**Exhibit 10.1****HYDRILCOMPANY****RESTRICTED STOCK UNIT AGREEMENT**          This Restricted Stock Unit Agreement between Hydril Company (the “Company”) and «Name» (the“Grantee”), an employee of the Company or its Subsidiary, regarding an award (“Award”) of«Restricted» units (“Restricted Stock Units”) representing shares of Common Stock (as defined inthe Hydril Company 2000 Incentive Plan (the “Plan”))granted to the Grantee on [___,      ] (the “Grant Date”), such number of units subject to adjustment in connection with theoccurrence of any of the events described in Section 15 of the Plan, and further subject to thefollowing terms and conditions:          1. **Relationship to Plan**. This Award is subject to all of the terms, conditions and provisionsof the Plan and administrative interpretations thereunder, if any, which have been adopted by theCommittee thereunder and are in effect on the date hereof. Except as defined herein, capitalizedterms shall have the same meanings ascribed to them under the Plan. For purposes of thisRestricted Stock Unit Agreement:     (a) **“Cause”**means (i) the Grantee’s willful and continued failure to substantiallyperform his duties with the Company or any such actual or anticipated failure after awritten demand for substantial performance is delivered to the Grantee by the Committee,which demand specifically identifies the manner in which the Board believes that theGrantee has not substantially performed his duties, (ii) upon the Grantee’s willfulparticipation in conduct which is demonstrably and materially injurious to the Company,monetarily or otherwise, or (iii) upon there being substantial evidence that the Grantee isguilty of a crime classified as a felony (or the equivalent thereof) under applicable law,or that the Grantee has been convicted of such a crime. For purposes of this definition, noact, or failure to act, on the Grantee’s part shall be deemed “willful” unless done, oromitted to be done, by the Grantee not in good faith.     (b) **“Change in Control”**shall be conclusively deemed to have occurred if (and only if)any of the following events shall have occurred: (a) after the date the Plan is approvedby the Board any “person” (as such term is used in Sections 13(d) and 14(d) of the UnitedStates Securities Exchange Act of 1934, as amended from time to time (the “Exchange Act”)),other than a person who is a Nonemployee Director of the Company as of May 15, 2000 or anyperson controlled by such a Nonemployee Director, becomes the “beneficial owner” (asdefined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of theCompany representing 35% or more of the combined voting power of the Company’s thenoutstanding voting securities without prior approval of a least two-thirds of the membersof the Board in office immediately prior to such person’s attaining such percentageinterest; (b) the Company is a party to a merger, consolidation, sale of assets or otherreorganization, or a proxy contest, as a consequence of which members of the Board inoffice immediately prior to such
 

 
transaction or event thereafter constitute less than a majority of the members of theboard of directors or comparable governing body of the entity that is the survivor of suchtransaction or event or, in the case of sale of assets, the entity that is the successor tothe business of the Company; or (c) during any period of two consecutive years, individualswho at the beginning of such period constituted the Board (including for this purpose anynew member whose election or nomination for election by the Company’s stockholders wasapproved by a vote of at least two-thirds of the members then still in office who weremembers at the beginning of such period) cease for any reason to constitute at least amajority of the Board.     (c) **“Disability”**means incapacity due to a physical or mental illness which continuesfor a period of more than six (6) months, as determined by the Committee.     (d) **“Employment”**means employment with the Company or any of its Subsidiaries.     (e) **“Performance Period”**means the period [specified three-year period].     (f) **“Peer Companies”**means the companies listed in Appendix A, provided that if anysuch company ceases to be a stand-alone public company at any time during the PerformancePeriod it shall no longer be deemed a Peer Company.     (g) **“Return on Capital Employed (“ROCE”)”**means, for a specified period, a company’saverage annual after tax operating income divided by average capital employed (total assetsand short term debt, including current maturities of long-term debt minus total currentliabilities). For purposes of calculating ROCE, all factors (i.e., operating income,income taxes, total assets, short term debt, including current maturities of long-termdebt) shall be determined using data from the company’s annual report on Form 10-K for theapplicable period. Appendix B provides the detailed description of the how ROCE will becalculated and an illustration of the calculation.     2. **Vesting Schedule**.     (a) This Award shall vest with respect to a percentage of the aggregate number ofRestricted Stock Units subject to this Award upon the expiration of the Performance Periodas determined in accordance with the achievement of the performance criteria described inSection 2(b) below; provided, however, that the Grantee must be in continuous Employmentfrom the Grant Date through the expiration of the Performance Period in order for theRestricted Stock Units to be eligible for vesting.
 

 
     (b) The Award will vest subject to the satisfaction of the following two independentperformance criteria during the Performance Period:     (i) Performance Gateway. In order to be eligible for vesting, the Companymust achieve ten percent (10%) cumulative annualized ROCE for the Performance Period (the“Performance Gateway”).     (ii) Peer Ranking/Vesting Percentage. Once the Performance Gateway isachieved, the Company’s ROCE ranking shall be compared against the ROCE ranking of its PeerCompanies for the Performance Period and the Award’s vesting percentage shall be determinedas follows:     **Company’s ROCE Ranking As Compared to** **Percentage of Restricted Stock****Peer Company ROCE Ranking** **Units That Become Vested**Below Median  0%Median (50th Percentile)  20%75th Percentile or higher  100%If the Company’s ROCE ranking is between the 50th and 75th percentile of its Peer Companies, theAward shall vest with respect to a proportionate number of Restricted Stock Units. Any portion ofan Award that does not become vested in accordance with subsections 2(b) or 2(c) at the end of thePerformance Period shall be automatically forfeited.     (c) All Restricted Stock Units subject to this Award shall vest, irrespective of thelimitations set forth in this Section 2, provided that the Grantee has been in continuousEmployment since the Grant Date, upon the occurrence of:     (i) a Change in Control; or     (ii) the Grantee’s termination of Employment by reason of death orDisability.          3. **Forfeiture of Award Upon Termination**. Except as provided in any other agreement betweenthe Grantee and the Company, if the Grantee’s employment terminates other than by reason of deathor Disability, all unvested Restricted Stock Units, and all Dividend Equivalent Amounts (as definedin paragraph 4) attributable thereto, as of the termination date shall be automatically forfeited.          4. **Dividend Equivalent Payments.**During the period of time between the Grant Date and theearlier of the date the Restricted Stock Units vest or are forfeited, the Restricted Stock Unitswill be evidenced by book entry registration. In the event that dividends are paid with respect toCommon Stock, the Company shall credit to the Grantee’s account an amount (“Dividend EquivalentAmount”) equal to the amount of the dividend paid per share of Common Stock as of such dividendpayment date multiplied by the number of Restricted Stock Units credited to the Grantee’s account
 

 
immediately prior to such dividend payment date. Dividend Equivalent Amounts shall not bearinterest or be segregated in a separate account while in the custody of the Company. Upon vestingof all, or a portion of, the Grantee’s Restricted Stock Units, the Grantee shall be entitled toreceive a cash payment equal to any Dividend Equivalent Amounts, to the extent not yet paid,attributable to the vested Restricted Stock Units; provided that the Committee, in its solediscretion, may elect, in lieu of such cash payment, to deliver to the Grantee shares of CommonStock equal to the Fair Market Value of the cash payment.          5. **Payment**. As promptly as is reasonably practicable following the vesting of any portion ofthe Restricted Stock Units, the value of the vested Restricted Stock Units, to the extent not yetpaid, shall be payable to the Grantee in the form of shares of Common Stock.          6. **Delivery of Shares.**The Company shall not be obligated to deliver any shares of CommonStock if counsel to the Company determines that such sale or delivery would violate any applicablelaw or any rule or regulations of any governmental authority or any rule or regulation of, oragreement of the Company with, any securities exchange or association upon which the Common Stockis listed or quoted. The Company shall in no event be obligated to take any affirmative action inorder to cause the delivery of shares of Common Stock to comply with any such law, rule,regulations or agreement.          7. **Notices**. Unless the Company notifies the Grantee in writing of a different procedure, anynotice or other communication to the Company with respect to this Award shall be in writing andshall be:     (a) by registered or certified United States mail, postage prepaid, to Hydril Company,ATTENTION: Corporate Secretary, 3300 North Sam Houston Parkway East, Houston, Texas 77032;or     (b) by hand delivery or otherwise to Hydril Company, ATTENTION: Corporate Secretary,3300 North Sam Houston Parkway East, Houston, Texas 77032.          Any notices provided for in this Restricted Stock Unit Agreement or in the Plan shall be givenin writing and shall be deemed effectively delivered or given upon receipt or, in the case ofnotices delivered by the Company to the Grantee, five days after deposit in the United States mail,postage prepaid, addressed to the Grantee at the address specified at the end of this Agreement orat such other address as the Grantee hereafter designates by written notice to the Company.          8. **Assignment of Award.**Except as otherwise permitted by the Committee, the Grantee’s rightsunder the Plan and this Restricted Stock Unit Agreement are personal; no assignment or transfer ofthe Grantee’s rights under and interest in this Award may be made by the Grantee other than by willor by the laws of descent and
 

 
distribution.          Notwithstanding the foregoing, subject to approval by the Committee in its sole discretion,the Award is transferable by the Grantee to (a) the spouse, parent, brother, sister, children orgrandchildren (including adopted and stepchildren and grandchildren) of the Grantee (“ImmediateFamily Members”), (b) a trust or trusts for the exclusive benefit of such Immediate Family Members,or (c) a partnership or partnerships in which such Immediate Family Members have at least 99% ofthe equity, profit and loss interests. Subsequent transfers of a transferred Award shall beprohibited except by will or the laws of descent and distribution, unless such transfers are madeto the original Grantee or a person to whom the original Grantee could have made a transfer in themanner described herein. No transfer shall be effective unless and until written notice of suchtransfer is provided to the Committee, in the form and manner prescribed by the Committee.Following transfer, the Award shall continue to be subject to the same terms and conditions as wereapplicable immediately prior to transfer, and except as otherwise provided herein, the term“Grantee” shall be deemed to refer to the transferee. The consequences of termination ofEmployment shall continue to be applied with respect to the original Grantee, following which theAwards shall vest only to the extent specified in the Plan and this Restricted Stock UnitAgreement.          9. **Withholding**. At the time of delivery or vesting of Restricted Stock Units, the Companyshall withhold an appropriate number of shares of Common Stock, having a Fair Market Valuedetermined in accordance with the Plan, equal to the amount necessary to satisfy the minimumfederal, state and local tax withholding obligation with respect to this Award.          10. **Stock Certificates.**Certificates representing the Common Stock issued pursuant to theAward will bear all legends required by law and necessary or advisable to effectuate the provisionsof the Plan and this Award. The Company may place a “stop transfer” order against shares of theCommon Stock issued pursuant to this Award until all restrictions and conditions set forth in thePlan or this Agreement and in the legends referred to in this paragraph 10 have been complied with.          11. **No Shareholder Rights**. The Grantee shall have no rights of a shareholder with respect toshares of Common Stock subject to the Award unless and until such time as the Award has been paidpursuant to paragraph 5 and shares of Common Stock have been transferred to the Grantee.          12. **No Employment Guaranteed**. No provision of this Restricted Stock Unit Agreement shallconfer any right upon the Grantee to continued Employment with the Company or any Subsidiary.
 

 
          13. **Governing Law**. This Restricted Stock Unit Agreement shall be governed by, construed, andenforced in accordance with the laws of the State of Delaware.          14. **Section 409A**. Notwithstanding anything in this Restricted Stock Unit Agreement to thecontrary, if any Plan provision or Award would result in the imposition of an applicable tax underCode Section 409A and related regulations and Treasury pronouncements (“Section 409A”), that Planprovision or Award will be reformed to avoid imposition of the applicable tax and no action takento comply with Section 409A shall be deemed to adversely affect the Grantee’s rights to an Award.           **HYDRIL COMPANY**       Dated   By               Christopher T. Seaver      President and Chief Executive Officer          The Grantee hereby accepts the foregoing Restricted Stock Unit Agreement, subject to the termsand provisions of the Plan and administrative interpretations thereof referred to above.        Date:      Grantee’s Signature         Grantee’s Address:         «Street_Address»    «City_State___Zip»