Document:

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 

 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 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.

 2
 

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:

  	
   

  	
   

  
					

 

 3

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.

 4EXHIBIT 10.2

LONE STAR TECHNOLOGIES, INC. 

FORM OF DIRECTOR PERFORMANCE-BASED

RESTRICTED STOCK UNIT AWARD

Performance-Based
Restricted Stock Unit Award

Granted Pursuant to the

2004 Long-Term Incentive Plan

PERFORMANCE-BASED 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 60 months after the Date of Grant, subject to (i) the Recipient’s
continuing service as a director of LST (“service”) and
(ii) LST having 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.

(b)           Acceleration of Vesting Upon Involuntary Termination
of Service.  Non-vested RSUs not previously forfeited will
become fully vested if, before the fifth 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 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 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 

 1
 

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 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.

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 

 2
 

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 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:

  	
   

  	
   

  
					

 

 3

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) the Participant’s continuing
service and (ii) LST having average IBT of more than zero for Years 1 through
5, inclusive.

 4

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