Document:

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                                                                   EXHIBIT 10.13

                         Hydril Company Restoration Plan

                                TABLE OF CONTENTS

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<S>                                                                                                             <C>
ARTICLE I.  SCOPE OF PLAN.........................................................................................1
     1.01. Purpose................................................................................................1
     1.02. Sources of Payments....................................................................................1

ARTICLE II.  DEFINITIONS..........................................................................................2
     2.01. 401(k) Deferral Restoration Account....................................................................2
     2.02. 401(k) Match Restoration Account.......................................................................2
     2.03. 401(k) Plan............................................................................................2
     2.04. Accounts...............................................................................................2
     2.05. Accrued Benefit........................................................................................2
     2.06. Affiliate..............................................................................................2
     2.07. Compensation...........................................................................................2
     2.08. Beneficiary............................................................................................2
     2.09. Board of Directors.....................................................................................2
     2.10. Change of Ownership....................................................................................3
     2.11. Code...................................................................................................3
     2.12. Company................................................................................................3
     2.13. Company Discretionary Account..........................................................................3
     2.14. Credits................................................................................................3
     2.15. Early Retirement Date..................................................................................3
     2.16. Effective Date.........................................................................................3
     2.17. Employee...............................................................................................3
     2.18. ERISA..................................................................................................4
     2.19. Normal Retirement Date.................................................................................4
     2.20. Notice of Discontinuance...............................................................................4
     2.21. Participant............................................................................................4
     2.22. Plan...................................................................................................4
     2.23. Plan Year..............................................................................................4
     2.24. Salary Reduction Agreement.............................................................................4
     2.25. Trust..................................................................................................4
     2.26. Trust Agreement........................................................................................4
     2.27. Trustee................................................................................................4

ARTICLE III.  ELIGIBILITY AND PARTICIPATION.......................................................................5
     3.01. Qualified Individuals..................................................................................5
     3.02. Participants...........................................................................................5

ARTICLE IV.  CREDITS..............................................................................................6
     4.01.  Salary Reduction Agreements...........................................................................6
      (a) In General..............................................................................................6
      (b) Initial Elections to Defer Compensation.................................................................6
      (c) Term of Salary Reduction Agreement......................................................................6
      (d) Discontinuance of Salary Reduction Agreement............................................................6
      (e) Modification of Salary Reduction Agreements.............................................................7
</Table>

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     4.02. 401(k) Deferral Restoration Account Credits............................................................7
     4.03. 401(k) Match Restoration Account Credits...............................................................7
     4.04. Company Discretionary Accounts.........................................................................7

ARTICLE V.  HYPOTHETICAL INVESTMENT OPTIONS.......................................................................8
     5.01. In General.............................................................................................8
     5.02. Comparable Funds.......................................................................................8
     5.03. Value of Accounts......................................................................................8
     5.04. Dividend Credits.......................................................................................8
     5.05. Hypothetical Investment Elections......................................................................8
     5.06. Pro Rata Allocation....................................................................................8
     5.07. No Warranties..........................................................................................9
     5.08. Effective Date.........................................................................................9

ARTICLE VI.  VESTING.............................................................................................10
     6.01.  401(k) Deferral Restoration Account..................................................................10
     6.02.  401(k) Match Restoration Account.....................................................................10

ARTICLE VII.  BENEFITS...........................................................................................11
     7.01.  Commencement of Payment..............................................................................11
     7.02.  Form of Payments.....................................................................................11
     7.03.  Hardship Benefits....................................................................................11
     7.04.  Disability Benefits..................................................................................12
     7.05.  Death Benefits.......................................................................................12
     7.06.  Designation of Beneficiary...........................................................................12
     7.07.  Termination Benefit..................................................................................13
     7.08.  Retirement Benefits..................................................................................13

ARTICLE VIII.  ADMINISTRATION....................................................................................14
     8.01  Responsibilities and Powers of the Company............................................................14
     8.02  Outside Services......................................................................................14
     8.03. Statements............................................................................................14
     8.04. Payment Schedules.....................................................................................14
     8.05. Expenses..............................................................................................14

ARTICLE IX.  AMENDMENT AND TERMINATION...........................................................................15
     9.01.  Amendment............................................................................................15
     9.02.  Termination..........................................................................................15

ARTICLE X.  MISCELLANEOUS PROVISIONS.............................................................................16
     10.01. Inalienability of Benefits...........................................................................16
     10.02. No Right of Employment...............................................................................16
     10.03. Indemnification......................................................................................16
     10.04. Notice...............................................................................................16
     10.05. Construction.........................................................................................16
     10.06. Headings.............................................................................................17
</Table>

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<S>                                                                                                             <C>
     10.07. Severability.........................................................................................17
     10.08. Governing Law........................................................................................17
     10.09. Counterparts.........................................................................................18

SALARY REDUCTION AGREEMENT FORM                                                                           EXHIBIT A

BENEFIT PAYMENT FORM                                                                                      EXHIBIT B

INITIAL HYPOTHETICAL INVESTMENT FORM                                                                      EXHIBIT C

401(k) PLAN TRANSFER FORM                                                                                 EXHIBIT D

BENEFICIARY DESIGNATION FORM                                                                              EXHIBIT E

NOTICE OF DISCONTINUANCE FORM                                                                             EXHIBIT F

MODIFIED SALARY REDUCTION AGREEMENT FORM                                                                  EXHIBIT G
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                            ARTICLE I. SCOPE OF PLAN.

1.01. PURPOSE.

This Plan is intended to be an unfunded and nonqualified deferred compensation
arrangement that will provide deferred compensation benefits to a select group
of management or highly compensated employees of Hydril Company for the purposes
of Title I of ERISA.

The Plan is established and maintained by the Company solely for the purpose of
providing benefits for eligible employees in excess of the limitations on
benefits imposed by Code Sections 401(a)(4), 401(a)(17), 401(k), 401(m), 402(g)
and 415 on plans to which any of those sections apply.

1.02. SOURCES OF PAYMENTS.

The right of the Participant or his designated beneficiary to receive a
distribution of his Accounts hereunder or any benefit payment shall be an
unsecured claim against the general assets of the Company, and neither the
Participant nor his designated beneficiary shall have any rights in or against
the Trust described below, or any other specific assets of the Company.

The Company will establish a trust and make contributions to the Trust in order
to provide itself with a source of funds to assist it in the meeting of its
liabilities under the Plan. The Trust is intended to be a grantor trust, of
which the Company is the grantor, within the meaning of subpart E, part I,
subchapter J, chapter 1, subtitle A of the Code. Except as otherwise provided in
the Trust Agreement, the Trustee shall make payments to the Plan participants
and their beneficiaries in such manner and at such times as specified in the
Plan and the Trust Agreement. The Trust assets are subject to the claims of the
Company's creditors in the event of the Company's insolvency or bankruptcy,
pursuant to the terms of the Trust Agreement. The Company intends that this
Trust shall constitute an unfunded arrangement and shall not affect the status
of the Plan as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of ERISA.

Benefits payable to Plan participants and their beneficiaries under the Trust
Agreement may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered or subjected to attachment, levy, execution or
other legal or equitable process.

                                       1
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                            ARTICLE II. DEFINITIONS.

As used in the Plan, the following terms have the meanings set forth below,
unless a different meaning is plainly required by the context.

2.01. 401(k) DEFERRAL RESTORATION ACCOUNT

shall mean the separate account, if any, that may be established for a
Participant pursuant to Section 4.02 of this Plan.

2.02. 401(k) MATCH RESTORATION ACCOUNT

shall mean the separate account, if any, that may be established for a
Participant pursuant to Section 4.03 of this Plan.

2.03. 401(k) PLAN

shall mean the Hydril Company Savings Plan.

2.04. ACCOUNTS

shall mean a Participant's 401(k) Deferral Restoration Account, and 401(k) Match
Restoration Account.

2.05. ACCRUED BENEFIT

shall mean the value of all Credits to a Participant's Accounts and due and
owing to the Participant or his beneficiaries pursuant to the terms of this
Plan, minus any distributions hereunder.

2.06. AFFILIATE

shall mean any business entity that has adopted the 401(k) Plan and of which
Hydril Company owns more than fifty percent (50%).

2.07. COMPENSATION

shall mean wages within the meaning of Code Section 3401(a) and all other
payments of compensation to an Employee by the Employer (in the course of the
Employer's trade or business) for which the Employer is required to furnish the
Employee a written statement under Code Sections 6041(d) and 6051(a)(3), except
the following amounts shall be excluded: amounts paid or reimbursed by the
Employer for moving expenses incurred by an Employee, but only to the extent
that at the time of the payment it is reasonable to believe that these amounts
are deductible by the Employee under Code Section 217. Compensation under this
definition must be determined without regard to any rules under Code Section
3401(a) that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the exception for
agricultural labor in Code Section 3401(a)(2)).

2.08. BENEFICIARY

shall mean a person or persons designated by a Participant to receive benefits
hereunder upon the death of such Participant.

2.09. BOARD OF DIRECTORS

shall mean the board of directors of Hydril Company.

                                       2
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2.10. CHANGE OF OWNERSHIP

shall be conclusively deemed to have occurred if (and only if) any of the
following events shall have occurred: (a) after the date the Plan is approved by
the Board any "person" (as such term is used in Sections 13(d) and 14(d) of the
United Securities Exchange Act of 1934, as amended from time to time (the
"Exchange Act")), other than a person who is a Nonemployee Director of the
Company on the date the Plan is approved by the Board or any person controlled
by such a Nonemployee Director, becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 35% or more of the combined voting power of the Company's
then outstanding voting securities without prior approval of at least two-thirds
of the members of the Board in office immediately prior to such person's
attaining such percentage interest; (b) the Company 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 in office immediately prior to such
transaction or event thereafter constitute less than a majority of the members
of the board of directors or comparable governing body of the entity that is the
survivor of such transaction or event or, in the case of a sale of assets, the
entity that is the successor to the business of the Company; or (c) during any
period of two consecutive years, individuals who at the beginning of such period
constituted the Board (including for this purpose any new member whose election
or nomination for election by the Company's stockholders was approved by a vote
of at least two-thirds of the members then still in office who were members at
the beginning of such period) cease for any reason to constitute at least a
majority of the Board.

2.11. CODE

shall mean the Internal Revenue Code of 1986, as amended.

2.12. COMPANY

shall mean Hydril Company (incorporated in the state of Delaware), and its
successors and assigns.

2.13. COMPANY DISCRETIONARY ACCOUNT

shall mean the separate account, if any, that may be established for a
Participant pursuant to Section 4.04

2.14. CREDITS

shall represent the value of benefits payable to a Participant under the terms
of this Plan (whether vested or unvested) and credited pursuant to Article IV by
the Participant or the Company, prior to the conversion of the credits into
stock units pursuant to Section 5.03.

2.15. EARLY RETIREMENT DATE

shall mean the same as Normal Retirement Date.

2.16. EFFECTIVE DATE

shall mean the first day of January, 2001, which is the effective date of this
Plan.

2.17. EMPLOYEE

shall mean any employee of the Company or any Affiliate.

                                       3
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2.18. ERISA

shall mean the Employee Retirement Income Security Act of 1974, as amended.

2.19. NORMAL RETIREMENT DATE

shall mean the date on which the Employee attains age 60.

2.20. NOTICE OF DISCONTINUANCE

shall mean the written notice filed with the controller of the Company in
substantially the form attached hereto as Exhibit F, requesting the
discontinuance of the deferral of the Employee's Compensation.

2.21. PARTICIPANT

shall mean an Employee or former Employee who has an Accrued Benefit under this
Plan, and/or any Employee who is eligible to participate in the Plan and elected
to do so pursuant to Section 3.02.

2.22. PLAN

shall mean the Hydril Company Restoration Plan as set forth herein, effective as
of the first day of January, 2001, and as it may be amended from time to time.

2.23. PLAN YEAR

shall mean the 12-consecutive month period ending on December 31.

2.24. SALARY REDUCTION AGREEMENT

shall mean the agreement between the Company and the Participant pursuant to
Section 4.01 of this Plan. The form for such Agreement is Exhibit A.

2.25. TRUST

shall mean the Trust established pursuant to Section 1.02 of the Plan.

2.26. TRUST AGREEMENT

shall mean the agreement between the Company and the Trustee establishing the
Trust pursuant to Section 1.02 of the Plan.

2.27. TRUSTEE

shall mean Trustee of the Trust established pursuant to Section 1.02 of the
Plan.

                                       4
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                  ARTICLE III. ELIGIBILITY AND PARTICIPATION.

3.01. QUALIFIED INDIVIDUALS.

A Qualified Individual shall be any individual that is an Employee who is the
President, a Tier 2 executive, or certain select Tier 3 employees.

3.02. PARTICIPANTS.

Qualified Individuals who have been designated as eligible to participate under
the Plan may elect to become a Participant under the Plan by filing a written
notice with the Company, in the form prescribed by the terms of the Plan.

                                       5
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                              ARTICLE IV. CREDITS.

4.01. SALARY REDUCTION AGREEMENTS.

(a) IN GENERAL. Any Qualified Individual eligible to participate in this Plan
may elect to defer annually the receipt of a portion of the Compensation
otherwise payable to him by the Company or any Affiliate, which portion shall be
designated by him as a percentage of his Compensation, and such percentage shall
not exceed the amount equal to 15% of his Compensation that is regular base pay
and 100% of bonuses that would otherwise be paid to the Participant by the
Employer in cash. This election shall be made by filing a Salary Reduction
Agreement with the Company. Under this Salary Reduction Agreement the
Participant agrees to accept a reduction in his Compensation and the Company
agrees to credit on his behalf the amount of such reduction to this Plan.

Salary Reduction Agreements shall be executed on the form specified by the Plan,
a copy of which is attached as Exhibit A, and shall continue in effect until
revoked or amended in accordance with the terms of the Plan. Salary Reduction
Agreements shall be signed by the Participant and delivered to the
Administrative Committee of the Company within the period permitted under the
terms of this Article.

(b) INITIAL ELECTIONS TO DEFER COMPENSATION. For Qualified Individuals who are
Participants as of the effective date of this Plan, a Salary Reduction Agreement
pertaining to regular base pay must be delivered to the Administrative Committee
at 3300 North Sam Houston Parkway East, Houston, Texas 77032-3411 by March 31,
2001. The first salary reduction and Credit to each Participant's 401(k)
Deferral Restoration Account shall be for the pay period beginning on or about
April 1, 2001. A Salary Reduction Agreement pertaining to bonuses must be
delivered to the Administrative Committee at 3300 North Sam Houston Parkway
East, Houston, Texas 77032-3411 by the December 31 prior to the calendar year in
which the bonus will be paid.

For Qualified Individuals who become eligible to participate in the Plan
subsequent to the Plan's effective date, their initial Salary Reduction
Agreement pertaining to regular base pay must be delivered to the Administrative
Committee at the above address within thirty (30) days of the date of their
eligibility to participate in the Plan or they will have to wait until
subsequent annual enrollment. The initial Salary Reduction Agreement for each
Participant will become effective on the first day of the month following the
date the Salary Reduction Agreement is delivered to the Administrative
Committee. A Salary Reduction Agreement pertaining to bonuses must be delivered
to the Administrative Committee at 3300 North Sam Houston Parkway East, Houston,
Texas 77032-3411 by the December 31 prior to the calendar year in which the
bonus will be paid.

(c) TERM OF SALARY REDUCTION AGREEMENT. All elections to defer Compensation
shall continue, pursuant to the Salary Reduction Agreement, until:

         (i) the Participant's employment with the Employer and any Affiliate
         terminates because of the Participant's death, early retirement, normal
         retirement, disability, or any other cause; or

         (ii) the Salary Reduction Agreement is discontinued as provided in
         paragraph (d) below; or

         (iii) the Salary Reduction Agreement is modified as provided in
         paragraph (e) below.

(d) DISCONTINUANCE OF SALARY REDUCTION AGREEMENT. In the event of an
unforeseeable emergency that qualifies as a Financial Hardship (as defined in
Section 7.03) a Participant may discontinue his Salary Reduction Agreement for
the remainder of any calendar year by delivering a Notice of Discontinuance to
the Administrative Committee, which Notice is attached hereto as Exhibit E. A
Notice of Discontinuance shall be delivered at least twenty (20) days prior to
its effective date, which effective date shall be the first day of the month
next following timely notice. A Notice of Discontinuance shall apply only with
respect to the Participant's Compensation attributable to services not yet
performed. Any Participant who discontinues his Salary Reduction Agreement shall
not be allowed to defer any more compensation for the remainder of the calendar
year in which the discontinuance occurs. A Participant must timely submit a new
Salary Reduction Agreement Form to make deferrals in calendar years following
the calendar year of a Financial Hardship.

                                       6
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(e) MODIFICATION OF SALARY REDUCTION AGREEMENTS. A Participant will be allowed
to change the amount of his Salary Reduction Agreement once a year. Any
modification of a Participant's Salary Reduction Agreement will be delivered to
the Administrative Committee by December 15th of any calendar year, and will be
effective for the following calendar year. A copy of the Salary Reduction
Agreement Form is attached as Exhibit A.

4.02. 401(k) DEFERRAL RESTORATION ACCOUNT CREDITS.

The amount being credited on behalf of a Participant pursuant to paragraph (a)
of Section 4.01 shall be credited to the Participant's 401(k) Deferral
Restoration Account. Such Credits shall be made as of the date on which the
amount being credited would have been otherwise paid to the Participant.

4.03. 401(k) MATCH RESTORATION ACCOUNT CREDITS.

A Participant's 401(k) deferrals means the maximum permissible deferrals under
the 401(k) Plan, regardless of whether or not the Participant actually made a
deferral election. A Participant's 401(k) Matching Contribution means the
maximum permissible matching contribution under the 401(k) Plan, assuming
maximum deferrals under the 401(k) Plan (regardless of whether or not the
Participant actually made a deferral election). For each Plan Year, each
Participant shall receive Credits to his 401(k) Match Restoration Account, of a
percentage of such Participant's 401(k) deferrals (as defined above), plus a
percentage of deferrals under this Plan up to an amount equal to 6% of
Compensation, less such Participant's 401(k) Matching Contribution (as defined
above).

4.04.COMPANY DISCRETIONARY ACCOUNTS.

From time to time, at the Company's discretion, it may elect to make Credits to
a Participant's Company Discretionary Account.

                                       7
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                   ARTICLE V. HYPOTHETICAL INVESTMENT OPTIONS.

5.01. IN GENERAL.

All Credits to a Participant's Accounts shall be allocated among one or more of
the Hypothetical Investment Options determined from time to time by the Company
in its sole discretion.

5.02. COMPARABLE FUNDS.

Each Hypothetical Investment Option, shall have a comparable investment fund,
which fund shall be an open-ended investment company registered under the
Investment Company Act of 1940, as amended ("Comparable Fund").

5.03. VALUE OF ACCOUNTS.

Amounts credited to each of a Participant's Accounts shall be allocated to a
Hypothetical Investment Option or Options pursuant to Section 5.05, and shall be
converted into stock units having a value equal to the net asset value of the
applicable Comparable Investment Fund or Funds as of the "purchase date". The
purchase date is a date no later than ten (10) business days after the date of a
Credit to any of a Participant's Accounts, except for Dividend Credits which are
credited pursuant to Section 5.04 below. As of any given date, the total value
of a Participant's Accounts shall be equal to the number of stock units of each
Comparable Fund then in the Accounts multiplied by the net asset value of the
applicable Comparable Fund or Funds, plus the dollar value of all Credits that
have not be converted into stock units.

The Company has the right to change the Comparable Funds at its sole discretion,
with reasonable notice to participants.

5.04. DIVIDEND CREDITS.

For each Hypothetical Investment Option in which the Participant participates,
the Participant will receive additional Credits ("Dividend Credits") computed as
follows: The Dividend Credits shall be computed as if all dividends paid on the
Comparable Fund were reinvested in whole and fractional shares of the Comparable
Fund on the payment date (the "purchase date" for Dividend Credits) at the Net
Asset Value as of the date of record.

5.05. HYPOTHETICAL INVESTMENT ELECTIONS.

At the time the Participant files his initial Salary Reduction Agreement, the
Participant shall file a Hypothetical Investment Form. The Initial Hypothetical
Investment Form shall designate, in whole percentages, how his Credits will be
allocated among each Hypothetical Investment Options. Thereafter, on or about
the first business day of EACH CALENDAR QUARTER of each Plan Year, the
Participant shall have the opportunity to reallocate his present Credits, and to
file a Subsequent Hypothetical Investment Form for future Credits to his
Accounts. A Subsequent Hypothetical Investment Form must be delivered to the
Administrative Committee by the 15th day of the month preceding the start of the
calendar quarter. The Initial Hypothetical Investment Form is attached as
Exhibit C; the Subsequent is Exhibit F.

5.06. PRO RATA ALLOCATION.

All Stock Units of each Hypothetical Investment Option that have been allocated
to a Participant shall be divided pro rata among the Participant's 401(k)
Deferral Restoration Account and 401(k) Match Restoration Account, in accordance
with the total credits to each Account, less withdrawals.

                                       8
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5.07. NO WARRANTIES.

Neither the Board of Directors nor the Company warrants or represents in any way
that the value of each Participant's Accounts will increase and not decrease.
Such Participant assumes all risk in connection with any change in such value.

5.08. EFFECTIVE DATE.

The effective date of the allocation of Participants' Credits to the
Hypothetical Investment Options pursuant to Sections 5.01 through 5.07 is the
earlier of (a) ten (10) business days after the date the Trust is established,
or (b) 120 days from the date of the initial 401(k) Deferral Restoration Account
Credit. Prior to this date, simple interest shall be credited to each
Participant's account at a rate equal to the 3-year Treasury Note yield as of
the week in which the 401(k) Deferral Restoration Account is first credited for
any Participant.

                                       9
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                              ARTICLE VI. VESTING.

6.01. 401(k) DEFERRAL RESTORATION ACCOUNT.

Each Participant shall be one hundred percent (100%) vested, at all times, in
the value of his 401(k) Deferral Restoration Account.

6.02. 401(k) MATCH RESTORATION ACCOUNT.

Each Participant shall be one hundred percent (100%) vested, at all times, in
the value of his 401(k) Match Restoration Account.

                                       10
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                             ARTICLE VII. BENEFITS.

7.01. COMMENCEMENT OF PAYMENT.

Benefits will commence thirty (30) days or one (1) year from any of the
following events: a Participant's early retirement, a Participant's normal
retirement, disability, death, Financial Hardship or termination of employment
with the Company or in the event of a Change of Ownership of the Company. The
date which is thirty (30) days or one (1) year following any of the above events
is the Benefits Starting Date. The value of the Participant's Accrued Benefit
will be paid to the Participant, or, if the Participant is deceased, his
Beneficiary, pursuant to Section 7.02.

7.02. FORM OF PAYMENTS.

The Participant's Accrued Benefit shall be paid either (i) in a single lump sum
within 30 days following the distribution event, (ii) in equal annual
installments over a three (3) year, five (5) year or ten (10) year period
beginning on the date which is 30 days following the distribution event, (iii)
in a single lump sum one year after the distribution event, or (iv) in equal
annual installments over a three (3) year, five (5) year or ten (10) year
period, beginning one (1) year after the distribution event, as elected by the
Participant.

Generally the benefit payment form elected by the Participant is irrevocable
with respect to those deferrals, However, a Participant may elect a different
form of payment one time, as long as the new election is filed with the Company
no later than the December 31 that is at least one (1) year before the Plan Year
in which occurs the Benefits Starting Date.

If the Participant is to receive his Accrued Benefit in the form of installment
payments, the first installment shall commence on this Benefits Starting Date,
and each installment thereafter shall be paid on the anniversary of his Benefits
Starting Date. A Participant's remaining Accrued Benefit, after each
installment, shall continue to receive Dividend Credits and to be valued
pursuant to Article V. The amount of each installment for the three (3), five
(5) and ten (10) year installment payments shall be equal to his Accrued Benefit
on the payment date multiplied by a fraction. The numerator of the fraction
shall be one (1) and the denominator of the fraction shall be equal to the
number of installments remaining to be paid, including the current installment.

All payments of the Participant's Accrued Benefit shall be paid in cash.

7.03. HARDSHIP BENEFITS.

In the event the Employee, or former Employee who is receiving a distribution of
his Accrued Benefit pursuant to the installment method under Section 7.02,
suffers a Financial Hardship (as hereinafter defined), the Company shall
distribute to or utilize on behalf of the Employee as a hardship benefit (the
"Hardship Benefit") any portion of the Employee's Accrued Benefit up to, but not
in excess of, the Termination Benefit (as defined in section 7.07) to which the
Employee would have been entitled as of the date a Hardship Benefit is
distributed or utilized. Any Hardship Benefit shall be distributed or utilized
at such times as the Company shall determine, and the Employee's Accrued Benefit
shall be reduced by the amount so distributed and/or utilized. Financial
Hardship shall mean a financial need of the Employee caused by an unforeseeable
emergency. For purposes of this Section, an unforeseeable emergency is a severe
financial hardship to the Participant resulting from a sudden or unexpected
illness or accident of the Participant or of a dependent (as defined in Code
Section 152(a)) of the Participant, loss of the Participant's property due to
casualty, or other similar extraordinary and unforeseeable circumstances arising
as a result of events beyond the control of the Participant.

                                       11
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Payment under this Section shall not be made to the extent that such hardship is
or may be relieved:

         (i) through reimbursement or compensation by insurance; or

         (ii) by liquidation of the Participant's assets, to the extent the
         liquidation of such assets would not itself cause a severe financial
         hardship; or

         (iii) by cessation of deferrals under this Plan and/or the 401(k) Plan.

Withdrawals of amounts because of a Financial Hardship shall be made only to the
extent reasonably needed to satisfy the Financial Hardship.

The Company, in its sole discretion, shall make the decision of whether or not,
and to what extent, a Hardship Benefit is payable to the Participant, based on
the facts and circumstances of the case. The Company's decision as to whether or
not a Hardship Benefit is payable, and to what extent it is payable, shall be
final, conclusive and binding on all persons.

Hardship Benefits shall be withdrawn first from a Participants' 401(k) Deferral
Restoration Account, then, if required, from his 401(k) Match Restoration
Account.

7.04. DISABILITY BENEFITS.

Notwithstanding any other provision hereof, the Employee shall be entitled to
receive his Accrued Benefit hereunder prior to his Early Retirement Date or
Normal Retirement Date, whichever applies, in any case in which it is determined
by a duly licensed physician selected by the Company that, because of ill
health, accident, disability or general inability because of age, the Employee
is no longer able, properly and satisfactorily, to perform his regular duties as
an Employee. The Employee's Accrued Benefit upon Disability shall be distributed
to him, in the manner elected by the Employee, on his Benefits Starting Date
pursuant to Section 7.02.

7.05. DEATH BENEFITS.

In the event of the Employee's death while in the employment of the Company, the
Company shall pay to his Beneficiary his Accrued Benefit pursuant to Section
7.01, in a lump sum. If a Participant or former Participant dies after the
commencement of benefit payments made in the form of annual installments
pursuant to Section 7.02, the Participant's remaining Accrued Benefit shall be
paid to his Beneficiary in a lump sum within 30 days of receiving notice of his
death. Notice of a Participant's death shall be made by delivering to the
Administrative Committee a certified copy of the Participant's death
certificate.

7.06. DESIGNATION OF BENEFICIARY.

The Beneficiary of any Death Benefit payable under the Plan shall be the
Participant's Spouse. Except, however, the Participant may designate a
Beneficiary other than his Spouse if:

         (i) the Spouse has waived in writing his or her right to be the
         Participant's Beneficiary;

         (ii) the Participant has no Spouse; or

         (iii) the Spouse cannot be located.

                                       12
<PAGE>

If the Beneficiary of any Death Benefit is not the Spouse because one or more of
the preceding conditions is satisfied, then the Participant's Beneficiary of any
Death Benefit payable under this Plan shall be the same as provided by
beneficiary designations to the Plan (see Beneficiary Designation Form, attached
hereto as Exhibit D). If a Participant has failed to designate a Beneficiary or
if the Beneficiary designated by a deceased Participant dies before him or
before complete distribution of the Participant's benefits, such Participant's
benefits shall be paid in accordance with the following order of priority:

         (i) to the Participant's surviving spouse, or if there be none
         surviving;

         (ii) to the Participant's estate.

The Beneficiary Designation Form is attached as Exhibit D.

7.07. TERMINATION BENEFIT.

In the event of the Employee's termination of employment before his Early
Retirement Date for any reason, other than his disability or his death, the
Company shall pay to the Employee, as compensation for services rendered prior
to such termination, his Accrued Benefit pursuant to Section 7.02.

7.08. RETIREMENT BENEFITS.

The Company shall pay to any Participant who separates from service with the
Company on or after his Early Retirement Date or Normal Retirement Date, his
Accrued Benefit determined pursuant to Section 7.02.

                                       13
<PAGE>

                          ARTICLE VIII. ADMINISTRATION.

8.01 RESPONSIBILITIES AND POWERS OF THE COMPANY.

The Company shall be solely responsible for the operation and administration of
the Plan and shall have all powers necessary and appropriate to carry out its
responsibilities in operating and administering the Plan, including, but not
limited to, the power to construe and interpret the Plan, and the power to
remedy any ambiguities or inconsistencies in the Plan. Without limiting the
generality of the foregoing, the Company shall have the responsibility and power
to determine eligibility or participation in the Plan, whether a Credit should
be made on behalf of a Participant, the amount of the Credit and the value of
the amount so credited, and the Participant's nonforfeitable interest in his
Accounts. The determination by the Company made in good faith as to any matter
respecting the operation and administration of the Plan shall be conclusive and
binding on all persons, including Participants and their Beneficiaries.

Also, the Company may, by action of its governing body, appoint an
Administrative Committee consisting of more than one person who shall assist in
the operation and administration of the Plan, except those responsibilities
specifically delegated to other committees or bodies. All actions taken by the
Administrative Committee shall be deemed actions taken by the Company, and the
Company shall, alone, have responsibility in connection with such actions,
except with respect to willful misconduct or gross negligence. The Company may
appoint an Investment Committee to select the hypothetical investment elections.

8.02 OUTSIDE SERVICES.

The Company may engage counsel and such clerical, financial, investment,
accounting, and other specialized services as the Company may deem necessary or
desirable to the operation and administration of the Plan. The Company shall be
entitled to rely upon any opinions, reports, or other advice furnished by
counsel or other specialists engaged for such purposes and, in so relying, shall
be fully protected in any action, determination, or omission taken or made in
good faith.

8.03. STATEMENTS.

The Company shall cause to be furnished to each Participant a quarterly
statement of his Accounts, which statements shall summarize for the period all
Credits to each of his Accounts, the vested amount of each of his Accounts, the
changes in his Accounts, and the starting and ending balance of his Accounts.

8.04. PAYMENT SCHEDULES.

The Company shall deliver to the Trustee a schedule that indicates the amounts
payable in respect of each Participant (and his Beneficiary), that provides a
formula or other instructions acceptable to the Trustee for determining the
amounts so payable, the form in which such amount is to be paid (as provided for
or available under the Plan), and the time of commencement for payment of such
amounts. The Company shall also instruct the Trustee as to the amount or formula
for calculating the amount of any withholding of any federal, state or local
taxes that may be required to be withheld with respect to the payment of
benefits pursuant to the terms of the Plan.

8.05. EXPENSES.

The Company shall pay all costs and expenses incurred in operating and
administering the Plan.

                                       14
<PAGE>

                     ARTICLE IX. AMENDMENT AND TERMINATION.

9.01. AMENDMENT.

The Board of Directors and/or the Compensation Committee may amend the Plan at
any time, without the consent of the Participants or their Beneficiaries,
provided, however, that no amendment shall divest any Participant or Beneficiary
of the credits to and value of his Account, or of any rights to his Account,
which he would have been entitled if the Plan had been terminated immediately
prior to the effective date of such amendment.

9.02. TERMINATION.

The Board of Directors may terminate the Plan at any time. Upon termination of
the Plan, distributions of the value of a Participant's Accounts shall be made
in the manner and at the time heretofore prescribed; provided no additional
credits shall be made to the Account of a Participant following termination of
the Plan other than Dividend Credits thereon credited pursuant to Article V.

                                       15
<PAGE>

                      ARTICLE X. MISCELLANEOUS PROVISIONS.

10.01. INALIENABILITY OF BENEFITS.

The Participant's interest in his Accounts, and any benefits payable to the
Participant or his Beneficiary, may not be anticipated, assigned (either at law
or in equity), alienated, pledged, encumbered or subjected to attachment, levy,
execution or other legal or equitable process, and any attempt to do so shall be
void. Any such benefit or interest shall not in any manner be liable for or
subject to, voluntary or involuntary garnishment, attachment, execution, or
levy, or reliable for or subject to the debts, contract, liabilities,
engagements, or tort of any Participant or his Beneficiary. In the event that
the Board of Directors finds that any Participant or his Beneficiary has become
bankrupt or that any attempt has been made to anticipate, alienate, sell,
transfer, assign, pledge, encumber, charge, garnish, attach, execute on or levy
against any benefit payable under, or interest in, the Plan, the Board of
Directors shall hold or apply such benefit or interest or any part thereof to or
for the benefit of such Participant or his Beneficiary, his spouse, children,
parents or other blood relatives, or any of them.

Furthermore, the Company has no right of offset with respect to any benefit
payments hereunder for any debt, obligation or other liability representing an
amount the Employee owes to the Company or an Affiliate.

10.02. NO RIGHT OF EMPLOYMENT.

Nothing contained herein nor any action taken under the provisions hereof shall
be construed as a contract of employment for any term of years, nor as
conferring upon the Employee any right to be retained in the employ of the
Company in his present capacity, or any capacity.

10.03. INDEMNIFICATION.

The Company shall indemnify each Board of Directors member against any and all
claims, loss, damages, expense (including reasonable counsel fees), and
liability arising from any action, failure to act, or other conduct in the
member's official capacity in regard to this Plan, except when due to a Board of
Directors member's own gross negligence or willful misconduct.

10.04. NOTICE.

Any notice, consent or demand required or permitted to be given under the
provisions of this Plan shall be in writing, and shall be signed by the person
giving or making the same. If such notice, consent or demand is mailed to a
Participant or a Beneficiary hereto, it shall be sent by United States certified
mail, postage prepaid, addressed to such person's last known address as shown on
the records of the Company. The date of such mailing shall be deemed the date of
notice, consent or demand. Any Participant may change the address to which
notice is to be sent by giving written notice of the same to the Company. Notice
to the Company shall be delivered to the attention of the Administrative
Committee.

10.05. CONSTRUCTION.

The terms defined in the Plan shall apply equally to both singular and plural.
The masculine pronoun, whenever used, shall include the feminine. When used in
the Plan, the words "hereof", "herein" and "hereunder" and words of similar
import shall refer to the Plan as a whole and not to a particular provision of
the Plan, unless otherwise specified.

                                       16
<PAGE>

10.06. HEADINGS.

The headings of this Plan are included for convenience of reference only and in
no way define or delimit any of the provisions hereof or otherwise affect their
construction or effect.

10.07. SEVERABILITY.

If any provision of this Plan is determined to be invalid or unenforceable, such
determination shall not affect the validity or enforceability of any other
provisions of this Plan.

10.08. GOVERNING LAW.

The Plan shall be governed, construed, regulated, and administered by the laws
of the State of Texas.

                                       17
<PAGE>

10.09. COUNTERPARTS.

This Plan may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all counterparts shall, together, constitute only
one Plan.

IN WITNESS WHEREOF, the Company has executed this Plan on the 19th day of April,
2001.

                                                 /s/ Michael C. Kearney
                                                 -------------------------------
                                       Signature Michael C. Kearney

                                       CFO & VP Administration
                                       -----------------------------------------
                                       Title

                                       18<PAGE>

                                                                   EXHIBIT 10.14

                       HYDRIL CHANGE IN CONTROL AGREEMENT

                                 HYDRIL COMPANY
                       3300 North Sam Houston Parkway East
                              Houston, Texas 77032

                                                                January 15, 2002

[Name]
Hydril Company
3300 North Sam Houston Parkway East
Houston, Texas 77032

Dear [Name]:

                  Hydril Company (the "Corporation") considers it essential to
the best interests of its stockholders to foster the continuous employment of
key management personnel. In connection with this, the Corporation's Board of
Directors (the "Board") recognizes that, as is the case with many corporations,
the possibility of a change in control of the Corporation may exist and that
such possibility, and that such uncertainty and questions that it may raise
among management, could result in the departure or distraction of management
personnel to the detriment of the Corporation and its stockholders.

                  The Board previously had decided to reinforce and encourage
the continued attention and dedication of members of the Corporation's
management, including yourself, to their assigned duties without distraction
arising from the possibility of a change in control of the Corporation and had
entered into a letter agreement with you dated January 1, 1999, concerning
certain benefits to be paid to you upon severance from employment with the
Company following a change of control (the "Prior Agreement").

                  The Company has now determined to offer to enter into a new
letter agreement (the "Agreement") with you which, among other things, will have
a longer term than the Prior Agreement.

                  In order to induce you to remain in its employ, the
Corporation hereby agrees that after this Agreement has been fully executed, you
shall receive the severance benefits set forth in this Agreement in the event
your employment with the Corporation or one or more of its subsidiaries is
terminated under the circumstances described below subsequent to a "Change of
Control" (as defined in Section 2). This Agreement supersedes the Prior
Agreement which no longer has any force or effect.

                  1. Term of Agreement. This Agreement shall commence on January
15, 2002 and shall continue in effect through the earlier of (i) December 31,
2004 or (ii) the end of the calendar month in which your 65th birthday occurs.

<PAGE>
                                      -2-

                                                                January 15, 2002

                  2. Change in Control. No benefits shall be payable hereunder
unless there has been a Change in Control. For purposes of this Agreement, a
Change in Control shall be conclusively deemed to have occurred if (and only if)
any of the following events shall have occurred: (a) after the date hereof any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act),
other than a person who is a director of the Corporation on the date hereof or
any person controlled by such a director, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing 35% or more of the combined voting
power of the Corporation's then outstanding voting securities without prior
approval of a least two-thirds of the members of the Board of Directors of the
Corporation in office immediately prior to such person's attaining such
percentage interest; (b) the Corporation 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 of the Corporation in office immediately
prior to such transaction or event thereafter constitute less than a majority of
the members of the board of directors or comparable governing body of the entity
that is the survivor of such transaction or event or, in the case of a sale of
assets, the entity that is the successor to the business of the Corporation; or
(c) during any period of two consecutive years, individuals who at the beginning
of such period constituted the Board of Directors of the Corporation (including
for this purpose any new member whose election or nomination for election by the
Corporation's stockholders was approved by a vote of at least two-thirds of the
members then still in office who were members at the beginning of such period)
cease for any reason to constitute at least a majority of the Board of Directors
of the Corporation.

                  3. Termination Following Change in Control.

                  (i) General. If any of the events described in Section 2
constituting a Change in Control shall have occurred, you shall be entitled to
the benefits provided in Section 4(iii) upon the subsequent termination of your
employment during the term of this Agreement if such termination is (a) by the
Corporation without Cause or (b) by you for Good Reason.

                  (ii) Cause. Termination by the Corporation of your employment
for "Cause" shall mean termination (a) upon your willful and continued failure
to substantially perform your duties with the Corporation or any such actual or
anticipated failure after your issuance of a Notice of Termination (as defined
in Section 3(iv)) for Good Reason (as defined in Section 3(iii)), after a
written demand for substantial performance is delivered to you by the Board,
which demand specifically identifies the manner in which the Board believes that
you have not substantially performed your duties, (b) upon your willful
participation in conduct which is demonstrably and materially injurious to the
Corporation, monetarily or otherwise, or (c) upon there being substantial
evidence that you are guilty of a crime classified as a felony (or the
equivalent thereof) under applicable law, or that you have been convicted of
such a crime. For purposes of this Section 3(ii), no act, or failure to act, on
your part shall be deemed "willful" unless done, or omitted to be done, by you
not in good faith. In addition, "Cause" shall exist if as a result of your
incapacity due to physical or mental illness, you shall have been absent from
the

<PAGE>
                                      -3-

                                                                January 15, 2002

full-time performance of your duties with the Corporation for six (6)
consecutive months, and within thirty (30) days after written notice of
termination is given you shall not have returned to the full-time performance of
your duties (hereinafter, "Disability"). Notwithstanding the foregoing, you
shall not be deemed terminated for Cause unless and until there shall have been
delivered to you a copy of a resolution duly adopted by the affirmative vote of
not less than three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board (after reasonable notice to you and an opportunity for you,
together with your counsel, to be heard before the Board), finding that in the
Board's good faith opinion you were guilty of conduct set forth above in this
Section 3(ii) and specifying the particulars thereof in reasonable detail.

                  (iii) Good Reason. You shall be entitled to terminate your
employment for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean, without your express written consent, the occurrence after a Change in
Control of any of the following circumstances unless, in the case of subsections
(a), (e), (f) or (g), such circumstances are fully corrected prior to the Date
of Termination (as defined in Section 3(v)) specified in the Notice of
Termination (as defined in Section 3(iv)) given in respect thereof:

                  (a) the assignment to you of any duties inconsistent with the
         position in the Corporation or any subsidiary of the Corporation that
         you held immediately prior to the Change in Control, or a significant
         adverse alteration in the nature or status of your responsibilities or
         the conditions of your employment from those in effect immediately
         prior to such Change in Control;

                  (b) the reduction of your annual base salary as in effect on
         the date hereof or as the same may be increased from time to time;

                  (c) the relocation of the offices at which you are principally
         employed immediately prior to the date of the Change in Control to a
         location more than 25 miles from such location or your relocation to
         anywhere other than such prior office except for required travel on the
         Corporation's business to an extent substantially consistent with your
         present business travel obligations;

                  (d) failure to pay to you any portion of your current
         compensation or to pay to you any portion of an installment of deferred
         compensation under any deferred compensation program of the Corporation
         within seven (7) days of the date such compensation is due;

                  (e) failure to continue in effect any material compensation or
         benefit plan in which you participate immediately prior to the Change
         in Control, unless an equitable arrangement (embodied in an ongoing
         substitute or alternative plan) has been made with respect to such
         plan, or failure to continue your participation therein (or in such
         substitute or alternative plan) on a basis not materially less
         favorable, both in terms of the amount

<PAGE>
                                      -4-

                                                                January 15, 2002

         of benefits provided and the level of your participation relative to
         other participants, as existed at the time of the Change in Control;

                  (f) failure to obtain a satisfactory agreement from any
         successor to assume and agree to perform this Agreement, as
         contemplated in Section 5; or

                  (g) any purported termination of your employment that is not
         effected pursuant to a Notice of Termination satisfying the
         requirements of Section 3(iv) hereof (and, if applicable, the
         requirements of Section 3(ii) hereof), which purported termination
         shall not be effective for purposes of this Agreement.

Your right to terminate your employment pursuant to this Section 3(iii) shall
not be affected by your incapacity due to physical or mental illness. Your
continued employment shall not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting Good Reason hereunder.

                  (iv) Notice of Termination. Any purported termination of your
employment by the Corporation or by you (other than termination due to death
which shall terminate your employment automatically) shall be communicated by
written Notice of Termination to the other party hereto in accordance with
Section 6. "Notice of Termination" shall mean a notice that shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of your employment under the provision so indicated.

                  (v) Date of Termination, Etc. "Date of Termination" shall mean
(a) if your employment is terminated due to your death, the date of your death;
(b) if your employment is terminated for Disability thirty (30) days after
Notice of Termination is given (provided that you shall not have returned to the
full-time performance of your duties during such thirty (30)-day period), and
(c) if your employment is terminated pursuant to Section 3(ii) or Section 3(iii)
or for any other reason (other than death or Disability), the date specified in
the Notice of Termination (which, in the case of a termination for Cause shall
not be less than thirty (30) days from the date such Notice of Termination is
given, and in the case of a termination for Good Reason shall not be less than
fifteen (15) nor more than sixty (60) days from the date such Notice of
Termination is given). Notwithstanding anything to the contrary contained in
this Section 3(v), if within fifteen (15) days after any Notice of Termination
is given, the party receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination, then the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties, or as set forth in Section 10;
provided, however, that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.

<PAGE>
                                      -5-

                                                                January 15, 2002

                  4. Compensation Upon Termination or During Disability.
Following a Change in Control, you shall be entitled to the benefits described
below during a period of disability, or upon termination of your employment, as
the case may be, provided that such period or termination occurs during the term
of this Agreement. The benefits to which you are entitled, subject to the terms
and conditions of this Agreement, are:

                  (i) During any period during which you fail to perform your
full-time duties with the Corporation as a result of incapacity due to physical
or mental illness, you shall continue to receive your base salary at the rate in
effect at the commencement of any such period, together with all compensation
payable to you under the Corporation's disability plan or program or other
similar plan during such period, until this Agreement is terminated by the
Corporation pursuant to Section 3(ii) hereof or by you. Thereafter, or in the
event your employment is terminated by reason of your death, your benefits shall
be determined under the Corporation's retirement, insurance and other
compensation programs then in effect in accordance with the terms of such
programs.

                  (ii) If your employment shall be terminated by the Corporation
for Cause or by you other than for Good Reason, the Corporation shall pay you
your full base salary, when due, through the Date of Termination at the rate in
effect at the time Notice of Termination is given, plus all other amounts to
which you are entitled under any compensation plan of the Corporation at the
time such payments are due, and the Corporation shall have no further
obligations to you under this Agreement.

                  (iii) If your employment by the Corporation shall be
terminated by you for Good Reason or by the Corporation other than for Cause
(including Disability), then you shall be entitled to the benefits provided
below:

                  (a) the Corporation shall pay to you your full base salary,
         when due, through the Date of Termination at the rate in effect at the
         time Notice of Termination is given, at the time specified in Section
         4(v), plus all other amounts to which you are entitled under any
         compensation plan of the Corporation at the time such payments are due;

                  (b) in lieu of any further salary payments to you for periods
         subsequent to the Date of Termination, the Corporation shall pay as
         severance pay to you, at the time specified in Section 4(v), a lump sum
         severance payment (together with the payments provided in Sections
         4(iii)(c) and (d) below, the "Severance Payments") equal to 200% of
         your annual salary as in effect as of the Date of Termination or
         immediately prior to the Change in Control, whichever is greater and
         without regard to whether you have been employed by the Corporation or
         any of its subsidiaries for at least 12 consecutive months, and 200% of
         the average of the annual bonuses awarded to you pursuant to the
         Corporation's bonus plan(s) for executive officers, or any successor
         bonus plan(s) thereto, with respect to the three fiscal years preceding
         the Date of Termination; provided

<PAGE>
                                      -6-

                                                                January 15, 2002

         that if you shall not have been continuously employed by the
         Corporation or any of its subsidiaries for the preceding three full
         fiscal years, such average annual bonuses shall be determined based on
         the aggregate of all bonuses paid to you with respect to any of such
         three fiscal years and the actual period of your employment through the
         end of the preceding fiscal year (stated in years, including a fraction
         thereof); and provided further that if no bonuses shall have been paid
         to you with respect to the preceding fiscal year, such bonuses (for
         purposes of computing both the average annual bonuses and the aggregate
         amount of Severance Payments) shall be the greater of (x) the bonus
         award to you for such fiscal year, if any, theretofore approved by the
         Corporation's Board of Directors or a duly constituted committee
         thereof, (y) your target bonus for such fiscal year, stated as a
         percentage of your base annual salary, theretofore approved by the
         Corporation's Board of Directors or a duly constituted committee
         thereof, or (z) your current annual salary multiplied by the highest
         percentage that your bonuses represented in relation to your base
         annual salary with respect to either of the first two of the three
         preceding fiscal years.

                  (c) the Corporation shall pay to you all legal fees and
         expenses incurred by you as a result of such termination (including all
         such fees and expenses, if any, incurred in contesting or disputing any
         such termination or in seeking to obtain or enforce any right or
         benefit provided by this Agreement (as set forth in Section 10 of this
         Agreement); and

                  (d) for a twenty-four (24) month period after such
         termination, the Corporation shall arrange to provide you with life,
         disability, accident and group health insurance benefits substantially
         similar to those that you were receiving immediately prior to the
         Notice of Termination. Benefits otherwise receivable by you pursuant to
         this Section 4(iii)(d) shall be reduced to the extent comparable
         benefits are actually received by you during the twenty-four (24) month
         period following your termination, and any such benefits actually
         received by you shall be reported to the Corporation.

                  (iv) The payments provided for in Section 4(iii)(a) shall be
made not later than the fifth day following the Date of Termination. The
payments provided for in Sections 4(iii)(b), (c) and (d) shall be made not later
than the thirtieth day following the Date of Termination; provided, however,
that if the amounts of such payments cannot be finally determined on or before
such day, the Corporation shall pay to you on such day an estimate, as
determined in good faith by the Corporation, of the minimum amount of such
payments and shall pay the remainder of such payments (together with interest at
the rate provided in section 1274(b)(2)(B) of the Internal Revenue Code of 1986,
as amended (the "Code"), as soon as the amount thereof can be determined but in
no event later than the thirtieth day after the Date of Termination. In the
event that the amount of the estimated payments exceeds the amount subsequently
determined to have been due, such excess shall constitute a loan by the
Corporation to you, payable on the fifth day

<PAGE>
                                      -7-

                                                                January 15, 2002

after demand by the Corporation (together with interest at the rate provided in
section 1274(b)(2)(B) of the Code).

(v) You shall not be required to mitigate the amount of any payment provided for
in this Section 4 by seeking other employment or otherwise nor, except as
provided in Section 4(iii)(d), shall the amount of any payment or benefit
provided for in this Section 4 be reduced by any compensation earned by you as
the result of employment by another employer or self-employment, by retirement
benefits, by offset against any amount claimed to be owed by you to the
Corporation, or otherwise.

                  5. Successors, Binding Agreement.

                  (i) The Corporation shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform it if no such
succession had taken place. Failure of the Corporation to obtain such assumption
and agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle you to terminate your employment and
to receive compensation from the Corporation in the same amount and on the same
terms to which you would be entitled hereunder if you terminate your employment
for Good Reason following a Change in Control, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. Where the context requires,
"Corporation" shall mean the Corporation as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.

                  (ii) This Agreement shall inure to the benefit of and be
enforceable by you and your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If you
should die while any amount would still be payable to you hereunder had you
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to your devisee, legatee or
other designee or, if there is no such designee, to your estate.

                  6. Notice. For the purpose of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Corporation shall be directed to the
attention of the Board with a copy to the Secretary of the Corporation, or to
such other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.

<PAGE>
                                      -8-

                                                                January 15, 2002

                  7. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by you and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Texas without regard to its conflicts of law
principles. All references to sections of the Exchange Act or the Code shall be
deemed also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state or local law. The obligations of the Corporation under
Section 4 shall survive the expiration of the term of this Agreement. The
section headings contained in this Agreement are for convenience only, and shall
not affect the interpretation of this Agreement.

                  8. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

                  9. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

                  10. Arbitration, Dispute Resolution.

                  (i) Arbitration Procedure. Any disagreement, dispute,
controversy or claim arising out of or relating to this Agreement or the
interpretation of this Agreement or any arrangements relating to this Agreement
or contemplated in this Agreement or the breach, termination or invalidity
thereof shall be settled by arbitration in accordance with the Commercial
Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association (the "AAA") (except as otherwise provided in this Agreement) in
Houston, Texas. The arbitral tribunal shall consist of one arbitrator. In making
any decision, the arbitrator shall apply and follow the substantive law of Texas
without reference to the conflicts of law provisions thereof. The parties to the
arbitration jointly shall directly appoint such arbitrator within thirty (30)
days of initiation of arbitration. If the parties shall fail to appoint such
arbitrator as provided above, such arbitrator shall be appointed by the AAA as
provided in the Arbitration Rules. You and the Corporation agree that the
arbitral award may be enforced against the parties to the arbitration proceeding
or their assets wherever they may be found and that a judgment upon the arbitral
award may be entered in any court having jurisdiction thereof. The Corporation
shall pay all fees and expenses of the Arbitrator regardless of the result and
shall provide all witnesses and

<PAGE>
                                      -9-

                                                                January 15, 2002

evidence reasonably required by you to present your case. The Corporation shall
pay to you all reasonable arbitration expenses and legal fees incurred by you as
a result of a termination of your employment in seeking to obtain or enforce any
right or benefit provided by this Agreement (whether or not you are successful
in obtaining or enforcing such right or benefit). Such payments shall be made
within five (5) days after the your request for payment accompanied with such
evidence of fees and expenses incurred as the Corporation reasonably may
require.

                  (ii) Compensation During Dispute. Your compensation during any
disagreement, dispute, controversy or claim arising out of or relating to this
Agreement or the interpretation of this Agreement shall be as follows:

                  (a) If a purported termination by you for Good Reason occurs
         or is deemed to occur following a Change in Control and during the term
         of this Agreement, and such termination is disputed in accordance with
         Sections 3(v) and 10(i) of this Agreement, the Corporation shall
         continue to pay you the full compensation in effect when the notice
         giving rise to the dispute was given (including, but not limited to,
         salary) and continue you as a participant in all compensation, benefit
         and insurance plans in which you were participating when the notice
         giving rise to the dispute was given, until the dispute is finally
         resolved in accordance with Section 10(i). Amounts paid under this
         Section 10(ii)(a) are in addition to all other amounts due under this
         Agreement and shall not be offset against or reduce any other amounts
         due under this Agreement. You agree to remain in the employ of the
         Corporation during the resolution of the dispute and to continue to
         provide services unless your employment is terminated earlier by death,
         Disability or retirement, or by action of the Corporation. If the
         dispute is resolved by a determination that you did not have Good
         Reason, this Agreement, in accordance with its terms, shall continue to
         apply to the circumstances of the your employment by the Corporation
         and any termination thereof.

                  (b) If there is a termination by the Corporation followed by a
         dispute as to whether you are entitled to the payments and other
         benefits provided under this Agreement, then, during the period of that
         dispute the Corporation shall pay you fifty percent (50%) of the amount
         specified in Sections 4(iii)(a) and 4(iii)(b) hereof, and the
         Corporation shall provide you with the other benefits provided in
         Section 4(iii) of this Agreement, if, but only if, you agree in writing
         that if the dispute is resolved against you, you shall promptly refund
         to the Corporation all payments you receive under Sections 4(iii)(a)
         and 4(iii)(b) of this Agreement plus interest at the rate provided in
         Section 1274(d) of the Code, compounded quarterly. If the dispute is
         resolved in your favor, promptly after resolution of the dispute the
         Corporation shall pay you the sum that was withheld during the period
         of the dispute plus interest at the rate provided in Section 1274(d) of
         the Code, compounded quarterly.

<PAGE>
                                      -10-

                                                                January 15, 2002

                  11. Confidential Information and Non-Solicitation.

                  (i) For a period of two (2) years after a termination of your
employment with the Company with respect to which you receive Severance Payments
under Section 4 of this Agreement, you shall not, except as may be required by
applicable law, disclose to others or use, whether directly or indirectly, any
Confidential Information regarding the Company. "Confidential Information" shall
mean information about the Company, its subsidiaries and affiliates, and their
respective clients and customers that is not available to the general public and
that was learned by you in the course of your employment by the Company,
including (without limitation) any patterns, proprietary knowledge, trade
secrets, data, formulae, information, and client and customer lists and all
papers, resumes, records (including computer records) and the documents
containing such Confidential Information. You acknowledge that such Confidential
Information is specialized, unique in nature and of great value to the Company,
and that such information gives the Company a competitive advantage in
conducting its business. Upon the termination of your employment for any reason
whatsoever, you shall promptly deliver to the Company all documents, computer
tapes and disks (and all copies thereof) containing any Confidential
Information.

                  (ii) You recognize that you possess confidential information
about other employees of the Company relating to their education, experience,
skills, abilities, compensation and benefits, and interpersonal relationships
with customers of the Company. You recognizes that the information you possess
about these other employees is not generally known, is of substantial value to
the Company in developing its business and in securing and retaining customers,
and has been acquired by you because of your business position with the Company.
For a period of two (2) years after a termination of your employment with the
Company with respect to which you receive Severance Payments under Section 4 of
this Agreement, you shall not, directly or indirectly, solicit, recruit or hire
any employee of the Company for the purpose of being employed by you or by any
other person on whose behalf you are acting as an agent, representative or
employee and that you will not convey any such confidential information or trade
secrets about other employees of the Company to any business, individual,
partner, firm, corporation, or other entity.

                  (iii) You agree that the Company will or would suffer
irreparable injury if you were to violate any of the covenants set forth in this
Section 11 and that the Company would by reason of such violation be entitled to
injunctive relief in a court of appropriate jurisdiction, and you further
consent and stipulate to the entry of such injunctive relief in such a court
prohibiting you from violating any of such covenants.

                  (iv) If it is determined by a court of competent jurisdiction
in any state that any restriction in this Section 11 is excessive in duration or
scope or is unreasonable or unenforceable under the laws of that state, it is
the intention of the parties that such restriction may be modified or amended by
the court to render it enforceable to the maximum extent permitted by the law of
that state.

<PAGE>
                                      -11-

                                                                January 15, 2002

                  12. Entire Agreement. This Agreement sets forth the entire
agreement of the parties hereto in respect of the subject matter contained
herein and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto; and any prior agreement
of the parties hereto in respect of the subject matter contained herein,
including the Prior Agreement, is hereby terminated and cancelled.

                  13. No Rights of Employment. No provision of this Agreement
shall confer to any right upon you to continue employment with the Company or
any of its affiliates or subsidiaries.

                  If this letter sets forth our agreement on the subject matter
hereof, kindly sign and return to the Corporation the enclosed copy of this
letter, which shall then constitute our agreement on this subject.

                                       Sincerely,

                                       -----------------------------------------
                                       [Name]
                                       [Title]

Agreed to this     day of           , 2002
               ---        ----------

By:
   -----------------------------------
   [Name]

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