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 Commission
                                          Only as permitted by Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to SS. 240.14a-11(c) or SS. 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) and 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>






                               NL Industries, Inc.
                       16825 Northchase Drive, Suite 1200
                              Houston, Texas 77060



                                 March 27, 2000


Dear Shareholder:

     You are cordially invited to attend the 2000 Annual Meeting of Shareholders
of NL Industries,  Inc., which will be held on Wednesday,  May 10, 2000 at 10:00
a.m.  (C.D.T.) at the offices of Valhi,  Inc.  located at Three Lincoln  Centre,
5430 LBJ Freeway,  Suite 1700,  Dallas,  Texas. In addition to the matters to be
acted upon at the meeting,  which are described in detail in the attached Notice
of Annual Meeting of Shareholders and Proxy Statement, we will update you on the
Company. I hope that you will be able to attend.

     Whether or not you plan to be at the meeting,  please complete,  date, sign
and return the proxy card or voting  instruction  form  enclosed with this Proxy
Statement  promptly  or  vote  via  the  Internet  or  telephone  following  the
instructions  on the  proxy  card so that your  shares  are  represented  at the
Meeting 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 for the meeting in accordance with NL's By-Laws.


                                        Sincerely,





                                        J. Landis Martin
                                        President and Chief Executive Officer








<PAGE>



                               NL Industries, Inc.
                       16825 Northchase Drive, Suite 1200
                              Houston, Texas 77060

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

                             To Be Held May 10, 2000

To the Shareholders of NL Industries, Inc.:

     NOTICE IS HEREBY GIVEN that the 2000 Annual  Meeting of  Shareholders  (the
"Annual  Meeting")  of NL  Industries,  Inc.,  a  New  Jersey  corporation  (the
"Company"  or "NL"),  will be held on  Wednesday,  May 10,  2000,  at 10:00 a.m.
(C.D.T.) at the offices of Valhi, Inc. located at Three Lincoln Centre, 5430 LBJ
Freeway, Suite 1700, Dallas, Texas, for the following purposes:

     1. To elect  seven  directors  to serve  until the 2001  Annual  Meeting of
        Shareholders and until their successors are duly elected and qualified;

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

     The Board of  Directors  of the  Company set the close of business on March
22,  2000 as the  record  date (the  "Record  Date")  for the  determination  of
shareholders  entitled  to notice of, and to vote at, the Annual  Meeting.  Only
holders of record of NL's common stock,  $.125 par value per share, at the close
of business  on the Record  Date are  entitled to notice of, and to vote at, the
Annual Meeting.  The Company's stock transfer books will not be closed following
the Record Date.

     You are cordially invited to attend the Annual Meeting.  Whether or not you
expect to attend the Annual Meeting in person,  please complete,  sign, date and
mail the enclosed proxy card or voting instruction form promptly or vote via the
Internet or telephone  following the instructions on the proxy card so that your
shares may be represented and voted at the Annual  Meeting.  You may revoke your
proxy by following the procedures set forth in the accompanying Proxy Statement.
If you  choose,  you may vote in person at the Annual  Meeting  even  though you
previously submitted your proxy.

                                   By order of the Board of Directors,



                                   David B. Garten
                                   Vice President, General Counsel and Secretary


Houston, Texas
March 27, 2000


<PAGE>



                               NL Industries, Inc.
                       16825 Northchase Drive, Suite 1200
                              Houston, Texas 77060

                      ------------------------------------
                                 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 NL Industries,  Inc., a New
Jersey corporation (the "Company" or "NL"), for use at the Company's 2000 Annual
Meeting of Shareholders to be held at 10:00 a.m. (C.D.T.) on Wednesday,  May 10,
2000, at the offices of Valhi,  Inc.  located at Three Lincoln Centre,  5430 LBJ
Freeway,  Suite  1700,  Dallas,  Texas  75240-2697,  and at any  adjournment  or
postponement  thereof  (the  "Annual  Meeting").  This Proxy  Statement  and the
accompanying  proxy card or voting  instruction  form were  first  mailed to the
holders  of the  Company's  common  stock,  $.125 par  value per share  ("Common
Stock"), on or about April 3, 2000.


                            PURPOSE OF ANNUAL MEETING

     At the Annual  Meeting,  shareholders of the Company will consider and vote
upon (i) the  election  of seven  directors  to serve until the  Company's  2001
Annual Meeting of Shareholders  and until their  successors are duly elected and
qualified,  and (ii) such other  business as may properly come before the Annual
Meeting.  The  Company is not aware of any  business  to come  before the Annual
Meeting other than the election of directors.


                  QUORUM AND VOTING RIGHTS; PROXY SOLICITATION

     The  presence  in person or by proxy of the  holders of a  majority  of the
votes represented by the outstanding  shares of Common Stock entitled to vote at
the Annual  Meeting  is  necessary  to  constitute  a quorum for the  conduct of
business at the Annual Meeting. Director nominees will be elected by a plurality
of the votes  cast.  Except as may be  provided  in the  Company's  Amended  and
Restated Certificate of Incorporation (the "Certificate"), any other matter that
may be submitted to a shareholder  vote will require the  affirmative  vote of a
majority of the votes cast at the Annual  Meeting.  Shares of Common  Stock that
are voted to  abstain  from  business  coming  before  the  Annual  Meeting  and
broker/nominee  non-votes  will be counted as being in  attendance at the Annual
Meeting for purposes of determining whether a quorum is present, but will not be
counted as votes for or against any matter coming before the Annual Meeting. The
accompanying  proxy card provides space for a shareholder to withhold voting for
any or all  nominees for the Board.  Because  director  nominees  must receive a
plurality  of the votes  cast at the  Annual  Meeting,  a vote  withheld  from a
particular nominee will not affect the election of that nominee.

     The record date for  determination  of shareholders  entitled to notice of,
and to vote at, the Annual  Meeting is the close of  business  on March 22, 2000
(the "Record  Date").  As of the Record Date,  there were issued and outstanding
50,619,740 shares of Common Stock, each of which entitles the holder to one vote
on all matters that come before the Annual Meeting.  Valhi,  Inc.  ("Valhi"),  a
diversified company engaged in the titanium dioxide pigments, component products
(ergonomic computer support systems,  precision ball bearing slides and security
products),  titanium  metals  products,  and waste  management  industries,  and
Tremont  Corporation  ("Tremont"),  a holding  company  engaged in the  titanium
metals and titanium dioxide pigments industries, held approximately 60%



<PAGE>

and 20%,  respectively,  of the outstanding shares of the Common Stock as of the
Record Date and have indicated their intention to have their shares  represented
at the  Annual  Meeting.  Both  Valhi and  Tremont  are  affiliates  of  Contran
Corporation  ("Contran").  See "Security Ownership" and "Election of Directors."
If the shares of Common  Stock held by Valhi and Tremont  together or the shares
of Common Stock held by Valhi alone are  represented  at the Annual  Meeting,  a
quorum will be present.

     All shares of Common Stock  represented by properly  executed proxies will,
unless such proxies have been  previously  revoked,  be voted in accordance with
the  instructions  indicated  in  such  proxies.  If no  such  instructions  are
indicated, such shares will be voted (i) "FOR" the election of each of the seven
nominees  for  director,  and (ii) to the extent  allowed by federal  securities
laws,  in the  discretion  of the proxy  holders  on any other  matter  that may
properly  come  before the Annual  Meeting.  Any holder of Common  Stock has the
unconditional  right to revoke  his or her proxy at any time prior to the voting
thereof at the Annual Meeting by (i) filing with the Company's Secretary written
revocation  of his or her proxy,  (ii) giving a duly  executed  proxy  bearing a
later date,  or (iii) voting in person at the Annual  Meeting.  Attendance  by a
shareholder  at the Annual  Meeting will not in and of itself  revoke his or her
proxy.

     This proxy solicitation is made by and on behalf of the Board. Solicitation
of proxies for use at the Annual  Meeting may be made by mail,  telephone  or in
person,  by  directors,  officers and regular  employees  of the  Company.  Such
persons will receive no additional compensation for any solicitation activities.
The Company will request  banking  institutions,  brokerage  firms,  custodians,
trustees,  nominees and  fiduciaries  to forward  solicitation  materials to the
beneficial  owners of Common  Stock  held of  record by such  entities,  and the
Company  will,  upon the request of such record  holders,  reimburse  reasonable
forwarding expenses.  The costs of preparing,  printing,  assembling and mailing
the Proxy  Statement,  proxy card or voting  instruction  form and all materials
used in the  solicitation of proxies from  shareholders of the Company,  and all
clerical and other expenses of such solicitation, will be borne by the Company.

     First Chicago Trust Company, a division of EquiServe ("First Chicago"), the
transfer  agent and registrar for the Common  Stock,  has been  appointed by the
Board to serve as  inspector  of  election  (the  "Inspector  of  Election")  to
determine  the  number of shares of Common  Stock  represented  and voted at the
Annual Meeting. All proxies and ballots delivered to First Chicago shall be kept
confidential  by First  Chicago in  accordance  with the terms of the  Company's
By-Laws.

     IT IS THE INTENTION OF THE AGENTS  DESIGNATED IN THE ENCLOSED PROXY CARD TO
VOTE "FOR" THE  ELECTION OF ALL SEVEN  NOMINEES FOR  DIRECTOR  IDENTIFIED  BELOW
UNLESS  AUTHORITY  IS WITHHELD BY THE  SHAREHOLDER  GRANTING  THE PROXY.  IF ANY
NOMINEE BECOMES UNAVAILABLE TO SERVE FOR ANY REASON, THE PROXY WILL BE VOTED FOR
A  SUBSTITUTE  NOMINEE OR  NOMINEES  TO BE  SELECTED  BY THE  BOARD,  UNLESS THE
SHAREHOLDER WITHHOLDS AUTHORITY TO VOTE FOR THE ELECTION OF DIRECTORS. VALHI AND
TREMONT, WHICH HOLD APPROXIMATELY 60% AND 20%, RESPECTIVELY,  OF THE OUTSTANDING
COMMON STOCK, HAVE INFORMED THE COMPANY THAT THEY INTEND TO VOTE THEIR SHARES IN
FAVOR OF THE NOMINEES SET FORTH IN THIS PROXY  STATEMENT.  VALHI'S AND TREMONT'S
VOTES  TOGETHER,  OR VALHI'S  VOTES  ALONE,  ARE  SUFFICIENT  TO ELECT ALL SEVEN
NOMINEES.

                              ELECTION OF DIRECTORS

     The  Certificate  provides for a Board of Directors  consisting of not less
than seven and not more than  seventeen  persons,  as such number is  determined
from time to time by a majority of the entire  Board.  The Board has  determined
that it shall consist of seven members.

     At the Annual Meeting, holders of Common Stock will be asked to elect seven
nominees  to the  Board,  each to serve for a one-year  term  ending at the 2001
Annual Meeting of Shareholders or until his successor shall have been


<PAGE>

elected and qualified or until his earlier resignation, removal or death. All of
the nominees are currently  directors of the Company and have agreed to serve if
elected.

     THE BOARD OF  DIRECTORS  RECOMMENDS  A VOTE "FOR" THE  NOMINEES  IDENTIFIED
BELOW.

NOMINEES FOR DIRECTOR

     The information provided below has been provided by the respective nominees
for  election as  directors  for a term  expiring at the 2001 Annual  Meeting of
Shareholders  of the  Company.  Each of the  following  nominees for election is
currently a director of the Company whose term expires at the Annual Meeting.

     JOSEPH S. COMPOFELICE, age 50, has been a director of NL since 1995. He has
served  as  Chief  Executive   Officer  and  Chairman  of  the  Board  of  CompX
International  Inc.  ("CompX"),  a leading  manufacturer  of ergonomic  computer
support  systems,  precision  ball bearing  slides and  security  products and a
majority-owned  subsidiary of Valhi,  since February 1998, as President of CompX
since  January  1999,  and as a  director  of CompX  since  December  1997.  Mr.
Compofelice was Vice President and Chief Financial Officer of NL from 1994 until
1998.  Mr.  Compofelice  served as  Executive  Vice  President of Valhi and Vice
President and Chief Financial  Officer of Tremont from 1994 until February 1998.
From February 1996 until  February  1998,  Mr.  Compofelice  also served as Vice
President,  Chief Financial  Officer and, except for a period from March 1996 to
July 1996, has served as a director of Titanium Metals Corporation ("TIMET"), an
integrated  producer of titanium  metals products which is 39%-owned by Tremont,
since February 1994.

     J. LANDIS MARTIN, age 54, has been President and Chief Executive Officer of
NL since 1987, and a director of NL since 1986. He has served as Chairman of the
Board, President and Chief Executive Officer of Tremont since prior to 1995. Mr.
Martin also has served as Chairman of the Board of TIMET since prior to 1995 and
Chief  Executive  Officer of TIMET  since  1995.  Mr.  Martin is a  director  of
Halliburton Company, a diversified energy services company, Apartment Investment
and Management  Corporation,  a real estate  investment  trust, and Crown Castle
International Corporation, a telecommunications company.

     KENNETH R. PEAK,  age 54, has been a director of NL since 1989. Mr. Peak is
President and Chief Executive  Officer and Chairman of the Board of Contango Oil
& Gas, a publicly  traded  independent  oil and gas  exploration  and production
company. Since prior to 1995 to 1999, Mr. Peak was President of Peak Enernomics,
Inc.,  an energy  industry  consulting  firm.  Mr.  Peak serves as a director of
Cheniere  Energy  Company,  an oil and gas  exploration  company.  He  serves as
Chairman of NL's Audit  Committee and Management  Development  and  Compensation
Committee and is a member of NL's Nominations Committee.

     GLENN R. SIMMONS, age 72, has been a director of NL since 1986. Mr. Simmons
is Chairman of the Board of Keystone Consolidated Industries, Inc. ("Keystone"),
a steel fabricated wire products,  industrial wire and carbon steel rod company.
Since prior to 1995,  Mr.  Simmons has been Vice  Chairman of the Board of Valhi
and Contran,  a diversified  holding  company which directly and through related
entities holds  approximately  93% of the outstanding  common stock of Valhi and
48% of the outstanding common stock of Keystone.  Mr. Simmons is also a director
of Tremont,  CompX, and TIMET. Mr. Simmons has been an executive  officer and/or
director of various companies related to Valhi and Contran since 1969. He serves
as Chairman of NL's Nominations Committee. He is a brother of Harold C. Simmons.

     HAROLD  C.  SIMMONS,  age 68,  has been a  director  of NL  since  1986 and
Chairman  of the Board of NL since 1987.  He has been  Chairman of the Board and
Chief  Executive  Officer  of  Valhi  and  Contran  since  prior to 1995 and was
President  of Valhi and  Contran  from 1994 until  1998.  Mr.  Simmons is also a
director of Tremont.  Mr. Simmons has been an executive  officer and/or director
of various companies related to Valhi and Contran since 1964. He is a brother of
Glenn R. Simmons.




<PAGE>

     GENERAL THOMAS P. STAFFORD  (retired),  69, served as a director of NL from
1984 to 1986 and was  re-appointed  in February  2000.  General  Stafford  was a
co-founder of and has been affiliated with Stafford,  Burke and Hecker,  Inc., a
Washington-based  consulting firm, since 1982.  General Stafford  graduated from
the United States Naval Academy in 1952.  He was  commissioned  as an officer in
the United States Air Force ("USAF") and attended the USAF  Experimental  Flight
Test School in 1958. He was selected as an astronaut in 1962,  piloted Gemini VI
in 1965 and  commanded  Gemini IX in 1966. In 1969,  General  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 USAF 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. In
addition  to serving as a director  of NL,  General  Stafford  is a director  of
TIMET, Tremont, CMI Corporation,  Seagate  Technologies,  Inc. and The Wackenhut
Corp.  General  Stafford is a member of NL's Audit  Committee and its Management
Development & Compensation Committee.

     LAWRENCE  A.  WIGDOR,  age 58,  has  been a  director  and  Executive  Vice
President of NL since 1992.  Dr. Wigdor has been  President and Chief  Executive
Officer of Kronos, Inc. ("Kronos"),  a wholly owned subsidiary of NL involved in
the titanium  dioxide pigments  business,  since prior to 1995 and was President
and Chief Executive Officer of Rheox, Inc. ("Rheox"),  a wholly owned subsidiary
of NL involved in the specialty chemicals business, since prior to 1995 until it
was sold in January 1998.

         See also "Certain Relationships and Transactions."


                             MEETINGS AND COMMITTEES

     The Board held five meetings and took action by unanimous  written  consent
in  lieu  of a  meeting  on  four  occasions  in  1999.  Each  of the  directors
participated  in more than 75% of the total  number of meetings of the Board and
committees on which he served that were held during 1999.

     The Board has established three standing committees,  an Audit Committee, a
Management  Development and Compensation  Committee and a Nominations Committee,
all of which are composed  entirely of individuals  who are not employees of the
Company.

     Audit Committee. The principal  responsibilities of the Audit Committee are
to recommend to the Board the selection of the firm of independent  auditors; to
review the plan and results of the independent audit engagement, the program for
internal auditing,  the system of internal  accounting controls and the internal
audit results;  to review and approve the professional  services provided by the
independent auditors;  and to direct and supervise special audit inquiries.  The
Committee held two meetings in 1999. The current  members of the Audit Committee
are Mr. Peak, Chairman, and General Stafford.

     Management   Development   and   Compensation   Committee.   The  principal
responsibilities of the Management Development and Compensation Committee are to
review and make recommendations  regarding executive  compensation  policies and
periodically review and approve or make  recommendations with respect to matters
involving  executive  compensation,  to  take  action  or  to  review  and  make
recommendations to the Board regarding  employee benefit plans or programs,  and
to serve as a counseling  committee  to the Chief  Executive  Officer  regarding
matters  of key  personnel  selection,  organization  strategies  and such other
matters as the Board may from time to time direct.  The  Management  Development
and Compensation Committee also has been responsible for reviewing and approving
stock  option and other  stock-based  compensation  awards  under the  Company's
incentive plans. The Management  Development and Compensation Committee held one
meeting  and  took  action  by  written  consent  in lieu of a  meeting  on four
occasions  in 1999.  Its current  members are Mr.  Peak,  Chairman,  and General
Stafford.


<PAGE>

     Nominations  Committee.  The principal  responsibilities of the Nominations
Committee are to review and make  recommendations  to the Board  regarding  such
matters  as the size and  composition  of the Board and  criteria  for  director
nominations,  director  candidates,  the term of office of  directors,  and such
other  related  matters  as the  Board  may  request  from  time  to  time.  The
Nominations  Committee  held one  meeting in 1999.  The  current  members of the
Nominations  Committee  are Mr.  Glenn  Simmons,  Chairman,  and Mr.  Peak.  The
Nominations  Committee made its  recommendations  to the Board of Directors with
respect to the  election of  directors at the Annual  Meeting.  The  Nominations
Committee  will consider  recommendations  by  shareholders  of the Company with
respect to  nominees  for  election  as  director  if such  recommendations  are
submitted in writing to the Secretary of the Company and received not later than
December 31 of the year prior to the next annual  meeting of  shareholders,  and
are accompanied by a full statement of  qualifications  and  confirmation of the
recommended nominees' willingness to serve.

     The Board has previously established,  and from time to time may establish,
other committees to assist it in discharging its responsibilities.


                        EXECUTIVE OFFICERS OF THE COMPANY

     Set forth below is certain  information  regarding the Company's  executive
officers.  Biographical  information with respect to Messrs.  Simmons and Martin
and Dr. Wigdor is set forth above under "Election of Directors."

<TABLE>
<CAPTION>

             Name              Age                 Position(s)
<S>                            <C>       <C>

  Harold C. Simmons.........   68        Chairman of the Board

  J. Landis Martin..........   54        President and Chief Executive Officer

  Dr. Lawrence A. Wigdor....   58        Executive Vice President; President and
                                         Chief Executive Officer of Kronos

  Susan E. Alderton.........   48        Vice President, Chief Financial Officer
                                         and Treasurer

  David B. Garten...........   48        Vice President, General Counsel and
                                         Secretary

  Robert D. Hardy...........   39        Vice President, Controller, Assistant
                                         Treasurer and Assistant Secretary
</TABLE>


     Susan E.  Alderton has been Chief  Financial  Officer of the Company  since
February  1998 and Vice  President  and  Treasurer of the Company since prior to
1995. Ms. Alderton has been a director of Tremont since prior to 1995.

     David B. Garten has been Vice  President,  General Counsel and Secretary of
the Company since prior to 1995.

     Robert D. Hardy has been Vice  President,  Controller  of the Company since
March 1999, Assistant Treasurer since May 1995 and Assistant Secretary since May
1998.  From prior to 1995 to February  1998,  Mr. Hardy served as the  Company's
Director of Taxes, and from February 1998 to March 1999 served as Vice President
- Tax.


                               SECURITY OWNERSHIP

     Ownership of NL Common Stock.  The following table and  accompanying  notes
set  forth as of the  Record  Date  the  beneficial  ownership,  as  defined  by
regulations of the Securities and Exchange Commission (the



<PAGE>



"Commission"), of Common Stock held by (a) each person or group of persons known
by NL to  beneficially  own more  than 5% of the  outstanding  shares  of Common
Stock,  (b) each  director  or nominee for  director  of NL, (c) each  executive
officer  of NL listed  on the  Summary  Compensation  Table  below,  and (d) all
executive  officers  and  directors  of NL as a group.  See note (3)  below  for
information   concerning  individuals  and  entities  which  may  be  deemed  to
indirectly  beneficially own those shares of Common Stock directly  beneficially
held by Valhi and Tremont, as reported in the table below. No securities of NL's
subsidiaries are beneficially  owned by any director,  nominee for director,  or
officer of NL.  Information  concerning  ownership of equity  securities of NL's
parent  companies is contained in note (3) below and the table under the caption
"Ownership of Valhi and Tremont  Common Stock" below.  All  information is taken
from or based upon ownership filings made by such persons with the Commission or
information provided by such persons to NL.

 <TABLE>
 <CAPTION>
                                                     NL Common Stock
                                      -----------------------------------------
     Name of                          Amount and Nature of            Percent
   Beneficial Owner                   Beneficial Ownership(1)       of Class(2)
   ----------------                   -----------------------       -----------
<S>                                        <C>                         <C>
Valhi, Inc.                                30,135,390(3)               59.5%
   Three Lincoln Centre
   5430 LBJ Freeway
   Suite 1700
   Dallas, TX 75240
Tremont Corporation                        10,215,541(3)               20.2%
   1999 Broadway
   Suite 4300
   Denver, CO 80202
Joseph S. Compofelice                         258,716(4)                --
J. Landis Martin                              720,772(5)                1.4%
Kenneth R. Peak                                13,825(6)                --
Glenn R. Simmons                                7,800(3)(7)             --
Harold C. Simmons                              75,475(3)(8)             --
General Thomas P. Stafford                        -0-                   --
Dr. Lawrence A. Wigdor                        325,331(9)                --
Susan E. Alderton                             135,422(10)               --
David B. Garten                               160,298(11)               --
Robert D. Hardy                                60,826(12)               --
All directors and executive officers
   of the Company as a group
   (10 persons)                             1,758,466(3)(4)(5)(6)(7)    3.4%
                                              (8)(9)(10)(11)(12)
</TABLE>
--------------

(1)  All beneficial ownership is sole and direct unless otherwise noted.

(2)  No percent of class is shown for holdings of less than 1%.

(3)  Valhi Group,  Inc.  ("VGI"),  National City Lines,  Inc.  ("National")  and
     Contran  are  the   holders  of   approximately   81.8%,   9.5%  and  1.6%,
     respectively, of the outstanding common stock, $.01 par value per share, of
     Valhi, Inc. (the "Valhi Common Stock").  Valhi, the Company, and the Harold
     Simmons Foundation, Inc. (the "Foundation"), hold approximately 59.9%, 8.4%
     and 3.1%,  respectively,  of the outstanding  common stock, $1.00 par value
     per share,  of Tremont (the "Tremont Common  Stock").  National,  NOA, Inc.
     ("NOA") and Dixie  Holding  Company  ("Dixie  Holding")  are the holders of
     approximately  73.3%,  11.4% and 15.3%,  respectively,  of the  outstanding
     common stock of VGI. Contran and NOA are the 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
     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  holder  of 100% of the  outstanding  common  stock of Dixie
     Holding.  Contran is the  holder of  approximately  100% and  approximately
     88.9%  of the  outstanding  common  stock  of  Dixie  Rice  and  Southwest,
     respectively.  Substantially all of Contran's  outstanding  voting stock is
     held either by trusts  established  for the benefit of certain of Harold C.
     Simmons'  children and  grandchildren  (the  "Trusts"),  of which Harold C.
     Simmons is the sole  trustee,  or by Harold C.  Simmons  directly.  As sole
     trustee of the Trusts,  Harold C.  Simmons has the power to vote and direct
     the  disposition  of the shares of Contran common stock held by each of the
     Trusts. Mr. Simmons, however, disclaims beneficial ownership of all Contran
     shares held by the Trusts.

     The  Combined   Master   Retirement   Trust  (the  "Master   Trust")  holds
     approximately  0.1% of the  outstanding  shares of Valhi  Common  Stock and
     Tremont  Common  Stock.  Valhi  established  the Master Trust to permit the
     collective  investment by master trusts that maintain the assets of certain
     employee benefit plans Valhi and related companies adopt. Harold C. Simmons
     is  the  sole  trustee  of the  Master  Trust  and a  member  of the  trust
     investment  committee  for the Master  Trust.  Valhi's  Board of  Directors
     select the trustee and members of the trust  investment  committee  for the
     Master Trust. Harold C. Simmons and Glenn R. Simmons are members of Valhi's
     Board of  Directors  and are  participants  in one or more of the  employee
     benefit plans which invest through the Master Trust.  Each of such persons,
     however, disclaims beneficial ownership of the shares of Valhi Common Stock
     and Tremont Common



<PAGE>

     Stock held by the  Master  Trust,  except to the  extent of his  individual
     vested beneficial interest in the assets held by the Master Trust.

     Harold C.  Simmons is  Chairman  of the Board of NL, a director of Tremont,
     and  Chairman of the Board and Chief  Executive  Officer of Contran,  Dixie
     Rice, Southwest,  Dixie Holding, NOA, National, VGI and Valhi. By virtue of
     the  holding  of such  offices,  the stock  ownership  and his  service  as
     trustee,  all as described  above, (a) Mr. Simmons may be deemed to control
     such  entities,  and (b) Mr.  Simmons,  and certain of such entities may be
     deemed  to  possess  indirect  beneficial  ownership  of the  Common  Stock
     directly  beneficially  owned by Valhi and  Tremont and the shares of Valhi
     Common Stock and Tremont Common Stock held by Contran and its subsidiaries.
     However, Mr. Simmons disclaims beneficial ownership of the shares of Common
     Stock,  Valhi Common Stock and Tremont  Common  Stock  beneficially  owned,
     directly  and  indirectly,  by such  entities  except to the  extent of his
     individual  vested  beneficial  interest  in the assets  held by the Master
     Trust.

     The shares of Valhi Common Stock described  above as beneficially  owned by
     Contran include  approximately  0.4% of the outstanding  Valhi Common Stock
     that is directly held by the Contran Deferred Compensation Trust No. 2 (the
     "CDCT No. 2").  Boston Safe Deposit and Trust Company  serves as trustee of
     the CDCT No. 2 (the  "Trustee").  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 (i) retains the sole power to vote the Valhi  Common  Stock held by
     the CDCT No. 2, (ii) retains  dispositive power over such shares, and (iii)
     may be deemed the indirect  beneficial owner of such shares.  However,  Mr.
     Simmons  disclaims  such  beneficial  ownership of the shares  beneficially
     owned by the  CDCT  No.  2,  except  to the  extent  of his  interest  as a
     beneficiary of CDCT No. 2.

     The Foundation directly holds approximately 3.1% of the outstanding Tremont
     Common Stock and 0.5% of the outstanding Valhi Common Stock. The Foundation
     is a tax-exempt  foundation  organized for charitable  purposes.  Harold C.
     Simmons is the  chairman  of the board and chief  executive  officer of the
     Foundation  and may be deemed  to  control  the  Foundation.  Mr.  Simmons,
     however,   disclaims  beneficial  ownership  of  any  shares  held  by  the
     Foundation.

     Valmont  Insurance  Company  ("Valmont")  and a  subsidiary  of the Company
     directly own 1,000,000 shares and 1,186,200 shares, respectively,  of Valhi
     common stock.  Valhi holds 100% of the outstanding common stock of Valmont.
     Pursuant to Delaware  law,  Valhi  treats the shares of Valhi  common stock
     owned by Valmont and the  subsidiary  of the Company as treasury  stock for
     voting  purposes  and for the  purposes  of this  footnote  are not  deemed
     outstanding.

     The business address of VGI,  National,  NOA, Dixie Holding,  the CMRT, the
     Foundation  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.

(4)  The shares of Common Stock shown as beneficially  owned include (i) 205,800
     shares of Common Stock which Joseph S. Compofelice has the right to acquire
     by exercise of options within 60 days of the Record Date under the 1989 and
     1998 Long-Term  Performance  Incentive  Plans of NL  Industries,  Inc. (the
     "1989  Incentive  Plan" and the "1998 Incentive  Plan",  respectively,  and
     together  the  "Incentive  Plans"),  (ii)  7,916  shares  credited  to  Mr.
     Compofelice's account under the NL Industries, Inc. Retirement Savings Plan
     (the "Savings Plan"),  and (iii) 45,000 shares held by Mr.  Compofelice and
     his wife as joint tenants.

(5)  The shares of Common Stock shown as beneficially  owned include (i) 493,000
     shares of Common  Stock which J. Landis  Martin has the right to acquire by
     exercise of options  within 60 days of the Record Date under the  Incentive
     Plans and (ii) 17,631  shares  credited to Mr.  Martin's  account under the
     Savings Plan.




<PAGE>


(6)  The shares of Common Stock shown as  beneficially  owned  include (i) 6,000
     shares of Common  Stock  which  Kenneth R. Peak has the right to acquire by
     exercise of options  within 60 days of the Record  Date  pursuant to the NL
     Industries,   Inc.  1992  Non-Employee  Director  Stock  Option  Plan  (the
     "Director  Plan") and the 1998  Incentive Plan and (ii) 21 shares of Common
     Stock held by Mr.  Peak's  wife with  respect to which Mr.  Peak  disclaims
     beneficial ownership.

(7)  The shares of Common Stock shown as beneficially owned include 4,000 shares
     which  Glenn R.  Simmons  has the right to acquire by  exercise  of options
     within 60 days of the Record Date under the 1998 Incentive Plan.

(8)  The shares of Common Stock shown as beneficially owned by Harold C. Simmons
     include  69,475  shares  held by Mr.  Simmons'  wife with  respect to which
     beneficial  ownership is disclaimed  by Mr.  Simmons and 4,000 shares which
     Mr.  Simmons has the right to acquire by exercise of options within 60 days
     of the Record Date under the 1998 Incentive Plan.

(9)  The shares of Common  Stock shown as  beneficially  owned  include  209,800
     shares of  Common  Stock  which Dr.  Lawrence  A.  Wigdor  has the right to
     acquire by exercise of options  within 60 days of the Record Date under the
     Incentive Plans.

(10) The shares of Common Stock shown as  beneficially  owned include (i) 82,200
     shares of Common Stock which Susan E.  Alderton has the right to acquire by
     exercise of options  within 60 days of the Record Date under the  Incentive
     Plans, and (ii) 12,065 shares credited to Ms. Alderton's  account under the
     Savings Plan.

(11) The shares of Common Stock shown as  beneficially  owned include (i) 99,600
     shares of Common  Stock  which  David B. Garten has the right to acquire by
     exercise of options  within 60 days of the Record Date under the  Incentive
     Plans,  and (ii) 15,763 shares credited to Mr.  Garten's  account under the
     Savings Plan.

(12) The shares of Common Stock shown as  beneficially  owned include (i) 43,000
     shares of Common  Stock  which  Robert D. Hardy has the right to acquire by
     exercise of options  within 60 days of the Record Date under the  Incentive
     Plans,  (ii) 5,326 shares credited to Mr. Hardy's account under the Savings
     Plan,  and  (iii)  12,500  shares  held by Mr.  Hardy and his wife as joint
     tenants.


     Ownership  of Valhi and  Tremont  Common  Stock.  The  following  table and
accompanying notes set forth as of the Record Date (i) the beneficial ownership,
as defined above, of Valhi Common Stock held by (a) each director or nominee for
director  of NL,  (b)  each  executive  officer  of NL  listed  in  the  Summary
Compensation  Table below, and (c) all executive officers and directors of NL as
a group, and (ii) the beneficial ownership,  as defined above, of Tremont Common
Stock held by (a) each  director  or nominee  for  director  of NL, and (b) each
executive officer of NL listed in the Summary  Compensation Table below, and (c)
all executive officers and directors of NL as a group. See note (3) to the table
following the caption  "Ownership of NL Common  Stock"  above,  for  information
concerning individuals and entities who may be deemed to indirectly beneficially
own those  shares of Common  Stock  directly  beneficially  held by Tremont  and
Valhi.  Except  as  described  in note (3)  above  and the  table  below and the
accompanying   notes,  no  equity   securities  of  NL's  parent  companies  are
beneficially owned by any director, nominee for director or executive officer of
NL. All  information is taken from or based upon ownership  filings made by such
persons with the Commission or information provided by such persons to NL.




<PAGE>


<TABLE>
<CAPTION>

                                   Tremont Common Stock                Valhi Common Stock
                                -----------------------------      -------------------------------
                                 Amount and                         Amount and
                                 Nature of                          Nature of
            Name of              Beneficia         Percent          Beneficial          Percent
      Beneficial Owner           Ownership(1)    of Class (2)       Ownership (1)     of Class (2)
      ----------------           ------------    ------------       -------------     ------------
<S>                             <C>                 <C>          <C>                      <C>

Joseph S. Compofelice             5,000(3)           --                -0-                --
J. Landis Martin                210,428(4)          3.2%            25,000                --
Kenneth R. Peak                     -0-              --                -0-                --
Glenn R. Simmons                    534(5)(10)       --            423,183(5)(9)(10)      --
Harold C. Simmons                 3,747(5)(6)        --            630,383(5)(9)(11)      --
General Thomas P. Stafford         4,000(7)          --                -0-                --
Dr. Lawrence A. Wigdor              -0-              --                -0-                --
Susan E. Alderton                 7,011(12)          --                -0-                --
David B. Garten                  12,000(8)           --                -0-                --
Robert D. Hardy                     318              --                -0-                --
All directors and executive
   officers of the Company      243,038(3)(4)(5)    3.8%         1,078,566(5)(9)          --
   as a group (10 persons)            (6)(7)(8)(12)                  (10)(11)

</TABLE>

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

(1)  All beneficial ownership is sole and direct unless otherwise noted.

(2)  No percent of class is shown for  holdings of less than 1%. For purposes of
     calculating  the percent of class owned  1,186,200  shares of Valhi  Common
     Stock held by a subsidiary of NL and 1,000,000 shares of Valhi Common Stock
     held by Valmont are  excluded  from the amount of Valhi Common  Stock.  The
     Company  understands  that,  pursuant to Delaware  law,  Valhi treats these
     excluded shares as treasury stock for voting purposes.

(3)  The shares of Tremont Common Stock shown as beneficially owned by Joseph S.
     Compofelice represent 5,000 shares Mr. Compofelice has the right to acquire
     by the exercise of options within 60 days of the Record Date.

(4)  The shares of Tremont Common Stock shown as beneficially owned by J. Landis
     Martin  include  60,000 shares of Tremont Common Stock which Mr. Martin has
     the right to acquire by  exercise  of options  within 60 days of the Record
     Date and 520 shares held by the trustee for the benefit of Mr. Martin under
     the  Savings  Plan.  Such  shares  also  include  1,800  shares held by Mr.
     Martin's wife, 2,400 shares held by the Martin  Children's Trust No. II for
     which Mr.  Martin is the sole  trustee  and 100  shares  held by one of Mr.
     Martin's  daughters,  with respect to all of which beneficial  ownership is
     disclaimed by Mr. Martin.


(5)  Excludes  certain shares which may be deemed to be indirectly  beneficially
     owned by such individual as to which he disclaims beneficial ownership. See
     note (3) to the table following "Ownership of NL Common Stock" above.

(6)  The shares of Tremont Common Stock shown as beneficially owned by Harold C.
     Simmons  consist of 3,747 shares held by Mr.  Simmons' wife with respect to
     which beneficial ownership is disclaimed by Mr. Simmons.

(7)  The shares of Tremont Common Stock shown as beneficially owned by Thomas P.
     Stafford  include  4,000  shares  which  General  Stafford has the right to
     acquire by exercise of options within 60 days of the Record Date.

(8)  The shares of Tremont Common Stock shown as beneficially  owned by David B.
     Garten  include  11,500 shares which Mr. Garten has the right to acquire by
     exercise of options within 60 days of the Record Date.

(9)  Includes  shares that such person or group could  acquire upon the exercise
     of stock  options  within 60 days of the Record  Date.  During  such 60-day
     period, options for 550,000 shares of Valhi Common Stock are exercisable by
     Harold C. Simmons and options for 420,000  shares of Valhi Common Stock are
     exercisable  by Glenn R.  Simmons,  all of which shares are included in the
     amount  outstanding  for purposes of calculating the percent of class owned
     by such persons.

(10) Includes  2,383  shares of Valhi  Common  Stock and 515  shares of  Tremont
     Common Stock held in Glenn R. Simmons' individual  retirement account.  The
     Valhi shares also  include 800 shares held in a retirement  account for Mr.
     Simmons'  wife,  with  respect  to all of  which  beneficial  ownership  is
     disclaimed by Mr. Simmons.


<PAGE>

(11) Includes  77,000  shares of Valhi Common  Stock held by Harold C.  Simmons'
     wife,  with  respect to which  beneficial  ownership is  disclaimed  by Mr.
     Simmons.

(12) The shares of Tremont Common Stock shown as beneficially  owned by Susan E.
     Alderton  include 6,500 shares which Ms.  Alderton has the right to acquire
     by exercise of options within 60 days of the Record Date and 11 shares held
     by the trustee for the benefit of Ms. Alderton under the Savings Plan.


     The Company  understands  that Valhi,  Tremont  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 the Common Stock in the market, an assessment of the business
of and prospects  for the Company,  financial  and stock market  conditions  and
other factors deemed  relevant by such entities.  The Company does not presently
intend,  and understands that neither Valhi nor Tremont  presently  intends,  to
engage in any  transaction  or series of  transactions  that would result in the
Common  Stock  becoming  eligible  for  termination  of  registration  under the
Securities  Exchange  Act of 1934,  as  amended,  or  ceasing  to be traded on a
national securities exchange.


             SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Securities Exchange Act of 1934, as amended,  requires
the Company's  executive officers,  directors,  and persons who own beneficially
more than 10% of a registered class of the Company's  equity  securities to file
reports of ownership and changes in ownership with the Commission,  the New York
Stock Exchange,  the Pacific Exchange and the Company.  Based solely on a review
of copies of the  Section  16(a)  reports  furnished  to the Company and written
representations by certain reporting  persons,  the Company believes that all of
the Company's  executive  officers,  directors  and greater than 10%  beneficial
owners filed on a timely basis all reports  required  during and with respect to
the fiscal year ended December 31, 1999.



                COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
                              AND OTHER INFORMATION


Compensation of Directors

     During 1999, fees were paid to each director who was not an employee of the
Company or a subsidiary of the Company.  Fees consisted of an annual retainer of
$15,000,  payable in  quarterly  installments  and 1,000  shares of Common Stock
granted  pursuant to the 1998 Incentive  Plan,  plus an attendance fee of $1,000
for each  meeting of the Board or a committee at which the director was present.
Such  directors  also  received a fee of $1,000 per day for each day spent on NL
business  at the request of the Board or the  Chairman of the Board,  other than
the day of Board or committee meetings.  Directors are reimbursed for reasonable
expenses incurred in attending Board of Directors and committee meetings. If any
director who is not an officer or employee of NL or any  subsidiary or affiliate
of NL dies while in active service, his designated beneficiary or estate will be
entitled to receive a life insurance  benefit equal to the annual  retainer then
in effect.  Directors  receiving  fees for serving on the Board of  Directors in
1999 were Messrs. Compofelice, Peak, G. Simmons, H. Simmons, and former director
Admiral  Elmo R.  Zumwalt.  See "Certain  Relationships  and  Transactions."  In
addition,  General Stafford receives an annual payment of $15,000 as a result of
his service on the Board in the period prior to 1987.

     In 1999, Messrs.  Compofelice,  Peak, G. Simmons,  H. Simmons,  and Admiral
Zumwalt  were each  granted an option  pursuant  to the 1998  Incentive  Plan to
purchase  2,000  shares of Common  Stock at an exercise  price of  $12.5625  per
share,  representing  the last  reported  sales price of Common Stock on the New
York  Stock  Exchange  Composite  Tape on the date of the grant.  These  options
become  exercisable  one year  after the date of grant  and  expire on the fifth
anniversary following the date of the grant.




<PAGE>

Summary of Cash and Certain Other Compensation of Executive Officers

     The Summary  Compensation  Table set forth below provides  certain  summary
information  concerning annual and long-term compensation paid or accrued by the
Company  to or on behalf of its Chief  Executive  Officer  and each of its other
four most highly compensated executive officers for services rendered during the
years ended December 31, 1999, 1998 and 1997.


<TABLE>
<CAPTION>
                                                      SUMMARY COMPENSATION TABLE

                                                                                                        Long Term
                                          Annual Compensation (1)                                   Compensation (1)
                                          -----------------------                                        Awards
                                                                                                    ----------------

                                                                                    Other      Restricted Securities
Name and                                                                            Annual        Stock   Underlying   All Other
Principal Position                  Year      Salary         Bonus (2)           Compensation    Awards   Options     Compensation
                                               ($)              ($)                 (3)($)        ($)        (#)         (5)($)
-------------------------           ----      -------        ----------            ------        ------   ----------  ------------
<S>                                 <C>       <C>            <C>                   <C>            <C>     <C>           <C>
J. Landis Martin                    1999      500,000         500,000              17,435         -0-      99,000       125,320
President and Chief                 1998      500,000        2,750,000             19,742         -0-     120,000       328,520
Executive Officer (4)               1997      500,000         750,000                 -0-         -0-      90,000        19,520

Dr. Lawrence A. Wigdor              1999      650,000         650,000               8,833         -0-      99,000       171,073
Executive Vice President            1998      650,000        2,175,000             11,125         -0-      90,000       277,987
                                    1997      550,000         825,000                 121         -0-      75,000        25,804

Susan E. Alderton                   1999      225,000         225,000                 -0-         -0-      45,000        52,944
Vice President,                     1998      212,813         419,200                 -0-         -0-      30,000        49,883
Chief Financial Officer,            1997      178,500         166,800                 -0-         -0-      30,000        14,765
and Treasurer

David B. Garten                     1999      325,000         325,000                 -0-         -0-      45,000        69,427
Vice President, General Counsel     1998      250,000         575,000                 -0-         -0-      45,000        84,408
and Secretary                       1997      250,000         375,000                 -0-         -0-      45,000        18,013

Robert D. Hardy                     1999      200,000         147,500                 -0-         -0-      30,000        34,531
Vice President and                  1998      170,000         385,300                 -0-         -0-      30,000        44,424
Controller                          1997      130,000          84,500                 -0-         -0-      30,000        19,724


</TABLE>
<PAGE>


(1)  No payouts  under any long-term  incentive  plans (as defined by applicable
     federal  securities  regulations)  were  made  during  1999,  1998 or 1997.
     Therefore the column for such compensation otherwise required by applicable
     federal securities regulations has been omitted.

(2)  In 1998,  amounts  paid  pursuant  to the  Variable  Compensation  Plan and
     special  discretionary bonuses paid in view of contributions to the sale of
     the Company's rheological additives business. See "Compensation Committee's
     Report on Executive Compensation" below.

(3)  Amount which exceeds 120% of the applicable federal long-term interest rate
     accrued on deferred compensation.

(4)  During 1999, 1998 and 1997, Mr. Martin also served as an executive  officer
     of Tremont  and TIMET.  Mr.  Martin is  expected to continue to serve as an
     executive  officer of NL,  TIMET and Tremont in 2000 and to be  compensated
     directly by NL for  services  to NL and by TIMET for  services to TIMET and
     Tremont.  Mr.  Martin is  expected  to  continue  to  devote  approximately
     one-half of his working time to his duties as President and Chief Executive
     Officer of NL. See "Certain Relationships and Transactions."

(5)  For 1999 represents (i) $6,493,  $924,  $1,827,  and $801 of life insurance
     premiums paid by the Company for the benefit of Dr. Wigdor,  Ms.  Alderton,
     and Messrs. Garten and Hardy respectively, (ii) a contribution of $6,400 to
     the account of each of the named executive officers under the Savings Plan,
     (iii) a contribution of $11,680,  $7,200,  $9,920, $7,200 and $4,800 to the
     Savings Plan  accounts of Dr.  Wigdor,  Ms.  Alderton  and Messrs.  Martin,
     Garten  and  Hardy  respectively,  as  a  pension  contribution,  and  (iv)
     $146,500,  $38,420, $109,000, $54,000 and $22,530 accrued by the Company in
     unfunded  accounts for the benefit of Dr. Wigdor,  Ms. Alderton and Messrs.
     Martin,  Garten,  and  Hardy,  respectively,   under  the  NL  Supplemental
     Executive Retirement Plan ("SERP"). For 1998 represents:  (i) $5,207, $672,
     $1,108 and $574 of life  insurance  premiums  paid by the  Company  for the
     benefit  of  Dr.  Wigdor,  Ms.  Alderton,  and  Messrs.  Garten  and  Hardy
     respectively,  (ii) a contribution of $7,500 to the account of Ms. Alderton
     and $9,600 to the  account of each of the other  named  executive  officers
     under the Savings Plan,  (iii) a contribution of $11,680,  $7,200,  $9,920,
     $7,200 and $4,800 to the Savings Plan accounts of Dr. Wigdor,  Ms. Alderton
     and  Messrs   Martin,   Garten  and  Hardy   respectively,   as  a  pension
     contribution,  and (iv) $251,500,  $34,511,  $309,000,  $66,500 and $29,450
     accrued by the company in unfunded  accounts for the benefit of Dr. Wigdor,
     Ms. Alderton, and Messrs. Martin, Garten and Hardy, respectively, under the
     SERP.  For 1997  represents:  (i)  $4,524,  $440,  $1,213  and $527 of life
     insurance  premiums paid by the Company for the benefit of Dr. Wigdor,  Ms.
     Alderton, and Messrs. Garten and Hardy,  respectively,  (ii) a contribution
     of $7,125 to the account of Ms.  Alderton and $9,600 to the account of each
     of the other named  executive  officers under the Savings Plan, and (iii) a
     contribution of $11,680,  $7,200,  $9,920, $7,200 and $9,597 to the Savings
     Plan accounts of Dr. Wigdor,  Ms. Alderton and Messrs.  Martin,  Garten and
     Hardy respectively, as a pension contribution.

Stock Option Grants

     The following  table  provides  information  with respect to the individual
stock option grants to the executive officers named in the Summary  Compensation
Table set forth above under the 1998 Incentive Plan during fiscal year 1999.



<PAGE>

                                           OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>

                                                                                                      Potential Realizable Value at
                                                                                                         Assumed Rates of Stock
                                                 Percent of Total    Exercise or                            Appreciation for
                        Number of Securities     Options Granted        Base                                 Option Term (3)
                         Underlying Options       to Employees in      Price(2)   Expiration
     Name                  Granted (#)(1)           Fiscal Year       ($/Share)      Date                5% ($)            10% ($)
     ----                  --------------           -----------       ---------   ----------           -------            --------
<S>                           <C>                     <C>            <C>          <C>                  <C>                <C>
J. Landis Martin              33,000                  24.1%          $12.1875     5/04/09              252,934            640,983
                              33,000                                 $13.6875                          203,434            591,483
                              33,000                                 $15.1875                          153,934            541,983


Lawrence A. Wigdor            33,000                  24.1%          $12.1875     5/04/09              252,934            640,983
                              33,000                                 $13.6875                          203,434            591,483
                              33,000                                 $15.1875                          153,934            541,983


Susan E. Alderton             15,000                  11.0%          $12.1875     5/04/09              114,970            291,356
                              15,000                                 $13.6875                           92,470            268,856
                              15,000                                 $15.1875                           69,970            246,356


David B. Garten               15,000                  11.0%          $12.1875     5/04/09              114,970            291,356
                              15,000                                 $13.6875                           92,470            268,856
                              15,000                                 $15.1875                           69,970            246,356


Robert D. Hardy               10,000                   7.3%          $11.2813     2/10/09               70,947            179,795
                              10,000                                 $12.7813                           55,947            164,795
                              10,000                                 $14.2813                           40,947            149,795
</TABLE>

(1)  Grants of options to purchase  shares of Common  Stock under the  Incentive
     Plan vest over five years  from the date of grant,  at a rate of 40% on the
     second  anniversary of the date of grant, and 20% on each of the next three
     succeeding  anniversary  dates. The options expire on the tenth anniversary
     date of the date of grant.

(2)  Exercise  price for the first  tranche of stock is equal to the mean of the
     high and low  prices of the  Common  Stock on the New York  Stock  Exchange
     Composite  Tape on the date of grant;  exercise  prices of the  second  and
     third  tranches are equal to the foregoing  mean price on the date of grant
     plus $1.50 and $3.00, respectively.

(3)  Pursuant  to the  rules  of  the  Commission,  these  amounts  reflect  the
     calculations at assumed 5% and 10% appreciation  rates.  Such  calculations
     are not  intended  to  forecast  future  appreciation,  if any,  and do not
     necessarily  reflect the actual value,  if any,  that may be realized.  The
     actual  value of such  options,  if any,  would be  realized  only upon the
     exercise of such  options and depends  upon the future  performance  of the
     Common Stock. No assurance can be made that the amounts  reflected in these
     columns will be achieved.  The potential  realizable  value was computed as
     the difference  between the  appreciated  value (at the end of the ten-year
     term of the options) of the Common Stock into which the listed  options are
     exercisable  and  the  aggregate  exercise  price  of  such  options.   The
     appreciated value per share at the end of the ten-year term would be $18.38
     and $29.26 at the assumed 5% and 10% rates,  respectively,  with respect to
     options  granted to Mr.  Hardy and $19.85 and $31.61 at the  assumed 5% and
     10% rates, respectively, with respect to options granted to the other named
     executive officers.

Stock Option Exercises and Holdings

     The  following  table  provides  information  with respect to the executive
officers named in the Summary Compensation Table, as set forth above, concerning
the exercise of options during the last fiscal year and the value of unexercised
options held as of December 31, 1999. One of those executive  officers exercised
options during 1999 as shown in the table below.  No stock  appreciation  rights
have been granted under the Incentive Plans.


<TABLE>
<CAPTION>
                                  AGGREGATED OPTION EXERCISES IN 1999 AND 12/31/99 OPTION VALUES

                                                                             Number of Securities
                                                                            Underlying Unexercised      Value of Unexercised In-the-
                        Shares Acquired on                                  Options at 12/31/99(#)       Money Options at 12/31/99
      Name              Exercise (#)           Value Realized ($)         Exercisable/Unexercisable    ($) Exercisable/Unexercisable
      ----              ---------------        ------------------         -------------------------    -----------------------------
<S>                          <C>                    <C>                         <C>                           <C>
J. Landis Martin             -0-                    -0-                         418,000/291,000               1,904,438/232,155

Lawrence A. Wigdor           -0-                    -0-                         301,600/248,400                 589,517/216,324

Susan E. Alderton            -0-                    -0-                           62,400/96,600                  261,677/93,501

David B. Garten              -0-                    -0-                         145,200/121,800                 272,075/108,708

Robert D. Hardy              12,500                 28,594                        22,200/81,800                  45,366/104,603

</TABLE>


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
February 1996, the Company  approved the suspension of all future accruals under
the salaried  component of the Pension Plan  effective as of March 31, 1996 (the
"Suspension Date").  Salaried employees who were at least 21 years of age became
eligible to  participate  in the Pension  Plan if they  completed  at least five
months of service (as defined in the Pension Plan) in a specified



<PAGE>



twelve-month  period  prior  to the  Suspension  Date.  Annually,  prior  to the
Suspension  Date, the Board  established,  in its  discretion,  the amount of an
employee's annual pension benefit for the year based primarily on the employee's
total eligible earnings for that year and the Company's financial performance in
relationship  to its annual  operating plan for the previous year. To the extent
that the minimum,  target, or maximum level of operating income performance were
achieved,  the  employee  earned  an  annual  benefit  equal  to  1%,  2% or 3%,
respectively,  of such employee's  total base salary and bonus, up to the limits
set forth in the Internal Revenue Code. See "Compensation  Committee's Report on
Executive  Compensation  -  Variable  Compensation  Plan"  below.  Such  pension
benefits are payable upon  retirement  and  attainment of ages  specified in the
Pension  Plan.  The  Pension  Plan covers each  executive  officer  named in the
Summary  Compensation Table set forth above. No amounts were paid or distributed
to any of the named  executive  officers in 1999.  The estimated  accrued annual
benefits  payable upon retirement at normal  retirement age for Dr. Wigdor,  Ms.
Alderton, and Messrs. Martin, Garten, and Hardy are $29,439,  $34,419,  $50,277,
$26,410, and $12,348, respectively.

Severance Agreements

     Mr.  Martin has entered  into an  executive  severance  agreement  with the
Company  which  provides  that he may be terminated at any time by action of the
Board of Directors.  The executive  severance  agreement  also provides that the
following  payments  shall  be made to Mr.  Martin  in the  event  Mr.  Martin's
employment  is  terminated  by the  Company  without  cause (as  defined  in the
agreement) or Mr. Martin  terminates  his  employment  with the Company for good
reason (as defined in the  agreement):  (i) two times Mr.  Martin's  annual base
salary plus target bonus  (which  target bonus shall not be less than the amount
of his  annual  salary);  (ii)  accrued  salary  and bonus  through  the date of
termination;  and (iii) certain other benefits.  The agreement  provides that it
shall be in effect through December 31, 2000.

     Dr.  Wigdor has entered  into an  executive  severance  agreement  with the
Company  which  provides  that he may be terminated at any time by action of the
Board of Directors.  The executive  severance  agreement  also provides that the
following  payments  shall  be made to Dr.  Wigdor  in the  event  Dr.  Wigdor's
employment  is  terminated  by the  Company  without  cause (as  defined  in the
agreement) or Dr. Wigdor  terminates  his  employment  with the Company for good
reason (as defined in the agreement): (i) the greater of two times Dr. Wigdor 's
annual base salary plus target bonus (which  target bonus shall not be less than
the amount of his annual salary) or Dr. Wigdor's actual salary and bonus for the
two years prior to  termination;  (ii) accrued salary and bonus through the date
of termination; (iii) an amount in cash or Common Stock equal to the fair market
value of  outstanding  stock  options  granted  to Dr.  Wigdor  in excess of the
exercise  price and unvested  restricted  stock grants;  (iv) an amount equal to
unvested  Company  contributions  together with an amount equal to the Company's
matching  contributions  to Dr.  Wigdor's  account  under the Savings Plan for a
period of two years; (v) an amount equal to the vested and unvested  portions of
Dr.  Wigdor's  account  under the SERP;  and (vi) certain other  benefits.  This
agreement is automatically  extended for a one-year term commencing each January
1, unless the Company and Dr. Wigdor agree otherwise in writing.


            COMPENSATION COMMITTEE'S REPORT ON EXECUTIVE COMPENSATION

     The Company's Management  Development and Compensation  Committee (the "MDC
Committee")  consists of individuals  who are neither  officers nor employees of
the Company or its  subsidiaries  and who are not eligible to participate in any
of the employee benefit plans administered by the MDC Committee.

         The MDC  Committee  reviews and  recommends  compensation  policies and
practices related to the Company's  executive  officers.  The MDC Committee also
was  responsible  for reviewing and approving all  compensation  actions  during
1999,  including  stock-based  compensation,  involving the Company's  executive
officers.  However,  any action in connection with the Chief Executive Officer's
(the "CEO") base salary is



<PAGE>



reviewed and approved by the Board after  recommendation  by the MDC  Committee.
See "Meetings and Committees."

     The Company's  executive  compensation  system generally  consists of three
primary components:  base salary,  annual variable  compensation provided by the
Variable  Compensation  Plan, and the grant of stock options,  restricted  stock
and/or  stock  appreciation  rights.  Through  the  use  of the  foregoing,  the
Committee seeks to achieve a balanced compensation package that will attract and
retain  high-quality key executives,  appropriately  reflect each such executive
officer's individual performance,  contributions,  and general market value, and
provide  further  incentives  to  the  officers  to  maximize  annual  operating
performance and long-term shareholder value.

Base Salaries

         The MDC Committee reviews  recommendations by the CEO regarding changes
in base salaries for executive officers.  These  recommendations are made by the
CEO after consultation with the Chairman of the Board. Reviews regarding changes
in the  base  salaries  of  executive  officers  occur no more  frequently  than
annually. When recommendations  regarding changes in base salary levels are made
by  the  CEO,  the  MDC  Committee   may  take  such   actions,   including  any
modifications,  as it deems appropriate.  The CEO's  recommendations and the MDC
Committee's  actions in 1999 were based primarily on a subjective  evaluation of
past  and  potential  future  individual  performance  and  contributions,   and
alternative opportunities that might be available to the executives in question.
The  Committee  also  had  available  to it  compensation  data  from  companies
employing  executives  in positions  similar to those whose  salaries were being
reviewed as well as market  conditions  for  executives  in general with similar
skills,  background  and  performance  levels,  both  inside and  outside of the
chemicals  industry (such companies may include companies  contained in the peer
group index plotted on the Performance  Graph following this report),  and other
companies with similar financial and business characteristics as the Company, or
where the executive in question has similar  responsibilities.  In 1999, the MDC
Committee approved a base annual salary increase for Mr. Garten from $250,000 to
$325,000, and a base salary increase for Mr. Hardy from $170,000 to $200,000. No
action was taken with  respect to the base  salaries  of any of the other  named
executive officers of the Company.

Variable Compensation Plan

     Awards  under the  Variable  Compensation  Plan  constitute  a  significant
portion of an executive's  potential  annual cash  compensation  (between 0% and
150% of base  salary for the CEO and  certain  executive  officers).  Awards are
based primarily on Kronos achieving annual predetermined  operating income goals
and  secondarily,  with respect to Mr.  Hardy,  on individual  performance.  The
Company's management makes  recommendations to the Board regarding the operating
income plan for the year after  reviewing  market  conditions  and the Company's
operations,  competitive position,  marketing opportunities,  and strategies for
maximizing  financial  performance.  The Board approves this recommendation with
modifications it deems appropriate. Based on the business plan for the year, the
MDC Committee  sets the Company's and its business  segment's  operating  income
goals at three levels which are designed to help focus the Company's  executives
on achieving superior annual operating results in light of existing  conditions:
a threshold level,  which is the minimum operating income level for any award to
be made under the Variable  Compensation  Plan (the "Minimum  Level"),  a target
level (the "Target  Level"),  and a maximum  level (the  "Maximum  Level").  The
Variable  Compensation  Plan, in  combination  with base salary,  is designed to
result in executive  officers and other eligible  participants  receiving annual
cash compensation below competitive  compensation levels if the Minimum Level is
not achieved.

     Pursuant to the Variable  Compensation  Plan, if operating  income is below
the Minimum  Level,  no variable  compensation  is paid. If the Minimum Level is
met, executive officers are eligible to receive variable  compensation  payments
that in 1999  ranged  between  14% and  60% of  base  salary,  depending  on the
executive.  If the Target Level is reached,  the range of variable  compensation
payments  is higher,  and in 1999 ranged  between  22% and 100% of base  salary,
depending on the executive. If the Maximum Level is reached or exceeded,



<PAGE>



executives are eligible to receive the highest variable  compensation  payments,
and in 1999 the range of payments for which executives were eligible was between
35%  and  150%  of  base  salary,  depending  on the  executive.  In view of the
achievement of operating income above the Maximum Level during 1998, in 1999 the
MDC Committee  approved  Maximum Level payments under the Variable  Compensation
Plan to the  executive  officers,  including the CEO. Such awards to the CEO and
the four other highest paid executive  officers under the Variable  Compensation
Plan are  reported  in the bonus  column in the Summary  Compensation  Table set
forth above. In addition,  target levels for operating  income  performance were
utilized by the MDC Committee and the Board, as applicable,  for determining the
contributions by the Company to the accounts of eligible participants, including
the CEO and the executive  officers,  under the Savings Plan,  the Pension Plan,
and the SERP. See "Pension Plan" above.

Stock-Based Compensation

     The 1998 Incentive Plan further  supports the goal of maximizing  long-term
shareholder value by providing for stock-based compensation,  the value of which
is directly related to increases in shareholder  value.  Stock option grants, in
particular,  are  considered  a  significant  element  of  the  Company's  total
compensation  package  for  the  CEO and the  other  executive  officers  of the
Company.  The  Committee  believes  that  compensation  linked  to  stock  price
performance  helps focus the executives'  attention on management of the Company
from the shareholders' perspective.

     Option grants are intended to provide  incentives  to increase  shareholder
value in the future and to reward past  performance by the  executive.  In 1999,
the MDC Committee reviewed recommendations by the CEO regarding option grants to
executive  officers  other  than the CEO.  Options  were  granted  to  executive
officers,  including  the  CEO,  in the MDC  Committee's  discretion  based on a
subjective    evaluation    regarding   each    executive's    performance   and
responsibilities.  In 1999,  the MDC  Committee  included  in its  determination
regarding  the  number of  options  to be  granted  to each  executive  officer,
including  the CEO,  the  amount  and  terms  of  options  already  held by such
officers.  Grants made in 1999 are reported in the Option  Grants in Last Fiscal
Year Table set forth above.

     To help assure a focus on long-term  creation of shareholder value, the MDC
Committee  granted ten year  options,  which vest 40%,  60%, 80% and 100% on the
second,  third,  fourth  and  fifth  anniversary  dates  of the  date of  grant,
respectively.  In 1999 the MDC Committee granted options in three exercise-price
tranches.  One-third of such options granted in 1999 are exercisable at the fair
market value of the Common Stock on the date of grant. The remaining  two-thirds
of the options are  exercisable at levels that are above the market price on the
date of grant.  See the Summary  Compensation  Table above.  Although  permitted
under the  Incentive  Plan,  the MDC Committee in 1999 did not make or recommend
any grants of restricted stock, stock appreciation  rights or other equity-based
awards.

     To encourage growth in shareholder  value, the MDC Committee  believes that
executives  who are in a  position  to make a  substantial  contribution  to the
long-term  success of the Company should have a significant stake in its ongoing
success.  The MDC  Committee  has  established  goals for minimum  Common  Stock
ownership for executive  officers to encourage  executives to build their Common
Stock ownership.  The MDC Committee intends to take into consideration in making
grants of stock  options,  among other  things,  whether or not an executive has
achieved his or her ownership goals, with a new executive being allowed a period
of 5 years over which to meet his or her goal.  The table  below shows the goals
for the Company's current executive officers at year-end 1999 for minimum Common
Stock  ownership  and  year-end  market  value  of the  actual  share  ownership
(excluding unexercised options) as a multiple of 1999 base salary.




<PAGE>



                                               Year-end Market Value of Share
                                          Ownership as a Multiple of Base Salary

                                                      Actual              Goal
President and Chief Executive Officer                  6.9X                4X
Executive Vice President                               2.7X                3X
Vice Presidents:  Chief Financial Officer              3.6X                3X
                  General Counsel                      2.8X                3X
                  Controller                           1.3X                2X



Special Discretionary Bonuses

     Apart from the Variable  Compensation  Plan,  the MDC  Committee  may award
other bonuses as the  Committee  deems  appropriate  from time to time under its
general  authority  or under a  separate  discretionary  plan.  During  1999 the
Committee made no such awards.

Tax Code Limitation on Executive Compensation Deductions

     In 1993,  Congress amended the Internal Revenue Code to impose a $1 million
deduction limit on  compensation  paid to the CEO and the four other most highly
compensated   executive  officers  of  public  companies,   subject  to  certain
transition   rules  and  exceptions  for  compensation   received   pursuant  to
non-discretionary   performance-based   plans   approved   by   such   company's
shareholders.  In  1996,  the  Board  and the  Company's  shareholders  approved
amendments to the Company's Variable  Compensation Plan and Incentive Plan which
permit compensation paid or awards or grants made to executives pursuant to such
plans to continue to qualify for deductibility by the Company.

     The foregoing  report on executive  compensation  has been furnished by the
Company's MDC Committee of the Board of Directors.

                         Mr. Kenneth R. Peak (Chairman)
                           General Thomas P. Stafford




<PAGE>



                                PERFORMANCE GRAPH

     Set  forth  below  is a line  graph  comparing  the  yearly  change  in the
cumulative total  shareholder  return on the Common Stock against the cumulative
total  return of the S & P  Composite  500 Stock  Index and the S & P  Chemicals
Index for the period commencing  December 31, 1994 and ending December 31, 1999.
The graph  shows the value at  December  31 of each year  assuming  an  original
investment  of $100 and  reinvestment  of dividends and other  distributions  to
shareholders.

     [GRAPHIC  OMITTED - GRAPH  DESCRIPTION]  a line graph  plotting  the points
shown in the chart  below which  compares  the yearly  percentage  change in the
cumulative total  shareholder  return on the Common Stock against the cumulative
total return of the S & P Composite 500 Stock Index and S & P Chemical Index for
the period commencing December 31, 1994 and ending December 31, 1999.



<TABLE>
<CAPTION>
                            1994      1995     1996      1997      1998    1999
                            ----      ----     ----      ----      ----    ----
<S>                         <C>       <C>      <C>       <C>       <C>     <C>
NL Industries, Inc.         $100      $ 96     $ 88      $111      $116    $125
S & P 500                   $100      $138     $169      $226      $290    $351
S & P Chemicals Index       $100      $131     $173      $212      $193    $253

</TABLE>


                     CERTAIN RELATIONSHIPS AND TRANSACTIONS

Relationships with Related Parties

     As set forth under the caption  "Security  Ownership,"  Harold C.  Simmons,
through  Valhi and  Tremont,  may be deemed to control NL. The Company 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,  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  which  resulted  in the  acquisition  by one  related  party  of a
publicly-held equity interest in another related party. The Company from time to
time considers,  reviews and evaluates,  and understands that Contran, Valhi and
related entities consider,  review and evaluate,  such  transactions.  Depending
upon the business,  tax and other objectives then relevant,  including,  without
limitation,  restrictions  under certain  indentures and other agreements of the
Company,  it is possible  that the Company  might be a party to one or more such
transactions  in the  future.  It is the  policy  of the  Company  to  engage in
transactions  with related parties on terms,  in the opinion of the Company,  no
less favorable to the Company than could be obtained from unrelated parties.

     Harold C.  Simmons  and Glenn R.  Simmons,  each a director of NL, are also
directors of Valhi and Contran.  Each of the foregoing  persons and Mr.  Martin,
General  Stafford,  and Ms. Alderton are directors of Tremont.  Mr. Martin,  the
Company's President and Chief Executive Officer,  serves as an executive officer
and director of Tremont and TIMET. Mr. Compofelice serves as a director of TIMET
and assistant treasurer of the



<PAGE>



Company and served as an executive  officer of Tremont and TIMET until 1998.  In
addition,  Mr.  Compofelice  served as an  executive  officer  of Valhi in 1998.
General  Stafford  serves as director of TIMET.  Mr.  Garten serves as assistant
secretary of Tremont, and Mr. Hardy serves as assistant treasurer of Tremont and
TIMET.  Such persons  served in their  current  capacities in 1999 and expect to
continue  to  serve  in  their  current  capacities  in  2000.  Such  management
interrelationships  and the existing  intercorporate  relationships  may lead to
possible  conflicts of interest.  These  possible  conflicts  may arise from the
duties of loyalty owed by persons acting as corporate fiduciaries of two or more
companies under  circumstances  where such companies may have adverse interests.
Mr.  Martin  devotes  approximately  one-half of his working  time to NL and the
remainder  of his working time to TIMET and  Tremont.  See "Certain  Contractual
Relationships and Transactions" below.

     Although no specific  procedures  are in place that govern the treatment of
transactions among the Company,  Valhi, TIMET, Tremont and related entities, the
boards of directors of the Company, Valhi, TIMET and Tremont include one or more
members who are not officers or directors of any other entity that may be deemed
to be related to the Company. Additionally,  under applicable principles of law,
in the absence of  shareholder  ratification  or approval  by  directors  of the
Company who may be deemed disinterested,  transactions involving contracts among
the Company and any other  companies  under common control with the Company must
be fair to all companies involved. Furthermore, each director and officer of the
Company owes fiduciary duties of good faith and fair dealing with respect to all
shareholders of the company or companies for which they serve.


Certain Contractual Relationships and Transactions

     Intercorporate Services Agreements.  The Company and Contran are parties to
an intercorporate  services  agreement (the "Contran ISA") whereby Contran makes
available  to the Company the  services of Harold C. Simmons to consult with the
Company  and  assist in the  development  and  implementation  of the  Company's
strategic  plans and  objectives.  The services do not include  major  corporate
acquisitions,  divestitures  and other special projects outside the scope of the
Company's  business  as it has  been  conducted  in the  past.  NL paid  Contran
approximately  $950,00 in 1999 for  services  pursuant  to the  Contran  ISA and
expects to pay  approximately  the same  amount in 2000 for such  services.  The
Contran  ISA is subject to  automatic  renewal and may be  terminated  by either
party pursuant to a written notice delivered 30 days prior to a quarter-end. The
Company will continue to pay directors'  fees and expenses  separately to Harold
C. Simmons.  See  "Compensation  of Directors  and Executive  Officers and Other
Information" above.

     The Company and Valhi are parties to an intercorporate  services  agreement
(the "Valhi ISA")  whereby  Valhi  renders  certain  management,  financial  and
administrative  services  to  the  Company  and NL  provided  to  Valhi  certain
insurance  and risk  management  services.  The  Company  paid total net fees of
approximately $114,000 to Valhi for services provided during 1999. NL expects to
pay  approximately  the same amount or lower for services in 2000. The Valhi ISA
is subject to automatic  renewal and may be terminated by either party  pursuant
to a written notice delivered 30 days prior to a quarter-end.

     The Company and Tremont are parties to an intercorporate services agreement
(the  "Tremont  ISA")  whereby the Company  makes  available to Tremont  certain
services  with  respect to  Tremont's  tax,  insurance,  risk  management,  real
property and internal audit needs. Tremont paid fees of approximately $85,000 to
the Company for services  pursuant to the Tremont ISA during  1999.  The Tremont
ISA is  subject to  automatic  renewal  and may be  terminated  by either  party
pursuant  to a written  notice  delivered  30 days  prior to a  quarter-end.  NL
expects to receive  approximately the same amount for services to be provided to
Tremont in 2000.

     The Company and TIMET are parties to an intercorporate  services  agreement
(the "TIMET ISA") whereby the Company makes available to TIMET certain  services
with respect to TIMET's tax,  insurance,  risk  management,  real property,  and
internal audit needs. TIMET paid fees of approximately $392,000 for services



<PAGE>


pursuant  to the TIMET ISA during  1999.  The TIMET ISA is subject to  automatic
renewal and may be  terminated  by either  party  pursuant  to a written  notice
delivered 30 days prior to a  quarter-end.  NL expects to receive  approximately
the same amount for services to be provided to TIMET in 2000.

     The Company and CompX are parties to an intercorporate  services  agreement
(the "CompX ISA") whereby the Company makes available to CompX certain  services
with respect to CompX's  occupancy,  accounting,  computer  support and internal
audit needs. CompX paid fees of approximately  $173,000 for services pursuant to
the CompX ISA during 1999. The CompX ISA is subject to automatic renewal and may
be terminated  by either party  pursuant to a written  notice  delivered 30 days
prior to a quarter-end.  NL expects to receive approximately the same amount for
services to be provided to CompX in 2000.

     Aircraft.  In February 1999, the Company  purchased for $2.85 million a 25%
undivided  interest in an aircraft.  The seller of the aircraft  interest to the
Company  reacquired  the interest from TIMET in February 1999 for $2.85 million.
The purchase of the aircraft  interest was  unanimously  approved by the outside
directors of the Board. During 1999, the Company charged $58,824,  $35,648,  and
$10,908 to TIMET, CompX and Keystone,  respectively, for use of the aircraft and
the Company paid TIMET $86,418 for the use of a TIMET owned  aircraft.  In 1998,
TIMET paid the Company  $271,405 and the Company paid TIMET $10,892 for aircraft
usage.

     Insurance  Brokerage  Commissions.  EWI RE, Inc.  ("EWI")  arranges for and
brokers certain of the Company's  insurance  policies and those of the Company's
50%-owned  joint venture.  Parties related to Contran own 90% of the outstanding
common  stock  of EWI,  and a  son-in-law  of  Harold  C.  Simmons  manages  the
operations of EWI. Consistent with insurance industry practices,  EWI receives a
commission from the insurance  underwriters for the policies that it arranges or
brokers.  The Company and its joint  venture paid an aggregate of  approximately
$3.7  million  for such  policies in 1999,  which  amount  principally  included
payments for  reinsurance  premiums  paid to third  parties,  but also  included
commissions paid to EWI. In the Company's opinion,  the amounts that the Company
and its joint venture paid for these  insurance  policies are reasonable and the
terms are similar to those the Company and its joint venture could have obtained
through  an  unrelated   insurance  broker.   The  Company  expects  that  these
relationships with EWI will continue in 2000.

     Tremont Registration Rights Agreement. In connection with the 1991 purchase
by Tremont of 7.8 million shares of Common Stock from Valhi, the Company entered
into a Registration  Rights Agreement pursuant to which Tremont received certain
registration   rights  with  respect  to  the  purchased   shares.   Unless  all
registration  rights are exercised  earlier,  such agreement expires in December
2001.

     Insurance Sharing Agreement. An insurance subsidiary of Tremont has assumed
the  obligations of the issuer of certain  reinsurance  contracts that relate to
primary insurance policies issued by a third-party insurance company in favor of
Tremont and the Company.  The Company and the Tremont  insurance  subsidiary are
parties to an  insurance  sharing  agreement  with  respect to such  reinsurance
contracts (the "Insurance Sharing Agreement").  Under the terms of the Insurance
Sharing Agreement,  the Company will reimburse the Tremont insurance  subsidiary
with respect to certain loss payments and reserves  established  by such Tremont
subsidiary that (a) arise out of claims against the Company and its subsidiaries
(the  "NL  Liabilities"),  and (b)  are  subject  to  payment  by  such  Tremont
subsidiary  under  its  reinsurance  contracts  with the  third-party  insurance
company. Also pursuant to the Insurance Sharing Agreement, the Tremont insurance
subsidiary is to credit the Company with respect to certain underwriting profits
or recoveries that such Tremont subsidiary receives from independent  reinsurers
that relate to the NL  Liabilities.  As of December  31,  1999,  the Company had
current  accounts  payable to such  Tremont  subsidiary  of  approximately  $2.9
million with respect to such  Agreement.  At December 31, 1999,  the Company had
$9.7 million of  restricted  cash  equivalents  that  collateralized  letters of
credit  relating to the NL Liabilities  issued and  outstanding on behalf of the
insurance subsidiary of Tremont pursuant to the Insurance Sharing Agreement.




<PAGE>



                             INDEPENDENT ACCOUNTANTS

     The firm of  PricewaterhouseCoopers  LLP served as independent  auditors of
the  Company  for the year  ended  December  31,  1999,  and is  expected  to be
considered  for  appointment  to serve for the year  ended  December  31,  2000.
Representatives  of  PricewaterhouseCoopers  LLP are not  expected to attend the
Annual Meeting.


                  SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING

     In order to be included in the Company's  2001 Proxy  Statement and form of
proxy, shareholder proposals for the 2001 Annual Meeting of Shareholders must be
received at the principal  executive  offices of the Company,  16825  Northchase
Drive,  Suite 1200,  Houston,  Texas  77060,  Attention:  Mr.  David B.  Garten,
Secretary, not later than December 15, 2000. All such proposals shall be treated
in accordance with applicable rules administered by the Commission.


                         1999 ANNUAL REPORT ON FORM 10-K

     A copy of the Company's  1999 Annual Report on Form 10-K, as filed with the
Commission,  may be  obtained  without  charge by  writing:  Investor  Relations
Department,  NL Industries,  Inc., 16825 Northchase Drive, Suite 1200,  Houston,
Texas 77060.

                                  OTHER MATTERS

     The Board does not know of any business except as described above which may
be  presented  for  consideration  at the Annual  Meeting.  If any  business not
described  in this  Proxy  Statement  should  properly  come  before  the Annual
Meeting,  the persons  designated as agents in the enclosed proxy card or voting
instruction  form will vote on those  matters  in  accordance  with  their  best
judgment.

                                        NL INDUSTRIES, INC.



Houston, Texas
March 27, 2000





<PAGE>
                                   APPENDIX A


                               NL INDUSTRIES, INC.

                       16825 NORTHCHASE DRIVE, SUITE 1200
                              HOUSTON, TEXAS 77060

             PROXY FOR ANNUAL MEETING OF SHAREHOLDERS, MAY 10, 2000

The undersigned  hereby appoints David B. Garten and Robert D. Hardy and each of
them, the proxy and  attorney-in-fact  for the  undersigned,  with full power of
substitution  in each, to represent the undersigned and to vote on behalf of the
undersigned at the Annual Meeting of Shareholders  of NL Industries,  Inc. to be
held on May 10, 2000,  and at any  adjournment or  postponement  of such meeting
(the  "Annual  Meeting"),  all  shares of Common  Stock of NL  Industries,  Inc.
standing in the name of the undersigned or which the undersigned may be entitled
to vote on the matters described on the reverse side.

THIS PROXY IS SOLICITED  ON BEHALF OF THE BOARD OF  DIRECTORS OF NL  INDUSTRIES,
INC.

You are  encouraged  to specify your voting  choices by marking the  appropriate
boxes on the  reverse  side of this  card but you need not mark any boxes if you
wish to vote in  accordance  with the Board of Directors'  recommendations.  The
above-named  proxies cannot vote your shares unless you sign,  date and promptly
return this card.  Please use the enclosed  return  envelope.  This proxy may be
revoked by a proxy  accepted at a later date or otherwise as set forth in the NL
Proxy Statement that accompanied this proxy card.


                                            SEE REVERSE
                                            SIDE

<PAGE>

/X/          Please mark your votes as in this example

This  proxy,  if  properly  executed,  will be voted as  specified  below by the
shareholder.  If no  direction  is given,  this  proxy  will be voted  "FOR" all
nominees for Director listed below.

The Board of Directors  recommends a vote "FOR" all nominees for Director listed
below.

1.   Election of Directors.

     For    Withheld  Election of Directors.
    /  /     /   /    Nominees: 01. Joseph S. Compofelice, 02. J. Landis Martin,
                                03. Kenneth R. Peak, 04. Glenn R. Simmons,
                                05. Harold C. Simmons, 06. General Thomas P.
                                Stafford, and 07. Lawrence A. Wigdor


Withhold authority to vote for the following individual nominees:

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

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


               Please sign exactly as  shareholder's  name appears on this card.
               Joint  owners  should  each  sign.   When  signing  as  attorney,
               executor,  administrator,  trustee or guardian,  please give full
               title as such. If a corporation or partnership,  please sign full
               corporate or partnership  name and sign authorized  person's name
               and title.

               The undersigned shareholder hereby revokes all proxies heretofore
               given by the  undersigned  to vote at the  Annual  Meeting or any
               adjournments or postponements thereof.


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


                                       ----------------------------------------
                                        SIGNATURE(S)               DATE

<PAGE>

Dear Stockholder:

     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 the  telephone.  This  eliminates the need to return the
proxy card.

     To vote your shares electronically, you must use the control number printed
in the box above, just below the perforation.  The series of numbers that appear
in the box above must be used to access the system.

     To vote over the Internet:

     Log on to the  Internet  and go the Web site  http://www/eproxyvote.com/nl.
     Internet voting will be available until 12:01 A.M. on May 10, 2000.

     To vote over the telephone: 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 10, 2000

     Non-U.S. stockholders should call 1-201-536-8073

     Your  electronic vote authorizes the names Proxies in the same manner as if
you marked,  signed,  dated and returned the proxy card. If you vote your shares
electronically, do not mail back your proxy card.

                  Your vote is important. Thank you for voting.