NL INDUSTRIES INC
AMENDED & RESTATED SERP AGMT
<DOCUMENT>
<TYPE>EX-10.30
<SEQUENCE>5
<FILENAME>exhibit10-30.txt
<DESCRIPTION>AMENDED & RESTATED SERP AGMT
<TEXT>
                                                                   EXHIBIT 10.30

                             AMENDED AND RESTATED

                    SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                        FOR EXECUTIVES AND OFFICERS OF

                              NL INDUSTRIES, INC.




















                                                      as effective May 1, 2001


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                               TABLE OF CONTENTS


ARTICLE ONE
PURPOSES OF PLAN.............................................................1

ARTICLE TWO
DEFINITIONS..................................................................2
      2.1   Administrative Committee.........................................2
      2.2   Beneficiary......................................................2
      2.3   Board............................................................2
      2.4   Code.............................................................2
      2.5   Company..........................................................2
      2.6   Compensation.....................................................2
      2.7   Determination Date...............................................4
      2.8   Employee.........................................................4
      2.9   Employment.......................................................4
      2.10  Interest Credit Rate.............................................5
      2.11  Interest Equivalents.............................................5
      2.12  Participant......................................................5
      2.13  Plan.............................................................5
      2.14  Plan Year........................................................5
      2.15  Principal........................................................6
      2.16  Profitability Target Percentage..................................6
      2.17  Qualified Plan...................................................6
      2.18  Retirement Date................................................. 6
      2.19  Subsidiary.......................................................6
      2.20  Supplemental Compensation Ledger.................................7
      2.21  Top Hat Earnings.................................................7
      2.22  Total and Permanent Disability.................................  7

ARTICLE THREE
ADMINISTRATION...............................................................8
      3.1   Composition of Administrative Committee..........................8
      3.2   Administration of Plan...........................................9
      3.3   Action by Committee..............................................9
      3.4   Delegation.......................................................9
      3.5   Reliance Upon Information........................................9
      3.6   Responsibility and Indemnity....................................10





                                      i

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ARTICLE FOUR
PARTICIPATION...............................................................11
      4.1   Eligibility of Employees........................................11
      4.2   Designation of Participants.....................................11
      4.3   Notification of Participants and Former Participants............12
      4.4   Contributions...................................................12
      4.5   Special Provisions for any Employee's Initial Plan Year of
              Participation.................................................13
      4.6   Vesting.........................................................13
      4.7   Withholding.....................................................15

ARTICLE FIVE
CREDITING OF CONTRIBUTIONS AND AWARD
OF INTEREST EQUIVALENTS.....................................................16
      5.1   Crediting of Contributions......................................16
      5.2   Interest Equivalents............................................16
      5.3   Determination of Account........................................18

ARTICLE SIX
DISTRIBUTIONS...............................................................18
      6.1   "Parachute" Effect on Amount Distributed........................18
      6.2   Determination Date..............................................19
      6.3   Form and Date of Distributions..................................19
      6.4   Payor of Benefits...............................................19
      6.5   Claims and Appeals Procedures...................................20
      6.6   Facility of Payments............................................22
      6.7   Beneficiary Designations........................................22

ARTICLE SEVEN
RIGHTS OF PARTICIPANTS......................................................23
      7.1   Periodic Statement to Participants..............................23
      7.2   Limitation of Rights............................................24
      7.3   Nonalienation of Benefits.......................................25
      7.4   Prerequisites to Benefits.......................................26

ARTICLE EIGHT
MISCELLANEOUS...............................................................26
      8.1   Amendment or Termination of the Plan............................26
      8.2   Powers of the Company...........................................27
      8.3   Waiver..........................................................27
      8.4   Separability....................................................28
      8.5   Gender, Tense and Headings......................................28
      8.6   Governing Law...................................................28
      8.7   Notice..........................................................28

                                      ii

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      8.8   Incorporation of Certain Provisions of Participants' Contracts
              with the Company............................................. 28
      8.9   Effective Date..................................................29












                                     iii

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                             AMENDED AND RESTATED
                    SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
                        FOR EXECUTIVES AND OFFICERS OF
                              NL INDUSTRIES, INC.


                                  ARTICLE ONE

                               PURPOSES OF PLAN

      This Amended and Restated  Supplemental  Executive  Retirement  Plan of NL
Industries,  Inc. and each designated  Subsidiary is intended to provide greater
incentives  for  selected  executives  and  officers to attain and  maintain the
highest  standards  of  performance  by  enabling  such  persons  to make up for
benefits  lost due to  limits  on  benefits  which  are  permissible  under  the
Qualified Plan.

      The Plan was initially effective January 1, 1991.

      The plan was amended and restated effective February 9, 2000, as to anyone
who became or  remained  a  Participant  on or after  February  9, 2000.  Former
Participants remained entitled to benefits under the terms and provisions of the
Plan as in effect before that amendment and restatement.

      The Plan is amended and  restated  effective  May 1, 2001,  to provide for
immediate payment of all fully vested benefits under the plan.







                                      1

<PAGE>



                                  ARTICLE TWO

                                  DEFINITIONS

      In addition to the terms defined in the text hereof, each term below shall
have the  meanings  assigned  thereto  for all  purposes  of the Plan unless the
context reasonably requires a broader, narrower or different meaning.

      2.1 Administrative Committee. "Administrative Committee" means the Pension
and Employee  Benefits  Committee  (PEBCO) of NL  Industries,  Inc.  which shall
administer  the Plan pursuant to Article  Three hereof.  The Board may remove an
Administrative   Committee   member   pursuant  to  the  applicable   procedures
established by the Board.

      2.2  Beneficiary.   "Beneficiary"   means  a  person   designated  by  the
Participant,  as provided in Section  6.7, to receive any amounts  distributable
under the Plan on account of the death of the Participant.

      2.3  Board.  "Board"  means  the board of  directors  of the  Company,  or
equivalent governing authority,  or the duly appointed delegate of such board of
directors.

      2.4 Code.  "Code" means the Internal Revenue Code of 1986, as amended,  or
any successor thereto.

      2.5 Company.  "Company"  means NL  Industries,  Inc. or any successor that
assumes the Plan.

      2.6  Compensation.  "Compensation"  means  for any  Plan  Year  the  total
earnings reportable on the Employee's Form W-2 from the Company, including:

            (a)   base salary or wages, and overtime;

            (b)   incentive awards or bonuses;

                                      2

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            (c) foreign  service  allowances  which the Company or a  Subsidiary
pays. In addition, Compensation includes the following whether or not reportable
on Form W-2:

            (d)  amounts  contributed  by  the  Company  or a  Subsidiary  as an
      elective deferral on behalf of such Employee to a cafeteria plan described
      in Section 125 of the Code or under a plan  described in Section 401(k) or
      Section  408(k)  of  the  Code,  or  to  any  other  health,   retirement,
      transportation, or other employee benefit plan;

            (e) amounts paid through the Company for the Employee's  services to
      any other  employer,  or that would have been paid  through the Company if
      such  payment  had not been  deferred  to a  qualified  plan of such other
      employer or to a  non-qualified  plan for officers,  directors,  or highly
      compensated employees of such other employer;

            (f) incentive awards or bonuses paid by foreign  subsidiaries of the
      Company.Compensation  does not include relocation allowances or relocation
      bonuses,  hiring  or "sign  on"  bonuses,  imputed  value  of  group  life
      insurance,  tuition  refunds,  foreign service  premiums,  any income from
      stock options,  stock appreciation rights,  restricted stock,  performance
      award rights,  similar fringe benefits or perquisites,  any "stay bonuses"
      or  "supplemental  bonuses"  paid in 1989 or 1990 in  connection  with the
      restructuring of the Company.

      If the Company and any Participant enter into any bonus deferral agreement
or  arrangement,  such  deferred  bonus  shall  be  considered  to  be  part  of
Compensation  in the year in which such bonus  would have been  received by such
Participant if said bonus deferral agreement or arrangement had not been entered
into by the Company and the Participant.

                                      3

<PAGE>



      2.7  Determination  Date.  "Determination  Date" means,  with respect to a
Participant,  (i) the date the  Participant  terminates  Employment,  whether by
retirement on his Retirement Date, death, Disability,  or any other voluntary or
involuntary reason for departing from active service as a common law Employee of
the Company or of a designated  Subsidiary,  and (ii) effective May 1, 2001, for
fully vested  Participants,  "Determination  Date" means May 15, 2001,  and then
means the last day of each calendar month.

      2.8 Employee.  "Employee"  means any  individual who is a U. S. citizen or
U.S.  resident,  who  is an  executive  or  officer  of  the  Company  or of any
designated  Subsidiary,  and  who is  limited  as to the  benefits  which  might
otherwise be accrued on his behalf under the  Qualified  Plan because of (i) the
limit on projected annual benefits described in Section 415(b) of the Code (and,
for years prior to January 1, 2000, Section 415(e) of the Code), and/or (ii) the
limit on compensation that may be taken into account under Section 401(a)(17) of
the Code; or (in the event the Qualified  Plan is frozen),  who would be limited
as to the benefits  theoretically  accruable under the Qualified Plan as limited
by Section  401(a)(17) of the Code, if the Qualified Plan were an active defined
benefit  pension plan.

      2.9  Employment.  "Employment"  means  employment  by  the  Company  or  a
Subsidiary.  In  this  regard,  neither  the  transfer  of  a  Participant  from
employment by the Company to  employment  by a Subsidiary  nor the transfer of a
Participant  from  Employment by a Subsidiary to employment by the Company shall
be deemed to be a termination of Employment of the  Participant.  Moreover,  the
Employment of a Participant shall not be deemed to have been terminated  because
of his absence from active  employment on account of temporary illness or during
authorized vacation or during temporary leaves of absence from active employment

                                      4

<PAGE>



granted by the Company or a Subsidiary for reasons of professional  advancement,
education,  health,  or government  service,  or during  military  leave for any
period if the Participant  returns to active employment within 90 days after the
termination of his military  leave,  or during any period required to be treated
as a leave of absence by virtue of any valid law or agreement.

      2.10 Interest Credit Rate.  "Interest Credit Rate" means, (i) for unvested
Participants for all periods, and for both vested and unvested  Participants for
periods  prior to May 1, 2001,  the  assumed  rate of return on assets  used for
calculations  required by Statement of Financial  Accounting  Standards  No. 87,
unless the Board establishes a higher or lower rate with respect to a given Plan
Year; and (ii) for vested  Participants  for periods after April 30, 2001, zero,
except that for amounts payable on the May 15, 2001 Determination Date, interest
shall continue to be calculated under clause (i) in the preceding sentence until
May 15, 2001.

      2.11  Interest  Equivalents.  "Interest  Equivalents"  means  the  amounts
credited as interest to a Participant's account in the Supplemental Compensation
Ledger,  determined  and credited as provided in Section 5.2.

      2.12  Participant.  "Participant"  means an eligible Employee who has been
appointed to participate in the Plan pursuant to Section 4.2.

      2.13 Plan.  "Plan" means the  Supplemental  Executive  Retirement Plan for
Executives and Officers of NL Industries, Inc. set forth herein, and as the same
may  hereafter be amended from time to time.

      2.14 Plan Year.  "Plan Year"  means the twelve  consecutive  month  period
commencing on January 1 of a particular  calendar year and ending on December 31
of such calendar year.

                                      5

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      2.15 Principal.  "Principal"  means the total amount of all  contributions
which  have  been made to the Plan as  reflected  in the  Participant's  account
maintained in the  Supplemental  Compensation  Ledger,  less any distribution of
contributions from the Participant's accounts.

      2.16 Profitability  Target Percentage.  "Profitability  Target Percentage"
means 6%, 8%, or 10% depending on whether the A, B, or C  profitability  target,
respectively,  under the Company's Variable  Compensation Plan, is determined to
have been  achieved by the Company for the prior  calendar  year. If the Company
determines that a below-A year occurred,  the Profitability Target Percentage is
zero.

      2.17 Qualified Plan.  "Qualified Plan" means the Retirement Programs of NL
Industries, Inc. or any successor defined benefit plan maintained by the Company
which is intended to qualify under Section  401(a) of the Code. For the purposes
of the Plan,  the Qualified  Plan will be assumed to be a plan that is qualified
under Section 401(a) of the Code whether or not the Qualified Plan is covered by
a favorable determination letter issued by the Internal Revenue Service.

      If the Retirement Programs of NL Industries, Inc. are frozen or terminated
without  being  replaced by another  defined  benefit  plan,  this  Supplemental
Executive  Retirement  Plan for Executives  and Officers of NL Industries,  Inc.
shall nevertheless  continue to be operated as if an active defined benefit plan
still existed.

      2.18  Retirement  Date.  "Retirement  Date" means the date the Participant
retires under the terms of the Qualified  Plan.

      2.19 Subsidiary.  "Subsidiary"  means any  wholly-owned  subsidiary of the
Company or of any wholly-owned  subsidiary  thereof, or any other corporation or
business venture in which

                                      6

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the Company owns, directly or indirectly,  a significant  financial interest, if
the Board designates such corporation or business venture to be a Subsidiary for
the purposes of this Plan for any period of time,  and if the board of directors
(or equivalent  governing  authority) of such  corporation  or business  venture
consents to being designated as a Subsidiary.

      2.20 Supplemental Compensation Ledger.  "Supplemental Compensation Ledger"
means an appropriate record maintained by the Administrative  Committee for each
Participant  pursuant  to Section  5.1  hereof  which sets forth the name of the
Participant  and contains  separate  accounts  reflecting  (i) the amount of any
contributions  made to the Plan  under the  terms of  applicable  provisions  of
Article  Four of the Plan and (ii) the amount of Interest  Equivalents  credited
thereon  pursuant to Section 5.2 hereof.  The Supplemental  Compensation  Ledger
shall be utilized solely as a device for the measurement  and  determination  of
the  amounts  to be paid to the  Participant  under  the Plan.  A  Participant's
Supplemental Compensation Ledger shall not constitute or be treated as an escrow
or trust fund of any kind.

      2.21 Top Hat Earnings. "Top Hat Earnings" means, for each Participant, his
cumulative  earnings  for  the  calendar  year  that  exceed  the  Code  Section
401(a)(17)  limit for  qualified  pension  benefit  plans for the year.  For any
single month, Top Hat Earnings are: the calendar year's  cumulative  earnings at
the end of the month, less the Code Section  401(a)(17) limit for the year, less
the  cumulative  Top Hat Earnings for all prior months of the calendar  year. In
months in which the Code Section  401(a)(17) limit for the year has not yet been
reached, there are no Top Hat Earnings.

      2.22 Total and Permanent  Disability.  "Total and Permanent Disability" or
"Disability"  means a physical or mental condition which renders the Participant
incapable of

                                      7

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performing  the work for which he was  employed or is  qualified by training and
experience  and  which  entitles  the  Participant  to  participate  in  the  NL
Industries,  Inc. Long Term Disability Plan and/or  qualifies the Participant to
receive Social Security disability payments.




                                 ARTICLE THREE

                                ADMINISTRATION


      3.1 Composition of Administrative  Committee. The Administrative Committee
shall be the Pension and Employee  Benefits  Committee (PEBCO) of NL Industries,
Inc.,  which  is  a  committee   appointed  by  the  Management   Development  &
Compensation  (MD&C)  Committee  of the Board.  The  charter and bylaws of PEBCO
shall  govern  wherever  such  instruments  are  in  direct  conflict  with  the
provisions of this Article III. If, however,  PEBCO should cease to exist,  then
the MD&C Committee  shall  function as the  Administrative  Committee  until the
Board appoints a new Administrative Committee of at least two persons.

      Each member of the Administrative Committee shall serve at the pleasure of
the Board,  and the Board may  remove or replace a member of the  Administrative
Committee  pursuant to procedures  which shall be  established  by the Board.  A
member of the  Administrative  Committee may also be a Participant.  A member of
the  Administrative  Committee  who is  also a  Participant  shall  not  vote or
otherwise act on any matter relating solely to himself.

                                      8

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      3.2  Administration of Plan. The  Administrative  Committee shall operate,
administer,  interpret and construe the Plan. The Administrative Committee shall
have all powers  necessary or  appropriate to implement the terms and provisions
of the Plan, including the power to determine,  subject to the provisions of the
Plan,  the  Employees  who shall be eligible  to  participate  in the Plan.  The
determination  of the  Administrative  Committee as to the proper  construction,
interpretation  or  application  of any terms or provisions of the Plan shall be
final, binding, and conclusive with respect to all interested persons.

      3.3 Action by Committee.  A majority of the members of the  Administrative
Committee  shall  constitute a quorum for the  transaction of business,  and the
vote of a majority of those members  present at any meeting at which a quorum is
present  shall decide any question  brought  before the meeting and shall be the
act of the Administrative  Committee. In addition, the Administrative  Committee
may take any other  action  otherwise  proper  under the Plan by an  affirmative
vote, taken without a meeting, of a majority of its members.

      3.4  Delegation.  The  Administrative  Committee  may, in its  discretion,
delegate one or more of its duties to an officer or Employee of the Company or a
committee  composed  of  officers  and  Employees  of the  Company,  but may not
delegate  its  authority  to  construe  the Plan or to make  the  determinations
specified in Section 3.2.

      3.5 Reliance Upon Information.  The Administrative  Committee shall not be
liable for any decision  made or action taken in good faith in  connection  with
the  administration  of  the  Plan.  Without  limiting  the  generality  of  the
foregoing,  any  such  decision  made  or  action  taken  by the  Administrative
Committee in reliance upon any information  supplied to it by any officer of the
Company or any Subsidiary,  the Company's or any  Subsidiary's  legal counsel or
the

                                      9

<PAGE>



Company's or any  Subsidiary's  independent  accountants in connection  with the
administration of the Plan shall be deemed to have been taken in good faith.

      3.6  Responsibility  and  Indemnity.   No  member  of  the  Administrative
Committee shall be liable for any act done or any  determination  made hereunder
in good faith.  The Company and each  Subsidiary  hereby agrees to indemnify and
hold harmless each member of the  Administrative  Committee from and against any
and all losses, claims, damages, liabilities,  costs and expenses, including but
not limited to,  liability  for any  judgments  or  settlements  consented to in
writing by any such member of the Administrative  Committee,  which consent will
not be unreasonably  withheld,  and reasonable attorneys' fees arising out of or
in connection with or as a direct or indirect result of such member's serving on
the  Administrative  Committee,  except  only  those  losses,  claims,  damages,
liabilities,  costs and expenses, if any, arising out of, or in connection with,
or as a direct or indirect result of, the Administrative  Committee member's bad
faith,  gross  negligence  or  willful  neglect of his  duties  hereunder.  Each
affected  member of the  Administrative  Committee  shall  promptly  notify  the
Company and each  Subsidiary of any claim,  action or proceeding  for which such
member may seek indemnity.  Such indemnity is a continuing  obligation and shall
be binding on the Company and each Subsidiary and their  successors,  whether by
merger or otherwise,  and assigns. In addition, such indemnity shall survive the
resignation  or  removal  of the  Administrative  Committee  member  and/or  the
termination of the Plan.




                                      10

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                                 ARTICLE FOUR

                                 PARTICIPATION
      4.1  Eligibility  of  Employees.  Each  Employee  shall be  eligible to be
designated a participant in the Plan pursuant to Section 4.2. The Administrative
Committee may from time to time establish  additional  eligibility  requirements
for participation in the Plan.

      4.2   Designation of Participants.

            (a) Discretionary  Appointment of Participants.  The chief executive
      officer of the  Company,  in his sole  discretion  and subject only to the
      approval  of the  Board,  shall  designate  those  Employees  who shall be
      considered to be active or inactive Participants in the Plan.

            (b) Retroactive  Participation.  Designation of active participation
      for any Employee  may be made  retroactively  effective  to include  years
      preceding  the initial  Plan Year in which the  Employee is  designated  a
      Participant,  in which event the account of such active  Participant shall
      be credited  with  contributions  required  under the Plan and his account
      shall be credited  with Interest  Equivalents  required to be credited and
      shall otherwise be subject to all other terms and provisions of the Plan.

            (c) Discretionary Termination of Participation.  The chief executive
      officer of the Company shall likewise  designate any Participant who shall
      cease active  participation in the Plan for reasons other than retirement,
      death,  Disability,  or  termination  of  employment,  in which event such
      Participant shall cease to be credited with  contributions  required under
      the  Plan,  but the  account  of such  Participant  shall  continue  to be
      credited

                                      11

<PAGE>



      with Interest  Equivalents  required to be credited and shall otherwise be
      subject to all other terms and provisions of the Plan.

            For unvested  Participants,  any such  discretionary  termination of
      participation  shall not be retroactively  effective earlier than the last
      day of the preceding Plan Year. For vested  Participants,  effective April
      30,  2001,  discretionary   termination  of  participation  shall  not  be
      retroactively effective earlier than the last day of the preceding month.

            (d) CEO  Participation.  The chief executive  officer of the Company
      shall be a Participant (whether active or inactive) in the sole discretion
      of the Board,  subject only to the preceding  provisions  hereof regarding
      the effective date of his active or inactive participation.

      4.3   Notification of Participants and Former Participants.  As soon as
administratively practicable after any Employee is initially designated to be an
active Participant, the Administrative Committee shall notify such Employee that
he has been  designated to be a Participant  in the Plan.  Any Employee who is a
Participant,  but whose active  participation in the Plan has been designated to
cease (for reasons other than retirement,  death, Disability,  or termination of
employment), shall be notified as soon as administratively practicable after the
date on which such active  participation is to cease, but in no event later than
ninety (90) days after such date of his inactive  participation,  unless a later
notification date is reasonably necessary under the circumstances.

      4.4  Contributions.  An account shall be established in each Participant's
Supplemental  Compensation Ledger. For each calendar month of the Plan Year, the
amount to be  credited  for the month shall be  calculated  by  multiplying  the
Participant's Top Hat Earnings

                                      12

<PAGE>



for the month by the Profitability Target Percentage that applies for the month.
For the month in which a Participant  terminates  employment or otherwise ceases
to be eligible to continue  being a  Participant  in the Plan,  the amount to be
credited for such final month shall be based on the Participant's actual Top Hat
Earnings for that last month, whether a full or partial month.

      4.5  Special   Provisions  for  any   Employee's   Initial  Plan  Year  of
Participation.  In the case of any Participant who the Administrative  Committee
determines was  disadvantaged  as a result of the Plan's not being adopted as of
an earlier date or the Plan's not being  effective as to that  Participant as of
an earlier date, solely with respect to such Participant's  initial  designation
of participation in the Plan, any designation  pursuant to Section 4.2 shall set
forth the amount of any  contribution  credited  under the Plan with  respect to
such Participant's  initial Plan Year that is to be credited for a previous year
or for previous  months  within the then current  year,  both for the purpose of
determining  vesting in  accordance  with  Section  4.6,  and for the purpose of
determining  Interest  Equivalents  in  accordance  with  Section  5.2. Any such
amounts  credited with respect to a previous year or previous months need not be
uniformly or consistently determined and may be totally withheld with respect to
any such Participant described in the immediately preceding sentence.

      4.6  Vesting.   For  a  Determination   Date  that  is  the  date  of  the
Participant's death, Total and Permanent Disability,  Retirement Date or date of
involuntary  termination  of  employment  with the Company and all  Subsidiaries
other than for just cause,  amounts  credited under the Plan to the Supplemental
Compensation  Ledger  shall be fully  vested with  respect to such  Participant.
"Just cause" shall mean any of the following:

                                      13

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            (a) Any  act of  dishonesty,  including,  but not  limited  to,  any
      intentional  misapplication  of the Company's (or  Subsidiary's)  funds or
      other property;

            (b) The Participant's gross neglect of his duties; the Participant's
      gross  negligence  in the  performance  of his duties;  the  Participant's
      refusal to perform his duties;  or willful  disobedience of a lawful order
      or  directive  given to the  Participant  by any  superior  officer of the
      Company  (or  Subsidiary)  or  the  Board  and  within  the  scope  of the
      Participant's duties;

            (c) The Participant's  unsatisfactory performance of his duties that
      is not cured within  fifteen (15)  working  days after  written  notice is
      given  to  the  Participant  by the  Board  specifically  identifying  the
      reason(s) why the Board, in its judgment,  believes that the Participant's
      performance is unsatisfactory and what the Participant can do to cure such
      unsatisfactory performance to the full satisfaction of the Board;

            (d) The  Participant's  participation in any criminal activity or an
      activity involving moral turpitude;

            (e) The  Participant's  immoderate use of alcohol  and/or  narcotics
      which adversely affects the performance of his duties; and

            (f) The  Participant's  violation of the Company's (or Subsidiary's)
      rules  concerning  conflicts  of interest.  The  existence of "just cause"
      shall be determined by the Board in the exercise of its  discretion  after
      consultation with legal counsel of the Board's choosing.

                                      14

<PAGE>



      For any other  Determination  Date, amounts  attributable to contributions
which are credited to each account  maintained in the Supplemental  Compensation
Ledger for a Participant shall be vested as follows:

      Completed Years of Service
    with the Company or Subsidiary               Vested Percentage (%)

              Less than 5                                  0%
               5 or more                                  100%

For vesting  purposes,  years of service shall be determined  and credited under
the Plan using the same concepts as are used to determine years of service under
the Qualified  Plan. Any unvested  contributions  credited to the  Participant's
account or accounts in the  Supplemental  Compensation  Ledger  Account shall be
forfeited  upon his voluntary  termination  of  Employment.  Except as otherwise
provided in Section 8.2,  notwithstanding any other provision of the Plan to the
contrary,  should the Company or any Subsidiary  dissolve,  enter into a sale of
substantially  all of its assets, or enter into any  reorganization  incident to
which it is not the  surviving  entity,  all amounts which are  attributable  to
contributions  which  are not  already  fully  vested  and are  credited  to the
Supplemental  Compensation Ledger account or accounts maintained for the benefit
of each  Participant who is employed by the Company or the affected  Subsidiary,
whichever is  applicable,  may become fully vested as of the earlier of the date
of  closing  or the  effective  date,  whichever  may  be  applicable,  of  such
transaction, provided that the Board consents.

      4.7  Withholding.  Required tax withholding  for amounts  credited to each
vested  Participant's  account will be deducted from such  Participant's  second
payroll  of  each  month,  so that  vesting  and tax  withholding  are  properly
coordinated. Withholding taxes shall not affect the

                                      15

<PAGE>



amount credited under the Plan. If withholding laws change as to the withholding
taxability of amounts  credited under the Plan, this section will  automatically
be read as if the withholding tax changes were incorporated herein.




                                 ARTICLE FIVE

                     CREDITING OF CONTRIBUTIONS AND AWARD

                            OF INTEREST EQUIVALENTS

      5.1 Crediting of Contributions. The amount of contributions to the Plan on
behalf of a Participant  for any calendar month shall be credited to the account
maintained for the Participant in the Supplemental  Compensation  Ledger,  as of
the second payroll date of the month.

      For  the  month  during  which  a  Participant  terminates  employment  or
otherwise  ceases to be eligible to be a Participant  in the Plan, the amount of
contributions  to the Plan on behalf of such Participant for that final calendar
month or partial calendar month shall be credited to the account  maintained for
the Participant as of the last day of his or her participation in the Plan.

      5.2 Interest  Equivalents.  For  Participants  with monthly  determination
dates,  contributions  are not credited  with  interest.  The  remainder of this
Section 5.2 applies to unvested Participants only.

                                      16

<PAGE>



      Contributions   are  credited   with   interest   monthly.   Each  monthly
contribution is assumed, for the purpose of interest calculations,  to have been
made on the first day of the month for which the contribution is credited;  that
is, contributions start earning interest retroactively to the first of the month
for which the contribution is credited to the Plan, even though that credit does
not take place until the end of the month.

      The interest  credited each month is  one-twelfth  of the Interest  Credit
Rate in effect for that Plan Year, times the amount of principle  contributed to
the Plan during the  current  month,  resulting  in simple  interest  for months
during any current  Plan Year.  No interest is credited for any month on amounts
previously credited to the account as interest during the Plan Year.

      In addition,  for  undistributed  amounts  from prior  years,  interest is
credited each month,  at a rate of  one-twelfth  of the Interest  Credit Rate in
effect  for that Plan  Year,  times the total  amount  credited  to the  account
(interest  plus  principal)  as of the last day of the Plan Year  preceding  the
current Plan Year,  resulting in annually  compounded interest for periods prior
to any current Plan Year.

      For  the  month  during  which  a  Participant  terminates  employment  or
experiences  any  other  Determination  Date on  other  than the last day of the
month, Interest Equivalents for that last month will be calculated on a pro rata
basis, so that the account continues to be credited with interest for as long as
the individual remains a Participant.

      Interest Equivalents for unvested Participants continue accruing until the
account is distributed; however, interest will not be compounded for any payment
for which the period between the Determination Date and the payment date crosses
over a year end.

                                      17

<PAGE>



      5.3 Determination of Account. The total amount credited to a Participant's
account  maintained in the  Supplemental  Compensation  Ledger with respect to a
given calendar month shall consist of (i) the aggregate  amount of contributions
credited to the  Participant's  account  pursuant to Sections 4.4 and 4.5,  plus
(ii) the  aggregate  amount of Interest  Equivalents  credited  to such  account
pursuant  to  Section  5.2  hereof,   minus  (iii)  the   aggregate   amount  of
distributions, if any, made from such accounts pursuant to Article Six.




                                  ARTICLE SIX

                                 DISTRIBUTIONS

      6.1  "Parachute"  Effect on Amount  Distributed.  Any amount that is to be
distributed to a Participant  or Beneficiary  pursuant to this Article Six shall
be fixed and  determined  as of each  Determination  Date.  In addition,  if any
portion of the Participant's benefit is an "excess parachute payment" subject to
additional tax under Section 4999 of the Code, such Participant shall receive an
additional benefit (the "Parachute Gross-up") which shall be equal to the amount
of the  additional  tax under  Section  4999 of the Code divided by the Gross-up
Percentage. The Gross-up Percentage is the difference between the number one (1)
and the rate imposed by Section 4999 of the Code.  (In the year 2001,  that rate
is 20%)

      If the tax imposed by Section  4999 of the Code  changes,  (by a change in
the required  formula or rate or in the  applicability  of the tax), the formula
described in the preceding

                                      18

<PAGE>



paragraph  will  automatically  change to reflect the revised  calculation  of a
Parachute  Gross-up.

      The  Parachute  Gross-up  payment  shall be made at the  same  time as any
payment that constitutes an "excess parachute payment" is made to Participant.

      6.2  Determination  Date. The  undistributed  amount  credited to a vested
Participant's account maintained in the Supplemental  Compensation Ledger shall,
upon each  Determination  Date,  become  distributable  in  accordance  with the
provisions of Section 6.3 hereof.

      6.3 Form and Date of  Distributions.  Whenever  an  amount  credited  to a
Participant's account maintained in the Supplemental Compensation Ledger becomes
distributable,  such amount shall be distributed to such Participant in the form
of a single lump sum payment.  The distribution  shall be paid by the Company or
Subsidiary,  whichever  is  applicable.  The  distribution  shall be paid on the
Determination  Date,  unless later  payment is  reasonably  necessary  under the
circumstances. For vested Participants,  payments may be made on the date of the
Participant's  second payroll of each month,  if that second payroll is not more
than seven days prior to the Determination Date. The first distribution to newly
vested Participant shall be made on the second payroll of the month during which
such Participant became vested, if the vesting occurs before that second payroll
date,  otherwise  on the second  payroll of the  following  month.

      6.4  Payor  of  Benefits.  Subject  to the  following  provisions  hereof,
benefits  payable  under  the  Plan  with  respect  to a  Participant's  account
maintained   under  the  Supplemental   Compensation   Ledger  with  respect  to
contributions  credited  under  the Plan,  plus  Interest  Equivalents  credited
pursuant to Section 5.2,  shall be the  obligation of and paid by the Company or
any  Subsidiary,  whichever  may be  applicable,  or any  successor  pursuant to
Section 8.2, which

                                      19

<PAGE>



employed the  Participant  at the time of the effective  date the  contributions
were  credited.  Adoption  and  maintenance  of the Plan by the  Company and any
Subsidiary shall not create a joint venture or partnership relationship among or
between such  persons for purposes of payment of benefits  under the Plan or for
any other purpose.

      6.5 Claims and Appeals Procedures. When a benefit is due and payable under
the Plan, the Administrative Committee may direct payment. If the Administrative
Committee does not so direct,  the Participant or beneficiary may submit a claim
to the human  resources  department of the Company or  Subsidiary.  Under normal
circumstances,  a final  decision on a claimant's  request for benefits shall be
made within  ninety (90) days after  receipt of the claim.  However,  if special
circumstances  require an extension of time to process a claim, a final decision
may be deferred up to one hundred  eighty (180) days after  receipt of the claim
if prior to the end of the  initial  ninety  (90) day  period,  the  claimant is
furnished  written notice of the special  circumstances  requiring the extension
and the anticipated date of a final decision. If the claim is denied, within the
applicable  period of time set out above,  the claimant  shall  receive  written
notification  of the denial,  which notice shall set forth the specific  reasons
for the denial,  the relevant Plan provisions on which the denial is based,  and
the claim review  procedure  under the Plan. In the event that a claim is denied
or in the event that no action is taken on the claim within the  above-described
period(s) of time, the following procedure shall be used:

            (a) First,  in the event that the claimant  does not timely  receive
      the  above-described  written  notification,  the  claimant's  request for
      benefits  shall be deemed to be denied as of the last day of the  relevant
      period and the claimant shall

                                      20

<PAGE>



      be entitled to a full review of his claim in accordance with the following
      provisions of this Section.

            (b)  Second,  a claimant  is  entitled to a full review of his claim
      after actual or constructive notification of a denial. A claimant desiring
      a review  must  make a written  request  to the  Administrative  Committee
      requesting such a review, which may include whatever comments or arguments
      that the claimant wishes to submit.  Incident to the review,  the claimant
      may represent himself or appoint a representative to do so, and shall have
      the  right  to  inspect  all  documents   pertaining  to  the  issue.  The
      Administrative  Committee,  in  its  sole  discretion,  may  schedule  any
      meeting(s) with the claimant and/or the claimant's  representative that it
      deems  necessary or  appropriate to facilitate or expedite its review of a
      denied claim.

A request for a review must be filed with the  Administrative  Committee  within
ninety  (90) days after the denial of the claim for  benefits  was  actually  or
constructively  received by the claimant.  If no request is received  within the
90-day time limit, the denial of benefits will be final.  However,  if a request
for review of a denied claim is timely filed, the Administrative  Committee must
render its  decision  under normal  circumstances  within sixty (60) days of its
receipt of the request for review. In special  circumstances the decision may be
delayed if, prior to expiration of the initial  60-day  period,  the claimant is
notified of the  extension,  but must in any event be rendered no later than one
hundred  twenty  (120) days after  receipt of the  request.  If the  decision on
review is not furnished to the claimant within the applicable time period(s) set
above,  the claim shall be deemed denied on the last day of the relevant period.
All decisions of the

                                      21

<PAGE>



Administrative  Committee shall be in writing and shall include specific reasons
for  whatever  action  has been  taken,  and the Plan  provisions  on which  the
decision is based.

      Any changes to the law governing  timing  requirements  for the claims and
appeal  process of this Plan,  will  automatically  change the timings stated in
this Section 6.5.

      6.6 Facility of Payments. If the Administrative  Committee determines that
any  person  entitled  to  payments  under the Plan is  physically  or  mentally
incompetent  to handle  his or her own  financial  affairs,  the  Company or any
Subsidiary,  whichever may be  applicable,  shall make such payment to the legal
guardian or other personal representative of such person for the use and benefit
of such  person.  If the  Administrative  Committee  for any reason is unable to
determine with  reasonable  certainty the proper person to pay as legal guardian
or personal  representative,  the Company or Subsidiary shall pay the amount due
hereunder into a court of competent  jurisdiction in an interpleader  proceeding
for the purpose of being directed by such court as to the proper  disposition of
the amount due  hereunder.  Any such  payment to a legal  guardian  or  personal
representative   shall  fully  discharge  the  Company's   and/or   Subsidiary's
obligations hereunder.

      6.7 Beneficiary  Designations.  Each person  becoming a Participant  shall
file  with  the   Administrative   Committee  a  designation   of  one  or  more
Beneficiaries to whom  distribution  otherwise due the Participant shall be made
in the event of his death while in the Employment of the Company or a Subsidiary
or after termination of Employment but prior to the complete distribution of the
amount in his accounts in the Supplemental Compensation Ledger. Such designation
shall be effective when received in writing by the Administrative Committee. The

                                      22

<PAGE>



Participant  may from time to time revoke or change any such  designation of the
Beneficiary by written document delivered to the Administrative Committee.

      If  there  is no  valid  designation  of  Beneficiary  on  file  with  the
Administrative  Committee at the time of the  Participant's  death, or if all of
the Beneficiaries  designated therein shall have all predeceased the Participant
or  otherwise  ceased to  exist,  the  Beneficiary  shall  be,  and any  payment
hereunder shall be made to, the Participant's  spouse, if he or she survives the
Participant, otherwise to the Participant's estate.

      If the Beneficiary, whether under a valid beneficiary designation or under
the preceding  sentence,  shall survive the Participant but die before receiving
payment  hereunder,  the benefits which would have been paid to the  Beneficiary
had he or  she  lived  shall,  unless  the  Participant's  designation  provided
otherwise, be distributed to the Beneficiary's estate.




                                 ARTICLE SEVEN

                            RIGHTS OF PARTICIPANTS

      7.1 Periodic  Statement to Participants.  As soon as practicable after the
end of each calendar  quarter,  or at such other time  determined to be suitable
(but not less often than yearly), the Administrative Committee shall cause to be
prepared and delivered to each Participant a written statement showing as of the
end of such calendar quarter the following information:

                                      23

<PAGE>



            (a) The balance, if any, credited to his account in the Supplemental
      Compensation Ledger as of the end of the preceding calendar quarter;

            (b) The  amount of  contributions  credited  to his  account  in the
      Supplemental Compensation Ledger for the calendar quarter;

            (c) The  adjustments  to his  account to reflect  the  crediting  of
      Interest  Equivalents  and any  distributions  made to the Participant for
      such calendar quarter; and

            (d) The new  balance  credited  to his account as of the end of such
      calendar quarter.

Notwithstanding the above provisions of this Section 7.1, effective May 1, 2001,
no periodic  statements  shall be required  for any vested  Participant  for any
month  that  includes  a  Determination  Date  after  the  Participant's   first
Determination  Date,  unless  the  Participant  makes a  written  request  for a
statement,  in which case the statement  shall be issued within 30 days of PEBCO
receiving  the  written  request,  unless a longer  time is  needed to issue the
statement due to circumstances not in PEBCO's control.

      7.2   Limitation of Rights.  Nothing in this Plan shall be construed to:

            (a)  Give any  individual  who is  employed  by the  Company  or any
      Subsidiary  any right to be a Participant in the Plan unless or until such
      person shall become an Employee and be properly  appointed a  Participant;

            (b) Give a  Participant  any rights  whatsoever  with respect to the
      contributions,  or  Interest  Equivalents  credited  in  the  Supplemental
      Compensation  Ledger until such  contributions  and  Interest  Equivalents
      become distributable in accordance with the terms of the Plan;

                                      24

<PAGE>



            (c) Limit in any way the right of the Company or any  Subsidiary  to
      terminate a Participant's Employment with the Company or any Subsidiary at
      any  time;

            (d) Except as otherwise  provided under the Plan, give a Participant
      or any other person any  interest in any fund or in any specific  asset or
      assets of the Company or any  Subsidiary;

            (e) Give a  Participant  or any other person any interests or rights
      other than those of any unsecured  general  creditor of the Company or any
      Subsidiary; or

            (f) Be  evidence  of any  agreement  or  understanding,  express  or
      implied,  that the Company or any Subsidiary  will employ a Participant in
      any particular  position or at any particular  rate of  remuneration.

      7.3  Nonalienation of Benefits.  No right or benefit under this Plan shall
be subject to anticipation,  alienation, sale, assignment,  pledge, encumbrance,
or charge,  and any  attempt to  anticipate,  alienate,  sell,  assign,  pledge,
encumber,  or charge the same will be void. No right or benefit  hereunder shall
in any manner be liable for or subject to any debts, contracts,  liabilities, or
torts of the person entitled to such benefits. If any Participant or Beneficiary
hereunder  shall become  bankrupt or attempt to  anticipate,  alienate,  assign,
sell,  pledge,  encumber,  or charge any right or benefit  hereunder,  or if any
creditor shall attempt to subject the same to a writ of garnishment, attachment,
execution,  sequestration,  or any other form of process or involuntary  lien or
seizure,   then  such  right  or  benefit  shall,   in  the  discretion  of  the
Administrative  Committee,  either cease and terminate  absolutely or be held by
the Company or any  Subsidiary  for the sole benefit of the  Participant  or the
Beneficiary, his spouse, children, or other dependents, or any of them in

                                      25

<PAGE>



such manner and in such  proportion as the  Administrative  Committee shall deem
proper, free and clear of the claims of any other part whatsoever.

      7.4  Prerequisites  to Benefits.  No Participant,  nor any person claiming
through a  Participant,  shall have any right or  interest  in the Plan,  or any
benefits hereunder,  unless and until all the terms, conditions,  and provisions
of the Plan which affect such  Participant  or such other person shall have been
complied with as specified herein.




                                 ARTICLE EIGHT

                                 MISCELLANEOUS

      8.1 Amendment or Termination of the Plan. The Board may amend or terminate
the Plan at any time.  Provided,  however,  the  provisions of Section 8.2 which
provides for payment of fully vested  benefits upon  termination of the Plan may
not be amended without the consent of at least  two-thirds of all  Participants.
For the purpose of the immediately  preceding  sentence,  each Participant shall
have one vote. Any such amendment or termination shall not,  however,  adversely
affect the rights of any Participant or Beneficiary to any amounts then standing
to his  credit in his  account  in the  Supplemental  Compensation  Ledger.  For
purposes of this Section 8.1, the primary Beneficiary of a deceased  Participant
has the rights of a  Participant  to be counted in  determining  the  two-thirds
number and to vote.

                                      26

<PAGE>



      8.2  Powers of the  Company.  The  existence  of  outstanding  and  unpaid
benefits  under the Plan  shall not  affect in any way the right or power of the
Company   or  any   Subsidiary   to   make   or   authorize   any   adjustments,
recapitalization,   reorganization   or  other   changes  in  the  Company's  or
Subsidiary's   capital   structure  or  in  its  business,   or  any  merger  or
consolidation  of  the  Company  or  any  Subsidiary,  or any  issue  of  bonds,
debentures,  common or preferred  stock,  if applicable,  or the  dissolution or
liquidation of the Company or any Subsidiary,  or any sale or transfer of all or
any part of its assets or business, or any other act or proceeding, whether of a
similar character or otherwise.

      Should the Company or any Subsidiary  (or any successor  thereto) elect to
dissolve,  enter into a sale of its  assets,  or enter  into any  reorganization
incident  to which it is not the  surviving  entity,  unless  the  surviving  or
successor  entity  shall  formally  agree to  assume  the Plan,  the Plan  shall
terminate  with  respect to the  Company  or any  Subsidiary  (or any  successor
thereto) on the earlier of the date of closing or the effective date,  whichever
may be  applicable,  of such  transaction  and the full amount of any  remaining
unpaid  benefits  credited  to the  Supplemental  Compensation  Ledger  of  each
Participant, whether or not vested, shall become fully vested and nonforfeitable
if the Board approves in accordance  with Section 4.6, and then all fully vested
amounts shall be immediately paid to each such Participant (or Beneficiary) in a
single lump sum payment of cash.

      8.3 Waiver. A waiver by the Company,  any Subsidiary or any Participant of
any of the terms or conditions contained in the Plan shall not be construed as a
general  waiver by such party of any other terms or conditions  contained in the
Plan, and, except to the extent prohibited

                                      27

<PAGE>



by applicable law, the waiving party shall be free to reinstate any such term or
condition previously waived by giving written notice to the other party.

      8.4  Separability.  If any  provision or  provisions  of the Plan shall be
found to be invalid,  illegal,  or unenforceable  in any respect,  such invalid,
illegal, or unenforceable provision shall be severed from the Plan and shall not
affect the validity, legality and enforceability of the remainder of the Plan.

      8.5 Gender,  Tense and Headings.  Whenever the context requires,  words of
the  masculine  gender used herein shall  include the  feminine and neuter,  and
words used in the singular  shall  include the plural.  Headings of Articles and
Sections,  as used herein, are inserted solely for convenience and reference and
constitute no part of the Plan.

      8.6  Governing  Law. The Plan shall be subject to and governed by the laws
of the State of Texas and, to the extent  applicable,  the  Employee  Retirement
Income  Security Act of 1974, as amended,  and any other  applicable laws of the
United States.

      8.7 Notice.  Any notice  required or permitted to be given under this Plan
shall be sufficient if in writing and hand  delivered,  or sent by registered or
certified mail, to the Administrative  Committee,  Participant or Beneficiary at
the address last furnished by such person.  Such notice shall be deemed given as
of the date of delivery  or, if delivery is made by mail,  as of the dates shown
on the postmark on the receipts for registration or certification.

      8.8  Incorporation of Certain  Provisions of Participants'  Contracts with
the Company.  If any contract  between a Participant and the Company  includes a
specific definition of just cause for termination of employment,  of disability,
or of involuntary termination of

                                      28

<PAGE>


employment,  such definition is hereby  incorporated  into the Plan by reference
and  shall  override  any  conflicting  definitions  in  the  Plan  as  to  that
Participant.

      8.9 Effective Date. The Plan was initially effective January 1, 1991. This
amendment  and  restatement  of the Plan is  effective  May 1, 2001.

      IN WITNESS  WHEREOF,  the  Company has caused  this  amended and  restated
Agreement to be executed  this 8th day of March,  2002,  to be effective the 1st
day of May, 2001.

                                          NL INDUSTRIES, INC.

ATTEST:

                                          By  /s/Robert D. Hardy
                                          ----------------------

                                          (Title:PEBCO CHAIRMAN)
David B. Garten
------------------------------
(Title:PEBCO SECRETARY)


                                      29

</TEXT>
</DOCUMENT>
