##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K/A
 Amendment No. 1
 o
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from                      to
 Commission file number: 000-31579
 HYDRIL COMPANY
  DELAWARE
    
    95-2777268(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)3300 NORTH SAM HOUSTON PARKWAY EASTHOUSTON, TX
    
    77032-3411(Address of principal executive offices)
    
    (Zip Code)
 (281) 449-2000
  Title of Class:
    
    Name of each exchange on which Registered:Common Stock, par value $.50 per share
    
    Nasdaq Global Select MarketRights to Purchase Preferred Stock
 þ o
 o þ
 þ o
 o
  þ o o
 o þ
   Class
    

Outstanding
at April 25, 2007Common Stock, $.50 par value per share
    
    17,956,834 sharesClass B common stock outstanding
    
    2,928,332 shares




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##### 



Explanatory Note
  TABLE OF CONTENTS
 PagePART III
    
    
    1ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    
    
    1Executive Officers
    
    
    1Directors
    
    
    1Section 16(a) Beneficial Ownership Reporting Compliance
    
    
    2Code of Business Conduct and Ethics
    
    
    2Shareholder Communication with the Board of Directors
    
    
    2Audit Committee and Audit Committee Financial Expert
    
    
    2ITEM 11. EXECUTIVE COMPENSATION
    
    
    3Compensation Discussion and Analysis
    
    
    3Compensation and Corporate Governance Committee Report
    
    
    17Executive Compensation
    
    
    18Director Compensation
    
    
    33Compensation Committee Interlocks and Insider Participation
    
    
    34ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
    
    
    35Equity Compensation Plan Information
    
    
    35Security Ownership of Certain Beneficial Owners and Management
    
    
    35ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
    
    
    39Director Independence
    
    
    39Transactions with Related Persons
    
    
    39Related Party Transaction Policies and Procedures
    
    
    40ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
    
    
    40Fees Paid to Deloitte & Touche LLP
    
    
    40Audit Committee Preapproval
    
    
    40PART IV
    
    
    41ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
    
    41Certification of CEO Pursuant to Rule 13a-14(a)Certification of CFO Pursuant to Rule 13a-14(a)




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PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
 
 EXECUTIVE OFFICERS
  
 DIRECTORS
  Jerry S. Cox
 Roger Goodan
 Gordon T. Hall
 Kenneth S. McCormick
 Christopher T. Seaver
 Patrick T. Seaver
 Richard C. Seaver
 T. Don Stacy
 1




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##### Table of Contents



Lew O. Ward
 
 SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
   
 CODE OF BUSINESS CONDUCT AND ETHICS
  
 SHAREHOLDER COMMUNICATION WITH THE BOARD OF DIRECTORS
  
 AUDIT COMMITTEE AND AUDIT COMMITTEE FINANCIAL EXPERT
  2




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##### Table of Contents



ITEM 11. EXECUTIVE COMPENSATION.
 
 COMPENSATION DISCUSSION AND ANALYSIS
  
    
    Members and role of the Compensation and Corporate Governance Committee
    
    Compensation-setting process
    
    Philosophy regarding executive compensation
    
    Elements of the executive compensation program
    
    Compensation decisions for 2006 and for the first quarter of 2007 with respect
to the executive officers
    
    Executive compensation policies
    
    Change-in-control arrangements
 Members and Role of the Compensation and Corporate Governance Committee
 Committee Members and Independence
  Role of the Committee
   
    
    Discharge the Board of Directors responsibilities relating to executive compensation
    
    Review and approve goals and objectives relevant to CEO compensation and
evaluate the CEOs performance in light of those goals and objectives
    
    Review all elements of compensation of executive officers and approve
appropriate adjustments based on the Committees evaluation
    
    Administer annual and longer-term incentive and other compensation plans
    
    Prepare an annual report for the Companys proxy statement
    
    Review management succession planning and development
    
    Review and approve non-employee director compensation
    
    Oversee fulfillment of corporate governance standards
 Committee Meetings
   
    
    Financial reports on year-to-date performance versus budget and compared to
prior year performance
 3




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##### Table of Contents




    
    Calculations and reports on levels of achievement of individual and corporate
performance objectives
    
    Reports on the Companys strategic objectives and budget for future periods
    
    Information on the executive officers stock ownership, option and restricted stock unit holdings
    
    Information regarding equity compensation plan dilution
    
    Tally sheets setting forth the total compensation of the executive officers,
including base salary, cash incentives, equity awards, perquisites and other
compensation and any amounts payable to the executive officers upon voluntary or
involuntary termination, early or normal retirement or following a change-in-control of
Hydril
    
    Information regarding compensation programs and compensation levels at peer
companies for employees including executive officers and the members of the board of
directors
 Compensation-Setting Process
 A Continuing Process
   Managements Role in the Compensation-Setting Process
   
    
    Background information regarding the Companys strategic objectives
    
    Suggestions on annual performance targets
    
    His evaluation of the performance of the executive officers (other than himself)
    
    Compensation recommendations for the executive officers (other than himself)
  
    
    Provide Hydril compensation data
    
    Provide background information, particularly regarding items such as proposed
amendments to plans
 4




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
    
    Implement the compensation processes as approved by the Committee
    
    Discuss the succession planning
    
    Take minutes of the meetings
 Committee Consultants
  Establishment of Performance Objectives for Incentive Compensation
   Compensation Benchmarking Relative to Market
  
    
    Cameron International Corporation
    
    Carbo Ceramics, Inc.
    
    Core Laboratories NV
    
    Dril-Quip, Inc.
    
    Grant Prideco, Inc.
    
    Hanover Compressor Company
    
    Helix Energy Solutions Group, Inc.
 5




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
    
    Lone Star Technologies, Inc.
    
    Lufkin Industries, Inc.
    
    Horizon Offshore, Inc.
    
    Maverick Tube Corporation*
    
    NS Group Inc.*
    
    NATCO Group, Inc.
    
    National Oilwell VARCO, Inc.
    
    Newpark Resources, Inc.
    
    Oceaneering International, Inc.
    
    Oil States International, Inc.
    
    Superior Energy Services, Inc.
    
    Tetra Technologies, Inc.
    
    Universal Compression Holdings, Inc.
    
    W-H Energy Services, Inc.
 
 *
    
    Company acquired during 2006 and accordingly not included in 2007 peer group.  Committee Effectiveness
  Philosophy Regarding Executive Compensation
  
    
    Attract, motivate, retain and reward the executive talent that Hydril needs in
order to maximize its return to stockholders
    
    Provide performance-based incentives that motivate and reward the achievement
of specified short and long-term objectives designed to create stockholder value
    
    Align the executives interests with those of our stockholders
 Pay-for-Performance
  6




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Overall Market Position
  Additional Considerations
  
    
    Individual historical compensation levels
    
    The management of direct compensation over an executives career
    
    The executives performance over time and level of experience
    
    The potential future contribution of the executive
    
    The executives role and responsibilities
    
    Relative compensation levels among the Companys executive officers
  
    
    Industry conditions
    
    Hydril performance overall and in comparison to the industry peer group
    
    The overall effectiveness of the compensation program in achieving desired performance levels
 Elements of Compensation
 Direct Compensation
 Base Salary
 7




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Annual Cash Performance Compensation
  
    
    Create shareholder value
    
    Provide a financial incentive to focus on specific performance targets
    
    Reward employees based on individual and company/segment performance
    
    Encourage employees to continually improve Company performance
  
    
    Hydrils total company financial performance
    
    segment financial performance and
    
    individual performance against objectives
   8




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Equity Incentive Compensation
   9




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Indirect Compensation
  Health and Welfare Benefits
 Employee Stock Purchase Plan
 Defined Benefit Pension Benefits
 4 01(k) Plan
 10




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% of Base SalaryEmployees Age
    
    Contributed to PlanLess Than 35 years
    
    
    2.0
    %35-39
    
    
    2.5
    %40-44
    
    
    3.0
    %45-49
    
    
    3.5
    %50-54
    
    
    4.0
    %55-59
    
    
    4.5
    %60 or older
    
    
    5.0
    %
  Employees Age at
    
    % of Base SalaryDecember 31, 2001
    
    Contributed to Plan45-49
    
    
    1.0
    %50-54
    
    
    1.5
    %55 or older
    
    
    2.0
    %
  Nonqualified Deferred Compensation Plan
    11




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Perquisites
 Compensation Decisions
  Executive Summary
   
    
    For 2006, the Committee increased base salaries for the named executive
officers, on average, by 7%
    
    For 2007, the Committee increased base salaries for the named executive
officers, on average, by approximately 11%
    
    Named executive officers received annual cash performance compensation payments
with respect to 2006 of, on average, 117% of their base salaries for 2006; these
payments included both payments under the 2006 MIP and discretionary bonus amounts
    
    The executive officers received equity incentive awards during 2006 with grant
date fair values of, on average, 208% of their base salaries for 2006
 Base Salary Decisions
    12




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Executive/Title
    
    2005 Salary
    
    2006 Salary
    
    2007 SalaryChristopher T. Seaver, President/Chief Executive Officer
    
    $
    385,000
    
    
    $
    405,000
    
    
    $
    445,500Chris D. North, Chief Financial Officer and Secretary
    
    
    184,000
    
    
    
    205,000
    
    
    
    225,500Charles E. Jones, Executive Vice President, Chief
Operating Officer
    
    
    276,000
    
    
    
    290,000
    
    
    
    319,000Neil G. Russell, Sr VP Premium Connections and Business
Development(1)
    
    
    246,626
    
    
    
    262,105
    
    
    
    302,591E. Charles Chauviere III, VP Pressure Control
    
    
    184,000
    
    
    
    200,000
    
    
    
    220,000
 
 (1)
    
    Mr. Russells 2005 and 2006 base salaries are denominated and paid monthly in pound sterling
and the amounts set forth above in dollars are based on the exchange rate at the time of
payment. His 2007 base salary, which is also denominated and payable in pound sterling is
presented in dollars using a conversion rate of .5172.  Annual Cash Performance Compensation for 2006
   Component
    
    Target (in thousands)Consolidated Operating Income
    
    $
    128,609Pressure Control Segment Operating Income
    
    
    45,158Premium Connections Segment Operating Income
    
    
    106,000
   13




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Christopher T.
    
    Chris D.
    
    Charles E.
    
    Neil G.
    
    E. CharlesMetric
    
    Seaver
    
    North
    
    Jones
    
    Russell
    
    Chauviere IIICompany Operating Income
    
    
    80
    %
    
    
    70
    %
    
    
    80
    %
    
    
    20
    %
    
    
    20
    %Segment Operating Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50
    %
    
    
    50
    %Individual Performance Objectives
    
    
    20
    %
    
    
    30
    %
    
    
    20
    %
    
    
    30
    %
    
    
    30
    %
   Component
    
    Actual (in thousands)Consolidated Operating Income
    
    $
    132,212Pressure Control Segment Operating Income
    
    
    54,556Premium Connections Segment Operating Income
    
    
    100,053
   2006 TotalExecutive
    
    BonusChristopher T. Seaver
    
    $
    450,000Chris D. North
    
    
    310,000Charles E. Jones
    
    
    260,000Neil G. Russell(1)
    
    
    206,315E. Charles Chauviere III
    
    
    310,000
 
 (1)
    
    Mr. Russells compensation is denominated and paid in pound sterling and is set
forth above in dollars using a conversion rate of .5172. 14




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Establishment of 2007 Management Incentive Plan
  Name
    
    Threshold(1)
    
    Target
    
    MaximumChristopher T. Seaver
    
    $
    133,650
    
    
    $
    334,125
    
    
    $
    501,188Chris D. North
    
    
    39,463
    
    
    
    112,750
    
    
    
    169,125Charles E. Jones
    
    
    76,560
    
    
    
    191,400
    
    
    
    287,100Neil G. Russell(2)
    
    
    52,953
    
    
    
    151,296
    
    
    
    226,943E. Charles Chauviere III
    
    
    38,500
    
    
    
    110,000
    
    
    
    165,000
 
 (1)
    
    Amounts assume threshold performance under the financial objective components
and no payout under the individual component (which has no threshold level).(2)
    
    Mr. Russells bonus opportunities are denominated in pound sterling and are set
forth above in dollars using a conversion rate of .5172.   Equity Incentive Compensation Decisions
   15




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Executive Compensation Policies
 Stock Ownership Guidelines
  Securities Trading Policy
  Policy Against Repricing Stock Options
  Internal Pay Equity
  Deductibility of Compensation Over $1 Million
  16




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Policy on Timing of Stock Awards
  Change in Control Arrangements
    
 COMPENSATION AND CORPORATE GOVERNANCE COMMITTEE REPORT
   
 Pursuant to SEC Rules, the foregoing Compensation and Corporate Governance Committee Report is
not deemed filed with the SEC.
 17




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EXECUTIVE COMPENSATION
 Summary Compensation Table
  Change inPensionValue andNon-qualifiedDeferredCompen-
    
    All OtherStock
    
    Option
    
    sation
    
    Compen-Year
    
    Salary
    
    Bonus(1)
    
    Awards(2)
    
    Awards(3)
    
    Earnings(4)
    
    sation(5)
    
    TotalChristopher T.
Seaver
Chairman,
President and Chief
Executive Officer
    
    
    2006
    
    
    $
    405,000
    
    
    $
    450,000
    
    
    $
    652,444
    
    
    $
    392,155
    
    
    $
    15,566
    
    
    $
    83,775
    
    
    $
    1,998,940Chris D. North
Chief Financial
Officer and
Secretary
    
    
    2006
    
    
    
    205,000
    
    
    
    310,000
    
    
    
    239,595
    
    
    
    73,720
    
    
    
    11,264
    
    
    
    26,353
    
    
    
    865,933Charles E. Jones
Executive Vice
President and Chief
Operating Officer
    
    
    2006
    
    
    
    290,000
    
    
    
    260,000
    
    
    
    399,683
    
    
    
    147,955
    
    
    
    8,349
    
    
    
    34,344
    
    
    
    1,140,331Neil G. Russell
Senior Vice
President  Premium
Connections and
Senior Vice
President -
Business
Development(6)
    
    
    2006
    
    
    
    262,105
    
    
    
    206,315
    
    
    
    264,814
    
    
    
    148,870
    
    
    
    261,486
    
    
    
    59,465
    
    
    
    1,203,055E. Charles
Chauviere III
Vice President
- Pressure Control
    
    
    2006
    
    
    
    200,000
    
    
    
    310,000
    
    
    
    240,909
    
    
    
    78,422
    
    
    
    822
    
    
    
    19,689
    
    
    
    849,842
 
 (1)
    
    The amounts set forth in the table above for Bonus consist of all bonus amounts paid
out with respect to 2006. See Compensation Discussion and AnalysisCompensation
DecisionsAnnual Cash Performance Compensation for 2006 and Grants of Plan-Based Awards for
more information.(2)
    
    The amounts set forth in the table above for Stock Awards are equal to the dollar amounts
recognized as stock-based compensation expense for the year ended December 31, 2006 for
financial reporting purposes in accordance with Statement of Financial Accounting Standards
No. 123 (revised 2004), Share-Based Payment (FAS 123R) with respect to awards of both
time-vesting restricted stock units (restricted stock units) and performance restricted
stock units (performance restricted stock units) in the case of each named executive
officer, except that in accordance with applicable disclosure requirements, these amounts do
not reflect any reduction for estimated forfeiture related to service-based vesting
conditions. None of the named executive officers forfeited any stock awards in 2006. For
purposes of FAS 123R and the amounts set forth in the table above, compensation expense for
restricted stock and restricted stock units is based on the market value of the underlying
stock at the date of grant and is recognized on a straight-line basis over the requisite
service period of the award (which is equal to the period over which the award vests). In the
case of all of the outstanding performance restricted stock units, for purposes of both FAS
123R and the amounts set forth above, Hydril determined that, based on performance under the
applicable performance criteria, compensation expense for those units should be based on the
assumption that performance conditions relating to all outstanding performance restricted
stock units will be met in full and that all such units will vest. For more information
regarding Hydrils accounting for stock-based awards under FAS 123R, please see Note 2
Stock-Based Compensation in the notes to Hydrils consolidated financial statements included
in its Annual Report on Form 10-K for the year ended December 31, 2006. See the Grants of
Plan-Based Awards below for more information regarding the grants of restricted stock units
and performance restricted stock units in 2006. 18




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The following table sets forth, for each named executive officer, the portion of the stock-based
compensation expense relating to stock awards set forth above for 2006, that relates to awards
made in each of the periods indicated below. Restricted Stock Units, PerformanceRestricted Stock Units and Restricted Stock2003
    
    2004
    
    2005
    
    2006
    
    TotalChristopher T. Seaver
    
    $
    70,629
    
    
    $
    90,043
    
    
    $
    249,816
    
    
    $
    241,956
    
    
    $
    652,444Chris D. North
    
    
    9,779
    
    
    
    35,356
    
    
    
    104,784
    
    
    
    89,676
    
    
    
    239,595Charles E. Jones
    
    
    47,017
    
    
    
    47,330
    
    
    
    154,747
    
    
    
    150,588
    
    
    
    399,683Neil G. Russell
    
    
    38,031
    
    
    
    32,323
    
    
    
    104,784
    
    
    
    89,676
    
    
    
    264,814E. Charles Chauviere III
    
    
    14,126
    
    
    
    32,323
    
    
    
    104,784
    
    
    
    89,676
    
    
    
    240,909
 (3)
    
    The amounts set forth in the table above for Option Awards are equal to the dollar
amounts recognized as stock-based compensation expense for the year ended December 31, 2006
for financial reporting purposes in accordance with FAS 123R with respect to awards of options
for the purchase of common stock in the case of each named executive officer, except that in
accordance with applicable disclosure requirements, these amounts do not reflect any reduction
for estimated forfeiture related to service-based vesting conditions. For purposes of FAS 123R
and the amounts set forth in the table above, compensation expense for stock options is based
on the grant date fair value of the award and is recognized on a straight-line basis over the
requisite service period of the award (which is equal to the period over which the award
vests). The grant date fair value of all options granted by Hydril in 2001, 2002, 2003 and
2004 was estimated using the Black-Scholes model and the following assumptions:
 2001
    
    2002
    
    2003
    
    2004Expected life (years)
    
    
    6.25
    
    
    
    6.25
    
    
    
    5.5
    
    
    
    3.71Interest rate
    
    
    4.72
    %
    
    
    3.18
    %
    
    
    2.75
    %
    
    
    3.67
    %Volatility
    
    
    50.89
    %
    
    
    50.18
    %
    
    
    49.83
    %
    
    
    36.00
    %Dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Weighted-average fair value per
shares at grant date
    
    $
    10.79
    
    
    $
    13.26
    
    
    $
    13.12
    
    
    $
    9.34
 For more information regarding Hydrils accounting for stock-based awards under FAS 123R, please
see Note 2 Stock-Based Compensation in the notes to Hydrils consolidated financial statements
included in its Annual Report on Form 10-K for the year ended December 31, 2006.The following table sets forth, for each named executive officer, the portion of the stock-based
compensation expense relating to stock options set forth above for 2006, that relates to awards
made in each of the periods indicated below. The Company did not make any awards of stock
options to named executive officers in 2005 or 2006.
 Stock Options2001
    
    2002
    
    2003
    
    2004
    
    TotalChristopher T. Seaver
    
    $
    160,096
    
    
    $
    74,770
    
    
    $
    91,360
    
    
    $
    65,928
    
    
    $
    392,155Chris D. North
    
    
    20,066
    
    
    
    10,040
    
    
    
    12,865
    
    
    
    30,748
    
    
    
    73,720Charles E. Jones
    
    
    50,166
    
    
    
    30,120
    
    
    
    26,255
    
    
    
    41,414
    
    
    
    147,955Neil G. Russell
    
    
    50,166
    
    
    
    30,120
    
    
    
    40,170
    
    
    
    28,414
    
    
    
    148,870E. Charles Chauviere III
    
    
    20,066
    
    
    
    10,040
    
    
    
    19,901
    
    
    
    28,414
    
    
    
    78,422
 (4)
    
    The amounts set forth in the table above for Changes in Pension Value and Nonqualified
Deferred Compensation Earnings represent the aggregate increase in the actuarial present
value of each named executive officers accumulated benefit under Hydrils defined benefit and
actuarial pension plans from December 31, 2005 to December 31, 2006. See the disclosure under
Pension Benefits below for more information regarding these plans. Amounts under the Hydril
Company Restoration Plan, a nonqualified deferred compensation plan are invested, at the
direction of the executive officer, in substantially the same investment alternatives as are
available under Hydrils qualified defined contribution plan. There were no above-market
earnings under the
 19




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##### Table of Contents



Restoration Plan for 2006. See the disclosure under Nonqualified Deferred Compensation below
for more information regarding the Restoration Plan.
 (5)
    
    The amounts set forth in the table above for All Other Compensation include the following:
 Contributionsby HydrilContributions
    
    to RestorationContributions
    
    by Hydril
    
    Plan andby Hydril
    
    to Retirement
    
    Relatedto 401(k) Plan
    
    Plan(a)
    
    Amounts(b)
    
    Perquisites(c)Christopher T. Seaver
    
    $
    6,429
    
    
    $
    13,200
    
    
    $
    53,673
    
    
    $
    10,473Chris D. North
    
    
    6,600
    
    
    
    11,000
    
    
    
    8,753
    
    
    
    (d
    )Charles E. Jones
    
    
    4,624
    
    
    
    7,700
    
    
    
    22,020
    
    
    
    (d
    )Neil G. Russell
    
    
    0
    
    
    
    19,655
    
    
    
    20,520
    
    
    
    19,290E. Charles Chauviere III
    
    
    6,441
    
    
    
    6,600
    
    
    
    6,648
    
    
    
    (d
    )
 (a)
    
    Contributions are made by Hydril under its defined contribution retirement plans in
the United States and the United Kingdom. The contributions in the United States are
made under the retirement plan element of Hydrils 401(k) plan, the Hydril Company
Savings Plan. The retirement plan element was added in an amendment and restatement of
the Savings Plan when Hydrils defined benefit retirement plan, covering substantially
all of its domestic employees, was frozen. The United Kingdom defined contribution
plan was established when the United Kingdom defined benefit retirement plan was
frozen. Neil Russell is a participant in only the United Kingdom plan and the other
named executive officers are participants in only the United States plan.(b)
    
    In the case of Messrs. Seaver, North, Jones and Chauviere, the amounts shown
represents contributions by Hydril under the Hydril Company Restoration Plan. See the
disclosure under Nonqualified Deferred Compensation below for more information
regarding the Restoration Plan. In the case of Neil Russell, who ceased to
participate in the Restoration Plan upon reassignment to the United Kingdom during
2004, the amounts shown represent a monthly payment to him of $1,710 in lieu of
participation in the Restoration Plan pursuant to the terms of his employment
agreement.(c)
    
    In the case of Mr. Seaver, amounts for perquisites relate to reimbursement by
Hydril for financial and tax consulting, executive physical expenses and club dues. In
the case of Mr. Russell, amounts for perquisites relate to reimbursement by Hydril for
financial and tax consulting and club dues and a monthly vehicle allowance.(d)
    
    The total value, based on the aggregated incremental cost to Hydril, of
perquisites and personal benefits did not exceed $10,000.
 (6)
    
    In June 2004, Hydril entered into an employment agreement with Neil Russell in connection
with his reassignment to the United Kingdom. The employment agreement provides that Neil
Russells employment is at will and that the agreement shall not be construed as a contract of
employment. The agreement sets forth the compensation Neil Russell will receive to the extent
he remains employed during the term of the agreement. Under the terms of the agreement, Neil
Russell is entitled to receive an initial base salary of approximately £130,000 per year
(subject to annual increases in base salary as determined by Hydril management and the
Compensation & Corporate Governance Committee), a monthly payment of $1,710 in lieu of
participating in the Hydril Company Restoration Plan, a monthly vehicle allowance of £450 per
month, and participation in Hydrils Management Incentive Plan at the target rate of 50% of
his annual salary. The monthly payment in lieu of participation in the Hydril Company
Restoration Plan and the entire amount of the monthly vehicle allowance are reflected in
amounts set forth under All Other Compensation in the table above.Neil Russells salary, non-equity incentive plan compensation, pension value, retirement plan
contributions and perquisites are denominated and paid in pound sterling and are reported in the
table above in U.S. dollars. Neil Russells salary for 2006 of £142,275, his retirement plan
contributions and Hydril cash disbursements for perquisites were converted to U.S. dollars using
the average conversion rate of pound sterling to the U.S. dollar
 20




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##### Table of Contents



for the month in which the payment was made (which monthly conversion rate ranged from 0.5090 to
0.5731 for 2006). Neil Russells bonus and non-equity incentive plan compensation for 2006
were converted to U.S. dollars using a conversion rate of $1.00 = .5172 pounds. Neil Russells
benefits under the U.K. pension plan were converted to dollars using an exchange rate of $1.00
=.05791 pounds at December 31, 2005 and $1.00 =0.5097 pounds at December 31, 2006.
 Grants of Plan-Based Awards
  AllOtherStock
    
    Grant DateCompen-
    
    
    
    
    
    
    
    
    
    
    
    
    
    Estimated Future Payouts
    
    Awards:
    
    Fair Valuesation
    
    Estimated Possible Payouts Under
    
    Under Equity Incentive Plan
    
    Number
    
    ofCom-
    
    Non-Equity Incentive Plan Awards(2)
    
    Awards(3)
    
    of Stock
    
    Stock andmittee
    
    Thresh-
    
    
    
    
    
    
    
    
    
    Thresh
    
    
    
    
    
    Maxi-
    
    or
    
    OptionGrant
    
    Action
    
    old
    
    Target
    
    Maxi-
    
    -old
    
    Target(6)
    
    mum
    
    Units(4)
    
    Awards(5)Name
    
    Date(1)
    
    Date
    
    ($)
    
    ($)
    
    mum ($)
    
    (#)
    
    (#)
    
    (#)
    
    (#)
    
    ($)Christopher T. Seaver
    
    
    3/6/06
    
    
    
    3/06/06
    
    
    $
    121,500
    
    
    $
    303,750
    
    
    $
    455,2656/1/06
    
    
    
    5/15/06
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,430
    
    
    
    7,150
    
    
    
    7,150
    
    
    
    
    
    
    $
    537,6806/1/06
    
    
    
    5/15/06
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,150
    
    
    
    537,680Chris D. North
    
    
    3/6/06
    
    
    
    3/06/06
    
    
    
    33,875
    
    
    
    102,500
    
    
    
    153,7506/1/06
    
    
    
    5/15/06
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    530
    
    
    
    2,650
    
    
    
    2,650
    
    
    
    2,650
    
    
    
    199,2806/1/06
    
    
    
    5/15/06
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    199,280Charles E. Jones
    
    
    3/6/06
    
    
    
    3/06/06
    
    
    
    69,600
    
    
    
    174,000
    
    
    
    261,0006/1/06
    
    
    
    5/15/06
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    890
    
    
    
    4,450
    
    
    
    4,450
    
    
    
    
    
    
    
    334,6406/1/06
    
    
    
    5/15/06
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,450
    
    
    
    334,640Neil G. Russell
    
    
    3/6/06
    
    
    
    3/06/06
    
    
    
    43,505
    
    
    
    124,300
    
    
    
    186,4506/1/06
    
    
    
    5/15/06
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    530
    
    
    
    2,650
    
    
    
    2,650
    
    
    
    
    
    
    
    199,2806/1/06
    
    
    
    5/15/06
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,650
    
    
    
    199,280E. Charles Chauviere III
    
    
    3/6/06
    
    
    
    3/06/06
    
    
    
    35,000
    
    
    
    100,000
    
    
    
    150,0006/1/06
    
    
    
    5/15/06
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    530
    
    
    
    2,650
    
    
    
    2,650
    
    
    
    
    
    
    
    199,2806/1/06
    
    
    
    5/15/06
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,650
    
    
    
    199,280
 
 (1)
    
    The Compensation Committee has generally taken action with regard to equity awards to
named executive officers once annually, at its meeting held in conjunction with Hydrils
annual meeting of stockholders, and, for administrative reasons, has provided that such awards
become effective upon the first business day of the succeeding month. In 2006, the
Compensation Committee took action to approve restricted stock unit and performance restricted
stock unit awards under Hydril incentive plans at its meeting on May 15, 2006, following the
Hydril annual meeting of stockholders on that date. Consistent with its historical practice,
the Committee provided that such awards would become effective on June 1, 2006.(2)
    
    Amounts set forth under the columns under Estimated Possible Payouts Under Non-Equity
Incentive Plan Awards relate to the range of bonus payouts under the 2006 Management
Incentive Plan. The Compensation Committee exercised discretion in determining the amounts of
2006 bonuses to be paid. In addition to considering the performance criteria and targets
under the 2006 Management Incentive Plan, the Compensation Committee also considered a number
of other factors. As a result, all bonus amounts paid with respect to 2006 are presented in
the Bonus column of the Summary Compensation Table. Bonuses paid for 2006 were in excess of
the amounts payable under the 2006 Management Incentive Plan based on Hydrils actual
consolidated and segment operating income. See Elements of CompensationDirect
CompensationAnnual Cash Performance Compensation  and Compensation DecisionsAnnual Cash
Performance Compensation for 2006 in Compensation Discussion and Analysis for more
information.The amounts set forth in the table above for possible payout at the Threshold level assume
that the threshold levels of objectives under the 2006 Management Incentive Plan are met for the
consolidated and segment operating income objectives and that no bonus is payable pursuant to
the strategic objectives component. The amounts set forth in the table above for possible
payout at the Target level assume that the target level of 21




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##### Table of Contents



objectives is met for the consolidated and segment operating income objectives and that the
payout with respect to strategic objectives is at the target rate.(3)
    
    Amounts set forth under the columns under Estimated Future Payouts Under Equity Incentive
Plan Awards relate to awards of performance restricted stock units made under the Hydril 2005
Incentive Plan. Each of the named executive officers received awards in June 2006 of
performance restricted stock units. The vesting of the performance restricted stock units is
dependent upon whether, and the extent to which, specified performance objectives relating to
After-Tax Return on Capital Employed (ROCE) are attained for the three-year period ending
December 31, 2008. None of the performance restricted stock units will vest unless (a) Hydril
achieves at least a 10% cumulative annualized ROCE for the three-year period and (b) the ROCE
achieved is equal to or greater than the average ROCE (50th percentile) for a specified peer
group of companies. If these two minimum thresholds are met, then 20% to 100% of the units
will vest upon completion of the three-year period, depending on Hydrils ROCE relative to
that of the peer group for that period. The units will vest 100% if Hydrils ROCE is in the
top quartile of its peer group (75th percentile or above) for the period. For performance
between the 50th percentile and 75th percentile, 20% to 100% of the units will vest
proportionately on the basis of Hydrils relative performance. Performance restricted stock
units settle automatically in shares of common stock on a one-for-one basis upon vesting.
Under the award agreements, Hydril is required to withhold the number of shares upon the
vesting of performance restricted stock units required to satisfy tax withholding obligations
that arise upon vesting.(4)
    
    Amounts set forth under this column represent awards of restricted stock units made under the
Hydril 2000 Incentive Plan. Each of the named executive officers received awards of
restricted stock units in June 2006 which automatically convert into common stock on a
one-to-one basis upon vesting. The restricted stock units vest with respect to 60% of the
aggregate number of shares subject to the award on the third anniversary of the date of grant
and with respect to an additional 20% of the aggregate number of shares subject to the award
on each of the fourth and fifth anniversary of the date of grant. Under the award
agreements, Hydril is required to withhold the number of shares upon the vesting of restricted
stock units required to satisfy tax withholding obligations that arise upon vesting.(5)
    
    The dollar values set forth in the table above represent the aggregate grant date fair values
of the restricted stock units and performance restricted stock units granted in 2006 computed
in accordance with FAS 123R. For more information see note 1 to the Summary Compensation
Table above.(6)
    
    The terms of the performance restricted stock units specify a minimum and maximum payout
level, but do not provide for a target payout level. In accordance with applicable
regulations, the amounts set forth above for the target payout are based on the 2005
performance by Hydril under the awards performance criteria. For 2005, Hydrils ROCE was in
the top quartile of the relevant peer group. In the event Hydrils ROCE for the relevant
three-year performance period of the awards is in top quartile, 100% of the performance
restricted stock units would vest, and accordingly the amounts set forth above are 100% of the
performance restricted stock units awarded in 2006. 22




---



##### Table of Contents



Outstanding Equity Awards at Fiscal Year-End
  Option Awards
    
    Stock AwardsEquityIncentiveEquity
    
    PlanIncentive
    
    Awards:Number
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Plan
    
    Market orof
    
    
    
    
    
    
    
    
    
    
    
    
    
    Number
    
    
    
    
    
    Awards:
    
    PayoutSecurities
    
    Number of
    
    
    
    
    
    
    
    
    
    of
    
    
    
    
    
    Number of
    
    Value ofUnder-
    
    Securities
    
    
    
    
    
    
    
    
    
    Shares
    
    Market
    
    Unearned
    
    Unearnedlying
    
    Underlying
    
    
    
    
    
    
    
    
    
    or Units
    
    Value of
    
    Shares,
    
    Shares,Unexer-
    
    Unexercised
    
    
    
    
    
    
    
    
    
    of Stock
    
    Shares or
    
    Units or
    
    Units orcised
    
    Options
    
    
    
    
    
    
    
    
    
    That
    
    Units of
    
    Other
    
    OtherOptions
    
    (#)
    
    Option
    
    
    
    
    
    Have
    
    Stock That
    
    Rights That
    
    Rights That(#)
    
    Un-
    
    Exercise
    
    Option
    
    Not
    
    Have Not
    
    Have Not
    
    Have NotExer-
    
    exercisable
    
    Price
    
    Expiration
    
    Vested
    
    Vested
    
    Vested
    
    VestedName
    
    cisable
    
    (1)
    
    ($)
    
    Date
    
    (#)(2)
    
    ($)(3)
    
    (#)(4)
    
    ($)(3)(4)Christopher T. Seaver
    
    
    
    
    
    
    3,923
    
    
    $
    28.0400
    
    
    
    05/21/073,681
    
    
    
    29.8815
    
    
    
    06/01/089,012
    
    
    
    
    
    
    
    19.2750
    
    
    
    11/08/112,077
    
    
    
    25.4900
    
    
    
    05/21/1210,319
    
    
    
    27.1650
    
    
    
    06/01/13100
    
    
    
    21,300
    
    
    
    28.7900
    
    
    
    06/01/1440,950
    
    
    
    3,079,031
    
    
    
    13,750
    
    
    $
    1,033,863Chris D. North
    
    
    2,400
    
    
    
    
    
    
    
    19.2750
    
    
    
    11/08/11800
    
    
    
    25.4900
    
    
    
    05/21/121,960
    
    
    
    27.1650
    
    
    
    06/01/133,540
    
    
    
    28.7900
    
    
    
    06/01/141,880
    
    
    
    5,640
    
    
    
    33.3900
    
    
    
    08/16/1414,370
    
    
    
    1,080,480
    
    
    
    5,450
    
    
    
    409,786Charles E. Jones
    
    
    6,000
    
    
    
    
    
    
    
    17.0000
    
    
    
    09/26/1012,000
    
    
    
    
    
    
    
    19.2750
    
    
    
    11/08/114,800
    
    
    
    2,400
    
    
    
    25.4900
    
    
    
    05/21/124,000
    
    
    
    4,000
    
    
    
    27.1650
    
    
    
    06/01/138,920
    
    
    
    13,380
    
    
    
    28.7900
    
    
    
    06/01/1424,312
    
    
    
    1,828,019
    
    
    
    8,450
    
    
    
    635,356Neil G. Russell
    
    
    6,000
    
    
    
    
    
    
    
    19.2750
    
    
    
    11/08/112,400
    
    
    
    2,400
    
    
    
    25.4900
    
    
    
    05/21/123,060
    
    
    
    6,120
    
    
    
    27.1650
    
    
    
    06/01/133,060
    
    
    
    9,180
    
    
    
    28.7900
    
    
    
    06/01/1415,050
    (5)
    
    
    1,131,610
    
    
    
    5,450
    
    
    
    409,786E. Charles Chauviere III
    
    
    4,800
    
    
    
    
    
    
    
    19.2750
    
    
    
    11/08/11800
    
    
    
    800
    
    
    
    25.4900
    
    
    
    05/21/123,032
    
    
    
    3,032
    
    
    
    27.1650
    
    
    
    06/01/136,120
    
    
    
    9,180
    
    
    
    28.7900
    
    
    
    06/01/1414,690
    
    
    
    1,104,541
    
    
    
    5,450
    
    
    
    409,786
 
 (1)
    
    Options granted by Hydril to executive officers generally vest ratably over five years
from the date of grant.(2)
    
    Represents outstanding unvested restricted stock units, except in the case of Charles E.
Jones, as to whom the amount shown is comprised of 20,850 unvested restricted stock units and
3,462 shares of unvested restricted stock. Restricted stock units automatically convert into
common stock on a one-to-one basis upon vesting. The outstanding unvested restricted stock
and restricted stock units vest on June 1, of each year as follows: 23




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##### Table of Contents



Restricted Stock Units and Restricted Stock2007
    
    2008
    
    2009
    
    2010
    
    2011
    
    TotalChristopher T. Seaver
    
    
    11,960
    
    
    
    13,520
    
    
    
    10,010
    
    
    
    4,030
    
    
    
    1,430
    
    
    
    40,950Chris D. North
    
    
    3,720
    
    
    
    4,720
    
    
    
    3,790
    
    
    
    1,610
    
    
    
    530
    
    
    
    14,370Charles E. Jones
    
    
    6,651
    
    
    
    8,291
    
    
    
    5,950
    
    
    
    2,530
    
    
    
    890
    
    
    
    24,312Neil G. Russell
    
    
    4,760
    
    
    
    4,360
    
    
    
    3,790
    
    
    
    1,610
    
    
    
    530
    
    
    
    15,050E. Charles Chauviere III
    
    
    3,880
    
    
    
    4,880
    
    
    
    3,790
    
    
    
    1,610
    
    
    
    530
    
    
    
    14,690
 
 (3)
    
    The market values set forth above are based on the closing price of the Hydril common
stock on the last trading day of 2006 of $75.19.(4)
    
    Represents outstanding awards of performance restricted stock units made in 2005 and 2006.
See the Grants of Plan-Based Awards Table for more information about the performance
restricted stock units granted in 2006. The vesting of the performance restricted stock units
granted in 2005 and 2006 is dependent upon whether, and the extent to which, specified
performance objectives relating to ROCE are attained for a three-year period, ending on
December 31, 2007 and 2008, respectively. The terms of the performance restricted stock units
specify a minimum and a maximum payout level, but do not provide for a target payout level.
In accordance with applicable regulations, the amounts set forth above for the number of units
that have not yet vested and the payout value of the units that have not vested, are based on
the number of units that would have vested had the performance requirements provided for under
the 2005 and 2006 awards been applied to the 2005 fiscal year only. For 2005, Hydrils ROCE
was in the top quartile of the relevant peer group. In the event Hydrils ROCE for each of
the relevant three-year performance periods for the 2005 and 2006 awards is in the top
quartile, 100% of the units granted in each year would pay out. Accordingly, the amounts set
forth above reflect 100% of the 2005 and 2006 awards. Performance restricted stock units were
not granted prior to 2005. Depending on achievement of performance targets, these performance
restricted stock units may vest up to the following number of shares on December 31, 2007 and
on December 31, 2008. Maximum Possible Vesting ofPerformance Restricted Stock Units2007
    
    2008
    
    TotalChristopher T. Seaver
    
    
    6,600
    
    
    
    7,150
    
    
    
    13,750Chris D. North
    
    
    2,800
    
    
    
    2,650
    
    
    
    5,450Charles E. Jones
    
    
    4,000
    
    
    
    4,450
    
    
    
    8,450Neil G. Russell
    
    
    2,800
    
    
    
    2,650
    
    
    
    5,450E. Charles Chauviere III
    
    
    2,800
    
    
    
    2,650
    
    
    
    5,450
 
 (5)
    
    Of these restricted stock units, 1,400 were transferred by Mr. Russell in 2005 for no
consideration to an irrevocable trust for the benefit of himself and family members. The
trust is administered by independent trustees and Mr. Russell has no voting or investment
power with regard to the units held by the trust and is not regarded as the beneficial owner
of these units. The units held by the trust as of December 31, 2006 vest on June 1, 2007. 24




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##### Table of Contents



Option Exercises and Stock Vested
  Option Awards
    
    Stock AwardsNumber of
    
    
    
    
    
    Number ofShares
    
    
    
    
    
    SharesAcquired
    
    Value Realized
    
    Acquired
    
    Value Realizedon Exercise
    
    on Exercise
    
    on Vesting
    
    on VestingName
    
    (#)
    
    ($)(1)
    
    (#)
    
    ($)(2)Christopher T. Seaver
    
    
    74,108
    
    
    $
    3,515,245
    
    
    
    7,800
    
    
    $
    586,560Chris D. North
    
    
    13,980
    
    
    
    660,249
    
    
    
    1,080
    
    
    
    81,216Charles E. Jones
    
    
    
    
    
    
    
    
    
    
    5,192
    
    
    
    390,438Neil G. Russell
    
    
    6,000
    
    
    
    398,570
    
    
    
    1,400
    
    
    
    105,280E. Charles Chauviere III
    
    
    
    
    
    
    
    
    
    
    1,560
    
    
    
    117,312
 
 (1)
    
    The amounts set forth in the table above for values realized on exercise of options are
computed based on the difference between the exercise price and the market price of the Hydril
common stock on the date of exercise.(2)
    
    The amounts set forth in the table above for values realized on vesting of stock awards are
computed by multiplying the number of shares or units vesting by the market value of the
Hydril common stock on the vesting date. Pension Benefits
  Number of
    
    PresentYears
    
    Value ofCredited
    
    AccumulatedService
    
    BenefitName
    
    Plan Name
    
    (#)(1)
    
    ($)(2)Christopher T. Seaver
    
    Hydril Company Retirement Plan(3)
    
    
    16
    
    
    $
    286,468Chris D. North
    
    Hydril Company Retirement Plan(3)
    
    
    22
    
    
    
    207,305Charles E. Jones
    
    Hydril Company Retirement Plan(3)
    
    
    15
    
    
    
    153,648Neil G. Russell
    
    Hydril U.K. Pension Plan(4)
    
    
    20
    
    
    
    1,610,274E. Charles Chauviere III
    
    Hydril Company Retirement Plan(3)
    
    
    3
    
    
    
    15,128
 
 (1)
    
    Years of credited service set forth above are the years of credited service for each named
executive officer as of the date the applicable plan was frozen. Subsequent to that date, no
additional years of credit will accrue to any participant for purposes of the calculation of
plan benefits except that subsequent service does accrue for the limited purpose of
determining eligibility for unreduced early retirement benefits under the Hydril Company
Retirement Plan as described in note (2) below.(2)
    
    In the case of the Hydril Company Retirement Plan, the present value of accumulated benefits
was determined assuming a discount rate of 5.75% and a monthly retirement benefit payable in
the form of a single life annuity (net of social security offset). In the case of the Hydril
U.K. Pension Plan, the present value of accumulated benefits was determined assuming a
discount rate of 5.00%, an exchange rate of pound sterling to dollars of 25




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##### Table of Contents



0.5097, a monthly retirement benefit in the form of a 50% joint and survivor annuity and a cost
of living adjustment rate of 2.75% per year. While the calculations set forth above assume
benefits paid in a particular manner, benefits are payable in other forms. Upon retirement
under the Hydril Company Retirement Plan a participant may choose one of the following: a
single life annuity form of benefit, a 50%, 75%, or 100% joint and survivor annuity form of
benefit, a 10 year or 15 year certain and continuous form of benefit, or a 10 year or 15 year
period certain form of benefit. Under the Hydril U.K. Pension Plan, upon retirement, a
participant may choose either a lump sum cash payment or the normal retirement benefit, which is
a monthly lifetime payment, indexed each year for inflation, with a 50% continuation to the
surviving spouse in the event of death after retirement. There are also continuing payments of
5% or 10% to surviving dependent children under the normal retirement benefit option under this
plan.The Hydril Company Retirement Plan provides for unreduced benefits upon early retirement
beginning at age 62, subject to the participant having attained 30 years of service with Hydril
(for this purpose, service subsequent to the date the plan was frozen is applicable). Pursuant
to this provision, Messrs. North, Jones and Chauviere could be eligible to retire with unreduced
benefits at ages 62, 62 and 64, respectively, and accordingly retirement at those ages was
assumed for purposes of the present value calculation. In the case of Mr. Seaver, retirement at
the plans specified normal retirement age of 65 was assumed, as he will not be eligible for an
unreduced benefit prior to age 65. The Hydril U.K. Pension Plan does not provide for unreduced
early retirement benefits.The Hydril Company Retirement Plan also provides for reduced early retirement benefits,
beginning at age 55, if a participant has at least 5 years of vesting service. In the case of
such a reduced benefit early retirement, benefits are reduced by approximately 6.7% multiplied
by the number of years (prorated for partial years) between the early retirement date and the
date the participant would have been eligible to retire with unreduced benefits. All of the
named executive officers that participate in the Hydril Company Retirement Plan have satisfied
the 5 year vesting requirement for reduced benefit early retirement eligibility. The Hydril
U.K. Pension Plan does contemplate the possibility of early retirement subject to reduced
benefits beginning at age 50. However, any such early retirements must be approved by the
trustees of the plan and currently early retirements are not permitted by the trustees. In the
event of any early retirement, benefits would be actuarially reduced to make the effect neutral
to the plan.(3)
    
    The Hydril Company Retirement Plan, a defined benefit plan, was frozen effective December 31,
2001. No additional benefits will accrue to any participant in the plan subsequent to that
date. The benefits that participants are entitled to under the plan, which were determined as
of the date the plan was frozen, were based on formulas utilizing years of credited service,
final average salary and social security benefits. Final average salary was determined by
taking the average of the highest 60 consecutive months, subject to Internal Revenue Code
limits, out of the last 120 months prior to the date the plan was frozen. Final average
salary consisted of base compensation, bonuses, patent awards, sales incentives and any
amounts deferred pursuant to Sections 401(k), 125 and 132(f) of the Internal Revenue Code.
The benefits of all named executive officers were capped by Internal Revenue Code limitations.(4)
    
    Mr. Russell participates only in the Hydril U.K. Pension Plan, a defined benefit plan, which
was frozen effective July 31, 2003. No additional benefits will accrue to any participant in
the frozen plan subsequent to that date. The monthly benefits that participants are entitled
to under the plan, which were determined as of the date the plan was frozen, are equal to
1/60th of final pensionable salary times service, indexed each year for cost of living, with a
50% continuation to the surviving spouse in the event of death after retirement. There are
also continuing payments of 5% or 10% to surviving dependent children under the Hydril U.K.
Pension Plan. 26




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##### Table of Contents



Nonqualifed Deferred Compensation (1)
  AggregateExecutive
    
    Registrant
    
    Aggregate
    
    Aggregate
    
    Balance atContributions
    
    Contributions
    
    Earnings in
    
    Withdrawals/
    
    Lastin Last FY
    
    in Last FY
    
    Last FY
    
    Distributions
    
    FYEName
    
    ($)(2)
    
    ($)(3)
    
    ($)(4)
    
    ($)
    
    ($)Christopher T. Seaver
    
    $
    125,286
    
    
    $
    53,673
    
    
    $
    86,449
    
    
    
    
    
    
    $
    1,984,525Chris D. North
    
    
    10,250
    
    
    
    8,753
    
    
    
    3,738
    
    
    
    
    
    
    
    37,144Charles E. Jones
    
    
    283,657
    
    
    
    22,020
    
    
    
    163,420
    
    
    
    
    
    
    
    1,383,790Neil G. Russell(5)
    
    
    
    
    
    
    
    
    
    
    20,499
    
    
    
    
    
    
    
    464,794E. Charles Chauviere III
    
    
    33,524
    
    
    
    6,648
    
    
    
    21,695
    
    
    
    
    
    
    
    189,211
 
 (1)
    
    Hydril Company implemented the Hydril Company Restoration Plan effective April 1, 2001. The
purpose of the Restoration Plan is to attract and retain select managerial and other key
employees by providing retirement benefits beyond that which may be provided under the Hydril
Company Savings Plan and to restore the benefits that participants would otherwise be entitled
to under the Savings Plan but for federally mandated limitations. Under the Restoration Plan,
a participant may elect to defer receiving up to 15% of regular base pay and up to 100% of any
bonus. Deferrals are made on a pre-tax basis. Hydril Company contributes amounts equal to
those deferred by the participants to a rabbi trust. Hydril also contributes additional
amounts to the rabbi trust to restore certain benefits that the employee would earn but for
federally mandated limitations. Although Hydril has established a rabbi trust, the plan is
unfunded and all of the assets in the trust will remain subject to Hydrils general creditors
in the event of insolvency. Distributions from the Restoration Plan are limited to
retirement, termination of employment, disability, death, change of control and financial
hardship. In the event of death or hardship, benefits are paid in a lump sum. In the case
of all other triggering events, participants receive distributions either in the form of a
single lump sum or annual installments, in each case commencing either 30 days or one year
after the triggering event, all in accordance with an advance election made by the
participant.(2)
    
    The following amounts deferred by the named executive officers in 2006 under the Restoration
Plan are included in the amounts set forth in the Summary Compensation Table under Salary:
Christopher Seaver: $60,750; Chris North: $10,250; Charles Jones: $43,500; and Charles
Chauviere: $20,000.(3)
    
    All of the amounts contributed by Hydril under the Restoration Plan in 2006 are included in
the amounts set forth in the Summary Compensation Table under All Other Compensation.(4)
    
    All contributions to the rabbi trust are invested, at the direction of the participant, in
mutual fund alternatives that are substantially the same as those available under the Hydril
Company Savings Plan. Each participants account under the Restoration Plan is credited with
earnings or losses as if the participants account balance had been invested in the mutual
fund(s) selected. Participants may change their investment elections quarterly. No portion
of the amounts set forth in the table above as aggregate earnings in 2006 under the
Restoration Plan are included in any amounts sets forth in the Summary Compensation Table.
The mutual fund alternatives under the Restoration Plan and the rate of return for each such
fund for the year ended December 31, 2006 are as follows: Name of Fund
    
    Rate of ReturnMoney Market Fund
    
    
    4.62
    %PIMCO Funds:Low Duration/A
    
    
    3.32
    %Bond Fund of America/A
    
    
    5.88
    %Phoenix Real Estate Securities Fund/A
    
    
    36.27
    %Washington Mutual Investors Fund/A
    
    
    18.04
    %Vanguard 500 Index/Inv
    
    
    15.64
    %
 27




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##### Table of Contents



Name of Fund
    
    Rate of ReturnGrowth Fund of America/A
    
    
    10.94
    %Franklin Balance Sheet Investment/Inv A
    
    
    16.35
    %AIM Small Cap Growth Fund/A
    
    
    14.30
    %EuroPacific Growth Fund/A
    
    
    21.87
    %MFS International New Discovery Fund/A
    
    
    26.85
    %Oppenheimer Developing Markets/A
    
    
    25.19
    %
 
 (5)
    
    Mr. Russell ceased to make additional deferrals under the Restoration Plan upon his
reassignment to the United Kingdom in 2004. Amounts previously contributed by him and by
Hydril under the Restoration Plan continue to be subject to the rabbi trust and accrue
earnings based on his investment elections. Potential Payments Upon Termination or Change in Control
   Change in Control Agreements
  
    
    payment of his full base salary through the date of termination at the rate in
effect when notice of termination is given, plus all other amounts to which he is
entitled under any compensation plan when such payments are due;
    
    six months after termination, payment of a lump sum equal to the sum of 200% of
his annual salary as in effect as of his termination date or immediately prior to the
change in control, whichever is greater, plus 200% of his prior three years average
annual bonuses (Christopher Seaver is entitled to payment six months after termination
of a lump sum equal to the sum of 290% of his annual salary in effect as of his
termination date or immediately prior to the change in control, whichever is greater,
plus 290% of his prior three years average annual bonuses);
 28




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##### Table of Contents




    
    interest on the lump sum payment described above at the rate provided in the
Internal Revenue Code from the date of termination through the date of payment;
    
    payment of all legal fees and expenses incurred by him as a result of his
termination, including fees and expenses incurred in contesting termination or in
seeking to enforce any right or benefit provided by the agreement; and
    
    provision of life, disability, accident and group health insurance benefits,
for 24 months after his termination, substantially similar to those that he was
receiving immediately prior to his termination (Christopher Seaver is entitled to
provisions of life, disability, accident and group health insurance benefits, for 35
months after his termination, substantially similar to those that he was receiving
immediately prior to his termination).
      29




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##### Table of Contents



Cash
    
    WelfarePayment(1)
    
    Benefits(2)Christopher T. Seaver
    
    $
    2,477,105
    
    
    $
    53,987Chris D. North
    
    
    801,166
    
    
    
    33,759Charles E. Jones
    
    
    1,098,157
    
    
    
    24,251Neil G. Russell
    
    
    915,441
    
    
    
    37,881E. Charles Chauviere III
    
    
    798,437
    
    
    
    33,583
 
 (1)
    
    Amounts shown are comprised of (1) the lump sum payment due six months after termination
based on salary and prior bonuses, as described above and (2) interest on such lump sum
payment for the six month period at the rate of 4.97% annually, the short-term interest rate
specified pursuant to the Internal Revenue Code at December 31, 2006. Amounts shown do not
include any amounts for payment of base salary (or other amounts executive would already be
entitled to) as a result of employment prior to the date of termination of employment. The
change in control agreements also provide for the payment by Hydril of the executive officers
legal fees and expenses. The amounts set forth in the table above assume that no such
payments are made.  CashName
    
    PaymentChristopher T. Seaver
    
    $
    2,596,587Chris D. North
    
    
    842,896Charles E. Jones
    
    
    1,157,203Neil G. Russell
    
    
    998,084E. Charles Chauviere III
    
    
    839,144
 
 (2)
    
    Amounts shown represent an estimate of the value of welfare benefits required to be provided
pursuant to the change in control agreements. Medical insurance costs were estimated based on
current COBRA rates, assuming 10% annual increases. Life insurance costs were estimated based
on quotes for such insurance obtained by Hydrils insurance broker from a number of carriers.
The cost to provide long-term disability insurance is based on Hydrils current group coverage
insurance rates. Employees currently pay the cost of their accidental death and disability
coverage and accordingly, no amount was included for that. Acceleration of Vesting of Equity Awards
   30




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##### Table of Contents



Values at December 31, 2006Closing price of $75.19 per
    
    Values assuming a price ofshare
    
    $97.00 per shareValue ofRestricted StockUnits and
    
    
    
    
    
    Value of RestrictedPerformance
    
    
    
    
    
    Stock Units andValue of
    
    Restricted Stock
    
    Value of
    
    PerformanceOptions
    
    Units
    
    Options
    
    Restricted StockAccelerated(1)
    
    Accelerated(2)
    
    Accelerated(3)
    
    Units Accelerated(4)Christopher T. Seaver
    
    $
    1,938,867
    
    
    $
    4,112,894
    
    
    $
    2,839,620
    
    
    $
    5,305,900Chris D. North
    
    
    533,897
    
    
    
    1,490,266
    
    
    
    794,308
    
    
    
    1,922,540Charles E. Jones
    
    
    932,212
    
    
    
    2,463,375
    
    
    
    1,363,614
    
    
    
    3,177,914Neil G. Russell
    
    
    839,145
    
    
    
    1,541,396
    
    
    
    1,225,182
    
    
    
    1,988,500E. Charles Chauviere III
    
    
    611,324
    
    
    
    1,514,327
    
    
    
    895,116
    
    
    
    1,953,580
 
 (1)
    
    The amounts set forth in this column are equal to the aggregate of the in-the-money value
of options that were not vested on December 31, 2006, the vesting of which would be
automatically accelerated under the situations indicated above. The in-the-money value of
each option is the difference between the exercise price and the closing stock price of $75.19
on December 29, 2006.(2)
    
    The amounts set forth in this column are equal to number of restricted stock units and
performance restricted stock units that were not vested on December 31, 2006, the vesting of
which would be automatically accelerated under the situations indicated above, multiplied by
the closing stock price of $75.19 on December 29, 2006.(3)
    
    The amounts set forth in this column are equal to the aggregate of value of options that were
not vested on December 31, 2006, the vesting of which would be automatically accelerated under
the situations indicated above, assuming a stock price of $97.00 per share, the cash merger
consideration in the pending merger transaction with Tenaris.(4)
    
    The amounts set forth in this column are equal to number of restricted stock units and
performance restricted stock units that were not vested on December 31, 2006, the vesting of
which would be automatically accelerated under the situations indicated above, multiplied by
$97.00 per share, the cash merger consideration in the pending merger transaction with
Tenaris. Restoration Plan
   31




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##### Table of Contents



Management Incentive Plan
  32




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##### Table of Contents



DIRECTOR COMPENSATION
  Director Compensation
 Change inPension ValueFees Earned
    
    
    
    
    
    
    
    
    
    and Nonqualifiedor
    
    
    
    
    
    
    
    
    
    DeferredPaid in
    
    Stock
    
    Option
    
    Compensation
    
    All OtherCash
    
    Awards
    
    Awards
    
    Earnings
    
    Compensation
    
    TotalName
    
    ($)(1)
    
    ($)(2) (3)
    
    ($)(3)
    
    ($)
    
    ($)
    
    ($)Jerry S. Cox
    
    $
    47,300
    
    
    $
    161,525
    
    
    $
    14,750
    
    
    
    
    
    
    
    
    
    
    $
    223,575Roger Goodan
    
    
    44,000
    
    
    
    161,525
    
    
    
    14,750
    
    
    
    
    
    
    
    
    
    
    
    220,275Gordon T. Hall
    
    
    47,300
    
    
    
    161,525
    
    
    
    14,750
    
    
    
    
    
    
    
    
    
    
    
    223,575Kenneth S. McCormick
    
    
    62,300
    
    
    
    161,525
    
    
    
    14,750
    
    
    
    
    
    
    
    
    
    
    
    238,575Richard C. Seaver
    
    
    175,000
    
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    $
    17,500
    (5)
    
    
    192,500Patrick T. Seaver
    
    
    37,400
    
    
    
    161,525
    
    
    
    14,750
    
    
    
    
    
    
    
    
    
    
    
    213,675T. Don Stacy
    
    
    59,000
    
    
    
    161,525
    
    
    
    14,750
    
    
    
    
    
    
    
    
    
    
    
    235,275Lew O. Ward
    
    
    42,900
    
    
    
    161,525
    
    
    
    14,750
    
    
    
    
    
    
    
    
    
    
    
    219,175
 
 (1)
    
    In 2006, Hydrils non-employee directors received an annual retainer of $33,000.
Non-employee directors who serve as chairman of a Board committee receive an additional
$15,000 annually for serving in that capacity. Non-employee directors also received a fee of
$1,100 for attendance at each Board of Directors meeting and each committee meeting of which
they are a member. Richard C. Seaver served as Chairman of the Board of Directors until
November 2006 and continues to serve as Chairman Emeritus and a director of Hydril. He is
regarded as an employee and was paid $175,000 by Hydril in 2006.(2)
    
    The amounts set forth in the table above for Stock Awards and Option Awards are equal to
the dollar amounts recognized by Hydril as stock-based compensation expense for the year ended
December 31, 2006 for financial reporting purposes in accordance with FAS 123R with respect to
prior awards of options and deferred share units, respectively, granted to non-employee
directors, except that in accordance with applicable disclosure requirements, these amounts do
not reflect any reduction for estimated forfeiture related to service-based vesting
conditions.The following table sets forth the portion of the stock-based compensation expense for 2006 in
the case of each nonemployee director that relates to awards made in each of the periods
indicated below. The amounts are the same for each of the non-employee directors. Hydril did
not make awards of options to non-employee directors in 2005 or 2006. 2003
    
    2004
    
    2005
    
    2006
    
    TotalOption Awards
    
    $
    5,464
    
    
    $
    9,286
    
    
    $
    
    
    
    $
    
    
    
    $
    14,750Stock Awards
    
    
    
    
    
    
    77,516
    
    
    
    54,643
    
    
    
    29,367
    
    
    
    161,525
  2003
    
    2004Expected life (years)
    
    
    5.5
    
    
    
    3.71Interest rate
    
    
    2.75
    %
    
    
    3.67
    %Volatility
    
    
    49.83
    %
    
    
    36.00
    %Dividend yield
    
    
    0
    %
    
    
    0
    %Weighted-average fair value per shares at grant date
    
    $
    13.12
    
    
    $
    9.34
 33




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##### Table of Contents



For more information regarding Hydrils accounting for stock options under FAS 123R, please see
Note 2 Stock-Based Compensation in the notes to Hydrils consolidated financial statements
included in its Annual Report on Form 10-K for the year ended December 31, 2006.With respect to deferred share units, compensation expense is recognized on a mark-to-market
basis over the vesting period based on the fair market value of the underlying stock at the end
of each reporting period. As a result, the amount expensed for a given award is adjusted on an
ongoing basis for changes in the price of the common stock.In 2006, each non-employee director received an award of 2,000 deferred share units, with a
grant dated fair value of $75.20. The awards will vest and become payable in full on June 1,
2009. Upon vesting, the deferred share units are settled in cash at the then fair market value
of the common stock on a one-for-one basis. As the deferred share units cannot result in the
issuance of shares of Hydril common stock, they are not issued in connection with any Hydril
incentive plan. In 2006, each of the non-employee directors waived the automatic annual grant
under the Hydril Company 2000 Incentive Plan of a nonqualified stock option award to each
non-employee director for 3,000 shares of common stock(3)
    
    As of December 31, 2006, the directors named above held stock options for the purchase of the
following number of shares of common stock and the following amounts of unvested deferred
share units: Jerry S.
    
    Roger
    
    Gordon T.
    
    Kenneth S.
    
    Richard C.
    
    Patrick
    
    T. Don
    
    Lew O.Cox
    
    Goodan
    
    Hall
    
    McCormick
    
    Seaver
    
    T. Seaver
    
    Stacy
    
    WardStock options
    
    
    3,002
    
    
    
    5,982
    
    
    
    3,002
    
    
    
    1,001
    
    
    
    0
    
    
    
    5,982
    
    
    
    5,982
    
    
    
    1,001Deferred share units
    
    
    6,500
    
    
    
    6,500
    
    
    
    6,500
    
    
    
    6,500
    
    
    
    0
    
    
    
    6,500
    
    
    
    6,500
    
    
    
    6,500
 
 (4)
    
    Richard Seaver is a participant in the Hydril Company Retirement Plan. Due to benefit
payments he received during 2006 under that plan, the actuarial present value of his
accumulated benefit under the plan declined by $19,360 at December 31, 2006 as compared with
December 31, 2005. See Pension Benefits above for more information regarding the Hydril
Company Retirement Plan.(5)
    
    The amounts set forth for Richard Seaver for All Other Compensation represent contributions
by Hydril under its 401(k) Plan and defined contribution retirement plan. 
 COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
  34




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##### Table of Contents



ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
 
 EQUITY COMPENSATION PLAN INFORMATION
  (c)(a)
    
    
    
    
    
    
    Number of shares ofNumber of shares of
    
    
    
    
    
    
    common stock remainingcommon stock to be
    
    
    (b)
    
    
    available for futureissued upon exercise
    
    
    Weighted average
    
    
    issuance under equityof outstanding
    
    
    exercise price of
    
    
    compensation plansoptions, warrants
    
    
    outstanding options,
    
    
    (excluding securitiesPlan Category
    
    and rights(1)
    
    
    warrants and rights(2)
    
    
    reflected in column (a))(3)Equity compensation
plans approved by
security
holders(4)
    
    
    740,421
    
    
    $
    25.53
    
    
    
    1,312,683Equity compensation
plans not approved
by security holders
    
    None
    
    None
    
    NoneTotal
    
    
    740,421
    
    
    $
    25.53
    
    
    
    1,312,683
 
 (1)
    
    Includes 293,262 shares that may be issued pursuant to previously made restricted stock unit
awards, subject to and upon vesting of the awards.(2)
    
    Excludes restricted stock unit awards.(3)
    
    The amount shown represents (i) 134,683 shares of common stock available for grant pursuant
to awards of stock, as well as stock options or stock appreciation rights, under the Hydril
Company 2000 Incentive Plan and (ii) 1,178,000 shares of common stock available for use under
the Hydril Company 2005 Incentive Plan, of which 527,800 are available for awards other than
options or stock appreciation rights. With respect to the Hydril Company 2005 Incentive Plan,
no more than 1,200,000 shares of common stock are available for options, and no more than
550,000 shares of common stock are available for awards other than options or stock
appreciation rights. The amount shown excludes shares under the Hydril Company Employee Stock
Purchase Plan which was terminated on January 1, 2006.(4)
    
    The shares of common stock set forth above relate to the Hydril Company 2000 Incentive Plan
and the Hydril Company 2005 Incentive Plan. 
 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
  
    
    each person or entity known to Hydril to be a beneficial owner of 5% or more of
either class of Hydrils voting securities or having beneficial ownership of voting
stock holding 5% or more of the voting power;
    
    each of Hydrils directors or nominees for director;
    
    Hydrils chief executive officer, chief financial officer and each of its other
named executive officers; and
    
    all of Hydrils executive officers and directors as a group.
 35




---



##### Table of Contents



Combined
    
    PercentagesShares
    
    Combined
    
    Combined(Common and
    
    Outstanding
    
    Votingclass B)
    
    Shares
    
    PowerDirectors and Executive Officers:(1)E. Charles Chauviere III
    
    
    19,801
    
    
    
    *
    
    
    
    *Jerry S. Cox
    
    
    4,001
    
    
    
    *
    
    
    
    *Roger Goodan
    
    
    8,072
    
    
    
    *
    
    
    
    *Gordon T. Hall
    
    
    2,001
    
    
    
    *
    
    
    
    *Charles E. Jones(2)
    
    
    43,708
    
    
    
    *
    
    
    
    *Kenneth S. McCormick
    
    
    
    
    
    
    
    
    
    
    Chris D. North
    
    
    7,349
    
    
    
    *
    
    
    
    *Neil G. Russell
    
    
    20,570
    
    
    
    *
    
    
    
    *Christopher T. Seaver(3)
    
    
    114,056
    
    
    
    *
    
    
    
    2.35
    %Patrick T. Seaver(3)
    
    
    21,286
    
    
    
    *
    
    
    
    *Richard C. Seaver(3)(4)
    
    
    2,215,251
    
    
    
    10.56
    %
    
    
    46.80
    %T. Don Stacy
    
    
    7,481
    
    
    
    *
    
    
    
    *Lew O. Ward
    
    
    16,347
    
    
    
    *
    
    
    
    *All directors and executive officers as a group (14 persons)
    
    
    2,487,826
    
    
    
    11.86
    %
    
    
    49.57
    %Other 5% Stockholders:Myron E. Harpole(5)
    
    
    1,574,739
    
    
    
    7.51
    %
    
    
    32.92
    %Blanche Ebert Seaver Endowment for Frank R. Seaver College
and Northern Trust Bank of California, N.A.(6)
    
    
    1,296,424
    
    
    
    6.18
    %
    
    
    27.39
    %Tenaris(7)
    
    
    1,035,208
    
    
    
    4.93
    %
    
    
    21.81
    %The Seaver Institute and the Trust under Paragraph VIII of
the Will of Frank R. Seaver, Deceased(8)
    
    
    299,611
    
    
    
    1.43
    %
    
    
    6.33
    %Declaration of Trust dated December 28, 1978(9)
    
    
    219,765
    
    
    
    1.05
    %
    
    
    4.64
    %T. Rowe Price Associates, Inc.(10)
    
    
    1,852,766
    
    
    
    8.83
    %
    
    
    3.91
    %Neuberger Berman Inc.(11)
    
    
    1,903,979
    
    
    
    9.08
    %
    
    
    4.02
    %Oppenheimer Funds, Inc.(12)
    
    
    1,164,329
    
    
    
    5.55
    %
    
    
    2.46
    %Mario J. Gabelli(13)
    
    
    1,329,521
    
    
    
    6.34
    %
    
    
    2.81
    %
 
 *
    
    Less than 1% 36




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##### Table of Contents



(1)
    
    The amounts shown for directors and executive officers as of March 21, 2007 include, in
some cases, shares held by trusts of which the applicable director is a trustee and shares
held by members of the immediate family of the applicable director or officer. Except in
the case of Messrs. Richard, Patrick and Christopher Seaver, all shares shown in the table
above are shares of common stock or shares of common stock issuable upon exercise of
options. For information regarding Richard Seavers holdings, see footnote 4. For Messrs.
Christopher and Patrick Seaver, 111,100 and 9,555 shares, respectively, of the shares shown
in the table above are class B common stock; the remainder are common stock or options to
purchase common stock. The amounts of shares shown in the table above representing shares
of common stock that may be acquired upon exercise of options is as follows within 60 days
of March 21, 2006: Charles Chauviere: 14,752; Roger Goodan: 4,981; Charles Jones: 35,720;
Chris North: 4,280; Neil Russell: 14,520; Patrick Seaver: 4,981; Don Stacy: 4,981; Gordan
Hall: 2,001; Jerry Cox: 2,001; and all directors and executive officers as a group: 94,992.
The amounts shown in the table above do not include 6,500 deferred share units held by each
of the non-employee directors, which settle in cash upon vesting.(2)
    
    The amount of common stock held by Charles Jones includes 3,462 shares of restricted
common stock awarded on June 1, 2003. Charles Jones has voting power over these shares, but
they remain subject to forfeiture until the restricted stock award vests. The award will
vest with respect to 1,731 shares on each of June 1, 2007 and June 1, 2008.(3)
    
    Christopher Seaver, Patrick Seaver and Richard Seaver, individually and in his capacity
as the sole trustee of the Richard C. Seaver Living Trust, are parties to the voting and
support agreement with Tenaris, pursuant to which they generally have agreed to vote
specified shares in favor of the merger transaction. The voting and support agreement
concerns the following number of shares: Christopher Seaver: 111,100 shares of class B
common stock and 2,956 shares of common stock; Patrick Seaver: 2,325 shares of class B
common stock; the Richard C. Seaver Living Trust: 853,827 shares of class B common stock;
and Richard C. Seaver, individually: 65,000 shares of class B common stock. In addition,
any shares that the parties to the voting and support agreement subsequently acquire
beneficial ownership of, including pursuant to the exercise of stock options, will be
subject to the terms of the voting and support agreement. support agreement. See footnote
(7) below for information regarding the report filed by Tenaris and related parties
regarding the voting and support agreement and the shares subject thereto.(4)
    
    Richard Seaver is a director and Chairman Emeritus of the Board of Hydril. He reports
that he may be deemed the beneficial owner of 2,215,251 shares of class B common stock. Of
these shares, Richard Seaver reports sole voting and dispositive power over 65,000 shares
of class B common stock, which are held directly by him. Richard Seaver reports shared
voting and dispositive power over 2,150,251 shares: 853,827 shares of class B common stock
held by him as sole trustee of the Richard Seaver Living Trust and 1,296,424 shares of
class B common stock held by him as one of three trustees of the Blanche Ebert Seaver
Endowment for Frank R. Seaver College (the Endowment) (see footnote 6). Richard Seaver
disclaims beneficial ownership of the shares of class B common stock held by the Endowment.
Richard Seaver is the father of Christopher Seaver, Chairman of the Board, President and
Chief Executive Officer of Hydril, and Patrick Seaver, Vice Chairman of the Board of
Hydril. Richard Seavers business address is 3300 N. Sam Houston Parkway East, Houston,
Texas 77032.(5)
    
    Myron Harpole reports that he may be deemed the beneficial owner of 1,556,239 shares of
class B common stock and 18,500 shares of common stock. Of these shares, he reports sole
voting and dispositive power over 18,500 shares of common stock. Myron Harpole shares
voting and dispositive power over 1,556,239 shares of class B common stock as follows:
1,296,424 shares of class B common stock held by him as one of three trustees of the
Endowment (see footnote 5) and 259,815 shares of class B common stock held by him as the
sole trustee of two charitable trusts of which he is not a beneficiary (one of which is
referenced in footnote 8). Myron Harpole disclaims beneficial ownership of the shares of
class B common stock held by the Endowment and the shares of class B common stock held by
the two charitable trusts. Myron Harpole is one of 15 directors of The Seaver Institute
(see footnote 8). Myron Harpoles business address is 140 South Lake Avenue, Suite 274,
Pasadena, California 91101.(6)
    
    The Endowment reports that it may be deemed the beneficial owner of 1,296,424 shares of
class B common stock over which it holds shared voting and dispositive power. The sole
beneficiary of the Endowment is 37




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##### Table of Contents



the Frank R. Seaver College of Pepperdine University. Richard Seaver and Myron Harpole are
two of the three trustees of the Endowment (see footnotes 4 and 5). Northern Trust, NA
reports that it may be deemed the beneficial owner of 1,296,424 shares of class B common
stock. It has shared voting and dispositive power over these shares as one of three trustees
of the Endowment. Northern Trust disclaims beneficial ownership of all of these shares. The
business address for the Endowment (care of Northern Trust) and Northern Trust is 355 South
Grand Avenue, Suite 2600, Los Angeles, California 90071.(7)
    
    Tenaris, Rocca & Partners S.A., San Faustin N.V. and I.I.I. Industrial Investments Inc.
each reports that it has shared voting and dispositive power over 2,956 shares of common
stock and 1,032,252 shares of class B common stock pursuant to the voting and support
agreement. See footnote (3) above for more information regarding the voting and support
agreement. Each of these entities disclaims beneficial ownership of these shares. The
business address for Tenaris is 46 A Ave John F Kennedy, 2nd floor L-1855, Luxembourg; the
business address for Rocca & Partners S.A. is Vanterpool Plaza, 2nd Floor, Wickhams Cay I,
Road Town, Tortola, British Virgin Islands; the business address for San Faustin N.V. is
Berg Arrarat I, Curacao, Netherlands Antilles; and the business address for I.I.I.
Industrial Investments Inc. is 69 Dr. Roys Drive, Georgetown, Grand Cayman, Cayman
Islands.(8)
    
    The Seaver Institute is a non-profit corporation for scientific, educational,
charitable and religious purposes. The Seaver Institute and the Trust created under
Paragraph VIII of the Will of Frank R. Seaver, Deceased (the Paragraph VIII Trust) report
that they have shared voting and dispositive power over 299,611 shares of class B common
stock held by The Seaver Institute as sole trustee under the Paragraph VIII Trust, the
beneficiaries of which are various educational and religious institutions. The Board of
Directors of The Seaver Institute is currently comprised of 15 individuals, including
Richard Seaver, Patrick Seaver and Christopher Seaver, each of whom is a director of
Hydril, and Martha Seaver, Victoria Seaver Dean, and R. Carlton Seaver, each of whom is the
child of Richard Seaver and sibling of Christopher Seaver and Patrick Seaver. Victoria
Seaver Dean is also the president of The Seaver Institute. The business address for each of
The Seaver Institute and the Paragraph VIII Trust is 11611 San Vicente Blvd., Suite 545,
Los Angeles, California 90049.(9)
    
    The Declaration of Trust dated December 28, 1978 reports that it may be deemed the
beneficial owner of 219,765 shares of class B common stock over which it holds shared
voting and dispositive power. Myron Harpole serves as trustee under the Declaration of
Trust (see footnote 5). The business address for the Declaration of Trust is c/o Myron
Harpole, 140 South Lake Avenue, Suite 274, Pasadena, California 90071.(10)
    
    T. Rowe Price Associates, Inc. reports that it has sole voting power over 361,900
shares of common stock and sole dispositive power over 1,852,766 shares of common stock. T.
Rowe Price Associates, Inc. disclaims beneficial ownership of all of these shares. The
business address for T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore,
Maryland 21202.(11)
    
    Neuberger Berman Inc. reports that its wholly owned subsidiary, Neuberger Berman, LLC,
has sole voting power over 53,986 shares of common stock, shares voting power over
1,389,142 shares of common stock, and shares dispositive power over 1,903,979 shares of
common stock with other wholly owned subsidiaries, Neuberger Berman Management Inc. and
Neuberger Berman Equity Funds. The business address for Neuberger Berman Inc. is 605 Third
Avenue, New York, New York 10158.(12)
    
    Oppenheimer Funds, Inc. reports that it shares voting and dispositive power over
1,164,329 shares of common stock. Oppenheimer Funds, Inc. disclaims beneficial ownership of
all of these shares. The business address for Oppenheimer Funds, Inc. is Two World
Financial Center, 225 Liberty Street, New York, New York 10281.(13)
    
    Gabelli Funds, LLC reports that it has sole voting and dispositive power over 355,000
shares of common stock; GAMCO Asset Management Inc. reports that it has sole voting power
over 759,500 shares of common stock and sole dispositive power over 778,900 shares of
common stock; Gabelli Securities, Inc. reports that it has sole voting and dispositive
power over 132,221 shares of common stock; MJG Associates, Inc. reports that it has sole
voting and dispositive power over 16,400 shares of common stock; 38




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##### Table of Contents



Gabelli Foundation, Inc. reports that it has sole voting and dispositive power over 7,500
shares of common stock; GGCP, Inc. reports that it has sole voting and dispositive power
over 10,000 shares of common stock; GAMCO Investors, Inc. reports that it has sole voting
and dispositive power over 15,000 shares of common stock; and Mario J. Gabelli reports that
he has sole voting and dispositive power over 14,500 shares of common stock and may be
deemed to beneficially own all 1,329,521 shares of common stock. The business address for
Mario J. Gabelli, GGCP, Inc., GAMCO Investors, Inc., Gabelli Securities, Inc., GAMCO Asset
Management Inc. and Gabelli Funds, LLC is One Corporate Center, Rye, New York 10580; the
business address for MJG Associates, Inc. is 140 Greenwich Avenue, Greenwich, Connecticut
06830; and the business address for Gabelli Foundation, Inc. is 165 West Liberty Street,
Reno, Nevada 89501. 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 
 DIRECTOR INDEPENDENCE
   
    
    Jerry Cox is a member of the Board of Regents of Pepperdine University and Lew
Ward serves on the Advisory Board to Pepperdine University. Pepperdine, formerly a
significant direct stockholder of Hydril, no longer holds Hydril shares directly but
remains the beneficiary under the Blanche Ebert Seaver Endowment for Frank R. Seaver
College, which holds approximately 27% of the voting power of Hydrils stock. The
trustees of the Endowment are Richard Seaver, Myron Harpole and Northern Trust Bank of
California, N.A.
    
    Gordon Hall holds a small passive, indirect interest in an entity in which
Hydril holds a minority ownership interest. Mr. Halls indirect holdings represent
approximately a 1% equity interest in the entity and Hydril holds approximately a 9%
equity interest. Mr. Hall has advised that his investment represents a de minimis
amount of his total assets.
 
 TRANSACTIONS WITH RELATED PERSONS
  39




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##### Table of Contents



RELATED PARTY TRANSACTION POLICIES AND PROCEDURES
  
 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
 
 FEES PAID TO DELOITTE & TOUCHE LLP
  Audit-RelatedYear
    
    Audit Fees(1)
    
    Fees(2)
    
    Tax Fees(3)2006
    
    $
    994,471
    
    
    $
    99,664
    
    
    $
    50,2942005
    
    
    1,112,195
    
    
    
    38,038
    
    
    
    112,542
 
 (1)
    
    The amount for 2006 includes fees incurred for the review and testing of internal controls
over financial reporting required under Section 404 of the Sarbanes-Oxley Act of 2002.(2)
    
    The amounts represent fees for employee benefit plan audits, review of a registration
statement on Form S-8 and accounting research and consultation.(3)
    
    The amounts represent fees for tax compliance and consulting, the majority of which were for
tax compliance. 
 AUDIT COMMITTEE PREAPPROVAL
  40




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a)
    
    The following documents are filed as part of this report:
 1.
    
    Financial Statements
 
    
    No financial statements are filed as part of this Amendment No. 1 to
the Registrants Annual Report on Form 10-K. The originally filed Annual Report on
Form 10-K included the financial statements of the Registrant as set forth under
Item 8 therein.
 2.
    
    Financial Statement Schedules
 
    
    All schedules have been omitted because either they are not applicable
or the required information is shown in the financial statements.
 3.
    
    Exhibits
 ExhibitNo.
    
    
    
    Description2.1*
    
    
    
    Agreement and Plan of Merger among Hydril Company,
Tenaris S.A. and Hokkaido Acquisition, Inc. dated as of
February 11, 2007 (incorporated by reference to Exhibit
2.1 of the Companys Form 8-K filed with the Commission
on February 12, 2007).3.1*
    
    
    
    Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 of the
Companys Form 10-Q filed with the Commission on
November 14, 2000).3.2*
    
    
    
    Restated Bylaws of the Company (incorporated by
reference to Exhibit 3.2 of Amendment No. 1 to the
Registration Statement on Form S-1 of the Company filed
with the Commission on July 31, 2000).4.1*
    
    
    
    Form of Specimen Common Stock Certificate (incorporated
by reference to Exhibit 4.1 of Amendment No. 1 to the
Registration Statement on Form S-1 of the Company filed
with the Commission on July 31, 2000).4.2*
    
    
    
    Rights Agreement dated as of April 9, 2002 between the
Company and Mellon Investor Services LLC, as Rights
Agent, which includes as Exhibit A the form of
Certificate of Designations of Series A Junior
Participating Preferred Stock setting forth the terms of
the Preferred Stock, as Exhibit B the form of Rights
Certificate and as Exhibit C the Summary of Rights to
Purchase Preferred Stock. Pursuant to the Rights
Agreement, Rights Certificates will not be mailed until
after the Distribution Date (as defined in the Rights
Agreement) (incorporated by reference to Exhibit 99.1 to
the Companys Current Report on Form 8-K filed with the
Commission on April 9, 2002).4.3*
    
    
    
    Amendment to the Rights Agreement, dated as of February
11, 2007 between the Company and Mellon Investor
Services LLC, as Rights Agent (incorporated by reference
to Exhibit 4.1 to the Companys Form 8-K filed with the
Commission on February 12, 2007).10.3*+
    
    
    
    Employment Agreement with Neil Russell dated March 12,
2004 (incorporated by reference to Exhibit 10.3 of the
Companys Form 10-K for the year-ended December 31,
2004).10.5*+
    
    
    
    Hydril Company 2000 Incentive Plan (incorporated by
reference to Exhibit 10.3 of Amendment No. 1 to the
Registration Statement on Form S-1 of the Company filed
with the Commission on July 31, 2000).10.6*+
    
    
    
    Amendment to Hydril Company 2000 Incentive Plan
(incorporated by reference to Exhibit 10.5 of the
Companys Form 10-K for the year-ended December 31,
2003).10.7*+
    
    
    
    Form of Stock Option Award Agreement for Employees under
the Hydril Company 2000 Incentive Plan (incorporated by
reference to Exhibit 10.7 of the Companys Form 10-K for
the year-ended December 31, 2004).10.8*+
    
    
    
    Form of Stock Option Award Agreement for Non-employee
Directors under the Hydril Company 2000 Incentive Plan
(incorporated by reference to Exhibit 10.8 of the
Companys Form 10-K for the year-ended December 31,
2004).10.9*+
    
    
    
    Form of Restricted Stock Unit Award Agreement for
Employees under the Hydril Company 2000 Incentive Plan
(incorporated by reference to Exhibit 10.9 of the
Companys Form 10-K for the year-ended December 31,
2004).
 41




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##### Table of Contents



ExhibitNo.
    
    
    
    Description10.10*+
    
    
    
    Form of Restricted Stock Award Agreement for Employees
under the Hydril Company 2000 Incentive Plan
(incorporated by reference to Exhibit 10.10 of the
Companys Form 10-K for the year-ended December 31,
2004).10.11*+
    
    
    
    Form of Indemnification Agreement (incorporated by
reference to Exhibit 10.5 of Amendment No. 1 to the
Registration Statement on Form S-1 of the Company filed
with the Commission on July 31, 2000).10.12*+
    
    
    
    Hydril Company Restoration Plan (incorporated by
reference to Exhibit 10.13 of the Companys Form 10-K
for the year-ended December 31, 2001).10.13**+
    
    
    
    Forms of Change in Control Agreements.10.14**+
    
    
    
    Description of Non-employee Director Compensation.10.15*+
    
    
    
    Executive Officer 2006 Bonus Criteria under the 2006
Management Incentive Plan (incorporated by reference to
the Companys Form 8-K filed with the Commission on
March 10, 2006).10.16*+
    
    
    
    2006 Management Incentive Plan (incorporated by
reference to Exhibit 10.1 of the Companys Form 8-K
filed with the Commission on March 10, 2006).10.17*+
    
    
    
    Executive Officer Salaries (incorporated by reference to
the Companys Form 8-K filed with the Commission on
March 10, 2006).10.18*+
    
    
    
    Form of Restricted Stock Unit Agreement
(Performance-Based) for Employees under the Hydril 2000
and 2005 Incentive Plans (incorporated by reference to
Exhibit 10.1 of the Companys Form 10-Q for the quarter
ended June 30, 2005).10.19*+
    
    
    
    Hydril Company 2005 Incentive Plan (incorporated by
reference to Annex A to our Definitive Proxy Statement
on Schedule 14A filed with the Commission on April 8,
2005).10.20*+
    
    
    
    Form of Deferred Share Unit Award Agreement between
Hydril and Non-employee Directors (incorporated by
reference to Exhibit 10.2 of the Companys Form 8-K
filed with the Commission on May 23, 2005).21.1**
    
    
    
    Subsidiaries of the Registrant.23.1**
    
    
    
    Consent of Independent Registered Public Accounting Firm.24.1**
    
    
    
    Powers of Attorney.31.1
    
    
    
    Certification by Christopher T. Seaver, Chief Executive
Officer, pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934.31.2
    
    
    
    Certification by Chris D. North, Chief Financial
Officer, pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934.32.1**
    
    
    
    Certification by Christopher T. Seaver, Chief Executive
Officer, pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (Subsection (a) and (b) of Section 1350,
Chapter 63 of Title 18, United States Code).32.2**
    
    
    
    Certification by Chris D. North, Chief Financial
Officer, pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (Subsection (a) and (b) of Section 1350,
Chapter 63 of Title 18, United States Code).
 
 *
    
    Incorporated by reference as indicated.**
    
    Previously filed with the original Annual Report on Form 10-K.+
    
    Denotes management compensatory plan or agreement. 42




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##### Table of Contents



SIGNATURE
  HYDRIL COMPANYBy:
    
    /s/ Chris D. NorthChris D. North, Vice President of Finance,Chief Financial Officer and Secretary(Authorized officer and principalaccounting and financial officer
  Signature
    
    Title/s/ Christopher T. Seaver
    
    President, Chief Executive Officer and Chairman of the BoardChristopher T. Seaver
    
    (Principal Executive Officer)/s/ Chris D. North
    
    Vice President of Finance, Chief Financial Officer and SecretaryChris D. North
    
    (Principal Accounting and Financial Officer)*
    
    Chairman Emeritus of the BoardRichard C. Seaver*
    
    DirectorJerry S. Cox*
    
    DirectorRoger Goodan*
    
    DirectorGordon T. Hall*
    
    DirectorKenneth S. McCormick*
    
    DirectorPatrick T. Seaver*
    
    DirectorT. Don Stacy*
    
    DirectorLew O. Ward
 *By:
    
    /s/ Christopher T. SeaverChristopher T. SeaverAttorney-in-Fact




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##### Table of Contents



INDEX TO EXHIBITS
 ExhibitNo.
    
    
    
    Description2.1*
    
    
    
    Agreement and Plan of Merger among Hydril Company,
Tenaris S.A. and Hokkaido Acquisition, Inc. dated as of
February 11, 2007 (incorporated by reference to Exhibit
2.1 of the Companys Form 8-K filed with the Commission
on February 12, 2007).3.1*
    
    
    
    Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 of the
Companys Form 10-Q filed with the Commission on
November 14, 2000).3.2*
    
    
    
    Restated Bylaws of the Company (incorporated by
reference to Exhibit 3.2 of Amendment No. 1 to the
Registration Statement on Form S-1 of the Company filed
with the Commission on July 31, 2000).4.1*
    
    
    
    Form of Specimen Common Stock Certificate (incorporated
by reference to Exhibit 4.1 of Amendment No. 1 to the
Registration Statement on Form S-1 of the Company filed
with the Commission on July 31, 2000).4.2*
    
    
    
    Rights Agreement dated as of April 9, 2002 between the
Company and Mellon Investor Services LLC, as Rights
Agent, which includes as Exhibit A the form of
Certificate of Designations of Series A Junior
Participating Preferred Stock setting forth the terms of
the Preferred Stock, as Exhibit B the form of Rights
Certificate and as Exhibit C the Summary of Rights to
Purchase Preferred Stock. Pursuant to the Rights
Agreement, Rights Certificates will not be mailed until
after the Distribution Date (as defined in the Rights
Agreement) (incorporated by reference to Exhibit 99.1 to
the Companys Current Report on Form 8-K filed with the
Commission on April 9, 2002).4.3*
    
    
    
    Amendment to the Rights Agreement, dated as of February
11, 2007 between the Company and Mellon Investor
Services LLC, as Rights Agent (incorporated by reference
to Exhibit 4.1 to the Companys Form 8-K filed with the
Commission on February 12, 2007).10.3*+
    
    
    
    Employment Agreement with Neil Russell dated March 12,
2004 (incorporated by reference to Exhibit 10.3 of the
Companys Form 10-K for the year-ended December 31,
2004).10.5*+
    
    
    
    Hydril Company 2000 Incentive Plan (incorporated by
reference to Exhibit 10.3 of Amendment No. 1 to the
Registration Statement on Form S-1 of the Company filed
with the Commission on July 31, 2000).10.6*+
    
    
    
    Amendment to Hydril Company 2000 Incentive Plan
(incorporated by reference to Exhibit 10.5 of the
Companys Form 10-K for the year-ended December 31,
2003).10.7*+
    
    
    
    Form of Stock Option Award Agreement for Employees under
the Hydril Company 2000 Incentive Plan (incorporated by
reference to Exhibit 10.7 of the Companys Form 10-K for
the year-ended December 31, 2004).10.8*+
    
    
    
    Form of Stock Option Award Agreement for Non-employee
Directors under the Hydril Company 2000 Incentive Plan
(incorporated by reference to Exhibit 10.8 of the
Companys Form 10-K for the year-ended December 31,
2004).10.9*+
    
    
    
    Form of Restricted Stock Unit Award Agreement for
Employees under the Hydril Company 2000 Incentive Plan
(incorporated by reference to Exhibit 10.9 of the
Companys Form 10-K for the year-ended December 31,
2004).10.10*+
    
    
    
    Form of Restricted Stock Award Agreement for Employees
under the Hydril Company 2000 Incentive Plan
(incorporated by reference to Exhibit 10.10 of the
Companys Form 10-K for the year-ended December 31,
2004).10.11*+
    
    
    
    Form of Indemnification Agreement (incorporated by
reference to Exhibit 10.5 of Amendment No. 1 to the
Registration Statement on Form S-1 of the Company filed
with the Commission on July 31, 2000).10.12*+
    
    
    
    Hydril Company Restoration Plan (incorporated by
reference to Exhibit 10.13 of the Companys Form 10-K
for the year-ended December 31, 2001).10.13**+
    
    
    
    Forms of Change in Control Agreements.10.14**+
    
    
    
    Description of Non-employee Director Compensation.10.15*+
    
    
    
    Executive Officer 2006 Bonus Criteria under the 2006
Management Incentive Plan (incorporated by reference to
the Companys Form 8-K filed with the Commission on
March 10, 2006).




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##### Table of Contents



ExhibitNo.
    
    
    
    Description10.16*+
    
    
    
    2006 Management Incentive Plan (incorporated by
reference to Exhibit 10.1 of the Companys Form 8-K
filed with the Commission on March 10, 2006).10.17*+
    
    
    
    Executive Officer Salaries (incorporated by reference to
the Companys Form 8-K filed with the Commission on
March 10, 2006).10.18*+
    
    
    
    Form of Restricted Stock Unit Agreement
(Performance-Based) for Employees under the Hydril 2000
and 2005 Incentive Plans (incorporated by reference to
Exhibit 10.1 of the Companys Form 10-Q for the quarter
ended June 30, 2005).10.19*+
    
    
    
    Hydril Company 2005 Incentive Plan (incorporated by
reference to Annex A to our Definitive Proxy Statement
on Schedule 14A filed with the Commission on April 8,
2005).10.20*+
    
    
    
    Form of Deferred Share Unit Award Agreement between
Hydril and Non-employee Directors (incorporated by
reference to Exhibit 10.2 of the Companys Form 8-K
filed with the Commission on May 23, 2005).21.1**
    
    
    
    Subsidiaries of the Registrant.23.1**
    
    
    
    Consent of Independent Registered Public Accounting Firm.24.1**
    
    
    
    Powers of Attorney.31.1
    
    
    
    Certification by Christopher T. Seaver, Chief Executive
Officer, pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934.31.2
    
    
    
    Certification by Chris D. North, Chief Financial
Officer, pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934.32.1**
    
    
    
    Certification by Christopher T. Seaver, Chief Executive
Officer, pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (Subsection (a) and (b) of Section 1350,
Chapter 63 of Title 18, United States Code).32.2**
    
    
    
    Certification by Chris D. North, Chief Financial
Officer, pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (Subsection (a) and (b) of Section 1350,
Chapter 63 of Title 18, United States Code).
 
 *
    
    Incorporated by reference as indicated.**
    
    Previously filed with the original Annual Report on Form 10-K.+
    
    Denotes management compensatory plan or agreement.