Exhibit 10.5

 

LONE STAR TECHNOLOGIES, INC.
FORM OF EMPLOYEE RESTRICTED STOCK AGREEMENT

 

Restricted Stock
Granted Pursuant to the
2004 Long-Term Incentive Plan

 

1.                                       Date of Grant.  This grant of
restricted stock is made on [          ], 20[    ] (the “Date of Grant”)
pursuant to and subject to the terms hereof and all of the terms and conditions
of the 2004 Long-Term Incentive Plan (the “Plan”) of Lone Star Technologies,
Inc. (“LST”)

 

2.                                       Grant.  LST hereby grants to
[                  ] (the “Participant”) [          ] shares (the “Shares”) of
Common Stock, $1.00 par value per share, of LST (“Common Stock”) subject to the
restrictions and upon the terms and conditions hereinafter stated.

 

3.                                       Restrictions on Transferability.  The
Shares shall not be sold, assigned, transferred, disposed of, pledged or
otherwise hypothecated by Participant other than to LST until they are vested in
accordance with the terms hereof.

 

4.                                       General and Accelerated Vesting. 
Unless vesting is accelerated in accordance with this Section or Section 5
hereof, Participant’s ownership of the Shares not previously forfeited shall
vest with respect to [            ] shares on each of the dates which are 24
months, 36 months, 48 months, 60 months, and 72 months, respectively, after the
Date of Grant.  Non-vested Shares not previously forfeited shall immediately
vest in Participant if Participant’s employment terminates by reason of
Participant’s death, retirement after age 65 or retirement with the consent of
LST (subject, in the case of retirement, to such other conditions as LST may
impose).  In addition, if there is a Change in Control (within the meaning of
Section 9(d) of the Plan) and, within two years after the Change in Control,
Participant’s employment is terminated by the Company without Cause (within the
meaning of Section 5(e)(ii) of the Plan) or is terminated by Participant as a
result of a reduction of his compensation or any material change in location,
authority, duties or other working conditions of his employment, all of the
Shares not then vested and not previously forfeited shall immediately vest in
Participant upon the date of such termination.

 

5.                                       Performance-Based Vesting.  Non-vested
Shares not previously forfeited will become vested in accordance with the
performance matrix set forth in Schedule A annexed hereto. For the purposes of
Schedule A, the “200[X] Objective” is the income before taxes (“IBT”) of LST
presented in its Base Action Plan (“BAP”) for 200[X]; the “200[Y] Objective” is
LST’s IBT presented in its 200[Y] BAP; and the “2004 Objective Shortfall” is the
excess, if any, of the 200[X] Objective over LST’s IBT for the year ended
December 31, 200[X]. If any Shares become vested under Row E of Schedule A, then
Row D shall become inapplicable. If any Shares become vested under this Section
5, then Section 4 shall cease to apply and future vesting, if any, will be
determined under this Section 5 (subject to acceleration under the second and
third sentences of Section 4 above).  Determinations as to whether the 200[X]
Objective or

 

1

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

 

the 200[Y] Objective has been achieved, or whether the 200[Y] IBT equals or
exceeds the sum of the 200[Y] Objective and the 200[X] Objective Shortfall,
shall be made by the Human Resources Committee based on audited financial
statements for the appropriate year.  Any vesting of Shares for a particular
year shall become effective as of the date of the applicable determination by
the Human Resources Committee of LST (the “Human Resources Committee”).  Any
decision of the Human Resources Committee as to any question with respect to the
Shares granted hereunder shall be final and conclusive on all persons.

 

6.                                       Forfeiture. The Participant shall
forfeit any unvested Shares upon the termination of the Participant’s employment
with LST (other than a termination of employment that results in the vesting of
Participant’s Shares pursuant to the provisions hereof).

 

7.                                       Stock Certificates.  LST shall retain
physical possession of the certificate(s) evidencing the Shares until the Shares
become vested or the Shares are forfeited. Participant shall deliver to LST
stock powers, endorsed in blank, relating to the Shares as soon as practical
after the Date of Grant.

 

8.                                       Voting and Dividends.  All voting
rights with respect to the Shares shall be exercisable by Participant
notwithstanding the restrictions imposed on the Shares herein.  Any cash
dividends paid on the Shares shall be remitted to Participant, subject to
applicable withholding.  Stock distributed in connection with a stock split or
stock dividend with respect to the Shares shall be subject to the restrictions
and risk of forfeiture to the same extent as the Shares.

 

9.                                       Tax Withholding.  When the restrictions
imposed on any of the Shares lapse, the Participant shall pay to LST in cash, or
in Shares, or make other arrangements satisfactory to LST regarding the payment
of, any federal, state or local taxes required by law to be withheld with
respect to the Shares, and LST and its subsidiaries shall, to the extent
permitted by law, have the right to deduct from any payment otherwise due to
Participant any federal, state or local tax required by law to be withheld with
respect to the Shares. Notwithstanding the foregoing, if Participant elects,
within 30 days of the Date of Grant, to include in taxable income the fair
market value of the Shares, Participant shall promptly pay to LST in cash any
federal, state or local taxes required to be withheld with respect to the
Shares.

 

10.                                 Rights of Participant.  Nothing herein
contained shall confer on Participant any right with respect to the continuation
of employment or interfere with the right of LST to terminate such employment.

 

11.                                 Provisions of the Plan Control. This
restricted stock grant is subject to all the terms, conditions and provisions of
the Plan, a copy which has been furnished or made available to Participant, and
to such rules, regulations and interpretations as may be established or made by
the Human Resources Committee acting within the scope of its authority and
responsibility under the Plan. The applicable provisions of the Plan shall
govern in any situation where this instrument is silent or where the applicable
provisions of this instrument are contrary to or not reconcilable with such Plan
provisions.

 

2

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

 

12.                                 Miscellaneous.  LST shall have the right to
offset against its obligation to deliver any of the Shares any outstanding
amounts owed by Participant to LST at the time those Shares would otherwise be
delivered. This restricted stock grant shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to its
principles of conflict of laws. The terms of this award may not be amended,
except as provided in the Plan or by a written instrument executed by LST and
Participant.

 

 

 

LONE STAR TECHNOLOGIES, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

3

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