Exhibit
10.1


LONE STAR
TECHNOLOGIES, INC. 

FORM OF STRATEGIC INCENTIVE PLAN PARTICIPANT

PERFORMANCE-BASED RESTRICTED STOCK AGREEMENT


PERFORMANCE-BASED
RESTRICTED STOCK

GRANTED PURSUANT TO THE

2004 LONG-TERM INCENTIVE PLAN


Section 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”).


Section 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.


Section 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.


Section 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 on the date which
is 60 months after the Date of Grant provided LST had average income before
taxes from continuing operations (“IBT”) of more
than zero for the five calendar year period ending on the December 31
immediately preceding the date which is 60 months 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 LST or the successor employer 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.


Section 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. Years 1 through 6 shall refer to six successive
fiscal years of LST, and Year 1 shall refer to the fiscal year of LST which
includes the Date of Grant.  For the
purposes of Schedule A, the “Year 1 Objective”
is a goal (an “IBT Goal”) approved by the Human
Resources Committee of LST (the “Human Resources Committee”)
with respect to the IBT of LST, which IBT Goal relates to Year 1; the “Year 2 Objective” is the IBT Goal for Year 2; the “Year 3 Objective” is the IBT Goal for Year 3; the “Year 1 Objective Shortfall” is the excess, if any, of the
Year 1 



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Objective over LST’s IBT for Year 1; and the “Year 2 Objective Shortfall” is the excess, if any, of the
Year 2 Objective over LST’s IBT for Year 2.  If any Shares become vested under Rows I or J
of Schedule A, then Rows C and G shall become inapplicable.  If any Shares become vested under Rows K or L
of Schedule A, then Rows D and F 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 Year 1 Objective, Year 2 Objective or
Year 3 Objective has been achieved, whether the Year 2 IBT equals or exceeds
the sum of the Year 2 Objective and the Year 1 Objective Shortfall or whether
the Year 3 IBT equals or exceeds the sum of the Year 3 Objective and the Year 2
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.  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.


Section 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).


Section 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.


Section 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.


Section 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.


Section
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 or LST’s shareholders, as applicable, to
terminate such employment.



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Section 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.


Section
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:

  	
   

  	
   

  
					



 



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SCHEDULE A


	
   

  	
   

  	
  Achievement

  	
   

  	
  Year 2

  	
   

  	
  Year 3

  	
   

  	
  Year 4

  	
   

  	
  Year 5

  	
   

  	
  Year 6(1)

  
	
  A

  	
   

  	
  None of Year 1
  Objective, Year 2 Objective or Year 3 Objective achieved.

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  100%

  
	
  B

  	
   

  	
  Year 1 Objective
  achieved but neither Year 2 Objective nor Year 3 Objective achieved.

  	
   

  	
  331⁄3%

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  662⁄3%

  
	
  C

  	
   

  	
  Year 2 Objective
  achieved but neither Year 1 Objective nor Year 3 Objective achieved.

  	
   

  	
  0

  	
   

  	
  331⁄3%

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  662⁄3%

  
	
  D

  	
   

  	
  Year 3 Objective
  achieved but neither Year 1 Objective nor Year 2 Objective achieved.

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  331⁄3%

  	
   

  	
  0

  	
   

  	
  662⁄3%

  
	
  E

  	
   

  	
  Both Year 1 Objective
  and Year 2 Objective achieved but Year 3 Objective not achieved.

  	
   

  	
  331⁄3%

  	
   

  	
  331⁄3%

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  331⁄3%

  
	
  F

  	
   

  	
  Both Year 1 Objective
  and Year 3 Objective achieved but Year 2 Objective not achieved.

  	
   

  	
  331⁄3%

  	
   

  	
  0

  	
   

  	
  331⁄3%

  	
   

  	
  0

  	
   

  	
  331⁄3%

  
	
  G

  	
   

  	
  Both Year 2 Objective
  and Year 3 Objective achieved but Year 1 Objective not achieved.

  	
   

  	
  0

  	
   

  	
  331⁄3%

  	
   

  	
  331⁄3%

  	
   

  	
  0

  	
   

  	
  331⁄3%

  
	
  H

  	
   

  	
  Each of Year 1, Year 2
  and Year 3 Objectives achieved.

  	
   

  	
  331⁄3%

  	
   

  	
  331⁄3%

  	
   

  	
  331⁄3%

  	
   

  	
  —

  	
   

  	
  —

  
	
  I

  	
   

  	
  Year 1 Objective not
  achieved but Year 2 IBT equals or exceeds sum of (i) Year 2 Objective
  and (ii) Year 1 Objective Shortfall. Year 3 Objective not achieved.

  	
   

  	
  0

  	
   

  	
  662⁄3%

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  331⁄3%

  
	
  J

  	
   

  	
  Year 1 Objective not
  achieved but Year 2 IBT equals or exceeds sum of (i) Year 2 Objective
  and (ii) Year 1 Objective Shortfall. Year 3 Objective achieved.

  	
   

  	
  0

  	
   

  	
  662⁄3%

  	
   

  	
  331⁄3%

  	
   

  	
  —

  	
   

  	
  —

  
	
  K

  	
   

  	
  Year 1 Objective not
  achieved. Year 2 Objective not achieved but Year 3 IBT equals or exceeds sum
  of (i) Year 3 Objective and (ii) Year 2 Objective Shortfall.

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  662⁄3%

  	
   

  	
  0

  	
   

  	
  331⁄3%

  
	
  L

  	
   

  	
  Year 1 Objective
  achieved. Year 2 Objective not achieved but Year 3 IBT equals or exceeds sum
  of (i) Year 3 Objective and (ii) Year 2 Objective Shortfall.

  	
   

  	
  331⁄3%

  	
   

  	
  0

  	
   

  	
  662⁄3%

  	
   

  	
  —

  	
   

  	
  —

  







(1)             60
months after the Date of Grant subject to (i) Participant’s continuing
employment with LST in accordance with Section 6 and (ii) LST having average
IBT of more than zero for Years 1 through 5, inclusive.



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