optionee engage in any “Detrimental Activity,” as defined below, at any time during his or her employment or during a period of one year following his or her termination the Company shall be entitled to: (i) cancel any un-exercised portion of the Option; (ii) recover from the Optionee the value of any portion of the Option that has been exercised; (iii) seek injunctive relief against the Optionee; (iv) recover all damages, court costs, and attorneys’ fees incurred by the Company in enforcing the provisions of this Option grant, and (v) set-off any such sums to which the Company is entitled hereunder against any sum which may be owed the Optionee by the Company.

(b)  “Detrimental Activity” for the purposes hereof, other than with respect to involuntary termination without cause, termination in connection with or as a result of a “Change of Control” (as defined in Section 10(b) hereof), or termination following a reduction in job responsibilities, shall include: (i) rendering of services for any person or organization, or engaging directly or indirectly in any business, which is or becomes competitive with the Company; (ii) disclosing to anyone outside the Company, or using in other than the Company’s business, without prior written authorization from the Company, any confidential information including material relating to the business, products or services of the Company acquired by the Optionee during employment with the Company; (iii) soliciting, interfering, inducing, or attempting to cause any employee of the Company to leave his or her employment, whether done on Optionee’s own account or on account of any person, organization or business which is or becomes competitive with the Company, or (iv) directly or indirectly soliciting the trade or business of any customer of the Company.  “Detrimental Activity” for the purposes hereof with respect to involuntary termination without cause, termination in connection with or as a result of a “Change of Control”, or termination following a reduction in job responsibilities, shall include only part (ii) of the preceding sentence.

9.           Termination of Employment.

(a)  If the Optionee’s employment terminates, for reasons other than cause (as defined below), at age 60 or older and the Optionee has at least ten years of service with the Company, any unvested shares shall continue to vest according to the terms of the Option except that if such termination occurs within one year from grant date, the number of shares that will continue to vest shall be reduced to be proportionate to that portion of the year between grant date and termination date; andthe Optionee shall have the right to exercise the Option at any time within the lesser of: (i) the term of the option, or (ii) a three (3) year period commencing on the day next following such termination, or one (1) year from the last date of vesting, whichever is greater; and

(b)  If the Optionee is an Executive Officer of the Company at age 65 or older with at least ten years of service with the Company and the Optionee’s employment terminates for reasons, other than cause (as defined below), any unvested shares shall continue to vest according to the terms of the Option and the Optionee shall have the right to exercise the Option according to the terms of the Option; and

(c)  If the Optionee’s employment terminates by reason of death or long-term disability  of the Optionee, any unvested Shares shall vest in full as of the date of such termination, and the Optionee or his/her personal representatives, heirs, legatees or distributees shall have the right to exercise the Option granted hereunder at any time within the term of the Option or within a three (3) year period commencing on the date of  such termination, whichever is less, but in either case, never less than 12 months from the date of such termination.  For purposes of this Stock Option Agreement, long-term disability shall mean that the participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months; and

(d)  If the Optionee’s employment terminates by reason of a workforce reduction, any unvested shares shall continue to vest according to the terms of the option except that if such termination occurs within one year from grant date, the number of shares that will continue to vest shall be reduced to be proportionate to that portion of the year between the grant date and termination date; and the Optionee shall have the right to exercise the Option granted hereunder at any time within the lesser of: (i) the term of the Option, or (ii) a three(3) year period commencing on the day next following such termination, or one (1) year from the last date of vesting, whichever is greater; and

(e)  If the Optionee’s employment terminates voluntarily other than as provided for in Sections (a), (b), (c) or (d) above, or as a result of involuntary termination other than for cause or as provided for in Sections (c) and (d) above, no additional Shares shall vest for the benefit of the Optionee after the termination date, and the Option shall be exercisable by the Optionee, with respect to those Shares which had already vested only, within a three (3) month period after such termination or the term of the Option, whichever is less, but only to the extent it was exercisable immediately prior to the date of termination; and

(f) If the Optionee’s employment is terminated for cause, the Option shall terminate and no longer be exercisable for either the vested or the unvested Shares.  For purposes of the Stock Option Agreement, “cause” shall mean the Optionee has (1) engaged in gross negligence or willful misconduct in the performance of his duties and responsibilities respecting his position with the Company, (2) willfully refused, without proper legal reason, to perform the duties and responsibilities respecting his position with the Company, (3) breached any material policy or code of conduct established by the Company and affecting the Optionee, (4) engaged in conduct that Optionee knows or should know is materially injurious to the Company, (5) been convicted of a felony or a misdemeanor involving moral turpitude, or (6) engaged in an act of dishonest or impropriety which materially impairs the Optionee’s effectiveness in his position with the Company.

10.           Change of Control.

(c)Notwithstanding Section 11.2 of the Plan, upon a “Change of Control” of the Company, the Option granted hereunder shall immediately and fully vest and become fully exercisable.

(d)“Change of Control” for the purposes of this Option, shall mean the earliest date on which:

(vii)   any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s outstanding voting securities, other than through the purchase of voting securities directly from the Company through a private placement; or

(viii)   individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of the directors comprising the Incumbent Board shall from and after such election be deemed to be a member of the Incumbent Board; or

(ix)  

(x)   a merger or consolidation involving the Company or its stock, or an acquisition by the Company, directly or indirectly or through one or more subsidiaries, of another entity or its stock or assets in exchange for the stock of the Company unless, immediately following such transaction less than 50% of the then outstanding voting securities of the surviving or resulting corporation or entity will be (or is) then beneficially owned, directly or indirectly, by all or substantially of the individuals and entities who were the beneficial owners of the Company’s outstanding voting securities immediately prior to such transaction (treating, for purposes of determining whether the 50% continuity test is met, any ownership of the voting securities of the surviving or resulting corporation or entity that results from a stockholder’s ownership of the stock of, or their ownership interest in, the corporation or other entity with which the Company is merged or consolidated as not owned by persons who were beneficial owners of the Company’s outstanding voting securities immediately prior to the transaction).

(xi)   a tender offer or exchange offer is made and consummated by a Person other than the Company for the ownership of 20% or more of the voting securities of the Company then outstanding; or

(xii)   all or substantially all of the assets of the Company are sold or transferred to a Person as to which (a) the Incumbent Board does not have authority (whether by law or contract) to directly control the use or further disposition of such assets and (b) the financial results of the Company and such Person are not consolidated for financial reporting purposes.

Anything else in this definition to the contrary notwithstanding, no Change of Control shall be deemed to have occurred by virtue of any transaction which results in you, or a group of Persons which includes you, acquiring more than 20% of either the combined voting power of the Company’s outstanding voting securities or the voting securities of any other corporation or entity which acquires all or substantially all of the assets of the Company, whether by way of merger, consolidation, sale of such assets or otherwise.

11.           Employment.  This Agreement is not an employment agreement.  Nothing contained herein shall be construed as creating any employment relationship.

12.           Notices.  All notices required or permitted under this Agreement shall be in writing and shall be delivered personally or by mailing the same by registered or certified mail postage prepaid, to the other party.  Notice given by mail as below set out shall be deemed delivered at the time and on the date the same is postmarked.

Notices to the Company should be addressed to:

Cameron International Corporation

1333 West Loop South, Suite 1700

Houston, Texas 77027

Attention:  Corporate Secretary

Telephone:  713-513-3322

13.           Definitions.  All undefined capitalized terms used herein shall have the meanings assigned to them in the Plan.

14.           Successors and Assigns.  Subject to the provisions of Paragraph 9 hereof, this Agreement shall inure to the benefit of and be binding upon the heirs, legatees, distributees, executors and administrators of the Optionee and the successors and assigns of the Company.  This Agreement shall be interpreted, construed, and enforced in accordance with the laws of the State of Texas.   In no event shall an Option granted hereunder be voluntarily or involuntarily sold, pledged, assigned or transferred by the Optionee other than:  (i) by will or the laws of descent and distribution; or (ii) pursuant to the qualified domestic relations order (as defined by the Internal Revenue Code); or (iii) with respect to Awards of nonqualified stock options, by transfer by an Optionee to a member of the Optionee’s Immediate Family, or to a partnership or limited liability company whose only partners or shareholders are the Optionee and members of his Immediate Family.  However, any Award transferred shall continue to be subject to all terms and conditions contained in the Award Agreement.

15.           Tax Withholding.

(c)With respect to the cash payment under the Plan, Optionee agrees that as a condition to the exercise of the Option granted hereunder, any cash payment shall be reduced by, or shall include such additional amount required to be paid or withheld with respect thereto under all applicable federal, state and local taxes and any other law or regulation that may be in effect as of the date of each such payment (“Tax Amounts”).

(d)With respect to issuance of Shares pursuant to the exercise of the Option granted hereunder, no issuance shall be made until appropriate arrangements have been made for the payment of any Tax Amounts that may be required to be paid or withheld with respect thereto, and such arrangements can be accomplished by:

(iv)   directing the Company to retain Shares (up to the Optionee’s minimum required tax withholding rate or such other rate that will not trigger a negative accounting impact) otherwise deliverable in connection with the Award;

(v)   payment of the Required Tax amounts to the Company; or

(vi)   if Optionee is a current employee or Director of the Company, the Optionee may satisfy the obligation for payment of the required Tax Amounts by tendering previously acquired Shares (either actually or by attestation, valued at their then “Fair Market Value” as defined by the Plan) that have been owned for a period of at least six months (or such other period necessary to avoid accounting charges against the Company’s earnings).

__________________________________

EX-10.32

Exhibit 10.32

CAMERON INTERNATIONAL CORPORATION

Restricted Stock Unit Award Agreement

(________, 20___)

This AWARD AGREEMENT (the “Award”) is between the employee listed on the attached Notice of Grant of Award (“Participant”) and Cameron International Corporation (the “Company”), in connection with the Restricted Stock Unit Award granted to Participant by the Company.

1.           Effective Date and Issuance of Restricted Stock.  The Company hereby grants to the Participant, on the terms and conditions set forth herein, an award of Restricted Stock Units (the “Award”).  This Restricted Stock Unit Award is a commitment to issue one Share of Cameron common stock (“Share”) for each share of restricted stock units specified on the Notice of Grant of Award, at vesting.  If Participant completes, signs, and returns one copy of this agreement (the “Award Agreement”) to the Company in Houston, Texas, U.S.A., this Award Agreement will be effective as of _________, 20___.

2.           Terms Subject to the Plan.  This Award Agreement is expressly subject to the terms and provisions of the Company's Equity Incentive Plan (the "Plan"), as indicated in your Notice of Grant of Award.  A copy of the Plan is available on the Cameron Intranet under the Legal Section.  In the event there is a conflict between the terms of the Plan and this Award Agreement, the terms of the Plan shall control.

3.           Vesting Requirement.  The Award shall become 100% vested, subject to the provisions of Section 4 below, on ________, 20___ (the “Vesting Date”).  All Restricted Stock Units which become vested shall be payable in accordance with Section 6 hereof.

4.           Termination of Employment.  Notwithstanding the foregoing:

(a) If the Participant’s employment voluntarily terminates at age 60 or older for reasons other than cause, and the Participant has at least ten years of service with the Company, any unvested Restricted Stock Units (RSU) shall continue to vest according to the terms of the RSU Award; except that if such termination occurs within one year from the effective date of the Award, the number of RSUs that will continue to vest shall be reduced to be proportionate to that portion of the year between such effective date and the date of termination and the balance of the Award shall be immediately cancelled. For purposes of the Award Agreement, “cause” shall mean the Participant has (1) engaged in gross negligence or willful misconduct in the performance of his duties and responsibilities respecting his position with the Company, (2) willfully refused, without proper legal reason, to perform the duties and responsibilities respecting his position with the Company, (3) breached any material policy or code of conduct established by the Company and affecting the Participant, (4) engaged in conduct that Participant knows or should know is materially injurious to the Company, (5) been convicted of a felony or a misdemeanor involving moral turpitude, or (6) engaged in an act of dishonest or impropriety which materially impairs the Participant’s effectiveness in his position with the Company.

(b)  If the Participant’s employment terminates by reason of the death or long-term disability of the Participant, the Award shall be immediately vested in full as of the date of such termination; except that if such termination occurs within one year from the effective date of the Award, the number of RSUs that will vest in full shall be reduced to be proportionate to that portion of the year between the effective date of the Award and the date of termination and the balance of the Award shall be immediately cancelled.  For purposes of this Award Agreement, long-term disability shall mean that the participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months.

(c)  If the Participant’s employment terminates by reason of a workforce reduction, as so designated by the Company, the Award shall continue to vest according to the terms of the award; except that if such termination occurs within one year from the effective date of the Award, the number of RSUs that will vest in full shall be reduced to be proportionate to that portion of the year between such effective date and the date of termination and the balance of the Award shall be immediately cancelled.

(d)  If the Participant’s employment terminates for reasons other than for those addressed in the previous three subsections, no RSUs shall vest for the benefit of the Participant after the termination date.

5.           Change of Control.

(a)Notwithstanding Section 11.2 of the Plan, upon a “Change of Control” of the Company, the Award granted hereunder shall immediately and fully vest.

(b)“Change of Control” for the purposes of this Award, shall mean the earliest date on which:

(i)   any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s outstanding voting securities, other than through the purchase of voting securities directly from the Company through a private placement; or

(ii)   individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of the directors comprising the Incumbent Board shall from and after such election be deemed to be a member of the Incumbent Board; or

(iii)   a merger or consolidation involving the Company or its stock, or an acquisition by the Company, directly or indirectly or through one or more subsidiaries, of another entity or its stock or assets in exchange for the stock of the Company unless, immediately following such transaction less than 50% of the then outstanding voting securities of the surviving or resulting corporation or entity will be (or is) then beneficially owned, directly or indirectly, by all or substantially of the individuals and entities who were the beneficial owners of the Company’s outstanding voting securities immediately prior to such transaction (treating, for purposes of determining whether the 50% continuity test is met, any ownership of the voting securities of the surviving or resulting corporation or entity that results from a stockholder’s ownership of the stock of, or their ownership interest in, the corporation or other entity with which the Company is merged or consolidated as not owned by persons who were beneficial owners of the Company’s outstanding voting securities immediately prior to the transaction).

(iv)   a tender offer or exchange offer is made and consummated by a Person other than the Company for the ownership of 20% or more of the voting securities of the Company then outstanding; or

(v)   all or substantially all of the assets of the Company are sold or transferred to a Person as to which (a) the Incumbent Board does not have authority (whether by law or contract) to directly control the use or further disposition of such assets and (b) the financial results of the Company and such Person are not consolidated for financial reporting purposes.

Anything else in this definition to the contrary notwithstanding, no Change of Control shall be deemed to have occurred by virtue of any transaction which results in the Participant, or a group of Persons which includes the Participant, acquiring more than 20% of either the combined voting power of the Company’s outstanding voting securities or the voting securities of any other corporation or entity which acquires all or substantially all of the assets of the Company, whether by way of merger, consolidation, sale of such assets or otherwise.

6.           Payment of Award.

(a)Employed through Vesting Date.If the Participant is employed with the Company through the Vesting Date, payment of his vested Restricted Stock Units shall be made within 30 days following the Vesting Date.

(b)Employment Terminates Prior to Vesting Date.

i.   If the Participant’s employment terminates by reason of death or long-term disability in accordance with Section 4(b), hereof, prior to the Vesting Date, the Award, as accelerated pursuant to Section 4 and/or 5 hereof, shall be paid within 30 days of such termination.

ii.   If the participant voluntarily terminates employment with the Company in accordance with Section 4(a), the vested portion of the Award shall be paid within 30 days following the Vesting Date.

iii. If the Participant terminates employment with the Company by reason of a workforce reduction in accordance with Section 4(c), the vested portion of his/her Award shall be paid within 30 days following the Vesting Date.

(c)Change in Control.  Upon the occurrence of a Change in Control that also constitutes a “change in control event” within the meaning of U.S. Department of Treasury Regulation Section 1.409A-3(i)(5) (a “Section 409A CIC”), Participant’s vested Award shall be paid within 30 days following such Section 409A CIC.  Upon the occurrence of a Change in control that is not a Section 409A CIC, Participant’s vested award shall be paid within 30 days following the Vesting Date.

The Shares which the Award entitles the Participant to receive shall be paid to the Participant, after deduction of the number of Shares the Fair Market Value, as defined in the Plan, of which equals the applicable minimum statutory withholding taxes.

7.           Restrictions on Transfer.  Except as provided by the Plan, neither this Restricted Stock Unit Award nor any Restricted Stock Units covered hereby may be sold, assigned, transferred, encumbered, hypothecated or pledged by the Participant, other than to the Company as a result of forfeiture of the units as provided herein.

8.           No Voting Rights.   The Restricted Stock Units granted pursuant to this Award, whether or not vested, will not confer any voting rights upon the Participant, unless and until the Award is paid in Shares.

9.           Changes in Capitalization.The Restricted Stock Units under this Award shall be subject to the provisions of the Plan relating to adjustments to corporate capitalization, provided, however, that in the event of any reorganization, recapitalization, dividend or distribution (whether in cash, shares or other property, other than a regular cash dividend), stock split, reverse stock split or other similar change in corporate structure affecting the shares subject to the Award, the Award shall be appropriately adjusted to reflect such change, but only so far as is necessary to maintain the proportionate interest of the Participant and preserve, without exceeding, the value of such Award.

10.           Covenant Not To Compete, Solicit or Disclose Confidential Information.

(a)The Optionee acknowledges that the Participant is in possession of and has access to confidential information, including material relating to the business, products or services of the Company and that he or she will continue to have such possession and access during employment by the Company.  The Participant also acknowledges that the Company’s business, products and services are highly specialized and that it is essential that they be protected, and, accordingly, the Participant agrees that as partial consideration for the Award granted herein that should the Participant engage in any “Detrimental Activity,” as defined below, at any time during his or her employment or during a period of one year following his or her termination the Company shall be entitled to: (i) recover from the Optionee the value of any portion of the Award that has been paid; (ii) seek injunctive relief against the Participant; (iii) recover all damages, court costs, and attorneys’ fees incurred by the Company in enforcing the provisions of this Award, and (iv) set-off any such sums to which the Company is entitled hereunder against any sum which may be owed the Participant by the Company.

(b)           “Detrimental Activity” for the purposes hereof, other than with respect to involuntary termination without cause, termination in connection with or as a result of a “Change of Control” (as defined in Section 10(b) hereof), or termination following a reduction in job responsibilities, shall include: (i) rendering of services for any person or organization, or engaging directly or indirectly in any business, which is or becomes competitive with the Company; (ii) disclosing to anyone outside the Company, or using in other than the Company’s business, without prior written authorization from the Company, any confidential information including material relating to the business, products or services of the Company acquired by the Optionee during employment with the Company; (iii) soliciting, interfering, inducing, or attempting to cause any employee of the Company to leave his or her employment, whether done on Optionee’s own account or on account of any person, organization or business which is or becomes competitive with the Company, or (iv) directly or indirectly soliciting the trade or business of any customer of the Company.  “Detrimental Activity” for the purposes hereof with respect to involuntary termination without cause, termination in connection with or as a result of a “Change of Control”, or termination following a reduction in job responsibilities, shall include only part (ii) of the preceding sentence.

11.           Employment.  This Award Agreement is not an employment agreement.  Nothing contained herein shall be construed as creating any employment relationship.

12.           Notices.  All notices required or permitted under this Agreement shall be in writing and shall be delivered personally or by mailing the same by registered or certified mail postage prepaid, to the other party.  Notice given by mail as below set out shall be deemed delivered at the time and on the date the same is postmarked.

Notices to the Company should be addressed to:

Cameron International Corporation

1333 West Loop South, Suite 1700

Houston, Texas 77027

Attention:  Corporate Secretary

Telephone:  713-513-3322

13.           Tax Withholding.   Participant agrees that as a condition to the payment of the Award hereunder, the Participant must pay all applicable federal, state and local taxes or all applicable withholding taxes required by other laws and regulations that may be in effect as of the date of each such payment (“Required Tax Amounts”) to the Company.  Subject to any applicable law or regulation, Participant may elect to pay Required Tax Amounts to the Company: (1) in cash or by payroll deduction, or (2) by having any Shares issued under this Award be reduced by the number of Shares of the Fair Market Value of which equals the Required Tax Amounts.  Failure to make an election within the time specified will result in the Required Tax Amounts being paid pursuant to method (2) above, namely, by a reduction of shares issued.

14.           Section 409A.

(a)This Award is intended to comply with Section 409A of the Code and ambiguous provisions, if any, shall be construed in a manner that is compliant with or exempt from the application of Section 409A, as appropriate.  This Award shall not be amended or terminated in a manner that would cause the Award or any amounts payable under the Award to fail to comply with the requirements of Section 409A, to the extent applicable, and, further, the provisions of any purported amendment that may reasonably be expected to result in such non-compliance shall be of no force or effect with respect to the Award.  The Company shall neither cause nor permit any payment, benefit or consideration to be substituted for a benefit that is payable under this Award if such action would result in the failure of any amount that is subject to Section 409A to comply with the applicable requirements of Section 409A.  For purposes of Section 409A, each payment under this Award shall be deemed to be a separate payment.

(b)Notwithstanding any provision of the Award to the contrary, if the Participant is a “specified employee” within the meaning of Section 409A as of the date of the Participant’s termination of employment and the Company determines, in good faith, that immediate payments of any amounts or benefits would cause a violation of Section 409A, then any amounts or benefits which are payable under this Award upon the Participant’s “separation from service” within the meaning of Section 409A which (i) are subject to the provisions of Section 409A; (ii) are not otherwise excluded under Section 409A; and (iii) would otherwise be payable during the first six-month period following such separation from service shall be paid on the first business day next following the earlier of (1) the date that is six months and one day following the Date of termination or (2) the date of the participant’s death.

______________________________________

EX-10.33

Exhibit 10.33

CAMERON INTERNATIONAL CORPORATION

Restricted Stock Unit Award Agreement

(___________________, 20___)

This AWARD AGREEMENT (the “Award”) is between the employee listed on the attached Notice of Grant of Award (“Participant”) and Cameron International Corporation (the “Company”), in connection with the Restricted Stock Unit Award granted to Participant by the Company.

1.           Effective Date and Issuance of Restricted Stock.  The Company hereby grants to the Participant, on the terms and conditions set forth herein, an award of Restricted Stock Units (the “Award”).  This Restricted Stock Unit Award is a commitment to issue one Share of Cameron common stock (“Share”) for each share of restricted stock units specified on the Notice of Grant of Award, at vesting.  If Participant completes, signs, and returns one copy of this agreement (the “Award Agreement”) to the Company in Houston, Texas, U.S.A., this Award Agreement will be effective as of ____________, 20____.

2.           Terms Subject to the Plan.  This Award Agreement is expressly subject to the terms and provisions of the Company's Equity Incentive Plan (the "Plan"), as indicated in your Notice of Grant of Award.  A copy of the Plan is available on the Cameron Intranet under the Legal Section.  In the event there is a conflict between the terms of the Plan and this Award Agreement, the terms of the Plan shall control.

3.           Vesting Requirement.  The Award shall become vested, subject to the provisions of Section 4 below, in three installments as follows: one-third on ____________, 20____ , one-third on ____________, 20____ , and one-third on ____________, 20____ (the “Vesting Dates”).  All Restricted Stock Units which become vested shall be payable in accordance with Section 6 hereof.

4.           Termination of Employment.  Notwithstanding the foregoing:

(a) If the Participant’s employment voluntarily terminates at age 60 or older for reasons other than cause, and the Participant has at least ten years of service with the Company, any unvested Restricted Stock Units (RSU) shall continue to vest according to the terms of the RSU Award; except that if such termination occurs within one year from the effective date of the Award, the number of RSUs that will continue to vest shall be reduced to be proportionate to that portion of the year between such effective date and the date of termination and the balance of the Award shall be immediately cancelled. For purposes of the Award Agreement, “cause” shall mean the Participant has (1) engaged in gross negligence or willful misconduct in the performance of his duties and responsibilities respecting his position with the Company, (2) willfully refused, without proper legal reason, to perform the duties and responsibilities respecting his position with the Company, (3) breached any material policy or code of conduct established by the Company and affecting the Participant, (4) engaged in conduct that Participant knows or should know is materially injurious to the Company, (5) been convicted of a felony or a misdemeanor involving moral turpitude, or (6) engaged in an act of dishonest or impropriety which materially impairs the Participant’s effectiveness in his position with the Company.

(b)  If the Participant’s employment terminates by reason of the death or long-term disability of the Participant, the Award shall be immediately vested in full as of the date of such termination; except that if such termination occurs within one year from the effective date of the Award, the number of RSUs that will vest in full shall be reduced to be proportionate to that portion of the year between the effective date of the Award and the date of termination and the balance of the Award shall be immediately cancelled.  For purposes of this Award Agreement, long-term disability shall mean that the participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months.

(c)  If the Participant’s employment terminates by reason of a workforce reduction, as so designated by the Company, the Award shall continue to vest according to the terms of the award; except that if such termination occurs within one year from the effective date of the Award, the number of RSUs that will vest in full shall be reduced to be proportionate to that portion of the year between such effective date and the date of termination and the balance of the Award shall be immediately cancelled.

(d)  If the Participant’s employment terminates for reasons other than for those addressed in the previous three subsections, no RSUs shall vest for the benefit of the Participant after the termination date.

5.           Change of Control.

(a)Notwithstanding Section 11.2 of the Plan, upon a “Change of Control” of the Company, the Award granted hereunder shall immediately and fully vest.

(b)“Change of Control” for the purposes of this Award, shall mean the earliest date on which:

(i)   any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s outstanding voting securities, other than through the purchase of voting securities directly from the Company through a private placement; or

(ii)   individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of the directors comprising the Incumbent Board shall from and after such election be deemed to be a member of the Incumbent Board; or

(iii)   a merger or consolidation involving the Company or its stock, or an acquisition by the Company, directly or indirectly or through one or more subsidiaries, of another entity or its stock or assets in exchange for the stock of the Company unless, immediately following such transaction less than 50% of the then outstanding voting securities of the surviving or resulting corporation or entity will be (or is) then beneficially owned, directly or indirectly, by all or substantially of the individuals and entities who were the beneficial owners of the Company’s outstanding voting securities immediately prior to such transaction (treating, for purposes of determining whether the 50% continuity test is met, any ownership of the voting securities of the surviving or resulting corporation or entity that results from a stockholder’s ownership of the stock of, or their ownership interest in, the corporation or other entity with which the Company is merged or consolidated as not owned by persons who were beneficial owners of the Company’s outstanding voting securities immediately prior to the transaction).

(iv)   a tender offer or exchange offer is made and consummated by a Person other than the Company for the ownership of 20% or more of the voting securities of the Company then outstanding; or

(v)   all or substantially all of the assets of the Company are sold or transferred to a Person as to which (a) the Incumbent Board does not have authority (whether by law or contract) to directly control the use or further disposition of such assets and (b) the financial results of the Company and such Person are not consolidated for financial reporting purposes.

Anything else in this definition to the contrary notwithstanding, no Change of Control shall be deemed to have occurred by virtue of any transaction which results in the Participant, or a group of Persons which includes the Participant, acquiring more than 20% of either the combined voting power of the Company’s outstanding voting securities or the voting securities of any other corporation or entity which acquires all or substantially all of the assets of the Company, whether by way of merger, consolidation, sale of such assets or otherwise.

6.           Payment of Award.

(a)Employed through Vesting Date.If the Participant is employed with the Company through the Vesting Date, payment of his vested Restricted Stock Units shall be made within 30 days following the Vesting Date.

(b)Employment Terminates Prior to Vesting Date.

i.   If the Participant’s employment terminates by reason of death or long-term disability in accordance with Section 4(b), hereof, prior to the Vesting Date, the Award, as accelerated pursuant to Section 4 and/or 5 hereof, shall be paid within 30 days of such termination.

ii.   If the participant voluntarily terminates employment with the Company in accordance with Section 4(a), the vested portion of the Award shall be paid within 30 days following the Vesting Date.

iii. If the Participant terminates employment with the Company by reason of a workforce reduction in accordance with Section 4(c), the vested portion of his/her Award shall be paid within 30 days following the Vesting Date.

(c)Change in Control.  Upon the occurrence of a Change in Control that also constitutes a “change in control event” within the meaning of U.S. Department of Treasury Regulation Section 1.409A-3(i)(5) (a “Section 409A CIC”), Participant’s vested Award shall be paid within 30 days following such Section 409A CIC.  Upon the occurrence of a Change in control that is not a Section 409A CIC, Participant’s vested award shall be paid within 30 days following the Vesting Date.

The Shares which the Award entitles the Participant to receive shall be paid to the Participant, after deduction of the number of Shares the Fair Market Value, as defined in the Plan, of which equals the applicable minimum statutory withholding taxes.

7.           Restrictions on Transfer.  Except as provided by the Plan, neither this Restricted Stock Unit Award nor any Restricted Stock Units covered hereby may be sold, assigned, transferred, encumbered, hypothecated or pledged by the Participant, other than to the Company as a result of forfeiture of the units as provided herein.

8.           No Voting Rights.   The Restricted Stock Units granted pursuant to this Award, whether or not vested, will not confer any voting rights upon the Participant, unless and until the Award is paid in Shares.

9.           Changes in Capitalization.The Restricted Stock Units under this Award shall be subject to the provisions of the Plan relating to adjustments to corporate capitalization, provided, however, that in the event of any reorganization, recapitalization, dividend or distribution (whether in cash, shares or other property, other than a regular cash dividend), stock split, reverse stock split or other similar change in corporate structure affecting the shares subject to the Award, the Award shall be appropriately adjusted to reflect such change, but only so far as is necessary to maintain the proportionate interest of the Participant and preserve, without exceeding, the value of such Award.

10.           Covenant Not To Compete, Solicit or Disclose Confidential Information.

(a)The Optionee acknowledges that the Participant is in possession of and has access to confidential information, including material relating to the business, products or services of the Company and that he or she will continue to have such possession and access during employment by the Company.  The Participant also acknowledges that the Company’s business, products and services are highly specialized and that it is essential that they be protected, and, accordingly, the Participant agrees that as partial consideration for the Award granted herein that should the Participant engage in any “Detrimental Activity,” as defined below, at any time during his or her employment or during a period of one year following his or her termination the Company shall be entitled to: (i) recover from the Optionee the value of any portion of the Award that has been paid; (ii) seek injunctive relief against the Participant; (iii) recover all damages, court costs, and attorneys’ fees incurred by the Company in enforcing the provisions of this Award, and (iv) set-off any such sums to which the Company is entitled hereunder against any sum which may be owed the Participant by the Company.

(b)           “Detrimental Activity” for the purposes hereof, other than with respect to involuntary termination without cause, termination in connection with or as a result of a “Change of Control” (as defined in Section 10(b) hereof), or termination following a reduction in job responsibilities, shall include: (i) rendering of services for any person or organization, or engaging directly or indirectly in any business, which is or becomes competitive with the Company; (ii) disclosing to anyone outside the Company, or using in other than the Company’s business, without prior written authorization from the Company, any confidential information including material relating to the business, products or services of the Company acquired by the Optionee during employment with the Company; (iii) soliciting, interfering, inducing, or attempting to cause any employee of the Company to leave his or her employment, whether done on Optionee’s own account or on account of any person, organization or business which is or becomes competitive with the Company, or (iv) directly or indirectly soliciting the trade or business of any customer of the Company.  “Detrimental Activity” for the purposes hereof with respect to involuntary termination without cause, termination in connection with or as a result of a “Change of Control”, or termination following a reduction in job responsibilities, shall include only part (ii) of the preceding sentence.

11.           Employment.  This Award Agreement is not an employment agreement.  Nothing contained herein shall be construed as creating any employment relationship.

12.           Notices.  All notices required or permitted under this Agreement shall be in writing and shall be delivered personally or by mailing the same by registered or certified mail postage prepaid, to the other party.  Notice given by mail as below set out shall be deemed delivered at the time and on the date the same is postmarked.

Notices to the Company should be addressed to:

Cameron International Corporation

1333 West Loop South, Suite 1700

Houston, Texas 77027

Attention:  Corporate Secretary

Telephone:  713-513-3322

13.           Tax Withholding.   Participant agrees that as a condition to the payment of the Award hereunder, the Participant must pay all applicable federal, state and local taxes or all applicable withholding taxes required by other laws and regulations that may be in effect as of the date of each such payment (“Required Tax Amounts”) to the Company.  Subject to any applicable law or regulation, Participant may elect to pay Required Tax Amounts to the Company: (1) in cash or by payroll deduction, or (2) by having any Shares issued under this Award be reduced by the number of Shares of the Fair Market Value of which equals the Required Tax Amounts.  Failure to make an election within the time specified will result in the Required Tax Amounts being paid pursuant to method (2) above, namely, by a reduction of shares issued.

14.           Section 409A.

(a)This Award is intended to comply with Section 409A of the Code and ambiguous provisions, if any, shall be construed in a manner that is compliant with or exempt from the application of Section 409A, as appropriate.  This Award shall not be amended or terminated in a manner that would cause the Award or any amounts payable under the Award to fail to comply with the requirements of Section 409A, to the extent applicable, and, further, the provisions of any purported amendment that may reasonably be expected to result in such non-compliance shall be of no force or effect with respect to the Award.  The Company shall neither cause nor permit any payment, benefit or consideration to be substituted for a benefit that is payable under this Award if such action would result in the failure of any amount that is subject to Section 409A to comply with the applicable requirements of Section 409A.  For purposes of Section 409A, each payment under this Award shall be deemed to be a separate payment.

(b)Notwithstanding any provision of the Award to the contrary, if the Participant is a “specified employee” within the meaning of Section 409A as of the date of the Participant’s termination of employment and the Company determines, in good faith, that immediate payments of any amounts or benefits would cause a violation of Section 409A, then any amounts or benefits which are payable under this Award upon the Participant’s “separation from service” within the meaning of Section 409A which (i) are subject to the provisions of Section 409A; (ii) are not otherwise excluded under Section 409A; and (iii) would otherwise be payable during the first six-month period following such separation from service shall be paid on the first business day next following the earlier of (1) the date that is six months and one day following the Date of termination or (2) the date of the participant’s death.

______________________________________

EX-13.1

Management’s Discussion and Analysis of Financial Condition and

Results of Operations of Cameron International Corporation

The following discussion of Cameron International Corporation’s (the Company or Cameron) historical results of operations and financial condition should be read in conjunction with the Company’s consolidated financial statements and notes thereto included elsewhere in this Annual Report. All per share amounts included in this discussion are based on diluted shares outstanding.

Overview

Cameron is a provider of flow equipment products, systems and services to worldwide oil, gas and process industries. The Company’s operations are organized into three business segments — Drilling & Production Systems (DPS), Valves & Measurement (V&M) and Compression Systems (CS). 

Based upon the amount of equipment installed worldwide and available industry data, DPS is a leading provider of systems and equipment used to control pressures, direct flows of oil and gas wells and separate oil and gas from impurities. DPS’s products are employed in a wide variety of operating environments including basic onshore fields, highly complex onshore and offshore environments, deepwater subsea applications and ultra-high temperature geothermal operations. DPS’s products include surface and subsea production systems, blowout preventers (BOPs), drilling and production control systems, oil and gas separation equipment, gas conditioning units, membrane separation systems, water processing systems, block valves, gate valves, actuators, chokes, wellheads, manifolds, drilling riser and aftermarket parts and services. DPS’s customers include oil and gas majors, national oil companies, independent producers, engineering and construction companies, drilling contractors, rental companies and geothermal energy producers. Based upon the amount of equipment installed worldwide and available industry data, V&M is a leading provider of valves and also supplies measurement systems primarily used to control, direct and measure the flow of oil and gas as they are moved from individual wellheads through flow lines, gathering lines and transmission systems to refineries, petrochemical plants and industrial centers for processing. V&M’s products include gate valves, ball valves, butterfly valves, Orbit® valves, double block and bleed valves, plug valves, globe valves, check valves, actuators, chokes and aftermarket parts and services as well as measurement products such as totalizers, turbine meters, flow computers, chart recorders, ultrasonic flow meters and sampling systems. V&M’s customers include oil and gas majors, independent producers, engineering and construction companies, pipeline operators, drilling contractors and major chemical, petrochemical and refining companies. CS provides reciprocating and integrally geared centrifugal compression equipment and related aftermarket parts and services. The Company’s compression equipment is used by gas transmission companies, compression leasing companies, oil and gas producers and processors, independent power producers, petrochemical and refining companies, natural gas processing companies, durable goods manufacturers, utilities, air separation and chemical companies. 

Revenues for the years ended December 31, 2009, 2008 and 2007 were generated from shipments to the following regions of the world (dollars in millions):

Region	2009		2008		2007
North America	$	2,032.5	$	2,066.7	$	1,741.0
South America		504.3		438.6		307.7
Asia, including Middle East		1,042.1		1,097.8		970.9
Africa		684.5		696.5		614.9
Europe		789.7		1,267.7		947.7
Other		170.1		281.6		84.2
	$	5,223.2	$	5,848.9	$	4,666.4

In addition to the historical data contained herein, this Annual Report, including the information set forth in the Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this report, may include forward-looking statements regarding future market strength, customer spending and order levels, revenues and earnings of the Company, as well as expectations regarding equipment deliveries, margins, profitability, the ability to control and reduce raw material, overhead and operating costs, cash generated from operations, capital expenditures and the use of existing cash balances and future anticipated cash flows made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company’s actual results may differ materially from those described in any forward-looking statements. Any such statements are based on current expectations of the Company’s performance and are subject to a variety of factors, some of which are not under the control of the Company, which can affect the Company’s results of operations, liquidity or financial condition. Such factors may include overall demand for, and pricing of, the Company’s products; the size and timing of orders; the Company’s ability to successfully execute large subsea and drilling projects it has been awarded; the possibility of cancellations of orders in backlog; the Company’s ability to convert backlog into revenues on a timely and profitable basis; the impact of acquisitions the Company has made or may make; changes in the price of (and demand for) oil and gas in both domestic and international markets; raw material costs and availability; political and social issues affecting the countries in which the Company does business; fluctuations in currency markets worldwide; and variations in global economic activity. In particular, current and projected oil and gas prices historically have generally directly affected customers’ spending levels and their related purchases of the Company’s products and services. As a result, changes in oil and gas price expectations may impact the demand for the Company’s products and services and the Company’s financial results due to changes in cost structure, staffing and spending levels the Company makes in response thereto. See additional factors discussed in “Factors That May Affect Financial Condition and Future Results” contained herein.

29

Because the information herein is based solely on data currently available, it is subject to change as a result of, among other things, changes in conditions over which the Company has no control or influence, and should not therefore be viewed as assurance regarding the Company’s future performance. Additionally, the Company is not obligated to make public disclosure regarding such changes unless required under applicable disclosure rules and regulations. 

The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to costs to be incurred on projects where the Company utilizes accounting rules for construction-type and production-type contracts as promulgated in the Financial Accounting Standards Board’s Accounting Standards Codification (FASB ASC) for revenue recognition, warranty obligations, bad debts, inventories, intangible assets, assets held for sale, exposure to liquidated damages, income taxes, pensions and other postretirement benefits, other employee benefit plans, and contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that the Company believes are reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions.

Critical Accounting Policies

The Company believes the following critical accounting policies affect the more significant judgments and estimates used in the preparation of its consolidated financial statements. These policies and the other sections of the Company’s Management’s Discussion and Analysis of Results of Operations and Financial Condition have been reviewed with the Company’s Audit Committee of the Board of Directors. 

Revenue Recognition — The Company generally recognizes revenue, net of sales taxes, once the following four criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery of the equipment has occurred or services have been rendered, (iii) the price of the equipment or service is fixed and determinable and (iv) collectibility is reasonably assured. For certain engineering, procurement and construction-type contracts, which typically include the Company’s subsea and drilling systems and processing equipment contracts, revenue is recognized in accordance with the FASB ASC’s accounting rules relating to construction-type and production-type contracts.  Under this guidance, the Company recognizes revenue on these contracts using a units-of-completion method. Under the units-of-completion method, revenue is recognized once the manufacturing process is complete for each unit specified in the contract with the customer, including customer inspection and acceptance, if required by the contract. This method requires the Company to make estimates regarding the total costs of the project, which impacts the amount of gross margin the Company recognizes in each reporting period.  The Company routinely, and at least quarterly, reviews its estimates relating to total estimated contract profit or loss and recognizes changes in those estimates as they are determined.  Revenue associated with change orders is not included in the calculation of estimated profit on a contract until approved by the customer.  Costs associated with unapproved change orders are deferred if (i) the customer acknowledges a change has occurred and (ii) it is probable that the costs will be recoverable from the customer.  If these two conditions are not met, the costs are included in the calculation of estimated profit on the project.  Anticipated losses on these contracts are recorded in full in the period in which they become evident.

Factors that may affect future project costs and margins include the ability to properly execute the engineering and design phases consistent with our customers’ expectations, production efficiencies obtained, and the availability and costs of labor, materials and subcomponents.  These factors can significantly impact the accuracy of the Company’s estimates and can materially impact the Company’s future period earnings.  Approximately 28%, 28% and 21% of the Company's revenues for the years ended December 31, 2009, 2008 and 2007, respectively, were recognized under accounting rules for construction-type and production-type contracts.

Allowance for Doubtful Accounts — The Company maintains allowances for doubtful accounts for estimated losses that may result from the inability of its customers to make required payments. Such allowances are based upon several factors including, but not limited to, historical experience, the length of time an invoice has been outstanding, responses from customers relating to demands for payment and the current and projected financial condition of specific customers. Were the financial condition of a customer to deteriorate, resulting in an impairment of its ability to make payments, additional allowances may be required. See Note 4 of the Notes to Consolidated Financial Statements for additional information relating to the Company’s allowance for doubtful accounts. 

Inventories — The Company’s aggregate inventories are carried at cost or, if lower, net realizable value. Inventories generally located in the United States and Canada are carried on the last-in, first-out (LIFO) method. Inventories generally located outside of the United States and Canada are carried on the first-in, first-out (FIFO) method. The Company provides a reserve for estimated inventory obsolescence or excess quantities on hand equal to the difference between the cost of the inventory and its estimated realizable value. The future estimated realizable value of inventory is generally based on the historical usage of such inventory. The Company ages its inventory with no recent demand and applies various valuation factors based on the number of years since the last demand from customers for such material. If future conditions cause a reduction in the Company’s current estimate of realizable value, due to a decrease in customer demand, a drop in commodity prices or other market-related factors that could influence demand for particular products, additional provisions may be required. Additional information relating to the Company’s allowance for obsolete and excess inventory may be found in Note 5 of the Notes to Consolidated Financial Statements. 

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Goodwill— The Company reviews the carrying value of goodwill in accordance with accounting rules on impairment of goodwill as contained in the FASB’s ASC which requires that the Company estimate the fair value of each of its reporting units annually and compare such amounts to their respective book values to determine if an impairment of goodwill is required. Generally, this review is conducted during the first quarter of each annual period.  Based upon the most recent annual evaluation, no impairment of goodwill was required.  At December 31, 2009, goodwill recorded by the Company was $1,441.6 million.  Should the Company’s estimate of the fair value of any of its reporting units decline dramatically in future periods due to changes in customer demand, market activity levels, interest rates or other factors which would impact future earnings and cash flow or market valuation levels of the Company or any of its reporting units, an impairment of goodwill could be required. Additional information relating to the Company’s goodwill may be found in Note 6 of the Notes to Consolidated Financial Statements. 

Product Warranty— The Company provides for the estimated cost of product warranties either at the time of sale based upon historical experience, or, in some cases, when specific warranty problems are encountered. Should actual product failure rates or repair costs differ from the Company’s current estimates, or should the Company reach a settlement for an existing warranty claim in an amount that is different from what has been previously estimated, revisions to the estimated warranty liability would be required. See Note 7 of the Notes to Consolidated Financial Statements for additional details surrounding the Company’s warranty accruals. 

Contingencies— The Company accrues for costs relating to litigation, including litigation defense costs, claims and other contingent matters, including liquidated damage liabilities, when such liabilities become probable and reasonably estimable. Such estimates may be based on advice from third parties, amounts specified by contract, amounts designated by legal statute or management’s judgment, as appropriate. Revisions to contingent liability reserves are reflected in income in the period in which different facts or information become known or circumstances change that affect the Company’s previous assumptions with respect to the likelihood or amount of loss. Amounts paid upon the ultimate resolution of contingent liabilities may be materially different from previous estimates and could require adjustments to the estimated reserves to be recognized in the period such new information becomes known. 

Deferred Tax Assets — The Company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. The Company has considered all available evidence in assessing the need for valuation allowances, including future taxable income and ongoing prudent and feasible tax planning strategies. Accordingly, the Company has recorded valuation allowances against certain of its deferred tax assets as of December 31, 2009. In the event the Company were to determine that it would not be able to realize all or a part of its deferred tax assets in the future, an adjustment to the valuation allowances against these deferred tax assets would be charged to income in the period such determination was made. 

The Company also considers all unremitted earnings of its foreign subsidiaries, except certain amounts primarily earned before 2003, certain amounts earned during 2009, certain amounts earned by NATCO, and amounts previously subjected to tax in the U.S., to be permanently reinvested. Should the Company change its determination of earnings that it anticipates are to be remitted, it would be required to change the amount of deferred income taxes that are currently recorded. 

Derivative Financial Instruments— The Company recognizes all derivative financial instruments as assets and liabilities on a gross basis and measures them at fair value. Under the accounting requirements on derivatives and hedging, as contained in the FASB’s ASC, hedge accounting is only applied when the derivative is deemed highly effective at offsetting changes in anticipated cash flows of the hedged item or transaction. Changes in fair value of derivatives that are designated as cash flow hedges are deferred in accumulated other elements of comprehensive income until the underlying transactions are recognized in earnings, at which time any deferred hedging gains or losses are also recorded in earnings on the same line as the hedged item. Any ineffective portion of the change in the fair value of a derivative used as a cash flow hedge is recorded in earnings as incurred. The amounts recorded in earnings from ineffectiveness for the years ended December 31, 2009, 2008 and 2007 have not been material. The Company may at times also use forward contracts to hedge foreign currency assets and liabilities. These contracts are not designated as hedges. Therefore, the changes in fair value of these contracts are recognized in earnings as they occur and offset gains or losses on the related asset or liability.  At December 31, 2009, the Company also has in place fixed-to-floating rate interest rate swaps on a portion of its long-term fixed rate debt.  Changes in the fair value of these contracts are reflected as an increase or decrease in interest expense as incurred.

The determination of the effectiveness or ineffectiveness of many of the Company’s derivative contracts that are accounted for as cash flow hedges is dependent to a large degree on estimates of the amount and timing of future anticipated cash flows associated with large projects or plant-wide inventory purchasing programs.  These estimates may change over time as circumstances change or may vary significantly from final actual cash flows.  Changes in these estimates that result in the derivative contracts no longer effectively offsetting the expected or actual changes in the anticipated cash flows could impact the amount of the change in the fair value of the derivative contracts that must be recognized immediately in earnings each period.   At December 31, 2009, the Company had a net liability of $2.3 million recorded in its Consolidated Balance Sheet reflecting the fair value of its open derivative contracts at that date and expects approximately $8.4 million (net of tax) of accumulated other elements of comprehensive income to be recognized as a reduction in earnings during 2010.

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Pension and Postretirement Benefits Accounting — The Company follows the accounting requirements on retirement plans as contained in the FASB’s ASC with regard to recognition of the funded status of its defined benefit pension and other postretirement benefit plans and in determining the amount of its net periodic benefit costs for the years ended December 31, 2009, 2008 and 2007. The measurement date for all of the Company’s plans was December 31, 2009.  The assumptions used in calculating the pension amounts recognized in the Company’s consolidated financial statements included discount rates, interest costs, expected return on plan assets, retirement and mortality rates, inflation rates, salary growth and other factors. The Company based the discount rate assumptions of its defined benefit pension plan in the United Kingdom on the average yield at December 31, 2009 of a hypothetical high-quality bond portfolio (rated AA- or better) with maturities that approximately matched the estimated cash flow needs of the plan.  The Company’s inflation assumption was based on an evaluation of external market indicators. The expected rate of return on plan assets was based on historical experience and estimated future investment returns taking into consideration anticipated asset allocations, investment strategy and the views of various investment professionals.  During 2009, the plan assets increased in value by approximately $23.5 million.  The difference between this actual return and an estimated growth in the value of those assets of $13.3 million will be deferred in accumulated other elements of comprehensive income and amortized as a reduction to expense over the remaining service life of the plan participants. Retirement and mortality rates were based primarily on actuarial tables that are thought to approximate actual plan experience. In accordance with the accounting requirements for retirement plans, actual results that differ from these assumptions are recorded in accumulated other elements of comprehensive income and amortized over future periods and, therefore, generally affect recognized expense and the recorded obligation in future periods. While the Company believes the assumptions used are appropriate, differences in actual experience or changes in assumptions may affect the Company’s pension obligations and future expense. 

During 2007, the Company announced its intention to terminate its U.S. defined benefit pension plans. In connection with a curtailment of future benefits from these plans, effective as of December 31, 2007, and an initial settlement during 2007 of certain existing obligations of the plans relating primarily to participants who were no longer active employees at that time, the Company recorded a $35.7 million charge for the year in its 2007 consolidated results of operations. A final charge of approximately $26.2 million was recognized in 2008, in connection with the settlement of the remaining obligations of the plans, primarily to participants who were active employees of the Company during 2008.

The following table illustrates the sensitivity to a change in certain assumptions used in (i) the calculation of pension expense for the year ending December 31, 2010 and (ii) the calculation of the projected benefit obligation (PBO) at December 31, 2009 for the Company’s most significant remaining pension plan, the United Kingdom pension plan:

(dollars in millions)	Increase (decrease) in 2010 pre-tax pension expense			Increase (decrease) in PBO at December 31, 2009
Change in Assumption:
25 basis point decrease in discount rate	$	1.3		$	13.5
25 basis point increase in discount rate	$	(1.5	)	$	(11.8	)
25 basis point decrease in expected return on assets	$	0.5		$	−
25 basis point increase in expected return on assets	$	(0.7	)	$	−

Financial Summary

The following table sets forth the consolidated percentage relationship to revenues of certain income statement items for the periods presented: 

	Year Ended December 31,
	2009			2008			2007
Revenues		100	%		100.0	%		100.0	%
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown separately below)		67.8			70.6			69.5
Selling and administrative expenses		13.7			11.4			12.4
Depreciation and amortization		3.0			2.3			2.4
Interest income		(0.1	)		(0.5	)		(0.7	)
Interest expense		1.8			1.2			0.9
Restructuring expense and acquisition related costs		1.5			−			−
Charge for pension plan termination		−			0.4			0.8
Total costs and expenses		87.7			85.4			85.3
Income before income taxes		12.3			14.6			14.7
Income tax provision		(3.2	)		(4.7	)		(4.2	)
Net income		9.1	%		9.9	%		10.5	%

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Results of Operations

Consolidated Results — 2009 Compared to 2008

The Company’s net income for 2009 totaled $475.5 million, or $2.11 per diluted share, compared to $580.7 million, or $2.54 per diluted share in 2008.  The decreased level of earnings in each of the Company’s business segments, the decline in interest income earned on short-term investments as well as higher interest expense and higher restructuring and acquisition related costs were the primary drivers in the 16.9% decrease in earnings per share for 2009 as compared to 2008.

The results for 2009 included a pre-tax charge of $81.6 million related to costs incurred in connection with the November 2009 acquisition of NATCO Group, Inc. (NATCO), as well as various world-wide restructuring activities taken to ensure the Company’s cost structure is in line with the Company’s expectation of activity levels.  The results for 2008 included a final pre-tax charge of $26.2 million associated with a decision made in 2007 to terminate the Company’s U.S. defined benefit pension plans.

Income before income taxes in 2009 as compared to 2008 for the DPS, V&M and CS segments is discussed in more detail below.

Revenues

Revenues for 2009 totaled $5.2 billion, a decrease of $625.6 million, or 10.7%, from $5.8 billion in 2008. The decline in revenues primarily reflected the weakness in global market conditions during 2009.  These decreases were partially offset by approximately $124.6 million of revenues added during 2009 from newly acquired businesses.

During 2009, nearly 43% of the Company’s third party revenue was reflected in entities with functional currencies other than the U.S. dollar.  In translating these entities’ functional currency income statements to U.S. dollars for consolidation purposes, an increase in the value of the U.S. dollar compared to the applicable functional currency will result in a lower amount of U.S. dollar revenues and costs for the same amount of functional currency revenues and costs.  The net effects of a stronger U.S. dollar against many of these other foreign currencies accounted for approximately 19% of the total decrease in the Company’s revenues for 2009 as compared to 2008.

A further discussion of revenues by segment may be found below. 

Cost and Expenses

Cost of sales (exclusive of depreciation and amortization) for 2009 totaled $3.5 billion, a decrease of $587.8 million, or 14.2%, from $4.1 billion in 2008.  As a percent of revenues, cost of sales (exclusive of depreciation and amortization) decreased from 70.6% in 2008 to 67.8% in 2009.  References to margins in this Management’s Discussion and Analysis of Financial Condition and Results of Operations refers to Revenues minus Cost of Sales (exclusive of depreciation and amortization) as shown separately on the Company’s Consolidated Results of Operations statement for each of the three years in the period ended December 31, 2009.  The decrease in the ratio of cost of sales to revenues was due to improved margins in the DPS segment, primarily related to major drilling, subsea and process systems projects (approximately a 3.3 percentage-point decrease in the ratio).  This was partially offset by a mix shift involving V&M and CS segment sales which added approximately 0.6 percentage-points to the ratio of cost of sales to revenues.

Selling and administrative expenses for 2009 totaled $715.6 million as compared to $668.3 million, an increase of $47.3 million, or 7.1%.  As a percentage of revenues, selling and administrative expenses increased from 11.4% in 2008 to 13.7% in 2009.  Nearly 20% of the increase was attributable to the incremental impact on costs from newly acquired businesses in the past year, partially offset by the impact of a stronger U.S. dollar on the translation of selling and administrative expenses incurred by the Company’s foreign subsidiaries.  Excluding these effects, the remaining increase was mainly attributable to (i) provisions for doubtful accounts totaling $9.7 million relating to uncertainties regarding collection of receivables, (ii) a $7.5 million write-down related to a receivable associated with the 2006 sale of the Company’s interest in its Iranian joint venture and (iii) increased advisory and litigation costs of approximately $16.5 million.

Depreciation and amortization expense totaled $156.6 million in 2009, an increase of $24.5 million, or 18.6%, from $132.1 million in 2008.  Depreciation expense increased $16.0 million year-over-year as a result of increased capital spending, primarily related to new and expanded facilities in various international locations and for new machinery and equipment.  Amortization expense increased $8.5 million primarily due to additional amortization from certain acquired intangible assets as well as higher capital spending on the Company’s enterprise-wide information technology assets.

Interest income declined by $21.5 million, or 78.6%, from $27.3 million in 2008 to $5.8 million in 2009 due primarily to lower short-term interest rates during 2009 as compared to 2008.

Interest expense totaled $92.4 million in 2009 as compared to $70.3 million in 2008, an increase of $22.1 million.  The increase is primarily due to $22.3 million of additional interest associated with the issuance of $450.0 million of 6.375% senior notes and $300.0 million of 7.0% senior notes in June 2008.

  During 2009, the Company incurred a total of $81.6 million of restructuring expenses including (i) $62.2 million associated with various world-wide restructuring activities taken to ensure the Company’s cost structure is in line with the Company’s expectation of activity levels and (ii) $19.4 million of costs incurred in connection with the November 2009 acquisition of NATCO.

During 2007, the Company announced its intention to terminate its U.S. defined benefit pension plans, effective as of December 31, 2007.  In connection with the plans’ curtailment and the settlement during 2007 of a portion of the existing plan obligations associated with participants who were no longer active employees of the Company at that time, an initial settlement charge of $35.7 million was taken during the year ended December 31, 2007.   A final settlement charge of $26.2 million was taken during the year ended December 31, 2008 associated with the settlement of all remaining plan obligations associated with participants who were active employees of the Company during 2008 and any others who were not covered by the initial settlement of plan obligations made in 2007.

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The income tax provision for 2009 was $167.3 million compared to $270.7 million in 2008.  The effective tax rates for 2009 and 2008 were 26.0% and 31.8%, respectively.   The tax provision for 2009 was reduced for certain discrete items totaling $21.1 million associated mainly with a net reduction in reserves for uncertain tax positions primarily related to settlements with tax authorities, reductions in valuation allowances related to losses incurred in prior years and certain other adjustments.  Absent these items, the effective tax rate for 2009 would have been 29.3%.  The decrease in the effective tax rate before discrete items for 2009 as compared to 2008, was due primarily to changes in the Company’s international structure implemented during 2009.

Segment Results — 2009 Compared to 2008

Information relating to results by segment may be found in Note 15 of the Notes to Consolidated Financial Statements.

DPS Segment

	Year Ended December 31,				Decrease
(dollars in millions)	2009		2008		$			%
Revenues	$	3,406.1	$	3,736.7	$	(330.6	)	(8.8	)%
Income before income taxes	$	631.5	$	639.9	$	(8.4	)	(1.3	)%

DPS segment revenues for 2009 totaled $3.4 billion, a decrease of $330.6 million, or 8.8%, compared to $3.7 billion in 2008.  Over two-thirds of the decrease in segment sales was the result of an 18% decrease in surface equipment sales.  Surface equipment sales decreased in all major regions of the world, except Latin America, due to the impact of lower commodity prices on activity levels.  Sales of drilling equipment decreased 9% primarily as a result of lower deliveries for major rig construction projects in 2009 as compared to 2008 and lower demand for drilling riser.  Subsea equipment sales declined 4% due mainly to lower shipments and activity levels for large projects offshore Egypt and Western Australia partially offset by increased shipments and activity related to a large field offshore Eastern Canada.  Sales related to process systems applications increased 17%, all of which was due to the effect of incremental sales from newly acquired businesses.

Income before income taxes for 2009 totaled $631.5 million as compared to $639.9 million in 2008, a decrease of $8.4 million, or 1.3%.  Cost of sales as a percent of revenues decreased from 72.6% in 2008 to 68.1% in 2009.  The decrease was due to (i) a reduction of 3.5 percentage-points in the ratio of cost of sales to revenues in the drilling and subsea product lines due largely to improved margins on major rig construction and subsea development projects and (ii) an improvement in margins on projects related to process systems applications which resulted in a 0.9 percentage-point decrease in the ratio of cost of sales to revenues.

Selling and administrative costs for 2009 totaled $363.6 million, an increase of $51.0 million, or 16.3%, from $312.6 million in 2008.  Selling and administrative expenses as a percent of revenues increased from 8.4% in 2008 to 10.7% in 2009.  The increase was mainly due to (i) a $7.1 million increase in the provision for doubtful accounts, (ii) a $7.5 million write-down related to a receivable associated with the 2006 sale of the Company’s interest in its Iranian joint venture, (iii) higher advisory and litigation costs of $13.6 million and (iv) higher employee-related costs due to headcount increases, primarily in the segment’s subsea business, and the incremental impact of costs added from newly acquired businesses.

Depreciation and amortization expense for 2009 was $90.3 million, an increase of $19.8 million, or 28.1%, from $70.5 million in 2008.  Nearly 44% of the increase was attributable to the incremental impact of costs added from newly acquired businesses with the remainder largely due to increased capital spending on new and expanded facilities in Romania, Malaysia, Brazil, Singapore and Azerbaijan.

V&M Segment

	Year Ended December 31,				Decrease
(dollars in millions)	2009		2008		$			%
Revenues	$	1,194.7	$	1,473.2	$	(278.5	)	(18.9	)%
Income before income taxes	$	211.3	$	301.4	$	(90.1	)	(29.9	)%

V&M segment revenues totaled $1.2 billion for 2009, a decrease of $278.5 million, or 18.9%, from $1.5 billion in 2008.  Excluding the incremental impact of additional revenues from new acquisitions during the past year, revenues for the segment’s legacy businesses declined 20.1% in 2009.  Nearly 59% of the decrease in V&M’s sales was due to a 42% decline in sales of distributed valves from the record levels of 2008 due to weakness in the North American markets during much of 2009.  Sales of engineered valves decreased 11% due largely to market weakness in Canada and the United States and customer delays on pipeline construction projects. Lower awards for refinery and petrochemical projects contributed to a 9% decline in sales of process valves.  Excluding the effects of new acquisitions during 2009, sales of measurement products declined 14% in 2009 as compared to 2008 due largely to weaker market conditions in the United States, Canada and the United Kingdom.

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Income before income taxes totaled $211.3 million in 2009, a decrease of $90.1 million, or 29.9%, from $301.4 million in 2008.  Cost of sales as a percentage of revenues decreased from 65.7% in 2008 to 65.4% in 2009.  The decrease in this ratio was due primarily to a mix shift toward a greater proportion of sales of higher-margin engineered valves, process valves and aftermarket parts and services (which reduced the cost of sales to revenue ratio by 3.2 percentage-points) partially offset by the impact of lower distributed product margins, which increased the cost of sales to revenues ratio by 2.8 percentage-points.

Selling and administrative expenses for 2009 totaled $166.4 million as compared to $171.4 million in 2008, a decrease of $5.0 million, or 3.0%.  Absent the incremental impact of additional costs added through new acquisitions during the past year, selling and administrative expenses from the segment’s legacy businesses declined $11.4 million or 6.6% from 2008.  The majority of this decrease, which was concentrated largely in the segment’s engineered and distributed valves businesses, was due to the effects of lower employee-related costs mainly attributable to plant closures, headcount reductions and other spending controls.

Depreciation and amortization in the V&M segment increased $4.0 million, or 12.5%, from $32.2 million in 2008 to $36.2 million in 2009. Approximately $0.8 million of the increase was due to newly acquired businesses during the past year with the remaining increase primarily the result of increased capital spending in recent periods by the segment’s engineered valves business mainly for projects in Italy and the United States. 

CS Segment

	Year Ended December 31,				Decrease
(dollars in millions)	2009		2008		$			%
Revenues	$	622.5	$	638.9	$	(16.4	)	(2.6	)%
Income before income taxes	$	90.6	$	102.0	$	(11.4	)	(11.2	)%

CS segment revenues for 2009 totaled $622.5 million, a decrease of $16.4 million, or 2.6%, from $638.9 million in 2008.  Nearly 85% of the segment decrease was attributable to a 5% decline in sales of reciprocating compression equipment.  Sales of Ajax units were down 15% as a result of lower orders from North American packagers and lease fleet operators and reciprocating aftermarket revenues decreased 14%, primarily due to the impact on customers of lower natural gas prices for most of the year.  Offsetting these declines was a 67% increase in sales of Superior Compressors primarily due to higher project activity in Eastern Europe.  Centrifugal compression equipment product line sales declined 1% during 2009 as compared to 2008 primarily as a result of a 27% decrease in sales of new plant air equipment and a 6% decline in aftermarket revenues due to weak global market conditions during much of the current year.  This was partially offset by an 11% increase in sales of engineered units primarily for gas compression applications in Russia and the Middle East which was ordered prior to the recent industry downturn.

Income before income taxes for the CS segment totaled $90.6 million in 2009, a decrease of $11.4 million, or 11.2%, from $102.0 million in 2008.  Cost of sales as a percent of revenues increased from 68.9% in 2008 to 70.4% in 2009, primarily reflecting higher costs in the reciprocating product line.  The increase in the ratio of cost of sales to revenues was due primarily to higher provisions for inventory obsolescence and higher inventory write-offs in 2009 which resulted in an approximate 1.7 percentage point increase.

Selling and administrative expenses for 2009 totaled $77.2 million, a decrease of $4.0 million, or 4.9%, from $81.2 million in 2008.  The decrease was primarily attributable to lower employee-related costs associated with headcount reductions and spending controls partially offset by a $2.6 million increase in the provision for bad debts during 2009.

Depreciation and amortization expense totaled $16.5 million in 2009 compared to $15.3 million in 2008, an increase of $1.2 million, or 8.3%.  Higher levels of capital spending for machinery and equipment in recent periods accounted for the majority of the increase.

Corporate Segment

The Corporate segment’s loss before income taxes for 2009 totaled $290.6 million, an increase of $98.7 million from $191.9 million in 2008.  The primary factors causing the increase were (i) restructuring expense and acquisition related costs of $81.6 million in 2009 compared to a charge of $26.2 million in 2008 relating to the final settlement of the Company’s U.S. defined benefit pensions plans, (ii) higher interest expense of $22.1 million and (iii) lower interest income of $21.5 million.  These items are discussed in further detail in “Consolidated Results – 2009 Compared to 2008” above.

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Consolidated Results — 2008 Compared to 2007

The Company’s net income for 2008 totaled $580.7 million, or $2.54 per diluted share, compared to $488.2 million, or $2.11 per diluted share in 2007.  The higher level of earnings in each of the Company’s business segments, particularly in the DPS segment, was the primary driver in the 20.4% increase in earnings per share for 2008 as compared to 2007.

The results for 2008 included a final pre-tax charge of $26.2 million associated with a decision made in 2007 to terminate the Company’s U.S. defined benefit pension plans.   The results for 2007 included (i) an initial charge of $35.7 million for termination of the Company’s U.S. defined benefit pension plans referred to above and (ii) reductions in the income tax provision of $34.1 million for certain discrete items during the year, including (a) a reduction of $16.1 million based on a change in the estimated utilization of certain foreign tax credits in the United States, (b) a reduction of $5.7 million for resolution of an international contingency relating to transfer pricing, (c) a reduction of $5.5 million in an international valuation allowance based on estimated usage of certain foreign net operating loss carry forwards, (d) a reduction of $5.1 million based on a change in the estimated utilization of certain foreign tax deductions locally resulting from changes in estimated earnings internationally, (e) a reduction in deferred taxes of $1.8 million due to changes in statutory tax rates in certain international jurisdictions and (f) adjustments to other tax accruals and valuation allowances, which reduced income tax expense by $6.2 million.  These reductions were partially offset by an increase of $6.3 million in the Company’s tax accruals based on changes in the estimated recoverability of certain foreign local tax benefits.

Income before income taxes in 2008 as compared to 2007 for the DPS, V&M and CS segments is discussed in more detail below.

Revenues

Revenues for 2008 totaled $5.8 billion, an increase of over $1.1 billion, or 25.3%, from $4.7 billion in 2007, reflecting strength in all major product lines during 2008 and the incremental impact of newly acquired businesses during the past year.  Over 70% of the year-over-year increase in revenues was related to the DPS segment, which was largely impacted by higher revenues in that segment’s drilling and subsea product lines.

During 2008, nearly 43% of the Company’s third party revenue was reflected in entities with functional currencies other than the U.S. dollar.  In translating these entities’ functional currency income statements to U.S. dollars for consolidation purposes, a decline in the value of the U.S. dollar compared to the applicable functional currency will result in a higher amount of U.S. dollar revenues and costs for the same amount of functional currency revenues and costs.  The net effects of a weaker U.S. dollar against these other foreign currencies did not significantly impact the Company’s revenues for 2008 as compared to 2007, except in the V&M segment because during a large portion of 2008 the dollar was weak against most other foreign currencies although it strengthened significantly toward the end of the year.

A further discussion of revenues by segment may be found below.  

Cost and Expenses

Cost of sales (exclusive of depreciation and amortization) for 2008 totaled $4.1 billion, an increase of $885.7 million, or 27.3%, from $3.2 billion in 2007.  As a percent of revenues, cost of sales (exclusive of depreciation and amortization) increased from 69.5% in 2007 to 70.6% in 2008.  The increase noted above is due primarily to an approximate 1.0 percentage-point increase in the ratio due to a combination of increased volumes and a change in sales mix to more sales of equipment for major subsea projects, which typically carry lower margins as compared to the Company’s other product lines, higher costs of raw materials and higher shrinkage across each of the Company’s businesses, offset by reductions in subcontract costs and labor efficiencies gained from increased volumes.

Selling and administrative expenses for 2008 totaled $668.3 million as compared to $577.6 million, an increase of $90.7 million, or 15.7%.  As a percentage of revenues, selling and administrative expenses declined from 12.4% in 2007 to 11.4% in 2008.  Nearly 11% of the increase was attributable to the effects of a weaker U.S. dollar against certain other foreign currencies throughout a portion of 2008 as compared to 2007, which increased the U.S. dollar amount of the Company’s costs for the same reasons as mentioned above, as well as the incremental impact on costs from newly acquired businesses in the past year.  Excluding these effects, employee-related costs were up nearly $64.3 million due largely to higher headcount levels, higher employee incentives resulting from improved company-wide financial performance and higher travel costs resulting from increased activity levels.  In addition, increased non-cash stock compensation expense and a charge taken in 2008 relating to a dispute on an historical acquisition added $7.9 million of additional costs.  The remaining increase is largely attributable to higher facility costs and other economic effects.

Depreciation and amortization expense totaled $132.1 million in 2008, an increase of $22.3 million, or 20.3%, from $109.8 million in 2007.  Depreciation expense increased $17.3 million year-over-year as a result of increased capital spending, primarily for new machinery and equipment.  Amortization expense increased $5.0 million primarily due to higher capital spending on the Company’s enterprise-wide information technology assets and due to additional amortization of certain other acquired intangible assets.

Interest income declined by $3.4 million, or 11.0%, from $30.7 million in 2007 to $27.3 million in 2008 due primarily to lower short-term interest rates during 2008 as compared to 2007.

Interest expense totaled $70.3 million in 2008 as compared to $43.8 million in 2007, an increase of $26.5 million.  The increase is primarily due to $26.2 million of additional interest associated with the issuance of $450.0 million of 6.375% senior notes and $300.0 million of 7.0% senior notes in June 2008.

During 2007, the Company announced its intention to terminate its U.S. defined benefit pension plans, effective as of December 31, 2007.  In connection with the plans’ curtailment and the settlement during 2007 of a portion of the existing plan obligations associated with participants who were no longer active employees of the Company at that time, an initial settlement charge of $35.7 million was taken during the year ended December 31, 2007.   A final settlement charge of $26.2 million was taken during the year ended December 31, 2008 associated with the settlement of all remaining plan obligations associated with participants who were active employees of the Company during 2008 and any others who were not covered by the initial settlement of plan obligations made in 2007.  Following settlement of the plan obligations described above, approximately $5.1 million of excess defined benefit pension plan assets remained available for use by the Company in meeting its future matching contribution funding obligations under the Cameron International Corporation Retirement Savings Plan, a separate defined contribution 401(k) plan.

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The income tax provision for 2008 was $270.7 million compared to $199.8 million in 2007.  The effective tax rates for 2008 and 2007 were 31.8% and 29.0%, respectively.   The tax provision for 2007 was reduced for certain discrete items totaling $34.1 million as described previously.  Absent these items, the effective tax rate for 2007 would have been 34.0%.  The decrease in the effective tax rate for 2008 as compared to 2007, absent the discrete items, was due primarily to an increase in the amount of income in lower tax rate jurisdictions in 2008 as compared to 2007.

Segment Results — 2008 Compared to 2007

Information relating to results by segment may be found in Note 15 of the Notes to Consolidated Financial Statements.

DPS Segment

	Year Ended December 31,				Increase
(dollars in millions)	2008		2007		$		%
Revenues	$	3,736.7	$	2,887.1	$	849.6	29.4	%
Income before income taxes	$	639.9	$	498.8	$	141.1	28.3	%

    DPS segment revenues for 2008 totaled $3.7 billion, an increase of $849.6 million, or 29.4%, compared to $2.9 billion in 2007.  A 43% increase in subsea equipment sales and a 35% increase in drilling equipment sales accounted for nearly three-fourths of the segment’s revenue increase for 2008 as compared to 2007.  The increase in subsea equipment sales was due mainly to increased shipments and activity levels for large projects offshore West Africa, Egypt, Eastern Canada, Western Australia and in the Gulf of Mexico.  Nearly two-thirds of the increase in drilling equipment sales was for major deepwater rig construction projects with the remaining increase largely attributable to higher demand for blowout preventers (BOPs) and related equipment for land and jack-up rigs and the impact of newly acquired businesses.  In addition, surface equipment sales were up over 15% primarily as a result of higher demand for new equipment in North America, the Middle East and Indonesia due to higher activity levels for most of 2008 as compared to 2007, as well as higher sales of aftermarket parts and services in all regions and the impact of newly acquired businesses.  This was partially offset by a decline in demand for new surface equipment from customers in Latin America.  Sales of oil, gas and water separation applications were up nearly 31% as various large projects awarded in 2007 were completed or nearing completion as of December 31, 2008.

Income before income taxes for 2008 totaled $639.9 million as compared to $498.8 million in 2007, an increase of $141.1 million, or 28.3%.  Cost of sales as a percent of revenues increased from 71.8% in 2007 to 72.6% in 2008.  The increase was due to a 0.8 percentage-point increase in the ratio, mainly from increased volumes and a change in sales mix to more sales of equipment for major subsea projects, which typically carry lower margins as compared to the segment’s base business, partially offset by the impact of an increase in sales of lower cost drilling equipment.

Selling and administrative costs for 2008 totaled $312.6 million, an increase of $51.9 million, or 19.9%, from $260.7 million in 2007.  Selling and administrative expenses as a percent of revenues declined from 9.0% in 2007 to 8.4% in 2008.  Over 60% of the increase was attributable to higher employee-related costs due mainly to higher headcount levels, as well as increased incentive and travel costs and the impact of newly acquired businesses, with the remainder due largely to higher support costs relating to expansion of the segment’s global business operations.

Depreciation and amortization expense for 2008 was $70.5 million, an increase of $14.6 million, or 26.2%, from $55.9 million in 2007.  Depreciation expense increased $12.7 million due mainly to higher levels of capital spending in recent periods for new machinery and equipment.  Amortization expense was up $1.9 million from 2007 primarily associated with the amortization of newly acquired intangible assets.

V&M Segment

	Year Ended December 31,				Increase
(dollars in millions)	2008		2007		$		%
Revenues	$	1,473.2	$	1,273.7	$	199.5	15.7	%
Income before income taxes	$	301.4	$	268.0	$	33.4	12.5	%

     V&M segment revenues totaled $1.5 billion for 2008, an increase of $199.5 million, or 15.7%, from $1.3 billion in 2007.  Approximately 20% of the increase was attributable to the effects of a weaker U.S. dollar throughout a portion of 2008 as compared to 2007 and the incremental impact of new product line acquisitions during the past year.  Excluding these effects, nearly 40% of the segment’s revenue growth was the result of a 12% increase in sales of engineered valves in 2008 as compared to 2007, resulting mainly from higher levels of international pipeline construction project activity.  Sales of process valves increased 15% year-over-year as a result of higher demand for equipment for use in gas processing, refinery and product storage applications.  Higher rig count and activity levels throughout much of 2008 in the United States and Canada contributed to a 12% increase in demand for distributed valves and an 8% increase in sales of aftermarket parts and services.  Sales of measurement products increased 27% in 2008 as compared to 2007, nearly 40% of which was due to the incremental impact of new product line acquisitions during the year, with the remainder due largely to an increase in market activity in the United States and higher demand for equipment to be  used in nuclear applications.

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Income before income taxes totaled $301.4 million in 2008, an increase of $33.4 million, or 12.5%, from $268.0 million in 2007.  Cost of sales as a percentage of revenues increased from 64.2% in 2007 to 65.7% in 2008.  The increase in this ratio was due primarily to (i) an increase in the cost of raw materials, freight, labor and manufacturing overhead that was not fully offset by higher pricing (approximately a 1.1 percentage-point increase) and (ii) an increase in the ratio of certain indirect production costs in relation to revenues, primarily relating to higher headcount levels and higher overhead costs associated with expansion of the segment’s business (approximately a 0.6 percentage-point increase).

Selling and administrative expenses for 2008 totaled $171.4 million as compared to $157.3 million in 2007, an increase of $14.1 million, or 9.0%.  Over one-third of the increase was attributable to the effects of a weaker U.S. dollar throughout a portion of 2008 as compared to 2007 and the incremental impact of new product line acquisitions during the past year.  Excluding these effects, over 90% of the remaining increase was attributable to higher employee-related costs, particularly in the selling and marketing function, that were mainly associated with higher headcount levels needed to support expansion of the segment’s business.

Depreciation and amortization in the V&M segment increased $2.2 million, or 7.2%, from $30.0 million in 2007 to $32.2 million in 2008 primarily as a result of increased capital spending for new machinery and equipment in recent periods. 

CS Segment

	Year Ended December 31,				Increase
(dollars in millions)	2008		2007		$		%
Revenues	$	638.9	$	505.6	$	133.3	26.4	%
Income before income taxes	$	102.0	$	76.5	$	25.5	33.4	%

 CS segment revenues for 2008 totaled $638.9 million, an increase of $133.3 million, or 26.4%, from $505.6 million in 2007.  Two-thirds of the segment increase was attributable to a 37% increase in sales of centrifugal compression equipment, while sales of reciprocating equipment also increased more than 15%.  Within the centrifugal compression equipment product line, shipments of engineered units designed primarily to meet air separation, gas and engineered air requirements increased 42% with sales of new plant air equipment and aftermarket parts and services both up more than 30% from the prior year as a result of higher demand across all product lines by the segment’s industrial customer base.  Over one-half of the increase in the reciprocating product line was due to a 39% increase in sales of Ajax units primarily to customers in China, Russia, Mexico and to packagers in the United States.  In addition, shipments of Superior Compressors increased 12% primarily due to demand from packagers in the United States and sales of aftermarket parts and services were up 9% largely due to increased parts availability allowing for a reduction in beginning of the year backlog levels.

    Income before income taxes for the CS segment totaled $102.0 million in 2008, an increase of $25.5 million, or 33.4%, from $76.5 million in 2007.  Cost of sales as a percent of revenues declined from 69.3% in 2007 to 68.9% in 2008.  The improvement was primarily due to a decrease of 0.3 percentage points in the ratio resulting from lower costs associated with transactions denominated in currencies other than the functional currency of the segment’s legal entities.  The segment also benefitted from a mix shift to a higher amount of sales of higher-margin centrifugal compression equipment during the year and improved pricing within the centrifugal compression equipment product line.

  Selling and administrative expenses for 2008 totaled $81.2 million, an increase of $16.3 million, or 25.0%, from $64.9 million in 2007.  Over 80% of the increase was due to higher employee-related costs largely attributable to higher headcount and increased employee incentive costs.

    Depreciation and amortization expense totaled $15.3 million in 2008 compared to $13.7 million in 2007, an increase of $1.6 million, or 11.6%.  Higher levels of capital spending in recent periods accounted for the majority of the increase.

Corporate Segment

The Corporate segment’s loss before income taxes for 2008 totaled $191.9 million, an increase of $36.6 million from $155.3 million in 2007.  The primary factors causing the increase were (i) higher interest expense of $26.5 million and (ii) higher selling and administrative expenses of $8.4 million.  An increase of $3.9 million in foreign currency losses, increased depreciation and amortization of $3.9 million and a decline in interest income of $3.4 million were mostly offset by a decline of $9.5 million in the 2008 charge for the final settlement of the Company’s U.S. defined benefit pension plans as compared to the initial settlement charge recorded in 2007.

Included in the Corporate segment were increased foreign currency losses, as compared to the prior year, of $3.9 million, primarily related to intercompany loans the Company had with various foreign subsidiaries that were denominated in currencies other than the U.S. dollar.

Selling and administrative expenses in 2008 totaled $103.1 million, an increase of $8.4 million, from $94.7 million in 2007.  The increase is due primarily to (i) higher employee incentive costs of $4.1 million mostly related to increased 2008 company-wide financial performance, (ii) higher noncash stock compensation expense of $4.2 million and (iii) a $3.6 million charge taken in 2008 related to a dispute on an historical acquisition.  These increases were partially offset by a decline of approximately $3.0 million in legal costs associated with compliance-related activities.   Additionally, during 2008, the Company recorded a $5.8 million reduction in expense relating to one of its non-U.S. defined benefit pension plans.  A similar reduction in expense was recorded in 2007 relating to another of the Company’s non-U.S. defined benefit pension plans.

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Depreciation and amortization increased by $3.9 million from $10.2 million in 2007 to $14.1 million in 2008 primarily due to higher amortization expense associated with the Company’s capitalized enterprise-wide software systems as well as additional amortization of certain intangible assets relating to intellectual property.

The decreases in interest income and the charge for terminating the Company’s U.S. defined benefit pension plan as well as the increase in interest expense in 2008 as compared to 2007 are discussed in “Consolidated Results – 2008 Compared to 2007” above.

Orders and Backlog

Orders were as follows:

	Year Ended December 31,				Decrease
(dollars in millions)	2009		2008		$			%
DPS	$	3,126.2	$	5,255.4	$	(2,129.2	)	(40.5	)%
V&M		1,004.1		1,573.5		(569.4	)	(36.2	)%
CS		464.9		711.7		(246.8	)	(34.7	)%
	$	4,595.2	$	7,540.6	$	(2,945.4	)	(39.1	)%

Orders during 2009 were down $2.9 billion, or 39.1%, from $7.5 billion in 2008 to $4.6 billion in 2009 with the DPS segment accounting for 72% of the decrease.  Orders for the fourth quarter of 2009 however, increased modestly from the third quarter of 2009 and 16.6% from the fourth quarter of 2008.  Orders cancelled during 2009 totaled $117.1 million.

   DPS segment orders for 2009 totaled $3.1 billion, down almost $2.2 billion, or 40.5%, from $5.3 billion for 2008. Excluding the incremental effect of orders from newly acquired businesses, legacy orders for the DPS segment declined 42.2% from 2008 levels. Subsea equipment orders decreased 48%, accounting for approximately 60% of the total decrease in segment orders for 2009 as compared to 2008.   The decrease in subsea orders was primarily due to orders received in 2008 relating to two large projects offshore West Africa as well as a project offshore Eastern Canada amounting to nearly $1.7 billion in total compared to two large orders received in 2009 to provide a number of trees and other equipment to projects offshore Brazil and in the Gulf of Mexico totaling approximately $618 million.  Excluding the incremental effect of orders from newly acquired businesses, drilling equipment orders declined 49% during 2009 as compared to 2008 due largely to a lower level of activity with regard to new deepwater rig construction projects and lower levels of awards for new land and aftermarket equipment.  Legacy surface equipment orders were down 27% as a result of the impact of lower commodity prices on activity levels which negatively impacted demand from all major regions of the world.   Excluding the incremental effect of orders from newly acquired businesses, orders for process systems (which is a later cycle business) were down 21% due to the lack of major project awards in 2009 as compared to 2008.

   The V&M segment received orders totaling $1.0 billion in 2009, a decrease of $569.4 million, or 36.2%, from $1.6 billion in 2008.  A 54% decline in distributed valve orders and a 34% decline in orders for engineered valves accounted for 79% of the decrease in total segment orders during 2009 as compared to 2008.  Distributed valve orders were negatively impacted during 2009 by weak market conditions and activity levels in the United States and Canada.  The downturn in the North American market and delays in the startup of major pipeline construction projects resulted in the lower level of awards for engineered valves during the year.  Orders for process valves declined 32% as a result of a slowdown in projects supporting refinery and petrochemical applications. Additionally, excluding the incremental effect of orders from newly acquired businesses, weakness in the drilling and production markets resulted in a 26% decline in orders for legacy measurement products in the United States, Canada and the United Kingdom.

Orders in the CS segment for 2009 totaled $464.9 million, down $246.8 million, or 34.7%, from $711.7 million in 2008. Over two-thirds of the decrease was due to a 43% decline in orders for centrifugal compression equipment. Orders for new engineered units decreased 53% due mainly to a slowdown in demand from international customers for projects requiring the use of air separation equipment.  Weakness in the global industrial markets also contributed to a 37% decrease in awards for plant air equipment and a 22% decline in demand for aftermarket parts and services.  Reciprocating compression equipment orders were down nearly 25% for 2009 compared to 2008 due mainly to (i) a 46% decrease in orders for Ajax units and a 47% decrease in orders for Superior Compressors, primarily from North American packagers and lease fleet operators, and (ii) a 10% decrease in demand for aftermarket parts and services which reflected weakness in natural gas prices for much of 2009 as well as lower customer maintenance activity levels.

Backlog was as follows: 

	Year Ended December 31,				Decrease
(dollars in millions)	2009		2008		$			%
DPS	$	4,364.1	$	4,416.8	$	(52.7	)	(1.2	)%
V&M		547.1		749.2		(202.1	)	(27.0	)%
CS		278.6		440.5		(161.9	)	(36.8	)%
	$	5,189.8	$	5,606.5	$	(416.7	)	(7.4	)%

The decline in backlog in the V&M and CS segments at the end of 2009 as compared to 2008 may have a negative impact on 2010 revenues of those segments when compared to revenues reported for those segments in 2009.

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Recent Pronouncements

Effective January 1, 2009, the Company adopted the provisions of FASB ASC Topic No. 805, Business Combinations (ASC 805), and FASB ASC 810, related to Noncontrolling Interests in Consolidated Financial Statements. These two standards were adopted in conjunction with each other on a prospective basis. The most significant changes to business combination accounting pursuant to ASC 805 and ASC 810 are the following: (a) recognize, with certain exceptions, 100 percent of the fair values of assets acquired, liabilities assumed and noncontrolling interests in acquisitions of less than a 100 percent controlling interest when the acquisition constitutes a change in control of the acquired entity, (b) acquirers’ shares issued in consideration for a business combination will be measured at fair value on the closing date, not the announcement date, (c) recognize contingent consideration arrangements at their acquisition date fair values, with subsequent changes in fair value generally reflected in earnings, (d) the expensing of all transaction costs as incurred and most restructuring costs, (e) recognition of pre-acquisition loss and gain contingencies at their acquisition date fair values, with certain exceptions, (f) capitalization of acquired in-process research and development rather than expense recognition and (g) recognize changes that result from a business combination transaction in an acquirer’s existing income tax valuation allowances and tax uncertainty accruals as adjustments to income tax expense.  See Note 2 of the notes to consolidated financial statements for acquisitions subject to this new accounting guidance in 2009.

Liquidity and Capital Resources

The Company’s cash and cash equivalents increased by nearly $240.0 million to $1,861.0 million at December 31, 2009 as compared to $1,621.0 million at December 31, 2008. The main reason for the increase was positive cash flow from operations of $613.5 million partially offset by (i) debt repayments totaling $131.1 million associated with redemption of the remaining 1.5% Convertible Debentures during 2009 and (ii) capital expenditures of $240.9 million.

During 2009, the Company generated $613.5 million of cash from operations as compared to $987.6 million for 2008. The primary reasons for the decrease were the lower level of earnings in 2009 and the increased cash needed for working capital growth during 2009 as compared to cash generated from reductions in working capital in 2008.  Net income for 2009 totaled $475.5 million, a decrease of $105.2 million from 2008.  Cash totaling nearly $10.6 million was utilized for working capital increases in 2009 following a reduction of working capital in 2008 that generated approximately $211.0 million of additional cash.  During 2009, cash utilized for increasing inventories, largely for the DPS segment’s subsea business, and for deposits made to vendors and other prepayments as well as for current year income tax payments, was mostly offset by cash received as a result of strong collections of receivables, largely from the DPS segment’s drilling and surface businesses and from higher progress payments received from customers.   During 2008, working capital declined as accounts payable and accrued liabilities grew at a faster pace than inventory and accounts receivable.

The Company utilized $225.7 million of cash for investing activities in 2009 as compared to $460.0 million during 2008.  Capital spending decreased from $272.2 million in 2008 to $240.9 million in 2009.  In November 2009, the Company issued 23.6 million shares of its common stock for the acquisition of 100% of the outstanding stock of NATCO Group, Inc. (NATCO) as well as certain other consideration related to replacement of vested and unvested stock compensation awards held by former NATCO employees at the acquisition date.   NATCO’s balance sheet included $34.4 million of cash on hand at the date of acquisition which was added to Cameron’s consolidated balance sheet following the acquisition.  This additional cash acquired was partially offset by $23.2 million of cash utilized in 2009 for the purchase of assets or capital stock of two other businesses.  During 2008, the Company spent $191.7 million in connection with the acquisition of certain assets and liabilities of seven businesses.

During 2008, the Company’s financing activities generated $415.1 million of cash compared to $169.3 million of cash utilized during 2009. In June 2008, the Company received net proceeds after issuance costs of approximately $742.4 million from issuance of long-term senior notes with maturities of 10 and 30 years.  On June 18, 2009, the Company notified the holders of its 1.5% Convertible Debentures that it would exercise its right to redeem for cash all of the outstanding notes on July 20, 2009 at a redemption price equal to 100% of the outstanding principal amount, plus accrued and unpaid interest up to, but not including the redemption date.  A total of $131.1 million was spent for redemption of the remaining outstanding 1.5% Convertible Debentures. Additionally, the Company spent $29.2 million of cash in 2009 to acquire more than 935,000 shares of treasury stock as compared to $279.4 million spent in 2008 to acquire nearly 7.0 million shares.

The Company expects to spend an estimated $180 million for capital equipment and facilities during 2010 in connection with its program of improving manufacturing efficiency and lowering costs.  Cash on hand and future expected operating cash flows will be utilized to fund the Company’s 2010 capital spending program as well as costs expected to be incurred in connection with the continued integration of the operations of NATCO into those of the Company.

On a longer-term basis, the Company issued $450.0 million of 6.375% 10-year senior notes and $300.0 million of 7.0% 30-year senior notes in June 2008. The Company also has outstanding $500.0 million face value of 2.5% Convertible Debentures due in 2026. Under the terms of the debenture agreements, holders of the Company’s 2.5% Convertible Debentures could require the Company to redeem them beginning in June 2011. At December 31, 2009, the 2.5% Convertible Debentures did not meet the requirements to allow for conversion by the holders of the debt.

Despite recent uncertainty and volatility in the credit markets, the Company believes, based on its current financial condition, existing backlog levels and current expectations for future market conditions, that it will be able to meet its short- and longer-term liquidity needs with the existing $1.9 billion of cash on hand, expected cash flow from future operating activities and amounts available under its $585.0 million five-year multicurrency revolving credit facility, which expires on April 14, 2013.

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The following summarizes the Company’s significant cash contractual obligations and other commercial commitments for the next five years as of December 31, 2009.  

(dollars in millions)			Payments Due by Period
Contractual Obligations	Total		Less Than 1 Year		1 – 3 Years		4 – 5 Years		After 5 Years
Debt (a)	$	1,266.7	$	16.7	$	500.0	$	−	$	750.0
Capital lease obligations (b)		12.7		5.6		6.6		0.5		−
Operating leases		160.1		32.1		53.0		38.8		36.2
Purchase obligations (c)		908.2		858.2		44.8		5.0		0.2
Minimum required contributions to funded defined benefit pension  plans (d)		9.4		9.4		−		−		−
Benefit payments expected for unfunded pension and postretirement benefit plans		18.5		2.1		4.1		3.9		8.4
Unrecognized tax benefits (e)		29.0		29.0		−		−		−
Total contractual cash obligations	$	2,404.6	$	953.1	$	608.5	$	48.2	$	794.8

(a)  See Note 10 of the Notes to Consolidated Financial Statements for information on redemption rights by the Company, and by holders of the Company’s debentures, that would allow for early redemption of the 2.5% Convertible Debentures in 2011.

(b)  Payments shown include interest.

(c)  Represents outstanding purchase orders entered into in the ordinary course of business.

(d)  The Company does not estimate its future minimum required contributions beyond one year.  Due to the underfunded nature of the Company’s defined benefit pension plans in the U.K., the Company may elect to contribute more than the minimum required amount to the plans during 2010.

(e)  The balance shown represents the portion of the Company’s unrecognized tax benefits recorded as a current liability at December 31, 2009. The remaining balance of unrecognized tax benefits totaling $31.4 million has been excluded from the table as the Company cannot reasonably estimate the timing of the associated future cash outflows.

(dollars in millions)	Amount of Commitment Expiration by Period
Other Unrecorded Commercial Obligations and Off-Balance Sheet Arrangements	Total Commitment		Less Than 1 Year		1 - 3 Years		4 – 5 Years		After 5 Years
Committed lines of credit	$	585.0	$	−	$	−	$	585.0	$	−
Standby letters of credit and bank guarantees		871.6		508.9		210.3		106.0		46.4
Financial letters of credit		22.9		22.1		0.8		−		−
Insurance bonds		4.5		4.3		0.1		0.1		−
Other financial guarantees		5.0		1.0		4.0		−		−
Total commercial commitments	$	1,489.0	$	536.3	$	215.2	$	691.1	$	46.4

    The Company secures certain contractual obligations under various agreements with its customers or other parties through the issuance of letters of credit or bank guarantees. The Company has various agreements with financial institutions to issue such instruments. As of December 31, 2009, the Company had $871.6 million of letters of credit and bank guarantees outstanding in connection with the delivery, installation and performance of the Company’s products. Additional letters of credit and guarantees are outstanding at December 31, 2009 in connection with certain financial obligations of the Company. Should these facilities become unavailable to the Company, the Company’s operations and liquidity could be negatively impacted. Circumstances which could result in the withdrawal of such facilities include, but are not limited to, deteriorating financial performance of the Company, deteriorating financial condition of the financial institutions providing such facilities, overall constriction in the credit markets or rating downgrades of the Company.

Factors That May Affect Financial Condition and Future Results

Downturns in the oil and gas industry have had, and will likely in the future have, a negative effect on the Company’s sales and profitability.

Demand for most of the Company’s products and services, and therefore its revenues, depends to a large extent upon the level of capital expenditures related to oil and gas exploration, production, development, processing and transmission. Declines, as well as anticipated declines, in oil and gas prices could negatively affect the level of these activities, or could result in the cancellation, modification or rescheduling of existing orders. As an example, the substantial decline in oil and gas prices which began during the latter half of 2008 and continued into early 2009, combined with the constricted credit markets during that time, caused a reduction in orders by the Company’s customers during 2009 which will, in certain cases, negatively impact the Company’s expected 2010 revenues and profitability.

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Factors that contribute to the volatility of oil and gas prices include, but are not limited to, the following: 

· demand for oil and gas, which is impacted by economic and political conditions and weather;

· the ability of the Organization of Petroleum Exploring Countries (OPEC) to set and maintain production levels and pricing;

· the level of production from non-OPEC countries;

· policies regarding exploration and development of oil and gas reserves;

· the political environments of oil and gas producing regions, including the Middle East.

Recent tightening of borrowing standards by lenders could adversely impact the ability of the Company’s customers to finance future purchases of equipment or could adversely impact the Company’s ability to finance the Company’s future operational and capital needs.

The public and private credit markets in the United States and around the world became severely constricted in late 2008 due to economic concerns about various world economies.  This uncertainty and turmoil in the credit markets negatively impacted, in certain cases, the ability of customers to finance purchases of the Company’s equipment which may have contributed to a decline in sales, profitability and operating cash flows of the Company during a portion of 2009.  While economic conditions have shown some improvement in recent months, significant uncertainty still exists over future economic conditions and lenders in many cases continue to exercise tighter lending standards than in recent previous years.  As a result, certain customers may continue to face difficulty in financing new purchases of the Company’s equipment which could have a negative impact on the Company’s future results of operations and operating cash flows.  Additionally, although the Company does not currently anticipate a need to access the credit markets for new financing in the short-term, a prolonged constriction on future lending by banks or investors could also result in higher interest rates on future debt obligations of the Company or could restrict the Company’s ability to obtain sufficient financing to meet its long-term operational and capital needs or could limit its ability in the future to consummate significant business acquisitions to be paid for in cash.   

Cancellation of orders in backlog are possible.

The Company experienced $117.1 million of order cancellations during 2009.  The Company is typically protected against financial losses related to products and services it has provided prior to any cancellation. However, if the Company’s customers cancel existing purchase orders, future profitability could be further negatively impacted.

At December 31, 2009, the Company had a backlog of orders for equipment to be used on deepwater drilling rigs of approximately $683.9 million, including approximately $178.5 million of equipment ordered for rigs whose construction was not supported by a pre-existing contract with an operator.  Although oil and gas prices have increased in recent months, should they begin to decline again or, in some cases, stay at current levels for an extended period of time, further order cancellations or delays in expected shipment dates may occur.

The inability of the Company to deliver its backlog on time could affect the Company’s future sales and profitability and its relationships with its customers.

At December 31, 2009, the Company’s backlog was $5.2 billion.  The ability to meet customer delivery schedules for this backlog is dependent on a number of factors including, but not limited to, access to the raw materials required for production, an adequately trained and capable workforce, project engineering expertise for large subsea projects, sufficient manufacturing plant capacity and appropriate planning and scheduling of manufacturing resources. Many of the contracts the Company enters into with its customers require long manufacturing lead times and contain penalty or incentive clauses relating to on-time delivery. A failure by the Company to deliver in accordance with customer expectations could subject the Company to financial penalties or loss of financial incentives and may result in damage to existing customer relationships. Additionally, the Company bases its earnings guidance to the financial markets on expectations regarding the timing of delivery of product currently in backlog. Failure to deliver backlog in accordance with expectations could negatively impact the Company’s financial performance and thus cause adverse changes in the market price of the Company’s outstanding common stock and other publicly-traded financial instruments.

Integration of the recent acquisition of NATCO into the Company’s operations may cause disruptions, inefficiencies or the risk of unplanned costs for the Company.

On November 18, 2009, the Company closed on the stock-for-stock acquisition of NATCO for a total purchase price valued at approximately $988.5 million based on the closing price of the Company’s common stock on that date.  This is the largest acquisition in the history of the Company.   The Company will spend a good portion of 2010 integrating the operations of NATCO into the existing Cameron operations in both the Process Systems and Flow Control divisions of the DPS segment and in the Measurement division of the V&M segment.  The integration of these operations will require a significant amount of time and effort for management and employees of those divisions and may result in disruptions and inefficiencies occurring in the legacy operations of those businesses for a period of time.  Additionally, former NATCO customers may elect to buy from competitors of Cameron rather than continue to do business with the former operations of NATCO now that they have become part of the Cameron organization.  Costs of integrating the former NATCO operations into Cameron could exceed what is currently expected.  Both of these events, if they occurred, could negatively impact the Company’s expected future revenues, costs, profitability and operating cash flows.

Following the NATCO acquisition, total Cameron goodwill at December 31, 2009 was $1.4 billion, a large portion of which was allocated to the Company’s Process Systems division reporting unit, which includes the majority of the newly acquired NATCO operations.  As a result, a future deterioration in expected profitability or cash flows of the Company or its Process Systems division reporting unit could negatively impact the estimated fair market values of both which, if it were to occur, could increase the likelihood of a goodwill impairment charge being required.

42

The Company has embarked on a significant capital expansion program in recent years.

The Company has spent $240.9 million in 2009 and $272.2 million in 2008 on capital expenditures for new machine tools and other equipment, including 2009 expenditures of $48.6 million for expanding its subsea facility in Johor, Malaysia and expenditures of $38.3 million in 2009 for completion of a new surface manufacturing facility in Ploiesti, Romania. For 2010, the Company expects full-year capital expenditures of approximately $180 million.  To the extent this ongoing program of continuing to upgrade machine tools, manufacturing technologies, processes and facilities in order to improve efficiency and address expected market demand for the Company’s products causes disruptions in the Company’s plants, or the needed machine tools or facilities are not delivered and installed or in use as currently expected, the Company’s ability to deliver existing or future backlog may be negatively impacted. In addition, if the new facilities recently completed or nearing completion are unable to add production in accordance with the currently scheduled timetable, or in the event production is not as efficient as scheduled, future profitability may be negatively impacted.

Execution of subsea systems projects exposes the Company to risks not present in its other businesses.

This market is significantly different from the Company’s other markets since subsea systems projects are significantly larger in scope and complexity, in terms of both technical and logistical requirements. Subsea projects (i) typically involve long lead times, (ii) typically are larger in financial scope, (iii) typically require substantial engineering resources to meet the technical requirements of the project and (iv) often involve the application of existing technology to new environments and in some cases, new technology. The Company’s subsea business unit received orders in the amount of $1.4 billion during 2009.  Several of these orders are substantially more complex and involve substantially more risk than previous projects.  To the extent the Company experiences unplanned efficiencies or difficulties in meeting the technical and/or delivery requirements of the projects, the Company’s earnings or liquidity could be positively or negatively impacted. The Company accounts for its subsea projects, as well as separation and drilling projects, using accounting rules as contained in the FASB’s ASC relating to construction-type and production-type contracts.  In accordance with this guidance, the Company estimates the expected margin on these projects and recognizes this margin as units are completed.  Factors that may affect future project costs and margins include the ability to properly execute the engineering and design phases consistent with our customers’ expectations, production efficiencies obtained, and the availability and costs of labor, materials and subcomponents.  These factors can significantly impact the accuracy of the Company’s estimates and materially impact the Company’s future period earnings.  If the Company experiences cost underruns or overruns, the expected margin could increase or decline.  In accordance with the accounting guidance, the Company would record a cumulative adjustment to increase or reduce the margin previously recorded on the related project.  Subsea projects accounted for approximately 16% of total revenues for the year ended December 31, 2009. As of December 31, 2009, the Company had a subsea systems project backlog of approximately $2.0 billion.

Fluctuations in worldwide currency markets can impact the Company’s profitability.

The Company has established multiple “Centers of Excellence” facilities for manufacturing such products as subsea trees, subsea chokes, subsea production controls and BOPs. These production facilities are located in the United Kingdom, Brazil and other European and Asian countries. To the extent the Company sells these products in U.S. dollars, the Company’s profitability is eroded when the U.S. dollar weakens against the British pound, the euro, the Brazilian real and certain Asian currencies, including the Singapore dollar. Alternatively, profitability is enhanced when the U.S. dollar strengthens against these same currencies.

The Company’s worldwide operations expose it to instability and changes in economic and political conditions, foreign currency fluctuations, trade and investment regulations and other risks inherent to international business.

The economic risks of doing business on a worldwide basis include the following: 

· volatility in general economic, social and political conditions, including Venezuela where the Company has $118.7 million of unfilled subsea orders with its national oil company;

· differing tax rates, tariffs, exchange controls or other similar restrictions;

· changes in currency rates;

· inability to repatriate income or capital;

· reductions in the number or capacity of qualified personnel; and

· seizure of equipment.

43

Cameron has manufacturing and service operations that are essential parts of its business in developing countries and economically and politically volatile areas in Africa, Latin America, Russia and other countries that were part of the Former Soviet Union, the Middle East, and Central and South East Asia. The Company also purchases a large portion of its raw materials and components from a relatively small number of foreign suppliers in developing countries. The ability of these suppliers to meet the Company’s demand could be adversely affected by the factors described above.

Increasingly, some of the Company’s customers, particularly the national oil companies, have required a certain percentage of, or an increased percentage of, local content in the products they buy directly or indirectly from the Company.  This requires the Company to add to or expand its manufacturing capabilities in certain countries that are presently without the necessary infrastructure or human resources in place to conduct business in a manner as typically done by Cameron.  This increases the risk of untimely deliveries, cost overruns and defective products.

Economic conditions around the world have resulted in decreased tax revenues for many governments, which could lead to changes in tax laws in countries where the Company does business, including the United States.  Changes in tax laws, including changes proposed or currently under consideration in the United States and other countries, could have a negative impact on the Company’s future results.

The Company is subject to trade regulations that expose the Company to potential liability.

Doing business on a worldwide basis also puts the Company and its operations at risk due to political risks and the need for compliance with the laws and regulations of many jurisdictions. These laws and regulations impose a range of restrictions and/or duties on importation and exportation, operations, trade practices, trade partners and investment decisions. The Company has received inquiries regarding its compliance with certain such laws and regulations from several U.S. federal agencies.

The Company does business and has operations in a number of developing countries that have relatively underdeveloped legal and regulatory systems when compared to more developed countries. Several of these countries are generally perceived as presenting a higher than normal risk of corruption, or as having a culture where requests for improper payments are not discouraged. Maintaining and administering an effective U.S. Foreign Corrupt Practices Act (FCPA) compliance program in these environments presents greater challenges to the Company than is the case in other, more developed countries.

In July 2007, the Company was one of a number of companies to receive a letter from the Criminal Division of the U.S. Department of Justice (DOJ) requesting information on activities undertaken on their behalf by a customs clearance broker. The DOJ is inquiring into whether certain of the services provided to the Company by the customs clearance broker may have involved violations of the U.S. Foreign Corrupt Practices Act (FCPA).  In response, the Company engaged special counsel reporting to the Audit Committee of the Board of Directors to conduct an investigation into its dealings with the customs clearance broker in Nigeria and Angola to determine if any payment made to or by the customs clearance broker on the Company’s behalf constituted a violation of the FCPA. Special counsel also reviewed the extent, if any, of the Company’s knowledge and involvement in the performance of these services and activities and whether the Company fulfilled its obligations under the FCPA.  In addition, the U.S. Securities and Exchange Commission (SEC) is conducting an informal inquiry into the same matters.  The investigation by special counsel has been completed and the Company is waiting for the agencies to commence discussions regarding the ultimate disposition of this matter.  The current tolling agreement between the Company and the agencies expires on April 30, 2010.  At this stage, the Company cannot predict what the disposition will entail. The Company undertook enhanced compliance training efforts for its personnel, including foreign operations personnel dealing with customs clearance regulations and hired a Chief Compliance Officer in September 2008 to oversee and direct all legal compliance matters for the Company. 

The Company completed its acquisition of NATCO in November 2009, and at the time NATCO had a pending SEC enforcement action under the FCPA.  In January 2010, without admitting or denying the underlying allegations, it settled the action and agreed to a civil penalty of $65,000, and, in a related proceeding, agreed to an order requiring it to cease and desist from future violations of the FCPA.

Compliance with U.S. regulations on trade sanctions and embargoes also poses a risk to Cameron since its business is conducted on a worldwide basis through various entities. Cameron has received a number of inquiries from U.S. governmental agencies regarding compliance with these regulations. On March 25, 2009, Cameron received a letter from the Office of Global Security Risk of the U.S. Securities and Exchange Commission inquiring into the status of Cameron's non-U.S. entities' withdrawal from conducting business in or with Iran, Syria and Sudan. In mid-2006, Cameron adopted a policy which prohibited doing business with these and other U.S. embargoed countries and restricted its non-U.S. subsidiaries and persons from taking new orders from those countries, though Cameron did not prohibit them from honoring then existing contracts if they were, in the opinion of non-U.S. counsel, binding and enforceable in accordance with their terms and would subject a Cameron entity to damages for a failure to perform thereunder, provided such contracts could, in fact, be performed without any U.S. person or entity involvement and otherwise in accordance with existing U.S. regulations. Cameron's records show that its non-U.S. entities recognized revenues in 2009 of approximately $6.4 million with respect to business with Iran.  No deliveries were made to Syria or Sudan in 2009.  Cameron's backlog report shows remaining revenues from deliveries to Iran of approximately $3.7 million scheduled to be recognized subsequent to December 31, 2009.  It is expected that, with these deliveries, performance under the pre-mid-2006 contracts will be complete. Cameron is examining these deliveries to confirm they were in compliance with its policy and is actively monitoring present and future performance of its non-U.S. entities to ensure compliance.  Cameron also received an inquiry in 2006 from the Office of Global Security Risk regarding essentially the same matters as in 2009. In December 2008, Cameron received an inquiry from the U.S. Department of Treasury's Office of Foreign Assets Control regarding a bank guaranty Cameron requested to support a sale to a Burmese entity. Cameron has responded and has received no further inquiry regarding this matter.

44

In January 2007, the Company underwent a Pre-Assessment Survey as part of a Focused Assessment Audit initiated by the Regulatory Audit Division of the U.S. Customs and Border Protection, Department of Homeland Security. The Pre-Assessment Survey of the period September 2001 through September 2007 resulted in a finding that the Company had deficiencies in its U.S. customs compliance process and had underpaid customs duties.  The Company has since paid these duties and taken corrective action with respect to these deficiencies.  The sufficiency of these corrective actions is currently undergoing a Follow-Up Compliance Improvement Plan Review which is expected to be completed by the end of the third quarter of 2010.

The Company is subject to environmental, health and safety laws and regulations that expose the Company to potential liability.

The Company’s operations are subject to a variety of national and state, provisional and local laws and regulations, including laws and regulations relating to the protection of the environment. The Company is required to invest financial and managerial resources to comply with these laws and expects to continue to do so in the future. To date, the cost of complying with governmental regulation has not been material, but the fact that such laws or regulations are frequently changed makes it impossible for the Company to predict the cost or impact of such laws and regulations on the Company’s future operations. The modification of existing laws or regulations or the adoption of new laws or regulations imposing more stringent environmental restrictions could adversely affect the Company.

Enacted and proposed climate protection regulations and legislation may impact the Company’s operations or those of its customers.

In December 2009, the United States Environmental Protection Agency (EPA) announced an endangerment finding under the United States Clean Air Act that greenhouse gas emissions endanger public health and welfare.  The EPA also enacted regulations in September 2009, which became effective January 1, 2010, requiring monitoring and reporting by certain facilities and companies of greenhouse gas emissions.  Carbon emission reporting and reduction programs have also expanded in recent years at the state, regional and national levels with certain countries having already implemented various types of cap-and-trade programs aimed at reducing carbon emissions from companies that currently emit greenhouse gases such as electric power generators and utilities.  In addition, in June 2009, the United States House of Representatives passed The American Clean Energy and Security Act which is expected to be considered by the United States Senate during 2010.

To the extent Cameron is subject to any of these or other similar proposed or newly enacted laws and regulations, the Company expects that its efforts to monitor, report and comply with such laws and regulations, and any related taxes imposed on companies by such programs, will increase the Company’s cost of doing business in certain jurisdictions, including the United States, and may require costs to modify certain of its compression products which involve the use of power generation equipment and its facilities in order to lower any direct or indirect emissions of greenhouse gases from those facilities.

To the extent the Company’s customers, particularly those involved in power generation, petrochemical processing or petroleum refining, are subject to any of these or other similar proposed or newly enacted laws and regulations, the Company is exposed to risks that the additional costs by customers to comply with such laws and regulations could impact their ability or desire to continue to operate at similar levels in certain jurisdictions as historically seen or as currently anticipated which could negatively impact the Company’s operations in those same jurisdictions in support of its customers.

The Company could also be impacted by new laws and regulations that might favor the increased use of non-fossil fuels, including nuclear, solar and bio-fuels or that are designed to increase energy efficiency.

If the proposed or newly executed laws dampen demand for oil and gas production, they could lower spending by the Company’s customers for the Company’s products and services.

Environmental Remediation

The Company’s worldwide operations are subject to domestic and international regulations with regard to air, soil and water quality as well as other environmental matters. The Company, through its environmental management system and active third-party audit program, believes it is in substantial compliance with these regulations. 

The Company is currently identified as a potentially responsible party (PRP) with respect to two sites designated for cleanup under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) or similar state laws. One of these sites is Osborne, Pennsylvania (a landfill into which a predecessor of the CS operation in Grove City, Pennsylvania deposited waste), where remediation is complete and remaining costs relate to ongoing ground water treatment and monitoring. The other is believed to be a de minimis exposure. The Company is also engaged in site cleanup under the Voluntary Cleanup Plan of the Texas Commission on Environmental Quality at former manufacturing locations in Houston and Missouri City, Texas. Additionally, the Company has discontinued operations at a number of other sites which had been active for many years. The Company does not believe, based upon information currently available, that there are any material environmental liabilities existing at these locations. At December 31, 2009, the Company’s consolidated balance sheet included a noncurrent liability of $7.3 million for environmental matters.

Environmental Sustainability

The Company has pursued environmental sustainability in a number of ways. Processes are monitored in an attempt to produce the least amount of waste. None of the Company’s facilities are rated above Small Quantity Generated status. All of the waste disposal firms used by the Company are carefully selected in an attempt to prevent any future Superfund involvements. Actions are taken in an attempt to minimize the generation of hazardous wastes and to minimize air emissions. None of the Company’s facilities are classified as sites that generate more than minimal air emissions. Recycling of process water is a common practice. Best management practices are used in an effort to prevent contamination of soil and ground water on the Company’s sites. The Company has an active health, safety and environmental audit program in place throughout the world.

45

Market Risk Information

The Company is currently exposed to market risk from changes in foreign currency rates and changes in interest rates. A discussion of the Company’s market risk exposure in financial instruments follows.

Foreign Currency Exchange Rates

A large portion of the Company’s operations consist of manufacturing and sales activities in foreign jurisdictions, principally in Europe, Canada, West Africa, the Middle East, Latin America and the Pacific Rim. As a result, the Company’s financial performance may be affected by changes in foreign currency exchange rates in these markets. Overall, for those locations where the Company is a net receiver of local non-U.S. dollar currencies, Cameron generally benefits from a weaker U.S. dollar with respect to those currencies. Alternatively, for those locations where the Company is a net payer of local non-U.S. dollar currencies, a weaker U.S. dollar with respect to those currencies will generally have an adverse impact on the Company’s financial results. The impact on the Company’s financial results of gains or losses arising from foreign currency denominated transactions, if material, have been described under “Results of Operations” in this Management’s Discussion and Analysis of Financial Condition and Results of Operations for the periods shown.

In order to mitigate the effect of exchange rate changes, the Company will often attempt to structure sales contracts to provide for collections from customers in the currency in which the Company incurs its manufacturing costs. In certain instances, the Company will enter into foreign currency forward contracts to hedge specific large anticipated receipts or disbursements in currencies for which the Company does not traditionally have fully offsetting local currency expenditures or receipts. The Company was party to a number of long-term foreign currency forward contracts at December 31, 2009. The purpose of the majority of these contracts was to hedge large anticipated non-functional currency cash flows on major subsea, drilling, valve or other equipment contracts involving the Company’s United States operations and its wholly-owned subsidiaries in Brazil, Italy, Romania, Singapore and the United Kingdom. At December 31, 2009, the Company was also party to certain foreign currency forward and foreign currency option contracts which have not been accounted for as hedges under the accounting rules for derivatives and hedging activities as reflected in the FASB’s ASC, involving underlying foreign currency denominated accounts recorded on the balance sheet of its wholly-owned subsidiary in Canada or anticipated foreign currency cash flows of its wholly-owned subsidiary in Italy.

 Interest Rates

The Company is subject to interest rate risk on its long-term fixed interest rate debt, variable-interest rate borrowings and interest rate swaps. Variable-rate debt, where the interest rate fluctuates periodically, exposes the Company’s cash flows to variability due to changes in market interest rates. Fixed-rate debt, where the interest rate is fixed over the life of the instrument, exposes the Company to changes in the fair value of its debt due to changes in market interest rates and to the risk that the Company may need to refinance maturing debt with new debt at a higher rate.  Interest rate swaps, where the interest rates fluctuate daily, expose the Company to changes in the fair value of the swaps and to changes in cash flow, due to market interest rate changes.

The Company has performed a sensitivity analysis to determine how market interest rate changes might affect the fair value of its debt. This analysis is inherently limited because it represents a singular, hypothetical set of assumptions. Actual market movements may vary significantly from the assumptions. The effects of market movements may also directly or indirectly affect the Company’s assumptions and its rights and obligations not covered by the sensitivity analysis. Fair value sensitivity is not necessarily indicative of the ultimate cash flow or the earnings effect from the assumed market rate movements. 

An instantaneous one-percentage-point decrease in interest rates across all maturities and applicable yield curves would have increased the fair value of the Company’s fixed-rate debt positions by approximately $90.5 million at December 31, 2009 ($71.8 million at December 31, 2008), whereas a one-percentage-point increase in interest rates would have decreased the fair value of the Company’s fixed rate debt by $78.6 million at December 31, 2009 ($63.9 million at December 31, 2008).  A one-percentage-point decrease in floating interest rates would have increased the fair value of the Company’s interest rate swaps by $8.0 million at December 31, 2009, whereas a one-percentage-point increase in floating interest rates would have decreased the fair value of the Company’s interest rate swaps by $6.6 million at December 31, 2009.  This analysis does not reflect the effect that increasing or decreasing interest rates would have on other items, such as new borrowings, nor the impact they would have on interest expense and cash payments for interest. 

46

The Company manages its debt portfolio to achieve an overall desired position of fixed and floating rates and employs interest rate swaps as a tool to achieve that goal. The major risks from interest rate derivatives include changes in the interest rates affecting the fair value of such instruments, potential increases in interest expense due to market increases in floating interest rates and the creditworthiness of the counterparties in such transactions. 

The fair values of the 6.375% 10-year Senior Notes and the 7.0% 30-year Senior Notes are principally dependent on prevailing interest rates.  The fair value of the 2.5% Convertible Debentures is principally dependent on prevailing interest rates and the Company’s current share price as it relates to the initial conversion price of the instrument.

The Company has various other long-term debt instruments, but believes that the impact of changes in interest rates in the near term will not be material to these instruments.

On October 19, 2009, the Company entered into an interest rate swap with a third party to receive a fixed interest rate of 6.375% and to pay a variable rate based on the 3 month London Interbank Offered Rate (LIBOR) plus 4.801% on a notional value of $200,000,000.  The swap matures on January 15, 2012 and provides for semi-annual payments each January 15 and July 15, beginning January 15, 2010.  Interest is compounded quarterly on the 15th of each January, April, July and October.  An additional interest rate swap with a notional value of $200,000,000 and terms identical to the above was also entered into on October 23, 2009, except that the variable rate to be paid is based on 3 month LIBOR plus 4.779%.  The fair value of both interest rate swaps will be reflected on the Company’s consolidated balance sheet as either an asset or liability with the change in the fair value of the swaps reflected as an adjustment to the Company’s consolidated interest expense.

Information relating to the Company’s outstanding foreign currency forward and option contracts as well as its outstanding interest rate swaps and the fair values recorded in the Company’s Consolidated Balance Sheets at December 31, 2009 and 2008 follows:

	December 31, 2009
	Year of Contract Expiration
(amounts in millions except exchange rates)	2010		2011		2012		Total			December 31, 2008
FX Forward Contracts −
Buy EUR/Sell GBP:
Notional amount to buy (in EUR)		8.2		0.7		−		8.9			49.5
Average GBP to EUR contract rate		0.8072		0.8120		−		0.8076			0.7992
Average GBP to EUR rate at December 31, 2009		0.8923		0.8934		−		0.8924			0.9611
Fair value at December 31, 2009 in U.S. dollars							$	1.2		$	11.6
Buy EUR/Sell CAD:
Notional amount to sell (in EUR)		24.6		−		−		24.6			−
Average CAD to EUR contract rate		1.5773		−		−		1.5773			−
Average CAD to EUR rate at December 31, 2009		1.5132		−		−		1.5132			−
Fair value at December 31, 2009 in U.S. dollars							$	1.5		$	−
Sell USD/Buy GBP:
Notional amount to sell (in USD)		45.2		3.2		−		48.4			156.1
Average USD to GBP contract rate		1.8380		1.7884		−		1.8346			1.9155
Average USD to GBP rate at December 31, 2009		1.6064		1.6023		−		1.6061			1.4498
Fair value at December 31, 2009 in U.S. dollars							$	(6.0	)	$	(37.9	)
Other Currencies:
Fair value at December 31, 2009 in U.S. dollars							$	(0.4	)	$	(19.5	)
FX Options to buy EUR −
Notional Amount to sell in USD		15.6		−		−		15.6
Average USD to EUR contract rate		1.4705		−		−		1.4705
Average USD to EUR rate at December 31, 2009		1.4337		−		−		1.4337
Fair value at December 31, 2009 in U.S. dollars							$	0.2		$	−
Interest Rate Swaps −
Notional Amount in USD		−		−		400.0		400.0
Fair value at December 31, 2009 in U.S. dollars							$	1.2		$	−

47

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company maintains a system of internal controls that is designed to provide reasonable but not absolute assurance as to the reliable preparation of the consolidated financial statements. The Company’s management, including its Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s disclosure controls and procedures or the Company’s internal controls will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of errors or fraud, if any, within Cameron have been detected. 

The control environment of Cameron is the foundation for its system of internal controls over financial reporting and is embodied in the Company’s Standards of Conduct. It sets the tone of the Company’s organization and includes factors such as integrity and ethical values. The Company’s internal controls over financial reporting are supported by formal policies and procedures that are reviewed, modified and improved as changes occur in the Company’s business or as otherwise required by applicable rule-making bodies. 

The Audit Committee of the Board of Directors, which is composed solely of outside directors, meets periodically with members of management, the internal audit department and the independent registered public accountants to review and discuss internal controls over financial reporting and accounting and financial reporting matters. The independent registered public accountants and the internal audit department report to the Audit Committee and accordingly have full and free access to the Audit Committee at any time.

Assessment of Internal Control Over Financial Reporting

Cameron’s management is responsible for establishing and maintaining adequate internal control (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) over financial reporting. 

Management conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework established in “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included a review of the documentation surrounding the Company’s financial controls, an evaluation of the design effectiveness of these controls, testing of the operating effectiveness of these controls and a conclusion on this evaluation. Although there are inherent limitations in the effectiveness of any system of internal controls over financial reporting – including the possibility of the circumvention or overriding of controls – based on management’s evaluation, management has concluded that the Company’s internal controls over financial reporting were effective as of December 31, 2009, based on the framework established in “Internal Control – Integrated Framework”. However, because of changes in conditions, it is important to note that internal control system effectiveness may vary over time. 

In conducting management’s evaluation of the effectiveness of the Company’s internal controls over financial reporting, NATCO Group, Inc. and two other businesses acquired during 2009 for a total purchase price of approximately $1,011.7 million, as more fully described in Note 2 of the Notes to Consolidated Financial Statements, were excluded.  These operations constituted less than 1.5% of the Company’s consolidated revenues and income before income taxes and approximately 17% and 26% of total and net assets, respectively, as of and for the year ended December 31, 2009.

Ernst & Young LLP, an independent registered public accounting firm that has audited the Company’s financial statements as of and for the three-year period ended December 31, 2009, has issued a report on their audit of management’s internal control over financial reporting, which is included herein.

/S/ Jack B. Moore

Jack B. Moore 

President and

Chief Executive Officer

Date:  February 26, 2010

/S/ Charles M. Sledge

Charles M. Sledge

Senior Vice President and

Chief Financial Officer

Date:  February 26, 2010

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of

Cameron International Corporation

We have audited the internal control over financial reporting of Cameron International Corporation (the Company) as of December 31, 2009, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of NATCO Group, Inc. and two other businesses acquired during 2009 for a total purchase price of approximately $1,011.7 million, as more fully described in Note 2 of the Notes to Consolidated Financial Statements, which is included in the 2009 consolidated financial statements of the Company and constituted less than 1.5% of the Company’s consolidated revenues and income before income taxes and approximately 17% and 26% of total and net assets, respectively, as of and for the year ended December 31, 2009.  Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of NATCO Group, Inc. and the two other businesses acquired during 2009 as referred to above.

In our opinion, Cameron International Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of the Company as of December 31, 2009 and 2008, and the related statements of consolidated results of operations, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2009 and our report dated February 26, 2010 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Houston, Texas

February 26, 2010

49

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of

Cameron International Corporation

We have audited the accompanying consolidated balance sheets of Cameron International Corporation (the Company) as of December 31, 2009 and 2008, and the related statements of consolidated results of operations, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2009.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Cameron International Corporation at December 31, 2009 and 2008, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2009, in conformity with U.S. generally accepted accounting principles.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2010 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Houston, Texas

February 26, 2010

50

Consolidated Results of Operations

	Year Ended December 31,
(dollars in thousands, except per share data)	2009			2008			2007
Revenues	$	5,223,245		$	5,848,877		$	4,666,368
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown separately below)		3,540,106			4,127,931			3,242,238
Selling and administrative expenses		715,599			668,296			577,588
Depreciation and amortization		156,587			132,079			109,774
Interest income		(5,851	)		(27,350	)		(30,745	)
Interest expense		92,370			70,290			43,845
Restructuring expense and acquisition related costs		81,605			−			−
Charge for pension plan termination		−			26,196			35,725
Total costs and expenses		4,580,416			4,997,442			3,978,425
Income before income taxes		642,829			851,435			687,943
Income tax provision		(167,310	)		(270,732	)		(199,762	)
Net income	$	475,519		$	580,703		$	488,181
Earnings per common share:
Basic	$	2.15		$	2.67		$	2.23
Diluted	$	2.11		$	2.54		$	2.11

The Notes to Consolidated Financial Statements are an integral part of these statements.

51

Consolidated Balance Sheets

	December 31,
(dollars in thousands, except  shares and per share data)	2009			2008
Assets
Cash and cash equivalents	$	1,860,988		$	1,621,046
Receivables, net		959,010			950,362
Inventories, net		1,664,152			1,336,925
Other		230,009			148,110
Total current assets		4,714,159			4,056,443
Plant and equipment, net		1,192,402			931,647
Goodwill		1,441,580			709,217
Other assets		377,232			205,064
Total assets	$	7,725,373		$	5,902,371
Liabilities and stockholders’ equity
Current portion of long-term debt	$	22,164		$	161,279
Accounts payable and accrued liabilities		2,208,153			1,854,384
Accrued income taxes		65,896			95,545
Total current liabilities		2,296,213			2,111,208
Long-term debt		1,232,302			1,218,627
Deferred income taxes		122,980			99,149
Other long-term liabilities		154,118			128,860
Total liabilities		3,805,613			3,557,844
Commitments and contingencies		−			−
Stockholders’ equity:
Common stock, par value $.01 per share, 400,000,000 shares authorized,  263,111,472 shares issued at December 31, 2009 and 236,316,873 shares issued at December 31, 2008		2,631			2,363
Preferred stock, par value $.01 per share, 10,000,000 shares authorized, no shares issued or outstanding		−			−
Capital in excess of par value		2,244,000			1,254,593
Retained earnings		2,285,432			1,809,913
Accumulated other elements of comprehensive income		9,492			(84,218	)
Less: Treasury stock at cost, 18,453,758 shares at December 31, 2009 and 19,424,120 shares at December 31, 2008		(621,795	)		(638,124	)
Total stockholders’ equity		3,919,760			2,344,527
Total liabilities and stockholders’ equity	$	7,725,373		$	5,902,371

The Notes to Consolidated Financial Statements are an integral part of these statements.

52

Consolidated Cash Flows

	Year Ended December 31,
(dollars in thousands)	2009			2008			2007
Cash flows from operating activities:
Net income	$	475,519		$	580,703		$	488,181
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		114,683			98,728			81,458
Amortization		41,904			33,351			28,316
Non-cash charge for pension plan termination		−			26,196			35,725
Non-cash stock compensation expense		27,701			35,627			31,383
Tax benefit of employee stock compensation plan transactions and   deferred income taxes		(35,765	)		1,941			35,602
Changes in assets and liabilities, net of translation, acquisitions and non-cash items:
Receivables		165,162			(157,899	)		(69,223	)
Inventories		(220,941	)		(9,325	)		(355,215	)
Accounts payable and accrued liabilities		139,835			278,973			219,503
Other assets and liabilities, net		(94,638	)		99,282			(44,010	)
Net cash provided by operating activities		613,460			987,577			451,720
Cash flows from investing activities:
Capital expenditures		(240,921	)		(272,248	)		(245,589	)
Acquisitions, net of cash acquired (see Note 2 of the Notes to Consolidated Financial Statements)		11,203			(191,681	)		(76,386	)
Proceeds from sale of plant and equipment		4,035			3,903			9,056
Net cash used for investing activities		(225,683	)		(460,026	)		(312,919	)
Cash flows from financing activities:
Short-term loan borrowings (repayments), net		(18,908	)		31,859			(200,707	)
Redemption of convertible debt securities		(131,109	)		(106,891	)		−
Issuance of long-term senior notes		−			747,922			−
Debt issuance costs		−			(5,550	)		−
Purchase of treasury stock		(29,175	)		(279,393	)		(321,913	)
Proceeds from stock option exercises		10,193			17,628			52,784
Excess tax benefits from employee stock compensation plans transactions		6,446			16,986			28,034
Principal payments on capital leases		(6,737	)		(7,434	)		(5,312	)
Net cash provided by (used for) financing activities		(169,290	)		415,127			(447,114	)
Effect of translation on cash		21,455			(61,548	)		14,692
Increase (decrease) in cash and cash equivalents		239,942			881,130			(293,621	)
Cash and cash equivalents, beginning of year		1,621,046			739,916			1,033,537
Cash and cash equivalents, end of year	$	1,860,988		$	1,621,046		$	739,916

The Notes to Consolidated Financial Statements are an integral part of these statements.

53

Consolidated Changes in Stockholders’ Equity

(dollars in thousands)	Common Stock		Capital in Excess of Par value			Retained Earnings			Accumulated Other Elements of Comprehensive Income			Treasury Stock			Total
Balance – December 31, 2006		1,162		1,207,281			745,829			16,326			(177,772	)		1,792,826
Net income							488,181									488,181
Foreign currency translation										59,686						59,686
Change in fair value of derivatives accounted for  as cash flow hedges, net of $2,803 in taxes										5,011						5,011
Other comprehensive income from derivative  transactions recognized in current year earnings, net of $2,225 in taxes										(4,583	)					(4,583	)
Pension settlement loss, net of $14,422 in taxes										23,282						23,282
Pension curtailment gain, net of $757 in taxes										(1,222	)					(1,222	)
Actuarial loss, net of amortization										2,504						2,504
Comprehensive income																572,859
Adjustment to initially apply FIN 48				(2,000	)		(4,996	)								(6,996	)
Non-cash stock compensation expense				31,383												31,383
Purchase of treasury stock													(341,423	)		(341,423	)
Common and treasury stock issued under stock option and other employee benefit plans				(40,411	)								93,195			52,784
Tax benefit of employee stock compensation plan transactions				32,239												32,239
Stock split		1,162		(1,162	)											−
Balance ― December 31, 2007		2,324		1,227,330			1,229,014			101,004			(426,000	)		2,133,672
Net income							580,703									580,703
Foreign currency translation										(169,378	)					(169,378	)
Loss on treasury locks, net of amortization and taxes										(1,192	)					(1,192	)
Change in fair value of derivatives accounted for as cash flow hedges, net of $26,920 in taxes										(47,245	)					(47,245	)
Other comprehensive income from derivative  transactions recognized in current year  earnings, net of $1,421 in taxes										3,254						3,254
Pension settlement loss, net of $9,693 in taxes										16,503						16,503
Impact after currency effects of actuarial gains/losses and plan amendments, net of $3,917 in taxes										7,911						7,911
Amortization of net actuarial losses and prior service credits, net of $2,295 in taxes										5,219						5,219
Comprehensive income																395,775
Adjustment for change in measurement date for post-retirement benefit plans							196			(294	)					(98	)
Non-cash stock compensation expense				35,627												35,627
Purchase of treasury stock													(259,883	)		(259,883	)
Treasury stock issued under stock option and other employee benefit plans				(30,159	)								47,759			17,600
Tax benefit of employee stock compensation plan transactions				22,548												22,548
Stock issued for conversion of convertible debt		39		(39	)											−
Adjustment to conversion option resulting from  conversion of convertible debt, net of taxes				(714	)											(714	)
Balance ― December 31, 2008		2,363		1,254,593			1,809,913			(84,218	)		(638,124	)		2,344,527
Net income							475,519									475,519
Foreign currency translation										86,649						86,649
Amortization of treasury locks, net of taxes										26						26
Change in fair value of derivatives accounted for as cash flow hedges, net of $6,664 in taxes										11,256						11,256
Other comprehensive income from derivative transactions recognized in current year earnings, net of $9,601 in taxes										16,215						16,215
Impact after currency effects of actuarial gains/losses, net of $9,697 in taxes										(22,955	)					(22,955	)
Amortization of net actuarial losses and prior service credits, net of $580 in taxes										2,371						2,371
Pension settlement loss										148						148
Comprehensive income																569,229
Equity securities issued for purchase of NATCO		236		982,082									6,207			988,525
Non-cash stock compensation expense				27,701												27,701
Purchase of treasury stock													(29,175	)		(29,175	)
Treasury stock issued under stock option and other employee benefit plans				(30,062	)								39,297			9,235
Tax benefit of employee stock compensation  plan transactions				9,718												9,718
Stock issued for conversion of convertible debt		32		(32	)											−
Balance ― December 31, 2009	$	2,631	$	2,244,000			$2,285,432			$      9,492		$	(621,795	)	$	3,919,760

The Notes to Consolidated Financial Statements are an integral part of these statements.

54

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Summary of Major Accounting Policies

   Company Operations — Cameron International Corporation (Cameron or the Company) is a leading provider of flow equipment products, systems and services to worldwide oil, gas and process industries. Products include oil and gas pressure control and separation equipment, including valves, wellheads, manifolds, controls, chokes, blowout preventers and assembled systems for oil and gas drilling, production and transmission processes used in onshore, offshore and subsea applications. Cameron also manufactures and services air and gas compressors and turbochargers. 

The Company’s operations are organized into three business segments — Drilling and Production Systems (DPS), Valves & Measurement (V&M) and Compression Systems (CS). Additional information regarding each segment may be found in Note 15 of the Notes to Consolidated Financial Statements. 

Principles of Consolidation— The consolidated financial statements include the accounts of the Company and all majority-owned subsidiaries. Investments from 20% to 50% in affiliated companies are accounted for using the equity method.

Estimates in Financial Statements— The preparation of the financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates include, but are not limited to, estimates of total contract profit or loss on certain long-term production contracts, estimated losses on accounts receivable, estimated realizable value on excess and obsolete inventory, contingencies, including tax contingencies, estimated liabilities for litigation exposures and liquidated damages, estimated warranty costs, estimates related to pension accounting, estimates related to the fair value of reporting units for purposes of assessing goodwill for impairment, estimated proceeds from assets held for sale and estimates related to deferred tax assets and liabilities, including valuation allowances on deferred tax assets. Actual results could differ materially from these estimates. 

Revenue Recognition— The Company generally recognizes revenue, net of sales taxes, once the following four criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery of the equipment has occurred or services have been rendered, (iii) the price of the equipment or service is fixed and determinable and (iv) collectibility is reasonably assured. For certain engineering, procurement and construction-type contracts, which typically include the Company’s subsea and drilling systems and processing equipment contracts, revenue is recognized in accordance with accounting rules relating to construction-type and production-type contracts as promulgated in the Financial Accounting Standards Board’s Accounting Standards Codification (FASB ASC). Under this guidance, the Company recognizes revenue on these contracts using a units-of-completion method. Under the units-of-completion method, revenue is recognized once the manufacturing process is complete for each unit specified in the contract with the customer, including customer inspection and acceptance, if required by the contract.  This method requires the Company to make estimates regarding the total costs of the project, which impacts the amount of gross margin the Company recognizes in each reporting period.  The Company routinely, and at least quarterly, reviews its estimates relating to total estimated contract profit or loss and recognizes changes in those estimates as they are determined.  Revenue associated with change orders is not included in the calculation of estimated profit on a contract until approved by the customer.  Costs associated with unapproved change orders are deferred if (i) the customer acknowledges a change has occurred and (ii) it is probable that the costs will be recoverable from the customer.  If these two conditions are not met, the costs are included in the calculation of estimated profit on the project.  Anticipated losses on contracts are recorded in full in the period in which they become evident.

Factors that may affect future project costs and margins include the ability to properly execute the engineering and design phases consistent with our customers’ expectations, production efficiencies obtained, and the availability and costs of labor, materials and subcomponents.  These factors can significantly impact the accuracy of the Company’s estimates and materially impact the Company’s future period earnings.  Approximately 28%, 28% and 21% of the Company's revenues for the years ended December 31, 2009, 2008 and 2007, respectively, were recognized under the accounting rules for construction-type and production-type contracts.

Shipping and Handling Costs— Shipping and handling costs are reflected in the caption entitled “Cost of sales (exclusive of depreciation and amortization shown separately below)” in the accompanying Consolidated Results of Operations statements. 

Cash Equivalents — The Company considers all investments purchased with original maturities of three months or less to be cash equivalents. 

Short-term Investments— Investments in available-for-sale marketable debt and equity securities are carried at fair value, based on quoted market prices. Differences between cost and fair value are reflected as a component of accumulated other elements of comprehensive income until such time as those differences are realized. The basis for computing realized gains or losses is the specific identification method. If the Company determines that a loss is other than temporary, such loss will be charged to earnings. No material realized gains or losses on short-term investments were recognized during the years ended December 31, 2009, 2008 and 2007. 

Allowance for Doubtful Accounts — The Company maintains allowances for doubtful accounts for estimated losses that may result from the inability of its customers to make required payments. Such allowances are based upon several factors including, but not limited to, historical experience, the length of time an invoice has been outstanding, responses from customers relating to demands for payment and the current and projected financial condition of specific customers. 

Inventories— Aggregate inventories are carried at cost or, if lower, net realizable value. On the basis of current costs, 48% of inventories at December 31, 2009 and 55% at December 31, 2008 are carried on the last-in, first-out (LIFO) method. For these locations, the use of LIFO results in a better matching of costs and revenues. The remaining inventories, which are generally located outside the United States and Canada, are carried on the first-in, first-out (FIFO) method. The Company provides a reserve for estimated inventory obsolescence or excess quantities on hand equal to the difference between the cost of the inventory and its estimated realizable value.

55

Plant and Equipment— Property, plant and equipment, both owned and under capital lease, are carried at cost. Maintenance and repair costs are expensed as incurred. The cost of renewals, replacements and betterments is capitalized. The Company capitalizes software developed or obtained for internal use. Accordingly, the cost of third-party software, as well as the cost of third-party and internal personnel that are directly involved in application development activities, are capitalized during the application development phase of new software systems projects. Costs during the preliminary project stage and post-implementation stage of new software systems projects, including data conversion and training costs, are expensed as incurred. Depreciation and amortization is provided over the estimated useful lives of the related assets, or in the case of assets under capital leases, over the related lease term, if less, using the straight-line method. The estimated useful lives of the major classes of property, plant and equipment are as follows:

	Estimated Useful Lives
Buildings and leasehold improvements	10-40years
Machinery, equipment and tooling	3-18years
Office furniture, software and other	3-10years

Goodwill —The Company reviews the carrying value of goodwill in accordance with accounting rules on impairment of goodwill as contained in the FASB’s ASC which requires that the Company estimate the fair value of each of its reporting units annually and compare such amounts to their respective book values to determine if an impairment of goodwill is required.  Generally, this review is conducted during the first quarter of each annual period.  Based upon the most recent annual evaluation, no impairment of goodwill was required.  The estimated fair value of each reporting unit for the 2009, 2008 and 2007 evaluations was determined using discounted cash flows (Level 3 unobservable inputs) or other market-related valuation models consistent with the accounting guidance for fair-value measurements in the FASB’s ASC. Certain estimates and judgments are required in the application of the fair value models.  The Company’s reporting units for goodwill impairment evaluation purposes are the Drilling, Surface, Subsea, Flow Control and Process Systems product lines of the DPS segment, the Engineered Valves, Distributed Valves, Process Valves, Measurement Systems product lines and the Aftermarket Services business of the V&M segment and the Reciprocating and Centrifugal Compression product lines of the CS segment. See Note 15 of the Notes to Consolidated Financial Statements for further discussion of the Company’s business segments. 

Intangible Assets— The Company’s intangible assets, excluding goodwill, represent purchased patents, trademarks, customer lists and other identifiable intangible assets. The majority of other identifiable intangible assets are amortized on a straight-line basis over the years expected to be benefited, generally ranging from 5 to 20 years. Such intangibles are tested for recoverability whenever events or changes in circumstances indicate that their carrying value may not be recoverable. As many areas of the Company’s business rely on patents and proprietary technology, it has followed a policy of seeking patent protection both inside and outside the United States for products and methods that appear to have commercial significance. The costs of developing any intangibles internally, as well as costs of defending such intangibles, are expensed as incurred. No material impairment of intangible assets was required as of December 31, 2009, 2008 or 2007.

Long-Lived Assets — In accordance with accounting rules for the impairment or disposal of long-lived assets as contained in the FASB’s ASC, long-lived assets, excluding goodwill and indefinite-lived intangibles, to be held and used by the Company are reviewed to determine whether any events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. For long-lived assets to be held and used, the Company bases its evaluation on impairment indicators such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements and other external market conditions or factors that may be present. If such impairment indicators are present or other factors exist that indicate that the carrying amount of the asset may not be recoverable, the Company determines whether an impairment has occurred through the use of an undiscounted cash flow analysis of the asset at the lowest level for which identifiable cash flows exist. If an impairment has occurred, the Company recognizes a loss for the difference between the carrying amount and the fair value of the asset. Assets are classified as held for sale when the Company has a plan for disposal of such assets and those assets meet the held for sale criteria contained in the FASB’s ASC and are stated at estimated fair value less estimated costs to sell.  No material impairment of long-lived assets was required as of December 31, 2009, 2008 or 2007.

Product Warranty— Estimated warranty costs are accrued either at the time of sale based upon historical experience or, in some cases, when specific warranty problems are encountered. Adjustments to the recorded liability are made periodically to reflect actual experience. 

Contingencies — The Company accrues for costs relating to litigation, including litigation defense costs, claims and other contingent matters, including liquidated damage liabilities, when such liabilities become probable and reasonably estimable. Such estimates may be based on advice from third parties, amounts specified by contract, amounts designated by legal statute or management’s judgment, as appropriate. Revisions to contingent liability reserves are reflected in income in the period in which different facts or information become known or circumstances change that affect the Company’s previous assumptions with respect to the likelihood or amount of loss. Amounts paid upon the ultimate resolution of contingent liabilities may be materially different from previous estimates and could require adjustments to the estimated reserves to be recognized in the period such new information becomes known. 

56

Income Taxes— The asset and liability approach is used to account for income taxes by recognizing deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. Income tax expense includes U.S. and foreign income taxes, including U.S. federal taxes on undistributed earnings of foreign subsidiaries to the extent such earnings are planned to be remitted. Taxes are not provided on the translation component of comprehensive income since the effect of translation is not considered to modify the amount of the earnings that are planned to be remitted. 

The Company accounts for uncertainties in its income tax positions under the income tax accounting provisions of the FASB’s ASC.  Interest related to an underpayment of income taxes is reflected as a component of interest expense in the Consolidated Results of Operations statement. Penalties on a tax position taken by the Company are reflected as a component of income tax expense in the Consolidated Results of Operations statement. See Note 12 of the Notes to Consolidated Financial Statements for further discussion of the Company’s income taxes.

Environmental Remediation and Compliance — Environmental remediation and postremediation monitoring costs are accrued when such obligations become probable and reasonably estimable. Such future expenditures are not discounted to their present value. 

Pension and Postretirement Benefits Accounting— The Company follows the FASB’s ASC rules on accounting for retirement benefits with regard to recognition of the funded status of its defined benefit pension and other postretirement benefit plans and in determining the amount of its net periodic benefit costs.  The measurement date for all of the Company’s plans was December 31, 2009.

Stock-Based Compensation— At December 31, 2009, the Company had four stock-based employee compensation plans, which are described in further detail in Note 9 of the Notes to Consolidated Financial Statements. Compensation expense for the Company’s stock-based compensation plans is measured using the fair value method required by the FASB’s ASC rules on stock compensation. Under this guidance, the fair value of stock option grants and restricted stock unit awards is amortized to expense using the straight-line method over the shorter of the vesting period or the remaining employee service period. 

Derivative Financial Instruments— Consistent with accounting guidance for derivative instruments and hedging activities included in the FASB’s ASC, the Company recognizes all derivative financial instruments as assets and liabilities on a gross basis and measures them at fair value.  Hedge accounting is only applied when the derivative is deemed highly effective at offsetting changes in anticipated cash flows of the hedged item or transaction. Changes in fair value of derivatives that are designated as cash flow hedges are deferred in accumulated other elements of comprehensive income until the underlying transactions are recognized in earnings, at which time any deferred hedging gains or losses are also recorded in earnings on the same line as the hedged item. Any ineffective portion of the change in the fair value of a derivative used as a cash flow hedge is recorded in earnings as incurred. The amounts recorded in earnings from ineffectiveness for the years ended December 31, 2009, 2008 and 2007 have not been material. The Company may at times also use forward or option contracts to hedge foreign currency assets and liabilities. These contracts are not designated as hedges under the accounting guidance described above.  Therefore, the changes in fair value of these contracts are recognized in earnings as they occur and offset gains or losses on the related asset or liability. 

The Company will also periodically use interest rate swaps to modify the interest characteristics of some or all of its fixed or floating rate debt.  Changes in the fair value of these derivatives are recognized as an adjustment to interest expense as they occur.

Foreign Currency — For most subsidiaries and branches outside the U.S., the local currency is the functional currency.  The financial statements of these subsidiaries and branches are translated into U.S. dollars as follows: (i) assets and liabilities at year-end exchange rates; (ii) income, expenses and cash flows at average exchange rates; and (iii) stockholders’ equity at historical exchange rates. For those subsidiaries for which the local currency is the functional currency, the resulting translation adjustment is recorded as a component of accumulated other elements of comprehensive income in the accompanying Consolidated Balance Sheets. 

For certain other subsidiaries and branches, operations are conducted primarily in currencies other than the local currencies, which are therefore the functional currency. Non-functional currency monetary assets and liabilities are remeasured at ending exchange rates. Revenue, expense and gain and loss accounts of these foreign subsidiaries and branches are remeasured at average exchange rates. Non-functional currency non-monetary assets and liabilities, and the related revenue, expense, gain and loss accounts are remeasured at historical rates. 

Foreign currency gains and losses arising from monetary transactions denominated in a currency other than the functional currency of the entity involved are included in income. The effects of foreign currency transactions were losses of $19,362,000,  $321,000, and $360,000 for the years ended December 31, 2009, 2008, and 2007 respectively.

Recently Issued Accounting Pronouncements — Effective January 1, 2009, the Company adopted the provisions of FASB ASC Topic No. 805, Business Combinations (ASC 805), and FASB ASC 810, related to Noncontrolling Interests in Consolidated Financial Statements. These two standards were adopted in conjunction with each other on a prospective basis. The most significant changes to business combination accounting pursuant to ASC 805 and ASC 810 are the following: (a) recognize, with certain exceptions, 100 percent of the fair values of assets acquired, liabilities assumed and noncontrolling interests in acquisitions of less than a 100 percent controlling interest when the acquisition constitutes a change in control of the acquired entity, (b) acquirers’ shares issued in consideration for a business combination will be measured at fair value on the closing date, not the announcement date, (c) recognize contingent consideration arrangements at their acquisition date fair values, with subsequent changes in fair value generally reflected in earnings, (d) the expensing of all transaction costs as incurred and most restructuring costs, (e) recognition of pre-acquisition loss and gain contingencies at their acquisition date fair values, with certain exceptions, (f) capitalization of acquired in-process research and development rather than expense recognition and (g) recognize changes that result from a business combination transaction in an acquirer’s existing income tax valuation allowances and tax uncertainty accruals as adjustments to income tax expense.  See Note 2 of the Notes to Consolidated Financial Statements for acquisitions subject to this new accounting guidance in 2009.

57

Reclassifications and Revisions — Certain prior year amounts have been reclassified to conform to the current year presentation.

   Subsequent Events — The Company has evaluated subsequent events through February 26, 2010, which is the date these financial statements were filed with the U.S. Securities and Exchange Commission.

Note 2: Acquisitions (Unaudited)

Pursuant to an Amended and Restated Agreement and Plan of Merger dated June 1, 2009 (the “Agreement”) with NATCO Group, Inc. (“NATCO”), the Company issued 1.185 shares of Cameron International Corporation common stock (the “Exchange Ratio”), or a total of approximately 23,637,708 shares, in order to acquire each NATCO common share outstanding on November 18, 2009 (the “Merger Date”).  The Company has included the financial results of NATCO, constituting less than 1.5% of the Company’s consolidated revenues and income before income taxes, in its consolidated financial statements for the period subsequent to the Merger Date. The majority of the NATCO operations have been included in the DPS segment.

Prior to the Merger Date, the prior management of Natco reported the following amounts in their Quarterly Report on Form 10-Q for the nine months ended September 30, 2009 and in their Annual Report on Form 10-K for the year ended December 31, 2008:

(dollars in thousands)	Nine Months Ended September 30, 2009		Year Ended December 31, 2008
Revenues	$	472,593	$	657,404
Net income	$	24,909	$	35,097

NATCO designed, manufactured and marketed oil and gas production equipment and separation systems. NATCO products and services have been used onshore and offshore, upstream and downstream, in most major oil and gas producing regions of the world. The Company believes that gaining access to NATCO’s separation and processing technology, products and services will significantly enhance its business as a provider of flow equipment, systems, and services in the oil and gas industry.

The Merger has been accounted for as a purchase business combination.   Assets acquired and liabilities assumed were recorded at their estimated fair values as of November 18, 2009, with the excess purchase price being recorded as goodwill.   The total preliminary purchase price is as follows:

	$ in thousands
Value of Cameron common shares issued in exchange for NATCO common shares	$	959,468
Cash paid for fractional shares		17
Value of NATCO stock options and restricted stock awards assumed		29,057
Total preliminary purchase price	$	988,542

The fair value of Cameron shares issued in exchange for NATCO shares and in exchange for NATCO stock option and restricted stock awards assumed was based on the closing price of the Company’s common stock on the Merger Date. For all NATCO stock options and restricted stock awards granted prior to June 1, 2009, vesting was accelerated under the terms of the NATCO stock option and restricted stock agreements; therefore, there was no modification of the awards under accounting rules for stock compensation awards. NATCO stock options and restricted stock awards granted between the signing of the Agreement and the Merger Date were exchanged for Cameron options and awards with similar terms and conditions and will continue to vest in accordance with the original terms under which they were awarded.

Preliminary Purchase Price Allocation

Under the purchase method of accounting, the total preliminary purchase price was allocated to NATCO’s net tangible and identifiable intangible assets based on their fair values as of the Merger Date. The excess of the purchase price over the net tangible and identifiable intangible assets was recorded as goodwill. The preliminary allocation of the purchase price was based upon preliminary valuations, and the Company’s estimates and assumptions are subject to change upon the receipt of additional information required to finalize the valuations. The primary areas of the purchase price allocation, which are not yet finalized, relate to inventory, property, plant and equipment, identifiable intangible assets, goodwill, certain preacquisition contingencies and related adjustments to deferred taxes. The final valuation of net assets is expected to be completed as soon as possible, but no later than one year from the acquisition date. The following table, set forth below, displays the total preliminary purchase price allocated to NATCO’s net tangible and identifiable intangible assets based on their estimated fair values as of the Merger Date. These items are included in the Company’s Consolidated Balance Sheet as of December 31, 2009 and are treated as non-cash additions, except for the cash acquired, in the Company’s Consolidated Cash Flows Statement for the year ended December 31, 2009.

58

	$ in thousands
Cash	$	34,396
Accounts receivable		157,051
Inventory		57,936
Other current assets		13,076
Property, plant and equipment		103,652
Goodwill		731,375
Intangibles		147,860
Other non-current assets		25,749
Accounts payable and accrued liabilities		(203,034	)
Deferred taxes		(56,146	)
Other non-current liabilities		(23,373	)
Total preliminary purchase price	$	988,542

The primary intangible assets identified by the Company were trade names, customer relationships, and technology with associated preliminary values of $14,000,000, $71,900,000 and $56,000,000, respectively. The remaining $5,960,000 consists of customer backlog and non-compete agreements. The useful lives associated with the trade names, customer relationships and technology ranged from 15-20 years.

Other Acquisitions

During 2009, the Company acquired the assets or capital stock of two other businesses for a total cash purchase price of $23,176,000.  These businesses were acquired to enhance the Company’s product offerings or aftermarket services in the DPS and V&M segments. The two acquisitions were included in the Company’s consolidated financial statements for the periods subsequent to the acquisitions. As of December 31, 2009, preliminary goodwill recorded as a result of these acquisitions was approximately $9,997,000, of which $3,348,000 will be deductible for income tax purposes.

During 2008, the Company acquired the assets or capital stock of seven businesses for a total cash purchase price of $191,681,000. These businesses were acquired to enhance the Company’s product offerings and to strengthen the Company’s ability to deliver a broader range of solutions to its customers in the DPS segment’s drilling, surface and flow control businesses and in the V&M segment’s measurement business. Total goodwill recorded from these acquisitions was approximately $95,966,000. Reductions to goodwill totaling approximately $23,364,000 were recorded during 2009 upon the finalization of the purchase price allocations from the prior year acquisitions based on receipt of information in 2009 relating to the fair value of the assets and liabilities acquired.

Note 3: Restructuring Expense and Acquisition Related Costs

During 2009, the Company incurred a total of $81,605,000 of restructuring expense and acquisition related costs, including (i) $60,951,000 associated with world-wide voluntary and involuntary employee severance programs, which primarily impacted the Company’s operations in the United States and France, (ii) $19,393,000 of costs incurred in connection with the November 2009 acquisition of NATCO and (iii) $1,261,000 of facility closure and other related costs.  Over 1,100 employees were covered by the employee severance programs.

Note 4: Receivables

Receivables consisted of the following:

	December 31,
(dollars in thousands)	2009			2008
Trade receivables	$	907,160		$	897,453
Other receivables		67,669			62,557
Allowance for doubtful accounts		(15,819	)		(9,648	)
Total receivables	$	959,010		$	950,362

59

Note 5: Inventories

Inventories consisted of the following:

	December 31,
(dollars in thousands)	2009			2008
Raw materials	$	168,594		$	126,649
Work-in-process		483,964			403,791
Finished goods, including parts and subassemblies		1,167,811			931,168
Other		11,515			10,197
		1,831,884			1,471,805
Excess of current standard costs over LIFO costs		(108,779	)		(85,240	)
Allowance for obsolete and excess inventory		(58,953	)		(49,640	)
Total inventories	$	1,664,152		$	1,336,925

Note 6: Plant and Equipment, Goodwill and Other Assets

Plant and equipment consisted of the following:

	December 31,
(dollars in thousands)	2009			2008
Land and land improvements	$	60,881		$	48,067
Buildings		477,952			347,034
Machinery and equipment		988,483			800,965
Tooling, dies, patterns, etc.		127,338			106,511
Office furniture & equipment		107,878			123,734
Capitalized software		178,391			129,305
Assets under capital leases		29,742			28,624
Construction in progress		110,015			160,299
All other		26,764			22,107
		2,107,444			1,766,646
Accumulated depreciation		(915,042	)		(834,999	)
Total plant and equipment, net	$	1,192,402		$	931,647

Changes in goodwill during 2009 were as follows:

(dollars in thousands)	DPS			V&M			CS		Total
Balance at December 31, 2008	$	369,281		$	277,714		$	62,222	$	709,217
Current year acquisitions		731,592			9,780			−		741,372
Changes primarily associated with adjustments to prior year acquisitions – related to  finalization of purchase price allocations		(23,191	)		(173	)		−		(23,364	)
Translation and other		4,339			10,016			−		14,355
Balance at December 31, 2009	$	1,082,021		$	297,337		$	62,222	$	1,441,580

Other assets consisted of the following:

	December 31,
(dollars in thousands)	2009			2008
Deferred income taxes	$	35,444		$	23,507
Other intangibles:
Gross:
Customer lists		115,004			45,873
Patents and technology		100,363			41,612
Trademarks		51,217			36,846
Noncompete agreements, engineering drawings and other		70,085			40,087
Accumulated amortization		(69,048	)		(46,575	)
Other		74,167			63,714
Total other assets	$	377,232		$	205,064

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Amortization associated with the Company’s capitalized software and other amortizable intangibles recorded as of December 31, 2009 is expected to approximate $29,498,000, $26,445,000, $22,049,000, $17,042,000 and $13,741,000 for the years ending December 31, 2010, 2011, 2012, 2013 and 2014, respectively.

Note 7: Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consisted of the following:

	December 31,
(dollars in thousands)	2009		2008
Trade accounts payable and accruals	$	549,665	$	525,507
Salaries, wages and related fringe benefits		228,267		164,411
Advances from customers		1,051,965		855,872
Sales-related costs and provisions		70,538		85,565
Payroll and other taxes		58,443		39,409
Product warranty		45,631		33,551
Fair market value of derivatives		6,125		35,715
Other		197,519		114,354
Total accounts payable and accrued liabilities	$	2,208,153	$	1,854,384

Additional information relating to the Company’s outstanding derivative contracts as of December 31, 2009 may be found in Note 18 of the Notes to Consolidated Financial Statements.

Activity during the year associated with the Company’s product warranty accruals was as follows (dollars in thousands): 

Balance December 31, 2008		Warranty Provisions		Acquisitions		Charges Against Accrual			Translation and Other			Balance December 31, 2009
$	33,551	$	41,718	$	6,276	$	(35,829	)	$	(85	)	$	45,631

Note 8: Employee Benefit Plans

As of December 31, 2009, the Company sponsored separate defined benefit pension plans for employees of its United Kingdom (U.K.) and German subsidiaries as well as several unfunded defined benefit arrangements for various other employee groups. The U.K. defined benefit pension plan was frozen to new entrants effective June 14, 1996. 

In June 2007, the Company notified employees and beneficiaries that it had elected to terminate the Cameron International Corporation Retirement Plan (Retirement Plan) as well as certain related unfunded supplemental plans, which covered the majority of salaried U.S. employees and certain domestic hourly employees at the time the Retirement Plan was frozen to new entrants, effective May 1, 2003.  In addition, the Company curtailed future benefits from being earned under the Retirement Plan, effective December 31, 2007.  The Company distributed the assets of the Retirement Plan in two phases.  The first phase occurred during the fourth quarter of 2007 and included former employees who were participants in the Retirement Plan.  In connection with this initial distribution of plan assets and the curtailment of future benefits from the Retirement Plan, the Company recorded a pre-tax settlement loss of $37,704,000 and a pre-tax curtailment gain of $1,979,000, for a net charge in 2007 of $35,725,000.  During the fourth quarter of 2008, the Company recorded an additional settlement loss of $26,196,000 in connection with the final distribution of plan assets to current employees who were participants in the Retirement Plan and any others not covered by the initial distribution of plan assets during 2007.  Following the final distribution, the excess remaining plan assets of approximately $5,117,000 became available to the Company to be used in meeting the cash funding obligations for matching contributions under the Cameron International Corporation Retirement Savings Plan, a defined contribution 401(k) plan available to the Company’s eligible United States-based employees.

Certain of the Company’s employees also participate in various domestic employee welfare benefit plans, including medical, dental and prescriptions. Additionally, certain employees receive retiree medical, prescription and life insurance benefits. All of the welfare benefit plans, including those providing postretirement benefits, are unfunded.

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Total net benefit plan expense (income) associated with the Company’s defined benefit pension and postretirement benefit plans consisted of the following:

	Pension Benefits									Postretirement Benefits
(dollars in thousands)	2009			2008			2007			2009			2008			2007
Service cost	$	2,687		$	3,867		$	9,039		$	8		$	3		$	5
Interest cost		14,068			20,315			25,129			534			1,075			1,211
Expected return on plan assets		(13,285	)		(22,113	)		(33,444	)		−			−			−
Amortization of prior service cost (credit)		15			15			(540	)		(890	)		(382	)		(383	)
Amortization of losses (gains)		5,741			9,365			14,065			(1,915	)		(1,484	)		(1,078	)
Net benefit plan expense (income) before  settlement loss and curtailment gain		9,226			11,449			14,249			(2,263	)		(788	)		(245	)
Settlement loss		235			26,196			37,704			−			−			−
Curtailment gain		−			−			(1,979	)		−			−			−
Total net benefit plan expense (income)	$	9,461		$	37,645		$	49,974		$	(2,263	)	$	(788	)	$	(245	)
Net benefit plan expense (income):
U.S. plans	$	361		$	29,701		$	42,065		$	(2,263	)	$	(788	)	$	(245	)
Foreign plans		9,100			7,944			7,909			−			−			−
Total net benefit plan expense (income)	$	9,461		$	37,645		$	49,974		$	(2,263	)	$	(788	)	$	(245	)

Included in accumulated other elements of comprehensive income at December 31, 2009 and 2008 are the following amounts that have not yet been recognized in net periodic benefit plan cost, as well as the amounts that are expected to be recognized in net periodic benefit plan cost during the year ending December 31, 2010:

	December 31, 2009						December 31, 2008						Year Ending December 31, 2010
(dollars in thousands)	Before Tax			After Tax			Before Tax			After Tax			Expected Amortization
Pension benefits:
Prior service cost	$	(29	)	$	(18	)	$	(44	)	$	(28	)	$	−
Actuarial losses, net		(97,066	)		(69,824	)		(75,145	)		(54,075	)		6,913
Post retirement benefits:
Prior service credit		4,926			3,110			5,816			3,664			(890	)
Actuarial gains		11,348			7,208			18,018			11,351			(1,169	)
	$	(80,821	)	$	(59,524	)	$	(51,355	)	$	(39,088	)	$	4,854

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The change in the projected benefit obligation associated with the Company’s defined benefit pension plans and the change in the accumulated benefit obligation associated with the Company’s postretirement benefit plans was as follows:

	Pension Benefits						Postretirement Benefits
(dollars in thousands)	2009			2008			2009			2008
Benefit obligation at beginning of year	$	221,340		$	389,820		$	8,963		$	17,825
Service cost		2,687			3,867			8			3
Interest cost		14,068			20,315			534			1,075
Plan participants’ contributions		940			930			−			−
Actuarial losses (gains)		30,715			(20,588	)		4,755			(4,639	)
Exchange rate changes		21,182			(73,144	)		−			−
Benefits and expenses paid from plan assets		(16,413	)		(98,878	)		−			−
Benefits paid directly by the Company		−			(3,679	)		(1,601	)		(1,571	)
Plan amendments		−			−			−			(3,999	)
Acquisitions		−			2,697			5,650			−
Change in plan measurement date		−			−			−			269
Benefit obligation at end of year	$	274,519		$	221,340		$	18,309		$	8,963
Benefit obligation at end of year:
U.S. plans	$	3,036		$	12,872		$	18,309		$	8,963
Foreign plans		271,483			208,468			−			−
Benefit obligation at end of year	$	274,519		$	221,340		$	18,309		$	8,963

The total accumulated benefit obligation for the Company’s defined benefit pension plans was $239,169,000 and $194,813,000 at December 31, 2009 and 2008, respectively.

The change in the plan assets associated with the Company’s defined benefit pension and postretirement benefit plans was as follows:

	Pension Benefits						Postretirement Benefits
(dollars in thousands)	2009			2008			2009			2008
Fair value of plan assets at beginning of year	$	195,129		$	368,381		$	−		$	−
Actual return on plan assets		23,509			(21,076	)		−			−
Company contributions		25,428			12,225			1,601			−
Plan participants’ contributions		940			930			−			−
Exchange rate changes		18,724			(65,359	)		−			−
Acquisitions		−			2,585			−			−
Excess assets remitted to plan sponsor		(5,117	)		−			−			−
Benefits and expenses paid from plan assets		(16,413	)		(102,557	)		(1,601	)		−
Fair value of plan assets at end of year	$	242,200		$	195,129		$	−		$	−
Fair value of plan assets at end of year:
U.S. plans	$	−		$	15,764		$	−		$	−
Foreign plans		242,200			179,365			−			−
Fair value of plan assets at end of year	$	242,200		$	195,129		$	−		$	−

The funded status of the Company’s defined benefit pension and postretirement benefit plans was as follows:

	Pension Benefits December 31,						Postretirement Benefits  December 31,
(dollars in thousands)	2009			2008			2009			2008
Overfunded plans	$	−		$	5,328		$	−		$	−
Underfunded plans		(32,319	)		(31,539	)		(18,309	)		(8,963	)
Funded status	$	(32,319	)	$	(26,211	)	$	(18,309	)	$	(8,963	)
Funded status at end of year:
Current	$	(207	)	$	5,125		$	(1,880	)	$	(1,169	)
Non-current		(32,112	)		(31,336	)		(16,429	)		(7,794	)
Funded status at end of year	$	(32,319	)	$	(26,211	)	$	(18,309	)	$	(8,963	)

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Actual asset investment allocations for the Company’s main defined benefit pension plans in the United States and the United Kingdom, which account for approximately 97.0% of total plan assets, are as follows:

	Pension Benefits
(dollars in thousands)	2009			2008
U.S. plan:
Equity securities		−			−
Fixed income debt securities, cash and other		−			100	%
U.K. plan:
Equity securities		56	%		44	%
Fixed income debt securities, cash and other		44	%		56	%

In each jurisdiction, the investment of plan assets is overseen by a plan asset committee whose members act as trustees of the plan and set investment policy. For the years ended December 31, 2009 and 2008, the investment strategy has been designed to approximate the performance of market indexes. The asset allocation for the U.S. plan at December 31, 2008 was heavily weighted towards fixed income debt securities, cash and other short-term investments due to the plan termination announced during 2007 as discussed above. The Company has modified its targeted allocation for the U.K. plan for 2010 and beyond to be approximately 55% in equities, 40% in fixed income debt securities and 5% in real estate and other.

    During 2009, the Company made contributions totaling approximately $25,428,000 to the assets of its various defined benefit pension plans. Contributions to plan assets for 2010 are currently expected to approximate $9,380,000 assuming no change in the current discount rate or expected investment earnings.

The fair values of the Company’s pension plan assets by asset category at December 31, 2009 were as follows:

(dollars in thousands)	Fair Value Based on Quoted Prices in Active Markets for Identical Assets (Level 1)		Fair Value Based on Significant Other Observable Inputs (Level 2)		Fair Value Based on Significant Unobservable Inputs (Level 3)		Total
Cash and cash equivalents	$	14,227	$	−	$	−	$	14,277
Equity Securities:
US Equities		−		54,278		−		54,278
Other		22,919		53,438		−		76,357
Bonds:
Non-US Government Bonds		−		70,746		−		70,746
Non-US Corporate Bonds		−		17,271		−		17,271
Alternative Investments:
Insurance contracts		−		−		7,172		7,172
Other		−		−		2,099		2,099
Total assets	$	37,196	$	195,733	$	9,271	$	242,200

Changes in the fair value of pension plan assets determined based on level 3 unobservable inputs were as follows (dollars in thousands):

	Year Ended December 31, 2009
Balance at beginning of the year	$	8,622
Purchases/Sales, net		479
Actual return on plan assets		(220	)
Currency impact		390
Balance at end of the year	$	9,271

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The weighted-average assumptions associated with the Company’s defined benefit pension and postretirement benefit plans were as follows:

	Pension Benefits						Postretirement Benefits
	2009			2008			2009			2008
Assumptions related to net benefit costs:
Domestic plans:
Discount rate		5.08-6.52	%		5.00 – 6.25	%		4.88-6.52	%		6.25	%
Expected return on plan assets		5.25	%		5.25	%		–			–
Health care cost trend rate		–			–			9.00	%		7.50	%
Measurement date	1/1/2009			1/1/2008			1/1/2009			10/1/2007
International plans:
Discount rate		5.75-6.25	%		5.25 – 5.75	%		–			–
Expected return on plan assets		5.50-6.75	%		4.50 – 6.75	%		–			–
Rate of compensation increase		3.00-4.50	%		2.75 – 4.50	%		–			–
Measurement date	1/1/2009			1/1/2008				–			–
Assumptions related to end-of-period benefit obligations:
Domestic plans:
Discount rate		5.03	%		5.08 – 6.52	%		5.03	%		6.52	%
Health care cost trend rate		–			–			9.00	%		7.50	%
Measurement date	12/31/2009			12/31/2008			12/31/2009			12/31/2008
International plans:
Discount rate		5.50-5.75	%		5.75 – 6.25	%		–			–
Rate of compensation increase		3.00-4.50	%		3.00 – 4.50	%		–			–
Measurement date	12/31/2009			12/31/2008				–			–

The Company’s discount rate assumptions for its U.S. postretirement benefits plan and its U.K. defined benefit pension plan are based on the average yield of a hypothetical high quality bond portfolio with maturities that approximately match the estimated cash flow needs of the plans. 

The assumptions for expected long-term rates of return on assets are based on historical experience and estimated future investment returns, taking into consideration anticipated asset allocations, investment strategies and the views of various investment professionals. 

The rate of compensation increase assumption for foreign plans reflect local economic conditions and the Company’s compensation strategy in those locations.

The health care cost trend rate is assumed to decrease gradually from 9% to 5% by 2018 and remain at that level thereafter. A one-percentage-point change in the assumed health care cost trend rate would have the following effects:

(dollars in thousands)	One-percentage- point Increase		One-percentage- point Decrease
Effect on total of service and interest cost components in 2009	$	19	$	(18	)
Effect on postretirement benefit obligation as of December 31, 2009	$	1,052	$	(945	)

Year-end amounts applicable to the Company’s pension plans with projected benefit obligations in excess of plan assets and accumulated benefit obligations in excess of plan assets were as follows:

	Projected Benefit Obligation in Excess of Plan Assets						Accumulated Benefit Obligation in Excess of Plan Assets
(dollars in thousands)	2009			2008			2009			2008
Fair value of applicable plan assets	$	242,200		$	179,761		$	9,271		$	7,005
Projected benefit obligation of applicable plans	$	(274,519	)	$	(211,300	)	$	−		$	−
Accumulated benefit obligation of applicable plans	$	−		$	−		$	(18,533	)	$	(13,712	)

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Future expected benefit payments are as follows:

	Pension Benefits				Postretirement Benefits
(dollars in thousands)	U.S. Unfunded Plans		Foreign Funded Plans		U.S. Unfunded Plans
Year ended December 31:
2010	$	212	$	6,059	$	1,926
2011	$	220	$	6,228	$	1,860
2012	$	214	$	6,420	$	1,828
2013	$	209	$	6,746	$	1,773
2014	$	205	$	6,914	$	1,719
2015 - 2019	$	1,243	$	38,634	$	7,190

The Company’s United States-based employees who are not covered by a bargaining unit and certain others are also eligible to participate in the Cameron International Corporation Retirement Savings Plan. Under this plan, employees’ savings deferrals are partially matched in cash and invested at the employees’ discretion. In connection with the termination of the Retirement Plan, as described above, the Company modified the Retirement Savings Plan, effective January 1, 2008, to provide enhanced benefits to eligible employees.  Beginning January 1, 2008, the Company provides nondiscretionary retirement contributions to the Retirement Savings Plan on behalf of each eligible employee equal to 3% of their defined pay (prior to January 1, 2008, the Company made cash contributions for hourly employees who were not covered under collective bargaining agreements and contributed 2% of pay for new employees hired after May 1, 2003, dependent on the Company meeting certain specified financial objectives).  Eligible employees vest in the 3% retirement contributions plus any earnings after completing three years of service.  In addition, the Company provides an immediately vested matching contribution of up to 100% of the first 6% of pay contributed by each eligible employee.  Prior to January 1, 2008, the Company matched up to 100% of the first 3% of pay contributed by each eligible employee and up to 50% of the next 3% of eligible employee contributions.  Employees may contribute amounts in excess of 6% of their pay to the Retirement Savings Plan, subject to certain United States Internal Revenue Service limitations. The Company’s expense under this plan for the years ended December 31, 2009, 2008 and 2007 amounted to $20,575,000, $19,584,000 and $13,228,000, respectively. In addition, the Company provides savings or other benefit plans for employees under collective bargaining agreements and, in the case of certain international employees, as required by government mandate, which provide for, among other things, Company matching contributions in cash based on specified formulas. Expense with respect to these various defined contribution and government-mandated plans for the years ended December 31, 2009, 2008 and 2007 amounted to $34,295,000, $33,846,000 and $17,437,000, respectively.

Note 9: Stock-Based Compensation Plans

The Company has grants outstanding under four equity compensation plans, only one of which, the 2005 Equity Incentive Plan (2005 EQIP), is currently available for future grants of equity compensation awards to employees and non-employee directors. The other three plans, which continue to have options outstanding at December 31, 2009, are the Company’s Long-Term Incentive Plan, as Amended and Restated as of November 2002, the Broadbased 2000 Incentive Plan and the Second Amended and Restated 1995 Stock Option Plan for Non-Employee Directors.  Options granted under the Company’s four equity compensation plans had an exercise price equal to the market value of the underlying common stock on the date of grant and all terms were fixed.

Stock-based compensation expense recognized was as follows:

	Year Ended December 31,
(dollars in thousands)	2009		2008		2007
Outstanding restricted and deferred stock unit and award grants	$	18,505	$	20,084	$	15,610
Unvested outstanding stock option grants		9,196		15,543		15,773
Total stock-based compensation expense	$	27,701	$	35,627	$	31,383

The total income statement tax benefit recognized from stock-based compensation arrangements during the years ended December 31, 2009, 2008 and 2007  totaled approximately $10,208,000, $13,182,000, $12,004,000, respectively.

Stock options

Options with terms of seven years are granted to officers and other key employees of the Company under the 2005 EQIP plan at a fixed exercise price equal to the fair value of the Company’s common stock on the date of grant. The options vest in one-third increments each year on the anniversary date following the date of grant, based on continued employment. Grants made in previous years to officers and other key employees under the Long-Term and Broadbased Incentive Plans provide similar terms, except that the options terminate after ten years rather than seven. 

66

In connection with the acquisition of NATCO, effective November 18, 2009, the Company issued 811,727 vested and 132,793 unvested options for the Company’s common stock to certain former NATCO employees in exchange for similar options in NATCO common stock held by those employees immediately prior to the acquisition date.  The terms, conditions and value of the options issued by the Company were similar to the NATCO options and thus, no option modification accounting was required at the date of the exchange (see Note 2 of the Notes to Consolidated Financial Statements for further information).

A summary of option activity under the Company’s stock compensation plans as of and for the year ended December 31, 2009 is presented below: 

Options	Shares			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (dollars in thousands)
Outstanding at January 1, 2009		7,368,776		$	26.52
Granted		827,000			39.24
Added through acquisitions		944,520			27.26
Exercised		(1,220,531	)		17.17
Forfeited		(88,043	)		30.42
Expired		(31,734	)		32.96
Outstanding at December 31, 2009		7,799,988		$	29.35		4.49	$	100,973
Vested at December 31, 2009 or expected to vest in the future		7,775,983		$	29.34		4.48	$	100,761
Exercisable at December 31, 2009		5,293,918		$	27.52		3.83	$	78,197

	At December 31, 2009
Stock-based compensation cost not yet recognized under the straight-line method (dollars in thousands)	$	12,720
Weighted-average remaining expense recognition period (in years)		2.02

The fair values per share of option grants for the years ended December 31, 2009, 2008 and 2007 were estimated using the Black-Scholes-Merton option pricing formula with the following weighted-average assumptions: 

	Year Ended December 31,
	2009			2008			2007
Expected life (in years)		2.4			3.3			2.6
Risk-free interest rate		1.1	%		1.7	%		3.4	%
Volatility		32.0	%		36.8	%		31.2	%
Expected dividend yield		0.0	%		0.0	%		0.0	%

    The Company determined the assumptions involving the expected life of its options and volatility rates based primarily on historical data and consideration of expectations for the future.

The above assumptions and market prices of the Company’s common stock at the date of option exercises resulted in the following values:

	Year Ended December 31,
	2009		2008		2007
Grant-date fair value per option	$	8.10	$	6.31	$	10.32
Intrinsic value of options exercised (dollars in thousands)	$	23,511	$	59,921	$	95,203
Average intrinsic value per share of options exercised	$	19.26	$	35.08	$	23.69

Restricted and deferred stock units and awards

During 2005, the Company began issuing restricted stock units with no exercise price to key employees in place of stock options. During 2009, 2008 and 2007, grants of restricted stock units were made to officers and key employees. Approximately 72,634 and 235,433 of the restricted stock unit grants during 2008 and 2007,  respectively, contained performance-based conditions which were fully satisfied based on the Company’s full-year 2008 and 2007 financial performance against certain targets. No 2009 restricted stock unit grants contained performance-based conditions.  The restricted stock units granted to officers and other key employees generally provided for three-year 100% cliff vesting on the third anniversary of the date of grant, based on continued employment.

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In connection with the acquisition of NATCO, effective November 18, 2009, the Company issued 68,881 unvested Cameron restricted common stock awards to certain former NATCO employees in exchange for similar shares of NATCO restricted stock held by those employees immediately prior to the acquisition date.  The terms, conditions and value of the restricted stock awards issued by the Company were similar to the NATCO restricted stock awards and thus, no restricted stock modification accounting was required at the date of the exchange (see Note 2 of the Notes to Consolidated Financial Statements for further information).

Under an update to the Compensation Program for Non-Employee Directors approved by the Board of Directors in May 2008, non-employee directors are entitled to receive an annual number of deferred stock units that is equal to a value of $250,000 determined on the day following the Company’s annual meeting of stockholders or, if a director’s election to the Board occurs between annual meetings of stockholders, the initial grant of deferred stock units is based on a pro-rata portion of the annual grant amount equal to the remaining number of months in the board year until the next annual meeting of stockholders.  These units, which have no exercise price and no expiration date, vest in one-fourth increments quarterly over the following year but cannot be converted into common stock until the earlier of termination of Board service or three years, although Board members have the ability to voluntarily defer conversion for a longer period of time. 

A summary of restricted stock unit and restricted stock award activity under the Company’s stock compensation plans as of and for the year ended December 31, 2009 is presented below: 

Restricted Stock Units and Awards	Number			Weighted-Average Grant Date Fair Value
Nonvested at January 1, 2009		1,799,869		$	30.16
Granted		616,904			25.44
Added through acquisitions		68,881			40.59
Vested		(525,160	)		21.57
Forfeited		(48,407	)		27.46
Nonvested at December 31, 2009		1,912,087		$	31.56

	At December 31, 2009
Stock-based compensation cost not yet recognized under the straight-line method (dollars in thousands)	$	19,447
Weighted-average remaining expense recognition period (in years)		1.28

The intrinsic value of restricted stock units vesting during the years ended December 31, 2009, 2008 and 2007 was $10,980,000, $19,278,000 and $5,277,000, respectively.

During the years ended December 31, 2009, 2008 and 2007, respectively, a total of 616,904, 639,799 and 708,042 restricted stock units (post-split) at a weighted-average grant date fair value of $25.44, $36.40 and $29.04 per share (post-split) were granted. The fair value of restricted stock units is determined based on the closing trading price of the Company’s common stock on the grant date.

At December 31, 2009, 8,340,040 shares were reserved for future grants of options, deferred stock units, restricted stock units and other awards. The Company may issue either treasury shares or newly issued shares of its common stock in satisfaction of these awards.

Note 10: Debt

    The Company’s debt obligations were as follows: 

	Year Ended December 31,
(dollars in thousands)	2009			2008
Short-term borrowings under revolving credit facility	$	−		$	14,482
Senior notes, net of $1,928 of unamortized original issue discount at December 31, 2009 ($2,028 at December 31, 2008)		748,072			747,972
Convertible debentures, net of discount of $22,768 at December 31, 2009 ($38,543 at December 31, 2008)		477,232			592,566
Other debt		16,742			10,941
Obligations under capital leases		12,420			13,945
		1,254,466			1,379,906
Current maturities		(22,164	)		(161,279	)
Long-term portion	$	1,232,302		$	1,218,627

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On June 26, 2008, the Company issued $450,000,000 in aggregate principal amount of 6.375% Senior Notes due July 15, 2018 (the “2018 Notes”) and $300,000,000 in aggregate principal amount of 7.0% Senior Notes due July 15, 2038 (the “2038 Notes” and, together with the 2018 Notes, the “Notes”). The Company pays interest on the Notes on January 15 and July 15 of each year, beginning January 15, 2009.  The Company may redeem some of the Notes from time to time or all of the Notes at any time at redemption prices that include accrued and unpaid interest and a make-whole premium as defined in the respective supplemental indentures (the Supplemental Indentures).  In the event of the occurrence of a Change of Control Repurchase Event, as defined in the Supplemental Indentures, the holders of the Notes may require the Company to repurchase the Notes at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest.  The Notes are senior unsecured obligations of the Company and rank equally with all of the Company’s other existing unsecured and unsubordinated debt.

On April 14, 2008, the Company entered into a multicurrency revolving credit facility providing for borrowings up to $585,000,000, which expires on April 14, 2013. The facility allows the Company to borrow funds at the London Interbank Offered Rate (LIBOR) plus 40 basis points (including a facility fee), which varies based on the Company's current debt rating, and, if aggregate outstanding credit exposure exceeds one-half of the total facility amount, an additional 10-basis-point fee is incurred. The Company, at its option, may also borrow at other specified rates as defined in the credit facility. Additionally, the Company is required to maintain a total debt-to-capitalization ratio of no more than 60% during the term of the agreement. At December 31, 2008, the Company had Pound Sterling borrowings outstanding totaling £10,000,000, under its $585,000,000 multicurrency revolving credit facility at an interest rate of 4.20% with a maturity date of January 20, 2009.  No amounts were outstanding under the credit facility at December 31, 2009.

On May 23, 2006, the Company issued $500,000,000 face value of twenty-year senior convertible debentures, due June 15, 2026, that pay interest semi-annually at a rate of 2.5% on each June 15 and December 15, beginning December 15, 2006.  The Company has the right to redeem the 2.5% Convertible Debentures at any time on or after June 20, 2011, at principal plus accrued and unpaid interest. Holders may require the Company to repurchase all or a portion of the 2.5% Convertible Debentures on June 15 of 2011, 2016 and 2021, or at any time the Company undergoes a fundamental change as defined in the debenture agreement, for principal plus accrued and unpaid interest. Prior to June 15, 2011, holders may also convert their debenture holdings into shares of common stock at a conversion rate of 28.2656 shares of common stock per $1,000 principal amount, or $35.38 per share (post-split basis), only under the following circumstances: 

• during any quarter after June 30, 2006, if the closing price of the Company’s common stock exceeds 130% of the then-current conversion price for at least 20 consecutive trading days in the 30 consecutive trading day period ending on the last trading day of the immediately preceding quarter;

• during the five business-day period after any five consecutive trading day period in which the trading price per debentures for each day of the period was less than 97% of the product of the last reported sales price of the Company’s common stock and the current conversion rate;

• upon the occurrence of specified corporate events; or

• upon receipt of a notice of redemption by the Company.

Holders may also convert the 2.5% Convertible Debentures into shares of common stock at any time on or after June 15, 2011 without meeting the above provisions. In either case involving conversion by the holders, any amount due up to and including the principal amount of the debt and accrued but unpaid interest will be satisfied in cash by the Company. The portion of the conversion value of the debt in excess of principal may, at the option of the Company, be satisfied in either cash or shares of the Company’s common stock. The initial conversion rate is subject to adjustment based on certain specified events or in the event the Company undergoes a fundamental change as defined. As part of the offering of the 2.5% Convertible Debentures, the Company agreed to file a shelf registration statement related to the resale of the debentures and the common stock issuable upon conversion of the debentures within a specified period of time and to have the registration statement become effective and maintain effectiveness during periods specified in the debenture agreement. This registration statement was filed timely by the Company on August 14, 2006. If the registration statement subsequently ceases to be effective, the Company could be subject to liquidated damage payments of up to 0.50% per year on the principal amount of the 2.5% Convertible Debentures, payable on June 15 and December 15 of each year during the period that the registration statement is not effective, as defined in the debenture agreement.

During 2004, the Company issued an aggregate amount of $238,000,000 face value of twenty-year convertible debentures due 2024 with an interest rate of 1.5%, payable semi-annually on May 15 and November 15. The Company had the right to redeem the 1.5% Convertible Debentures anytime after May 15, 2009 at the principal amount plus accrued and unpaid interest, and the debenture holders had the right to require the Company to repurchase the debentures on the fifth, tenth and fifteenth anniversaries of the issue. The 1.5% Convertible Debentures were convertible into the Company’s common stock at a rate of 57.9428 shares per debenture, or $17.26 per share (post-split basis). The holders could convert the debentures into the Company’s common stock only under the following circumstances: 

• during any quarter in which the sales price of the Company’s common stock exceeds 120% of the conversion price for at least 20 consecutive trading days in the 30 consecutive trading day period ending on the last trading day of the immediately preceding quarter;

• during any five consecutive trading day period immediately following any five consecutive trading day period in which the average trading price for the debentures is less than 97% of the average conversion value of the debentures;

• upon fundamental changes in the ownership of the Company’s common stock, which would include a change of control as defined in the debenture agreement.

69

The Company elected to use the “cash pay” provision with respect to its 1.5% Convertible Debentures for any debentures tendered for conversion or designated for redemption. Under this provision, the Company will satisfy in cash its conversion obligation for 100% of the principal amount of any debentures submitted for conversion, with any remaining amount to be satisfied in shares of the Company’s common stock. 

During 2008, the Company notified the holders of its 1.5% and 2.5% Convertible Debentures of their rights under the terms of the debentures to request conversion of those debentures.  As a result of conversions by the holders, $106,891,000 principal value of the 1.5% Convertible Debentures were repaid by the Company in cash during 2008 along with the issuance of 3,975,147 new shares of the Company’s common stock to satisfy the excess of the conversion value of the debentures over the principal balance.

On June 18, 2009, the Company notified the holders of its 1.5% Convertible Debentures that it would exercise its right to redeem for cash all of the outstanding notes on July 20, 2009 at a redemption price equal to 100% of the outstanding principal amount, plus accrued and unpaid interest up to, but not including the redemption date.   All of the remaining 1.5% Convertible Debentures, with a principal value totaling $131,109,000, were either converted by the holders or redeemed by the Company in cash.  In addition, approximately 3,156,891 shares of common stock were issued to holders of the 1.5% Convertible Debentures who elected the conversion option in recognition of the conversion value of those debentures at the conversion date.

    The Company’s 2.5% and 1.5% Convertible Debentures are accounted for under accounting rules for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) as contained in the FASB’s ASC.  These accounting rules require the Company to separately account for the liability and equity components of its convertible debt instruments in a manner that reflects the Company’s non-convertible debt borrowing rates when interest cost is recognized.  Specifically, the accounting rules require bifurcation of a component of the debt, classification of that component in equity and the accretion of the resulting discount on the debt as a component of interest expense.  The bifurcation of the debt and equity components was based on estimated market borrowing rates of 5.9% and 4.85%, respectively, for non-convertible debt instruments similar to the 2.5% and 1.5% Convertible Debentures.  The bifurcation resulted in approximately $65,802,000 being included in capital in excess of par value on the Company’s Consolidated Balance Sheets at both December 31, 2009 and 2008, related to the initial conversion value of the Company’s 2.5% and 1.5% Convertible Debentures.   The discount on the 2.5% Convertible Debentures remaining at December 31, 2009 from the initial bifurcation of the conversion value was $22,768,000, which will be fully amortized to interest expense by June 15, 2011.   In addition to the expense associated with the stated interest rates on the debt, an additional amount of interest expense totaling $15,775,000, $20,623,000 and $20,532,000 has been recognized for the years ended December 31, 2009, 2008 and 2007, respectively, relating to the amortization of the remaining discount on the convertible debentures that is intended to result in a rate of interest expense recognized in the Company’s Consolidated Results of Operations for each year that approximates the estimated market borrowing rates for non-convertible debt instruments as shown above.  Had the 2.5% Convertible Debentures been convertible at December 31, 2009 (which they were not under the terms of the debenture agreement), the Company could have been required to issue approximately 2,171,077 shares of its common stock in satisfaction of the conversion value of the debentures in excess of their principal amount based on the closing price of the Company’s common stock of $41.80 at December 31, 2009.

Other debt, some of which is held by entities located in countries with high rates of inflation, has a weighted-average interest rate of 12.9% at December 31, 2009 (15.8% at December 31, 2008). Future maturities of the Company’s debt (including the remaining amount of unamortized discount but excluding capital leases) are approximately $16,742,000 in 2010, $477,232,000 in 2011, and $748,072,000 thereafter. Maturities in 2011 are mainly related to the 2.5% Convertible Debentures, which the holders have the right to require the Company to repurchase on June 15, 2011.  Maturities thereafter are related to the 6.375% and 7.0% Senior Notes issued during 2008.

In addition to the above, the Company also has other unsecured and uncommitted credit facilities available to its foreign subsidiaries to fund ongoing operating activities. Certain of these facilities also include annual facility fees. 

Interest paid during the years ended December 31, 2009, 2008 and 2007 approximated $81,974,000, $47,448,000 and $17,279,000, respectively.

Note 11: Leases

The Company leases certain facilities, office space, vehicles and office, data processing and other equipment under capital and operating leases. Rental expenses for the years ended December 31, 2009, 2008 and 2007 were $57,419,000, $49,582,000 and $42,709,000, respectively. Future minimum lease payments with respect to capital leases and operating leases with noncancelable terms in excess of one year were as follows:

(dollars in thousands)	Capital Lease Payments			Operating Lease Payments
Year ended December 31:
2010	$	5,553		$	32,140
2011		4,165			32,234
2012		2,407			20,716
2013		520			17,938
2014		16			20,842
Thereafter		−			36,260
Future minimum lease payments		12,661			160,130
Less: amount representing interest		(241	)		−
Lease obligations at December 31, 2009	$	12,420		$	160,130

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Note 12: Income Taxes

The components of income before income taxes were as follows: 

	Year Ended December 31,
(dollars in thousands)	2009		2008		2007
Income before income taxes:
U.S. operations	$	223,950	$	334,250	$	287,363
Foreign operations		418,879		517,185		400,580
Income before income taxes	$	642,829	$	851,435	$	687,943

The provisions for income taxes were as follows: 

	Year Ended December 31,
(dollars in thousands)	2009			2008			2007
Current:
U.S. federal	$	83,531		$	142,306		$	64,497
U.S. state and local		3,440			708			4,143
Foreign		119,376			139,298			99,725
		206,347			282,312			168,365
Deferred:
U.S. federal		(33,299	)		(25,215	)		20,578
U.S. state and local		(291	)		3,024			(3,787	)
Foreign		(5,447	)		10,611			14,606
		(39,037	)		(11,580	)		31,397
Income tax provision	$	167,310		$	270,732		$	199,762

 The reasons for the differences between the provision for income taxes and income taxes using the U.S. federal income tax rate were as follows:

	Year Ended December 31,
(dollars in thousands)	2009			2008			2007
U.S. federal statutory rate		35.00	%		35.00	%		35.00	%
State and local income taxes		0.38			0.67			0.68
Foreign statutory rate differential		(7.26	)		(4.86	)		(3.47	)
Change in valuation allowance on deferred tax assets		1.99			0.71			(1.52	)
Nondeductible expenses		1.54			0.59			1.28
Net U.S. tax on foreign source income		(5.00	)		0.58			0.59
Change in utilization of certain foreign tax credits		−			−			(2.26	)
All other		(0.62	)		(0.89	)		(1.26	)
Total		26.03	%		31.80	%		29.04	%
Total income taxes paid	$	231,171		$	159,680		$	199,283

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Components of deferred tax assets (liabilities) were as follows:

	December 31,
(dollars in thousands)	2009			2008
Deferred tax liabilities:
Plant and equipment	$	(71,748	)	$	(43,818	)
Inventory		(39,484	)		(38,769	)
Convertible debentures		(8,181	)		(13,572	)
Intangible assets		(82,359	)		−
Other		(22,953	)		(13,477	)
Total deferred tax liabilities		(224,725	)		(109,636	)
Deferred tax assets:
Postretirement benefits other than pensions		12,310			12,472
Reserves and accruals		98,861			54,519
Net operating losses and tax credits		102,554			23,237
Pensions		20,080			7,998
Other		12,197			24,218
Total deferred tax assets		246,002			122,444
Valuation allowance		(46,127	)		(28,748	)
Net deferred tax liabilities	$	(24,850	)	$	(15,940	)

Changes in the Company’s unrecognized tax benefits were as follows:

	Year Ended December 31,
(dollars in thousands)	2009			2008			2007
Balance at beginning of year	$	46,611		$	47,344		$	42,789
Increases due to tax positions taken prior to the fiscal year		26,056			240			2,850
Increases due to tax positions taken during the fiscal year		12,744			3,805			7,943
Decreases relating to settlements with tax authorities		(27,552	)		(3,170	)		(2,412	)
Decreases resulting from the lapse of applicable statutes of limitation		(1,400	)		(1,552	)		(5,727	)
Net (decrease) increase due to translation and interest		3,957			(56	)		1,901
Balance at end of year	$	60,416		$	46,611		$	47,344

The Company is not currently aware of any adjustments that may occur that would materially increase or decrease the amount of its unrecognized tax benefits during the next twelve-month period or any material amounts included as unrecognized tax benefits at December 31, 2009 that, if recognized, would not impact the Company’s effective income tax rate.

There were no material payments for interest or penalties for the years ended December 31, 2009, 2008 or 2007. Also, there were no material accruals for unpaid interest or penalties at December 31, 2009 or 2008.

The Company and its subsidiaries file income tax returns in the United States, various domestic states and localities and in many foreign jurisdictions. The earliest years’ tax returns filed by the Company that are still subject to examination by authorities in the major tax jurisdictions are as follows:

United States	United Kingdom	Canada	France	Germany	Norway	Singapore	Italy
2000	2007	2002	2006	2004	2003	2004	2005

Primarily due to losses incurred in certain jurisdictions as well as changes in estimates concerning the realizability of certain deferred tax assets, valuation allowances increased in 2009 by $12,852,000, increased in 2008 by $7,103,000 and decreased in 2007 by $6,897,000, with a corresponding offset in the Company’s income tax expense. In addition, valuation allowances were established in 2007 in the amount of $7,400,000, to offset the tax benefit of net operating losses and other deferred tax assets recorded as part of international acquisitions. Similar valuation allowances established in prior years were reduced in 2008 by $7,650,000, with a corresponding offset to goodwill. Certain valuation allowances are recorded in the non-U.S. dollar functional currency of the respective operation and the U.S. dollar equivalent reflects the effects of translation. The valuation allowance increased in 2009 by $4,527,000 and decreased in 2008 and 2007 by $4,612,000 and $3,830,000, respectively, due to translation. 

At December 31, 2009, the Company had net operating loss and credit carryforwards in numerous jurisdictions with various expiration periods, including certain jurisdictions which have no expiration period. The Company had a valuation allowance of $46,127,000 as of December 31, 2009 against these net operating loss and credit carryforwards and other deferred tax assets.  The Company has considered all available evidence in assessing the need for the valuation allowance, including future taxable income and ongoing prudent and feasible tax planning strategies. In the event the Company were to determine that it would not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the net deferred tax assets would be charged to income in the period such determination was made. 

72

The tax benefit that the Company receives with respect to certain stock benefit plan transactions is credited to capital in excess of par value and does not reduce income tax expense. This benefit amounted to $9,718,000, $22,548,000 and $32,239,000 in 2009, 2008 and 2007, respectively, including adjustments made to certain accruals related to prior year benefits. 

The Company considers all unremitted earnings of its foreign subsidiaries, except certain amounts primarily earned before 2003, certain amounts earned during 2009, certain amounts earned by NATCO, and amounts previously subjected to tax in the U.S., to be permanently reinvested. An estimate of the amounts considered permanently reinvested is $1,679,000,000. It is not practical for the Company to compute the amount of additional U.S. tax that would be due on this amount. The Company has provided deferred income taxes on the earnings that the Company anticipates will be remitted.

The Company operates in jurisdictions in which it has been granted tax holidays. Currently the benefit of these holidays is not material.

Note 13: Stockholders’ Equity

Common Stock

On December 7, 2007, stockholders of the Company approved an amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 150,000,000 to 400,000,000. Additionally, effective December 28, 2007, the Company implemented a 2-for-1 stock split in the form of a stock dividend at that date.

    In February 2006, the Company’s Board of Directors changed the number of shares of the Company’s common stock authorized for repurchase from the 5,000,000 shares authorized in August 2004 to 10,000,000 shares in order to reflect the 2-for-1 stock split effective December 15, 2005. This authorization was subsequently increased to 20,000,000 in connection with the 2-for-1 stock split effective December 28, 2007 and eventually to 30,000,000 by a resolution adopted by the Board of Directors on February 21, 2008. Additionally, on May 22, 2006, the Company’s Board of Directors approved repurchasing shares of the Company’s common stock with the proceeds remaining from the Company’s 2.5% Convertible Debenture offering, after taking into account a planned repayment of $200,000,000 principal amount of the Company’s outstanding 2.65% Senior Notes due 2007. This authorization is in addition to the 30,000,000 shares described above. 

Purchases pursuant to the 30,000,000-share Board authorization may be made by way of open market purchases, directly or indirectly, for the Company’s own account or through commercial banks or financial institutions and by the use of derivatives such as a sale or put on the Company’s common stock or by forward or economically equivalent transactions. 

Changes in the number of shares of the Company’s outstanding stock for the last three years were as follows:

	Common Stock		Treasury Stock			Shares Outstanding
Balance - December 31, 2006		116,170,863		(3,881,236	)		112,289,627
Purchase of treasury stock before stock split		−		(5,284,256	)		(5,284,256	)
Stock issued under stock option and other employee benefit plans before stock split		−		2,074,029			2,074,029
Effect of stock split on shares outstanding		116,170,863		(7,091,464	)		109,079,399
Purchase of treasury stock after stock split		−		(150,000	)		(150,000	)
Balance - December 31, 2007		232,341,726		(14,332,927	)		218,008,799
Purchase of treasury stock		−		(6,968,363	)		(6,968,363	)
Stock issued under stock option and other employee benefit plans		−		1,877,170			1,877,170
Stock issued upon conversion of the 1.5% Convertible Debentures		3,975,147		−			3,975,147
Balance - December 31, 2008		236,316,873		(19,424,120	)		216,892,753
Purchase of treasury stock		−		(935,178	)		(935,178	)
Stock issued related to NATCO acquisition		23,637,708		237,323			23,875,031
Stock issued under stock option and other employee benefit plans		−		1,668,217			1,668,217
Stock issued upon conversion of the 1.5% Convertible Debentures		3,156,891		−			3,156,891
Balance - December 31, 2009		263,111,472		(18,453,758	)		244,657,714

     At December 31, 2009, 17,204,156 shares of unissued common stock were reserved for future issuance under various employee benefit plans.

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Preferred Stock

The Company is authorized to issue up to 10,000,000 shares of preferred stock, par value of $.01 per share.  Shares of preferred stock may be issued in one or more series of classes, each of which series or class shall have such distinctive designation or title as shall be fixed by the Board of Directors of the Company prior to issuance of any shares.  Each such series or class shall have such voting powers, full or limited, or no voting powers, and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated in such resolution or resolutions providing for the issuance of such series or class of preferred stock as may be adopted by the Board of Directors prior to the issuance of any shares thereof.

Stockholder Rights Plan

On August 19, 2009, the Board of Directors approved amending its Stockholder Rights Agreement to accelerate the expiration of its outstanding Stockholder Rights to August 31, 2009 from October 31, 2017.

Amendment to Bylaws

The Board of Directors approved an amendment to the Company’s Bylaws, effective February 18, 2010, to adopt a majority vote standard for non-contested elections of directors.

Retained Earnings

Delaware law, under which the Company is incorporated, provides that dividends may be declared by the Company’s Board of Directors from a current year’s earnings as well as from the total of capital in excess of par value plus the retained earnings, which amounted to approximately $4,529,432,000 at December 31, 2009.

Note 14: Accumulated Other Elements of Comprehensive Income

Accumulated other elements of comprehensive income comprised the following:

	December 31,
(dollars in thousands)	2009			2008
Accumulated foreign currency translation gain (loss)	$	81,576		$	(5,073	)
Prior service credits, net, related to the Company’s pension and postretirement benefit plans		3,092			3,636
Actuarial losses, net, related to the Company’s pension  and postretirement benefit plans		(62,616	)		(42,724	)
Change in fair value of derivatives accounted for as cash flow hedges, net of tax and other (1)		(12,560	)		(40,057	)
	$	9,492		$	(84,218	)

1 Approximately $8,391,000 (after tax) of accumulated other elements of comprehensive income is expected to be recognized as a reduction in earnings during 2010.

Note 15: Business Segments

    The Company’s operations are organized into three separate business segments - DPS, V&M and CS.

    Based upon the amount of equipment installed worldwide and available industry data, DPS is a leading provider of systems and equipment used to control pressures, direct flows of oil and gas wells and separate oil and gas from impurities. DPS’s products include surface and subsea production systems, blowout preventers, drilling and production control systems, oil and gas separation equipment, gas conditioning units, membrane separation systems, water processing systems, block valves, gate valves, actuators, chokes, wellheads, manifolds, drilling riser and aftermarket parts and services.

Based upon the amount of equipment installed worldwide and available industry data, V&M is a leading provider of valves and also supplies measurement systems primarily used to control, direct and measure the flow of oil and gas as they are moved from individual wellheads through flow lines, gathering lines and transmission systems to refineries, petrochemical plants and industrial centers for processing. V&M’s products include gate valves, ball valves, butterfly valves, Orbit valves, double block and bleed valves, plug valves, globe valves, check valves, actuators, chokes and aftermarket parts and services as well as measurement products such as totalizers, turbine meters, flow computers, chart recorders, ultrasonic flow meters and sampling systems.

CS provides reciprocating and integrally geared centrifugal compression equipment and related aftermarket parts and services for the energy industry and for manufacturing companies and chemical process industries worldwide.

The Company’s primary customers are oil and gas majors, national oil companies, independent producers, engineering and construction companies, drilling contractors, rental companies, geothermal energy and independent power producers, pipeline operators, major chemical, petrochemical and refining companies, natural gas processing and transmission companies, compression leasing companies, durable goods manufacturers, utilities and air separation companies.

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The Company markets its equipment through a worldwide network of sales and marketing employees supported by agents and distributors in selected international locations. Due to the extremely technical nature of many of the products, the marketing effort is further supported by a staff of engineering employees.

The Company expenses all research and product development and enhancement costs as incurred, or if incurred in connection with a product ordered by a customer, when the revenue associated with the product is recognized. For the years ended December 31, 2009, 2008 and 2007, the Company incurred research and product development costs, including costs incurred on projects designed to enhance or add to its existing product offerings, totaling approximately $78,115,000, $68,665,000 and $59,585,000, respectively. DPS accounted for 70%, 69% and 68% of each respective year’s total costs.

Summary financial data by segment follows: 

	Year Ended December 31, 2009
(dollars in thousands)	DPS		V&M		CS		Corporate & Other			Consolidated
Revenues	$	3,406,054	$	1,194,685	$	622,506	$	−		$	5,223,245
Depreciation and amortization	$	90,313	$	36,208	$	16,525	$	13,541		$	156,587
Interest income	$	−	$	−	$	−	$	(5,851	)	$	(5,851	)
Interest expense	$	−	$	−	$	−	$	92,370		$	92,370
Income (loss) before income taxes	$	631,475	$	211,347	$	90,558	$	(290,551	)	$	642,829
Capital expenditures	$	174,405	$	49,965	$	12,324	$	4,227		$	240,921
Total assets	$	4,771,052	$	1,181,273	$	411,748	$	1,361,300		$	7,725,373

	Year Ended December 31, 2008
(dollars in thousands)	DPS		V&M		CS		Corporate & Other			Consolidated
Revenues	$	3,736,706	$	1,473,245	$	638,926	$	−		$	5,848,877
Depreciation and amortization	$	70,498	$	32,192	$	15,253	$	14,136		$	132,079
Interest income	$	−	$	−	$	−	$	(27,350	)	$	(27,350	)
Interest expense	$	−	$	−	$	−	$	70,290		$	70,290
Income (loss) before income taxes	$	639,919	$	301,405	$	102,014	$	(191,903	)	$	851,435
Capital expenditures	$	163,649	$	62,982	$	24,614	$	21,003		$	272,248
Total assets	$	3,069,816	$	1,199,353	$	423,379	$	1,209,823		$	5,902,371

	Year Ended December 31, 2007
(dollars in thousands)	DPS		V&M		CS		Corporate & Other			Consolidated
Revenues	$	2,887,079	$	1,273,680	$	505,609	$	-		$	4,666,368
Depreciation and amortization	$	55,882	$	30,039	$	13,668	$	10,185		$	109,774
Interest income	$	-	$	-	$	-	$	(30,745	)	$	(30,745	)
Interest expense	$	-	$	-	$	-	$	43,845		$	43,845
Income (loss) before income taxes	$	498,751	$	268,033	$	76,483	$	(155,324	)	$	687,943
Capital expenditures	$	147,304	$	59,736	$	22,783	$	15,766		$	245,589
Total assets	$	2,784,305	$	1,174,630	$	363,656	$	408,228		$	4,730,819

For internal management reporting, and therefore in the above segment information, Corporate and Other includes expenses associated with the Company’s Corporate office, as well as all of the Company’s interest income, interest expense, certain litigation expense managed by the Company’s General Counsel, foreign currency gains and losses from certain intercompany lending activities managed by the Company’s centralized Treasury function, all of the restructuring expense and acquisition related costs for the Company, the charge for the termination of the U.S. defined benefit pension plans and all of the Company’s stock compensation expense. Consolidated interest income and expense are treated as a Corporate item because cash equivalents and debt, including location, type, currency, etc., are managed on a worldwide basis by the Corporate Treasury Department. In addition, income taxes are managed on a worldwide basis by the Corporate Tax Department and are therefore treated as a corporate item. 

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Revenue by shipping location and long-lived assets by country were as follows: 

	Year Ended December 31,
(dollars in thousands)	2009		2008		2007
Revenues:
United States	$	2,551,301	$	2,885,127	$	2,359,256
United Kingdom		663,412		765,779		664,026
Other foreign countries		2,008,532		2,197,971		1,643,086
Total revenues	$	5,223,245	$	5,848,877	$	4,666,368

	December 31,
(dollars in thousands)	2009		2008		2007
Long-lived assets:
United States	$	1,769,316	$	1,034,959	$	849,580
United Kingdom		232,839		182,474		210,972
Other foreign countries		899,448		541,274		496,259
Total long-lived assets	$	2,901,603	$	1,758,707	$	1,556,811

Note 16: Earnings Per Share

    The calculation of basic and diluted earnings per share for each period presented was as follows: 

	Year Ended December 31,
(amounts in thousands, except per share data)	2009		2008		2007
Net income	$	475,519	$	580,703	$	488,181
Average shares outstanding (basic)		221,391		217,524		219,355
Common stock equivalents		2,194		2,529		3,439
Incremental shares from assumed conversion of convertible debentures		1,441		8,594		8,593
Shares utilized in diluted earnings per share calculation		225,026		228,647		231,387
Earnings per share:
Basic	$	2.15	$	2.67	$	2.23
Diluted	$	2.11	$	2.54	$	2.11

The Company’s 2.5% Convertible Debentures have been included in the calculation of diluted earnings per share for the year ended December 31, 2009, since the average price of the Company’s common stock exceeded the conversion price of the debentures during a portion of 2009.  The Company’s 1.5% and 2.5% Convertible Debentures have both been included in the calculation of diluted earnings per share for the years ended December 31, 2008 and 2007, since the average market price of the Company’s common stock exceeded the conversion price of the debentures during all or a portion of each year.   See Note 10 of the Notes to Consolidated Financial Statements for further information regarding conversion of these debentures.

Note 17: Summary of Non-cash Operating, Investing and Financing Activities

    The effect on net assets of non-cash operating, investing and financing activities was as follows:

	Year Ended December 31,
(dollars in thousands)	2009			2008
Net assets of NATCO acquired in exchange for Cameron common stock, excluding net cashacquired	$	954,146		$	−
Tax benefit of employee stock compensation plan transactions	$	9,718		$	22,548
Change in fair value of derivatives accounted for as cash flow hedges, net of tax	$	11,256		$	(47,245	)
Actuarial loss and impact of plan amendments, net, related to defined benefit pension and postretirement  benefit plans	$	(22,955	)	$	7,911
Change in net assets due to a change in the measurement date of the Company’s postretirement benefit plans	$	−		$	(98	)

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Note 18: Off-Balance Sheet Risk and Guarantees, Concentrations of Credit Risk and Fair Value of Financial Instruments

Off-Balance Sheet Risk and Guarantees

    At December 31, 2009, the Company was contingently liable with respect to approximately $871,554,000 of bank guarantees and standby letters of credit issued on its behalf by major domestic and international financial institutions in connection with the delivery, installation and performance of the Company’s products under contract with customers throughout the world. The Company was also liable to these financial institutions for financial letters of credit and other guarantees issued on its behalf totaling nearly $27,891,000 which provide security to third parties relating to the Company’s ability to meet specified financial obligations, including payment of leases, customs duties, insurance and other matters. Additionally, the Company was liable for approximately $4,470,000 of insurance bonds at December 31, 2009 relating to the requirements in certain foreign jurisdictions where the Company does business that the Company hold insurance bonds rather than bank guarantees.

    The Company’s other off-balance sheet risks were not material at December 31, 2009.

Concentrations of Credit Risk

    Apart from its normal exposure to its customers, who are predominantly in the energy industry, the Company had no significant concentrations of credit risk at December 31, 2009. The Company typically does not require collateral for its customer trade receivables.  Allowances for doubtful accounts are recorded for estimated losses that may result from the inability of customers to make required payments.  See Note 4 of the Notes to Consolidated Financial Statements for additional information.

Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of cash and cash equivalents, trade receivables, trade payables, derivative instruments and debt instruments. The book values of cash and cash equivalents, trade receivables, trade payables, derivative instruments and floating-rate debt instruments are considered to be representative of their respective fair values. Certain cash equivalents have also been valued based on quoted market prices which are considered to be Level 1 market inputs as defined in the fair value measurements guidance of the FASB’s ASC.  At December 31, 2009, the fair value of the Company’s fixed-rate debt (based on Level 1 quoted market rates) was approximately $1,450,927,000 as compared to $1,250,000,000 face value of the debt.  At December 31, 2008, the fair value of the Company’s fixed rate debt (based on Level 1 quoted market rates) was approximately $1,303,470,000 as compared to $1,381,109,000 face value of the debt.

In order to mitigate the effect of exchange rate changes, the Company will often attempt to structure sales contracts to provide for collections from customers in the currency in which the Company incurs its manufacturing costs. In certain instances, the Company will enter into foreign currency forward contracts to hedge specific large anticipated receipts or disbursements in currencies for which the Company does not traditionally have fully offsetting local currency expenditures or receipts. The Company was party to a number of long-term foreign currency forward contracts at December 31, 2009. The purpose of the majority of these contracts was to hedge large anticipated non-functional currency cash flows on major subsea, drilling, valve or other equipment contracts involving the Company’s United States operations and its wholly-owned subsidiaries in Brazil, Italy, Romania, Singapore and the United Kingdom. At December 31, 2009, the Company was also party to certain foreign currency forward and foreign currency option contracts which have not been accounted for as hedges involving underlying foreign currency denominated accounts recorded on the balance sheet of its wholly-owned subsidiary in Canada or anticipated foreign currency cash flows of its wholly-owned subsidiary in Italy.  The Company determines the fair value of its outstanding foreign currency forward and option contracts based on quoted exchange rates for the respective currencies applicable to similar instruments.  These quoted exchange rates are considered to be Level 2 observable market inputs.

The Company manages its debt portfolio to achieve an overall desired position of fixed and floating rates and employs interest rate swaps as a tool to achieve that goal.  On October 19, 2009, the Company entered into an interest rate swap with a third party to receive a fixed interest rate of 6.375% and to pay a variable rate based on the 3 month London Interbank Offered Rate (LIBOR) plus 4.801% on a notional value of $200,000,000.  The swap matures on January 15, 2012 and provides for semi-annual payments each January 15 and July 15, beginning January 15, 2010.  Interest is compounded quarterly on the 15th of each January, April, July and October.  An additional interest rate swap with a notional value of $200,000,000 and terms identical to the above was also entered into on October 23, 2009, except that the variable rate to be paid is based on 3 month LIBOR plus 4.779%.  The fair value of the interest rate swaps is affected by changes in quoted 3-month LIBOR rates, which is also considered to be a Level 2 observable market input.

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 Information relating to the contracts and the estimated fair values recorded in the Company’s Consolidated Balance Sheets at December 31, 2009 and 2008 follows:

	December 31, 2009 Year of Contract Expiration
(amounts in thousands except exchange rates)	2010		2011		2012		Total			December 31, 2008
FX Forward Contracts −
Buy EUR/Sell GBP:
Notional amount to buy (in EUR)		8,204		715		−		8,919			49,456
Average GBP to EUR contract rate		0.8072		0.8120		−		0.8076			0.7992
Average GBP to EUR rate at December 31, 2009		0.8923		0.8934		−		0.8924			0.9611
Fair value at December 31, 2009 in U.S. dollars							$	1,206		$	11,596
Buy EUR/Sell CAD:
Notional amount to sell (in EUR)		24,600		−		−		24,600			−
Average CAD to EUR contract rate		1.5773		−		−		1.5773			−
Average CAD to EUR rate at December 31, 2009		1.5132		−		−		1.5132			−
Fair value at December 31, 2009 in U.S. dollars							$	1,497		$	−
Sell USD/Buy GBP:
Notional amount to sell (in USD)		45,196		3,222		−		48,418			156,129
Average USD to GBP contract rate		1.8380		1.7884		−		1.8346			1.9155
Average USD to GBP rate at December 31, 2009		1.6064		1.6023		−		1.6061			1.4498
Fair value at December 31, 2009 in U.S. dollars							$	(5,994	)	$	(37,917	)
Other Currencies:
Fair value at December 31, 2009 in U.S. dollars							$	(448	)	$	(19,507	)
FX Options to buy EUR −
Notional Amount to sell in USD		15,600		−		−		15,600
Average USD to EUR contract rate		1.4705		−		−		1.4705
Average USD to EUR rate at December 31, 2009		1.4337		−		−		1.4337
Fair value at December 31, 2009 in U.S. dollars							$	184		$	−
Interest Rate Swaps −
Notional Amount in USD		−		−		400,000		400,000
Fair value at December 31, 2009 in U.S. dollars							$	1,245		$	−

The fair value of derivative financial instruments recorded in the Company’s Consolidated Balance Sheet at December 31, 2009 was as follows (in thousands):

	Asset Derivatives			Liability Derivatives
	Balance sheet location	Fair value		Balance sheet location	Fair value
Derivatives designated as hedging instruments:
Foreign exchange contracts	Current assets	$	1,181	Current liabilities	$	(6,027	)
	Non-current assets		3	Non-current liabilities		(349	)
			1,184			(6,376	)
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Current assets		1,735	Current liabilities		(98	)
Interest rate swaps	Non-current assets		1,245	Non-current liabilities		−
			2,980			(98	)
Total Derivatives		$	4,164		$	(6,474	)

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The effects of derivative financial instruments on the Company’s consolidated financial statements for the year ended December 31, 2009 were as follows (in thousands):

	Effective Portion						Ineffective Portion and Other
Derivatives in Cash Flow Hedging Relationships	Amount of Pre-Tax Gain (Loss) Recognized in OCI on Derivatives		Location of Gain (Loss) Reclassified from Accumulated OCI into Income	Amount of Gain (Loss) Reclassified from Accumulated OCI into Income			Location of Gain (Loss) Recognized in Income on Derivatives	Amount of Gain (Loss) Recognized in Income on Derivatives
Foreign exchange contracts	$	17,920	Revenues	$	(17,303	)	Cost of goods sold-ineffective portion	$	2,828
			Cost of goods sold		(8,365	)
			Depreciation expense		(148	)
Total	$	17,920		$	(25,816	)		$	2,828

Approximately $1,051,000 was recognized as a reduction to cost of goods sold and $1,245,000 was recognized as a reduction in interest expense during the year ended December 31, 2009 relating to foreign currency forward contracts and interest rate swap agreements, respectively, which were not designated as hedging instruments.

Note 19: Contingencies

    The Company is subject to a number of contingencies, including environmental matters, litigation and tax contingencies.

Environmental Matters

The Company’s worldwide operations are subject to regulations with regard to air, soil and water quality as well as other environmental matters. The Company, through its environmental management system and active third-party audit program, believes it is in substantial compliance with these regulations.

The Company is currently identified as a potentially responsible party (PRP) with respect to two sites designated for cleanup under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) or similar state laws. One of these sites is Osborne, Pennsylvania (a landfill into which a predecessor of the CS operation in Grove City, Pennsylvania deposited waste), where remediation is complete and remaining costs relate to ongoing ground water treatment and monitoring. The other is believed to be a de minimis exposure. The Company is also engaged in site cleanup under the Voluntary Cleanup Plan of the Texas Commission on Environmental Quality at former manufacturing locations in Houston and Missouri City, Texas. Additionally, the Company has discontinued operations at a number of other sites which had been active for many years. The Company does not believe, based upon information currently available, that there are any material environmental liabilities existing at these locations. At December 31, 2009, the Company’s consolidated balance sheet included a noncurrent liability of approximately $7,329,000 for environmental matters.

Legal Matters

In 2001, the Company discovered that contaminated underground water from the former manufacturing site in Houston referenced above had migrated under an adjacent residential area. Pursuant to applicable state regulations, the Company notified the affected homeowners. Concerns over the impact on property values of the underground water contamination and its public disclosure led to a number of claims by homeowners.  The Company has settled these claims, primarily as a result of a settlement of a class action lawsuit, and is obligated to reimburse 197 homeowners for any diminution in value of their property due to contamination concerns at the time of any sale.

Recent testing results of monitoring wells on the southeastern border of the plume have caused the Company to notify 33 homeowners whose property is adjacent to the class area that their property may be affected.  The Company is taking remedial measures to prevent these properties from being affected.

The Company believes, based on its review of the facts and law, that any potential exposure from existing agreements as well as any possible new claims that may be filed with respect to this underground water contamination will not have a material adverse effect on its financial position or results of operations. The Company’s consolidated balance sheet included a liability of approximately $13,701,000 for these matters as of December 31, 2009.

The Company has been named as a defendant in a number of multi-defendant, multi-plaintiff tort lawsuits since 1995. At December 31, 2009, the Company’s consolidated balance sheet included a liability of approximately $5,099,000 for such cases, including estimated legal costs. The Company believes, based on its review of the facts and law, that the potential exposure from these suits will not have a material adverse effect on its consolidated results of operations, financial condition or liquidity.

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Regulatory Contingencies

In January 2007, the Company underwent a Pre-Assessment Survey as part of a Focused Assessment Audit initiated by the Regulatory Audit Division of the U.S. Customs and Border Protection, Department of Homeland Security.  The PreAssessment Survey of the period September 2001 through September 2007 resulted in a finding that the Company had deficiencies in its U.S. customs compliance process and had underpaid customs duties.  The Company has since paid these duties and taken corrective action with respect to the deficiencies.  The sufficiency of these corrective actions is currently undergoing a Follow-Up Compliance Improvement Plan Review which is expected to be completed by the end of the third quarter of 2010.

In July 2007, the Company was one of a number of companies to receive a letter from the Criminal Division of the U.S. Department of Justice (DOJ) requesting information on activities undertaken on their behalf by a customs clearance broker. The DOJ is inquiring into whether certain of the services provided to the Company by the customs clearance broker may have involved violations of the U.S. Foreign Corrupt Practices Act (FCPA).  In response, the Company engaged special counsel reporting to the Audit Committee of the Board of Directors to conduct an investigation into its dealings with the customs clearance broker in Nigeria and Angola to determine if any payment made to or by the customs clearance broker on the Company’s behalf constituted a violation of the FCPA. Special counsel also reviewed the extent, if any, of the Company’s knowledge and involvement in the performance of these services and activities and whether the Company fulfilled its obligations under the FCPA.  In addition, the U.S. Securities and Exchange Commission (SEC) is conducting an informal inquiry into the same matters.  The investigation by special counsel has been completed and the Company is waiting for the agencies to commence discussions regarding the ultimate disposition of this matter.  The current tolling agreement between the Company and the agencies expires on April 30, 2010.  At this stage, the Company cannot predict what the disposition will entail. The Company undertook enhanced compliance training efforts for its personnel, including foreign operations personnel dealing with customs clearance regulations and hired a Chief Compliance Officer in September 2008 to oversee and direct all legal compliance matters for the Company. 

The Company completed its acquisition of NATCO in November 2009, and at the time NATCO had a pending SEC enforcement action under the FCPA.  In January 2010, without admitting or denying the underlying allegations, it settled the action and agreed to a civil penalty of $65,000, and, in a related proceeding, agreed to an order requiring it to cease and desist from future violations of the FCPA.

Tax Contingencies

The Company has legal entities in over 35 countries. As a result, the Company is subject to various tax filing requirements in these countries. The Company prepares its tax filings in a manner which it believes is consistent with such filing requirements. However, some of the tax laws and regulations which the Company is subject to are subject to interpretation and/or judgment. Although the Company believes that the tax liabilities for periods ending on or before the balance sheet date have been adequately provided for in the financial statements, to the extent that a taxing authority believes that the Company has not prepared its tax filings in accordance with the authority’s interpretation of the tax laws/regulations, the Company could be exposed to additional taxes.

Note 20: Unaudited Quarterly Operating Results

Unaudited quarterly operating results were as follows: 

	2009 (quarter ending)
(dollars in thousands, except per share data)	March 31,		June 30,		September 30,		December 31,
Revenues	$	1,257,023	$	1,270,038	$	1,231,791	$	1,464,393
Revenues less cost of sales (exclusive of depreciation and amortization)	$	413,365	$	429,254	$	403,779	$	436,741
Restructuring expense and acquisition related costs	$	22,316	$	10,864	$	5,853	$	42,572
Net income	$	114,637	$	138,604	$	124,944	$	97,334
Earnings per share:
Basic	$	0.53	$	0.64	$	0.57	$	0.42
Diluted	$	0.52	$	0.62	$	0.56	$	0.41

	2008 (quarter ending)
(dollars in thousands, except per share data)	March 31,		June 30,		September 30,		December 31,
Revenues	$	1,339,254	$	1,480,633	$	1,504,733	$	1,524,257
Revenues less cost of sales (exclusive of depreciation and amortization)	$	373,895	$	417,388	$	453,907	$	475,756
Charge for pension plan termination	$	−	$	−	$	−	$	26,196
Net income	$	122,981	$	148,785	$	162,980	$	145,957
Earnings per share:
Basic	$	0.57	$	0.69	$	0.75	$	0.67
Diluted	$	0.53	$	0.64	$	0.71	$	0.66

80

Selected Consolidated Historical Financial Data of Cameron International Corporation

The following table sets forth selected historical financial data for the Company for each of the five years in the period ended December 31, 2009. This information should be read in conjunction with the consolidated financial statements of the Company and notes thereto included elsewhere in this Annual Report.

	Year Ended December 31,
(dollars in thousands, except per share data)	2009			2008			2007			2006			2005
Income Statement Data:
Revenues	$	5,223,245		$	5,848,877		$	4,666,368		$	3,742,907		$	2,517,847
Costs and expenses:
Cost of sales (exclusive of depreciation and amortization shown  separately below)		3,540,106			4,127,931			3,242,238			2,601,072			1,796,277
Selling and administrative expenses		715,599			668,296			577,588			528,568			381,267
Depreciation and amortization		156,587			132,079			109,774			101,350			78,398
Interest income		(5,851	)		(27,350	)		(30,745	)		(26,939	)		(13,060	)
Interest expense		92,370			70,290			43,845			34,974			18,484
Restructuring expense and acquisition related costs		81,605			−			−			−			−
Charge for pension plan termination		−			26,196			35,725			−			−
Acquisition integration costs		−			−			−			29,578			−
Total costs and expenses		4,580,416			4,997,442			3,978,425			3,268,603			2,261,366
Income before income taxes		642,829			851,435			687,943			474,304			256,481
Income tax provision		(167,310	)		(270,732	)		(199,762	)		(165,316	)		(89,384	)
Net income	$	475,519		$	580,703		$	488,181		$	308,988		$	167,097
Basic earnings per share	$	2.15		$	2.67		$	2.23		$	1.36		$	0.75
Diluted earnings per share	$	2.11		$	2.54		$	2.11		$	1.32		$	0.74
Balance Sheet Data (at the end of period):
Total assets	$	7,725,373		$	5,902,371		$	4,730,819		$	4,350,750		$	3,098,562
Stockholders’ equity	$	3,919,760		$	2,344,527		$	2,133,672		$	1,792,826		$	1,610,090
Long-term debt	$	1,232,302		$	1,218,627		$	682,443		$	662,191		$	419,613
Other long-term obligations	$	277,098		$	228,009		$	221,828		$	267,521		$	146,998

81

EX-21.1

Exhibit 21.1

CAMERON INTERNATIONAL CORPORATION

SUBSIDIARIES & JOINT VENTURES

(As of 12/31/2009)

Cameron International Corporation (Delaware) -- Parent - 100									% Owned By Subsidiary	% Owned By CAM	State/Country of Incorporation or Organization
1 - Cameron Algerie S.á.r.l. (1 share owned by CPEGI)										100%	Algeria
1 - Cameron Al Rushaid Limited Company										50%	Saudi Arabia
1 - Cameron Argentina S.A.I.C. (122,700 shares owned by CPEGI)									Less than 1%	100%	Argentina
1 - Cameron Gabon, S.A. (1 share owned by Chairman)										100%	Gabon
1 - Cameron/Curtiss-Wright EMD LLC										50%	USA (Delaware)
1 - Cameron Offshore Systems Nigeria Limited										100%	Nigeria
1 - Cameron Services Middle East LLC (Joint Venture - 51% owned by outsiders)									25%	24%	Oman
1 - Cameron Venezolana, S.A. - (51% owned by CPEGI)										100%	Venezuela
1 - Cameron Angola - Prestaçao de Serviços, Limitada - (1 share owned by CPEGI)										100%	Angola
1 - Compression Services Company										100%	USA (Ohio)
1 - Cooper Cameron Foreign Sales Company Ltd.										100%	Barbados
1 - Cameron International Holding Corp. (CESI has partial interest)									8.36%	91.64%	USA (Nevada)
	2 - Cameron Lux I SARL9								100%		Luxembourg
		3 - Angola Oilfield Equipment Limited (Joint Venture  - 51% owned              by Mahinda Servico)							49%		Angola
		3 - Cameron Middle East Ltd.							100%		Cayman Islands
		3 - Cameron Products Ltd.							100%		Cayman Islands
		3 - Cameron Russia Ltd.							100%		Cayman Islands
		3 - Cameron Services Russia Ltd.							100%		Cayman Islands
		3  - Cameron Australasia Pty. Ltd.							100%		Australia
			4 - Cooper Cameron Valves Australia Pty. Ltd.						100%		Australia
			4 - Geographe Energy Pty Ltd						100%		Australia
		3 - Cameron Campex Limited							80.10%		Cayman Islands
			4 - ShanDong Cooper Cameron Petroleum Equipment PTE LTD  (10-12-2004)						100%		China
		3 - Cameron do Brasil Ltda. (1 share owned by Cameron (Lux) SARL)							100%		Brazil
			4 - On/Off Manufatura e Comércio de Vávulas Ltda.						100%		Brazil
			[1 share owned by Cameron Holding (Cayman) Limited]
			4 - Cam Macaé Brasil Participações Ltda.						100%		Brazil
			[1 share owned by On/Off Manufatura e Comércio de Vávulas Ltda.]
		3 - Cameron (Trinidad) Limited							100%		Trinidad and Tobago
		3 - Cameron International Malaysia Sdn Bhd							49%		Malaysia
		3 - Cameron Holding (Luxembourg) SARL							100%		Luxembourg
			4 - Cameron (Luxembourg) SARL						100%		Luxembourg
				5 - Cameron APME Holding PTY LTD					100%		Australia
				5 - Cameron GmbH					100%		Germany
				5 - Cameron Italy S.R.L.					100%		Italy
				5 - Cameron Ireland Limited					100%		Ireland
				5 - Cameron Systems (Ireland) Limited					100%		Ireland
				5 - Cameron International Malaysia Systems Sdn Bhd					100%		Malaysia
				5 - Cameron Korea Limited					100%		Korea
				5 - Cameron Valves - Trading and Industrial Services LDA					55%		Portugal
					6 - Cameron Valves & Measurement West Africa Limited				70%		Nigeria
				5 - Cameron Netherlands B.V. (11-2004)					100%		Netherlands
					6 - Cameron Egypt LLC (.1% owned by Cameron (Luxembourg) SARL)				100%		Egypt
					6 - Cameron Euro Automation Center B.V.				100%		Netherlands
					6- Caméron România S.A.				100%		Romania
				5- Cameron Holding (Dutch) B.V.					100%		Netherlands
					6- Cameron Canada Corporation				100%		Canada (Nova Scotia)
				5 - Cooper Cameron Holding (U.K.) Limited					100%		United Kingdom
					6 - Cameron France, S.A.S.				100%		France
					6 - Cameron Limited				100%		United Kingdom
						7 - Cooper Cameron (U.K.) Investments Limited			100%		United Kingdom
							8 - Cameron Manufacturing (India) Private Limited		100%		India
							8 - Flow Control-Tati Production Sdn. Bhd.		49%		Malaysia
						7 - Cameron Offshore Engineering Limited			100%		United Kingdom
						7 - Cooper Cameron Pensions Limited			100%		United Kingdom
						7 - Cameron Integrated Services Limited			100%		United Kingdom
						7 - D.E.S. Operations Limited			100%		Scotland
						7 - DES Operations, Inc.			100%		USA (Texas)
						7 - International Valves Limited			100%		United Kingdom
						7 - Jiskoot Holdings Limited			100%		United Kingdom
						7 - Jiskoot Limited			100%		United Kingdom
						8 - Jiskoot Limited			100%		United Kingdom
						7 - Cameron Technologies UK Limited			100%		United Kingdom
						7 - Petreco International Limited			100%		United Kingdom
							8 - KCC Group Limited		100%		United Kingdom
								9 - Petreco International (Middle East) Limited	100%		United Kingdom
								9 - KCC Process Equipment Limited	100%		United Kingdom
								10 - RJB Engineering (UK) Limited	100%		United Kingdom
								9 - KCC Resources (Jersey) Limited	100%		Jersey
					6 - Cameron International Holding B.V.				100%		Netherlands
						7 - Cameron Energy Services B.V.			100%		Netherlands
						7 - Cameron B.V.			100%		Netherlands
						7 - Cooper Cameron Holding (Norway) AS			100%		Norway
							8 - Cameron Norge AS		100%		Norway
				5 - SBS Oilfield Equipment GmbH					100%		Austria
				5 - SBS Immobilienentwicklung und -verwertungs GmbH (0.1%  owned by Cameron Limited)					100%		Austria
				5 - Geographe Energy Singapore Pte Ltd					100%		Singapore
					6 - PT Geographe Energy Indonesia				100%		Indonesia
		3 - Cooper Cameron Libya Limited							50%		Malta
		3 - Cameron (Singapore) Pte. Ltd.							100%		Singapore
			4 - Cameron Systems Shanghai Co., Ltd.						100%		China
			4 - Riyan Cameron (B) Sendirian Berhad						100%		Brunei
			4 - PT Cameron Systems - (Joint Venture - 8% owned by outsider)						92%		Indonesia
			4 - Cameron Equipment (Shanghai) Co., Ltd.						100%		China
			4 - Cameron Beijing Commercial Co., Ltd.						100%		China
1 - Cameron (Holding) Corp.									73.60%	26.40%	USA (Nevada)
	2-  Cameron Technologies, Inc.								100%		USA (Delaware)
		3 - Cameron Flow Systems Ltd.							100%		Canada (Alberta)
		3 - NuFlo Finance and Royalty Company							100%		USA (Delaware)
		3 - Cameron Technologies US, Inc.							100%		USA (Delaware)
1 - Sequel Holding, Inc.										100%	USA (Delaware)
1 - Petreco International Inc. (partially owned by Sequel Holding, Inc.)									51%	49%	USA (Delaware)
	2 - Petreco-KCC Holding, Inc.								100%		USA (Delaware)
		3 - Petreco-KCC Limited							100%		United Kingdom
	2 - Petreco Canada Inc.								100%		Canada (Alberta)
1 - Cooper Cameron Corporation Nigeria Limited										60%	Nigeria
1 - Cameron Systems Srl										100%	Italy
1 - Cameron Systems de Venezuela, S.A.										100%	Venezuela
1 - Cameron Energy Services International, Inc.										100%	USA (Ohio)
	2 - Canada Tiefbohrgeräte und Maschinenfabrik GmbH (1 share owned by CPEGI)								100%		Austria
1 - Cameron de Mexico S.A. de C.V. (1 share owned by CPEGI)										100%	Mexico
1 - Cameron Petroleum Equipment Group, Inc. (CPEGI)										100%	USA (Delaware)
1 - Cameron Wellhead Services, Inc.										100%	USA (Nevada)
	2 - Cameron (Malaysia) Sdn Bhd1								49%		Malaysia
		3 - Cooper Cameron Valves Singapore Pte. Ltd.							100%		Singapore
			4 - Cooper Cameron Corporation Sdn Bhd						100%		Malaysia
			4 - PCC Bumi Flow Technologies Sdn. Bhd.						100%		Malaysia
1 - NATCO Group Inc.										100%	USA (Delaware)
	2 - NTC Technical Services, Inc.									100%	USA (Delaware)
		3 - NTG Group de Mexico, S. de R.L. de C.V. (1% owned by NATCO Group Inc.)							100%		Mexico
		3 - NTC Technical Services Sdn. Bhd.							100%		Malaysia
	2 - National Tank Company								100%		USA (Delaware)
		3 - NATCO do Brasil Industria, Comercio e Servicos de Petróleo e Gás Ltda. (2% owned by NATCO Holdings LLC)							50%		Brazil
		3 - NATCO de Colombia Ltda (1 share owned by NATCO Holdings LLC)							100%		Colombia
		3 - NATCO Holdings LLC							100%		USA (Delaware)
		3 - Linco-Electromatic, Inc.							100%		USA (Texas)
		3 - Connor Sales Company, Inc.							100%		USA (North Dakota)
		3 - Axsia Holdings Limited							100%		United Kingdom
			4 - Axsia Group Limited						100%		United Kingdom
				5 - Axsia Limited					100%		United Kingdom
					6 - Axsia Howmar Limited				100%		United Kingdom
						7 - Fluid Processing (L) Bhd			100%		Labuan
					6 - NATCO UK Limited				100%		United Kingdom
						7 - Axsia Serck Baker (Nigeria) Ltd (50% owned by Axsia Limited)			50%		Nigeria
						7 - Fluid Processing Sdn Bhd 7			20%		Malaysia
				5 - Richard Mozley Limited					100%		United Kingdom
		3 - NATCO Group de Venezuela, S.A.							100%		Venezuela
		3 - NATCO Luxembourg S.á.r.l.							100%		Luxembourg
			4 - NATCO Norge Holdings AS						50%		Norway
				5 - NATCO Norway AS					100%		Norway
			4 - NATCO Al Rushaid Middle East Ltd.6						50%		Saudi Arabia
			4 - NATCO Process Systems Pte Ltd.2						50%		Singapore
		3 - NATCO Japan Co., Ltd.3							60%		Japan
		3 - Scomi NTC Sdn. Bhd.5							30%		Malaysia
		3 - NATCO Canada, Ltd.							100%		Canada (Alberta)
		3 - TEST Automation & Controls, Inc.							100%		USA (Louisiana)
			4 - TEST International8						49%		Cayman Islands
			4 - TEST Angola - Tecnologia e Serviços Petrolíferos, Lda.4						49%		Angola
			4 - TPS (technical Petroleum Services) Nigeria Limited						49%		Nigeria
			4 - Process Analytical Applications, Inc.						49%		USA (Texas)
			4 - TEST Saudi Arabia Ltd.10						50%		Saudi Arabia
1Local Malaysian law requires that a majority of stock be owned by local residents. Attorney/agents hold 51% of stock on CIC's behalf.
2 Dormant. Created for aborted acquisition.
3 20% owned by Daichi; 20% owned by Modec
4 51% owned by Prodiaman
5 70% owned by Scomi
6 50% owned by Al Rushaid Petroleum Investment Company
7 80% owned by local partner
8 NATCO International payroll company
9 Formerly a Cayman entity; formerly named Cameron Holding (Cayman) Limited
10 50% owned by Abdulla Alsukwaket Trading & Contract

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements on Forms S-3, S-3/A, and S-8 of Cameron International Corporation of our reports dated February 26, 2010, with respect to the consolidated financial statements and schedule of Cameron International Corporation and the effectiveness of internal control over financial reporting of Cameron International Corporation, incorporated by reference or included in this Annual Report (Form 10-K) of Cameron International Corporation for the year ended December 31, 2009.

Registration Statement No.	Purpose
No. 333-26923 No. 33-95004	Form S-8 Registration Statements pertaining to the Amended and Restated Cooper Cameron Corporation Long-Term Incentive Plan
No. 333-53545
No. 333-37850
No. 333-106224
No. 33-95002	Form S-8 Registration Statement pertaining to the Cooper Cameron Corporation Retirement Savings Plan
No. 333-57991	Form S-8 Registration Statement pertaining to the Individual Account Retirement Plan for Bargaining Unit Employees at the Cooper Cameron  Corporation  Buffalo, New York Plant
No. 333-51705	Form S-3 Registration Statement pertaining to the Cooper Cameron  Corporation shelf registration of up to $500 million of securities
No. 333-79787	Form S-8 Registration Statement pertaining to the Cooper Cameron Corporation Second Amended and Restated 1995 Stock Option Plan for Non-Employee Directors
No. 333-46638	Form S-8 Registration Statements pertaining to the Cooper Cameron Corporation
No. 333-82082	Broad Based 2000 Incentive Plan
No. 333-61820
No. 333-104755
No. 333-96565	Form S-3 and S-3/A Registration Statements pertaining to the Cooper Cameron Corporation shelf registration of up to $500 million of securities
No. 333-128414	Form S-8 Registration Statements pertaining to the Cameron International Corporation 2005 Equity Incentive Plan
No. 333-136900
No. 333-136589	Form S-3 Registration Statement pertaining to the Cameron International 2.50% Convertible Senior Notes due 2026
No. 333-151838	Form S-3ASR Registration Statement pertaining to the Cameron International Corporation $750 Million Ten-year and Thirty-year Unsecured Senior Notes
No. 333-156712	Form S-8 Registration Statement pertaining to the Cameron International Corporation Deferred Compensation Plan for Non-Employee Directors and the Cameron International Corporation Nonqualified Deferred Nonqualified Deferred Compensation Plan

         /s/  Ernst & Young LLP

Houston, Texas

February 26, 2010

EX-31.1

Exhibit 31.1

Cameron International Corporation and Subsidiaries

Certification

I, Jack B. Moore, certify that:

1. I have reviewed this annual report on Form 10-K of Cameron International Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 26, 2010

 /s/ Jack B. Moore                                   

 Jack B. Moore

 President and Chief Executive Officer

EX-31.2

Exhibit  31.2

Cameron International Corporation and Subsidiaries

Certification

I, Charles M. Sledge, certify that:

1. I have reviewed this annual report on Form 10-K of Cameron International Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 26, 2010

  /s/ Charles M. Sledge                                        

 Charles M. Sledge

 Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of CEO and CFO Pursuant to

18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K for the year ended December 31, 2009 of Cameron International Corporation (the Company) as filed with the Securities and Exchange Commission on the date hereof (the Report), each of the undersigned officers of the Company certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to such officer’s knowledge:

(1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, (15 U.S.C. 78m  or 78o(d)) and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 26, 2010

	/s/  Jack B. Moore
Name:	Jack B. Moore
Title:	President and Chief Executive Officer
	/s/  Charles M. Sledge
Name:	Charles M. Sledge
Title:	Senior Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Cameron International Corporation and will be retained by Cameron International Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

Note: The certification the registrant furnishes in this exhibit is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. Registration Statements or other documents filed with the Securities and Exchange Commission shall not incorporate this exhibit by reference, except as otherwise expressly stated in such filing.