Document:

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                       HYDRIL COMPANY 2000 INCENTIVE PLAN

         1. Plan. This Hydril Company 2000 Incentive Plan (the "Plan") was
adopted by Hydril Company (the "Company") to reward certain corporate officers
and key employees of the Company, as well as certain nonemployee directors of
the Company, by providing for certain cash benefits and by enabling them to
acquire shares of common stock of the Company.

         2. Objectives. The purpose of this Plan is to further the interests of
the Company, its Subsidiaries and its shareholders by providing incentives in
the form of awards to officers, key employees and directors who can contribute
materially to the success and profitability of the Company and its Subsidiaries.
Such awards will recognize and reward outstanding performances and individual
contributions and give Participants in the Plan an interest in the Company
parallel to that of the shareholders, thus enhancing the proprietary and
personal interest of such Participants in the Company's continued success and
progress. This Plan will also enable the Company and its Subsidiaries to attract
and retain such officers, employees, and directors.

         3. Definitions. As used herein, the terms set forth below shall have
the following respective meanings:

               "Annual Director Award Date" means, for each year beginning on or
after the IPO Closing Date, the first business day of the month next succeeding
the date upon which the annual meeting of stockholders of the Company is held in
such year.

               "Authorized Officer" means the Chairman of the Board or the Chief
Executive Officer of the Company (or any other senior officer of the Company to
whom either of them shall delegate the authority to execute any Award Agreement,
where applicable).

               "Award" means an Employee Award or a Director Award.

               "Award Agreement" means any Employee Award Agreement or Director
Award Agreement.

               "Board" means the Board of Directors of the Company.

               "Cash Award" means an award denominated in cash.

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

               "Committee" means the Compensation Committee of the Board or such
other committee of the Board or the Board as is designated by the Board to
administer the Plan.

               "Common Stock" means the common stock, par value $0.50 per share,
of the Company.

               "Company" means Hydril Company, a Delaware corporation.

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               "Director Award" means a Director Option.

               "Director Award Agreement" means a written agreement setting
forth the terms, conditions and limitations applicable to a Director Award.

               "Director Option" means a Nonqualified Stock Option granted to a
Nonemployee Director pursuant to paragraph 9 hereof.

               "Dividend Equivalents" means, with respect to shares of
Restricted Stock that are to be issued at the end of the Restriction Period, an
amount equal to all dividends and other distributions (or the economic
equivalent thereof) that are payable to stockholders of record during the
Restriction Period on a like number of shares of Common Stock.

               "Employee" means an employee of the Company or any of its
Subsidiaries and an individual who has agreed to become an employee of the
Company or any of its Subsidiaries and is expected to become such an employee
within the following six months.

               "Employee Award" means any Option, SAR, Stock Award, Cash Award
or Performance Award granted, whether singly, in combination or in tandem, to a
Participant who is an Employee pursuant to such applicable terms, conditions and
limitations (including treatment as a Performance Award) as the Committee may
establish in order to fulfill the objectives of the Plan.

               "Employee Award Agreement" means a written agreement setting
forth the terms, conditions and limitations applicable to an Employee Award.

               "Fair Market Value" of a share of Common Stock means, as of a
particular date, (i) if shares of Common Stock are listed on a national
securities exchange, the mean between the highest and lowest sales price per
share of such Common Stock on the consolidated transaction reporting system for
the principal national securities exchange on which shares of Common Stock are
listed on that date, or, if there shall have been no such sale so reported on
that date, on the next preceding date on which such a sale was so reported, (ii)
if shares of Common Stock are not so listed but are quoted on the Nasdaq
National Market, the mean between the highest and lowest sales price per share
of Common Stock reported by the Nasdaq National Market on that date, or, if
there shall have been no such sale so reported on that date, on the next
preceding date on which such a sale was so reported, (iii) if shares of Common
Stock are not so listed or quoted, the mean between the closing bid and asked
price on that date, or, if there are no quotations available for such date, on
the next preceding date on which such quotations shall be available, as reported
by the Nasdaq Stock Market, or, if not reported by the Nasdaq Stock Market, by
the National Quotation Bureau Incorporated or (iv) if shares of Common Stock are
not publicly traded, the most recent value determined by an independent
appraiser appointed by the Company for such purpose provided that,
notwithstanding the foregoing, "Fair Market Value" in the case of any Award
granted in connection with the IPO means the price per share of Common Stock set
on the IPO Pricing Date, as set forth in the final prospectus relating to the
IPO.

               "Grant Date" means the date an Award is granted to a Participant
pursuant to the Plan.

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               "Grant Price" means the price at which a Participant may exercise
his or her right to receive cash or Common Stock, as applicable, under the terms
of an Award.

               "IPO" means the first time a registration statement filed under
the Securities Act of 1933 and respecting an underwritten primary offering by
the Company of shares of Common Stock is declared effective under that Act and
the shares registered by that registration statement are issued and sold by the
Company (otherwise than pursuant to the exercise of any over-allotment option).

               "IPO Closing Date" means the date on which the Company first
receives payment for the shares of Common Stock it sells in the IPO.

               "IPO Pricing Date" means the date of the execution and delivery
of an underwriting or other purchase agreement among the Company and the
underwriters relating to the IPO setting forth the price at which shares of
Common Stock will be issued and sold by the Company to the underwriters and the
terms and conditions thereof.

               "Incentive Stock Option" means an Option that is intended to
comply with the requirements set forth in Section 422 of the Code.

               "Nonemployee Director" means an individual serving as a member of
the Board who is not an employee of the Company or any of its Subsidiaries.

               "Nonqualified Stock Option" means an Option that is not an
Incentive Stock Option.

               "Option" means a right to purchase a specified number of shares
of Common Stock at a specified Grant Price, which may be an Incentive Stock
Option or a Nonqualified Stock Option.

               "Option Value" means the value of a Director Option which shall
be one-third of the Fair Market Value of a share of Common Stock.

               "Participant" means an Employee or Nonemployee Director to whom
an Award has been granted under this Plan.

               "Performance Award" means an award made pursuant to this Plan to
a Participant who is an Employee that is subject to the attainment of one or
more Performance Goals.

               "Performance Goal" means a standard established by the Committee,
to determine in whole or in part whether a Performance Award shall be earned.

               "Restricted Stock" means Common Stock that is restricted or
subject to forfeiture provisions.

               "Restriction Period" means a period of time beginning as of the
Grant Date of an Award of Restricted Stock and ending as of the date upon which
the Common Stock subject to such Award is no longer restricted or subject to
forfeiture provisions.

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               "Stock Appreciation Right" or "SAR" means a right to receive a
payment, in cash or Common Stock, equal to the excess of the Fair Market Value
or other specified valuation of a specified number of shares of Common Stock on
the date the right is exercised over a specified Grant Price, in each case, as
determined by the Committee.

               "Stock Award" means an Award in the form of shares of Common
Stock or units denominated in shares of Common Stock, including an award of
Restricted Stock.

               "Subsidiary" means (i) in the case of a corporation, any
corporation of which the Company directly or indirectly owns shares representing
50% or more of the combined voting power of the shares of all classes or series
of capital stock of such corporation which have the right to vote generally on
matters submitted to a vote of the stockholders of such corporation and (ii) in
the case of a partnership or other business entity not organized as a
corporation, any such business entity of which the Company directly or
indirectly owns 50% or more of the voting, capital or profits interests (whether
in the form of partnership interests, membership interests or otherwise).

         4. Eligibility.

               (a) Employees. Employees eligible for the grant of Employee
Awards under this Plan are those who hold positions of responsibility and whose
performance, in the judgment of the Committee, can have a significant effect on
the success of the Company and its Subsidiaries.

               (b) Directors. Members of the Board eligible for the grant of
Director Awards under this Plan are those who are Nonemployee Directors.

         5. Common Stock Available for Awards. Subject to the provisions of
paragraph 15 hereof, no Award shall be granted if it shall result in the
aggregate number of shares of Common Stock issued under the Plan plus the number
of shares of Common Stock covered by or subject to Awards then outstanding under
the Plan (after giving effect to the grant of the Award in question) to exceed
1,950,000 shares of Common Stock. The number of shares of Common Stock that are
the subject of Awards under this Plan that are forfeited or terminated, expire
unexercised, are settled in cash in lieu of Common Stock or in a manner such
that all or some of the shares covered by an Award are not issued to a
Participant or are exchanged for Awards that do not involve Common Stock, shall
again immediately become available for Awards hereunder. The Committee may from
time to time adopt and observe such procedures concerning the counting of shares
against the Plan maximum as it may deem appropriate. The Board and the
appropriate officers of the Company shall from time to time take whatever
actions are necessary to file any required documents with governmental
authorities, stock exchanges and transaction reporting systems to ensure that
shares of Common Stock are available for issuance pursuant to Awards.

         6. Administration.

               (a) This Plan shall be administered by the Committee except as
otherwise provided herein. Subject to the provisions hereof, the Committee shall
have full and exclusive power and authority to administer this Plan and to take
all actions that are specifically

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contemplated hereby or are necessary or appropriate in connection with the
administration hereof. The Committee shall also have full and exclusive power to
interpret this Plan and to adopt such rules, regulations and guidelines for
carrying out this Plan as it may deem necessary or proper, all of which powers
shall be exercised in the best interests of the Company and in keeping with the
objectives of this Plan. The Committee may, in its discretion, provide for the
extension of the exercisability of an Award, accelerate the vesting or
exercisability of an Award, eliminate or make less restrictive any restrictions
applicable to an Award, waive any restriction or other provision of this Plan or
an Award or otherwise amend or modify an Award in any manner that is either (i)
not adverse to the Participant to whom such Award was granted or (ii) consented
to by such Participant. Notwithstanding any other provision hereof, no Award
consisting of an Option may be granted upon substitution or in exchange for
another Option at a lower exercise price than the original Option if at the
effective date of such substitution or exchange the exercise price is less than
the Fair Market Value of the Common Stock. The Committee may grant an Award to
an Employee who it expects to become an employee of the Company or any of its
Subsidiaries within the following six months, with such Award being subject to
the individual's actually becoming an employee within such time period, and
subject to such other terms and conditions as may be established by the
Committee. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in this Plan or in any Award in the manner and to
the extent the Committee deems necessary or desirable to further the Plan
purposes. Any decision of the Committee in the interpretation and administration
of this Plan shall lie within its sole and absolute discretion and shall be
final, conclusive and binding on all parties concerned.

         (b) No member of the Committee or officer of the Company to whom the
Committee has delegated authority in accordance with the provisions of paragraph
7 of this Plan shall be liable for anything done or omitted to be done by him or
her, by any member of the Committee or by any officer of the Company in
connection with the performance of any duties under this Plan, except for his or
her own willful misconduct or as expressly provided by statute.

         7. Delegation of Authority. The Committee may delegate to the Chief
Executive Officer and to other senior officers of the Company its duties under
this Plan pursuant to such conditions or limitations as the Committee may
establish. The Committee may engage or authorize the engagement of a third party
administrator to carry out administrative functions under the Plan.

         8. Employee Awards.

               (a) The Committee shall determine the type or types of Employee
Awards to be made under this Plan and shall designate from time to time the
Employees who are to be the recipients of such Awards. Each Employee Award shall
be embodied in an Employee Award Agreement, which shall contain such terms,
conditions and limitations as shall be determined by the Committee in its sole
discretion and, if required by the Committee, shall be signed by the Participant
to whom the Employee Award is granted and by an Authorized Officer for and on
behalf of the Company. Employee Awards may consist of those listed in this
paragraph 8(a) and may be granted singly, in combination or in tandem. Employee
Awards may also be granted in combination or in tandem with, in replacement of,
or as alternatives to, grants or rights under this Plan or any other employee
plan of the Company or any of its Subsidiaries, including the plan of

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any acquired entity. An Employee Award may provide for the grant or issuance of
additional, replacement or alternative Employee Awards upon the occurrence of
specified events, including the exercise of the original Employee Award granted
to a Participant. All or part of an Employee Award may be subject to conditions
established by the Committee, which may include, but are not limited to,
continuous service with the Company and its Subsidiaries, achievement of
specific business objectives, increases in specified indices, attainment of
specified growth rates and other comparable measurements of performance. Upon
the termination of employment by a Participant who is an Employee, any
unexercised, deferred, unvested or unpaid Employee Awards shall be treated as
set forth in the applicable Employee Award Agreement.

               (i) Option. An Employee Award may be in the form of an Option,
which may be an Incentive Stock Option or a Nonqualified Stock Option. The Grant
Price of an Option shall be not less than the Fair Market Value of the Common
Stock subject to such Option on the Grant Date. Subject to the foregoing
provisions, the terms, conditions and limitations applicable to any Options
awarded to Employees pursuant to this Plan, including the Grant Price, the term
of the Options and the date or dates upon which they become exercisable, shall
be determined by the Committee.

               (ii) Stock Appreciation Rights. An Employee Award may be in the
form of an SAR. The terms, conditions and limitations applicable to any SARs
awarded to Employees pursuant to this Plan, including the Grant Price, the term
of any SARs and the date or dates upon which they become exercisable, shall be
determined by the Committee.

               (iii) Stock Award. An Employee Award may be in the form of a
Stock Award. The terms, conditions and limitations applicable to any Stock
Awards granted pursuant to this Plan shall be determined by the Committee.

               (iv) Cash Award. An Employee Award may be in the form of a Cash
Award. The terms, conditions and limitations applicable to any Cash Awards
granted pursuant to this Plan shall be determined by the Committee.

               (b) Performance Award. Without limiting the type or number of
Employee Awards that may be made under the other provisions of this Plan, an
Employee Award may be in the form of a Performance Award. A Performance Award
shall be paid, vested or otherwise deliverable solely on account of the
attainment of one or more pre-established, objective Performance Goals
established by the Committee. Such a Performance Goal may be based on one or
more business criteria that apply to the Employee, one or more business units of
the Company, or the Company as a whole, and may include one or more of the
following: increased revenue, net income, stock price, market share, earnings
per share, return on equity, return on assets, decrease in costs, shareholder
value, net cash flow, total shareholder return, return on capital, return on
investors' capital, operating income, funds from operations, cash flow, cash
from operations, after-tax operating income, proceeds from dispositions, net
cash flow before financing activities, and total market value. Unless otherwise
stated, such a Performance Goal need not be based upon an increase or positive
result under a particular business criterion and could include, for example,
maintaining the status quo or limiting economic losses (measured, in each case,
by reference to specific business criteria). The terms, conditions and
limitations

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applicable to any Performance Awards made pursuant to this Plan shall be
determined by the Committee.

         9. Director Awards. Each Nonemployee Director of the Company shall be
granted Director Awards in accordance with this paragraph 9 and subject to the
applicable terms, conditions and limitations set forth in this Plan and the
applicable Director Award Agreements. Notwithstanding anything to the contrary
contained herein, Director Awards shall not be granted in any year in which a
sufficient number of shares of Common Stock are not available to make all such
scheduled Awards under this Plan.

               (a) Initial Director Options. On the IPO Pricing Date, each
Nonemployee Director, and each person who has agreed to become a Nonemployee
Director in connection with the IPO shall be automatically granted a Director
Option on that number of shares of Common Stock such that the aggregate Option
Value is $25,000, but in the case of a person who is not a Nonemployee Director
on such date, the grant under this subparagraph (a) shall be subject to that
person becoming a Nonemployee Director no later than the next regularly
scheduled meeting of the Board.

               (b) Annual Director Options. On each Annual Director Award Date,
each Nonemployee Director shall automatically be granted a Director Option such
that the aggregate Option Value is $25,000.

               (c) Other Terms of Director Options. Each Director Option shall
have a term of ten years following the Grant Date. The Grant Price of each share
of Common Stock subject to a Director Option shall be equal to the Fair Market
Value of the Common Stock subject to such Option on the Grant Date. All Director
Options shall be fully vested upon the earlier to occur of (i) the completion of
one year of service as a Nonemployee Director or (ii) the termination of the
Nonemployee Director's status as a member of the Board in connection with a
change in control of the Company, as determined by the Board. All Director
Options shall become exercisable in increments of one-third of the total number
of shares of Common Stock that are subject thereto (rounded up to the nearest
whole number) on the first and second anniversaries of the Grant Date and of all
remaining shares of Common Stock that are subject thereto on the third
anniversary of the Grant Date. Notwithstanding the foregoing exercise schedule,
all Director Options held by a Nonemployee Director shall immediately become
fully exercisable if the Nonemployee Director terminates his or her status as a
member of the Board.

               (d) Director Option Agreements. Any Award of Director Options
shall be embodied in a Director Award Agreement, which shall contain the terms,
conditions and limitations set forth above and shall be signed by an Authorized
Officer for and on behalf of the Company.

         10. Payment of Awards.

               (a) General. Payment made to a Participant pursuant to an Award
may be made in the form of cash or Common Stock, or a combination thereof, and
may include such restrictions as the Committee shall determine, including, in
the case of Common Stock, restrictions on transfer and forfeiture provisions. If
such payment is made in the form of

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Restricted Stock, the applicable Award Agreement relating to such shares shall
specify whether they are to be issued at the beginning or end of the Restriction
Period. In the event that shares of Restricted Stock are to be issued at the
beginning of the Restriction Period, the certificates evidencing such shares (to
the extent that such shares are so evidenced) shall contain appropriate legends
and restrictions that describe the terms and conditions of the restrictions
applicable thereto. In the event that shares of Restricted Stock are to be
issued at the end of the Restricted Period, the right to receive such shares
shall be evidenced by book entry registration or in such other manner as the
Committee may determine.

               (b) Deferral. With the approval of the Committee, amounts payable
in respect of Awards may be deferred and paid either in the form of installments
or as a lump-sum payment. The Committee may permit selected Participants to
elect to defer payments of some or all types of Awards or any other compensation
otherwise payable by the Company in accordance with procedures established by
the Committee and may provide that such deferred compensation may be payable in
shares of Common Stock. Any deferred payment pursuant to an Award, whether
elected by the Participant or specified by the Award Agreement or by the
Committee, may be forfeited if and to the extent that the Award Agreement so
provides.

               (c) Dividends, Earnings and Interest. Rights to dividends or
Dividend Equivalents may be extended to and made part of any Stock Award,
subject to such terms, conditions and restrictions as the Committee may
establish. The Committee may also establish rules and procedures for the
crediting of interest or other earnings on deferred cash payments and Dividend
Equivalents for Stock Awards.

               (d) Substitution of Awards. At the discretion of the Committee, a
Participant may be offered an election to substitute an Award for another Award
or Awards of the same or different type.

               (e) Cash-out of Awards. At the discretion of the Committee, an
Award that is an Option or SAR may be settled by a cash payment equal to the
difference between the Fair Market Value per share of the applicable class of
Common Stock on the date of exercise and the Grant Price of the Award,
multiplied by the number of shares with respect to which the Award is exercised.

         11. Option Exercise. The Grant Price shall be paid in full at the time
of exercise in cash or, if permitted by the Committee and elected by the
optionee, the optionee may purchase such shares by means of tendering Common
Stock or surrendering another Award, including Restricted Stock, valued at Fair
Market Value on the date of exercise, or any combination thereof. The Committee
shall determine acceptable methods for Participants to tender Common Stock or
other Awards. The Committee may provide for procedures to permit the exercise or
purchase of such Awards by use of the proceeds to be received from the sale of
Common Stock issuable pursuant to an Award. Unless otherwise provided in the
applicable Award Agreement, in the event shares of Restricted Stock are tendered
as consideration for the exercise of an Option, a number of the shares issued
upon the exercise of the Option, equal to the number of shares of Restricted
Stock used as consideration therefor, shall be subject to the same restrictions
as the Restricted Stock so submitted as well as any additional restrictions that
may be imposed by the Committee. The Committee may adopt additional rules and
procedures regarding the

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exercise of Options from time to time, provided that such rules and procedures
are not inconsistent with the provisions of this paragraph.

         12. Taxes. The Company or its designated third party administrator
shall have the right to deduct applicable taxes from any Employee Award payment
and withhold, at the time of delivery or vesting of cash or shares of Common
Stock under this Plan, an appropriate amount of cash or number of shares of
Common Stock or a combination thereof for payment of taxes or other amounts
required by law or to take such other action as may be necessary in the opinion
of the Company to satisfy all obligations for withholding of such taxes. The
Committee may also permit withholding to be satisfied by the transfer to the
Company of shares of Common Stock theretofore owned by the holder of the
Employee Award with respect to which withholding is required. If shares of
Common Stock are used to satisfy tax withholding, such shares shall be valued
based on the Fair Market Value when the tax withholding is required to be made.
The Committee may provide for loans, on either a short term or demand basis,
from the Company to a Participant who is an Employee to permit the payment of
taxes required by law.

         13. Amendment, Modification, Suspension or Termination of the Plan. The
Board may amend, modify, suspend or terminate this Plan for the purpose of
meeting or addressing any changes in legal requirements or for any other purpose
permitted by law, except that (i) no amendment or alteration that would
adversely affect the rights of any Participant under any Award previously
granted to such Participant shall be made without the consent of such
Participant and (ii) no amendment or alteration shall be effective prior to its
approval by the stockholders of the Company to the extent such approval is
required by applicable legal requirements.

         14. Assignability. Unless otherwise determined by the Committee and
provided in the Award Agreement, no Award or any other benefit under this Plan
shall be assignable or otherwise transferable except by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security Act,
or the rules thereunder. The Committee may prescribe and include in applicable
Award Agreements other restrictions on transfer. Any attempted assignment of an
Award or any other benefit under this Plan in violation of this paragraph 14
shall be null and void.

         15. Adjustments.

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

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

         16. Restrictions. No Common Stock or other form of payment shall be
issued with respect to any Award unless the Company shall be satisfied based on
the advice of its counsel that such issuance will be in compliance with
applicable federal and state securities laws. Certificates evidencing shares of
Common Stock delivered under this Plan (to the extent that such shares are so
evidenced) may be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any securities exchange
or transaction reporting system upon which the Common Stock is then listed or to
which it is admitted for quotation and any applicable federal or state
securities law. The Committee may cause a legend or legends to be placed upon
such certificates (if any) to make appropriate reference to such restrictions.

         17. Unfunded Plan. This Plan shall be unfunded. Although bookkeeping
accounts may be established with respect to Participants under this Plan, any
such accounts shall be used merely as a bookkeeping convenience. The Company
shall not be required to segregate any assets for purposes of this Plan or
Awards hereunder, nor shall the Company, the Board or the Committee be deemed to
be a trustee of any benefit to be granted under this Plan. Any liability or
obligation of the Company to any Participant with respect to an Award under this
Plan shall be based solely upon any contractual obligations that may be created
by this Plan and any Award Agreement, and no such liability or obligation of the
Company shall be deemed to be secured by any pledge or other encumbrance on any
property of the Company. Neither the Company nor the Board nor the Committee
shall be required to give any security or bond for the performance of any
obligation that may be created by this Plan.

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         18. Governing Law. This Plan and all determinations made and actions
taken pursuant hereto, to the extent not otherwise governed by mandatory
provisions of the Code or the securities laws of the United States, shall be
governed by and construed in accordance with the laws of the State of Delaware.

         19. Effectiveness. This Plan shall be effective as of the date it is
approved by the Board of Directors. Notwithstanding the foregoing, the adoption
of this Plan is expressly conditioned upon the approval by the holders of a
majority of shares of Common Stock present, or represented, and entitled to vote
at a meeting of the Company's stockholders held on or before one year from the
adoption of this Plan by the Board of Directors. If the stockholders of the
Company should fail so to approve this Plan prior to such date, this Plan shall
terminate and cease to be of any further force or effect and all grant of Awards
hereunder shall be null and void.

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                                                                    EXHIBIT 10.5

                            INDEMNIFICATION AGREEMENT

         This AGREEMENT is made and entered into this ___ of _____, 2000, by and
between Hydril Company, a Delaware corporation ("Hydril"), and
___________________ (the "Indemnitee").

         WHEREAS, Indemnitee is a director or an executive officer or both of
Hydril;

         WHEREAS, the Bylaws of Hydril provide certain indemnification rights to
directors and executive officers of Hydril, and its directors and executive
officers have been otherwise assured indemnification, as provided by Delaware
law;

         WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability in order to enhance Indemnitee's continued service to
Hydril in an effective manner and Indemnitee's reliance on past assurances of
indemnification, Hydril wishes to provide in this Agreement for the
indemnification of and the advancing of expenses (whether partial or complete)
to Indemnitee to the fullest extent permitted by law and as set forth in this
Agreement, and, to the extent insurance is maintained, for the continued
coverage of Indemnitee under Hydril's directors' and officers' liability
insurance policies;

         NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained herein and Indemnitee's continuing to serve as a
director or an executive officer or both of Hydril, the parties hereto agree as
follows:

     1. Requirement of Indemnity and Advancement of Expenses. Hydril shall
indemnify Indemnitee against Expenses (as this and all other capitalized words
are defined in Section 12), and advance Expenses to Indemnitee, in each case to
the fullest extent permitted by applicable law in effect on the date hereof, and
to such greater extent as applicable law may thereafter permit, in the event
that Indemnitee was or is a party or is threatened to be made a party to or is
involved or is threatened to be involved (as a witness or otherwise) in or
otherwise requires representation by counsel in connection with any Proceeding
by reason of the fact that Indemnitee is or was serving in a Corporate Status or
by reason of Indemnitee's alleged action or inaction in such capacity. The
rights of Indemnitee provided under the preceding sentence shall include, but
not be limited to, the right to be indemnified to the fullest extent permitted
by Section 145(b) of the DGCL in Proceedings by or in the right of Hydril and to
the fullest extent permitted by Section 145(a) of the DGCL in all other
Proceedings.

     2. Indemnity in Any Proceeding or Matter. Notwithstanding any other
provision of this Agreement, to the extent that the Indemnitee has been
successful on the merits or otherwise, including, without limitation, the
dismissal of an action with or without prejudice, in defense of any Proceeding
covered by this Agreement, the Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred by the Indemnitee or on Indemnitee's
behalf in connection therewith. If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to any Matter in
such Proceeding, Hydril shall indemnify Indemnitee against all Expenses actually
and reasonably incurred by him or on his

                                      -1-

<PAGE>   2

behalf relating to each Matter. The termination of any Matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such Matter.

     3. Advancement of Expenses. In the event of a Proceeding in which
Indemnitee is a party or is involved and that may give rise to a right of
indemnification under this Agreement, following a request by Indemnitee in
accordance with Section 4, Expenses reasonably incurred by the Indemnitee in
connection with such Proceeding shall be paid by Hydril in advance of the final
disposition of the Proceeding; provided, however, that if the DGCL requires or
if Hydril so requests, payment shall be made to or on behalf of the Indemnitee
only upon delivery to Hydril of an undertaking, by or on behalf of the
Indemnitee, to repay all amounts so advanced if it shall ultimately be
determined under Section 145 of the DGCL that the Indemnitee is not entitled to
be indemnified by Hydril. Indemnitee agrees that Indemnitee shall reimburse
Hydril for all Expenses paid by Hydril in defending any Proceeding against
Indemnitee in the event and only to the extent that it shall be determined by
final judgment or other final adjudication that, under the provisions of any
applicable law and the provisions of this Agreement, Indemnitee is not entitled
to be indemnified by Hydril for such Expenses.

     4. Written Request. To obtain indemnification, Indemnitee shall submit to
Hydril a written request with such information as is reasonably available to
Indemnitee, including with respect to the amount of any Expenses or potential
Expenses. The Secretary of Hydril shall promptly advise the Board of Directors
of such request.

     5. Determination of Entitlement Prior to a Change of Control. If there has
been no Change of Control at the time the request for indemnification is sent,
Indemnitee's entitlement to indemnification shall be determined by a Reviewing
Party in accordance with Section 145(d) of the DGCL If entitlement to
indemnification is to be determined by Independent Counsel, Hydril shall furnish
notice to Indemnitee within 10 days after receipt of the request for
indemnification, specifying the identity and address of Independent Counsel. The
Indemnitee may, within 14 days after receipt of such written notice of
selection, deliver to Hydril a written objection to such selection. Such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of Independent Counsel and the objection
shall set forth with particularity the factual basis of such assertion. If there
is an objection to the selection of Independent Counsel, either Hydril or
Indemnitee may petition the Court for a determination that the objection is
without a reasonable basis and/or for the appointment as Reviewing Party of an
Independent Counsel selected by the Court.

     6. Determination of Entitlement After a Change of Control. If there has
been a Change of Control at the time a request for indemnification is sent, then
with respect to all matters thereafter arising concerning the rights of the
Indemnitee to indemnity payments and advances under this Agreement, the
Reviewing Party shall be an Independent Counsel selected in the following
manner. Indemnitee shall give Hydril written notice advising of the identity and
address of the Independent Counsel selected by Indemnitee. Unless Hydril objects
within seven days after receipt of such written notice of selection, the
Independent Counsel selected by Indemnitee shall be the Reviewing Party. Any
such objection by Hydril may be asserted only on the ground that the Independent
Counsel so selected does not meet the requirements of Independent Counsel, and
the objection shall set forth with particularity the factual basis of such

                                      -2-

<PAGE>   3

assertion. If Hydril so objects, Indemnitee may petition the Court for a
determination that Hydril's objection to the selection of an Independent Counsel
is without a reasonable basis and/or for the appointment as Reviewing Party of
an Independent Counsel selected by the Court.

     7. Procedure for Reviewing Party. The Indemnitee and Indemnitee's counsel
shall be given an opportunity to be heard and to present evidence on the
Indemnitee's behalf in connection with consideration by the Reviewing Party. An
Independent Counsel who serves as a Reviewing Party, among other things, shall
render its written opinion to Hydril and the Indemnitee as to whether and to
what extent the Indemnitee would be permitted to be indemnified under applicable
law. Hydril agrees to indemnify fully such Independent Counsel against any and
all expenses (including attorneys' fees), claims, liabilities and damages
actually and reasonably incurred, arising out of or relating to this Agreement
or its engagement pursuant hereto.

     8. Presumption and Deemed Determination. If a Change of Control shall have
occurred before the request for indemnification is sent by Indemnitee,
Indemnitee shall be presumed (except as otherwise expressly provided in this
Agreement) to be entitled to indemnification upon submission of a request for
indemnification in accordance with Section 4 of this Agreement, and thereafter
Hydril shall have the burden of proof to overcome the presumption in reaching a
determination contrary to the presumption. The presumption shall be used by
Independent Counsel as a basis for a determination of entitlement to
indemnification unless Hydril provides information sufficient to overcome such
presumption by clear and convincing evidence or the investigation, review and
analysis of Independent Counsel convinces him by clear and convincing evidence
that the presumption should not apply.

         Except in the event that the determination of entitlement to
indemnification is to be made by Independent Counsel, if the person or persons
empowered under Section 5 or 6 of this Agreement to determine entitlement to
indemnification shall not have made and furnished to Indemnitee in writing a
determination within 60 days after receipt by Hydril of the request therefor,
the requisite determination of entitlement to indemnification shall be deemed to
have been made and Indemnitee shall be entitled to such indemnification unless
Indemnitee knowingly misrepresented a material fact in connection with the
request for indemnification or such indemnification is prohibited by law. The
termination of any Proceeding or of any Matter therein, by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or its equivalent,
shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification or create a
presumption that Indemnitee did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of Hydril, or
with respect to any criminal Proceeding, that Indemnitee had reasonable cause to
believe that his conduct was unlawful.

     9. Fees and Expenses of Counsel. Hydril agrees to provide full cooperation
to and shall pay any and all reasonable fees and expenses of Independent Counsel
incurred acting pursuant to this Agreement and in any proceeding to which it is
a party or witness in respect of its investigation and written report and shall
pay all reasonable fees and expenses incident to the procedures in which such
Independent Counsel was selected or appointed.

                                      -3-

<PAGE>   4

     10. Judicial Determination. In the event that (i) a determination is made
pursuant to Section 5 or 6 that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of Expenses is not timely made pursuant
to Section 3 of this Agreement, (iii) Independent Counsel has not made and
delivered a written opinion determining the request for indemnification (a)
within 90 days after being appointed by the Court, or (b) within 90 days after
objections to his selection have been overruled by the Court, or (c) within 90
days after the time for Hydril or Indemnitee to object to his selection, or (iv)
payment of indemnification is not made within 5 days after a determination of
entitlement to indemnification has been made or deemed to have been made
pursuant to Section 5, 6 or 8 of this Agreement, Indemnitee shall be entitled to
an adjudication in an appropriate court of the State of Delaware, or in any
other court of competent jurisdiction, of his entitlement to such
indemnification or advancement of Expenses. In the event that a determination
shall have been made that Indemnitee is not entitled to indemnification, any
judicial proceeding or arbitration commenced pursuant to this Section 10 shall
be conducted in all respects as a de novo trial on the merits and Indemnitee
shall not be prejudiced by reason of that adverse determination. If a Change of
Control shall have occurred, in any judicial proceeding commenced pursuant to
this Section, Hydril shall have the burden of proving that Indemnitee is not
entitled to indemnification or advancement of Expenses, as the case may be. If a
determination shall have been made or deemed to have been made that Indemnitee
is entitled to indemnification, Hydril shall be bound by such determination in
any judicial proceeding commenced pursuant to this Section 10, or otherwise,
unless Indemnitee knowingly misrepresented a material fact in connection with
the request for indemnification, or such indemnification is prohibited by law.

         Hydril shall be precluded from asserting in any judicial proceeding
commenced pursuant to this Section 10 that the procedures and presumptions of
this Agreement are not valid, binding and enforceable and shall stipulate in any
such court that Hydril is bound by all provisions of this Agreement. In the
event that Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication to enforce his rights under, or to recover damages for breach of,
this Agreement, Indemnitee shall be entitled to recover from Hydril, and shall
be indemnified by Hydril against, any and all Expenses actually and reasonably
incurred by him in such judicial adjudication, but only if he prevails therein.
If it shall be determined in such judicial adjudication that Indemnitee is
entitled to receive part but not all of the indemnification or advancement of
Expenses sought, the Expenses incurred by Indemnitee in connection with such
judicial adjudication or arbitration shall be appropriately prorated.

     11. Establishment of Trust. In the event of a Potential Change of Control,
Hydril shall, upon written request by the Indemnitee, create a trust for the
benefit of the Indemnitee and from time to time upon written request of the
Indemnitee shall fund such trust in an amount sufficient to satisfy any and all
expenses reasonably anticipated at the time of each such request to be incurred
in connection with investigating, preparing for and defending any Proceeding,
and any and all judgments, fines, penalties and settlement amounts of any and
all Proceedings covered by this Agreement, from time to time actually paid or
claimed, reasonably anticipated or proposed to be paid. The terms of the trust
shall provide that upon a Change of Control, (a) the trust shall not be revoked
or the principal thereof invaded, without the written consent of the Indemnitee,
(b) the trustee shall advance within two business days of a request by the
Indemnitee any and all expenses reasonably incurred by the Indemnitee (and the
Indemnitee hereby agrees to

                                      -4-

<PAGE>   5

reimburse the trust under the circumstances under which the Indemnitee would be
required to reimburse Hydril under this Agreement), (c) the trust shall continue
to be funded by Hydril in accordance with the funding obligation set forth
above, (d) the trustee shall promptly pay to the Indemnitee all amounts for
which the Indemnitee shall be entitled to indemnification pursuant to this
Agreement or otherwise, and (e) all unexpended funds in such trust shall revert
to Hydril upon a final determination by the Court that the Indemnitee has been
fully indemnified under the terms of this Agreement. The trustee shall be chosen
by the Indemnitee. Nothing in this Section 11 shall relieve Hydril of any of its
obligations under this Agreement.

     12. Definitions. For purposes of this Agreement:

         "Change of Control" means a change of control of Hydril after the date
hereof in any one of the following circumstances (1) there shall have occurred
an event required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar schedule or
form) promulgated under the Exchange Act, whether or not Hydril is then subject
to such reporting requirement; (2) any "person" (as such term is used in Section
13(d) and 14(d) of the Exchange Act) shall have become the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Hydril representing 40% or more of the combined voting power of
Hydril's then outstanding voting securities without prior approval of at least
two-thirds of the members of the Board of Directors in office immediately prior
to such person attaining such percentage interest; (3) Hydril is a party to a
merger, consolidation, sale of assets or other reorganization, or a proxy
contest, as a consequence of which members of the Board of Directors in office
immediately prior to such transaction or event constitute less than a majority
of the Board of Directors thereafter; (4) during any period of two consecutive
years, individuals who at the beginning of such period constituted the Board of
Directors (including for this purpose any new director whose election or
nomination for election by Hydril's stockholders was approved by a vote of at
least two-thirds of the directors then still in office who were directors at the
beginning of such period) cease for any reason to constitute at least a majority
of the Board of Directors.

         "Corporate Status" describes the status of a person who (a) is or was a
director, officer or employee of Hydril, or is or was serving at the request of
Hydril as a director, officer or employee of another Company, partnership, joint
venture, trust or other enterprise, in each case which is controlled by Hydril,
or (b) is or was serving, at the written request of Hydril or pursuant to an
agreement in writing with Hydril which request or agreement provides for
indemnification under these By-laws, as a director, officer or employee of
another Company, partnership, joint venture, trust or other enterprise not
controlled by Hydril, provided that if such written request or agreement
referred to in this clause (b) provides for a lesser degree of indemnification
by Hydril than that provided pursuant to this Agreement, the provisions
contained in or made pursuant to such written request or agreement shall govern.
References above to "other enterprises" shall include employee benefit plans and
references to "serving at the request of Hydril" shall include any service as a
director, officer or employee which imposes duties on, or involves services by,
such director, officer or employee with respect to an employee benefit plan or
its participants or beneficiaries.

                                      -5-

<PAGE>   6

         "Court" means the Court of Chancery of the State of Delaware or any
other court of competent jurisdiction.

         "DGCL" means the Delaware General Corporation Law.

         "Disinterested Director" means a director of Hydril who is not and was
not a party to the Proceeding in respect of which indemnification is sought by
indemnitee.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Expenses" shall include all costs, charges, expenses, liabilities and
losses (including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement) actually and reasonably incurred or
suffered by such person in connection therewith, and all reasonable attorneys'
fees of Indemnitee, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, and all other disbursements
or expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, or being or
preparing to be a witness in a Proceeding.

         "Indemnitee" includes any person who is, or is threatened to be made, a
witness in or a party to any Proceeding as described in Section 1 or 2 of this
Agreement by reason of his Corporate Status.

         "Independent Counsel" means a law firm, or member of a law firm, that
is experienced in matters of corporation law and neither presently is, nor in
the five years previous to his selection or appointment has been, retained to
represent: (i) Hydril or Indemnitee in any matter material to either such party,
or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder.

         "Matter" is a claim, a material issue, or a substantial request for
relief.

         "Person" means any person as defined in Section 3(a)(9) and 13(d)(3) of
the Exchange Act.

         "Potential Change of Control" shall be deemed to have occurred if (i)
Hydril enters into an agreement or arrangement, the consummation of which would
result in the occurrence of a Change of Control; (ii) any Person publicly
announces an intention to take or to consider taking actions which if
consummated would constitute a Change of Control; (iii) any Person (other than a
trustee or other fiduciary, holding securities under an employee benefit plan of
Hydril, acting in such capacity) who is or becomes the beneficial owner,
directly or indirectly, of securities of Hydril representing 10% or more of the
combined voting power of Hydril's then outstanding Voting Securities, increases
such Person's beneficial ownership of such securities by 5% or more over the
percentage so owned by such Person on the date hereof; or (iv) the Board of
Directors adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change of Control has occurred.

                                      -6-

<PAGE>   7

         "Proceeding" includes any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, administrative
hearing or any other proceeding, or any inquiry or investigation that the
Indemnitee in good faith believes might lead to the institution of any such
action, suit or other proceeding, whether civil, criminal, administrative,
investigative or other, except one initiated by an Indemnitee pursuant to
Section 10 of this Agreement to enforce his rights under this Agreement.

         "Reviewing Party" means any person or body (i) permitted to determine
entitlement to indemnification under Section 145(d) of the DGCL, (ii) designated
as the Reviewing Party by Hydril's Board of Directors, and (iii) who is not a
party to the particular Proceeding for which the Indemnitee is seeking
indemnification; provided, however, that if there has been a Change of Control,
the Reviewing Party shall be the Independent Counsel selected pursuant to
Section 6 of this Agreement.

         "Voting Securities" means any securities of Hydril having the right
under ordinary circumstances to vote at an election of the Board of Directors.

     13. Non-Exclusivity. The rights of indemnification and to receive
advancement of Expenses as provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may at any time be entitled
under applicable law, the Certificate of Incorporation, the By-laws, any
agreement, a vote of stockholders or a resolution of directors, or otherwise;
provided, that this Agreement shall supersede any prior agreements or
understandings, both written and oral, between Indemnitee and Hydril, with
respect to the subject matter hereof; provided, further, that, notwithstanding
the foregoing proviso, and in light of the fact that this Agreement is generally
intended to provide for indemnification to the fullest extent permitted by the
DGCL, this Agreement shall not be construed to deprive the Indemnitee of any
indemnification by Hydril permitted by applicable law with respect to an act or
omission occurring prior to the date hereof that Indemnitee would otherwise have
been entitled to under any such prior agreement. No amendment, alteration or
repeal of this Agreement or any provision hereof shall be effective as to any
Indemnitee for acts, events and circumstances that occurred, in whole or in
part, before such amendment, alteration or repeal. The provisions of this
Agreement shall continue as to an Indemnitee whose Corporate Status has ceased
and shall inure to the benefit of Indemnitee and his successors and assigns as
provided in Section 16.

     14. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby; and, to the fullest extent possible,
the provisions of this Agreement shall be construed so as to give effect and
understandings to the intent manifested by the provision held invalid, illegal
or unenforceable.

     15. Survival. Hydril acknowledges that in continuing to provide services to
Hydril, the Indemnitee is relying on this Agreement. Accordingly, Hydril agrees
that its obligations hereunder will survive (a) any actual or purported
termination of this Agreement by Hydril or its successors or assigns whether by
operation of law or otherwise, and (b) termination of the Indemnitee's services
to Hydril, whether such services were terminated by Hydril or the

                                      -7-

<PAGE>   8

Indemnitee, with respect to any Proceeding, whether or not such Proceeding is
made, threatened or commenced before or after the actual purported termination
of this Agreement or the termination of the Indemnitee's services to Hydril.

     16. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of Hydril and spouses, heirs, executors, administrators and
personal and legal representatives of Indemnitee and his estate. Hydril shall
require and cause any successor (whether direct or indirect by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of Hydril, by written agreement in form and substance satisfactory to the
Indemnitee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that Hydril would be required to perform if no
such succession had taken place.

     17. Notices. Any communication required or permitted to Hydril under this
Agreement shall be addressed to the Secretary of Hydril and any such
communication to Indemnitee shall be addressed to his home address unless he
specifies otherwise and shall be personally delivered or delivered by overnight
mail delivery.

     18. Liability Insurance. To the extent Hydril maintains an insurance policy
or policies providing directors' and officers' liability insurance, Indemnitee
shall be covered by such policy or policies, in accordance with its or their
terms, to the maximum extent of the coverage available for any Company director
or officer.

     19. No Duplication of Payments. Hydril shall not be liable under this
Agreement to make any payment in connection with any claim made against
Indemnitee to the extent the Indemnitee has otherwise actually received payment
(under any insurance policy or otherwise) of the amounts otherwise indemnifiable
hereunder.

     20. Waiver. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.

     21. Subrogation. In the event of payment under this Agreement, Hydril shall
be subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that
may be necessary to secure such rights, including the execution of such
documents necessary to enable Hydril effectively to bring suit to enforce such
rights; provided however, that Hydril shall not enforce any of such rights in
any manner or at any time as would prevent or delay payment to Indemnitee of all
amounts owing to him.

     22. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of

                                      -8-

<PAGE>   9

the business or assets of Hydril), assigns, spouses, heirs, executors,
administrators and personal and legal representatives.

     23. Effective Date. This Agreement shall be effective as of the date hereof
and shall apply to any claim for indemnification by the Indemnitee on or after
such date.

     24. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws thereof. 25. Captions; Headings. The captions
and headings appearing herein are included solely for convenience of reference
and are not intended to affect the interpretation of any provision of this
Agreement. 26. Amendments. This Agreement may not be amended without the
agreement in writing of Hydril and Indemnitee.

     25. Captions; Headings. The captions and headings appearing herein are
included solely for convenience of reference and are not intended to affect
the interpretation of any provision of this Agreement.

     26. Amendments. This agreement may not be amended without the agreement in
writing of Hydril and Indemnitee.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.

                                       HYDRIL COMPANY

                                       By:
                                           -------------------------------------

                                           -------------------------------------

                                      -9-

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