Document:

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                                                                   EXHIBIT 10.12

                                SUPPLY AGREEMENT

                      Concluded on the date set forth below

                                 by and between

                        VOESTALPINE TUBULARS Gmbh & Co KG

                         an Austrian limited partnership

                                       and

                               GRANT PRIDECO, INC.

                             A Delaware corporation

                         to be effective August 1, 2003

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                                    PREAMBLE

         WHEREAS, VoestAlpine Tubulars GmbH & Co KG (formerly known as
VOEST-ALPINE STAHHLROHR KINDBERG GmbH & Co KG) is a limited partnership duly
organized, validly existing and in good standing under the laws of Austria, with
its principal place of business in Kindberg and business address at Alpine
StraBe 17, A-8652 Kindberg, Austria, registered in the commercial register of
the Higher Court of Leoben under the registration number 165400 k (hereinafter
referred to as "Seller"), which has been involved for many years in the
manufacture of casings and tubings; and

         WHEREAS, Grant Prideco, Inc. is a company duly organized, validly
existing and in good standing under the laws of Delaware, with its principal
place of business in Houston, Texas and business address at 1330 Post Oak
Boulevard Suite 2700, Houston, Texas 77056 (hereinafter referred to as
"Purchaser"), which has been involved in the field of manufacturing of drill
pipe and the processing of casings and tubings; and

         WHEREAS, Purchaser and Seller entered a Supply Agreement dated July 23,
1999 that will expire July 31, 2003 (the "Original Supply Agreement"); and

         WHEREAS, Purchaser and Seller want to avoid any disruption in the
supply of Materials under the Original Supply Agreement and therefore desire to
enter this agreement on this ______ day of __________, 2003 to be effective on
August 1, 2003 (the "Effective Date")

         WHEREAS, Purchaser wishes to purchase and Seller wishes to supply
certain pipes as defined below;

         WHEREAS, Purchaser is an affiliate of Seller and Purchaser and Seller
desire, to avoid repetitive negotiations, and to set forth the terms under which
affiliated purchases will be made, Purchaser and Seller (hereinafter referred to
as the "Parties" and each a "Party") wish to enter into this exclusive supply
agreement (hereinafter referred to as "Supply Agreement") on a long-term basis
establishing the terms and conditions of the purchase which will be applicable
to these transactions.

         NOW THEREFORE, it is agreed as follows:

1.       SALE AND PURCHASE

1.1      Seller herewith grants to Purchaser the right to purchase on a
         worldwide basis green pipes (hereinafter referred to as "Green Pipes")
         intended for the further processing into drill pipe and other Oil
         Country Tubular Goods (hereinafter referred to a "OCTG"). The sale of
         Green Pipes by or on behalf of Seller to other persons requires the
         prior written consent of Purchaser. If Seller sells Green Pipes to
         third persons without the prior written consent of Purchaser, any such
         sale shall be credited against Purchaser's Annual Minimum Purchase
         Obligation pursuant to Section 2.1.

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         For the purposes of this Supply Agreement, Green Pipes shall mean pipes
         used to manufacture drill pipe, tubing and casing, provided that plain
         end casing and tubing already produced to grade and requiring only end
         finishing to be converted to finished OCTG are expressly excluded from
         the term "Green Pipes" used in this Supply Agreement.

1.2      Seller grants to Purchaser the right, but Purchaser shall not be
         obligated, to purchase API couplings on an exclusive basis in North,
         Central and South America (Green Pipes and API couplings are
         hereinafter collectively referred to as the "Material").

1.3      Seller and Purchaser agree that Purchaser shall have the sole right to
         sell drill pipe and drill pipe hollows in the world. The Seller shall
         not, directly or indirectly, sell any drill pipe or drill pipe hollows
         without the written consent of the Purchaser.

2.       ANNUAL MINIMUM PURCHASE OBLIGATION

2.1      Subject to the provisions of Section 13, Purchaser shall place orders
         for purchase and Seller shall sell and deliver Green Pipes in a minimum
         quantity of (i) 56,667 for the calendar year of 2003 (7/12 x 60,000
         (original agreement ending July 2003)) + (5/12 x 52,000 (the agreement
         beginning August 2003)); (ii) _52,000 metric tons for each year on a
         calendar year basis thereafter during the term of the Agreement
         ("Annual Minimum Purchase Obligation"). For the purposes of Section 2
         and Section 13 of this Agreement, purchases of Materials made by an
         Affiliate of Purchaser shall be attributed to Purchaser. The term
         "Affiliate" shall mean, with respect to Purchaser, any individual,
         firm, corporation, division, association, partnership, joint venture,
         limited liability company, organization or business (collectively
         "Entity") that, directly or indirectly through one or more
         intermediaries, controls, is controlled by or is under common control
         with Purchaser. For purposes of this definition, "control" means the
         ownership, directly or indirectly of 50% or more of the voting
         securities of an Entity or the possession of the power to direct, or
         cause the direction of, the management and policies of that Entity,
         whether through the ownership of voting stock, by contract or
         otherwise.

2.2      Subject to the provisions of Section 2.1 and Section 13, Purchaser
         shall use good faith efforts to place orders in monthly lot amounts
         that are consistent with the Annual Minimum Purchase Obligations of
         this agreement, with a minimum of 100 metric tons per dimension upon
         individual purchase orders placed by Purchaser. The Parties agree from
         time to time that Purchaser's monthly purchase (lot amounts) may vary
         based on Purchaser's good faith needs, provided, however, that without
         the consent of Seller, each order shall not deviate from the previous
         order by more than 2,000 metric tons. Purchaser's failure to place
         orders of Green Pipe in an amount equal to the Annual Minimum Purchase
         Obligation shall not constitute a default under this Supply Agreement
         and Seller's only remedy for that failure will be the right to receive
         the penalties provided for under Section 13 and no more.

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2.3      Purchaser shall be entitled to order in excess of its Annual Minimum
         Purchase Obligation up to 80,000 metric tons per year. Orders exceeding
         80,000 metric tons require the prior consent of Seller.

3.       TERM AND TERMINATION

3.1      This Supply Agreement shall commence on August 1, 2003 (the "Effective
         Date"), and shall be concluded for an original term on July 31, 2007.
         This Supply Agreement shall automatically be renewed for successive
         one-year periods, unless terminated at the end of the original term or
         any renewal period in writing, subject to a six-month termination
         period. Nine months prior to the expiration of the original term the
         Parties shall meet to negotiate terms and conditions for a renewal of
         the Supply Agreement.

3.2      If either Party is in material default of any of its obligations under
         this Supply Agreement and such default continues unremedied for 90 days
         after written notice thereof by the Party not in default, such
         non-defaulting Party may cancel this Supply Agreement and/or any orders
         which may be affected by such default and shall have the right, in its
         sole discretion, to exercise all rights and remedies available to it
         under this Supply Agreement, including, but not limited to Section 13,
         or to exercise such rights and remedies as provided for in other
         agreements concluded between the Parties or their affiliates, including
         but not limited to the Operating Agreement dated July 23, 1999
         concluded between VOEST-ALPINE SCHIENEN GmbH & Co KG and GRANT PRIDECO,
         INC.

3.3      An uncured failure to pay any amounts due to Seller under this Supply
         Agreement which is not contested within 90 days of submission of the
         invoice therefor as provided in Section 4.3 hereof shall be considered
         a material default by Purchaser in the meaning of Section 3.2.

3.4      Continued failure by Seller to materially meet the quality and
         specification requirements of the delivery requirements under this
         Supply Agreement or breach by Seller of the exclusivity provisions of
         Section 1.1 and Section 1.3 hereof shall be considered a material
         default by Seller in the meaning of Section 3.2.

3.5      Furthermore, Seller may by written notice to Purchaser forthwith
         terminate this Supply Agreement;

                  (a) if bankruptcy proceedings are opened against Purchaser, or
                  Purchaser is insolvent; or

                  (b) if Purchaser or an affiliated entity no longer holds any
                  limited partnership interest in Seller.

3.6      Furthermore, Purchaser may by written notice to Seller forthwith
         terminate this Supply Agreement:

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                  (a) if bankruptcy proceedings are opened against Seller, or
                  Seller is insolvent, or

                  (b) if Purchaser or an affiliated entity no longer holds any
                  limited partnership interest in Seller.

3.7      (i) If an event of force majeure occurs, the affected Party shall
         promptly give notice thereof to the other Party and use its best
         efforts to cure or correct such event of force majeure. Seller may,
         during a period of shortage or delay due to any such causes, prorate
         its supply in such a manner as deemed equitable in the judgement of
         Seller. The Annual Minimum Purchase Obligation and the term of this
         Supply agreement as provided in Section 3.1 herein shall be adjusted
         accordingly based upon the duration of any force majeure event. If the
         event of force majeure shall continue for a period of twelve months,
         either Party shall have the right to forthwith terminate this Supply
         Agreement.

         (ii) For the purpose of the Supply Agreement "force majeure" shall mean
         all circumstances which are beyond the control of a Party exercising a
         normal standard of care and which prevents such Party from complying
         with its contractual obligations hereunder. Subject to the foregoing
         and without limiting the generality of the foregoing, the following
         circumstances in particular shall be regarded as force majeure: acts of
         God; hurricane, tornado; labor strike, lockout or other industrial
         disturbance; war, riot, sabotage, act of public enemy, terrorist act or
         gang violence, blockade; serious epidemic; earthquake or other earth
         movement, flood or other natural disaster; bomb blast or other
         explosion; fire, shortage of goods essential to a Party's performance
         of this Agreement, or their delay by a carrier; or, government action
         that prevents performance. It is explicitly agreed among the parties
         that any changes in market conditions or the institution of U.S.
         Antidumping and Countervailing Duty proceeding shall (subject to the
         provisions of Section 12) not be considered as force majeure events.

3.8      Any termination of this Supply Agreement will not affect any individual
         purchase order which may have been issued by Purchaser prior to the
         date of termination, unless stated otherwise herein. The provisions of
         Sections 8, 9, 10, 11, 12, 13, 15, and 16.3 shall survive any
         termination of this Supply Agreement. In case this Supply Agreement is
         terminated, Purchaser shall pay within 60 (sixty) days after the date
         of termination any still outstanding Purchase Price or penalty payments
         due to Seller. In the event this Supply Agreement is terminated by
         Purchaser pursuant to this Section 3 as a result of a material default
         by Seller, any penalty payments due to Seller pursuant to Section 13
         accruing on or after the date of such material default shall not be
         paid and shall be deemed to be forfeited by Seller.

4.       PURCHASE PRICE/INVOICE

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4.1      The base purchase price for the Green Pipes is the same price utilized
         in the predecessor contract ("Purchase Price") and shall include
         European sales tax and all export taxes and duties if applicable to
         Green Pipes. The Purchase Price is based on Purchaser's specifications
         in Purchaser's specification No. 359 (1), rev. O, dated May 7, 1998. To
         the extent there are deviations from this specification, the Purchase
         Price shall be adjusted as set forth on ANNEX A, to the extent provided
         in ANNEX A. ANNEX B sets forth length requirements for ANNEX A.
         Deviations not contemplated by ANNEXES A AND B shall result in an
         adjustment to the Purchase Price that reflects the differential in
         costs of manufacture of the product from Purchaser's specification No.
         359 (1). Purchaser shall consult with Seller on any change in
         specifications and will not request specifications which Seller cannot
         fulfill with commercially reasonable efforts. The Purchase Price is
         calculated on the basis of C.I.F. Houston in accordance with Incoterms
         2000. Upon Purchaser's request, the Green Pipes shall be delivered to a
         destination port other than Houston. If any change in delivery terms
         pursuant to Purchaser's request results in a higher or lower cost to
         Seller, the Purchase Price shall be increased or decreased accordingly.

4.2      During the term of this Supply Agreement (including the renewal
         periods), the Purchase Price shall be subject to adjustment on a
         semi-annual basis (starting on the first day of the sixth calendar
         month following the Effective Date of this Supply Agreement). The
         adjustment shall be computed on the basis of the average of seamless
         alloy casing and tubing prices as reported by the Preston Pipe Report
         or any report replacing it at the time of order placement and shall be
         effected for all purchase orders given on or after the first day of the
         calendar month following the issuance of such Preston Pipe Report. The
         basis of assessment shall be the average of seamless alloy casing and
         tubing prices as reported in the Preston Pipe Report published in
         January 1999 and reflecting actual October 1998 prices. This report
         shall be regarded as the 100 Index. The index figure, however, is
         limited to upward fluctuations of not more than 5%, based on the 100
         Index during the term of this Supply Agreement. Downwards fluctuations
         may be made, but not below the 100 Index.

4.3      Invoices will be submitted by Seller to Purchaser. Invoices will
         reference Purchaser's purchase order number and will contain such other
         information as Purchaser may reasonably request. Purchaser shall effect
         payment within sixty (60) calendar days after the vessel arrival in the
         port of destination or net 105 days from ocean bill of lading date,
         whichever comes first. Purchaser shall pay interest on overdue invoice
         payments that are not contested as provided in Section 3.3 from the due
         date up to the actual date of payment at the rate determined to be
         three percent (3%) per annum above the six months EURIBOR.

4.4      The Parties may agree from time to time to set off any amount owed by
         Seller to Purchaser pursuant to this Supply Agreement against any
         amount owed by Purchaser to Seller pursuant to this Supply Agreement.

4.5      In the event the Green Pipe being purchased by Purchaser does not meet
         the specifications and is rejected, Purchaser may elect to credit
         amounts paid for that

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         Green Pipe against other purchases or to set off against penalties due
         by Purchaser pursuant to Section 13 if Seller agrees to the rejection
         or if it is determined that the Green Pipe does not meet the required
         specifications.

5.       PURCHASE ORDERS

5.1      This Supply Agreement does not constitute a purchase order. Purchases
         under this Supply Agreement shall be made with purchase orders in a
         form mutually agreed upon, placed by Purchaser.

5.2      Any individual purchase order shall be acknowledged by Seller. Each
         order acknowledgment shall contain either Seller's confirmation of the
         delivery date as requested by Purchaser or Seller's own estimated
         delivery date, which shall be no later than 10 days after Purchaser's
         requested delivery date. Unless otherwise agreed to by Purchaser and
         Seller there shall be at least two (2) months between receipt of the
         purchase order and the delivery date. For the purposes of this Supply
         Agreement, the date on which material is delivered shall be the ocean
         bill of lading date.

5.3      If Seller is unable to furnish the total quantity as ordered by
         Purchaser, Seller shall without undue delay advise Purchaser. In such
         an event, Purchaser shall have the option to cancel, at no charge,
         within 10 days from receipt of such advice the portion of the
         individual purchase order which Seller is unable to furnish and the
         entire amount of the cancelled portion shall be credited against the
         Annual Minimum Purchase Obligation.

6.       DELIVERY DATES

6.1      Seller agrees to make every reasonable effort to meet the delivery
         dates specified by Purchaser in any purchase order. If Seller is late
         in the delivery of Green Pipes by 14 or more days, such late shipment
         shall be counted for the Purchaser's monthly orders under Section 2.1
         of this Supply Agreement for both the month in which the order was
         placed and the following month. If Seller is late in the delivery of
         Green Pipes by one or more months, Purchaser shall have the option to
         cancel, at no charge, the portion of the individual purchase order
         which has not yet been delivered and the entire amount of the cancelled
         portion shall be credited against the Annual Minimum Purchase
         Obligation.

6.2      Delivery is C.I.F. Houston in accordance with Incoterms 2000. Purchaser
         may also request, as specified in any particular purchase order, that
         the delivery destination of the Material be a location other than
         Houston. For the calculation of the Purchase Price, Section 4.1 of this
         Supply Agreement shall apply.

7.       HAZARDOUS CONDITIONS

7.1      In the event that Seller or Purchaser learns of any issue relating to a
         potential safety hazard or unsafe condition in any of the Material, or
         is advised of such by competent

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         authorities of any government having jurisdiction over such Material,
         it will immediately advise the other Party by the most expeditious
         means of communication. The Parties shall cooperate in communication
         with the public and governmental agencies and in correcting any such
         condition that is found to exist.

7.2      The Parties shall consult with each other prior to making any
         statements to the public or to any governmental agency concerning
         issues related to the safety hazard or unsafe condition except in
         circumstances in which a failure to do so would prevent the timely
         notification which may be required to be given under an applicable law
         or regulation.

7.3      Expenses associated with the correction of a safety hazard or unsafe
         condition by or associated with the Material, including reasonable
         attorney's fees, court costs, expenses, and the like, if they become
         necessary, shall be borne by the Party which caused such safety hazard
         or unsafe condition, subject only to any other arrangement negotiated
         by the Parties in light of the particular facts and circumstances then
         existing.

8.       CONFIDENTIAL INFORMATION

         The parties understand and agree that information concerning any of the
         information set forth herein is confidential to each of them and shall,
         except as may otherwise be required by law, regulation or order, only
         be disclosed to unaffiliated third parties, in writing or orally, upon
         the specific prior written agreement of the Parties, provided, however,
         that if any of such terms have previously been disclosed, for any of
         the foregoing reasons, these terms shall no longer be treated as
         confidential by either Party.

9.       PATENTS

9.1      Each Party hereby represents to the other Party that, to the best of
         its knowledge, there are no third-party patent, trade secret, or
         copyright rights which would be infringed by the manufacture, use or
         sale of the Material to be supplied hereunder.

9.2      Each Party will defend any suit or proceeding brought against the other
         Party, any of its affiliates or their customers, based on a claim that
         the manufacture, use or sale of the Material purchased hereunder
         constitutes an infringement of any patent or copyright of any country
         or any trade secret to the extent and only to the extent such suit or
         proceeding is attributable to the actions or omissions by such Party;
         provided that each Party is notified by the other Party in writing and
         given authority, information and assistance for the defense of same.
         If, as a result of any such suit or proceeding, the use or sale of the
         Material purchased hereunder is enjoined, both Parties shall use their
         best efforts to modify any infringing Material so that it becomes
         non-infringing.

10.      WARRANTY

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10.1     Green Pipes manufactured by Seller for Purchaser under this Supply
         Agreement shall be of the kind and quality as provided in Section 1 of
         this Supply Agreement and as per the specification mutually agreed by
         the Parties and the applicable parts of the API standards. In case of a
         conflict between the specification and the API standards, the
         specification shall prevail. The review or approval by Purchaser of any
         designs, engineering drawings, quality control procedures, or any other
         aspect of the design and manufacture of Material hereunder shall not
         relieve Seller of the responsibility for producing Material which
         complies with the specification and all current local, state and
         federal governmental specifications and standards existing at the date
         of delivery as expressly stated and identified in the specification.
         Further, Seller shall be responsible for producing Material which is of
         good workmanship and performance and of merchantable quality. Seller
         also warrants that it complies with all Austrian regulations applicable
         to the manufacturing of Material. Seller also shall be responsible for
         any mill-related defects in the Material, including, but no limited to,
         laps, slugs, gouges, slivers and seams, detected prior to or after
         processing.

10.2     The warranty period extends for, and warranty claims may only be
         asserted in writing by Purchaser against Seller within, the first 12
         months of service of the Green Pipes or within 2 years after delivery
         of the Green Pipes to Purchaser, whichever comes first. Warranty claims
         for corrosion or mechanical damage may only be asserted in writing by
         Purchaser against Seller within six (6) months after the Material's
         arrival at its port of destination.

10.3     In case Purchaser asserts warranty claims against Seller, Seller shall
         have the right to examine such Material within 30 calendar days. If any
         of the delivered Materials fails to meet the warranties set forth
         above, Seller shall, as promptly as practicable and at its expense,
         repair, replace or cause to be repaired or replaced same without undue
         delay. In either case, the cost of freight and handling to return or
         replace the Material shall be at the expense of Seller and the Seller
         shall reimburse Purchaser for the costs of any fabrication and
         reasonable additional inspection costs incurred by Purchaser in the
         processing of the defective Material.

10.4     In the event that a warranty claim exists and Seller has accepted to be
         responsible for the warranty claim, or is otherwise determined to be
         responsible, Seller will at Purchaser's option issue credit against
         future invoices or set off against due penalty payments or Seller will
         pay to Purchaser the amount due within 30 days receipt of a debit
         memorandum or some other written request for payment.

10.5     Notwithstanding any provision to the contrary, the Parties may agree to
         an adjustment in the Purchase Price or to a (partial) cancellation of
         the respective purchase order in the event of any failure or defect in
         the Material.

11.      PRODUCT LIABILITY

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11.1     In the event that product liability claims are asserted against Seller
         or Purchaser such Party will immediately advise the other Party of such
         claim by the most expeditious means of communication. The Parties shall
         cooperate in communication with the public and governmental agencies
         with respect to such liability claim.

11.2     Each Party shall defend any suit or proceeding brought against the
         other Party, any of its affiliates or their customers, based on product
         liability claims for which they are responsible. Unless agreed
         otherwise, until such time as responsibility has been determined, the
         Parties shall bear the costs and expenses (including, but not limited
         to, reasonable attorney's fees and expenses, settlements, judgments,
         and court costs) arising out of or related to product liability in the
         ratio of the value added to the finished product by each Party.

11.3     In the event a product liability claim is successfully asserted against
         one of the Parties, the Party which caused such defect agrees to
         protect, defend, hold harmless, indemnify, and reimburse the other
         Party and its distributors, dealers, affiliates, insurers, and
         customers during the term of this Supply Agreement and any time
         thereafter for any and all liabilities, losses, damages, costs and
         expenses (including but not limited to, reasonable attorney's fees and
         expenses, settlements, judgments, and court costs) arising out of or
         related to such liability, demand, lawsuit, action or claim.

11.4     If the Party which caused such defect cannot be identified, the Parties
         shall bear all liabilities, losses, damages, costs and expenses
         (including, but not limited to, reasonable attorney's fees and
         expenses, overhead, settlements, judgments, and court costs) arising
         out of or related to such liability, demand, lawsuit, action or claim
         in the ratio of the value added to the Green Pipe by each Party.

11.5     Both Parties shall maintain, at their own expense, appropriate
         insurance in the amount of at least US$ 25 million for injury, death,
         or property damage. Satisfactory evidence by copy of certificate of
         insurance thereof shall be submitted annually to the other Party upon
         the other Party's request. Such insurance shall be carried during the
         term of this Supply Agreement, including extension, and for at least
         three (3) years thereafter.

12.      PURCHASER'S AND SELLER'S LIABILITIES

12.1     The Parties shall consult with each other on a regular basis on
         procedures on how to minimize any risk with respect to the imposition
         of U.S. Antidumping or Countervailing Duties provided that such
         consultation is not in violation of law and is commercially reasonable.

12.2     To this end, Seller shall employ a special sales advisor ("Special
         Sales Advisor"). The appointment and dismissal of said Special Sales
         Advisor shall be at the recommendation of Purchaser and require the
         unanimous vote of the representatives of GRANT and VOEST-ALPINE
         SCHIENEN GmbH & Co KG to the Supervisory

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         Board of the general partner of the Seller. The Special Sales Advisor
         shall report to the Management Board of Seller.

12.3     If, despite these measures, a proceeding or investigation is initiated
         to lead to the imposition of U.S. Antidumping or Countervailing Duties
         on products covered by this Supply Agreement either Party may, upon
         written notice to the other, request a stay on the performance of the
         obligations under Sections 1, 2 and 13 under this Supply Agreement
         during the proceeding or investigation not to exceed two years;
         provided, however, that such Party reasonably determines that continued
         sales may subject the Party or the sales to the imposition of U.S.
         Antidumping or Countervailing Duties. During the period of the stay,
         all rights and obligations of the Parties under the above-referenced
         Sections shall cease.

12.4     At any time during the stay under Section 12.3, either Party may
         request that this Supply Agreement not be stayed and that Green Pipe
         continue to be imported into the U.S. provided that the requesting
         Party (i) agrees to indemnify the other Party for the additional duties
         or payments imposed (ii) agrees to post any required bonds and (iii)
         provides adequate assurances of payment for the additional duties or
         payments.

12.5     In the event that actual additional duties or payments are imposed,
         either Party may elect to terminate this Supply Agreement provided that
         the other Party may require the Supply Agreement not be terminated as
         long as such Party (i) agrees to indemnify the other Party for any
         additional duties or Payments imposed and (ii) provides adequate
         assurances of payment for the additional duties and payments.

12.6     If a proceeding or investigation is initiated threatening to lead to
         the imposition of U.S. Antidumping or Countervailing Duties with
         respect to products subject to this Supply Agreement. Purchaser shall,
         at its expense, defend Seller in such action. Purchaser shall be
         entitled to control the defense, but Seller shall be entitled to
         participate in the action.

12.7     This Section 12 provides for the exclusive remedies for any action by
         the Parties that may lead to the imposition of U.S. Antidumping or
         Countervailing Duties.

13.      PENALTY

13.1     Purchaser agrees to pay a penalty of EURO 43.60 for each metric ton to
         the extent that purchaser orders fell short of the Annual Minimum
         Purchase Obligation of Purchaser required under Section 2.1 based on a
         two (2) year average for the first two years of the Supply Agreement
         and a two (2) year average for the last two years of the Supply
         Agreement (for clarification the Parties intend to take a two year
         average of Materials purchased by the Purchaser during years 1 and 2 of
         the contract and compare the two year average to the Annual Minimum
         Purchase Obligation. If the average for that period is equal to or
         above the Annual Minimum Purchase Obligation, no penalties will be due.
         If the average for that period is below the Annual Minimum Purchase
         Obligation then a penalty will be due, which will be an

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         amount equal to: [each metric ton the average is below the Annual
         Minimum Purchase Obligation x the period averaged (2 years) x the
         penalty (EURO 43.60). The same calculation and averaging will be
         calculated for the two (2) year period comprising years 3 and 4 of the
         contract. Purchaser shall pay any penalties due within 30 days
         following the end of the two year period during which the penalties
         arose.

13.2     Any penalties paid pursuant to Section 13.1 may be applied by and
         repaid to Purchaser against separate invoices for purchases in excess
         of the Annual Minimum Purchase Obligation in the following two-year
         period. Any such penalty shall, at the request of Purchaser, be applied
         or repaid immediately following the year in which the purchases were in
         excess of the Minimum Purchase Obligations. However, the amount of the
         purchased Materials (over the Annual Minimum Purchase Obligation) that
         is used to obtain a refund of the penalty under this Section 13.2 shall
         not also be used in the two (2) year average under Section 13.1 for
         that current two (2) year period.

13.3     For calculation purposes of the penalty only, any order placed by
         Purchaser (or its Affiliates) which was not delivered in compliance
         with this Supply Agreement, shall be deducted from the Annual Minimum
         Purchase Obligation. In case this Supply Agreement is terminated, the
         penalty due for the last year prior to termination pursuant to Section
         13.1 shall be calculated on a pro rata basis.

14.      CURRENCY

         All the amount payable under this Supply Agreement that are denominated
         in EURO.

15.      DISPUTE RESOLUTION

         All disputes arising out of this Supply Agreement or related to its
         violation, termination or nullity shall be finally settled under the
         Rules of Arbitration and Conciliation of the International Arbitral
         Centre of the Austrian Federal Economic Chamber in Vienna (Vienna
         Rules) by three arbitrators appointed in accordance with these rules.
         The substantive law of Austria shall be applicable and the language to
         be used in the arbitral proceedings shall be English. The place of
         arbitration shall be Vienna, Austria.

16.      MISCELLANEOUS

16.1     Modifications of and amendments to this Supply Agreement shall be valid
         and binding only if made in writing.

16.2     If any provision hereof becomes invalid, this shall not effect the
         validity of the remaining provisions hereof.

                                                                              12
<PAGE>

16.3     This Supply Agreement shall be governed by and construed according to
         Austrian law. The application of the United Nations Convention on
         Contracts for the International Sale of Goods is expressly excluded.

16.4     The termination of this Supply Agreement shall not release either Party
         from any liability, obligation, or agreement which, pursuant to any
         provision of this Supply Agreement, is to survive or be performed after
         such expiration or termination.

16.5     This Supply Agreement has been made in the English language and has
         been executed in two originals with Seller and Purchaser receiving one
         each.

16.6     All notices, requests, consents and other communications hereunder
         shall be made in writing and sent by registered or certified mail or by
         any express mail service or courier service or by facsimile
         transmission (with receipt confirmed) to the parties at the addresses
         and numbers below:

         If to Purchaser to:

         Grant Prideco Inc.
         1330 Post Oak Blvd. Suite 2700
         Houston, Texas 77056

         Attn: President
         Telephone: 832-681-8000
         Telecopier: 832-681-8569

         With a copy to: General Counsel

         If to Seller to:

         VoestAlpine Tubulars GmbH & Co KG
         AlpinestraBe 17
         A-8652 Kindberg-Aumuhl, Austria
         Attn: ______________________
         Telephone:__________________
         Telecopier:__________________

         With a copy to:

         ___________________________
         ___________________________
         ___________________________
         Attn: ______________________
         Telephone:__________________
         Telecopier:__________________

                                                                              13
<PAGE>

16.7     The subject heading of this Supply Agreement are for the convenience of
         the Parties and shall not be considered in any question of
         interpretation or construction of this Supply Agreement.

IN WITNESS WHEREOF, the Parties have executed or caused to be executed this
Supply Agreement as of this 1st day of August, 2003.

GRANT PRIDECO, INC.

     /s/ Dan Latham
-----------------------------------

VOESTALPINE TUBULARS Gmbh & Co KG

_____________/s/ Illegible Authorized Signatory______________

                                                                              14
<PAGE>

                                     ANNEX A

Part 1

1.A)     For drill pipe and casing specs, minimum quantity of 500 MT/item

         GP 359
         TCA G1-01 rev. C type 2
         Price: Euro 605 / MT
         Surcharge of 2.5% applies for lots of 250 - 499 MT
         Surcharge of 4% applies for lots of 100 - 249 MT/size

1.B)     For drill pipe and casing specs, minimum purchase of 250 MT/size.

         Price for GP 348 rev. I             Euro 641 / MT
         Price for GP 347 rev. I             Euro 634 / MT
         Price for TCA 61-01 rev. C type 7   Euro 649 / MT

         For lots of 100 - 249 MT/item a surcharge of 2.5% shall apply.

1.C)     For tubing, minimum quantity of 250 MT/size.

         Price for GP spec 359          Euro 605 / MT
         Price for GP spec 347          Euro 634 / MT
         Price for GP spec 348          Euro 641 / MT
         For lots of 100 - 249 MT a surcharge of 2.5% shall apply.

                                                                              15
<PAGE>

                                     ANNEX B

                            GREEN TUBE LENGTH SUMMARY

                                   DRILL PIPE

The wall thickness shown is for 95% RBW. Our new tolerance will be +1' / -1'
except where we had a VA maximum length that is designated with a (VA). Grant
Prideco and VA will agree to and confirm on the purchase order any non-standard
lengths that might be customer specified.

<TABLE>
<CAPTION>
ITEM       SIZE       UPSET      WALL       AIM         MIN / MAX
----       -----      -----      ----      -----     ----------------
<S>        <C>        <C>        <C>       <C>       <C>
 1         2-3/8        H        .296      31.13     30.13 / 32.13
 2         2-7/8        H        .382      31.38     30.38 / 32.38
 3         3-1/2        EU       .268      31.49     30.49 / 32.49
 4         3-1/2        H        .388      31.34     30.34 / 32.34
 5         3-1/2        H        .474      30.74     29.74 / 31.74
 6         4            H        .348      31.47     30.47 / 32.47
 7         4            H        .401      31.83     30.83 / 31.99 VA
 8         4-1/2        H        .356      31.60     30.60 / 32.60
 9         4-1/2        H        .454      32.01     31.01 / 32.15 VA
 10        5            H        .382      31.34     30.34 / 32.34
 11        5            H        .528      31.50     30.50 / 31.66 VA
 12        5            EU       .792      29.96     28.98 / 30.96
 13        5-1/2        H        .381      31.30     30.30 / 32.26 VA
 14        5-1/2        H        .438      31.55     30.55 / 32.55
 15        5-1/2        H        .792      29.86     28.86 / 30.64 VA
 16        5-7/8        H        .381      31.97     30.97 / 32.58 VA
 17        5-7/8        H        .438      30.91     29.91 / 31.72 VA
 18        5-7/8        H        .792      29.86     28.86 / 30.86
 19        6-5/8        H        .348      32.10     31.10 / 33.10
 20        6-5/8        H        .382      31.77     30.77 / 32.77
</TABLE>

                                                                              16<PAGE>
                                                                   EXHIBIT 10.17

                               GRANT PRIDECO, INC.
                     NONQUALIFIED DEFERRED COMPENSATION PLAN

                                 (AS ESTABLISHED
                             EFFECTIVE JUNE 1, 2003)

<PAGE>

                               GRANT PRIDECO, INC.
                     NONQUALIFIED DEFERRED COMPENSATION PLAN

                                 (AS ESTABLISHED
                             EFFECTIVE JUNE 1, 2003)

                                   WITNESSETH:

         WHEREAS, Grant Prideco, Inc. and other adopting entities desire to
establish the Grant Prideco, Inc. Nonqualified Deferred Compensation Plan,
hereinafter referred to as the "Plan," for the benefit of their eligible
employees; and

         WHEREAS, it is intended that the Plan shall qualify as an unfunded
deferred compensation plan for a select group of management or highly
compensated employees within the meaning of the Employee Retirement Income
Security Act of 1974, as amended;

         NOW THEREFORE, the Plan is hereby established as follows, effective as
of June 1, 2003.

<PAGE>

                               GRANT PRIDECO, INC.
                     NONQUALIFIED DEFERRED COMPENSATION PLAN

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                            PAGE
                                                                                                            ----
<S>      <C>                                                                                                <C>
ARTICLE I DEFINITIONS AND CONSTRUCTION....................................................................     1
1.01     Definitions......................................................................................     1
1.02     Number and Gender................................................................................     3
1.03     Headings.........................................................................................     3

ARTICLE II    PARTICIPATION...............................................................................     4
2.01     Eligibility......................................................................................     4
2.02     Commencement of Participation....................................................................     4
2.03     Cessation of Participation Upon Committee Determination..........................................     4

ARTICLE III   PARTICIPANT DEFERRALS.......................................................................     4
3.01     Amount of Participant Deferrals..................................................................     4
3.02     Participant Deferral Elections...................................................................     5
3.03     Period of Effectiveness of Participant Deferral Elections........................................     5
3.04     Changes to Participant Deferral Election.........................................................     6
3.05     Cancellation of Participant Deferral Election....................................................     6

ARTICLE IV    COMPANY DEFERRALS...........................................................................     6
4.01     Company Matching Deferrals.......................................................................     6
4.02     Company Discretionary Deferrals..................................................................     6
4.03     Eligibility for Company Matching and Company Discretionary Deferrals.............................     6

ARTICLE V     VALUATION OF ACCOUNTS.......................................................................     7

ARTICLE VI    DEEMED INVESTMENT OF FUNDS..................................................................     7

ARTICLE VII   DETERMINATION OF VESTED INTEREST AND FORFEITURES............................................     8
7.01     Vested Interest..................................................................................     8
7.02     Forfeitures  ....................................................................................     8

ARTICLE VIII  DISTRIBUTION OF BENEFITS....................................................................     8
8.01     Amount of Benefit................................................................................     8
8.02     Time and Form of Payment.........................................................................     8
8.03     Designation of Beneficiaries.....................................................................     8
8.04     Payment of Benefits..............................................................................     9
8.05     Unclaimed Benefits...............................................................................     9
</Table>

                                      -i-
<PAGE>

                           TABLE OF CONTENTS (CONT'D.)

<Table>
<S>      <C>                                                                                                <C>
ARTICLE IX    ADMINISTRATION OF THE PLAN..................................................................     9
9.01     Plan Administrator...............................................................................     9
9.02     Resignation and Removal..........................................................................     9
9.03     Records..........................................................................................    10
9.04     Self-Interest of Committee Members...............................................................    10
9.05     Compensation and Bonding.........................................................................    10
9.06     Committee Powers and Duties......................................................................    10
9.07     Reliance on Documents, Instruments, etc..........................................................    11
9.08     Claims Review Procedures; Claims Appeals Procedures..............................................    11
9.09     Company to Supply Information....................................................................    12
9.10     Indemnity........................................................................................    13

ARTICLE X     ADMINISTRATION OF FUNDS.....................................................................    13
10.01    Payment of Expenses..............................................................................    13
10.02    Trust Fund Property..............................................................................    13

ARTICLE XI    ADOPTION OF PLAN BY OTHER EMPLOYERS.........................................................    13
11.01    Adoption Procedure...............................................................................    13
11.02    No Joint Venture Implied.........................................................................    14

ARTICLE XII   NATURE OF THE PLAN AND
         ESTABLISHMENT OF THE TRUST.......................................................................    14
12.01    Nature of the Plan...............................................................................    14
12.02    Establishment of the Trust.......................................................................    15

ARTICLE XIII  MISCELLANEOUS...............................................................................    15
13.01    Plan Not Contract of Employment..................................................................    15
13.02    Alienation of Interest Forbidden.................................................................    16
13.03    Withholding......................................................................................    16
13.04    Amendment and Termination........................................................................    16
13.05    Severability.....................................................................................    16
13.06    Arbitration......................................................................................    16
13.07    Governing Law....................................................................................    17
</Table>

<PAGE>

                               GRANT PRIDECO, INC.
                     NONQUALIFIED DEFERRED COMPENSATION PLAN

                                 (AS ESTABLISHED
                             EFFECTIVE JUNE 1, 2003)

                                    ARTICLE I
                          DEFINITIONS AND CONSTRUCTION

         1.01 DEFINITIONS. The words and phrases defined in this Article shall
have the meaning set out in the definition unless the context in which the word
or phrase appears reasonably requires a broader, narrower or different meaning.

                  "ACCOUNT(s)" means all ledger accounts pertaining to a
         Participant or former Participant which are maintained by the Committee
         to reflect the Company's obligation to the Participant or former
         Participant under the Plan. The Committee shall establish the following
         subaccounts and any additional subaccounts that the Committee considers
         necessary to reflect the entire interest of the Participant or former
         Participant under the Plan. Each of the subaccounts listed below and
         any additional subaccounts established by the Committee shall reflect
         credits and debits made to such subaccounts for earnings, losses,
         distributions and forfeitures.

                           (a) Participant Deferral Account - the Participant's
                  or former Participant's deferrals, if any, made pursuant to
                  Section 3.01.

                           (b) Company Matching Deferral Account - the credits
                  made on behalf of a Participant or former Participant pursuant
                  to Section 4.01.

                           (c) Company Discretionary Deferral Account - the
                  credits made on behalf of a Participant or former Participant,
                  if any, made pursuant to Section 4.02.

                  "AFFILIATE" means any entity which is a member of the same
         controlled group of corporations within the meaning of section 414(b)
         of the Code or which is a trade or business (whether or not
         incorporated) which is under common control (within the meaning of
         section 414(c) of the Code), which is a member of an affiliated service
         group (within the meaning of section 414(m) of the Code) with the
         Company.

                  "ANNUAL INCENTIVE PLAN" means the Company's employee annual
         incentive compensation plan, as amended from time to time, any
         guidelines issued pursuant to such plan, and any other incentive
         compensation plans adopted by the Company from time to time which are
         in replacement of or in addition to such plan.

                  "BASE COMPENSATION" means a Participant's wages from the
         Company as defined in section 3401(a) of the Code for purposes of
         federal income tax withholding at the source (but determined without
         regard to any rules that limit the remuneration included in wages based
         upon the nature or location of employment) modified by including any

                                       1
<PAGE>

         portion thereof that such Participant could have received in cash in
         lieu of (a) Participant Deferrals pursuant to Section 3.01 or (b)
         elective contributions made on his behalf by the Company pursuant to a
         qualified cash or deferred arrangement described in section 401(k) of
         the Code and any elective contributions under a cafeteria plan
         described in section 125 of the Code, and modified further by excluding
         the following items (even if includable in gross income):
         reimbursements or other expense allowances; fringe benefits (cash and
         noncash); moving expenses; deferred compensation (other than (a)
         Participant Deferrals pursuant to Section 3.01 or (b) elective
         contributions to the Company's qualified cash or deferred arrangement
         described in section 401(k) of the Code) such as amounts includable in
         gross income as a result of an exercise of a stock option or stock
         appreciation right; and welfare benefits as defined in ERISA.

                  "BOARD" means the Board of Directors of Grant Prideco, Inc.

                  "BONUS" means each incentive bonus, if any, paid in cash by
         the Company to or for the benefit of an Employee for services rendered
         or labor performed while an Employee. Annual bonuses are generally paid
         with respect to a completed fiscal year by the Company to its employees
         pursuant to the Annual Incentive Plan. An Employee's Bonus shall be
         determined by including any portion thereof that such Employee could
         have received in cash in lieu of (a) any Participant Deferrals pursuant
         to Section 3.01 or (b) elective contributions made on his behalf by the
         Company pursuant to the Qualified Plan.

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

                  "COMMITTEE" means the administrative committee appointed by
         the Board to administer the Plan.

                  "COMPANY" means Grant Prideco, Inc. or an Affiliate that
         adopts the Plan pursuant to Article XII.

                  "COMPANY DEFERRALS" means, collectively or individually, any
         of the deferrals made by the Company pursuant to Sections 4.01 and
         4.02.

                  "COMPANY DISCRETIONARY DEFERRALS" means credits, if any, to a
         Participant's Account pursuant to Section 4.02.

                  "COMPANY MATCHING DEFERRALS" means credits to a Participant's
         Account pursuant to Section 4.01.

                  "EMPLOYEE" means any individual who is an employee of the
         Company.

                  "ENTRY DATE" means the first day of each Plan Year.

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended.

                  "FUNDS" means the investment funds designated from time to
         time for the deemed investment of Accounts pursuant to Article VI.

                                       2
<PAGE>

                  "LIMITED BASE COMPENSATION" means Base Compensation up to the
         limitation specified in section 401(a)(17) of the Code that is in
         effect under the Qualified Plan for the Plan Year.

                  "PARTICIPANT" means each Employee who has met the eligibility
         requirements for participation in the Plan specified in Section 2.01.

                  "PARTICIPANT DEFERRAL" means any deferral made by a
         Participant pursuant to Section 3.01.

                  "PLAN" means the Grant Prideco, Inc. Nonqualified Deferred
         Compensation Plan, as amended from time to time.

                  "PLAN YEAR" means the twelve-consecutive-month period
         commencing January 1 of each year.

                  "QUALIFIED PLAN" means the Grant Prideco, Inc. 401(k) Savings
         Plan.

                  "SPONSOR" means Grant Prideco, Inc., a Delaware corporation.

                  "TRUST" means the trust, if any, established under the Trust
         Agreement.

                  "TRUST AGREEMENT" means the agreement, if any, entered into
         between the Company and the Trustee pursuant to Article XIII, as
         amended from time to time.

                  "TRUST FUND" means the funds and properties, if any, held
         pursuant to the provisions of the Trust Agreement, together with all
         income, profits, and increments thereto.

                  "TRUSTEE" means the trustee or trustees qualified and acting
         under the Trust Agreement at any time.

                  "VESTED INTEREST" means the portion of a Participant's or
         former Participant's Accounts which, pursuant to the Plan, is
         nonforfeitable.

         1.02 NUMBER AND GENDER. Wherever appropriate herein, words used in the
singular shall be considered to include the plural and words used in the plural
shall be considered to include the singular. The masculine gender, where
appearing in the Plan, shall be deemed to include the feminine gender.

         1.03 HEADINGS. The headings of Articles and Sections herein are
included solely for convenience, and if there is any conflict between such
headings and the text of the Plan, the text shall control.

                                       3
<PAGE>

                                   ARTICLE II
                                  PARTICIPATION

         2.01 ELIGIBILITY. The individuals who shall be eligible to participate
in the Plan shall be those Employees as the Committee shall determine from time
to time. The Committee shall not designate an Employee as being eligible to
participate in the Plan unless the individual is a member of a select group of
management or a highly compensated employee within the meaning of ERISA.

         2.02 COMMENCEMENT OF PARTICIPATION. Prior to each Entry Date, the
Committee shall notify those Employees who are determined by the Committee to be
eligible to participate in the Plan as of such Entry Date. Any such Employee may
elect to make Participant Deferrals beginning on such Entry Date by effecting,
prior to such Entry Date and within the time period prescribed by the Committee,
the Participant Deferral election in the form prescribed by the Committee.
Notwithstanding any provision herein to the contrary, an Employee who first
becomes an Employee on other than the first day of a Plan Year may elect to make
Participant Deferrals commencing on the date he first becomes an Employee by
effecting, prior to or within 30 days after the date he first becomes an
Employee and within the time period prescribed by the Committee, the Participant
Deferral election in the form prescribed by the Committee.

         2.03 CESSATION OF PARTICIPATION UPON COMMITTEE DETERMINATION.
Notwithstanding any provision herein to the contrary, an Employee who has become
a Participant of the Plan shall cease to be entitled to make Participant
Deferrals hereunder or receive credits under Article IV effective as of any date
designated by the Committee. Any such Committee action shall be communicated to
the affected individual prior to the effective date of such action. Any such
Eligible Employee may again become entitled to make Participant Deferrals
hereunder and to receive credits under Article IV beginning on any subsequent
Entry Date selected by the Committee in its sole discretion.

                                   ARTICLE III
                              PARTICIPANT DEFERRALS

         3.01 AMOUNT OF PARTICIPANT DEFERRALS.

                  (a) A Participant may:

                           (i) elect to defer an integral percentage of from one
                  percent (1%) to one hundred percent (100%) of his Base
                  Compensation in excess of his Limited Base Compensation for a
                  Plan Year; and/or

                           (ii) elect to defer an integral percentage of from
                  one percent (1%) to one hundred percent (100%) of his Bonus
                  for a Plan Year.

         Notwithstanding the foregoing, with respect to an Eligible Employee who
first becomes a Participant on a date other than an Entry Date, (i) any such
Participant Deferrals pursuant to Section 3.01(a)(i) shall apply only for the
portion of such Plan Year commencing with the date he first becomes a
Participant and ending on the last day of such Plan Year, and (ii) any such
Participant Deferral pursuant to Section 3.01(a)(ii) shall become effective as
of the first day of

                                       4
<PAGE>

the following Plan Year; provided, however, that in the case of the first Plan
Year in which the Plan is established a Participant may make a Participant
Deferral pursuant to Section 3.01(a)(ii) with respect to a Bonus that would be
payable during such Plan Year but for the Participant's deferral election if at
the time the deferral election is made the Participant does not have a present
right to demand and receive immediate payment of the Bonus.

         (b) If a Participant's Qualified Plan Elective Deferrals are reduced as
a result of the limitation contained in section 402(g) of the Code the
Participant may elect for a Plan Year to defer an integral percentage of from
one percent (1%) to up to twenty percent (20%) of his Limited Base Compensation.
The amount that may be deferred under the Plan for a Plan Year pursuant to this
Section 3.01(b), when added to the Participant's Qualified Plan Deferrals for
the Plan Year, may not exceed twenty percent (20%) of the Participant's Limited
Base Compensation. Deferrals elected pursuant to this Section 3.01(b) will begin
after the Participant's Qualified Plan Deferrals equal the limit specified in
section 402(g) of the Code.

         (c) A Participant may elect to defer under the Plan the amount of any
elective deferrals and matching contributions that are made to the Qualified
Plan on his behalf for the Plan Year which must be refunded to him pursuant to
the discrimination testing limitations of sections 401(k) and/or 401(m) of the
Code.

         3.02 PARTICIPANT DEFERRAL ELECTIONS. Base Compensation and Bonuses for
a Plan Year that are not deferred by a Participant pursuant to an election under
Sections 3.01(a), (b) and (c) shall be received by such Participant in cash. A
Participant's election to defer an amount of his Base Compensation and/or Bonus
pursuant to this Section shall be made by effecting, in the form prescribed by
the Committee, a Participant Deferral election pursuant to which the Participant
authorizes the Company to reduce his Base Compensation and/or Bonus in the
elected amount and the Company, in consideration thereof, agrees to credit an
equal amount to his Participant Deferral Account maintained under the Plan. The
reduction in a Participant's Base Compensation and/or Bonus pursuant to his
Participant Deferral election shall be effected by payroll reductions as
determined by the Committee following the effective date of such election.
Participant Deferrals made by a Participant shall be credited to his Participant
Deferral Account as of a date determined in accordance with procedures
established from time to time by the Committee; provided, however, that such
Participant Deferrals shall be credited to his Participant Deferral Account no
later than 30 days after the date upon which the Pay deferred would have been
received by such Participant in cash had he not elected to defer such amount
pursuant to Section 3.01.

         3.03 PERIOD OF EFFECTIVENESS OF PARTICIPANT DEFERRAL ELECTIONS. A
Participant Deferral election pursuant to Sections 3.01(a) and (b) shall become
effective as of the Entry Date (or later initial eligibility date, if
applicable) which is on or after the date the election is effected by the
Participant. With respect to an Eligible Employee who first becomes a
Participant on other than an Entry Date, any such Participant Deferrals pursuant
to Sections 3.01(a)(i) or 3.01(b) shall apply only for the portion of such Plan
Year commencing with the date he first becomes a Participant and ending on the
last day of such Plan Year. Except as specified in Section 3.01(a)(ii) in the
case of the first Plan Year of the Plan, a Participant Deferral election
pursuant to Section 3.01(a)(ii) shall become effective as of the first day of
the Plan Year following the date the election is effected by the Participant. A
Participant Deferral election shall remain in

                                       5
<PAGE>

force and effect for the entire (or partial, if applicable) Plan Year to which
such election relates. A Participant Deferral election shall be made for each
Plan Year, or partial Plan Year, in which the Participant is eligible to
participate. Plan provisions to the contrary notwithstanding, a Participant
Deferral election shall be suspended during any period of unpaid leave of
absence from the Company.

         3.04 CHANGES TO PARTICIPANT DEFERRAL ELECTION. A Participant who makes
a Participant Deferral election may change his election for future Participant
Deferrals as of the Entry Date of any subsequent Plan Year, by effecting such
change in the annual election prior to the Entry Date of such Plan Year, in the
form and within the time period prescribed by the Committee. Any such change
shall be effective as of the Entry Date of such Plan Year.

         3.05 CANCELLATION OF PARTICIPANT DEFERRAL ELECTION. A Participant who
has made a Participant Deferral election may cancel his election for future
Participant Deferrals, as of the Entry Date of any subsequent Plan Year, by
effecting such cancellation in the annual election prior to the Entry Date of
such Plan Year, in the form and within the time period prescribed by the
Committee. Any such change shall be effective as of the Entry Date of such Plan
Year. A Participant who so cancels his Participant Deferral election may again
make a new Participant Deferral election for a subsequent Plan Year by effecting
a new Participant Deferral election prior to the Entry Date of such Plan Year,
in the form and within the time period prescribed by the Committee.

                                   ARTICLE IV
                                COMPANY DEFERRALS

         4.01 COMPANY MATCHING DEFERRALS. For each payroll period, the Company
shall defer on a Participant's behalf an amount equal to 100 percent (100%) of
the first three percent (3%) of the Participant Deferrals made pursuant to
Sections 3.01(a) and (b) and 50 percent (50%) of the next three percent (3%) of
the Participant Deferrals made pursuant to Sections 3.01(a) and (b).

         Company Matching Deferrals made on a Participant's behalf pursuant to
this Section 4.01 shall be credited to such Participant's Company Matching
Deferral Account as of the date the corresponding Participant Deferral is
credited to the Participant's Account.

         4.02 COMPANY DISCRETIONARY DEFERRALS. As of any date selected by the
Company, the Company may credit a Participant's Company Discretionary Deferral
Account with Company Discretionary Deferrals in such amount, if any, as the
Company shall determine in its sole discretion. Such credits may be made on
behalf of some Participants but not others, and such credits may vary in amount
among individual Participants.

         4.03 ELIGIBILITY FOR COMPANY MATCHING AND COMPANY DISCRETIONARY
DEFERRALS. Notwithstanding Sections 4.01 and 4.02, no Participant shall be
eligible to participate in the Plan for purposes of sharing in the Company
Matching Deferrals or Company Discretionary Deferrals until the first day after
he completes one Year of Service. For this purpose, a "Year of Service" shall
mean a consecutive twelve-month period in which an Employee is employed by the

                                       6
<PAGE>

Company and earns an Hour of Service. For this purpose, an "Hour of Service"
means each hour that a Participant is paid or entitled to payment by the Company
for the performance of duties.

                                    ARTICLE V
                              VALUATION OF ACCOUNTS

         All amounts allocated to the Accounts of Participants shall be deemed
to be invested as of the date of such allocation, and the balance of each
Account shall reflect the result of daily pricing of the assets in which such
Account is deemed to be invested from the time of such allocation until the time
of distribution.

                                   ARTICLE VI
                           DEEMED INVESTMENT OF FUNDS

         Participant's and former Participant's Accounts shall be deemed to be
credited with earnings and losses. For the purpose of determining the earnings
or losses to be credited to the Participant's or former Participant's Accounts
under the Plan, the Committee shall assume that the Participant's or former
Participant's Accounts are invested in units or shares of the Funds in the
proportions selected by the Participant or former Participant in accordance with
procedures established by the Committee. This amount accrued by the Committee as
additional deferred compensation shall be a part of the Company's obligation to
the Participant or former Participant. The determination of deemed earnings and
losses on amounts deemed credited to the Participant's or former Participant's
Account shall in no way affect the ability of the general creditors of the
Company to reach the assets of the Company (including any rabbi trust maintained
in connection with the Plan) in the event of the insolvency or bankruptcy of the
Company or place the Participants or former Participants in a secured position
ahead of the general creditors of the Company. Although a Participant's or
former Participant's investment selections made in accordance with the terms of
the Plan and such procedures as may be established by the Committee shall be
relevant for purposes of determining the Company's obligation to the Participant
or former Participant under the Plan, there is no requirement that any assets of
the Company (including those held in any rabbi trust) shall be invested in
accordance with the Participant's or former Participant's investment selections.

         Each Participant or former Participant shall designate, in accordance
with the procedures established from time to time by the Committee, the manner
in which the amounts allocated to his Accounts shall be deemed to be invested
from among the Funds made available from time to time for such purpose by the
Committee. Such Participant or former Participant may designate one of such
Funds for the deemed investment of all such amounts allocated to his Accounts or
he may split the deemed investment of such amounts allocated to his Accounts
among such Funds in such increments as the Committee may prescribe. If a
Participant or former Participant fails to make a proper designation, then his
Accounts shall be deemed to be invested in the Fund or Funds designated in a
uniform and nondiscriminatory manner by the Committee from time to time.

         A Participant may change his deemed investment designation for future
deferrals to be allocated to his Accounts. Any such change shall be made in
accordance with the procedures

                                       7
<PAGE>

established by the Committee, and the frequency of such changes may be limited
by the Committee.

         A Participant or former Participant may elect to convert his deemed
investment designation with respect to the amounts already allocated to his
Accounts. Any such conversion shall be made in accordance with the procedures
established by the Committee, and the frequency of such conversions may be
limited by the Committee.

                                   ARTICLE VII
                DETERMINATION OF VESTED INTEREST AND FORFEITURES

         7.01 VESTED INTEREST. A Participant or former Participant shall have a
one hundred percent (100%) Vested Interest in amounts credited to his
Participant Deferral Account at all times. A Participant or former Participant
shall have a Vested Interest in the amounts credited to his Company Matching
Deferral Account and Company Discretionary Deferral Account equal to his
nonforfeitable interest in his employer matching contribution account under the
Qualified Plan.

         7.02 FORFEITURES. A Participant or former Participant who incurs a
Termination of Employment with a Vested Interest in amounts credited to his
Company Matching Deferral Account and Company Discretionary Deferral Account
that is less than one hundred percent (100%) shall forfeit to the Company the
nonvested portion of amounts credited to his Company Matching Deferral Account
and Company Discretionary Deferral Account as of the date of such Termination of
Employment.

                                  ARTICLE VIII
                            DISTRIBUTION OF BENEFITS

         8.01 AMOUNT OF BENEFIT. The Participant (or, in the event of the death
of the Participant while employed by the Company or an Affiliate, the
Participant's designated beneficiary) or former Participant shall be entitled to
a benefit equal in value to the Participant's or former Participant's Vested
Interest in the balance in his Accounts as of the date the payment of such
benefit is to commence pursuant to Section 8.02.

         8.02 TIME AND FORM OF PAYMENT. Payment of a Participant's or former
Participant's benefit under Section 8.01 shall be made, with respect to such
Participant's or former Participant's Accounts, in a single sum in cash, within
30 days following the date the Participant or former Participant incurs a
Termination of Employment.

         8.03 DESIGNATION OF BENEFICIARIES.

                  (a) Each Participant or former Participant shall have the
         right to designate the beneficiary or beneficiaries to receive payment
         of his benefit in the event of his death. Each such designation shall
         be made by executing the beneficiary designation form prescribed by the
         Committee and filing same with the Committee. Any such designation

                                       8
<PAGE>

         may be changed at any time by execution of a new designation in
         accordance with this Section.

                  (b) If no such designation is on file with the Committee at
         the time of the death of the Participant or former Participant or such
         designation is not effective for any reason as determined by the
         Committee, then the designated beneficiary or beneficiaries to receive
         such benefit shall be as follows:

                           (i) If a Participant or former Participant leaves a
                  surviving spouse, his benefit shall be paid to such surviving
                  spouse;

                           (ii) If a Participant or former Participant leaves no
                  surviving spouse, his benefit shall be paid to such
                  Participant's or former Participant's executor or
                  administrator, or to his heirs at law if there is no
                  administration of such Participant's or former Participant's
                  estate.

         8.04 PAYMENT OF BENEFITS. To the extent the Trust Fund has sufficient
assets, the Trustee shall pay benefits to Participants or former Participants or
their respective beneficiaries, except to the extent the Company pays the
benefits directly and provides adequate evidence of such payment to the Trustee.
To the extent the Trustee does not or cannot pay benefits out of the Trust Fund,
the benefits shall be paid by the Company. Any benefit payments made to a
Participant, or former Participant, or for his benefit pursuant to any provision
of the Plan shall be debited to such Participant's or former Participant's
Accounts. All benefit payments shall be made in cash to the fullest extent
practicable.

         8.05 UNCLAIMED BENEFITS. In the case of a benefit payable on behalf of
a Participant or former Participant, if the Committee is unable, after
reasonable efforts, to locate the Participant, the former Participant or the
beneficiary to whom such benefit is payable, upon the Committee's determination
thereof, such benefit shall be forfeited to the Company. Notwithstanding the
foregoing, if subsequent to any such forfeiture the Participant, the former
Participant or beneficiary to whom such benefit is payable makes a valid claim
for such benefit, such forfeited benefit (without any adjustment for earnings or
loss) shall be restored to the Plan by the Company and paid in accordance with
the Plan.

                                   ARTICLE IX
                           ADMINISTRATION OF THE PLAN

         9.01 PLAN ADMINISTRATOR. The Sponsor shall be the "plan administrator"
of the Plan within the meaning of ERISA. The Committee shall be responsible for
the administration of the Plan.

         9.02 RESIGNATION AND REMOVAL. The members of the Committee shall serve
at the pleasure of the Board; they may be officers, directors, or Employees or
any other individuals. At any time during his term of office, any member of the
Committee may resign by giving written notice to the Board, such resignation to
become effective upon the appointment of a substitute or, if earlier, the lapse
of thirty days after such notice is given as herein provided. At any time

                                       9
<PAGE>

during its term of office, and for any reason, any member of the Committee may
be removed by the Board.

         9.03 RECORDS. The Committee shall keep appropriate records of its
proceedings and the administration of the Plan and shall make available for
examination during business hours to any Participant, former Participant or the
beneficiary of any Participant or former Participant such records as pertain to
that individual's interest in the Plan.

         9.04 SELF-INTEREST OF COMMITTEE MEMBERS. No member of the Committee
shall have any right to vote or decide upon any matter relating solely to
himself under the Plan or to vote in any case in which his individual right to
claim any benefit under the Plan is particularly involved. In any case in which
any Committee member is so disqualified to act, the other members of the
Committee shall decide the matter in which the Committee member is disqualified.

         9.05 COMPENSATION AND BONDING. The members of the Committee shall
receive compensation with respect to their services on the Committee. Except to
the extent required by applicable law, or required by the Company, the members
of a Committee shall not be required to furnish bond or security for the
performance of their duties hereunder.

         9.06 COMMITTEE POWERS AND DUTIES. The Committee shall supervise the
administration and enforcement of the Plan according to the terms and provisions
hereof and shall have all powers necessary to accomplish these purposes,
including, but not by way of limitation, the right, power, and authority:

                  (a) to make rules, regulations, and bylaws for the
         administration of the Plan that are not inconsistent with the terms and
         provisions hereof, and to enforce the terms of the Plan and the rules
         and regulations promulgated thereunder by the Committee;

                  (b) to construe in its discretion all terms, provisions,
         conditions, and limitations of the Plan;

                  (c) to correct any defect or to supply any omission or to
         reconcile any inconsistency that may appear in the Plan in such manner
         and to such extent as it shall deem in its discretion expedient to
         effectuate the purposes of the Plan;

                  (d) to employ and compensate such accountants, attorneys,
         investment advisors, and other agents, employees, and independent
         contractors as the Committee may deem necessary or advisable for the
         proper and efficient administration of the Plan;

                  (e) to determine in its discretion all questions relating to
         eligibility;

                  (f) to determine whether and when a Participant has incurred a
         Termination of Employment;

                  (g) to make a determination in its discretion as to the right
         of any individual to a benefit under the Plan and to prescribe
         procedures to be followed by distributees in obtaining benefits
         hereunder;

                                       10
<PAGE>

                  (h) to receive and review reports from the Trustee as to the
         financial condition of the Trust Fund, including its receipts and
         disbursements; and

                  (i) to establish or designate Funds as deemed investment
         options as provided in Article VI.

         9.07 RELIANCE ON DOCUMENTS, INSTRUMENTS, ETC. The Committee may rely on
any certificate statement or other representation made on behalf of the Company,
any Employee or any Participant, which the Committee in good faith believes to
be genuine, and on any certificate, statement, report or other representation
made to it by any agent or any attorney, accountant or other expert retained by
it or the Company in connection with the operation and administration of the
Plan.

         9.08 CLAIMS REVIEW PROCEDURES; CLAIMS APPEALS PROCEDURES.

         (a) Claims Review Procedures. When a benefit is due, the Participant,
or the person entitled to benefits under Section 8.05 (a "claimant"), should
submit a claim to the Committee. Under normal circumstances, the Committee will
make a final decision as to a claim within 90 days after receipt of the claim.
If the Committee notifies the claimant in writing during the initial 90-day
period, it may extend the period up to 180 days after the initial receipt of the
claim. The written notice must contain the circumstances necessitating the
extension and the anticipated date for the final decision. If a claim is denied
during the claims period, the Committee must notify the claimant in writing, and
the written notice must set forth in a manner calculated to be understood by the
claimant:

                  (1) the specific reason or reasons for the denial;

                  (2) specific reference to the Plan provisions on which the
                  denial is based;

                  (3) a description of any additional material or information
                  necessary for the claimant to perfect the claim and an
                  explanation of why such material or information is necessary;
                  and

                  (4) an explanation of the Plan claims review procedures and
                  time limits, including a statement of the claimant's right to
                  bring a civil action under section 502(a) of ERISA.

         If a decision is not given to the claimant within the claims review
period, the claim is treated as if it were denied on the last day of the claims
review period.

         (b) Claims Appeals Procedures. If a claimant's claim made pursuant to
Section 9.08(a) is denied and he wants a review, he must apply to the Committee
in writing. That application can include any arguments, written comments,
documents, records, and other information relating to the claim for benefits. In
addition, the claimant is entitled to receive on request and free of charge
reasonable access to and copies of all information relevant to the claim. For
this purpose, "relevant" means information that was relied on in making the
benefit determination or that was submitted, considered or generated in the
course of making the determination, without regard to whether it was relied on,
and information that demonstrates

                                       11
<PAGE>

compliance with the Plan's administrative procedures and safeguards for assuring
and verifying that Plan provisions are applied consistently in making benefit
determinations. The Committee must take into account all comments, documents,
records, and other information submitted by the claimant relating to the claim,
without regard to whether the information was submitted or considered in the
initial benefit determination. The claimant may either represent himself or
appoint a representative, either of whom has the right to inspect all documents
pertaining to the claim and its denial. The Committee can schedule any meeting
with the claimant or his representative that it finds necessary or appropriate
to complete its review.

         The request for review must be filed within 90 days after the denial.
If it is not, the denial becomes final. If a timely request is made, the
Committee must make its decision, under normal circumstances, within 60 days of
the receipt of the request for review. However, if the Committee notifies the
claimant prior to the expiration of the initial review period, it may extend the
period of review up to 120 days following the initial receipt of the request for
a review. All decisions of the Committee must be in writing and must include the
specific reasons for its action, the Plan provisions on which its decision is
based, and a statement that the claimant is entitled to receive, upon request
and free of charge, reasonable access to, and copies of, all documents, records,
and other information relevant to the claimant's claim for benefits, and a
statement of the claimant's right to bring an action under section 502(a) of
ERISA If a decision is not given to the claimant within the review period, the
claim is treated as if it were denied on the last day of the review period.

         9.09 COMPANY TO SUPPLY INFORMATION. The Company shall supply full and
timely information to the Committee, including, but not limited to, information
relating to each Participant's Base Compensation, Bonus, age, death and such
other pertinent facts as the Committee may require. The Company shall advise the
Trustee of such of the foregoing facts as are deemed necessary for the Trustee
to carry out the Trustee's duties under the Plan and the Trust Agreement. When
making a determination in connection with the Plan, the Committee shall be
entitled to rely upon the aforesaid information furnished by the Company.

                                       12
<PAGE>

         9.10 INDEMNITY. To the extent permitted by applicable law, the Company
shall indemnify and hold harmless the Board, each member of the Committee, and
each delegate of the Committee or the Board against any and all expenses,
liabilities and claims (including legal fees incurred to investigate or defend
against such liabilities and claims) arising out of their discharge in good
faith of responsibilities under or incident to the Plan. Expenses and
liabilities arising out of willful misconduct shall not be covered under this
indemnity. This indemnity shall not preclude such further indemnities as may be
available under insurance purchased by the Company or provided by the Company
under any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, as such indemnities are permitted under applicable law.

                                    ARTICLE X
                             ADMINISTRATION OF FUNDS

         10.01 PAYMENT OF EXPENSES. All expenses incident to the administration
of the Plan and Trust, including but not limited to, legal, accounting, Trustee
fees, and expenses of the Committee, may be paid by the Company and, if not paid
by the Company, shall be paid by the Trustee from the Trust Fund, if any.

         10.02 TRUST FUND PROPERTY. All income, profits, recoveries,
contributions, forfeitures and any and all moneys, securities and properties of
any kind at any time received or held by the Trustee, if any, shall be held for
investment purposes as a commingled Trust Fund pursuant to the terms of the
Trust Agreement. The Committee shall maintain one or more Accounts in the name
of each Participant or former Participant, but the maintenance of an Account
designated as the Account of a Participant or former Participant shall not mean
that such Participant or former Participant shall have a greater or lesser
interest than that due him by operation of the Plan and shall not be considered
as segregating any funds or property from any other funds or property contained
in the commingled fund. No Participant or former Participant shall have any
title to any specific asset in the Trust Fund, if any.

                                   ARTICLE XI
                       ADOPTION OF PLAN BY OTHER EMPLOYERS

         11.01 ADOPTION PROCEDURE.

                  (a) With the written approval of the Sponsor, any entity that
         is an Affiliate may adopt the Plan by appropriate action of its board
         of directors or noncorporate counterpart, as evidenced by a written
         instrument executed by an authorized officer of such entity or an
         executed adoption agreement (approved by the board of directors or
         noncorporate counterpart of the Affiliate), agreeing to be bound by all
         the terms, conditions and limitations of the Plan except those, if any,
         specifically described in the adoption instrument, and providing all
         information required by the Sponsor. The Sponsor and the adopting
         Affiliate may agree to incorporate specific provisions relating to the
         operation of the Plan that apply to the adopting Affiliate only and
         shall become, only as to such adopting Affiliate and its employees, a
         part of the Plan.

                                       13
<PAGE>

                  (b) The provisions of the Plan may be modified so as to
         increase the obligations of an adopting Affiliate only with the consent
         of such Affiliate, which consent shall be conclusively presumed to have
         been given by such Affiliate unless the Affiliate gives the Company
         written notice of its rejection of the amendment within 30 days after
         the adoption of the amendment.

                  (c) The provisions of the Plan shall apply separately and
         equally to each adopting Affiliate and its employees in the same manner
         as is expressly provided for the Sponsor and its employees, except that
         the power to appoint or otherwise affect the Committee and the power to
         amend or terminate the Plan shall be exercised exclusively by the
         Sponsor. The Sponsor shall act as the agent for each Affiliate that
         adopts the Plan for all purposes of administration thereof.

                  (d) Any adopting Affiliate may, by appropriate action of its
         board of directors or noncorporate counterpart, terminate its
         participation in the Plan. Moreover, the Sponsor may, in its
         discretion, terminate an Affiliate's participation in the Plan at any
         time.

                  (e) The Plan will terminate with respect to any Affiliate that
         has adopted the Plan pursuant to this Section if the Affiliate ceases
         to be an Affiliate or revokes its adoption of the Plan by resolution of
         its board of directors or noncorporate counterpart evidenced by a
         written instrument executed by an authorized officer of the Affiliate.
         If the Plan terminates with respect to any Affiliate, the employees of
         that Affiliate will no longer be eligible to be Participants in the
         Plan.

                  (f) For purposes of the Code and ERISA, the Plan as adopted by
         the Affiliates shall constitute a single plan rather than a separate
         plan of each Affiliate.

         11.02 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 ever create a joint venture or partnership relation
between it and any other Affiliate.

                                   ARTICLE XII
                               NATURE OF THE PLAN
                         AND ESTABLISHMENT OF THE TRUST

         12.01 NATURE OF THE PLAN. The Company intends and desires by the
adoption of the Plan to recognize the value to the Company of the past and
present services of employees covered by the Plan and to encourage and assure
their continued service with the Company by making more adequate provision for
their future retirement security. The establishment of the Plan is, in part,
made necessary by certain benefit limitations which are imposed on the Qualified
Plan by the Code. The Plan is intended to constitute an unfunded, unsecured plan
of deferred compensation for a select group of management or highly compensated
employees of the Company. Plan benefits herein provided are a contractual
obligation of the Company that shall be paid out of the Company's general
assets. Nevertheless, subject to the terms hereof and of the

                                       14
<PAGE>

Trust Agreement, the Company may transfer money or other property to the Trustee
to provide Plan benefits hereunder, and the Trustee shall pay Plan benefits to
Participants, former Participants and their beneficiaries out of the Trust Fund.
To the extent the Company transfers assets to the Trustee pursuant to the Trust
Agreement, the Committee may, but need not, establish procedures for the Trustee
to invest the Trust Fund in accordance with each Participant's or former
Participant's designated deemed investments pursuant to Article VI respecting
the portion of the Trust Fund assets equal to such Participant's or former
Participant's Accounts.

         12.02 ESTABLISHMENT OF THE TRUST. The Board, in its sole discretion,
may establish the Trust and direct the Committee, for and on behalf of each
Company, to enter into the Trust Agreement. In such event, the Company shall
remain the owner of all assets in the Trust Fund and the assets shall be subject
to the claims of the Company's creditors if the Company ever becomes insolvent.
For purposes hereof, the Company shall be considered "insolvent" if (a) the
Company is unable to pay its debts as they become due or (b) the Company is
subject to a pending proceeding as a debtor under the United States Bankruptcy
Code (or any successor federal statute). The chief executive officer of the
Company and its board of directors shall have the duty to inform the Trustee in
writing if the Company becomes insolvent. Such notice given under the preceding
sentence by any party shall satisfy all of the parties' duty to give notice.
When so informed, the Trustee shall suspend payments to the Participants and
former Participants and hold the assets for the benefit of the Company's general
creditors. If the Company subsequently alleges that it is no longer insolvent or
if the Trustee receives a written allegation from a third party that the Company
is insolvent, the Trustee shall suspend payments to the Participants and former
Participants and hold the Trust Fund for the benefit of the Company's general
creditors, and shall determine in accordance with the Trust Agreement whether
the Company is insolvent. If the Trustee determines that the Company is not
insolvent, the Trustee shall resume payments to the Participants and former
Participants. No Participant, former Participant or beneficiary shall have any
preferred claim to, or any beneficial ownership interest in, any assets of the
Trust Fund, and, upon commencement of participation in the Plan, each
Participant and former Participant shall have agreed to waive his priority
credit position, if any, under applicable state law with respect to the assets
of the Trust Fund.

                                  ARTICLE XIII
                                  MISCELLANEOUS

         13.01 PLAN NOT CONTRACT OF EMPLOYMENT. The adoption and maintenance of
the Plan shall not be deemed to be a contract between the Company and any
individual or to be consideration for the employment of any individual. Nothing
herein contained shall be deemed to (a) give any individual the right to be
retained in the employ of the Company, (b) restrict the right of the Company to
discharge any individual at any time, (c) give the Company the right to require
any individual to remain in the employ of the Company, or (d) restrict any
individual's right to terminate his employment at any time.

                                       15
<PAGE>

         13.02 ALIENATION OF INTEREST FORBIDDEN. The interest of a Participant,
former Participant or his beneficiary or beneficiaries hereunder may not be
sold, transferred, assigned, or encumbered in any manner, either voluntarily or
involuntarily, and any attempt so to anticipate, alienate, sell, transfer,
assign, pledge, encumber, or charge the same shall be null and void; neither
shall the benefits hereunder be liable for or subject to the debts, contracts,
liabilities, engagements or torts of any individual to whom such benefits or
funds are payable, nor shall they be an asset in bankruptcy or subject to
garnishment, attachment or other legal or equitable proceedings.

         13.03 WITHHOLDING. All credits to a Participant's or former
Participant's Accounts and payments provided for hereunder shall be subject to
applicable withholding and other deductions as shall be required of the Company
under any applicable local, state or federal law.

         13.04 AMENDMENT AND TERMINATION. The Board, may from time to time, in
its discretion, amend, in whole or in part, any or all of the provisions of the
Plan on behalf of any Company; provided, however, that no amendment may be made
that would impair the rights of a Participant or former Participant with respect
to amounts already credited to his Accounts. The Board may terminate the Plan at
any time. If the Plan is terminated, the balance credited to a Participant's or
former Participant's Account shall be paid to such Participant, or former
Participant, or his designated beneficiary in the manner specified by the
Committee, which may include the payment of a single lump sum payment in full
satisfaction of all of such Participant's, former Participant's or beneficiary's
benefits hereunder.

         13.05 SEVERABILITY. If any provision of the Plan shall be held illegal
or invalid for any reason, said illegality or invalidity shall not affect the
remaining provisions hereof; instead, each provision shall be fully severable
and the Plan shall be construed and enforced as if said illegal or invalid
provision had never been included herein.

         13.06 ARBITRATION. Any controversy arising out of or relating to the
Plan, including without limitation, any and all disputes, claims (whether in
tort, contract, statutory or otherwise) or disagreements concerning the
interpretation or application of the provisions of the Plan, the Company's
employment of the Participant, or former Participant, and the termination of
that employment, shall be resolved by arbitration in accordance with the
Employee Benefit Plan Claims Arbitration Rules of the American Arbitration
Association (the "AAA") then in effect. No arbitration proceeding relating to
the Plan may be initiated by either the Company or the Participant, or former
Participant, unless the claims review and appeals procedures specified in
Section 9.08 have been exhausted. Within ten (10) business days of the
initiation of an arbitration hereunder, the Company and the Participant, or
former Participant, will each separately designate an arbitrator, and within
twenty (20) business days of selection, the appointed arbitrators will appoint a
neutral arbitrator from the panel of AAA National Panel of Employee Benefit Plan
Claims Arbitrators. The arbitrators shall issue their written decision
(including a statement of finding of facts) within thirty (30) days from the
date of the close of the arbitration hearing. The decision of the arbitrators
selected hereunder will be final and binding on both parties. This arbitration
provision is expressly made pursuant to and shall be governed by the Federal
Arbitration Act, 9 U.S.C. Sections 1-16 (or replacement or successor statute).
Pursuant to Section 9 of the Federal Arbitration Act, the Company and any
Participant agrees that any judgment of the United States District Court for the
District in which the headquarters of

                                       16
<PAGE>

the Company is located at the time of initiation of an arbitration hereunder
shall be entered upon the award made pursuant to the arbitration. Nothing in
this Section 13.06 shall be construed to, in any way, limit the scope and effect
of Article IX. In any arbitration proceeding full effect shall be given to the
rights, powers, and authorities of the Committee under Article IX.

         13.07 GOVERNING LAW. All provisions of the Plan shall be construed in
accordance with the laws of Texas, except to the extent preempted by federal law
and except to the extent that the conflicts of laws provisions of the State of
Texas would require the application of the relevant law of another jurisdiction,
in which event the relevant law of the State of Texas will nonetheless apply,
with venue for litigation or any proceeding under Section 13.06 being in
Houston, Texas.

                                       17
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officer this 1st day of June, 2003.

                                        GRANT PRIDECO, INC.

                                        By:   /s/ Warren Avery
                                            ------------------------------

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