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                                                                    EXHIBIT 10.6


                   HYDRIL COMPANY EMPLOYEE STOCK PURCHASE PLAN

                           (Effective October 1, 2000)

1. PURPOSE

         The Hydril Company Employee Stock Purchase Plan (the "Plan") is
designed to encourage and assist all employees of Hydril Company ("Hydril") and
its Subsidiaries (as defined in Section 4) (hereinafter collectively referred to
as the "Company"), where permitted by applicable laws and regulations, to
acquire an equity interest in Hydril through the purchase of shares of common
stock, $0.50 par value, of Hydril ("Common Stock"). It is intended that this
Plan shall constitute an "employee stock purchase plan" within the meaning of
Section 423 of the Internal Revenue Code of 1986, as amended (the "Code").

2. ADMINISTRATION OF THE PLAN

         The Plan shall be administered and interpreted by the Compensation
Committee (the "Committee") of the Board of Directors of Hydril (the "Board").
The Committee shall supervise the administration and enforcement of the Plan
according to its terms and provisions and shall have all powers necessary to
accomplish these purposes and discharge its duties hereunder including, but not
by way of limitation, the power to (i) employ and compensate agents of the
Committee for the purpose of administering the accounts of participating
employees; (ii) construe or interpret the Plan; (iii) determine all questions of
eligibility; and (iv) compute the amount and determine the manner and time of
payment of all benefits according to the Plan.

         The Committee may act by decision of a majority of its members at a
regular or special meeting of the Committee or by decision reduced to writing
and signed by all members of the Committee without holding a formal meeting.

3. NATURE AND NUMBER OF SHARES

         The Common Stock subject to issuance under the terms of the Plan shall
be shares of Hydril's authorized but unissued shares, previously issued shares
reacquired and held by Hydril or shares purchased on the open market. Subject to
Section 16, the aggregate number of shares which may be issued under the Plan
shall not exceed 220,000 shares of Common Stock. All shares purchased under the
Plan, regardless of source, shall be counted against the 220,000 share
limitation.

4. ELIGIBILITY REQUIREMENTS

         Each Employee (as hereinafter defined), except as described in the next
following paragraph, shall become eligible to participate in the Plan in
accordance with Section 5 on the first




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Enrollment Date (as defined therein) following employment by the Company.
Participation in the Plan is voluntary.

         The following Employees are not eligible to participate in the Plan:

                  (i) Employees who would, immediately upon enrollment in the
         Plan, own directly or indirectly, or hold options or rights to acquire,
         an aggregate of five percent or more of the total combined voting power
         or value of all outstanding shares of all classes of Hydril or any
         Subsidiary (in determining stock ownership of an individual, the rules
         of Section 424(d) of the Code shall be applied, and the Committee may
         rely on representations of fact made to it by the Employee and believed
         by it to be true);

                  (ii) Employees who are customarily employed by the Company
         less than 20 hours per week or less than 5 months in any calendar year;
         and

                  (iii) Employees who have not completed at least 30 days of
         service with the Company as of an Enrollment Date.

         "Employee" means any individual who (i) is employed full-time by Hydril
or any Subsidiary (as hereinafter defined), regardless of whether such
individual is working in the United States or internationally, (ii) is a United
States resident, and (iii) is paid on the United States payroll. "Subsidiary"
means any corporation (a) which is in an unbroken chain of corporations
beginning with Hydril if, on or after the Effective Date, each of the
corporations other than the last corporation in the chain owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain and (b) which has been
identified by the Committee prior to the beginning of a Purchase Period as being
eligible to participate in the Plan for that Purchase Period.

5. ENROLLMENT

         Each eligible Employee of Hydril or any Subsidiary as of October 1,
2000 (the "Effective Date") may enroll in the Plan as of the Effective Date.
Each other eligible Employee of Hydril or a Subsidiary who thereafter becomes
eligible to participate may enroll in the Plan on the first day of the Purchase
Period immediately following the date he first meets the eligibility
requirements of Section 4. Any eligible Employee not enrolling in the Plan when
first eligible may enroll in the Plan on the first day of any subsequent
Purchase Period for which he is eligible to participate. Any eligible Employee
may enroll or re-enroll in the Plan on the dates hereinabove prescribed or such
other specific dates established by the Committee from time to time ("Enrollment
Dates"). In order to enroll, an eligible Employee must complete, sign and submit
the appropriate form to the person designated by the Committee.

6. METHOD OF PAYMENT

         Payment for shares is to be made as of the applicable Purchase Date (as
defined in Section 9) through payroll deductions on an after-tax basis (with no
right of prepayment) over the



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Plan's designated purchase period (the "Purchase Period"), with the first such
deduction commencing with the first payroll period ending after the Enrollment
Date. Each Purchase Period under the Plan shall be such period as the Committee
may prescribe. However, in no event shall the Committee, in the exercise of its
discretion, designate a Purchase Period that could extend beyond 27 months from
any applicable Enrollment Date or otherwise fail to meet the requirements of
Section 423(b)(7) of the Code. Each participating Employee (hereinafter referred
to as a "Participant") will authorize such deductions from his pay for each
month during the Purchase Period and such amounts will be deducted in conformity
with his employer's payroll deduction schedule.

                  Each Participant may elect to make contributions each pay
period in amounts not less than one percent of the Participant's base salary
rate, not to exceed an annual contribution equal to ten percent of the
Participant's base salary rate (or such other dollar amounts as the Committee
may establish from time to time before an Enrollment Date for all purchases to
occur during the relevant Purchase Period). In establishing other dollar amounts
of permitted contributions, the Committee may take into account the Maximum
Share Limitation (as defined in Section 8). The rate of contribution shall be
designated by the Participant in the enrollment form.

                  A Participant may elect to increase or decrease the rate of
contribution effective as of the first day of the Purchase Period by giving
prior written notice to the person designated by the Committee on the
appropriate form. A Participant may not elect to increase or decrease the rate
of contribution during a Purchase Period. A Participant may suspend payroll
deductions at any time during the Purchase Period, by giving prior written
notice to the person designated by the Committee on the appropriate form. If a
Participant elects to suspend his payroll deductions, such Participant's account
will be used to purchase stock at the end of the Purchase Period to the extent
of contributions made during the Purchase Period prior to the suspension. A
Participant may also elect to withdraw his total contributions for the current
Purchase Period by giving prior written notice by such date as the Committee
shall establish to the person designated by the Committee on the appropriate
form. If a Participant timely elects to withdraw his contributions from the
Plan, he will receive in cash, as soon as administratively feasible, all funds
credited to his account during that Purchase Period. Any Participant who
suspends payroll deductions or timely elects to withdraw his contributions
during any Purchase Period cannot resume payroll deductions during such Purchase
Period and must re-enroll in the Plan in order to participate in the next
Purchase Period for which he is eligible to participate.

         Except in case of timely election to withdraw contributions,
resignation or other terminating event, the amount in a Participant's account at
the end of the Purchase Period will be applied to the purchase of the shares.

7. CREDITING OF CONTRIBUTIONS AND PAYMENT OF DIVIDENDS

         Contributions shall be credited to a Participant's account as soon as
administratively feasible after payroll withholding. Any such contributions
shall be deposited in or held by a bank or financial institution designated by
the Committee for this purpose (the "Custodian"). Dividends on shares held in a
Participant's account in the Plan will be paid directly to such Participant.
Interest will not be credited to a Participant's account.



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8. GRANT OF RIGHT TO PURCHASE SHARES ON ENROLLMENT

         Enrollment in the Plan by an eligible Employee on an Enrollment Date
will constitute the grant by Hydril to the Participant of the right to purchase
shares of Common Stock under the Plan. Re-enrollment by a Participant in the
Plan will constitute a grant by Hydril to the Participant of a new opportunity
to purchase shares on the Enrollment Date on which such re-enrollment occurs. A
Participant who has not (a) terminated employment or (b) made a timely election
to withdraw his Plan contributions for the current Purchase Period (in
accordance with Section 6), will have shares of Common Stock purchased for him
on the applicable Purchase Date, and he will automatically be re-enrolled in the
Plan on the Enrollment Date immediately following the Purchase Date on which
such purchase has occurred, unless (x) the Participant notifies the person
designated by the Committee on the appropriate form that he elects not to
re-enroll or (y) the Participant is not an eligible Employee for purposes of the
immediately following Purchase Period.

         Each right to purchase shares of Common Stock under the Plan during a
Purchase Period shall have the following terms:

                  (i) the right to purchase shares of Common Stock during a
         particular Purchase Period shall expire on the earlier of: (A) the
         completion of the purchase of shares on the Purchase Date occurring in
         the Purchase Period, or (B) the date on which participation of such
         Participant in the Plan terminates for any reason;

                  (ii) payment for shares purchased will be made only through
         payroll withholding in accordance with Sections 6 and 7;

                  (iii) purchase of shares will be accomplished only in
         accordance with Section 9;

                  (iv) the price per share will be determined as provided in
         Section 9;

                  (v) the right to purchase shares (taken together with all
         other such rights then outstanding under this Plan and under all other
         similar stock purchase plans of Hydril or any Subsidiary) will in no
         event give the Participant the right to purchase a number of shares
         during a calendar year in excess of the number of shares of Common
         Stock derived by dividing $25,000 by the fair market value of the
         Common Stock (the "Maximum Share Limitation") on the applicable Grant
         Date determined in accordance with Section 9;

                  (vi) shares purchased under this Plan may not be sold within
         150 days of the Purchase Date, or such longer period as may be required
         under applicable insider trading or other securities laws and
         regulations unless the Committee, in its sole discretion, waives this
         requirement to the extent permissible under such applicable laws and
         regulations; and



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                  (vii) the right to purchase shares will in all respects be
         subject to the terms and conditions of the Plan, as interpreted by the
         Committee, in its sole discretion, from time to time.

9. PURCHASE OF SHARES

         The right to purchase shares of Common Stock granted by Hydril under
the Plan is for the term of a Purchase Period. The fair market value of the
Common Stock ("Fair Market Value") as of a specific date will be the closing
price per share of the Common Stock as reported by the Nasdaq National Market on
such date (unless such date is not a trading day, in which case the next
preceding trading day will be used) or such other trading date designated by the
Committee. The Fair Market Value of the Common Stock will be determined (i) as
of the first day of the applicable Purchase Period (the "Grant Date") and (ii)
as of the last day of the applicable Purchase Period (the "Purchase Date").
These dates constitute the date of grant and the date of exercise for valuation
purposes of Section 423 of the Code.

         As of the Purchase Date, the Committee shall apply the funds then
credited to each Participant's account to the purchase of whole and fractional
shares of Common Stock. The cost to the Participant for the shares purchased
during a Purchase Period shall be the lower of:

                  (i) eighty-five percent of the Fair Market Value of Common
         Stock on the Grant Date; or

                  (ii) eighty-five percent of the Fair Market Value of Common
         Stock on the Purchase Date.

         Hydril will deliver certificates evidencing shares purchased to the
Custodian or to any other bank or financial institution designated by the
Committee for this purpose as soon as administratively feasible after the
Purchase Date. Notwithstanding the foregoing, Participants shall be treated as
the record owners of their shares effective as of the Purchase Date. Shares that
are held by the Custodian or any other designated bank or financial institution
shall be held in book entry form. If for any reason the purchase of shares with
a Participant's contributions to the Plan exceeds or would exceed the Maximum
Share Limitation, such excess amounts shall be refunded to the Participant as
soon as practicable after such excess has been determined to exist.

         If as of any Purchase Date the shares authorized for purchase under the
Plan are exceeded, enrollments shall be reduced proportionately to eliminate the
excess. Any funds that cannot be applied to the purchase of shares due to excess
enrollment shall be refunded as soon as administratively feasible. The Committee
in its discretion may also provide that excess enrollments may be carried over
to the next Purchase Period under this Plan or any successor plan according to
the regulations set forth under Section 423 of the Code.

10. MANNER OF WITHDRAWAL OF SHARES



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         A Participant may elect to withdraw at any time (without withdrawing
from participation in the Plan), and to receive a certificate for, the number of
shares which have been held in his account for at least 150 days after such
shares were purchased, by giving notice to the person designated by the
Committee on the appropriate form. Upon receipt of such notice from the person
designated by the Committee, the Custodian, bank or other financial institution
designated by the Committee for this purpose will arrange for the issuance and
delivery of such shares held in the Participant's account as soon as
administratively feasible.

         This 150 day holding requirement may be waived by the Committee, in its
sole discretion. Until such certificates are distributed to the Participant, the
Participant will not be permitted to transfer ownership of the certificates
except as contemplated by Section 14 of the Plan.

11. TERMINATION OF PARTICIPATION

         The right to participate in the Plan terminates immediately when a
Participant ceases to be employed by the Company for any reason whatsoever
(including death, total and permanent disability, retirement or when the
Participant's employer ceases to be a Subsidiary). Participation also terminates
immediately when the Participant makes a timely election to withdraw his
contributions for the current Purchase Period (in accordance with Section 6). A
Participant whose participation in the Plan has not terminated and who has not
suspended his payroll deductions during a Purchase Period will automatically be
re-enrolled in the Plan for the next Purchase Period, unless (x) such eligible
Employee notified the person designated by the Committee on the appropriate form
that he elects not to re-enroll or (y) such individual is not an eligible
Employee for purposes of the immediately following Purchase Period.
Participation terminates immediately after the Purchase Date if the Participant
elects not to re-enroll in the Plan for the next Purchase Period or if the
Participant has suspended payroll deductions during any Purchase Period and has
not re-enrolled in the Plan for the next Purchase Period or, if the Participant
is not an eligible Employee for purposes of the immediately following Purchase
Period. As soon as administratively feasible after termination of participation,
the Committee shall pay (in cash) to the Participant or his beneficiary or legal
representative all funds credited to his account; provided, however, that a
Participant whose termination of participation occurs due to his retirement will
be given the option of having shares of Common Stock purchased for him under the
Plan (to the extent of contributions made to the Plan prior to such termination)
as of the date of the Participant's retirement. Such date, as determined by the
Committee in its sole discretion, to be the Participant's Purchase Date for that
particular Purchase Period. The Participant may elect to receive a certificate
for the number of shares held in his account for at least 150 days after such
shares were purchased (unless the 150 day holding requirement is waived by the
Committee in its sole discretion), in accordance with Section 10 of the Plan.
For purposes of the Plan, a Participant is not deemed to have terminated his
employment if he transfers employment from Hydril to a Subsidiary, or vice
versa, or transfers employment between Subsidiaries.

12. UNPAID LEAVE OF ABSENCE

         Unless the Participant has made a timely election to withdraw his
contributions for that Purchase Period, shares will be purchased for his account
on the Purchase Date next following



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commencement of an unpaid leave of absence by such Participant, provided such
leave does not constitute a termination of employment. The number of shares to
be purchased will be determined by applying to the purchase the amount of the
Participant's contributions made up to the commencement of such unpaid leave of
absence. If the Participant's unpaid leave of absence both commences and
terminates during the same Purchase Period and he has resumed eligible
employment prior to the Purchase Date related to that Purchase Period, he may
also resume payroll deductions immediately, and shares will be purchased for him
on such Purchase Date as otherwise provided in Section 9.

13. DESIGNATION OF BENEFICIARY

         Each Participant may designate one or more beneficiaries in the event
of death and may, in his sole discretion, change such designation at any time.
Any such designation shall be effective upon receipt by the person designated by
the Committee and shall control over any disposition by will or otherwise.

         As soon as administratively feasible after the death of a Participant,
amounts credited to his account shall be paid in cash and a certificate for any
shares shall be delivered to the Participant's designated beneficiaries or, in
the absence of such designation, to the executor, administrator or other legal
representative of the Participant's estate. Such payment shall relieve the
Company of further liability to the deceased Participant with respect to the
Plan. If more than one beneficiary is designated, each beneficiary shall receive
an equal portion of the account unless the Participant has given express
contrary instructions.

14. ASSIGNMENT

         Except as provided in Section 13, the rights of a Participant under the
Plan will not be assignable or otherwise transferable by the Participant, other
than by will or the laws of descent and distribution. No purported assignment or
transfer of such rights of a Participant under the Plan, whether voluntary or
involuntary, by operation of law or otherwise, shall vest in the purported
assignee or transferee any interest or right therein whatsoever, but immediately
upon such assignment or transfer, or any attempt to make the same, such rights
shall terminate and become of no further effect. If this provision is violated,
the Participant's election to purchase Common Stock shall terminate, and the
only obligation of the Company remaining under the Plan will be to pay to the
person entitled thereto the amount then credited to the Participant's account.
No Participant may create a lien on any funds, securities, rights or other
property held for the account of the Participant under the Plan, except to the
extent that there has been a designation of beneficiaries in accordance with the
Plan, and except to the extent permitted by will or the laws of descent and
distribution if beneficiaries have not been designated. A Participant's right to
purchase shares under the Plan shall be exercisable only during the
Participant's lifetime and only by him.

15. COSTS

         All costs and expenses incurred in administering this Plan shall be
paid by Hydril. Any brokerage fees for the sale of shares purchased under the
Plan shall be paid by the Participant.



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16. ADJUSTMENTS

         (a) The existence of outstanding rights to purchase shares pursuant to
this Plan shall not affect in any manner the right or power of Hydril or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the capital stock of Hydril or its business
or any merger or consolidation of Hydril, or any issue of bonds, debentures,
preferred or prior preference stock (whether or not such issue is prior to, on a
parity with or junior to the existing Common Stock) or the dissolution or
liquidation of Hydril, or any sale or transfer of all or any part of its assets
or business, or any other corporate act or proceeding of any kind, whether or
not of a character similar to that of the acts or proceedings enumerated above.

         (b) In the event of any subdivision or consolidation of outstanding
shares of Common Stock, declaration of a dividend payable in shares of Common
Stock or other stock split, then (i) the number of shares of Common Stock
reserved under this Plan, (ii) the number of shares of Common Stock covered by
outstanding rights to purchase shares, (iii) the price in respect of such rights
to purchase shares, and (iv) the appropriate Fair Market Value and other price
determinations for such rights to purchase shares shall each be proportionately
adjusted by the Board as appropriate to reflect such transaction. In the event
of any other recapitalization or capital reorganization of Hydril, any
consolidation or merger of Hydril with another corporation or entity, the
adoption by Hydril of any plan of exchange affecting Common Stock or any
distribution to holders of Common Stock of securities or property (other than
normal cash dividends or dividends payable in Common Stock), the Board shall
make appropriate adjustments to (i) the number of shares of Common Stock covered
by outstanding rights to purchase shares, (ii) the price in respect of such
rights to purchase shares, and (iii) the appropriate Fair Market Value and other
price determinations for such rights to purchase shares to reflect such
transaction; provided that such adjustments shall only be such as are necessary
to maintain the proportionate interest of the holders of the outstanding rights
to purchase shares and preserve, without increasing, the value of such rights to
purchase shares. In the event of a corporate merger, consolidation, acquisition
of property or stock, separation, reorganization or liquidation, the Board shall
be authorized (x) to issue or assume outstanding rights to purchase shares by
means of substitution of new rights to purchase shares, as appropriate, as part
of such adjustment or (y) to cancel outstanding rights to purchase shares and
give the Participants who are the holders of such rights to purchase shares
notice and opportunity to exercise for 30 days prior to such cancellation.

17. REPORTS

         As soon as practicable following the end of each Purchase Period,
Hydril shall provide or cause to be provided to each Participant a report of his
contributions and the number of whole and fractional shares of Common Stock
purchased with such contributions by that Participant on each Purchase Date.

18. EQUAL RIGHTS AND PRIVILEGES

         All eligible Employees shall have equal rights and privileges with
respect to the Plan so that the Plan qualifies as an "employee stock purchase
plan" within the meaning of Section 423 or any successor provision of the Code
and related regulations. Any provision of the Plan which is



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inconsistent with Section 423 or any successor provision of the Code shall
without further act or amendment by Hydril be reformed to comply with the
requirements of Section 423. This Section 18 shall take precedence over all
other provisions in the Plan.

19. RIGHTS AS STOCKHOLDERS

         A Participant will have no rights as a shareholder under the election
to purchase until he becomes a shareholder as herein provided. A Participant
will become a shareholder with respect to shares for which payment has been
completed as provided in Section 9 at the close of business on the last trading
day of the Purchase Period.

20. MODIFICATION AND TERMINATION

         The Board may amend, modify or terminate the Plan at any time insofar
as permitted by law. The Committee may amend the Plan at any time insofar as
permitted by law. No amendment shall be effective unless within one year after
it is adopted by the Board or the Committee, as applicable, it is approved by
the holders of Hydril's outstanding shares if and to the extent such amendment
is required to be approved by stockholders in order to cause the rights granted
under the Plan to purchase shares of Common Stock to meet the requirements of
Section 423 of the Code (or any successor provision).

         The Plan shall terminate after all Common Stock issued under the Plan
has been purchased, unless terminated earlier by the Board or unless additional
Common Stock is issued under the Plan with the approval of the stockholders. In
the event the Plan is terminated, the Committee may elect to terminate all
outstanding rights to purchase shares under the Plan either immediately or upon
completion of the purchase of shares on the next Purchase Date, unless the
Committee has designated that the right to make all such purchases shall expire
on some other designated date occurring prior to the next Purchase Date. If the
rights to purchase shares under the Plan are terminated prior to expiration, all
funds contributed to the Plan which have not been used to purchase shares shall
be returned to the Participants as soon as administratively feasible.



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21. BOARD AND SHAREHOLDER APPROVAL; EFFECTIVE DATE

         This Plan shall be effective as of the Effective Date. Notwithstanding
the foregoing, the adoption of this Plan is expressly conditioned upon the
approval of (i) the Board and (ii) the holders of a majority of shares of
outstanding shares of Common Stock, on or before the date that is one year from
the Effective Date. If the Board or the stockholders of Hydril should fail so to
approve this Plan on or before such date, this Plan shall terminate and cease to
be of any further force or effect and all purchases of shares of Common Stock
under the Plan shall be null and void.

22. GOVERNMENTAL APPROVALS OR CONSENTS

         This Plan and any offering or sale made to Employees under it are
subject to any governmental approvals or consents that may be or become
applicable in connection therewith. Subject to the provisions of Section 20, the
Board and the Committee may make such changes in the Plan and include such terms
in any offering under the Plan as may be desirable to comply with the rules or
regulations of any governmental authority.

23. LISTING OF SHARES AND RELATED MATTERS

         If at any time the Board or the Committee shall determine, based on
opinion of legal counsel, that the listing, registration or qualification of the
shares covered by the Plan upon any national securities exchange or reporting
system or under any state or federal law is necessary or desirable as a
condition of, or in connection with, the sale or purchase of shares under the
Plan, no shares will be sold, issued or delivered unless and until such listing,
registration or qualification shall have been effected or obtained, or otherwise
provided for, free of any conditions not acceptable to legal counsel.

24. EMPLOYMENT RIGHTS

         The Plan shall neither impose any obligation on Hydril or on any
Subsidiary to continue the employment of any Participant, nor impose any
obligation on any Participant to remain in the employ of Hydril or of any
Subsidiary.

25. WITHHOLDING OF TAXES

         The Committee may make such provisions as it may deem appropriate for
the withholding of any taxes which it determines is required in connection with
the purchase of Common Stock under the Plan.

26. GOVERNING LAW

         The Plan and rights to purchase shares that may be granted hereunder
shall be governed by and construed and enforced in accordance with the laws of
the State of Texas.



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27. USE OF GENDER

         The gender of words used in the Plan shall be construed to include
whichever may be appropriate under any particular circumstances of the
masculine, feminine or neuter genders.

28. OTHER PROVISIONS

         The agreements to purchase shares of Common Stock under the Plan shall
contain such other provisions as the Committee and the Board shall deem
advisable, provided that no such provision shall in any way be in conflict with
the terms of the Plan.

         ADOPTED effective October 1, 2000.

                                                  HYDRIL COMPANY



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