SCHEDULE 14A INFORMATION
                Proxy Statement Pursuant to Section 14(a) of the
                         Securities Exchange Act of 1934

Filed by Registrant:                                          [X]
Filed by a Party other than the Registrant: [ ]

Check the appropriate box:
[ ]    Preliminary Proxy Statement          [ ]  Confidential, for Use of the
[X]    Definitive Proxy Statement                Commission Only (as permitted
[ ]    Definitive Additional Materials           by Rule 14a-6(e)(2))
[ ]    Soliciting Materials Pursuant to Section 240.14a-11(c) or Section
       240.14a-12

                               NL Industries, Inc.
-----------------------------------------------------------------------------
                (Name of Registrant as Specified in Its Charter)

----------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 0-11.

         1) Title of each class of securities to which transaction applies:

         2) Aggregate number of securities to which transaction applies:

         3) Per unit price or other underlying value of transaction
            computed pursuant to Exchange Act Rule 0-11 (Set forth amount
            on which the filing fee is calculated and state how it was
            determined):

         4) Proposed maximum aggregate value of transaction:

         5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange  Act Rule
    0-11(a)(2)  and  identify  the  filing for which the offsetting fee was paid
    previously. Identify the previous filing  by  registration statement number,
    or the Form or Schedule and the date of its filing.

         1) Amount Previously Paid:

         2) Form, Schedule or Registration Statement No.:

         3) Filing Party:

         4) Date Filed:

<PAGE>



[LOGO GOES HERE]               NL INDUSTRIES, INC.
                              THREE LINCOLN CENTRE
                                5430 LBJ FREEWAY
                                   SUITE 1700
                            DALLAS, TEXAS 75240-2697




                                     April 18, 2005




To our Shareholders:

     You are cordially invited to attend the 2005 Annual Meeting of Shareholders
of NL Industries,  Inc., which will be held on Thursday,  May 19, 2005, at 10:00
a.m.,  local time, at NL's corporate  offices at Three Lincoln Centre,  5430 LBJ
Freeway,  Suite 1700, Dallas, Texas. The matters to be acted upon at the meeting
are described in the attached Notice of Annual Meeting of Shareholders and Proxy
Statement.

     Whether or not you plan to attend the meeting, please complete,  date, sign
and  return  the  enclosed  proxy  card  or  voting   instruction  form  in  the
accompanying  envelope  as  promptly  as possible to ensure that your shares are
represented and voted in accordance with your wishes.  Your vote,  whether given
by  proxy  or in  person  at the  meeting,  will be held  in  confidence  by the
inspector of election as provided in NL's by-laws.

                                                Sincerely,


                                                /s/ Harold C. Simmons
                                                Harold C. Simmons
                                                Chairman of the Board and
                                                Chief Executive Officer

<PAGE>


                               NL INDUSTRIES, INC.
                              THREE LINCOLN CENTRE
                          5430 LBJ FREEWAY, SUITE 1700
                            DALLAS, TEXAS 75240-2697

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

                             To Be Held May 19, 2005

To the Shareholders of NL Industries, Inc.:

     NOTICE IS HEREBY GIVEN that the 2005 Annual  Meeting of  Shareholders  (the
"Meeting") of NL Industries, Inc., a New Jersey corporation ("NL"), will be held
on Thursday,  May 19, 2005, at 10:00 a.m., local time, at NL's corporate offices
at Three Lincoln Centre,  5430 LBJ Freeway,  Suite 1700,  Dallas,  Texas for the
following purposes:

     (1)  To elect six  directors  to serve  until the 2006  Annual  Meeting  of
          Shareholders; and

     (2)  To  transact  such other  business  as may  properly  come  before the
          Meeting or any adjournment or postponement thereof.

     The close of  business  on March 28,  2005 has been set as the record  date
(the "Record  Date") for the Meeting.  Only  holders of NL's common  stock,  par
value $0.125 per share, at the close of business on the Record Date are entitled
to notice of, and to vote at, the Meeting. NL's stock transfer books will not be
closed  following the Record Date. A complete list of  shareholders  entitled to
vote at the Meeting will be available for  examination  during  normal  business
hours by any  shareholder  of NL, for  purposes  related to the  Meeting,  for a
period of ten days  prior to the  Meeting  at the  place  where NL will hold the
Meeting.

     You are cordially invited to attend the Meeting. Whether or not you plan to
attend the Meeting,  please complete,  date and sign the accompanying proxy card
or voting instruction form and return it promptly in the enclosed  envelope.  If
you  choose,  you may still  vote in  person  at the  Meeting  even  though  you
previously submitted your proxy.


                                  By Order of the Board of Directors,


                                  /s/ Robert D. Graham
                                  Robert D. Graham
                                  Vice President, General Counsel and Secretary

Dallas, Texas
April 18, 2005

<PAGE>

                               NL INDUSTRIES, INC.
                              THREE LINCOLN CENTRE
                          5430 LBJ FREEWAY, SUITE 1700
                            DALLAS, TEXAS 75240-2697

                         ------------------------------

                                 PROXY STATEMENT

                         ------------------------------

                               GENERAL INFORMATION

     This proxy statement and the accompanying  proxy card or voting instruction
form are being furnished in connection  with the  solicitation of proxies by and
on behalf of the board of directors (the "Board of Directors") of NL Industries,
Inc., a New Jersey  corporation  ("NL"),  for use at the 2005 Annual  Meeting of
Shareholders  of NL to be held on Thursday,  May 19, 2005 and at any adjournment
or  postponement  thereof (the  "Meeting").  The  accompanying  Notice of Annual
Meeting of Shareholders  (the "Notice") sets forth the time,  place and purposes
of the Meeting. The Notice, this proxy statement, the accompanying proxy card or
voting  instruction form and NL's Annual Report to Shareholders,  which includes
NL's Annual Report on Form 10-K for the fiscal year ended December 31, 2004, are
first being  mailed to the holders of NL's common  stock,  par value  $0.125 per
share ("Common  Stock"),  on or about April 18, 2005.  NL's principal  executive
offices are  located at Three  Lincoln  Centre,  5430 LBJ  Freeway,  Suite 1700,
Dallas, Texas 75240-2697.

                  QUORUM, VOTING RIGHTS AND PROXY SOLICITATION

     The record  date set by the Board of  Directors  for the  determination  of
shareholders  entitled  to notice of and to vote at the Meeting was the close of
business on March 28, 2005 (the "Record Date"). Only holders of shares of Common
Stock as of the close of business on the Record Date are entitled to vote at the
Meeting.  As of the Record Date,  there were  48,547,134  shares of Common Stock
issued and  outstanding.  Each share of Common Stock  entitles its holder to one
vote on all matters to be acted on at the Meeting. The presence, in person or by
proxy,  of the holders of a majority of the shares of Common  Stock  entitled to
vote at the  Meeting is  necessary  to  constitute  a quorum for the  conduct of
business at the Meeting.  Under  applicable rules of the New York Stock Exchange
(the "NYSE") and  Securities  and Exchange  Commission  (the "SEC"),  brokers or
other nominees  holding shares of record on behalf of a client who is the actual
beneficial  owner of such  shares  are  authorized  to vote on  certain  routine
matters without receiving  instructions from the beneficial owner of the shares.
If a  broker/nominee  who is entitled to vote on a routine  matter does not vote
such shares,  such shares are referred to herein as "broker/nominee  non-votes."
Shares of Common Stock that are voted to abstain from any business coming before
the Meeting and broker/nominee  non-votes will be counted as being in attendance
at the Meeting for purposes of determining whether a quorum is present.

     If a  quorum  is  present,  a  plurality  of the  affirmative  votes of the
outstanding  shares of Common Stock  represented and entitled to be voted at the
Meeting,  is necessary to elect each director of NL. The accompanying proxy card
or  voting  instruction  form  provides  space  for a  shareholder  to  withhold
authority  to vote for any or all of the  nominees  to the  Board of  Directors.
Neither  shares as to which the  authority  to vote on the election of directors
has been withheld nor  broker/nominee  non-votes  will be counted as affirmative
votes to elect  director  nominees  to the Board of  Directors.  However,  since
director  nominees  need only  receive  the vote of a  plurality  of the  shares
represented  and  entitled  to  vote  at the  Meeting,  a vote  withheld  from a
particular nominee will not affect the election of such nominee.

     Except as NL's  amended  and  restated  certificate  of  incorporation  and
applicable laws may otherwise provide,  if a quorum is present,  the approval of
any other  matter that may  properly  come before the Meeting  will  require the
affirmative vote of a majority of the shares represented and entitled to vote at
the  Meeting.  Shares of Common  Stock that are voted to abstain  from any other
business  coming  before the Meeting and  broker/nominee  non-votes  will not be
counted as votes for or against any such other matter.

<PAGE>

     Unless  otherwise  specified,  the agents  designated  in the proxy card or
voting  instruction  form will  vote the  shares  represented  by a proxy at the
Meeting  "FOR" the election of the  director  nominees to the Board of Directors
and, to the extent allowed by applicable law, in the discretion of the agents on
any other matter that may properly come before the Meeting.

     EquiServe  Trust  Company  N.A.  ("EquiServe"),   the  transfer  agent  and
registrar for the Common Stock as of the Record Date,  has been appointed by the
Board of  Directors  to receive  proxies and  ballots,  ascertain  the number of
shares represented, tabulate the vote and serve as inspector of election for the
Meeting. All proxy cards, ballots or voting instructions  delivered to EquiServe
shall be kept  confidential  in  accordance  with NL's  by-laws.  Each holder of
record of Common Stock  executing  and  delivering  the proxy card enclosed with
this  proxy  statement  may  revoke  it at any time  prior to the  voting at the
Meeting by  delivering to EquiServe a written  revocation  of the proxy,  a duly
executed  proxy card bearing a later date or by voting in person at the Meeting.
Attendance by a  shareholder  at the Meeting will not in itself  constitute  the
revocation of such shareholder's proxy.

     The Board of Directors is making this proxy  solicitation.  NL will pay all
expenses related to the solicitation, including charges for preparing, printing,
assembling and distributing all materials delivered to shareholders. In addition
to the solicitation by mail, directors, officers and regular employees of NL may
solicit  proxies by telephone or in person,  for which such persons will receive
no additional compensation. NL has retained The Altman Group, Inc. to aid in the
distribution of this proxy statement and related  materials at an estimated cost
of $1,000.  Upon request,  NL will  reimburse  banking  institutions,  brokerage
firms,  custodians,  trustees,  nominees and  fiduciaries  for their  reasonable
out-of-pocket  expenses  incurred in  distributing  proxy  materials  and voting
instructions to the beneficial owners of Common Stock that such entities hold of
record.

                               CONTROLLED COMPANY

     Valhi,  Inc.  ("Valhi")  is the direct  holder of 83.1% of the  outstanding
shares of Common  Stock.  Contran  Corporation  ("Contran")  holds,  directly or
through subsidiaries, 90.8% of the outstanding shares of Valhi common stock, par
value $0.01 per share ("Valhi Common Stock").

     Valhi has  indicated  its  intention  to have its  shares  of Common  Stock
represented  at the Meeting and voted "FOR" the election of each of the director
nominees to the Board of Directors. If Valhi attends the Meeting in person or by
proxy and votes as  indicated,  the Meeting  will have a quorum  present and the
shareholders will elect all the nominees to the Board of Directors.

     Because  of the  Common  Stock  ownership  by  Valhi,  NL is  considered  a
controlled  company  under the listing  standards  of the NYSE.  Pursuant to the
listing  standards,  a  controlled  company may choose not to have a majority of
independent  directors,   independent  compensation,   nominating  or  corporate
governance  committees  or charters for these  committees.  NL has chosen not to
have a  majority  of  independent  directors  or an  independent  nominating  or
corporate  governance  committee.  The Board of Directors believes that the full
Board of Directors best represents the interests of all of NL's shareholders and
that it is appropriate  for all matters that would be considered by a nominating
or corporate  governance  committee to be considered  and acted upon by the full
Board of Directors. Applying the NYSE director independence standards, the Board
of Directors has determined that three of its directors are independent and have
no  material  relationship  with  NL.  While  the  members  of  NL's  management
development and compensation  committee (the "MD&C Committee") currently satisfy
the  independence  requirements of the NYSE, NL has chosen not to satisfy all of
the NYSE listing  standards  for a  compensation  committee.  See  "Meetings and
Committees of the Board of Directors" for more  information on the committees of
the Board of Directors. See also "Shareholder Proposals and Director Nominations
for the 2006 Annual  Meeting" for a description  of NL's policies and procedures
for shareholder nominations of directors.

                              ELECTION OF DIRECTORS

     NL's amended and restated  certificate of  incorporation  provides that the
Board of Directors shall consist of not less than seven nor more than 17 members
as  determined  by the  Board of  Directors  or the  shareholders.  The Board of
Directors  has  currently  set the number of directors at seven.  The  directors
elected  at the  Meeting  will hold  office  until the 2006  Annual  Meeting  of
Shareholders  and until their successors are duly elected and qualified or their
earlier removal, resignation or death.

                                      -2-
<PAGE>

     All of the nominees are  currently  directors of NL whose terms will expire
at the  Meeting.  All of the  nominees  have agreed to serve if elected.  If any
nominee is not available for election at the Meeting,  all shares represented by
a proxy will be voted "FOR" an alternate  nominee to be selected by the Board of
Directors,  unless the shareholder  executing such proxy withholds  authority to
vote for such nominee.  The Board of Directors believes that all of its nominees
will be available  for election at the Meeting and will serve if elected.  There
is currently a vacancy in one directorship on the Board of Directors.

     THE  BOARD  OF  DIRECTORS  RECOMMENDS  A VOTE  "FOR"  THE  ELECTION  OF THE
FOLLOWING NOMINEES FOR DIRECTOR.

     Nominees for Director. The respective nominees for election as directors of
NL for terms expiring at the 2006 Annual Meeting of  Shareholders  have provided
the following information.

     Cecil H. Moore,  Jr.,  age 65, has been a director  of NL since  2003.  Mr.
Moore is currently a private investor and retired from KPMG LLP in 2000 after 37
years in which he served  in  various  capacities  with the  firm.  Among  other
positions,  he served as managing  partner of the firm's Dallas,  Texas business
unit from 1990 to 1999.  Prior to 1990, Mr. Moore was  partner-in-charge  of the
audit and accounting  practice of the firm's Dallas,  Texas business unit for 12
years.  He is a member of NL's audit committee and on the board of directors and
chairman of the audit  committee of Kronos  Worldwide,  Inc.,  an  international
manufacturer  of titanium  dioxide  pigments  that is related to Valhi  ("Kronos
Worldwide"). Mr. Moore is also a director and chairman of the audit committee of
Perot  Systems  Corporation,  a  worldwide  provider of  information  technology
services and business solutions.

     Glenn R. Simmons, age 77, has been a director of NL since 1986. Mr. Simmons
has been vice  chairman of the board of Valhi and  Contran  since prior to 2000.
Mr. Simmons is chairman of the board of Keystone Consolidated Industries,  Inc.,
a steel  fabricated wire products,  industrial wire and carbon steel rod company
that is  related to  Contran  ("Keystone"),  and CompX  International,  Inc.,  a
subsidiary  of NL that is a  manufacturer  of  precision  ball  bearing  slides,
security products and ergonomic computer support systems ("CompX").  Mr. Simmons
is also a director of Kronos  Worldwide  and  Titanium  Metals  Corporation,  an
integrated  producer  of  titanium  metals  products  that is  related  to Valhi
("TIMET").   In  February  2004,   Keystone  filed  a  voluntary   petition  for
reorganization  under federal bankruptcy laws. Mr. Simmons has been an executive
officer or director  of various  companies  related to Valhi and  Contran  since
1969. He is a brother of Harold C. Simmons.

     Harold C.  Simmons,  age 73,  has served as chief  executive  officer of NL
since 2003, chairman of the board of NL since 1987 and as a director of NL since
1986.  Mr.  Simmons  has  served as  chairman  of the board and chief  executive
officer of Kronos  Worldwide  since 2003. He also has served as vice chairman of
the board of TIMET since August 2004. Mr. Simmons has been chairman of the board
of Valhi and  Contran  since  prior to 2000 and was chief  executive  officer of
Valhi from prior to 2000 to 2002. Mr.  Simmons has been an executive  officer or
director  of various  companies  related to Valhi and Contran  since  1961.  Mr.
Simmons is a brother of Glenn R. Simmons.

     General  Thomas P. Stafford  (retired),  age 74, served as a director of NL
from 1984 to 1986 and was  re-appointed in 2000. Gen.  Stafford was a co-founder
of,  and  has  been  affiliated  with,  Stafford,  Burke  and  Hecker,  Inc.,  a
Washington-based consulting firm, since 1982. He was selected as an astronaut in
1962,  piloted Gemini VI in 1965 and commanded  Gemini IX in 1966. In 1969, Gen.
Stafford was named Chief of the Astronaut  Office and was the Apollo X commander
for the first lunar module  flight to the moon.  He commanded  the  Apollo-Soyuz
joint mission with the Soviet  cosmonauts in 1975. After his retirement from the
United States Air Force in 1979 as  Lieutenant  General,  he became  chairman of
Gibraltar  Exploration  Limited,  an oil  and  gas  exploration  and  production
company,  and  served  in that  position  until  1984,  when he  joined  General
Technical  Services,  Inc.,  a  consulting  firm.  He is  chairman of NL's audit
committee and MD&C Committee.

     Steven L.  Watson,  age 54, has served as a director of NL since 2000.  Mr.
Watson  has  served as vice  chairman  of the board of  Kronos  Worldwide  since
October 2004 and a director of Kronos  Worldwide since 2003. Mr. Watson has been
president  and a director  of Valhi and Contran  since 1998 and chief  executive
officer of Valhi since 2002.  Mr.  Watson is also a director of CompX,  Keystone
and TIMET. Mr. Watson has served as an executive  officer or director of various
companies related to Valhi and Contran since 1980.

                                      -3-
<PAGE>

     Terry N.  Worrell,  age 60, has served as a director of NL since 2003.  Mr.
Worrell has been a private  investor  with  Worrell  Investments,  Inc.,  a real
estate  investment  company,  since  1989.  From 1974 to 1989,  Mr.  Worrell was
president and chief executive officer of Sound Warehouse of Dallas Inc., a chain
of retail music stores. Mr. Worrell also serves on NL's audit committee and MD&C
Committee.  Mr. Worrell is a director of Regency Centers Corporation and a trust
manager of Crescent Real Estate Equities  Company,  both real estate  investment
trusts.

                MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

     The  Board of  Directors  held five  meetings  and took  action by  written
consent on two occasions in 2004. Each director  participated in at least 75% of
such  meetings and of the meetings of the  committees  on which he served at the
time.  It is expected  that each  director  will attend NL's annual  meetings of
shareholders, which are held immediately before the annual meetings of the Board
of  Directors.  All members of the Board of Directors  attended NL's 2004 annual
shareholder meeting.

     The Board of  Directors  has  established  and  delegated  authority to the
following two standing committees.

          Audit  Committee.  The  audit  committee  assists  with  the  Board of
     Directors' oversight  responsibilities relating to the financial accounting
     and reporting processes and auditing processes of NL. The  responsibilities
     of the  audit  committee  are more  specifically  set  forth  in the  audit
     committee  charter,  a copy of  which  is  available  under  the  corporate
     governance   section  of  NL's   website,   www.nl-ind.com.   Applying  the
     requirements  of  the  NYSE  listing  standards  and  SEC  regulations,  as
     applicable, the Board of Directors has determined that

          o    each member of the audit  committee is  independent,  financially
               literate and has no material relationship with NL; and
          o    Mr. Cecil H. Moore, Jr. is an "audit committee financial expert."

     No member of the audit  committee  serves on more than three public company
     audit  committees.  For  further  information  on the  role  of  the  audit
     committee,  see "Audit Committee  Report." The current members of the audit
     committee are Thomas P. Stafford (chairman),  Cecil H. Moore, Jr. and Terry
     N.  Worrell.  The audit  committee  held eight  meetings and took action by
     written consent on one occasion in 2004.

          Management  Development  and  Compensation  Committee.  The  principal
     responsibilities  of the MD&C  Committee  are to  recommend to the Board of
     Directors  whether  or not to  approve  any  proposed  charge  to NL or its
     subsidiaries  pursuant  to an  intercorporate  services  agreement  with  a
     related  party;  to take  action or to review and approve  certain  matters
     regarding NL's employee benefit plans or programs;  to administer and grant
     awards under NL's equity  compensation  plans; and to review and administer
     such other  compensation  matters as the Board of Directors may direct from
     time to time. The Board of Directors has determined that each member of the
     MD&C Committee is  independent  by applying the NYSE director  independence
     standards.  For further information on the role of the MD&C Committee,  see
     "Executive  Compensation Report." The current members of the MD&C Committee
     are Thomas P. Stafford (chairman) and Terry N. Worrell.  The MD&C Committee
     held one  meeting and took action by written  consent on two  occasions  in
     2004.

     The Board of  Directors  is expected  to elect the members of the  standing
committees at the Board of Directors  annual meeting  immediately  following the
Meeting.  The Board of Directors has  previously  established,  and from time to
time may  establish,  other  committees  to  assist it in the  discharge  of its
responsibilities.

                                      -4-
<PAGE>

                               EXECUTIVE OFFICERS

     Set forth below is certain  information  relating to the executive officers
of NL. Each executive  officer serves at the pleasure of the Board of Directors.
Biographical  information  with  respect to Harold C. Simmons is set forth under
"Election of Directors--Nominees for Director."

<TABLE>
<CAPTION>

          Name                  Age                 Position(s)
-----------------------------   ---    --------------------------------------------------
<S>                             <C>    <C>
Harold C. Simmons............    73    Chairman of the Board and Chief Executive Officer
James W. Brown...............    48    Vice President and Controller
Robert D. Graham.............    49    Vice President, General Counsel and Secretary
Kelly D. Luttmer.............    41    Vice President and Tax Director
John A. St. Wrba.............    48    Vice President and Treasurer
Gregory M. Swalwell..........    48    Vice President, Finance and Chief Financial Officer

</TABLE>

     James W. Brown has served as vice president and controller of NL and Kronos
Worldwide  since 2003.  From 1998 to 2002, he served as vice president and chief
financial  officer of Software  Spectrum,  Inc.,  a global  business-to-business
software  services provider that is currently a wholly owned subsidiary of Level
3  Communications,  but from  1991 to 2002  was a  publicly  traded  corporation
("SSI").  From  1994 to 1998,  Mr.  Brown  served as vice  president,  corporate
accounting of Affiliated Computer Services, Inc., a provider of business process
and information technology outsourcing solutions.

     Robert  D.  Graham  has  served  as vice  president,  general  counsel  and
secretary of NL and Kronos  Worldwide since 2003 and vice president of Valhi and
Contran  since  2002.  From 1997 to 2002,  Mr.  Graham  served  as an  executive
officer,  and most recently as executive vice president and general counsel,  of
SSI.  From  1985 to 1997,  Mr.  Graham  was a  partner  in the law firm of Locke
Purnell  Rain  Harrell (A  Professional  Corporation),  a  predecessor  to Locke
Liddell & Sapp LLP.

     Kelly D. Luttmer has served as vice president of NL, CompX, Contran, Kronos
Worldwide and Valhi since October 2004, tax director of Kronos  Worldwide and NL
since 2003 and tax director of CompX,  Valhi and Contran since 1998. Ms. Luttmer
has served in tax accounting  positions with various  companies related to Valhi
and Contran since 1989.

     John A. St. Wrba has served as vice  president  and  treasurer  of NL since
2003,  Valhi since  February  2005 and Contran  since  October 2004. He has also
served as vice  president of Kronos  Worldwide  since May 2004 and  treasurer of
Kronos  Worldwide since 2003. He was NL's assistant  treasurer from 2002 to 2003
and from  prior to 1998  until  2000.  From 2000 until  2002,  he was  assistant
treasurer  of Kaiser  Aluminum & Chemical  Corporation,  a leading  producer  of
fabricated aluminum products.

     Gregory M. Swalwell has served as chief financial  officer of NL and Kronos
Worldwide  since May 2004, vice  president,  finance of Kronos  Worldwide and NL
since 2003 and vice president and controller of Valhi and Contran since prior to
2000. Mr. Swalwell has served in accounting and financial positions with various
companies related to Valhi and Contran since 1988.

                                      -5-
<PAGE>

                               SECURITY OWNERSHIP

     Ownership  of NL. The  following  table and  footnotes  set forth as of the
Record Date the beneficial  ownership,  as defined by regulations of the SEC, of
Common  Stock  held by each  individual,  entity  or  group  known  to NL to own
beneficially  more  than 5% of the  outstanding  shares of  Common  Stock,  each
director, each executive officer named in the summary compensation table in this
proxy  statement (a "named  executive  officer") and all directors and executive
officers as a group.  See  footnote  (4) below for  information  concerning  the
relationships  of certain  individuals  and  entities  that may be deemed to own
indirectly and  beneficially  more than 5% of the  outstanding  shares of Common
Stock.  All  information is taken from or based upon  ownership  filings made by
such individuals or entities with the SEC or upon  information  provided by such
individuals or entities.

<TABLE>
<CAPTION>
                                                              NL Common Stock
                                           ------------------------------------------------------
                                                 Amount and Nature                   Percent
     Name of Beneficial Owner                of Beneficial Ownership (1)           of Class (2)
------------------------------------       ------------------------------       -----------------
<S>                                        <C>                                  <C>
Harold C. Simmons (3)....................           30,800 (4)(5)                      *
  Valhi, Inc. (3)........................       40,350,931 (4)                        83.1%
  TIMET Finance Management Company (3)...          222,100 (4)                         *
  Annette C. Simmons (3).................           69,475 (4)                         *
                                           ---------------
                                                40,673,306 (4)(5)                     83.8%

Cecil H. Moore, Jr.......................              -0-                            -0-
Glenn R. Simmons.........................            8,000 (4)(5)                      *
Thomas P. Stafford.......................            5,000                             *
Steven L. Watson.........................           12,000 (4)(5)                      *
Terry N. Worrell.........................            1,000                             *
Robert D. Graham.........................              -0- (4)                        -0-
Gregory M. Swalwell......................              -0- (4)                        -0-
Kelly D. Luttmer.........................              -0- (4)                        -0-
James W. Brown...........................              -0- (4)                        -0-
All directors and
 executive officers
 as a group (11 persons).................       40,699,306 (4)(5)                     83.8%

</TABLE>

--------------------
*        Less than 1%.

(1)  Except as otherwise noted,  the listed entities,  individuals or group have
     sole  investment  power and sole  voting  power as to all  shares set forth
     opposite their names.  The number of shares and percentage of ownership for
     each  entity,  individual  or group  assumes the  exercise by such  entity,
     individual  or group  (exclusive  of  others)  of stock  options  that such
     entity,  individual or group may exercise  within 60 days subsequent to the
     Record Date.

(2)  The percentages are based on 48,547,134  shares of Common Stock outstanding
     as of the Record Date.

(3)  The business address of Valhi and Harold C. and Annette C. Simmons is Three
     Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas, Texas 75240-2697. The
     business  address  of TIMET  Finance  Management  Company  ("TFMC")  is 300
     Delaware Avenue, Suite 900, Wilmington, Delaware 19801.

(4)  TIMET is the  direct  holder  of 100% of the  outstanding  shares of common
     stock of TFMC.  Tremont LLC ("Tremont"),  Annette C. Simmons,  The Combined
     Master  Retirement  Trust  (the  "CMRT")  and  Valhi  are  the  holders  of
     approximately  39.5%,  14.3%,  12.0% and 2.4% of the outstanding  shares of
     TIMET common stock, par value $0.01 per share ("TIMET Common Stock"). Valhi
     is the sole member of Tremont. The ownership of Ms. Simmons is based on the
     1,600,000  shares of TIMET's 6 3/4% Series A Convertible  Preferred  Stock,
     par value $0.01 per share (the "TIMET Series A Preferred Stock"),  that she
     directly owns,  which are convertible into 2,666,666 shares of TIMET Common
     Stock.  The ownership of Valhi includes 24,500 shares of TIMET Common Stock
     that Valhi has the right to acquire  upon  conversion  of 14,700  shares of
     TIMET Series A Preferred  Stock that Valhi directly  holds.  The percentage
     ownership  of TIMET  Common  Stock  held by each of Ms.  Simmons  and Valhi
     assumes the full  conversion of only the shares of TIMET Series A Preferred
     Stock she or Valhi owns, respectively.

                                      -6-
<PAGE>

     Valhi Group, Inc. ("VGI"), National City Lines, Inc. ("National"), Contran,
     the  Harold  Simmons  Foundation,  Inc.  (the  "Foundation"),  the  Contran
     Deferred  Compensation  Trust No. 2 (the "CDCT No. 2") and the CMRT are the
     direct holders of  approximately  77.6%,  9.1%,  3.7%, 0.9%, 0.4% and 0.1%,
     respectively,  of the outstanding  shares of Valhi Common Stock.  National,
     NOA,  Inc.  ("NOA") and Dixie  Holding  Company  ("Dixie  Holding") are the
     direct holders of approximately  73.3%, 11.4% and 15.3%,  respectively,  of
     the outstanding common stock of VGI. Contran and NOA are the direct holders
     of approximately 85.7% and 14.3%,  respectively,  of the outstanding common
     stock of National.  Contran and  Southwest  Louisiana  Land  Company,  Inc.
     ("Southwest")  are the  direct  holders of  approximately  49.9% and 50.1%,
     respectively,   of  the  outstanding   common  stock  of  NOA.  Dixie  Rice
     Agricultural Corporation,  Inc. ("Dixie Rice") is the direct holder of 100%
     of the outstanding common stock of Dixie Holding.  Contran is the holder of
     100% of the outstanding common stock of Dixie Rice and approximately  88.9%
     of the outstanding common stock of Southwest.

     Substantially all of Contran's  outstanding  voting stock is held by trusts
     established for the benefit of certain children and grandchildren of Harold
     C. Simmons (the  "Trusts"),  of which Mr.  Simmons is the sole trustee,  or
     held by Mr. Simmons or persons or other entities related to Mr. Simmons. As
     sole  trustee of the Trusts,  Mr.  Simmons has the power to vote and direct
     the  disposition  of the shares of Contran  stock held by the  Trusts.  Mr.
     Simmons, however,  disclaims beneficial ownership of any Contran shares the
     Trusts hold.

     The Foundation  directly holds approximately 0.9% of the outstanding shares
     of Valhi Common Stock. The Foundation is a tax-exempt  foundation organized
     for charitable purposes.  Harold C. Simmons is the chairman of the board of
     the Foundation.

     The CDCT No. 2 directly holds  approximately 0.4% of the outstanding shares
     of Valhi Common Stock. U.S. Bank National Association serves as the trustee
     of the CDCT No. 2.  Contran  established  the CDCT No. 2 as an  irrevocable
     "rabbi trust" to assist Contran in meeting  certain  deferred  compensation
     obligations that it owes to Harold C. Simmons. If the CDCT No. 2 assets are
     insufficient to satisfy such obligations,  Contran must satisfy the balance
     of such  obligations.  Pursuant  to the  terms of the CDCT No.  2,  Contran
     retains  the  power to vote the  shares  held by the  CDCT No.  2,  retains
     dispositive  power  over  such  shares  and  may  be  deemed  the  indirect
     beneficial owner of such shares.

     The CMRT directly holds  approximately  12.0% of the outstanding  shares of
     TIMET  Common  Stock and 0.1% of the  outstanding  shares  of Valhi  Common
     Stock.  Valhi  established the CMRT to permit the collective  investment by
     master trusts that maintain assets of certain  employee benefit plans Valhi
     and related  companies adopt.  Harold C. Simmons is the sole trustee of the
     CMRT and a member of the trust investment  committee for the CMRT.  Valhi's
     board of directors  selects the trustee and members of the trust investment
     committee for the CMRT.  All of NL's executive  officers,  Glenn R. Simmons
     and  Steven  L.  Watson  are  participants  in one or more of the  employee
     benefit plans that invest through the CMRT. Each of such persons  disclaims
     beneficial  ownership  of any of the shares the CMRT  holds,  except to the
     extent of his or her individual vested beneficial interest,  if any, in the
     assets the CMRT holds.

     Harold C. Simmons is the chairman of the board and chief executive  officer
     of each of Kronos Worldwide and NL, vice chairman of the board of TIMET and
     the chairman of the board of each of Tremont,  Valhi, VGI,  National,  NOA,
     Dixie Holding, Dixie Rice, Southwest and Contran.

     By virtue of the  holding  of the  offices,  the  stock  ownership  and his
     services as trustee,  all as described  above, (a) Harold C. Simmons may be
     deemed to control  certain of such entities and (b) Mr. Simmons and certain
     of such entities may be deemed to possess indirect beneficial  ownership of
     shares  directly  held by  certain  of such other  entities.  However,  Mr.
     Simmons disclaims  beneficial  ownership of the shares  beneficially owned,
     directly or indirectly,  by any of such  entities,  except to the extent of
     his vested beneficial interest,  if any, in shares held by the CMRT and his
     interest as a beneficiary of the CDCT No. 2. Mr. Harold  Simmons  disclaims
     beneficial  ownership  of all  shares of Common  Stock  that  Valhi or TFMC
     directly holds.

                                      -7-
<PAGE>

     All  directors  or  executive  officers  of NL who are  also  directors  or
     executive  officers  of  Valhi,  TFMC or their  parent  companies  disclaim
     beneficial  ownership  of the  shares of Common  Stock  that  Valhi or TFMC
     directly hold.

     Annette  C.  Simmons  is the wife of Harold C.  Simmons.  She is the direct
     owner of 69,475 shares of Common Stock.  Mr. Simmons may be deemed to share
     indirect  beneficial  ownership of such shares.  Mr. Simmons  disclaims all
     such beneficial ownership.

     The Annette C. Simmons  Grandchildren's  Trust,  a trust of which Harold C.
     Simmons and Annette C. Simmons are  co-trustees  and the  beneficiaries  of
     which are the grandchildren of Annette C. Simmons,  is the direct holder of
     40,000  shares of Valhi Common  Stock (the  "Grandchildren's  Trust").  Mr.
     Simmons, as co-trustee of the Grandchildren's  Trust, has the power to vote
     and  direct  the   disposition   of  the  shares  Valhi  Common  Stock  the
     Grandchildren's  Trust directly  holds.  Mr. Simmons  disclaims  beneficial
     ownership  of any shares of Valhi  Common  Stock  that the  Grandchildren's
     Trust holds.

     NL and a subsidiary of NL directly hold  3,522,967 and 1,186,200  shares of
     Valhi Common  Stock,  respectively.  NL is a majority  owned  subsidiary of
     Valhi.  Pursuant to Delaware  law,  Valhi treats the shares of Valhi Common
     Stock  that NL and NL's  subsidiary  directly  hold as  treasury  stock for
     voting purposes,  and for purposes of calculating the percentage  ownership
     of the  outstanding  shares of Valhi  Common Stock as of the Record Date in
     this proxy statement such shares are not deemed outstanding.

     The business address of Tremont,  VGI,  National,  NOA, Dixie Holding,  the
     Foundation, the CMRT and Contran is Three Lincoln Centre, 5430 LBJ Freeway,
     Suite 1700, Dallas, Texas 75240-2697. The business address of Dixie Rice is
     600 Pasquiere  Street,  Gueydan,  Louisiana  70542. The business address of
     Southwest is 402 Canal Street, Houma, Louisiana 70360. The business address
     of TIMET is 1999 Broadway, Suite 4300, Denver, Colorado 80202.

(5)  The  shares of Common  Stock  shown as  beneficially  owned by such  person
     include the following number of shares such person has the right to acquire
     upon the exercise of stock  options  granted  pursuant to NL's stock option
     plans that such person may exercise within 60 days subsequent to the Record
     Date:

<TABLE>
<CAPTION>
                                                        Shares of Common Stock
                                                   Issuable Upon the Exercise of
                                                           Stock Options
                Name of Beneficial Owner            On or Before May 27, 2005
         -----------------------------------       -----------------------------
         <S>                                       <C>
         Harold C. Simmons..................                  4,000
         Glenn R. Simmons...................                  2,000
         Steven L. Watson...................                  4,000

</TABLE>

     NL understands that Contran and related entities may consider  acquiring or
disposing of shares of Common Stock through open-market or privately  negotiated
transactions, depending upon future developments, including, but not limited to,
the  availability and alternative uses of funds, the performance of Common Stock
in the market,  an assessment of the business of and prospects for NL, financial
and stock market  conditions and other factors deemed relevant by such entities.
NL  may  similarly   consider   acquisitions  of  shares  of  Common  Stock  and
acquisitions or dispositions of securities issued by related entities.

                                      -8-
<PAGE>

     Ownership of Related Companies. Certain NL directors and executive officers
own equity securities of certain NL related companies.

     Ownership of Kronos  Worldwide and Valhi. The following table and footnotes
set forth the  beneficial  ownership,  as of the Record  Date,  of the shares of
Kronos  Worldwide  common stock,  par value $0.01 per share  ("Kronos  Worldwide
Common  Stock"),  and Valhi  Common  Stock  held by each  director,  each  named
executive  officer and all  directors  and  executive  officers as a group.  All
information  is  taken  from  or  based  upon  ownership  filings  made  by such
individuals  or  entities  with  the SEC or upon  information  provided  by such
individuals or entities.

<TABLE>
<CAPTION>

                                          Kronos Worldwide Common Stock                 Valhi Common Stock
                                     -----------------------------------------   -----------------------------------
                                          Amount and                             Amount and Nature
                                     Nature of Beneficial        Percent of         of Beneficial        Percent of
Name of Beneficial Owner                 Ownership (1)          Class (1)(2)        Ownership (1)       Class (1)(3)
------------------------             ---------------------     ---------------   ------------------    -------------
<S>                                  <C>                       <C>               <C>                   <C>
Harold C. Simmons...........                 4,255  (4)(5)            *                3,383  (4)              *
  Valhi, Inc................            27,840,953  (4)(5)          56.9%               n/a                  n/a
  NL Industries, Inc........            17,550,532  (4)(5)          35.9%               n/a                  n/a
  TIMET Finance Management
    Company.................                 5,203  (4)(5)            *                  -0-                   -0-
  Valhi Group, Inc..........                   -0-  (4)              -0-          92,739,554  (4)            77.6%
  National City Lines, Inc..                   -0-  (4)              -0-          10,891,009  (4)             9.1%
  Contran Corporation.......                   -0-  (4)              -0-           4,864,300  (4)(6)          4.1%
  Harold Simmons Foundation,
    Inc.....................                   -0-  (4)              -0-           1,044,200  (4)              *
  The Combined Master
    Retirement Trust........                   -0-  (4)              -0-             115,000  (4)              *
  Annette C. Simmons........                36,356  (4)(5)            *               43,400  (4)              *
  Annette C. Simmons
    Grandchildren's Trust...                  -0-   (4)              -0-              40,000  (4)              *
                                     -------------                               -----------
                                        45,437,299                  92.8%        109,740,846                 91.8%

Cecil H. Moore, Jr..........                   512  (4)               *                  -0-  (4)              -0-
Glenn R. Simmons............                   208  (4)(5)            *               18,247  (4)(7)           *
Thomas P. Stafford..........                 2,132  (4)(5)            *                  -0-                   -0-
Steven L. Watson............                 4,233  (4)(5)            *              117,246  (4)(8)           *
Terry N. Worrell............                     5  (4)(5)            *                  -0-                   -0-
Robert D. Graham............                   -0-  (4)              -0-                 -0-  (4)              -0-
Gregory M. Swalwell.........                   -0-  (4)              -0-             101,166  (4)(8)           *
Kelly D. Luttmer............                   -0-  (4)              -0-              66,600  (4)(8)           *
All  directors and executive
  officers  of NL as a group
  (11 persons)..............            45,444,389  (4)(5)          92.8%        110,044,105  (4)(6)(7)(8)   91.9%

</TABLE>

--------------------
*        Less than 1%.

                                      -9-
<PAGE>

(1)  Except as otherwise noted,  the listed entities,  individuals or group have
     sole  investment  power and sole  voting  power as to all  shares set forth
     opposite their names.  The number of shares and percentage of ownership for
     each  entity,  individual  or group  assumes the  exercise by such  entity,
     individual  or group  (exclusive  of  others)  of stock  options  that such
     entity,  individual or group may  exercise,  or the receipt by such entity,
     individual or group of shares that such entity, individual or group has the
     right to receive (if determinable), within 60 days subsequent to the Record
     Date.

(2)  The percentages are based on 48,946,049  shares of Kronos  Worldwide Common
     Stock outstanding as of the Record Date.

(3)  The  percentages  are based on  119,535,878  shares of Valhi  Common  Stock
     outstanding  as of  the  Record  Date.  For  purposes  of  calculating  the
     outstanding  shares of Valhi Common Stock as of the Record Date,  3,522,967
     and  1,186,200  shares of Valhi Common Stock held by NL and a subsidiary of
     NL,  respectively,  are treated as treasury  stock for voting  purposes and
     excluded from the amount of Valhi Common Stock outstanding.

(4)  See  footnote  (4) to the  "Ownership  of NL"  table for a  description  of
     certain  relationships among the individuals,  entities or groups appearing
     in  this  table.  All  directors  or  executive  officers  of  NL  disclaim
     beneficial ownership of any shares of Kronos Worldwide Common Stock that NL
     directly  owns.  All  directors  or  executive  officers of NL who are also
     directors or executive officers of Valhi, TFMC, VGI, National, Contran, the
     Foundation or their parent companies disclaim  beneficial  ownership of the
     shares  of Kronos  Worldwide  or Valhi  Common  Stock  that  such  entities
     directly hold. Based on the relationships  described in footnote (4) to the
     "Ownership of NL" table,  these share amounts  exclude  certain shares that
     such  individual,   entity  or  group  may  be  deemed  to  indirectly  and
     beneficially  own and as to which  each  such  individual,  entity or group
     disclaims beneficial ownership.

     Harold C. Simmons disclaims  beneficial ownership of any and all securities
     that his wife, Annette C. Simmons, directly holds.

(5)  Includes  (excludes) the following  shares of Kronos Worldwide Common Stock
     that  such  entity,  individual  or  group  received  or  distributed,   as
     applicable,  on March 29, 2005 in a dividend  NL declared  that was paid in
     the form of shares of  Kronos  Worldwide  Common  Stock,  reported  without
     duplication:

<TABLE>
<CAPTION>
                                                     Number of Shares of Kronos
                                                       Worldwide Common Stock
                                                   Received (Distributed) in NL
                                                       Stock Dividend Paid on
                  Name of Beneficial Owner                 March 29, 2005
         ------------------------------------      -----------------------------
         <S>                                       <C>
         Harold C. Simmons...................                     145
         Valhi, Inc..........................                 221,319
         NL Industries, Inc..................                (266,229)
         TIMET Finance Management Company....                   1,218
         Annette C. Simmons..................                     380
         Glenn R. Simmons....................                      32
         Thomas P. Stafford..................                      27
         Steven L. Watson....................                      42
         Terry N. Worrell....................                       5

</TABLE>

(6)  Includes  439,400  shares of Valhi  Common  Stock  the CDCT No. 2  directly
     holds.

(7)  The shares of Valhi  Common Stock shown as  beneficially  owned by Glenn R.
     Simmons include 800 shares his wife holds in her retirement  account,  with
     respect to which shares he disclaims beneficial ownership.

                                      -10-
<PAGE>

(8)  The shares of Valhi Common Stock shown as beneficially owned by such person
     include the following number of shares such person has the right to acquire
     upon the exercise of stock options granted pursuant to Valhi's stock option
     plans that such person may exercise within 60 days subsequent to the Record
     Date:

<TABLE>
<CAPTION>
                                                  Shares of Valhi Common Stock
                                                 Issuable Upon the Exercise of
                                                         Stock Options
              Name of Beneficial Owner             On or Before May 27, 2005
         --------------------------------        ------------------------------
         <S>                                     <C>
         Steven L. Watson................                  100,000
         Gregory M. Swalwell.............                  100,000
         Kelly D. Luttmer................                   66,600

</TABLE>

      Ownership  of  CompX.  The following  table  and  footnotes  set forth the
beneficial  ownership,  as of the Record Date, of the class A common stock,  par
value $0.01 per share,  of CompX ("CompX Class A Common  Stock") and the class B
common stock, par value $0.01 per share, of CompX ("CompX Class B Common Stock,"
and collectively  with the CompX Class A Common Stock, the "CompX Common Stock")
held by each  director,  each named  executive  officer  and all  directors  and
executive  officers  as a group.  All  information  is taken  from or based upon
ownership  filings  made by such  individuals  or entities  with the SEC or upon
information provided by such individuals or entities.

<TABLE>
<CAPTION>
                                                                                                         CompX Class
                                                                                                         A and Class
                                               CompX Class A                    CompX Class B             B Common
                                               Common Stock                    Common Stock (1)             Stock
                                   ----------------------------------  --------------------------------    Combined
                                    Amount and Nature of     Percent    Amount and Nature of   Percent    Percent of
                                         Beneficial         of Class        Beneficial        of Class      Class
        Beneficial Owner               Ownership (2)         (2)(3)        Ownership (2)       (2)(3)       (2)(3)
------------------------------     ---------------------- -----------  --------------------- ---------- --------------
<S>                                <C>                    <C>          <C>                   <C>        <C>
Harold C. Simmons.............          40,700  (4)             *              -0-  (4)         -0-           *
   CompX Group, Inc...........       2,586,820  (4)           49.8%     10,000,000  (4)       100.0%        82.8%
   TIMET Finance Management
     Company..................         336,700  (4)            6.5%            -0-  (4)         -0-          2.2%
   Annette C. Simmons.........          20,000  (4)             *              -0-  (4)         -0-           *
                                   -----------                          ----------
                                     2,984,220  (4)           57.5%     10,000,000  (4)       100.0%        85.5%

Cecil H. Moore, Jr............             -0-  (4)            -0-             -0-  (4)         -0-          -0-
Glenn R. Simmons..............          69,300  (4)(5)(6)      1.3%            -0-  (4)         -0-           *
Thomas P. Stafford............             -0-  (4)            -0-             -0-  (4)         -0-          -0-
Steven L. Watson..............          19,800  (4)(5)          *              -0-  (4)         -0-           *
Terry N. Worrell..............             -0-  (4)            -0-             -0-  (4)         -0-          -0-
Robert D. Graham..............             -0-  (4)            -0-             -0-  (4)         -0-          -0-
Gregory M. Swalwell...........           5,000  (4)(5)          *              -0-  (4)         -0-           *
Kelly D. Luttmer..............           4,200  (4)(5)          *              -0-  (4)         -0-           *
All directors and executive
officers of NL as a group (11
persons)......................       3,082,520  (4)(5)(6)     58.4%     10,000,000  (4)       100.0%        85.7%

</TABLE>

--------------------
*        Less than 1%.

                                      -11-
<PAGE>

(1)  Each share of CompX Class B Common Stock entitles the holder to one vote on
     all  matters  except  the  election  of  directors,  on which each share is
     entitled to ten votes. In certain instances, shares of CompX Class B Common
     Stock are  automatically  convertible  into  shares of CompX Class A Common
     Stock.

(2)  Except as otherwise noted,  the listed entities,  individuals or group have
     sole  investment  power and sole  voting  power as to all  shares set forth
     opposite their names.  The number of shares and percentage of ownership for
     each  entity,  individual  or group  assumes the  exercise by such  entity,
     individual  or group  (exclusive  of  others)  of stock  options  that such
     entity,  individual or group may exercise  within 60 days subsequent to the
     Record Date.

(3)  The percentages are based on 5,193,780 shares of CompX Class A Common Stock
     outstanding  as of the Record Date and  10,000,000  shares of CompX Class B
     Common Stock outstanding as of the Record Date.

(4)  NL and TFMC directly hold 82.4% and 17.6%, respectively, of the outstanding
     shares of CGI common  stock.  Valhi holds  indirectly  through CGI and TFMC
     approximately  85.1% of the combined voting power of the outstanding shares
     of CompX Common Stock (approximately 97.8% for the election of directors).

     See  footnote  (4) to the  "Ownership  of NL"  table for a  description  of
     certain  relationships among the individuals,  entities or groups appearing
     in  this  table.  All  directors  or  executive  officers  of  NL  disclaim
     beneficial  ownership of any shares of CompX Common Stock that CGI directly
     owns.  All directors or executive  officers of NL who are also directors or
     executive  officers  of TFMC or its parent  companies  disclaim  beneficial
     ownership of the shares of Kronos Worldwide or Valhi Common Stock that TFMC
     directly holds. Based on the relationships described in footnote (4) to the
     "Ownership of NL" table,  these share amounts  exclude  certain shares that
     such  individual,   entity  or  group  may  be  deemed  to  indirectly  and
     beneficially  own and as to which  each  such  individual,  entity or group
     disclaims beneficial ownership.

     Harold C. Simmons disclaims  beneficial ownership of any and all securities
     that his wife, Annette C. Simmons, directly holds.

(5)  The shares of CompX  Class A Common  Stock shown as  beneficially  owned by
     such  person  include  the  following  number of shares such person has the
     right to acquire  upon the  exercise of stock  options  that such person or
     group may exercise within 60 days subsequent to the Record Date:

<TABLE>
<CAPTION>
                                             Shares of CompX Class A Common
                                                Stock Issuable Upon the
                                               Exercise of Stock Options
            Name of Beneficial Owner          On or Before May 27, 2005
         ----------------------------        ------------------------------
         <S>                                 <C>
         Glenn R. Simmons............                  56,800
         Steven L. Watson............                  14,800
         Gregory M. Swalwell.........                   5,000
         Kelly D. Luttmer............                   4,000

</TABLE>

(6)  The shares of CompX  Class A Common  Stock shown as  beneficially  owned by
     Glenn R.  Simmons  include  500  shares  his wife  holds in her  retirement
     account, with respect to which he disclaims beneficial ownership.

                                      -12-
<PAGE>

                COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
                              AND OTHER INFORMATION

     Compensation of Directors.  In 2004,  directors received an annual retainer
of $20,000,  paid in  quarterly  installments,  plus a fee of $1,000 per day for
attendance  at meetings  and at a daily rate ($125 per hour) for other  services
rendered on behalf of the Board of  Directors or its  committees.  For the first
two quarters of 2004, directors also received an annual retainer of $2,000, paid
in quarterly  installments,  for each  committee on which they served.  Starting
with the third  quarter of 2004,  the Board of Directors  increased the director
fees paid to  members  of the audit  committee.  The  increase  resulted  in the
chairman  of  the  audit  committee  and  any  member  of the  committee  who NL
identified as an "audit committee  financial  expert" for purposes of the annual
proxy  statement  receiving  an annual  retainer of $10,000,  paid in  quarterly
installments  (provided  that if one person served in both  capacities  only one
such retainer was paid),  and other members of the audit committee  receiving an
annual retainer of $5,000, paid in quarterly installments.  If any director dies
while serving on the Board of Directors,  his or her  designated  beneficiary or
estate will be entitled to receive a death benefit equal to the annual  retainer
then in effect. NL reimburses its directors for reasonable  expenses incurred in
attending  meetings and in the performance of other services  rendered on behalf
of the Board of Directors or its committees.  In addition,  Gen. Stafford (ret.)
receives an annual payment of $15,000 as a result of his service on the Board of
Directors prior to 1987.

     On the day of each annual  shareholder  meeting,  each director  receives a
grant of shares of Common Stock as determined by the following  formula based on
the closing price of a share of Common Stock on the date of such meeting.

<TABLE>
<CAPTION>

       Range of Closing Price Per             Shares of Common
       Share on the Date of Grant            Stock to Be Granted
       --------------------------            -------------------
       <S>                                   <C>
         Under $5.00                                2,000
         $5.00 to $9.99                             1,500
         $10.00 to $20.00                           1,000
         Over $20.00                                  500

</TABLE>

As a result of the $11.41  per share  closing  price of Common  Stock on May 20,
2004, the date of the 2004 annual shareholder meeting,  each director elected on
that date received a grant of 1,000 shares of Common Stock.

     Intercorporate   Services   Agreements.   Contran   and   certain   of  its
subsidiaries, including NL, have entered into intercorporate services agreements
(collectively,  the "ISAs")  pursuant  to which  Contran,  among  other  things,
provides  the  services  of all of the named  executive  officers  to certain of
Contran's subsidiaries,  including NL and its subsidiaries.  For a discussion of
these ISAs, see "Certain Relationships and Transactions--Intercorporate Services
Agreements."

                                      -13-
<PAGE>

     Summary of Cash and Certain Other Compensation of Executive  Officers.  The
summary  compensation  table below provides  information  concerning  annual and
long-term  compensation  paid or accrued by NL and its subsidiaries for services
rendered to NL and its  subsidiaries  during  2004,  2003 and 2002 by NL's chief
executive  officer and four other executive  officers with the highest charge to
NL or its  subsidiaries  pursuant to an ISA between NL and Contran (the "Contran
ISA") in 2004.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                                  Long Term
                                                                                               Compensation (1)
                                                                                              ----------------
                                                                                                   Awards
                                                                                              ----------------
                                                                   Annual Compensation (2)         Shares
                     Name and                                    --------------------------      Underlying
                Principal Position                      Year               Salary                Options (#)
---------------------------------------------------     ----     --------------------------   ----------------
<S>                                                    <C>       <C>                          <C>
Harold C. Simmons (3)..............................     2004     $  2,973,415  (4)                  -0-
Chairman of the Board and Chief Executive Officer       2003          990,830  (4)                  -0-
                                                        2002          984,220  (4)                2,000  (5)

Robert D. Graham (3)...............................     2004          455,900  (4)                  -0-
Vice President, General Counsel and Secretary           2003           20,000  (4)                  -0-

Gregory M. Swalwell (3)............................     2004          323,300  (4)                  -0-
Vice President, Finance and Chief Financial Officer     2003          154,000  (4)                  -0-

Kelly D. Luttmer (3)...............................     2004          278,300  (4)                  -0-
Vice President and Tax Director                         2003            8,000  (4)                  -0-

James W. Brown (3).................................     2004          252,400  (4)                  -0-
Vice President and Controller                           2003              -0-  (4)                  -0-

</TABLE>

----------------

(1)  For the periods  presented for each named executive  officer,  no shares of
     restricted  stock were  granted nor  payouts  made  pursuant  to  long-term
     incentive plans.  Therefore,  the columns for such  compensation  have been
     omitted.

(2)  For the periods  presented,  no named executive officer received a bonus or
     "other  annual  compensation,"  as  defined  by SEC  rules,  from NL or its
     subsidiaries.   Therefore,   the  columns   for  bonus  and  other   annual
     compensation have been omitted.

(3)  Other than Mr. Simmons, none of the named executive officers were executive
     officers of NL during 2002.  Messrs.  Graham and  Swalwell and Ms.  Luttmer
     became  executive  officers of NL effective July 17, 2003. Mr. Brown became
     an executive officer of NL effective December 8, 2003.

(4)  All executive officers of NL are employees of Contran. The amounts shown in
     the summary  compensation  table as salary for each named executive officer
     represent the portion of the fees NL and its  subsidiaries  paid to Contran
     pursuant to certain ISAs with respect to the services such officer rendered
     to NL and its subsidiaries. The amount shown in the table as salary for Mr.
     Simmons also includes  director  compensation paid to him by each of NL and
     Kronos   Worldwide.   The   components  of  salary  shown  in  the  summary
     compensation table for the named executive officers are as follows.

                                      -14-
<PAGE>

<TABLE>
<CAPTION>

                                                               2002                 2003               2004
                                                       -------------------  ------------------  ------------------
<S>                                                    <C>                  <C>                 <C>
          Harold C. Simmons
            ISA Fees:
               NL...................................   $        760,000     $        761,000     $      950,000
               CompX................................                n/a (a)              n/a (a)      1,000,000
               Kronos Worldwide.....................            190,000 (b)          190,000 (b)        950,000 (b)
            NL Cash Director Fees...................             19,000               23,500             24,000
            NL Director Stock.......................             15,220               16,330             11,410
            Kronos Worldwide Cash Director Fees.....                -0-                  -0-             23,000
            Kronos Worldwide Director Stock.........                -0-                  -0-             15,005
                                                         --------------      ---------------      --------------
                                                       $        984,220     $        990,830     $    2,973,415
                                                         ==============      ===============      ==============
</TABLE>
<TABLE>
<S>                                                                         <C>                  <C>
          Robert D. Graham
            ISA Fees:
               NL........................................................   $         20,000     $      298,000
               CompX.....................................................                n/a (a)          8,900
               Kronos Worldwide..........................................                -0- (b)        149,000 (b)
                                                                             ---------------      -------------
                                                                            $         20,000     $      455,900
                                                                             ===============      =============

          Gregory M. Swalwell
            ISA Fees:
               NL........................................................   $        154,000     $      113,700
               CompX.....................................................                n/a (a)         39,000
               Kronos Worldwide..........................................                -0- (b)        170,600 (b)
                                                                             ---------------      -------------
                                                                            $        154,000     $      323,300
                                                                             ===============      =============
          Kelly D. Luttmer
            ISA Fees:
               NL........................................................   $          8,000     $       82,500
               CompX.....................................................                n/a (a)         35,000
               Kronos Worldwide..........................................                -0- (b)        160,800 (b)
                                                                             ---------------      -------------
                                                                            $          8,000     $      278,300
                                                                             ===============      =============
          James W. Brown
            ISA Fees:
               NL........................................................   $            -0-     $       50,500
               CompX.....................................................                n/a                -0-
               Kronos Worldwide..........................................                -0- (b)        201,900 (b)
                                                                             ---------------      -------------
                                                                            $            -0-     $      252,400
                                                                             ===============      =============
</TABLE>


     (a)  Prior to  September  24, 2004,  CompX was not a  subsidiary  of NL and
          therefore  any ISA  charges  to  CompX  for such  executive  officer's
          compensation  are not included in the summary  compensation  table for
          2003. The 2002 ISA charge for Mr. Simmons to CompX was $1,000,000. The
          2003 ISA  charges  for the named  executive  officers to CompX were as
          follows:

<TABLE>
<CAPTION>
                                                            2003 ISA Charge
                   Named Executive Officer                     to CompX
          -------------------------------------------       ---------------
          <S>                                               <C>
          Harold C. Simmons..........................         $1,000,000
          Robert D. Graham...........................             27,000
          Gregory M. Swalwell........................             26,000
          Kelly D. Luttmer...........................            109,000
          James W. Brown.............................                -0-

</TABLE>

     (b)  Other than Mr. Simmons,  the 2003 ISA charges to Kronos  Worldwide and
          its subsidiaries for the named executive  officers'  services were not
          specifically  identifiable  to  a  particular  officer  and  were  not
          allocable between Kronos Worldwide and Kronos  International,  Inc., a
          wholly owned subsidiary of Kronos Worldwide ("KII").  In 2004, the ISA
          charges to Kronos Worldwide were  identifiable to each named executive
          officer and include amounts allocable to KII.

(5)  Represents shares of NL Common Stock underlying stock options NL granted to
     this named executive officer for his services as a director of NL.

                                      -15-
<PAGE>

     No Grants of Stock Options or Stock Appreciation Rights. Neither NL nor any
of its parent or  subsidiary  corporations  granted  any stock  options or stock
appreciation rights ("SARs") to the named executive officers during 2004.

     Stock Option Holdings.  The following table provides information concerning
the value of unexercised  stock options for Common Stock,  Valhi Common Stock or
CompX Class A Common Stock the named executive  officers held as of December 31,
2004,  of which  Messrs.  Graham and Brown held none.  Neither NL nor any of its
parent or  subsidiary  companies  has granted any SARs nor has Kronos  Worldwide
granted any stock options.

<TABLE>
<CAPTION>
                         DECEMBER 31, 2004 OPTION VALUES


                                                        Number of Shares Underlying        Value of Unexercised
                                                          Unexercised Options at           In-the-Money Options
                       Name                                December 31, 2004 (#)         at December 31, 2004 (1)
--------------------------------------------------     -----------------------------  ------------------------------
                                                        Exercisable   Unexercisable    Exercisable    Unexercisable
                                                       ------------   --------------  -------------   --------------
<S>                                                    <C>            <C>             <C>             <C>
Harold C. Simmons
   NL Stock Options...............................            6,000              -0-  $      86,829   $         -0-

Gregory M. Swalwell
   Valhi Stock Options............................           95,000            5,000        583,450          25,450
   CompX Stock Options............................            5,000              -0-            -0-             -0-
                                                       ------------   --------------  -------------   --------------
                                                            100,000            5,000        583,450          25,450

Kelly D. Luttmer
   Valhi Stock Options............................           66,600            5,000        351,386          25,450
   CompX Stock Options............................            4,000              -0-            -0-             -0-
                                                       ------------   --------------  -------------   --------------
                                                             70,600            5,000        351,386          25,450

</TABLE>

--------------------

(1)  Each aggregate value is based on the difference  between the exercise price
     of the  individual  stock  options and the closing sales price per share of
     such  underlying  common  stock on December 31,  2004.  Such closing  sales
     prices were $16.09 per share for Valhi Common  Stock,  $22.10 per share for
     Common Stock and $16.53 per share for CompX Class A Common Stock.

     Pension Plan.  The Retirement  Program of NL Industries,  Inc. for its U.S.
employees (the "Pension Plan") provides lifetime retirement benefits to eligible
employees.  In 1996, NL approved the suspension of all future accruals under the
salaried  component  of the  Pension  Plan.  No named  executive  officer  of NL
participates in the Pension Plan.

                                      -16-
<PAGE>

                      EQUITY COMPENSATION PLAN INFORMATION

     The following  table provides  summary  information as of December 31, 2004
with respect to equity compensation plans under which NL's equity securities may
be  issued  to  employees  or  nonemployees  (such  as  directors,  consultants,
advisers,  vendors,  customers,  suppliers and lenders) in exchange for goods or
services.
<TABLE>
<CAPTION>
                                         Column (A)                   Column (B)                   Column (C)
                                --------------------------    -------------------------    -------------------------
                                                                                             Number of Securities
                                                                                            Remaining Available for
                                                                                             Future Issuance Under
                                Number of Securities to be    Weighted-Average Exercise    Equity Compensation Plans
                                  Issued Upon Exercise of       Price of Outstanding        (Excluding Securities
                                   Outstanding Options,               Options,                  Reflected in
      Plan Category                Warrants and Rights           Warrants and Rights             Column (A))
--------------------------      --------------------------    -------------------------    -------------------------
<S>                             <C>                           <C>                          <C>
Equity  compensation  plans
approved     by    security
holders....................               245,100                     $  9.80                     4,089,600

Equity  compensation  plans
not  approved  by  security
holders....................                   -0-                         -0-                           -0-

Total......................               245,100                     $  9.80                     4,089,600

</TABLE>

                         CORPORATE GOVERNANCE DOCUMENTS

     Code of  Business  Conduct  and  Ethics.  NL has adopted a code of business
conduct  and  ethics  that  applies  to  all of  NL's  directors,  officers  and
employees,  including  NL's principal  executive  officer,  principal  financial
officer,  principal  accounting  officer  and  controller.  Only  the  Board  of
Directors may amend the code.  Only NL's audit  committee or other  committee of
the Board of Directors with specific  delegated  authority may grant a waiver of
the code. NL will disclose amendments to, or waivers of, the code as required by
law and the applicable rules of the NYSE.

     Corporate  Governance  Guidelines.  NL  has  adopted  corporate  governance
guidelines to assist the Board of Directors in exercising its  responsibilities.
Among other things,  the corporate  governance  guidelines  provide for director
qualifications, independence standards and responsibilities, approval procedures
for ISAs and that the audit  committee  chairman  preside at all meetings of the
independent directors.

     Audit Committee  Charter.  NL has adopted an audit committee  charter under
which the audit  committee  operates.  Among other things,  the audit  committee
charter provides the purpose,  authority,  resources and responsibilities of the
committee.

     A copy of each of these three documents, among others, is available on NL's
website at www.nl-ind.com  under the corporate  governance section. In addition,
any person may obtain a copy of these three documents without charge, by sending
a written request to the attention of NL's corporate secretary at NL Industries,
Inc.,  Three  Lincoln  Centre,  5430 LBJ  Freeway,  Suite  1700,  Dallas,  Texas
75240-2697.

             SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section  16(a) of the  Securities  Exchange  Act of 1934,  as amended  (the
"Exchange Act"), requires NL's executive officers, directors and persons who own
more than 10% of a registered class of NL's equity securities to file reports of
ownership  with the SEC,  the NYSE and NL.  Based  solely  on the  review of the
copies of such  forms and  representations  by  certain  reporting  persons,  NL
believes that for 2004 its executive  officers,  directors and 10%  shareholders
complied with all applicable filing requirements under section 16(a).

                                      -17-
<PAGE>

                          EXECUTIVE COMPENSATION REPORT

     During 2004, NL's independent directors and the MD&C Committee administered
matters regarding the compensation of NL's executive officers.

Contran ISA

     During 2004, NL paid certain fees to Contran for services provided pursuant
to an ISA between  Contran and NL (the "Contran  ISA").  Such services  provided
under the Contran ISA included the services of all of NL's executive officers.

     Contran  annually  determines  the  aggregate  fee to  charge  NL  and  its
subsidiaries  based  on (i) an  estimate  of the  amount  of time  each  Contran
employee that performs  services for NL and its subsidiaries  will spend on such
services over the year and (ii) Contran's  cost related to such employee,  which
includes the  employee's  base salary,  incentive  compensation  and an overhead
component  that takes into account other  employment  costs,  including  medical
benefits,  unemployment  and  disability  insurance  and pension costs and other
costs of providing an office, equipment and supplies related to the provision of
such  services.  The portion of the annual  charge NL pays under the Contran ISA
for the  services  of any  particular  individual  is capped at $1.0  million to
enhance NL's ability to deduct such charge for federal income tax purposes.  The
amount  of the fee NL paid  in 2004  under  the  Contran  ISA for a  person  who
provided services to NL or its subsidiaries  represents,  in management's  view,
the  reasonable  equivalent  of  "compensation"  for such  services.  It is also
management's view that the proposed aggregate charge to NL under the Contran ISA
is  fair  to  NL  and  its   shareholders.   See  "Certain   Relationships   and
Transactions--Intercorporate  Services  Agreements" for the aggregate  amount NL
paid to Contran in 2004 under the Contran ISA. For each named executive  officer
that was a Contran employee in 2004, the portion of the annual charge NL paid in
2004 to Contran  under the  Contran  ISA  attributable  to the  services of such
executive officer is set forth in footnote (4) to the summary compensation table
in this  proxy  statement.  The  amount  charged  under the  Contran  ISA is not
dependent upon NL's financial performance.

     Based upon the  independent  directors'  review of Contran's ISA allocation
process and documentation as to how Contran determines the necessary  personnel,
the  estimated  number of full  time  employees  that are  required  to  provide
services and the cost of such  services  under the Contran ISA and their related
discussions  with  management,   the  independent  directors  agreed  that  such
aggregate 2004 charge from Contran under the Contran ISA was fair and reasonable
to NL and its  shareholders.  In  making  such  determination,  the  independent
directors relied on their collective business experience and judgment.

Common Stock Based Compensation

     In 2004, the MD&C Committee administered matters regarding the Common Stock
based compensation of NL's executive officers. In 2004, however,  management did
not recommend any Common Stock based  compensation,  and the MD&C  Committee did
not grant any such  compensation  to any  executive  officers  other than annual
stock grants to NL's directors, including the chief executive officer, for their
services as directors. The MD&C Committee does not currently anticipate granting
Common Stock based compensation to anyone in 2005 other than these annual grants
of stock to directors. See "Compensation of Directors and Executive Officers and
Other Information -- Compensation of Directors."

Deductibility of Compensation

     Section  162(m) of the Code  generally  disallows a tax deduction to public
companies for  non-performance  based compensation over $1.0 million paid to the
company's  chief  executive  officer  and four  other  most  highly  compensated
executive officers. It is NL's general policy to structure the performance-based
portion of the compensation of its executive  officers in a manner that enhances
NL's ability to deduct fully such compensation.

     The following individuals,  in the capacities indicated,  hereby submit the
foregoing report.

     Gen. Thomas P. Stafford (ret.)             Terry N. Worrell
     Chairman of the MD&C Committee and         Member of the MD&C Committee and
     Independent Director                       Independent Director

     Cecil H. Moore, Jr.
     Independent Director

                                      -18-
<PAGE>

                     CERTAIN RELATIONSHIPS AND TRANSACTIONS

     Relationships   with  Related   Parties.   As  set  forth  under  "Security
Ownership," Harold C. Simmons,  through Contran, may be deemed to control NL. NL
and other entities that may be deemed to be controlled by or affiliated with Mr.
Simmons sometimes engage in (a) intercorporate  transactions such as guarantees,
management  and  expense  sharing  arrangements,  shared fee  arrangements,  tax
sharing agreements,  joint ventures,  partnerships,  loans, options, advances of
funds on open  account  and sales,  leases and  exchanges  of assets,  including
securities  issued  by  both  related  and  unrelated  parties  and  (b)  common
investment and acquisition strategies,  business combinations,  reorganizations,
recapitalizations,  securities  repurchases  and  purchases and sales (and other
acquisitions  and  dispositions)  of  subsidiaries,  divisions or other business
units,  which  transactions have involved both related and unrelated parties and
have included transactions that resulted in the acquisition by one related party
of an equity  interest in another  related  party.  NL  periodically  considers,
reviews  and  evaluates  and  understands  that  Contran  and  related  entities
periodically consider, review and evaluate such transactions. Depending upon the
business,  tax and other objectives then relevant,  it is possible that NL might
be a party to one or more of such transactions in the future. In connection with
these  activities  NL may  consider  issuing  additional  equity  securities  or
incurring additional indebtedness.  NL's acquisition activities have in the past
and may in the future include  participation  in  acquisition  or  restructuring
activities  conducted by other  companies that may be deemed to be controlled by
Mr.  Simmons.  It is the  policy of NL to engage in  transactions  with  related
parties on terms,  in the opinion of NL, no less  favorable  to NL than could be
obtained from unrelated parties.

     Certain directors or executive officers of Contran,  CompX,  Keystone,  NL,
TIMET or Valhi  also  serve as  directors  or  executive  officers  of NL.  Such
relationships  may  lead to  possible  conflicts  of  interest.  These  possible
conflicts  of  interest  may arise from the  duties of  loyalty  owed by persons
acting as corporate  fiduciaries to two or more companies under circumstances in
which such companies may have adverse interests.  No specific  procedures are in
place  that  govern  the  treatment  of  transactions  among NL and its  related
entities,   although  such  entities  may  implement   specific   procedures  as
appropriate  for  particular   transactions.   In  addition,   under  applicable
principles  of law, in the absence of  shareholder  ratification  or approval by
directors  who may be deemed  disinterested,  transactions  involving  contracts
among  companies  under common  control must be fair to all companies  involved.
Furthermore,  directors owe  fiduciary  duties of good faith and fair dealing to
all shareholders of the companies for which they serve.

     Intercorporate  Services Agreements.  NL and certain related companies have
entered into ISAs. Under the ISAs, employees of one company will provide certain
services,  including  executive officer services,  to the other company on a fee
basis. The services rendered under the ISAs may include  executive,  management,
financial,  internal audit, accounting,  tax, legal, insurance, risk management,
treasury,  aviation,  human resources,  technical,  consulting,  administrative,
office,  occupancy  and  other  services  as  required  from time to time in the
ordinary course of the recipient's business.  The fees paid pursuant to the ISAs
are  generally  based upon an estimate of the time  devoted by  employees of the
provider of the services to the affairs of the recipient and the employer's cost
related to such employees,  which includes the employees' cash  compensation and
an overhead  component  that takes into account  other  employment  costs of the
employees.   Each  of  the   ISAs  in   their   current   form   extends   on  a
quarter-to-quarter  basis,  generally subject to the termination by either party
pursuant to a written  notice  delivered  30 days prior to the start of the next
quarter.  Because of the large number of companies  affiliated  with Contran and
NL, NL believes it benefits  from cost savings and  economies of scale gained by
not having certain management, financial and administrative staffs duplicated at
each entity,  thus allowing certain  individuals to provide services to multiple
companies but only be compensated by one entity. With respect to a publicly held
company  that is a party to an ISA,  the ISA and the  related  aggregate  annual
charge is reviewed and approved by the independent directors of the company.

     Under the Contran ISA, NL paid Contran fees of  approximately  $3.6 million
for services  Contran  provided in 2004. In 2005, NL expects to pay Contran fees
of  approximately  $4.2 million for Contran's  services to be provided under the
Contran ISA. NL also pays director fees and expenses  directly to Messrs.  Glenn
and Harold Simmons and Watson for their services as directors of NL.

     Under the ISA  between  Contran  and  CompX,  CompX  paid  Contran  fees of
approximately  $2.3 million for the services  Contran provided in 2004. In 2005,
CompX  expects to pay Contran fees of  approximately  $2.6 million for Contran's
services to be provided  under this ISA. NL also pays director fees and expenses
directly to Messrs.  Glenn Simmons and Watson for their services as directors of
CompX.

                                      -19-
<PAGE>

     Under the ISA between Contran and Kronos  Worldwide,  Kronos Worldwide paid
Contran fees of  approximately  $4.4 million for  services  Contran  provided in
2004. In 2005,  Kronos  Worldwide  expects to pay Contran fees of  approximately
$5.7 million for services to be provided under the Contran ISA. Kronos Worldwide
also pays  director  fees and  expenses  directly  to  Messrs.  Glenn and Harold
Simmons and Watson for their services as directors of NL.

     Acquisition of CompX.  On September 24, 2004, NL completed the  acquisition
of  approximately  68.4% of the then  outstanding  shares of CompX  Common Stock
owned by Valhi and its wholly owned subsidiary,  Valcor, Inc.  ("Valcor"),  at a
purchase  price of $16.25 per share,  or an  aggregate of  approximately  $168.6
million (the "CompX Acquisition").  The purchase price was paid by NL's transfer
to Valhi and  Valcor of $168.6  million  of NL's  $200  million  long-term  note
receivable from Kronos Worldwide (the "Kronos Worldwide  Promissory  Note"). The
acquisition  was reviewed  and  approved by a special  committee of the Board of
Directors,  comprised of directors who were not affiliated with Valhi, after the
committee received an opinion from its financial advisor that the purchase price
was fair, from a financial point of view, to NL.

     Subsequent  to the  acquisition  and pursuant to a  subscription  agreement
effective  October 1, 2004, NL and TFMC capitalized CGI by each  contributing to
CGI 68.4%  and  14.6%,  respectively,  of the then  outstanding  shares of CompX
Common Stock.  As a result of the initial  contribution,  NL and TFMC held 82.4%
and 17.6% of the outstanding  shares of common stock of CGI,  respectively,  and
CGI held 83.0% of the then outstanding shares of CompX Common Stock. Pursuant to
the subscription agreement,  CGI agreed that it would not sell any of the shares
of CompX Common  Stock  contributed  to CGI by TFMC without the express  written
consent of TFMC. In addition, in accordance with the subscription agreement, the
parties entered into a voting agreement that provides,  among other things, that
NL will elect one nominee of TFMC to CGI's five member board of directors.

     Pursuant to CGI's certificate of incorporation, upon the written request of
a CGI stockholder,  CGI is obligated to redeem such number of the  stockholder's
shares of CGI common stock that the stockholder requests. The CGI stockholder is
also entitled to elect to receive as part of the redemption price such number of
shares of CompX Class A or Class B Common Stock that the holder  contributed  to
CGI  based  on the  same  ratio  of  shares  of  CGI  received  in  the  initial
contribution.  CGI's board of directors  is then  obligated to determine in good
faith and in its best business  judgment the redemption  price.  Pursuant to the
CGI's  certificate of  incorporation,  in determining the redemption  price, the
board of  directors  shall value each share of CompX Common Stock held by CGI at
the volume weighted average sales price of a share of CompX Class A Common Stock
for the ten trading days ending on the day CGI receives the redemption request.

     With the  initial  capitalization  of CGI,  CompX  became  eligible to file
consolidated  returns of U.S.  federal  income  taxes with NL and  Contran.  See
"--Tax Matters" below for a discussion of this relationship with NL and Contran.

     Loans between  Related  Parties.  In 2001, a wholly owned  subsidiary of NL
Environmental  Management Services, Inc. ("EMS"), a majority owned subsidiary of
NL, loaned $20 million to one of the Trusts,  the Harold C. Simmons Family Trust
No. 2 ("Family Trust No. 2"), under a $25 million  revolving  credit  agreement.
Special independent committees of NL's and EMS' boards of directors approved the
loan. The loan bears interest at the prime rate (5.25% at December 31, 2004), is
due on demand with sixty days notice and is  collateralized by 13,749 shares, or
approximately  35%, of  Contran's  outstanding  class A voting  common stock and
5,000 shares, or 100%, of Contran's series E cumulative preferred stock, both of
which are owned by the  Family  Trust  No.  2. The value of this  collateral  is
dependent in part on the value of Valhi,  as Contran's  interest in Valhi is one
of Contran's more substantial assets. At December 31, 2004, the outstanding loan
balance under the revolving credit agreement was $10.0 million and $15.0 million
was available for the Family Trust No. 2 to borrow.

     Effective October 22, 2002, NL had entered into a revolving credit facility
with  Tremont,  a wholly owned  subsidiary  of Valhi,  pursuant to which Tremont
could borrow up to $15 million. The credit agreement bore interest at prime plus
2% (with interest payable  quarterly) and was collateralized by the 10.2 million
shares of Common  Stock and the 5.1 million  shares of Kronos  Worldwide  Common
Stock then owned by Tremont.  The loan matured and was terminated as of December
31, 2004.

                                      -20-
<PAGE>

     On December 8, 2003, immediately prior to NL's distribution of 48.8% of the
outstanding   shares  of  Kronos  Worldwide   Common  Stock,   Kronos  Worldwide
distributed  a dividend  of the Kronos  Worldwide  Promissory  Note.  The Kronos
Worldwide  Promissory Note was unsecured and bore interest at 9% per annum, with
interest payable quarterly and all principal due in 2010. On September 24, 2004,
pursuant  to the  CompX  Acquisition,  NL  transferred  to Valhi  and  Valcor an
aggregate  $168.6 million of the Kronos  Worldwide  Promissory  Note. In October
2004, Valcor distributed its note receivable from Kronos Worldwide to Valhi, and
subsequently,  Kronos Worldwide  prepaid $100.0 million of the consolidated note
payable to Valhi  principally  using  available  cash on hand. In December 2004,
Kronos  Worldwide  prepaid the remaining  balances on the notes due Valhi and NL
that were originally  represented by the Kronos  Worldwide  Promissory Note, and
the related notes were cancelled.

     From time to time, other loans and advances are made between NL and various
related parties pursuant to term and demand notes.  These loans and advances are
entered into  principally for cash management  purposes.  When NL loans funds to
related parties, the lender is generally able to earn a higher rate of return on
the loan  than  the  lender  would  earn if the  funds  were  invested  in other
instruments.  While certain of such loans may be of a lesser credit quality than
cash equivalent  instruments  otherwise available to NL, NL believes that it has
evaluated the credit risks  involved,  and that those risks are  reasonable  and
reflected  in the terms of the  applicable  loans.  When NL borrows from related
parties,  it is generally able to pay a lower rate of interest than it would pay
if it borrowed from other parties.

     Interest  income on all loans to  unconsolidated  related  parties was $6.9
million in 2004,  which amount includes (i) $1.5 million in interest income from
CompX's discontinued Thomas Regout operations in Europe and (ii) $4.7 million in
interest income related the Kronos Worldwide Promissory Note.

     Short-Swing  Trading  Profits.  From December 2004 through January 2005, NL
sold certain shares of Kronos Worldwide Common Stock in the open-market.  In the
six months prior to such sales,  Valhi had purchased  shares of Kronos Worldwide
Common Stock in the open-market.  Pursuant to section 16(b) of the Exchange Act,
certain of such sales and  purchases  might be deemed to be matched for purposes
of computing  short-swing  profits.  As a result,  Valhi made several  voluntary
payments  to  Kronos  Worldwide   concurrently  with  NL's  sales   transactions
aggregating  approximately $600,000,  which amount represents the maximum amount
of any possible short-swing profits resulting from these transactions.

     Insurance Matters. Contran and NL participate in a combined risk management
program.  Pursuant to the program,  Contran and certain of its  subsidiaries and
affiliates,  including  NL and  certain  of  its  subsidiaries  and  affiliates,
purchase certain of their insurance  policies as a group,  with the costs of the
jointly owned policies being apportioned among the participating companies. Tall
Pines Insurance  Company,  including  Valmont Insurance Company that merged into
Tall Pines in December 2004 ("Tall Pines"), and EWI RE, Inc. ("EWI") provide for
or broker these insurance  policies.  Tall Pines is a captive  insurance company
wholly owned by Valhi,  and EWI is a reinsurance  brokerage and risk  management
firm  wholly  owned by NL. A  son-in-law  of Harold C.  Simmons  serves as EWI's
chairman  of the board and chief  executive  officer  and is  compensated  as an
employee of EWI.  Consistent with insurance industry  practices,  Tall Pines and
EWI receive  commissions  from insurance and  reinsurance  underwriters  for the
policies that they provide or broker.

     With respect to certain of such jointly  owned  insurance  policies,  it is
possible that unusually  large losses  incurred by one or more insureds during a
given  policy  period  could  leave the other  participating  companies  without
adequate  coverage under that policy for the balance of the policy period.  As a
result,  Contran and certain of its  subsidiaries  or affiliates,  including NL,
have entered into a loss sharing  agreement  under which any  uninsured  loss is
shared by those entities who have submitted claims under the relevant policy. NL
believes  the  benefits in the form of reduced  premiums  and  broader  coverage
associated  with  the  group  coverage  for  such  policies  justify  the  risks
associated with the potential for any uninsured loss.

     During 2004, Contran and its related parties paid premiums of approximately
$15.1  million  for  policies  Tall Pines  provided or EWI  brokered,  including
approximately  $9.2  million paid by NL,  CompX and Kronos  Worldwide  and their
subsidiaries  and  Louisiana  Pigment  Company,  L.P.,  a  partnership  of which
subsidiaries  of Kronos  Worldwide and Huntsman LLC each own 50% ("LPC").  These
amounts  principally  included  payments for reinsurance and insurance  premiums
paid to unrelated  third  parties,  but also included  commissions  paid to Tall
Pines and EWI. In NL's opinion,  the amounts that NL, its  subsidiaries  and LPC
paid for these insurance policies and the allocation among NL and its affiliates
of relative insurance premiums are reasonable and at least as favorable to those
they could have obtained through unrelated  insurance  companies or brokers.  NL
expects that these relationships with Tall Pines and EWI will continue in 2005.

                                      -21-
<PAGE>

     Tax Matters.  Prior to October 1, 2004,  CompX was a separate U.S.  federal
income taxpayer and was not a member of the consolidated U.S. federal tax return
of Contran (the  "Contran Tax Group").  Effective  with the  formation of CGI on
October 1, 2004,  CompX and its  qualifying  subsidiaries  became members of the
Contran Tax Group and CompX  entered  into a tax sharing  agreement  with NL and
Contran.

     As a member of the  Contran  Tax Group and  pursuant to certain tax sharing
agreements,  each  of  the  members  and  its  qualifying  subsidiaries  compute
provisions for U.S. income taxes on a separate company basis using tax elections
made by Contran.  Pursuant to the tax sharing agreements and using tax elections
made by Contran,  each of the  parties  makes  payments or receives  payments in
amounts it would have paid to or received from the U.S. Internal Revenue Service
had it not been a  member  of the  Contran  Tax  Group  but  instead  had been a
separate  taxpayer.  Refunds are generally  limited to amounts  previously  paid
under the respective tax sharing agreement.

     NL, CompX and Kronos  Worldwide are also a part of consolidated tax returns
filed by Contran in certain  U.S.  state  jurisdictions.  For such  consolidated
state tax returns, intercompany allocations of state tax provisions are computed
on a separate  company basis using tax elections  made by Contran.  As a result,
NL, CompX and Kronos  Worldwide make payments or receive payments in the amounts
that would have been paid to or received from the respective state tax authority
had they not been a part of the consolidated state tax return.

     Under certain circumstances, tax regulations could require Contran to treat
items  differently than NL, CompX or Kronos Worldwide would have treated them on
a stand  alone  basis.  In 2004,  pursuant  to the tax  sharing  agreements  and
consolidated  state tax  returns,  NL paid $1.7  million to Valhi and CompX paid
$0.2 million to Valcor.

                                      -22-
<PAGE>

                                PERFORMANCE GRAPH

     Set  forth  below  is a line  graph  comparing  the  yearly  change  in the
cumulative total shareholder return on Common Stock against the cumulative total
return of the S&P 500 Index, the S&P 500 Industrial  Conglomerates Index and the
S&P 500  Diversified  Chemicals  Index  for the  period  of  five  fiscal  years
commencing  December  31,  1999  and  ending  December  31,  2004.  The  S&P 500
Industrial  Conglomerates  Index  is a new  index  used  in  this  year's  proxy
statement and the S&P 500  Diversified  Chemicals Index is the old index used in
last year's  proxy  statement.  The old index is provided  below for  comparison
purposes. NL management believes that the S&P 500 Industrial Conglomerates Index
better  reflects  NL's  diversified  operations.  The  graph  shows the value at
December  31 of each  year  assuming  an  original  investment  of $100  and the
reinvestment of cash dividends and other distributions to shareholders.

     Comparison of Cumulative Return among NL Industries, Inc. Common Stock,
          the S&P 500 Index, the S&P 500 Industrial Conglomerates Index
                   and the S&P 500 Diversified Chemicals Index

                          [PERFORMANCE GRAPH OMITTED]

<TABLE>
<CAPTION>
                                                                        December 31,
                                                   ---------------------------------------------------
                                                    1999     2000     2001     2002     2003     2004
                                                   ------   ------   ------   ------   ------   ------
<S>                                                <C>      <C>      <C>      <C>      <C>      <C>
NL Industries, Inc. (1)......................        $100    $ 168    $ 112   $ 145     $ 167    $ 324

S&P 500 Index................................         100       91       80      62        80       89

S&P 500 Industrial Conglomerates Index.......         100      101       90      54        72       87

S&P 500 Diversified Chemicals Index..........         100       90       84      81       102      119

</TABLE>
---------------------

(1)  In determining  the value of the  reinvestment of NL  distributions  to its
     shareholders of Kronos Worldwide Common Stock on December 8, 2003 and March
     29, July 5, September 28 and December 29, 2004, the shares distributed were
     deemed sold and  reinvested  in Common  Stock,  and in each case the shares
     were valued at their  closing price on the payment date or the last trading
     date prior to the payment date, as applicable.

                                      -23-
<PAGE>

                             AUDIT COMMITTEE REPORT

     The  audit  committee  of the  Board of  Directors  is  comprised  of three
directors  and  operates  under  a  written  charter  adopted  by the  Board  of
Directors.  All members of the audit committee meet the  independence  standards
established  by the Board of Directors and the NYSE and  promulgated  by the SEC
under the  Sarbanes-Oxley  Act of 2002. The audit committee charter is available
on NL's website at www.nl-ind.com under the corporate governance section.

     NL's  management is  responsible  for,  among other  things,  preparing its
consolidated  financial  statements in  accordance  with  accounting  principles
generally  accepted in the United States of America  ("GAAP"),  establishing and
maintaining  internal  control over financial  reporting (as defined in Exchange
Act Rule 13a-15(f)) and evaluating the  effectiveness  of such internal  control
over financial  reporting.  The independent  auditor is responsible for auditing
NL's consolidated  financial  statements in accordance with the standards of the
Public Company Accounting  Oversight Board (United States) and for expressing an
opinion on the conformity of the financial statements with GAAP. The independent
auditor is also  responsible  for auditing NL's internal  control over financial
reporting in accordance with such standards and for expressing an opinion on (i)
management's  assessment  of the  effectiveness  of its  internal  control  over
financial  reporting  and (ii) the  effectiveness  of its internal  control over
financial  reporting.  The audit  committee  assists the Board of  Directors  in
fulfilling its  responsibility  to oversee  management's  implementation of NL's
financial reporting process. In its oversight role, the audit committee reviewed
and  discussed  the  audited  financial  statements  with  management  and  with
PricewaterhouseCoopers LLP ("PwC"), NL's independent auditor for 2004. The audit
committee also reviewed and discussed internal control over financial  reporting
with management and with PwC.

     The  audit   committee  met  with  PwC  and  discussed  any  issues  deemed
significant by the  independent  auditor,  including the required  matters to be
discussed by Statement of Auditing  Standards No. 61,  Communication  with Audit
Committee,  as  amended.  PwC  has  provided  to  the  audit  committee  written
disclosures  and the letter  required  by  Independence  Standards  Board No. 1,
Independence  Discussions  with  Audit  Committees,   and  the  audit  committee
discussed with PwC that firm's independence.  The audit committee also concluded
that  PwC's  provision  of  non-audit  services  to NL  and  its  affiliates  is
compatible with PwC's independence.

     Based upon the foregoing considerations, the audit committee recommended to
the Board of Directors that NL's audited financial statements be included in its
Annual Report on Form 10-K for 2004.

     Members  of the  audit  committee  of the Board of  Directors  respectfully
submit the foregoing report.

     Gen. Thomas P. Stafford (ret.)               Terry N. Worrell
     Chairman of the Audit Committee              Member of the Audit Committee

     Cecil H. Moore, Jr.
     Member of the Audit Committee

                                      -24-
<PAGE>

                           INDEPENDENT AUDITOR MATTERS

     Independent  Auditor.  PwC served as NL's independent  auditor for the year
ended December 31, 2004.  NL's audit  committee has appointed PwC to review NL's
quarterly  unaudited  consolidated  financial  statements  to be included in its
Quarterly  Reports on Form 10-Q for the first three quarters of 2005. NL expects
PwC will be  considered  for  appointment  to  audit  NL's  annual  consolidated
financial  statements and internal control over financial reporting for the year
ending December 31, 2005.  Representatives of PwC are not expected to attend the
Meeting.

     Fees Paid to PwC.  The  following  table shows the  aggregate  fees PwC has
billed or is expected to bill to NL and its subsidiaries  for services  rendered
for 2003 and 2004.

<TABLE>
<CAPTION>

                                                                Audit
                                                  Audit        Related         Tax         All Other
               Entity (1)                        Fees (2)      Fees (3)      Fees (4)       Fees (5)         Total
-----------------------------------------     -------------  -----------  -------------  -------------  -------------
<S>                                           <C>            <C>          <C>            <C>            <C>
NL and Subsidiaries
    2003.................................     $   420,401    $   57,183   $       -0-    $      -0-     $   477,584
    2004.................................     $   363,335    $   40,050   $       -0-    $      -0-     $   403,385

CompX and Subsidiaries
    2003.................................         447,251        62,644        44,900        25,810         580,605
    2004.................................         898,179        62,860        22,881        11,334         995,254

Kronos Worldwide and Subsidiaries (6)
    2003.................................         891,709        73,773       124,873           -0-       1,090,355
    2004.................................       2,571,259        20,236        51,735           -0-       2,643,230

Total
    2003.................................     $ 1,759,361    $  193,600   $   169,773    $   25,810     $ 2,148,544
    2004.................................     $ 3,832,773    $  123,146   $    74,616    $   11,334     $ 4,041,869

</TABLE>

--------------------

(1)  Fees are reported without duplication.

(2)  Fees for the following services:

     (a)  audits of consolidated year-end financial statements for each year and
          audit of internal control over financial reporting for 2004;
     (b)  reviews of the unaudited quarterly financial  statements  appearing in
          Forms 10-Q for each of the first three quarters of each year;
     (c)  consents and assistance with  registration  statements  filed with the
          SEC;
     (d)  normally provided  statutory or regulatory  filings or engagements for
          each year; and
     (e)  the  estimated  out-of-pocket  costs PwC incurred in providing  all of
          such services for which PwC is reimbursed.

(3)  Fees for assurance and related services  reasonably related to the audit or
     review of  financial  statements  for each year.  These  services  included
     employee benefit plan audits,  accounting consultations and attest services
     concerning   financial   accounting  and  reporting  standards  and  advice
     concerning internal controls.

(4)  Permitted fees for tax compliance, tax advice and tax planning services.

(5)  Fees for all services not described in the other categories.  For 2003, the
     disclosed fees include fees for an annual software  license and maintenance
     and an agreed upon procedures report for the Dutch government  related to a
     CompX  employee  severance  plan. For 2004, the disclosed fees include fees
     for  consultations  relative to the  disposition  of CompX's  Thomas Regout
     operations in Europe and research and development claims.

(6)  NL accounts for its interest in Kronos Worldwide by the equity method as of
     December 31, 2004.

     Preapproval  Policies  and  Procedures.  On February  22,  2005,  the audit
committee adopted an amended and restated preapproval policy, a copy of which is
attached as Appendix A to this proxy  statement,  with  respect to  preapproving
engagements of PwC to perform audit or nonaudit  services on behalf of NL or any
of its  subsidiaries  other  than  NL's  publicly  held  subsidiaries  and their
respective  subsidiaries.  As  of  May  6,  2003,  the  audit  committee  became
responsible for  preapproving  every engagement of PwC to perform such services.
Since May 6, 2003, the audit committee has preapproved the engagement of PwC for
all such services.

                                      -25-
<PAGE>

                                  OTHER MATTERS

     The Board of Directors  knows of no other  business  that will be presented
for consideration at the Meeting.  If any other matters properly come before the
Meeting,  the persons  designated as agents in the enclosed proxy card or voting
instruction  form will vote on such matters in accordance with their  reasonable
judgment.

   SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR THE 2006 ANNUAL MEETING

     Shareholders  may submit  proposals on matters  appropriate for shareholder
action at NL's annual shareholder meetings, consistent with rules adopted by the
SEC. NL must  receive  such  proposals  not later than  December  19, 2005 to be
considered for inclusion in the proxy  statement and form of proxy card relating
to the Annual Meeting of Shareholders in 2006.

     The Board of Directors will consider the director  nominee  recommendations
of  NL   shareholders.   The  Board  of  Directors   has  no  specific   minimum
qualifications for director  candidates.  The Board of Directors will consider a
potential  director  nominee's  ability to  satisfy  the need,  if any,  for any
required  expertise  on the  Board  of  Directors  or  one  of  its  committees.
Historically,  NL's management has recommended director nominees to the Board of
Directors.  Because  under the NYSE  listing  standards NL may be deemed to be a
controlled company,  the Board of Directors believes that additional policies or
procedures with regard to the consideration of director  candidates  recommended
by its shareholders are not appropriate.

     Proposals and nominations should be addressed to: Corporate  Secretary,  NL
Industries,  Inc., Three Lincoln Centre,  5430 LBJ Freeway,  Suite 1700, Dallas,
Texas 75240-2697.

                   COMMUNICATIONS WITH THE BOARD OF DIRECTORS

     Shareholders  who wish to communicate with the Board of Directors may do so
through the  following  procedures.  Shareholder  communications  not  involving
complaints or concerns regarding  accounting,  internal  accounting controls and
auditing matters related to NL ("Accounting Complaints or Concerns") may be sent
to the  attention of NL's  corporate  secretary at NL  Industries,  Inc.,  Three
Lincoln  Centre,  5430  LBJ  Freeway,  Suite  1700,  Dallas,  Texas  75240-2697.
Shareholder  communications  that relate to matters that are within the scope of
the responsibilities of the Board of Directors and its committees,  or summaries
of  such  communications,  will  be  forwarded  to the  chairman  of  the  audit
committee.

     Accounting Complaints or Concerns, which may be made anonymously, should be
sent  to the  attention  of NL's  general  counsel  with a copy  to  NL's  chief
financial  officer at the same address as the  corporate  secretary.  Accounting
Complaints or Concerns will be forwarded to the chairman of the audit committee.
NL will keep Accounting  Complaints or Concerns  confidential and anonymous,  to
the extent  feasible,  subject to applicable  law.  Information  contained in an
Accounting Complaint or Concern may be summarized, abstracted and aggregated for
purposes of analysis and investigation.

                         2004 ANNUAL REPORT ON FORM 10-K

     A copy of NL's  Annual  Report  on Form  10-K  for the  fiscal  year  ended
December  31,  2004,  as filed with the SEC,  is  included as part of the annual
report mailed to NL's shareholders with this proxy statement. This Annual Report
on Form 10-K may also be accessed on NL's website at www.nl-ind.com.

                                ADDITIONAL COPIES

     Pursuant to an SEC rule concerning the delivery of annual reports and proxy
statements,  a single set of these  documents  may be sent to any  household  at
which two or more  shareholders  reside if they appear to be members of the same
family.  Each  shareholder  continues  to receive a separate  proxy  card.  This
procedure,  referred  to  as  householding,  reduces  the  volume  of  duplicate
information  shareholders  receive and reduces mailing and printing expenses.  A
number of  brokerage  firms have  instituted  householding.  Certain  beneficial
shareholders who share a single address may have received a notice that only one
annual  report  and  proxy  statement  would  be sent to that  address  unless a
shareholder  at that  address  gave  contrary  instructions.  If, at any time, a
shareholder who holds shares through a broker no longer wishes to participate in
householding  and would prefer to receive a separate proxy statement and related
materials,  or if such  shareholder  currently  receives  multiple copies of the
proxy  statement  and related  materials at his or her address and would like to
request householding of NL communications,  the shareholder should notify his or
her broker. Additionally,  NL will promptly deliver a separate copy of NL's 2004
annual report or this proxy  statement to any shareholder at a shared address to
which a single copy of such  documents was  delivered,  upon the written or oral
request of the shareholder.

                                      -26-
<PAGE>

     To obtain copies of NL's 2004 annual report or this proxy statement without
charge, please mail your request to the attention of Robert D. Graham, Corporate
Secretary, at NL Industries, Inc., Three Lincoln Centre, 5430 LBJ Freeway, Suite
1700, Dallas, Texas 75240-2697, or call him at 972.233.1700.

                                               NL INDUSTRIES, INC.




                                               Dallas, Texas
                                               April 18, 2005

                                      -27-
<PAGE>

                                   Appendix A

                               NL INDUSTRIES, INC.

                       AUDIT COMMITTEE PREAPPROVAL POLICY

                  AMENDED AND RESTATED AS OF FEBRUARY 22, 2005

                                ----------------


                      Section 1. -- Statement of Principles

     The Audit  Committee  is  required,  subject to any  de-minimus  exceptions
permitted by applicable law or regulation, to preapprove the audit and non-audit
services  performed  by the  independent  auditor  in order to  assure  that the
provision of such services do not impair the auditors' independence.

     This Policy applies to services provided by the accounting firm that serves
NL  Industries,  Inc.  and  its  subsidiaries  (the  "Company")  as its  primary
independent auditor, and any international affiliates thereof.

     Unless a type of  service  to be  provided  by the  independent  auditor is
subject to  preapproval  under  Sections 3 or 4 of this Policy,  it will require
specific  preapproval by the Audit Committee under Section 2 of this Policy.  In
addition,  any proposed  services subject to preapproval under Section 3 of this
Policy  that  exceeds the  applicable  preapproved  fee level will also  require
preapproval under either Section 2 or Section 4 of this Policy.  Notwithstanding
the foregoing,  the preapproval  requirements  under this Policy are waived with
respect to the provision of permitted  non-Audit  Services to the extent allowed
by applicable law or regulation.

                       Section 2. -- Specific Preapproval

     Subject to Sections 4 and 5 of this Policy,  the  following  describes  the
Audit and Audit-related  services to be provided by the independent auditor that
must have the specific preapproval of the Audit Committee before the independent
auditor can be engaged:

     o    Annual audits of the consolidated financial statements of the Company,
          attestation  services associated with the Company's system of internal
          control over financial  reporting and other services  associated  with
          the Company's Annual Report on Form 10-K;
     o    Quarterly review  procedures  associated with the Company's  unaudited
          interim   consolidated   financial   statements   and  other  services
          associated with the Company's Quarterly Reports on Form 10-Q;
     o    Services associated with registration  statements filed by the Company
          with  the  Securities  and  Exchange  Commission  ("SEC"),   including
          responding to SEC comment letters and providing comfort letters;
     o    Statutory audits or annual audits of the annual  financial  statements
          of subsidiaries of the Company;
     o    Quarterly  review  procedures of the interim  financial  statements of
          subsidiaries of the Company;
     o    Services associated with potential business  acquisitions/dispositions
          involving the Company;
     o    Any other services provided to the Company not specifically  described
          above or in Section 3 of this Policy; and
     o    Any material changes in terms,  conditions or fees with respect to the
          foregoing resulting from changes in audit scope,  Company structure or
          other applicable matters.

                  Section 3. -- Other Categories of Preapproval

     Audit-related   services  are  assurance  and  related  services  that  are
reasonably  related to the  performance  of the audit or review of the Company's
financial  statements and that are  traditionally  performed by the  independent
auditor.  The Audit Committee believes that the provision of all of the services
described  below  does  not  impair  the  independence  of  the  auditor  and is
consistent with the SEC's rules on auditor independence.

                                      A-1
<PAGE>

     Subject to Section 5 of this Policy,  the following  Audit,  Audit-related,
Tax and All Other services to be provided by the  independent  auditor will have
the  preapproval  of the Audit  Committee,  subject to the  limitation  that the
aggregate  fees for such  services  provided by the  independent  auditor in any
calendar year may not exceed the limits established by the Audit Committee.  The
Audit Committee will periodically  revise the list of pre-approved  services and
the fee limitation based on subsequent determinations as it deems appropriate.

     o    Audit Services:

          o    Consultations with the Company's  management as to the accounting
               and/or disclosure  treatment of transactions or events and/or the
               actual or potential impact of final or proposed rules,  standards
               or interpretations of the SEC, the Financial Accounting Standards
               Board,  the Public Company  Accounting  Oversight  Board or other
               applicable    domestic    or    international    regulatory    or
               standard-setting bodies; and
          o    Assistance with responding to SEC comment letters received by the
               Company other than in connection  with a  registration  statement
               filed with the SEC.

     o Audit-related Services:

          o    Consultations with the Company's  management as to the accounting
               and/or disclosure  treatment of transactions or events and/or the
               actual or potential impact of final or proposed rules,  standards
               or interpretations of the SEC, the Financial Accounting Standards
               Board,  the Public Company  Accounting  Oversight  Board or other
               applicable    domestic    or    international    regulatory    or
               standard-setting    bodies   (note,   under   SEC   rules,   some
               consultations may be "audit" rather than "audit-related").
          o    Financial  statement  audits  of  employee  benefit  plans of the
               Company;
          o    Agreed-upon or expanded audit procedures related to the Company's
               accounting   records  required  to  respond  to  or  comply  with
               financial, accounting, legal, regulatory or contractual reporting
               requirements; and
          o    Internal  control  reviews and assistance  with internal  control
               reporting requirements of the Company (to the extent permitted by
               applicable rule or regulation).


     o Tax Services:

          o    Consultations  with  the  Company's  management  as  to  the  tax
               treatment  of   transactions  or  events  and/or  the  actual  or
               potential  tax  impact  of  final or  proposed  laws,  rules  and
               regulations in U.S.  federal,  state and local and  international
               jurisdictions;
          o    Consultations with the Company's management related to compliance
               with existing or proposed tax laws, rules and regulations in U.S.
               federal, state and local and international jurisdictions;
          o    Assistance in the preparation of and review of the Company's U.S.
               federal, state and local and international income,  franchise and
               other tax returns;
          o    Assistance with tax inquiries,  audits and appeals of the Company
               before the U.S. Internal Revenue Service and similar state, local
               and international agencies;
          o    Consultations  with the Company's  management  regarding domestic
               and international  statutory,  regulatory or  administrative  tax
               developments;
          o    Transfer pricing and cost segregation studies of the Company; and
          o    Expatriate  tax assistance and compliance for the Company and its
               employees.

     o Other Services:

          o    Assistance   with   corporate   governance   matters   (including
               preparation of board minutes and resolutions) and assistance with
               the  preparation  and filing of  documents  (such as paperwork to
               register new  companies  or to  de-register  existing  companies)
               involving the Company with non-U.S.  governmental  and regulatory
               agencies,  provided,  however, that the non-U.S.  jurisdiction in
               which  such  services  are  provided  does not  require  that the
               individual  providing  such  service  be  licensed,  admitted  or
               otherwise qualified to practice law.

     Any services provided by the independent  auditor under this Section of the
Policy  shall be  reported  to the full  Audit  Committee  by an  officer of the
Company  at the first  meeting of the Audit  Committee  held  subsequent  to the
engagement  of the  independent  auditor to provide such  services.  Such report
shall include detailed back-up documentation provided by the independent auditor
regarding the services provided.

                                      A-2
<PAGE>

                            Section 4. -- Delegation

     Subject to Section 5 of this  Policy,  the Audit  Committee  has  delegated
preapproval  authority to the Audit Committee  Chairman or his/her  designee for
(i) any  proposed  services  described in Section 3 of this Policy to the extent
that the aggregate fees for such services  provided by the  independent  auditor
during the then-current calendar year has exceeded the limits established by the
Audit  Committee or (ii) any other  proposed  services that are not described in
Section 3 of this Policy that the Audit Committee  Chairman or his/her  designee
determines  to be  appropriate  or necessary.  The Chairman or his/her  designee
shall report any  pre-approval  decisions  under this Section 4 of the Policy to
the full  Audit  Committee  at the first  meeting  of the Audit  Committee  held
subsequent to such pre-approval  decision. The Audit Committee does not delegate
its  responsibilities  to  pre-approve  services  performed  by the  independent
auditor to management.

                   Section 5. -- Prohibited Non-Audit Services

     The  following  is a list of non-audit  services for which the  independent
auditor is prohibited from providing to the Company under the terms of the SEC's
rules on auditor independence, or otherwise:

     o    Bookkeeping  or other services  related to the  accounting  records or
          financial statements of the Company;
     o    Financial information systems design and implementation;
     o    Appraisal    or    valuation    services,    fairness    opinions   or
          contribution-in-kind reports;
     o    Actuarial services;
     o    Internal audit outsourcing services;
     o    Management functions;
     o    Human resources;
     o    Broker, dealer, investment adviser or investment banking services;
     o    Any  service  for which no fee  would be  charged  unless a  specified
          finding  or result is  obtained,  or in which the amount of the fee is
          otherwise  dependent upon the finding or result of such service (other
          than any such fee which is fixed by a court of competent  authority or
          other public authorities and not dependent on a finding or result);
     o    Any tax service involving (i) a listed  transaction within the meaning
          of 26 C.F.R. ss.  1.6011.1-4(b)(2) or (ii) a confidential  transaction
          within the meaning of 26 C.F.R. ss. 1.6011.1-4(b)(3), or that would be
          a  confidential  transaction  within  the  meaning  of 26  C.F.R.  ss.
          1.6011.1-4(b)(3)  if the fee for the transaction were equal to or more
          than the minimum fee described in 26 C.F.R. ss. 1.6011.1-4(b)(3);
     o    Legal  services  to the  extent  that the  jurisdiction  in which such
          services are provided  requires  that the  individual  providing  such
          service be licensed,  admitted or otherwise qualified to practice law;
          and
     o    Expert services unrelated to the audit.

                            Section 6. -- Procedures

     Applications  to provide  services  that require  preapproval  by the Audit
Committee  under Section 2 of this Policy,  or that require  preapproval  of the
Chairman of the Audit  Committee  or his/her  designee  under  Section 4 of this
Policy, must be made by an auditor in writing. Such an application,  which shall
include  detailed  back-up  documentation  provided by the  independent  auditor
regarding the services  provided,  shall be submitted to the Audit  Committee or
the Chairman of the Audit Committee, as applicable, for final resolution.

                        Section 7. -- Engagement Letters

     Engagement  of the  independent  auditor  under this  Policy to provide the
following  services must be evidenced  pursuant to a written  engagement  letter
with the independent auditor that must at least be signed by the Chairman of the
Audit Committee or his/her designee before the engagement can commence:

                                      A-3
<PAGE>

     o    Annual audits of the consolidated financial statements of the Company,
          attestation  services associated with the Company's system of internal
          control over financial  reporting and other services  associated  with
          the Company's Annual Report on Form 10-K;
     o    Quarterly review  procedures  associated with the Company's  unaudited
          interim   consolidated   financial   statements   and  other  services
          associated with the Company's Quarterly Reports on Form 10-Q; and
     o    Any  engagement  for which  applicable  professional  standards of the
          independent auditor require an engagement letter.

     Any other  engagement of the  independent  auditor under this Policy may be
evidenced pursuant to a written engagement letter with the independent  auditor,
as may be required by the Audit  Committee,  the Chairman of the Audit Committee
or his/her  designee,  the  independent  auditor  or an officer of the  Company,
before the engagement can commence.  Any such engagement  letter may, but is not
required  to, be signed  by the  Chairman  of the  Audit  Committee  or  his/her
designee.

                                      A-4
<PAGE>

                               NL INDUSTRIES, INC.
                              THREE LINCOLN CENTRE
                          5430 LBJ FREEWAY, SUITE 1700
                            DALLAS, TEXAS 75240-2697
<PAGE>


Dear Shareholder:

     NL Industries,  Inc. encourages you to take advantage of new and convenient
ways by which you can vote your shares. You can vote your shares  electronically
through the internet or by telephone.  This  eliminates  the need to return this
proxy card.

1.   To vote over the internet:

     o    Log   on   to   the    internet    and    go   to   the    web    site
          http://www.eproxyvote.com/nl.  Internet voting will be available until
          12:01 A.M. on May 19, 2005.

2.   To vote over the telephone:

     o    On a touch-tone  telephone  call  1-877-PRX-VOTE  (1-877-779-8683)  24
          hours a day,  seven days a week.  Telephone  voting will be  available
          until 12:01 A.M. on May 19, 2005.

     o    Non-U.S. shareholders should call 1-201-536-8073.

Your  electronic or telephonic  vote authorizes the named proxies to vote in the
same manner as if you marked,  dated and returned  this proxy card.  If you vote
your shares electronically or telephonically, do not mail back this proxy card.

                  Your vote is important. Thank you for voting.

                                   DETACH HERE
--------------------------------------------------------------------------------
Proxy

                               NL INDUSTRIES, INC.
                              Three Lincoln Centre
                          5430 LBJ Freeway, Suite 1700
                            Dallas, Texas 75240-2697


THIS PROXY IS SOLICITED  ON BEHALF OF THE BOARD OF  DIRECTORS OF NL  INDUSTRIES,
INC. FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 19, 2005


The  undersigned  hereby appoints  Gregory M. Swalwell,  Robert D. Graham and A.
Andrew  R.  Louis,  and  each  of  them,  proxy  and  attorney-in-fact  for  the
undersigned,  with  full  power  of  substitution,  to  vote  on  behalf  of the
undersigned at the 2005 Annual  Meeting of  Shareholders  (the  "Meeting") of NL
Industries,  Inc., a New Jersey corporation ("NL"), to be held at NL's corporate
offices at Three Lincoln Centre, 5430 LBJ Freeway,  Suite 1700, Dallas, Texas on
Thursday,  May 19, 2005, at 10:00 a.m.  (local time),  and at any adjournment or
postponement of the Meeting, all of the shares of common stock, par value $0.125
per share, of NL standing in the name of the undersigned or that the undersigned
may be entitled to vote on the proposals set forth,  and in the manner directed,
on this proxy card.

      THIS PROXY MAY BE REVOKED AS SET FORTH IN THE NL PROXY STATEMENT THAT
                          ACCOMPANIED THIS PROXY CARD.

The proxies, if this card is properly executed, will vote in the manner directed
on this card. If no direction is made,  the proxies will vote "FOR" all nominees
named on the reverse  side of this card for  election as  directors  and, to the
extent  allowed by  applicable  law, in the  discretion of the proxies as to all
other matters that may properly come before the Meeting and any  adjournment  or
postponement thereof.

  PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE.

<PAGE>


NL Industries, Inc.
C/O EQUISERVE TRUST COMPANY N.A.
P.O. BOX 8073
EDISON, NJ   08818-8073

                Your vote is important. Please vote immediately.

       Vote-by-Internet                            Vote-by-Telephone

Log on to the internet and go to          Call toll-free
http://www.eproxyvote.com/nl.             1-877-PRX-VOTE (1-877-779-8683)

Follow the easy steps outlined            Follow the easy recorded instructions.
on the secured website.


  If you vote over the internet or by telephone, please do not mail your card.

            DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
--------------------------------------------------------------------------------

[ X ]    Please mark votes as in this example.

This proxy, if properly executed, will be voted as specified below by you. If no
direction is given,  this proxy will be voted "FOR" all  nominees for  directors
listed below and "FOR" proposal 2.

--------------------------------------------------------------------------------
The Board of Directors  recommends a vote "FOR" all nominees for director listed
below and "FOR" proposal 2.
--------------------------------------------------------------------------------

1.       Election of Directors.
         (Please see reverse)

                     FOR       WITHHOLD
         FOR                                 WITHHOLD
         ALL         [ ]          [ ]        FROM ALL
         NOMINEES                            NOMINEES

         ----------------------------------------------
         For all nominees except as written above.

         Director Nominees:
         01  Cecil H. Moore, Jr.,
         02  Glenn R. Simmons,
         03  Harold C. Simmons,
         04  Thomas P. Stafford
         05  Steven L. Watson, and
         06  Terry N. Worrell.

2.       In their  discretion,  the  proxies are  authorized to vote  upon  such
         other  business  as  may  properly  come  before  the  Meeting  and any
         adjournment or postponement thereof.

           [ ] FOR               [ ] AGAINST               [ ] ABSTAIN


Please sign exactly as the name that appears on this card.  Joint owners  should
each sign.  When  signing  other than in an  individual  capacity,  please fully
describe such  capacity.  Each signatory  hereby revokes all proxies  heretofore
given to vote at said Meeting and any adjournment or postponement thereof.

Signature:               Date:         Signature:               Date:
           ------------        -------            -------------       --------