EXHIBIT 10.3


LONE STAR TECHNOLOGIES, INC. 

FORM OF DIRECTOR RESTRICTED STOCK UNIT AWARD


Restricted Stock Unit Award

Granted Pursuant to the

2004 Long-Term Incentive Plan


RESTRICTED STOCK UNIT
AWARD granted               ,
20          (the “Date of Grant”) by Lone Star Technologies, Inc. (“LST”) to               
(“Recipient”) pursuant to LST’s 2004
Long-Term Incentive Plan (the “Plan”).


1.             Grant of Restricted Stock Units. 
LST hereby grants to the Recipient a total of               
restricted stock units (“RSUs”), each
representing the right to receive one share of Common Stock, $1.00 par value,
of LST (“Common Stock”) at a price per share of $              ,
upon the terms and conditions hereinafter stated.


2.             Vesting and
Forfeiture.


(a)           General.  Except as specifically provided herein, this RSU award will vest on the date
which is 72 months after the Date of Grant, subject to the Recipient’s
continuing service as a director of LST (“service”).


(b)           Acceleration of Vesting Upon Involuntary
Termination of Service.  Non-vested RSUs not previously
forfeited will become fully vested if, before the sixth anniversary of the Date
of Grant, (a) the Recipient’s service terminates by reason of the Recipient’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), or (b)
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, the Recipient’s service
terminates by reason of his removal without Cause (within the meaning of
Section 5(e)(ii) of the Plan) or his failure to be reelected or nominated for
reelection without Cause.


(c)           Performance-Based Vesting. 
Non-vested RSUs not previously forfeited will become vested in
accordance with the performance matrix set forth in Schedule A annexed
hereto.  Years 1 through 7 shall refer to
seven 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 income before taxes (“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 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 RSUs
become vested under Rows I or J of Schedule A, then Rows C and G shall become
inapplicable.  If any RSUs become vested
under Rows K or L of Schedule A, then Rows D and F shall become inapplicable.  If any RSUs become vested under this Section
2(c), then Sections 2(a) and 2(b) shall cease to apply and future vesting, if
any, will be determined under this Section 2(c) (subject to acceleration under
Section 2(b) above).  Determinations as
to 


 


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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 a RSU 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 RSUs granted hereunder shall be final and conclusive on all
persons.


(d)           Forfeiture. The Recipient shall forfeit any unvested RSUs upon the
termination of the Recipient’s service with LST (other than a termination of
service that results in the vesting of Recipient’s RSUs pursuant to Section
2(b) hereof).


3.             Issuance and
Delivery of Shares. Vested RSUs will be converted into shares of Common
Stock and a certificate for such shares registered in the name of the Recipient
will be delivered by LST to the Recipient on or as soon as practicable after
the later of (a) the date such RSUs vest and (b) the specified
delivery date(s) or event elected by the Recipient in an election made within
60 days of the Date of Grant and in accordance with Section 409A of the
Internal Revenue Code of 1986; provided, however, if the Recipient’s service
terminates on or after the date such RSUs vest and before any specified
delivery date(s) or event elected by the Recipient, the delivery of such shares
shall be made on or as soon as practicable after the date of service
termination.  A Recipient may, with the
approval of the Human Resources Committee, make prospective changes to the
Recipient’s delivery date election, subject to the timing and other
requirements applicable to subsequent deferral elections under Section 409A of
the Internal Revenue Code, including any applicable transition rules with
respect to pre-2007 deferrals.


4.             Withholding.
The delivery of shares of Common Stock represented by RSUs is conditioned on
the Recipient’s payment of the amount (if any) deemed necessary by LST to enable
it to satisfy any income tax withholding obligations attributable to the
issuance of such shares (unless other arrangements acceptable to LST are made
for the satisfaction of such withholding obligations).


5.             Transferability. The RSUs are not assignable or
transferable other than to a beneficiary designated to receive them upon the
Recipient’s death in a manner acceptable to LST or by will or the laws of
descent and distribution, and any attempt by the Recipient or any other person
claiming against, through or under the Recipient to cause any of the RSUs to be
transferred or assigned in any manner and for any purpose (other than as
expressly permitted by this instrument or the Plan) will be null and void and
without effect upon LST, the Recipient and any other person.


6.             Rights of
Recipient. Nothing herein contained shall confer on the Recipient any right
with respect to the continuation of directorship or employment or interfere
with the right of LST to terminate such directorship or the right of LST or any
subsidiary of LST to terminate such employment or, except as to shares actually
issued, confer any rights as a shareholder upon the holder hereof.


7.             Provisions of
the Plan Control. This RSU award is subject to all the terms, conditions
and provisions of the Plan, a copy which has been furnished or made available
to the Recipient, and to such rules, regulations and interpretations as may be
established or made by the


 


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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.


8.             Miscellaneous.
LST may affix to certificates representing shares issued pursuant to this
instrument any legend that LST determines to be necessary or advisable to
reflect any restrictions to which the shares may be subject, whether by
agreement or otherwise. LST may advise the transfer agent to place a stop order
against any legended shares. LST shall have the right to offset against its
obligation to issue and deliver shares under this instrument any outstanding
amounts owed by the Recipient to LST at the time those shares would otherwise
be issued and delivered. This RSU award 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
the Recipient.


LONE STAR TECHNOLOGIES, INC.


 


 


 


	
  By:

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
				



 


 


 


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SCHEDULE
A


	
   

  	
   

  	
  Achievement

  	
   

  	
  Year 2

  	
   

  	
  Year 3

  	
   

  	
  Year 4

  	
   

  	
  Year 5

  	
   

  	
  Year 6

  	
   

  	
  Year 7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A

  	
   

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

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B

  	
   

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

  	
   

  	
  33
  1/3

  	
  %

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  66
  2/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C

  	
   

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

  	
   

  	
  0

  	
   

  	
  33
  1/3

  	
  %

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  66
  2/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D

  	
   

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

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  33
  1/3

  	
  %

  	
  0

  	
   

  	
  0

  	
   

  	
  66
  2/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E

  	
   

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

  	
   

  	
  33
  1/3

  	
  %

  	
  33
  1/3

  	
  %

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  33
  1/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F

  	
   

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

  	
   

  	
  33
  1/3

  	
  %

  	
  0

  	
   

  	
  33
  1/3

  	
  %

  	
  0

  	
   

  	
  0

  	
   

  	
  33
  1/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  G

  	
   

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

  	
   

  	
  0

  	
   

  	
  33
  1/3

  	
  %

  	
  33
  1/3

  	
  %

  	
  0

  	
   

  	
  0

  	
   

  	
  33
  1/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H

  	
   

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

  	
   

  	
  33
  1/3

  	
  %

  	
  33
  1/3

  	
  %

  	
  33
  1/3

  	
  %

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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

  	
   

  	
  66
  2/3

  	
  %

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  33
  1/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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

  	
   

  	
  66
  2/3

  	
  %

  	
  33
  1/3

  	
  %

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


4

















 


	
  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

  	
   

  	
  66
  2/3

  	
  %

  	
  0

  	
   

  	
  0

  	
   

  	
  33
  1/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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.

  	
   

  	
  33
  1/3

  	
  %

  	
  0

  	
   

  	
  66
  2/3

  	
  %

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


 


 


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