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                                                                    EXHIBIT 4.21

                GRANT PRIDECO, INC. EMPLOYEE STOCK PURCHASE PLAN
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     WHEREAS, Grant Prideco, Inc., a Delaware corporation (the "Sponsor")
desires to establish the Grant Prideco, Inc. Employee Stock Purchase Plan (the
"Plan") to provide employees of the Sponsor and its affiliates that adopt the
Plan with an opportunity to purchase common stock of the Sponsor through
offerings of options at a discount and thus develop a stronger incentive to work
for the continued success of the Sponsor and its affiliates;

     NOW, THEREFORE, the Sponsor hereby establishes the Plan, effective as of
July 1, 2003, as follows:

                               TABLE OF CONTENTS

<Table>
<Caption>
                                                              SECTION
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<S>                                                           <C>
ARTICLE I -- PURPOSE, SHARE COMMITMENT AND INTENT
  Purpose...................................................     1.1
  Share Commitment..........................................     1.2
  Intent....................................................     1.3
  Shareholder Approval......................................     1.4

ARTICLE II -- DEFINITIONS
  Affiliate.................................................     2.1
  Authorized Leave of Absence...............................     2.2
  Base Pay..................................................     2.3
  Beneficiary...............................................     2.4
  Board.....................................................     2.5
  Code......................................................     2.6
  Committee.................................................     2.7
  Company...................................................     2.8
  Disability................................................     2.9
  Employee..................................................    2.10
  Employer..................................................    2.11
  Exercise Date.............................................    2.12
  Fair Market Value.........................................    2.13
  Five Percent Owner........................................    2.14
  Grant Date................................................    2.15
  Offering Period...........................................    2.16
  Option....................................................    2.17
  Option Price..............................................    2.18
  Participant...............................................    2.19
  Plan......................................................    2.20
  Regular, Full Time Employee...............................    2.21
  Retirement................................................    2.22
  Stock.....................................................    2.23
  Trading Day...............................................    2.24
ARTICLE III -- ELIGIBILITY
  General Requirements......................................     3.1
  Limitations Upon Participation............................     3.2

ARTICLE IV -- PARTICIPATION
  Grant of Option...........................................     4.1
  Payroll Deduction.........................................     4.2
  Payroll Deductions Continuing.............................     4.3
  Right to Stop Payroll Deductions..........................     4.4
  Accounting for Funds......................................     4.5
  Employer's Use of Funds...................................     4.6
  Return of Funds...........................................     4.7
</Table>

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<Table>
<Caption>
                                                              SECTION
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<S>                                                           <C>

ARTICLE V -- IN SERVICE WITHDRAWAL, TERMINATION OR DEATH
  In Service Withdrawal.....................................     5.1
  Termination of Employment for any Reason Other Than Death,
     Retirement or Disability...............................     5.2
  Termination of Employment due to Death....................     5.3
  Termination of Employment due to Retirement or Disability
     Within Three Months Prior the Exercise Date............     5.4

ARTICLE VI -- EXERCISE OF OPTION
  Purchase of Shares of Stock...............................     6.1
  Accounting for Shares of Stock............................     6.2
  Issuance of Shares of Stock...............................     6.3

ARTICLE VII -- ADMINISTRATION
  Powers....................................................     7.1
  Quorum and Majority Action................................     7.2
  Standard of Judicial Review of Committee Actions..........     7.3

ARTICLE VIII -- ADOPTION OF PLAN BY OTHER EMPLOYERS
  Adoption Procedure........................................     8.1
  No Joint Venture Implied..................................     8.2

ARTICLE IX -- TERMINATION AND AMENDMENT OF THE PLAN
  Termination...............................................     9.1
  Amendment.................................................     9.2

ARTICLE X -- MISCELLANEOUS
  Designation of Beneficiary................................    10.1
  Plan Not An Employment Contract...........................    10.2
  All Participants' Rights Are Equal........................    10.3
  Options Are Not Transferable..............................    10.4
  Voting of Shares of Stock.................................    10.5
  No Rights of Shareholder..................................    10.6
  Governmental Regulations..................................    10.7
  Notices...................................................    10.8
  Indemnification of Committee..............................    10.9
  Tax Withholding...........................................   10.10
  Gender and Number.........................................   10.11
  Severability..............................................   10.12
  Persons Based Outside of the United States................   10.13
  Governing Law; Parties to Legal Actions...................   10.14
</Table>

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                                   ARTICLE I

                      PURPOSE, SHARE COMMITMENT AND INTENT

     1.1  PURPOSE.  The purpose of the Plan is to provide Employees of the
Company and its Affiliates that adopt the Plan an opportunity to purchase shares
of Stock through periodic offerings of options to purchase shares of Stock at a
discount and thus develop a stronger incentive to work for the continued success
of the Company and its Affiliates.

     1.2  SHARE COMMITMENT.  The aggregate number of shares of Stock authorized
to be sold pursuant to Options granted under the Plan is 1,200,000, subject to
adjustment as provided in this Section. In computing the number of shares of
Stock available for grant, any shares of Stock relating to Options which are
granted, but which subsequently lapse, are cancelled or are otherwise not
exercised by the final date for exercise, shall be available for future grants
of Options.

     In the event of any stock dividend, split-up, recapitalization, merger,
consolidation, combination or exchange of shares, or the like, as a result of
which shares shall be issued in respect of the outstanding shares of Stock, or
the shares of Stock shall be changed into the same or a different number of the
same or another class of stock, the total number of shares of Stock authorized
to be committed to the Plan, the number of shares of Stock subject to each
outstanding Option, the Option Price applicable to each Option, and/or the
consideration to be received upon exercise of each Option shall be appropriately
adjusted by the Committee. In addition, the Committee shall, in its sole
discretion, have authority to provide for (a) acceleration of the Exercise Date
of outstanding Options or (b) the conversion of outstanding Options into cash or
other property to be received in certain of the transactions specified in this
paragraph above upon the completion of the transaction.

     1.3  INTENT.  It is the intention of the Company to have the Plan qualify
as an "employee stock purchase plan" under section 423 of the Code. Therefore,
the provisions of the Plan are to be construed to govern participation in a
manner consistent with the requirements of section 423 of the Code.

     1.4  SHAREHOLDER APPROVAL.  To be effective, the Plan must be approved by
the shareholders of the Company within 12 months after the Plan is adopted. The
approval of shareholders must comply with all applicable provisions of the
corporate charter, bylaws and applicable laws of the jurisdiction prescribing
the method and degree of shareholder approval required for the issuance of
corporate stock or options.

                                   ARTICLE II

                                  DEFINITIONS

     The words and phrases defined in this Article shall have the meaning set
out in these definitions throughout the Plan, unless the context in which any
word or phrase appears reasonably requires a broader, narrower, or different
meaning.

     2.1  "AFFILIATE" means any parent corporation and any subsidiary
corporation. The term "parent corporation" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if, at the
time of the action or transaction, each of the corporations (other than the
Company) owns stock possessing 50 percent or more of the total combined voting
power of all classes of stock in one of the other corporations in the chain. The
term "subsidiary corporation" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if, at the time of
the granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50 percent or more of
the total combined voting power of all classes of stock in one of the other
corporations in the chain.

     2.2  "AUTHORIZED LEAVE OF ABSENCE" means a bona fide leave of absence from
service with the Company or an Affiliate if the period of the leave does not
exceed 90 days, or, if longer, so long as the individual's right to reemployment
with the Company or an Affiliate is guaranteed either by statute or contract.

                                       B-1
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     2.3  "BASE PAY" means regular straight-time earnings or base salary,
excluding payments for overtime, shift differentials, incentive compensation,
bonuses, and other special payments, fees, allowances or extraordinary
compensation.

     2.4  "BENEFICIARY" means the person who is entitled to receive amounts
under the Plan upon the death of a Participant.

     2.5  "BOARD" means the board of directors of the Company.

     2.6  "CODE" means the United States Internal Revenue Code of 1986, as
amended from time to time.

     2.7  "COMMITTEE" a committee of at least two persons, who are members of
the Compensation Committee of the Board and are appointed by the Compensation
Committee of the Board, or, to the extent it chooses to operate as the
Committee, the Compensation Committee of the Board.

     2.8  "COMPANY" means Grant Prideco, Inc., a Delaware corporation, or any
successor (by merger or otherwise).

     2.9  "DISABILITY" means a permanent and total disability as defined in
section 22(e)(3) of the Code.

     2.10  "EMPLOYEE" means any person who is a common-law employee of an
Employer.

     2.11  "EMPLOYER" means the Company and any Affiliate that has adopted the
Plan.

     2.12  "EXERCISE DATE" means the last day of each Offering Period, which is
the day that all Options that eligible Employees have elected to exercise are to
be exercised.

     2.13  "FAIR MARKET VALUE" of one share of Stock means the last reported
sale price for a share of Stock on the principal exchange on which the Stock is
traded on the business day for which the Fair Market Value is being determined
(or, if the Stock was not traded on such date, on the immediately preceding date
on which the Stock was so traded).

     2.14  "FIVE PERCENT OWNER" means an owner of five percent or more of the
total combined voting power of all classes of stock of the Company or any
Affiliate. An individual is considered to own any stock that is owned directly
or indirectly by or for his brothers and sisters (whether by whole or
half-blood), spouse, ancestors and lineal descendants. Stock owned, directly or
indirectly, by or for a corporation, partnership, estate or trust is considered
as owned proportionately by or for its shareholders, partners, or beneficiaries.
An individual is considered to own stock that he may purchase under outstanding
options. The determination of the percentage of the total combined voting power
of all classes of stock of the Company or any Affiliate that is owned by an
individual is made by comparing the voting power or value of the shares owned
(or treated as owned) by the individual to the aggregate voting power of all
shares actually issued and outstanding immediately after the grant of the option
to the individual. The aggregate voting power or value of all shares actually
issued and outstanding immediately after the grant of the option does not
include the voting power or value of treasury shares or shares authorized for
issue under outstanding options held by the individual or any other person.

     2.15  "GRANT DATE" means the first day of each Offering Period, which is
the day the Committee grants all eligible Employees an Option under the Plan.

     2.16  "OFFERING PERIOD" means the period beginning on the Grant Date and
ending on the Exercise Date. The Offering Period shall commence on July 1 of
each calendar year and shall end on the last Trading Day on or before the last
day of June of the following calendar year, unless the Committee specifies
another Offering Period (which may not exceed 27 months).

     2.17  "OPTION" means an option granted under the Plan to purchase shares of
Stock at the Option Price on the Exercise Date.

     2.18  "OPTION PRICE" means the price to be paid for each share of Stock
upon exercise of an Option, which shall be 85 percent of the lesser of (a) the
Fair Market Value of a share of Stock on the Grant Date or (b) the Fair Market
Value of a share of Stock on the Exercise Date.

                                       B-2
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     2.19  "PARTICIPANT" means a person who is eligible to be granted an Option
under the Plan and who elects to have payroll deductions withheld under the Plan
for the purpose of exercising that Option on the Exercise Date.

     2.20  "PLAN" means the Grant Prideco, Inc. Employee Stock Purchase Plan, as
set out in this document and as it may be amended from time to time.

     2.21  "REGULAR, FULL TIME EMPLOYEE" means an employee whose customary
employment with his Employer is more than 20 hours per week and more than 5
months during any calendar year.

     2.22  "RETIREMENT" means the occurrence of the Participant's voluntary
termination of employment with the Company and all Affiliates after he has
attained the age of 65 and completed ten years of uninterrupted employment with
the Company and/or any Affiliate, including any predecessor thereto.

     2.23  "STOCK" means the common stock of the Company, $.01 par value per
share, or, in the event that the outstanding shares of common stock are later
changed into or exchanged for a different class of shares or securities of the
Company or another corporation, that other share or security. Shares of Stock,
when issued, may be represented by a certificate or by book or electronic entry.

     2.24  "TRADING DAY" means a day on which the principal securities exchange
on which the shares of Stock are listed is open for trading.

                                  ARTICLE III

                                  ELIGIBILITY

     3.1  GENERAL REQUIREMENTS.  Subject to Section 3.2, each Regular, Full Time
Employee of each Employer is eligible to participate in the Plan for a given
Offering Period if he is in the employ of an Employer on the Grant Date and he
enrolls in the Plan and authorizes payroll deductions for such Offering Period
in accordance with procedures established by the Committee. Participation in the
Plan is voluntary.

     3.2  LIMITATIONS UPON PARTICIPATION.  No Employee shall be granted an
Option to the extent that the Option would:

          (a)  cause the Employee to be a Five Percent Owner immediately after
     the grant;

          (b)  permit the Employee to purchase shares of Stock under all
     employee stock purchase plans, as defined in section 423 of the Code, of
     the Company and all Affiliates at a rate which exceeds $25,000 in Fair
     Market Value of the shares of Stock (determined at the time the Option is
     granted) for each calendar year in which the option granted to the Employee
     is outstanding at any time as provided in sections 423 and 424 of the Code;
     or

          (c)  permit the Employee to purchase shares of Stock in excess of the
     number of shares of Stock determined under Section 4.1.

In addition, no Option shall be granted to an Employee who resides in a country
whose laws make participation in the Plan impractical.

                                   ARTICLE IV

                                 PARTICIPATION

     4.1  GRANT OF OPTION.  Effective as of the Grant Date of each Offering
Period, the Committee shall grant an Option to each Participant which shall be
exercisable on the Exercise Date only through funds accumulated by the Employee
through payroll deductions made during the Offering Period. The Option shall be
for that number of whole shares of Stock that may be purchased by the amount in
the Participant's payroll deduction account on the Exercise Date at the Option
Price. The Committee may establish and announce to Employees prior to an
Offering Period, a maximum number of shares of Stock that may be purchased by an
Employee during the Offering Period. If the Committee does not specify a maximum
number of shares of
                                       B-3
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Stock that may be purchased during an Offering Period, the maximum number of
shares shall be that number of shares that may be purchased with the aggregate
amount of payroll deductions for the Offering Period authorized by the Employee
(determined assuming that the Employee will continue payroll deductions at the
same rate in effect on the Grant Date throughout the Offering Period) assuming
that the purchase price per share is 85 percent of the Fair Market Value of a
share of Stock on the Date of Grant.

     4.2  PAYROLL DEDUCTION.  For an Employee to participate during a given
Offering Period, he must authorize deductions from his Base Pay prior to the
beginning of the Offering Period in accordance with procedures established by
the Committee. Unless the Participant changes the rate of his payroll
deductions, his payroll deductions shall continue through the last pay date
prior to the Exercise Date. A Participant may not make additional payments to
his Plan account.

     4.3  PAYROLL DEDUCTIONS CONTINUING.  A Participant's payroll deduction
authorization shall remain in effect for all ensuing Offering Periods until
changed by him in accordance with procedures established by the Committee.

     4.4  RIGHT TO STOP PAYROLL DEDUCTIONS.  A Participant shall have the right
to discontinue his payroll deduction authorization in accordance with procedures
established by the Committee.

     4.5  ACCOUNTING FOR FUNDS.  As of each payroll deduction period, the
Employer shall cause to be credited to the Participant's payroll deduction
account in a ledger established for that purpose the funds withheld from and
attributable to the Employee's cash compensation for that period. No interest
shall be credited to the Participant's payroll deduction account at any time.
The obligation of the Employer to the Participant for this account shall be a
general corporate obligation and shall not be funded through a trust nor secured
by any assets which would cause the Participant to be other than a general
creditor of the Employer.

     4.6  EMPLOYER'S USE OF FUNDS.  All payroll deductions received or held by
an Employer may be used by the Employer for any corporate purpose, and the
Employer shall not be obligated to segregate such payroll deductions.

     4.7  RETURN OF FUNDS.  Except as specified herein, as soon as
administratively practicable after the expiration of an Offering Period, payroll
deductions that are not used to purchase Stock during such Offering Period will
be refunded to the Participants. In accordance with procedures established by
the Committee, an Employer may be permitted to apply a Participant's unused
payroll deductions to purchase additional shares of Stock during a subsequent
Offering Period, but only if the amount so applied does not exceed the value of
a fractional share that the Participant could not purchase during the preceding
Offering Period (because purchases of fractional shares are not permitted under
the Plan).

                                   ARTICLE V

                  IN SERVICE WITHDRAWAL, TERMINATION OR DEATH

     5.1  IN SERVICE WITHDRAWAL.  A Participant may, at any time on or before 15
days prior to the Exercise Date, or such other date as shall be selected by the
Committee from time to time, elect to withdraw all of the funds then credited to
his Plan account by giving notice in accordance with the rules established by
the Committee. The amount elected to be withdrawn by the Participant shall be
paid to him as soon as administratively feasible. Any election by a Participant
to withdraw his cash balance under the Plan terminates his right to exercise his
Option on the Exercise Date and his entitlement to elect any further payroll
deductions for the then-current Offering Period. If the Participant wishes to
participate in any future Offering Period, he must file a new payroll deduction
election within the time frame required by the Committee for participation for
that Offering Period.

     5.2  TERMINATION OF EMPLOYMENT FOR ANY REASON OTHER THAN DEATH; OR
RETIREMENT OR DISABILITY WHICH OCCURS MORE THAN THREE MONTHS PRIOR TO THE
EXERCISE DATE.  If a Participant's employment with the Company and all
Affiliates is terminated for any reason other than death prior to the Exercise
Date, or if the Participant's employment with the Company and all Affiliates is
terminated more than three months prior to the Exercise Date as a result of
Retirement of Disability, the Option granted to the Participant for that
                                       B-4
<PAGE>

Offering Period shall lapse. If a Participant is on an Authorized Leave of
Absence, for purposes of the Plan, the Participant's employment with the Company
and all Affiliates shall be deemed to be terminated on the later of the 91st day
of such leave or the date through which the Participant's employment is
guaranteed either by statute or contract. The Participant's funds then credited
to his Plan Account shall be returned to him as soon as administratively
feasible.

     5.3  TERMINATION OF EMPLOYMENT DUE TO DEATH.  If a Participant's employment
with the Company and all Affiliates is terminated due to death, the
Participant's Beneficiary (or such other person as may be entitled to amounts
credited to the Participant's account under Section 10.1) will have the right to
elect, either to:

          (a)  withdraw all of the funds then credited to his Plan account as of
     his termination date; or

          (b)  exercise the Option for the maximum number of whole shares of
     Stock that can be purchased at the Option Price on the last day of the
     Offering Period (in which the Participant's termination of employment with
     the Company and all Affiliates occurs).

     The Participant's Beneficiary (or such other person as may be entitled to
amounts credited to the Participant's account under Section 10.1) must make such
election by giving written notice to the Committee in accordance with procedures
established by the Committee. In the event the Beneficiary (or such other person
as may be entitled to amounts credited to the Participant's account under
Section 10.1) elects to withdraw the funds, any accumulated funds credited to
the Participant's Plan account as of the date of his termination of employment
with the Company and all Affiliates will be delivered as soon as
administratively practicable thereafter.

     5.4  TERMINATION OF EMPLOYMENT DUE TO RETIREMENT OR DISABILITY WITHIN THREE
MONTHS PRIOR TO THE EXERCISE DATE.  If a Participant's employment with the
Company and all Affiliates is terminated, within three months prior to the
Exercise Date, due to Retirement or Disability, the Participant (or the
Participant's personal representative or legal guardian in the event of
Disability) will have the right to elect either to:

          (a)  withdraw all of the funds then credited to his Plan account as of
     his termination date; or

          (b)  exercise the Option for the maximum number of whole shares of
     Stock that can be purchased at the Option Price on the last day of the
     Offering Period (in which the Participant's termination of employment with
     the Company and all Affiliates occurs).

     5.5  The Participant (or, if applicable, such other person designated in
the first paragraph of this Section 5.4) must make such election by giving
written notice to the Committee in accordance with procedures established by the
Committee. Any accumulated funds credited to the Participant's Plan account as
of the date of his termination of employment with the Company and all Affiliates
will be delivered to or on behalf of the Participant as soon as administratively
practicable thereafter.

                                   ARTICLE VI

                               EXERCISE OF OPTION

     6.1  PURCHASE OF SHARES OF STOCK.  Subject to Section 3.2, on the Exercise
Date of each Offering Period, each Participant's payroll deduction account shall
be used to purchase the maximum number of whole shares of Stock that can be
purchased at the Option Price for that Offering Period. If in any Offering
Period the total number of shares of Stock to be purchased by all Participants
exceeds the number of shares of Stock committed to the Plan, then each
Participant shall be entitled to purchase only his pro rata portion of the
shares of Stock remaining available under the Plan based on the balances in each
Participant's payroll deduction account as of the Exercise Date. After the
purchase of all shares of Stock available on the Exercise Date, all Options
granted for the Offering Period to the extent not used are terminated because no
Option shall remain exercisable after the Exercise Date.

     6.2  ACCOUNTING FOR SHARES OF STOCK.  After the Exercise Date of each
Offering Period, a report shall be given to each Participant stating the amount
of his payroll deduction account, the number of shares of Stock purchased and
the Option Price.

                                       B-5
<PAGE>

     6.3  ISSUANCE OF SHARES OF STOCK.  As soon as administratively feasible
after the end of the Offering Period, the Committee shall advise the appropriate
officer of the Company that the terms of the Plan have been complied with and
that it is appropriate for the officer to cause to be issued the shares of Stock
upon which Options have been exercised under the Plan. The Committee may
determine in its discretion the manner of delivery of the shares of Stock
purchased under the Plan, which may be by electronic account entry into new or
existing accounts, delivery of shares of Stock certificates or any other means
as the Committee, in its discretion, deems appropriate. The Committee may, in
its discretion, hold the shares of Stock certificate for any shares of Stock or
cause it to be legended in order to comply with the securities laws of the
applicable jurisdiction, or should the shares of Stock be represented by book or
electronic account entry rather than a certificate, the Committee may take such
steps to restrict transfer of the shares of Stock as the Committee considers
necessary or advisable to comply with applicable law.

                                  ARTICLE VII

                                 ADMINISTRATION

     7.1  POWERS.  The Committee has the exclusive responsibility for the
general administration of the Plan, and has all powers necessary to accomplish
that purpose, including but not limited to the following rights, powers, and
authorities:

          (a)  to make rules for administering the Plan so long as they are not
     inconsistent with the terms of the Plan;

          (b)  to construe all provisions of the Plan;

          (c)  to correct any defect, supply any omission, or reconcile any
     inconsistency which may appear in the Plan;

          (d)  to select, employ, and compensate at any time any consultants,
     accountants, attorneys, and other agents the Committee believes necessary
     or advisable for the proper administration of the Plan;

          (e)  to determine all questions relating to eligibility, Fair Market
     Value, Option Price and all other matters relating to benefits or
     Participants' entitlement to benefits;

          (f)  to determine all controversies relating to the administration of
     the Plan, including but not limited to any differences of opinion arising
     between an Employer and a Participant, and any questions it believes
     advisable for the proper administration of the Plan; and

          (g)  to delegate any clerical or recordation duties of the Committee
     as the Committee believes is advisable to properly administer the Plan.

     7.2  QUORUM AND MAJORITY ACTION.  A majority of the Committee constitutes a
quorum for the transaction of business. The vote of a majority of the members
present at any meeting shall decide any question brought before that meeting. In
addition, the Committee may decide any question by a vote, taken without a
meeting, of a majority of its members via telephone, computer, fax or any other
media of communication.

     7.3  STANDARD OF JUDICIAL REVIEW OF COMMITTEE ACTIONS.  The Committee has
full and absolute discretion in the exercise of each and every aspect of its
authority under the Plan. Notwithstanding anything to the contrary, any action
taken, or ruling or decision made by the Committee in the exercise of any of its
powers and authorities under the Plan shall be final and conclusive as to all
parties other than the Company, including without limitation all Participants
and their beneficiaries, regardless of whether the Committee or one or more of
its members may have an actual or potential conflict of interest with respect to
the subject matter of the action, ruling, or decision. No final action, ruling,
or decision of the Committee shall be subject to de novo review in any judicial
proceeding; and no final action, ruling, or decision of the Committee may be set
aside unless it is held to have been arbitrary and capricious by a final
judgment of a court having jurisdiction with respect to the issue.

                                       B-6
<PAGE>

                                  ARTICLE VIII

                      ADOPTION OF PLAN BY OTHER EMPLOYERS

     8.1  ADOPTION PROCEDURE.  With the approval of the Committee, any Affiliate
may adopt the Plan for all or any classification of its Employees by depositing
with the Sponsor:

          (a)  a duly executed adoption agreement setting forth agreement to be
     bound as an Employer by all the terms, provisions, conditions and
     limitations of the Plan except those, if any, specifically set forth in the
     adoption agreement;

          (b)  all other information required by the Sponsor; and

          (c)  the written consent of the Sponsor to the adoption of the Plan.

     8.2  NO JOINT VENTURE IMPLIED.  The document which evidences the adoption
of the Plan by an Affiliate shall become a part of the Plan. However, neither
the adoption of the Plan by an Affiliate nor any act performed by it in relation
to the Plan shall create a joint venture or partnership relation between it and
the Company or any other Affiliate.

                                   ARTICLE IX

                     TERMINATION AND AMENDMENT OF THE PLAN

     9.1  TERMINATION.  The Company may, by action of the Committee, terminate
the Plan at any time and for any reason. The Plan shall automatically terminate
upon the purchase by Participants of all shares of Stock committed to the Plan,
unless the number of shares of Stock committed to the Plan is increased by the
Committee or the Board and approved by the shareholders of the Company. Upon
termination of the Plan, as soon as administratively feasible there shall be
refunded to each Participant the remaining funds in his payroll deduction
account. The termination of the Plan shall not affect the current Options
already outstanding under the Plan to the extent there are shares of Stock
committed, unless the Participants agree.

     9.2  AMENDMENT.  The Committee has the right to modify, alter or amend the
Plan at any time and from time to time to any extent that it deems advisable,
including, without limiting the generality of the foregoing, any amendment to
the Plan deemed necessary to ensure compliance with section 423 of the Code. The
Committee may suspend the operation of the Plan for any period as it may deem
advisable. However, no amendment or suspension shall operate to reduce any
amounts previously allocated to a Participant's payroll deduction account, to
reduce a Participant's rights with respect to shares of Stock previously
purchased and held on his behalf under the Plan nor to affect the current Option
a Participant already has outstanding under the Plan without the Participant's
agreement. Any amendment changing the aggregate number of shares of Stock to be
committed to the Plan, the class of employees eligible to receive Options under
the Plan or the description of the group of corporations eligible to adopt the
Plan must have shareholder approval as set forth in Section 1.4.

                                   ARTICLE X

                                 MISCELLANEOUS

     10.1  DESIGNATION OF BENEFICIARY.

          (a)  A Participant may file a written designation of a Beneficiary who
     is to receive any cash and shares of Stock credited to the Participant's
     account under the Plan. If a Participant is married and the designated
     Beneficiary is not the Participant's spouse, written spousal consent shall
     be required for the designation to be effective.

          (b)  A Participant may change his designation of a Beneficiary at any
     time by written notice. If a Participant dies when he has not validly
     designated a Beneficiary under the Plan, the Company shall deliver such
     shares of Stock and cash to the executor or administrator of the estate of
     the Participant, or if

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<PAGE>

     no such executor or administrator has been appointed (to the knowledge of
     the Company), the Company, in its discretion, may deliver such shares of
     Stock and cash to the spouse or to any one or more dependents or relatives
     of the Participant, or if no spouse, dependent or relative is known to the
     Company, then to such other person as the Company may designate.

     10.2  PLAN NOT AN EMPLOYMENT CONTRACT.  The adoption and maintenance of the
Plan is not a contract between any Employer and its Employees which gives any
Employee the right to be retained in its employment. Likewise, it is not
intended to interfere with the rights of any Employer to discharge any Employee
at any time or to interfere with the Employee's right to terminate his
employment at any time.

     10.3  ALL PARTICIPANTS' RIGHTS ARE EQUAL.  All Participants will have the
same rights and privileges under the Plan as required by section 423 of the Code
and Department of Treasury Regulation section 1.423-2(f).

     10.4  OPTIONS ARE NOT TRANSFERABLE.  No Option granted a Participant under
the Plan is transferable by the Participant otherwise than by will or the laws
of descent and distribution, and must be exercisable, during his lifetime, only
by him. In the event any Participant attempts to violate the terms of this
Section, any Option held by the Participant shall be terminated by the Company
and, upon return to the Participant of the remaining funds in his payroll
deduction account, all of his rights under the Plan will terminate.

     10.5  VOTING OF SHARES OF STOCK.  Shares of Stock held under the Plan for
the account of each Participant shall be voted by the holder of record of those
shares of Stock in accordance with the Participant's instructions.

     10.6  NO RIGHTS OF SHAREHOLDER.  No eligible Employee or Participant shall
by reason of participation in the Plan have any rights of a shareholder of the
Company until he acquires shares of Stock as provided in the Plan.

     10.7  GOVERNMENTAL REGULATIONS.  The obligation to sell or deliver the
shares of Stock under the Plan is subject to the approval of all governmental
authorities required in connection with the authorization, purchase, issuance or
sale of the shares of Stock.

     10.8  NOTICES.  All notices and other communication in connection with the
Plan shall be in the form specified by the Committee and shall be deemed to have
been duly given when sent to the Participant at his last known address or to his
designated personal representative or beneficiary, or to the Employer or its
designated representative, as the case may be.

     10.9  INDEMNIFICATION OF COMMITTEE.  In addition to all other rights of
indemnification as they may have as directors or as members of the Committee,
the members of the Committee shall be indemnified by the Company against the
reasonable expenses, including attorneys' fees, actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or in
connection with any appeal, to which they or any of them may be a party by
reason of any action taken or failure to act under or in connection with the
Plan or any Option granted under the Plan, and against all amounts paid in
settlement (provided the settlement is approved by independent legal counsel
selected by the Company) or paid by them in satisfaction of a judgment in any
action, suit or proceeding, except in relation to matters as to which it is
adjudged in the action, suit or proceeding, that the Committee member is liable
for gross negligence or willful misconduct in the performance of his duties.

     10.10  TAX WITHHOLDING.  At the time a Participant's Option is exercised or
at the time a Participant disposes of some or all of the shares of Stock
purchased under the Plan, the Participant must make adequate provision for the
Employer's federal, state or other tax withholding obligations, if any, which
arise upon the exercise of the Option or the disposition of the shares of Stock.
At any time, the Employer may, but shall not be obligated to, withhold from the
Participant's compensation the amount necessary for the Employer to meet
applicable withholding obligations.

     10.11  GENDER AND NUMBER.  If the context requires it, words of one gender
when used in the Plan shall include the other genders, and words used in the
singular or plural shall include the other.

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<PAGE>

     10.12  SEVERABILITY.  Each provision of the Plan may be severed. If any
provision is determined to be invalid or unenforceable, that determination shall
not affect the validity or enforceability of any other provision.

     10.13  PERSONS BASED OUTSIDE OF THE UNITED STATES.  Notwithstanding any
provision of the Plan to the contrary, in order to comply with the laws in other
countries in which the Company and its Affiliates operate or have Employees, the
Committee, in its sole discretion, shall have the power and authority to:

          (a)  determine which Affiliates shall be covered by the Plan;

          (b)  determine which persons employed outside the United States are
     eligible to participate in the Plan;

          (c)  modify the terms and conditions of any Option granted to persons
     who are employed outside the United States to comply with applicable
     foreign laws;

          (d)  establish subplans and modify exercise procedures and other terms
     and procedures to the extent such actions may be necessary or advisable;
     and

          (e)  take any action, before or after an Option is granted, that it
     deems advisable to obtain or comply with any necessary local government
     regulatory exemptions or approvals.

     Notwithstanding the foregoing, the Committee may not take any actions
hereunder, and no Options shall be granted, that would violate section 423 of
the Code, any securities law or governing statute or any other applicable law.
Any income derived under the Plan shall not be treated as a part of an
Employee's regular compensation or salary for purposes of computing statutorily
mandated severance benefits or other statutorily mandated benefits in foreign
jurisdictions.

     Any subplans and modifications to Plan terms and procedures established
under this Section 10.13 by the Committee shall be attached to the Plan document
as Appendices.

     10.14  GOVERNING LAW; PARTIES TO LEGAL ACTIONS.  The provisions of the Plan
shall be construed, administered, and governed under the laws of the State of
Texas and, to the extent applicable, by the securities, tax, employment and
other laws of the United States.

                                       B-9