Document:

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                                                                   Exhibit 10.36

                          LONE STAR TECHNOLOGIES, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

         Section 1. PURPOSE. It is the purpose of the Plan to promote the
interests of the Company and its stockholders by providing a method by which
eligible employees may use voluntary payroll deductions to purchase shares of
Common Stock at a discount, thereby affording them the opportunity to invest
in the Company at a preferential price, and to acquire a proprietary interest
in the Company and an increased personal interest in its continued success
and progress. The Plan is intended to qualify as an "employee stock purchase
plan" within the meaning of Section 423 of the Code and shall be construed
accordingly.

         Section 2.  DEFINITIONS.  As used herein the following terms have the
following meanings:

                  (a) "Affiliate" means any corporation that is a parent
         corporation of the Company within the meaning of Section 424(e) of the
         Code or a subsidiary corporation of the Company within the meaning of
         Section 424(f) of the Code, and that has been designated by the
         Committee as an Affiliate for purposes of the Plan.

                  (b) "Board of Directors" means the Board of Directors of the
         Company.

                  (c) "Code" means the United States Internal Revenue Code of
         1986, as from time to time amended.

                  (d) "Committee" means the Committee described in Section 4
         hereof.

                  (e) "Common Stock" means the $1.00 par value Common Stock of
         the Company.

                  (f)        "Company" means Lone Star Technologies, Inc.

                  (g) "Compensation" means the regular base salary and hourly
         wages payable to an employee for services rendered to the Company or an
         Affiliate as an employee (prior to reduction for any elective deferrals
         within the meaning of Section 402(g) of the Code or any salary
         reduction amount elected for the purchase of benefits pursuant to a
         cafeteria plan within the meaning of Section 125 of the Code),
         excluding bonuses, overtime pay, allowances, reimbursements,
         commissions, profit sharing or deferred compensation payments and all
         other extraordinary remuneration.

                  (h) "Compensation Exchange Rate" means the New York foreign
         currency exchange rate as reported in THE WALL STREET JOURNAL.

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                  (i) "Custodian" means the entity designated by the Committee
         to assist it with the administration of the Plan relating to the
         custody of certificates for shares of Common Stock purchased under the
         Plan.

                  (j) "Eligible Employee" means any employee of the Company or
         an Affiliate who is eligible to participate in the Plan pursuant to
         Section 5 hereof.

                  (k) "Enrollment Date" means the first day of any Plan Period.

                  (l) "Fair Market Value" means the closing sales price of the
         Common Stock on the date in question (or, if there was no reported sale
         on such date, on the last preceding day on which any reported sale
         occurred) on the New York Stock Exchange or other principal stock
         exchange or stock market on which the Common Stock may from time to
         time be traded.

                  (m) "Option" means any option to purchase shares of Common
         Stock granted by the Company pursuant to the provisions of the Plan.

                  (n) "Participant" means an Eligible Employee who has become a
         Participant in the Plan pursuant to Section 6 hereof, and for whom a
         payroll deduction authorization form is in effect under the Plan or a
         stock account is being maintained pursuant to the Plan.

                  (o)        "Plan" means this Lone Star Technologies, Inc.
         Employee Stock Purchase Plan.

                  (p) "Plan Period" means each of the following periods,
         commencing July 1, 2000: (i) the period beginning on January 1 and
         ending on the following March 31; (ii) the period beginning on April 1
         and ending on the following June 30; (iii) the period beginning on July
         1 and ending on the following September 30; and (iv) the period
         beginning on October 1 and ending on the following December 31.

         Section 3. NUMBER OF SHARES. The aggregate number of shares of
Common Stock sold pursuant to the exercise of Options granted under the Plan
shall not exceed 200,000 shares. The maximum number of shares of Common Stock
available for sale under the Plan is subject to adjustment as provided in
Section 14 hereof. The Common Stock to be delivered upon exercise of Options
shall consist of authorized but unissued shares of Common Stock or shares of
Common Stock previously issued and reacquired by the Company.

         Section 4. ADMINISTRATION OF THE PLAN. The Plan shall be
administered by the Committee, which shall consist of three or more members
of the Board of Directors. Each member of the Committee shall be appointed by
and shall serve at the pleasure of the Board of Directors. The Board of
Directors shall have the sole continuing authority to appoint members of the
Committee both in substitution for members previously appointed and to fill
vacancies however caused. The following provisions shall apply to the
administration of the Plan by the Committee:

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                  (a) The Committee shall designate one of its members as
         Chairperson and shall hold meetings at such times and places as it may
         determine. Each member of the Committee shall be notified in writing of
         the time and place of any meeting of the Committee at least two days
         prior to such meeting, provided that such notice may be waived by a
         Committee member. A majority of the members of the Committee shall
         constitute a quorum and any action taken by a majority of the members
         of the Committee present at any duly called meeting at which a quorum
         is present (or action unanimously approved in writing) shall constitute
         action by the Committee.

                  (b) The Committee may appoint a Secretary (who need not be a
         member of the Committee) who shall keep minutes of its meetings. The
         Committee may make such rules and regulations for the conduct of its
         business as it may determine.

                  (c) The Committee shall have full authority subject to the
         express provisions of the Plan to interpret the Plan, to provide,
         modify and rescind rules and regulations relating to the Plan
         (including rules and regulations relating to the withdrawal or sale of
         shares of Common Stock held in the stock accounts of Participants under
         the Plan) and to make all other determinations and perform such actions
         as the Committee deems necessary or advisable to administer the Plan.

                  (d) No member of the Committee shall be liable for any action
         taken or determination made in good faith with respect to the Plan or
         any Option granted hereunder.

         Section 5. ELIGIBLE EMPLOYEES. Each employee of the Company or an
Affiliate who is employed by the Company or an Affiliate on the date his or her
participation in the Plan is to become effective shall be eligible to
participate in the Plan; provided, however, that:

                  (a) An employee shall not be granted an Option if such
         employee would, immediately after grant of the Option, own stock
         possessing 5% or more of the total combined voting power or value of
         all classes of stock of the Company or any parent or subsidiary
         corporation of the Company (within the meaning of Section 424(e) and
         (f) of the Code). For purposes of determining stock ownership under
         this paragraph, the rules of Section 424(d) of the Code shall apply,
         and stock which the employee may purchase under any outstanding options
         shall be treated as stock owned by the employee; and

                  (b) No employee shall be granted an Option under the Plan
         which would permit such employee's rights to purchase shares of stock
         under all employee stock purchase plans (within the meaning of Section
         423(b) of the Code) of the Company and its parent and subsidiary
         corporations (within the meaning of Section 424(e) and (f) of the Code)
         to accrue (within the meaning of Section 423(b)(8) of the Code) at a
         rate which exceeds U.S. $25,000 of fair market value of such stock
         (determined at the time such Option is granted) for each calendar year
         in which such Option is outstanding at any time.

For purposes of this Section 5, the term "employee" shall not include (i) an
employee who has been employed by the Company or an Affiliate less than 12
months prior to an Enrollment Date, (ii) an

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employee whose customary employment is 20 hours or less per week or (iii) an
employee whose customary employment is for not more than five months in any
calendar year.

         Section 6. METHOD OF PARTICIPATION. Each person who will be an
Eligible Employee on any Enrollment Date may elect to participate in the Plan
by executing and delivering to his or her employer, at least 15 calendar days
prior to such Enrollment Date, a payroll deduction authorization form as
provided in this Section. Such Eligible Employee shall thereby become a
Participant on such Enrollment Date and shall remain a Participant entitled
to receive Options under the Plan until (i) such Eligible Employee has
terminated his or her payroll deduction authorization pursuant to Section 11
hereof or (ii) such Eligible Employee's participation in the Plan is
terminated as provided in Section 12 hereof.

         The payroll deduction authorization form executed by an Eligible
Employee shall request withholding, by means of substantially equal payroll
deductions over the applicable Plan Period, of an amount which shall be not
less than 1% or more than 5% of such Eligible Employee's Compensation for
such Plan Period (or such other percentages as the Committee may establish
from time to time before an Enrollment Date for any purchases of Common Stock
to occur during Plan Periods commencing on or after such Enrollment Date). A
payroll deduction authorization form executed by a Participant shall remain
in effect for such Participant until (i) changed as provided below in this
Section, (ii) terminated as provided in Section 11 hereof or (iii) such
Participant's participation in the Plan is terminated as provided in Section
12 hereof. A Participant may change the withholding rate of his or her
payroll deduction authorization within the limits specified in the first
sentence of this paragraph by delivering a new payroll deduction
authorization form to his or her employer at least 15 calendar days prior to
the next Enrollment Date for which the change is to be effective. A
Participant may not change the withholding rate of his or her payroll
deduction authorization with respect to a Plan Period at any time after the
deadline set forth in the immediately preceding sentence. All amounts
withheld in accordance with a Participant's payroll deduction authorization
shall be credited to a book entry withholding account for such Participant.
No interest shall be payable on withholding accounts.

         Section 7. GRANT OF OPTIONS. Each Participant for whom a payroll
deduction authorization form is in effect under the Plan shall be granted an
Option on the first day of each Plan Period to purchase shares of Common
Stock. Each Option shall be exercisable on the last business day of the Plan
Period for the number of shares of Common Stock to be determined by dividing
(a) the balance in the Participant's withholding account on the last business
day of the Plan Period by (b) the purchase price per share of the Common
Stock as determined under Section 8 hereof. The Company shall reduce, on a
substantially proportionate basis, the number of shares of Common Stock
receivable by each Participant upon exercise of an Option in any Plan Period
in the event that the total number of shares of Common Stock then available
for sale under the Plan is less than the total number of shares with respect
to which all Participants exercise Options in such Plan Period.

         Section 8. OPTION PRICE. The purchase price per share of Common
Stock under each Option shall equal the lesser of (a) 90% of the Fair Market
Value per share of Common Stock on the date of grant of the Option and (b)
90% of the Fair Market Value per share of Common Stock on the date on which
the Option is exercised (or, with respect to clauses (a) and (b) above, such
other percentages, which shall be less than 100% but not less than 85%, of
such Fair Market Value as the

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Committee may establish from time to time before an Enrollment Date for all
purchases of Common Stock to occur during Plan Periods commencing on or after
such Enrollment Date).

         Section 9. EXERCISE OF OPTIONS. A Participant who holds an Option on
the last business day of a Plan Period shall be deemed automatically to have
exercised such Option on such day. Upon such exercise, the Company shall
apply the entire balance of the Participant's withholding account to the
purchase of the maximum number of shares of Common Stock as determined under
Section 7 hereof. For purposes of this Section 9, the balance in the
withholding account of a Participant whose salary or wages are not computed
in United States dollars shall be converted into United States dollars in
accordance with the Compensation Exchange Rate for the last business day of
the Plan Period.

         A Participant shall possess none of the rights and privileges of a
stockholder of the Company with respect to shares of Common Stock purchased
by such Participant under the Plan unless and until certificates representing
such shares have been issued. The cash proceeds received by the Company upon
exercise of an Option shall constitute general funds of the Company. Any
unexercised Option shall expire and become null and void as of the end of the
Plan Period in which such Option was granted.

         Section 10. ISSUANCE, CUSTODY, WITHDRAWAL AND SALE OF SHARES. The
Company shall issue and deliver to the Custodian certificates representing
shares of Common Stock purchased by Participants under the Plan as soon as
reasonably practicable after such shares are purchased; provided, however,
that the obligation of the Company to issue and deliver shares of Common
Stock shall be postponed for such period of time as may be necessary to
register or qualify the purchased shares under the Securities Act of 1933 and
any applicable foreign or state securities laws. The shares delivered to the
Custodian shall be held by it for the accounts of the Participants who
purchased such shares. The Custodian shall establish and maintain book entry
stock accounts for the Participants for this purpose, and each Participant
shall be credited in his or her stock account with the number of shares
acquired by such Participant under the Plan as of the date such shares are
issued. As set forth below in this Section, any Participant may elect to
receive a certificate for the whole shares of Common Stock held in his or her
stock account at any time after such shares are delivered to the Custodian.
Until such certificates are delivered to the Participant, the Participant
will not be permitted to transfer ownership of the shares held in his or her
stock account except as set forth below in this Section or in Section 12
hereof.

         The Company shall deliver or cause the Custodian to deliver to each
Participant for whom shares of Common Stock are being held in custody by the
Custodian all dividends and distributions in respect of the whole shares of
Common Stock being held for such Participant and all notices, proxy
statements and other communications to the Company's stockholders in
accordance with applicable law and the rules and regulations of the
Securities and Exchange Commission.

         Subject to the provisions of Section 16 hereof, a Participant may
elect to withdraw at any time (without withdrawing from participation in the
Plan for purposes of Section 6 hereof) all or any portion of the whole shares
of Common Stock that are held in his or her stock account by giving notice to
the Custodian in the manner approved by the Committee. Upon receipt of such
notice, the

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Custodian will arrange for the delivery of such whole shares to the
Participant as soon as administratively practicable.

         Subject to the provisions of Section 16 hereof, a Participant may
sell all or any portion of the whole shares of Common Stock held in his or
her stock account on the New York Stock Exchange or other principal stock
exchange or stock market on which the Common Stock may from time to time be
traded by giving notice to the Custodian in the manner approved by the
Committee. Upon receipt of such notice, the Custodian will arrange for the
sale of such Participant's whole shares as soon as administratively
practicable. The proceeds of such sale, less any associated commissions and
required withholding for taxes, shall be paid by the Custodian to the
Participant as soon as practicable after the sale.

         Section 11. CANCELLATION OF OPTIONS AND TERMINATION OF PAYROLL
DEDUCTION AUTHORIZATIONS. A Participant who holds an Option under the Plan
may cancel such Option by written notice delivered to his or her employer at
least 20 calendar days prior to the date of exercise of the Option. Any
Participant who cancels an Option pursuant to the provisions of the
immediately preceding sentence shall be deemed to have terminated his or her
payroll deduction authorization effective at the end of the Plan Period for
which such Option was granted or at such earlier time as is administratively
practicable for his or her employer. Upon such cancellation, the balance in
the Participant's withholding account shall be returned to such Participant
promptly following the end of such Plan Period or at such earlier time as is
administratively practicable for his or her employer. Partial cancellation of
an Option shall not be permitted.

         A Participant may terminate his or her payroll deduction
authorization as of any date by written notice delivered to his or her
employer at least 20 calendar days prior to such date. Any Participant who
voluntarily terminates his or her payroll deduction authorization effective
as of a date during a Plan Period shall be deemed to have canceled his or her
Option for such Plan Period. Upon termination by a Participant of his or her
payroll deduction authorization, the balance in the Participant's withholding
account shall be returned to such Participant promptly following the end of
the Plan Period in which such termination became effective or at such earlier
time as is administratively practicable for his or her employer. Partial
termination of a payroll deduction authorization shall not be permitted.

         A Participant who cancels or is deemed to have canceled an Option
pursuant to this Section 11 may re-enroll in the Plan as of any subsequent
Enrollment Date on which he or she is an Eligible Employee in accordance with
the procedure set forth in Section 6 hereof.

         Section 12. TERMINATION OF EMPLOYMENT. Upon the termination of a
Participant's employment with the Company or an Affiliate for any reason, (a)
such person shall cease to be a Participant, (b) any Option held by such
Participant under the Plan on the date of such termination of employment and
which has not become exercisable on such date shall be deemed canceled, (c)
the balance in such Participant's withholding account shall be returned, and
the whole shares of Common Stock held in such Participant's stock account
shall be delivered, to such Participant (or, in the event of the
Participant's death, to the executor or administrator of his or her estate)
and (d) he or she shall have no further rights under the Plan, except for his
or her right to receive the proceeds

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of any sale of shares of Common Stock that was made by such person pursuant
to Section 10 hereof prior to the termination of his or her employment.

         All Participants shall have the same rights and privileges under the
Plan. Notwithstanding the foregoing, nothing in the Plan shall confer upon
any Participant any right to continue in the employ of the Company or an
Affiliate or in any way interfere with the right of the Company or an
Affiliate to terminate the employment of the Participant at any time, with or
without cause. Transfers of employment among the Company and its Affiliates
and approved leaves of absence not exceeding 90 days shall not be considered
terminations of employment for purposes of the Plan.

         Section 13. TRANSFERABILITY. An Option granted under the Plan shall
not be transferable by the Participant and shall be exercisable only by the
Participant.

         Section 14. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. In the event
the Company shall effect a split of the Common Stock or declare a dividend
payable in Common Stock, or in the event the outstanding Common Stock shall
be combined into a smaller number of shares, the maximum number of shares
available for sale under the Plan shall be increased or decreased
proportionately, and the purchase price per share of Common Stock of all
outstanding Options shall be adjusted, for purposes of making the
determination required by Section 8 hereof, in a manner deemed appropriate by
the Committee.

         In the event of a reclassification of Common Stock not covered by
the foregoing, or in the event of a liquidation or reorganization of the
Company, including a merger, consolidation or sale of assets, the Board of
Directors shall make such adjustments, if any, as it may deem appropriate in
the number, purchase price and kind of shares that are covered by Options
theretofore granted under the Plan or that are otherwise subject to the Plan.
The provisions of this Section shall only be applicable if, and only to the
extent that, the application thereof does not conflict with any valid
governmental statute, regulation or rule.

         Section 15. AMENDMENT AND TERMINATION OF THE PLAN. The Board of
Directors may from time to time alter or amend the Plan but may not without
the approval of the stockholders of the Company make any alteration or
amendment thereof which operates to (a) increase the total number of shares
of Common Stock that may be sold pursuant to the exercise of Options granted
under the Plan (other than as provided in Section 14 hereof) or (b) modify
the corporations or class of corporations whose employees will be eligible to
receive Options under the Plan. No amendment of the Plan shall adversely
affect the rights of a Participant thereunder, except with the consent of
such Participant.

         Subject to the right of the Board of Directors to terminate the Plan
prior thereto, the Plan shall terminate when all of the Common Stock reserved
for purposes of the Plan has been purchased. No Options may be granted after
termination of the Plan. The Board of Directors may elect to terminate all
outstanding Options in connection with any termination by it of the Plan.
Upon termination of the Plan, the balance in each Participant's withholding
account and any whole shares of Common Stock being held in custody by the
Custodian for such Participant shall be delivered to such Participant.

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         Section 16. REQUIREMENTS OF LAW. The granting of Options, the sale
of shares of Common Stock upon the exercise of Options and the withdrawal and
sale of shares of Common Stock pursuant to the provisions of Section 10
hereof shall be subject to all applicable laws, rules and regulations and to
such approvals by governmental agencies as may be required. In connection
therewith, the Committee may impose such restrictions or limitations as may
be desirable to ensure compliance with such laws, rules or regulations or to
obtain such approvals.

         Section 17. WITHHOLDING OF TAXES. The Committee may make such
provisions as it may deem appropriate for the withholding of any taxes which
it determines is required in connection with the purchase or sale of Common
Stock under the Plan.

         Section 18. COSTS. All costs and expenses incurred in administering
the Plan shall be paid by the Company. Any brokerage fees or commissions for
the sale of shares of Common Stock purchased under the Plan shall be paid by
the Participant.

         Section 19. EFFECTIVE DATE OF THE PLAN. The Plan shall become
effective as of July 1, 2000, provided the Plan is approved at the 2000
annual meeting of stockholders of the Company as follows: (a) by the
affirmative vote of a majority of the shares of Common Stock present in
person or represented by proxy at the meeting and entitled to vote on the
approval of the Plan, as required by Delaware law; and (b) by a majority of
the votes cast at the meeting at which a quorum representing a majority of
all outstanding Common Stock is, either in person or by proxy, present and
voting on the Plan, as required by the regulations promulgated under Section
423 of the Code. If the Plan is not so approved, the Plan shall terminate.

         Section 20. QUALIFICATION OF PLAN. All Eligible Employees shall have
equal rights and privileges with respect to the Plan so that the Plan
qualifies as an "employee stock purchase plan" within the meaning of Section
423 of the Code (or any successor provision of the Code) and related
regulations. Any provision of the Plan that is inconsistent with Section 423
of the Code (or any successor provision of the Code) shall without further
act or amendment by the Company be reformed to comply with the requirements
of Section 423 of the Code (or such successor provision). This Section 20
shall take precedence over all other provisions of the Plan.

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                                                                   Exhibit 10.37

             LONE STAR TECHNOLOGIES, INC. DEFERRED COMPENSATION PLAN

         THIS PLAN, made and executed at Dallas, Texas, by LONE STAR
TECHNOLOGIES, INC., a Delaware corporation, is being established primarily for
the purpose of providing deferred compensation for a select group of management
or highly compensated employees of Lone Star Technologies, Inc. and its
participating subsidiaries.

                                   ARTICLE I.

                                  DEFINITIONS

         Section 1.1 DEFINITIONS. Unless the context clearly indicates
otherwise, when used in this Plan:

(a) "Account" means a Deferral Account or Matching Account, as the context
requires.

(b) "Affiliated Company" means any corporation or organization, other than an
Employer, which is a member of a controlled group of corporations (within the
meaning of Section 414(b) of the Internal Revenue Code of 1986, as amended (the
"Code")) or of an affiliated service group (within the meaning of Section 414(m)
of the Code) with respect to which an Employer is also a member, and any other
incorporated or unincorporated trade or business which along with an Employer is
under common control (within the meaning of Section 414(c) of the Code).

(c) "Committee" means the committee designated pursuant to Plan Section 2.1 to
administer this Plan.

(d) "Company" means Lone Star Technologies, Inc.

(e) "Deferral Account" means an account established and maintained on the books
of an Employer pursuant to Plan Section 3.2 to record a Participant's interest
under this Plan attributable to amounts credited to such Participant pursuant to
Plan Section 3.2(a).

(f) "Election Period" means the period prior to the beginning of a Plan Year
(or, with respect to the Plan's first Plan Year, the period prior to June 10,
2000) which is specified by the Committee for the making of deferral elections
for such year pursuant to Plan Section 3.1.

(g) "Eligible Employee" means, with respect to a Plan Year, the Chief Executive
Officer of the Company and any other employee of an Employer (i) whose annual
base salary as of the first day of such year (as estimated by the Committee
during the Election Period for such year) will be at least equal to the greater
of $85,000 or the compensation threshold amount applicable in determining a
highly compensated employee for such year under Section 414(q)(1) of the Code,
and (ii) who is designated by the Chief Executive Officer of the Company as an
Eligible Employee for such year for the purposes of this Plan.

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(h) "Employer" includes the Company and any other incorporated or unincorporated
trade or business which may adopt this Plan with the consent of the Chief
Executive Officer of the Company.

(i) "Matching Account" means an account established and maintained on the books
of an Employer pursuant to Plan Section 3.2 to record a Participant's interest
under this Plan attributable to amounts credited to such Participant pursuant to
Plan Section 3.2(b).

(j) "Participant" means an Eligible Employee or former Eligible Employee for
whom an Account is being maintained under this Plan.

(k) "Plan" means this Lone Star Technologies, Inc. Deferred Compensation Plan as
in effect from time to time.

(l) "Plan Year" means the 7-month period commencing June 1, 2000, and ending
December 31, 2000, and the 12-month period commencing on each subsequent January
1 and ending on the following December 31.

(m) "Retirement" means the termination of a Participant's employment with an
Employer or Affiliated Company for any reason other than death or transfer to
the employ of another Employer or Affiliated Company either (i) on or after
attaining the age of 65 years, or (ii) with the consent of the Committee, on or
after attaining the age of 55 years.

(n) "Unit" means a fictional deferred compensation unit used solely for
accounting purposes under this Plan to determine the number of shares of Company
common stock to be distributed to a Participant pursuant to this Plan.

(o) "Unit Value" means an amount equal to (i) if Company common stock is listed
or admitted to trading on a securities exchange registered under the Securities
Exchange Act of 1934, the average of the closing sale prices per share of such
stock as reported on the principal such exchange for the immediately preceding 5
days on which a sale of such stock was reported on such exchange, (ii) if
Company common stock is not listed or admitted to trading on any such exchange,
but is listed as a national market security by the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or any similar
system then in use, the average of the closing sale prices per share of such
stock as reported on NASDAQ or such system for the immediately preceding 5 days
on which a sale of such stock was reported on NASDAQ or such system, and (iii)
if Company common stock is not listed or admitted to trading on any such
exchange and is not listed as a national market security on NASDAQ or any
similar system then in use, but is quoted on NASDAQ or any similar system then
in use, the average of the mean between the closing high bid and low asked
quotations per share for such stock as reported on NASDAQ or such system for the
immediately preceding 5 days on which bid and asked quotations for such stock
were reported on NASDAQ or such system.

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                                   ARTICLE II.

                               PLAN ADMINISTRATION

         Section 2.1 COMMITTEE. This Plan shall be administered by a Committee
composed of at least three individuals appointed by the Chief Executive Officer
of the Company. Each member of the Committee so appointed shall serve in such
office until his or her death, resignation or removal by the Chief Executive
Officer of the Company. The Committee shall have discretionary and final
authority to interpret and implement the provisions of the Plan. The Committee
shall act by a majority of its members at the time in office and such action may
be taken either by a vote at a meeting or in writing without a meeting. The
Committee may adopt such rules and procedures for the administration of the Plan
as are consistent with the terms hereof and shall keep adequate records of its
proceedings and acts. Every interpretation, choice, determination or other
exercise by the Committee of any power or discretion given either expressly or
by implication to it shall be conclusive and binding upon all parties having or
claiming to have an interest under the Plan or otherwise directly or indirectly
affected by such action, without restriction, however, on the right of the
Committee to reconsider and redetermine such action. The Employers shall
indemnify and hold harmless each member of the Committee against any claim,
cost, expense (including attorneys' fees), judgment or liability (including any
sum paid in settlement of a claim with the approval of the Company) arising out
of any act or omission to act as a member of the Committee under this Plan,
except in the case of willful misconduct.

                                  ARTICLE III.

                        DEFERRED COMPENSATION PROVISIONS

         Section 3.1 DEFERRAL ELECTION. Subject to such conditions, limitations
and procedures as the Committee may prescribe from time to time for the purposes
of this Plan:

         (a) During the Election Period for the Plan Year commencing June 1,
         2000, an Eligible Employee may elect to have the payment of any
         specified portion of the annual base salary otherwise payable by an
         Employer to him or her during such year deferred for future payment by
         such Employer in such manner and at such time or times permitted under
         Plan Section 3.5 as shall be specified by such Eligible Employee in
         such election; provided, however, that the amount of annual base salary
         so deferred shall not exceed 25% of the aggregate amount of (i) any
         cash bonus paid by an Employer to such Eligible Employee after December
         31, 1999, and prior to June 1, 2000, and (ii) the annual base salary
         otherwise payable by an Employer to such Eligible Employee during the
         2000 calendar year.

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                  (b) During the Election Period for each Plan Year commencing
         after December 31, 2000, an Eligible Employee may elect to have the
         payment of (i) up to 25% of the annual base salary otherwise payable by
         an Employer to him or her during such year, and (ii) any specified
         portion of any cash bonus otherwise payable by an Employer to him or
         her during such year which, when added to the amount to be deferred for
         such year pursuant to clause (i) of this Plan Section 3.1, does not
         exceed 25% of the aggregate amount of the annual base salary and cash
         bonuses otherwise payable by an Employer to him or her during such
         year, deferred for future payment by such Employer in such manner and
         at such time or times permitted under Plan Section 3.5 as shall be
         specified by such Eligible Employee in such election.

         All elections made pursuant to this Plan Section 3.1 shall be made in
         writing on a form prescribed by and filed with the Committee and shall
         be irrevocable.

         Section 3.2 PARTICIPANT ACCOUNTS. For each Plan Year an Employer shall
establish and maintain on its books a Deferral Account and a Matching Account
for each Eligible Employee employed by such Employer who elects to defer the
receipt of compensation for such year pursuant to Plan Section 3.1. Each such
Account shall be designated by the name of the Participant for whom established
and the Plan Year to which it relates, and shall be credited in accordance with
the following provisions:

                  (a) The amount of compensation otherwise payable by an
         Employer to a Participant during a Plan Year that such Participant has
         elected to defer pursuant to Plan Section 3.1 shall be credited (as a
         dollar amount) by such Employer to such Participant's Deferral Account
         for that year no later than 15 days after the end of the month during
         which such amount would otherwise have been paid by such Employer to
         such Participant.

                  (b) No later than 15 days after the end of each quarter during
         a Plan Year, a dollar amount equal to 50% of the compensation otherwise
         payable by an Employer to a Participant during that quarter which is
         deferred by such Participant pursuant to Plan Section 3.2(a) shall be
         credited by such Employer to such Participant's Matching Account for
         that year; provided, however, that (i) the credit referred to in this
         Plan Section 3.4(b) shall be made for a Participant only if he or she
         is in the employ of (or on authorized leave of absence from) an
         Employer or Affiliated Company on the last day of such quarter, and
         (ii) the total dollar amount credited to a Participant's Matching
         Account for any Plan Year pursuant to this Plan Section 3.4(b) shall
         not exceed $25,000. On or before the last day of each Plan Year
         quarter, the Chief Executive Officer of the Company shall determine and
         notify the Committee as to whether the dollar amounts to be credited to
         Matching Accounts with respect to compensation deferred during that
         quarter shall remain credited to such Matching Accounts as dollar
         amounts or be converted into Units. If the dollar amount credited to a
         Matching Account with respect to compensation deferred during a Plan
         Year quarter is to be

                                       4
<PAGE>

         converted into Units, such dollar amount shall be converted into Units
         by dividing such dollar amount by the Unit Value on the last day of
         such quarter. Any provision of this Plan to the contrary
         notwithstanding, for the purposes of this Plan the period commencing
         June 1, 2000, and ending September 30, 2000, shall be treated as a Plan
         Year quarter.

         Section 3.3 ACCOUNT ADJUSTMENTS. Subject to such conditions,
limitations and procedures as the Committee may prescribe from time to time for
the accounting purposes of this Plan, at the end of each Plan Year quarter (and
at such other times as the Committee may prescribe) the amount credited as a
dollar amount to each Account maintained by an Employer for a Participant shall
be adjusted as a dollar amount to reflect the investment results that would be
attributable to the hypothetical investment of such credited amount in
accordance with investment directions given by such Participant. The investment
directions given and the hypothetical investments made pursuant to this Plan
Section 3.3 are fictitional devices established solely for the accounting
purposes of this Plan, and shall not require any Employer to make any actual
investment or otherwise set aside or earmark any asset for the purposes of this
Plan.

         Section 3.4 ADDITIONAL MATCHING ACCOUNT ADJUSTMENTS. If a cash dividend
is paid on Company common stock, on the date said dividend is paid each Matching
Account which is then credited with Units shall be further credited with the
number of Units equal to the amount of said dividend per share of Company common
stock multiplied by the number of Units then credited to such Matching Account,
with the product thereof divided by the Unit Value on the date such dividend is
paid. If the Company effects a split of its shares of common stock or pays a
dividend in the form of shares of Company common stock, or if the outstanding
shares of Company common stock are combined into a smaller number of shares, the
number of Units then credited to each Matching Account shall be increased or
decreased to reflect proportionately the increase or decrease in the number of
outstanding shares of Company common stock resulting from such split, dividend
or combination. In the event of a reclassification of shares of Company common
stock not covered by the foregoing, or in the event of a liquidation, separation
or reorganization (including, without limitation, a merger, consolidation or
sale of assets) involving the Company, the Board of Directors of the Company
shall make such adjustments, if any, to each Matching Account then credited with
Units as such Board in its absolute discretion may deem appropriate.

         Section 3.5 ACCOUNT PAYMENTS. The amount credited to each Account
maintained by an Employer for a Participant (i) shall become distributable to
such Participant pursuant to this Plan Section 3.5 on the first to occur of (A)
the date specified by such Participant in his or her election filed with the
Committee for such Account during the Election Period for the Plan Year to which
such Account relates (which date, with respect to a Matching Account, shall not
be prior to the beginning of the third Plan Year commencing after the end of the
Plan Year to which such Matching Account relates), (B) the date as of which such
Participant's employment with an Employer or Affiliated Company terminates for
any reason other than Retirement,

                                       5
<PAGE>

death or transfer to the employ of another Employer or Affiliated Company, or
(C) the date after such Participant's Retirement which is specified by the
Committee in its discretion as the date such Account shall become
distributable, and (ii) shall be distributed to such Participant either in a
single distribution or in approximately equal annual installments over a
period of up to 10 years, such form of distribution to be made in accordance
with such Participant's election filed with the Committee for such Account
during the Election Period for the Plan Year to which such Account relates.
When an amount credited as a dollar amount to an Account maintained by an
Employer for a Participant becomes distributable, such amount shall be paid
by such Employer to such Participant in cash and charged against such
Account. When Units credited to an Account maintained by an Employer for a
Participant become distributable, such Units shall be canceled and the
Employer maintaining such Account shall deliver or cause to be delivered to
such Participant a stock certificate evidencing the Participant's ownership
of one share of Company common stock for each Unit so canceled. If the amount
credited to an Account is paid in installments over a period of years, the
provisions of Plan Sections 3.3 and 3.4 shall continue to apply to the amount
credited to such Account from time to time.

         Section 3.6 DEATH OF PARTICIPANT. Upon the death of a Participant, the
dollar amount and Units credited to each Account maintained by an Employer for
such Participant shall be converted by such Employer into cash and shares of
Company common stock as provided in Plan Section 3.5, and shall be distributed
by such Employer in a single distribution to the beneficiary or beneficiaries
designated by such Participant. Such designation of beneficiary or beneficiaries
shall be made in writing on a form prescribed by and filed with the Committee
and shall remain in effect until changed by such Participant by the filing of a
new beneficiary designation form with the Committee. If a Participant fails to
so designate a beneficiary, or in the event all of the designated beneficiaries
are individuals who either predecease the Participant or survive the Participant
but die prior to receiving the full amount payable under this Plan, any
remaining amount payable under this Plan shall be paid to such Participant's
estate. All distributions under this Plan Section 3.6 shall be made as soon as
practicable following a Participant's death.

         Section 3.7 HARDSHIP DISTRIBUTIONS. If a Participant encounters an
unanticipated severe financial emergency which is caused by an event or series
of events beyond the control of such Participant and which has or will result in
a severe financial hardship to such Participant if he or she does not receive an
early distribution from an Account being maintained for such Participant under
this Plan, the Committee in its absolute discretion may direct the Employer
maintaining such Account to pay to such Participant and charge against such
Account such portion of the amount then credited to such Account (including, if
appropriate, the entire balance thereof) as the Committee shall determine to be
necessary to alleviate the severe financial hardship of such Participant. No
distribution shall be made to a Participant pursuant to this Plan Section 3.7
unless such Participant requests such a distribution in writing and provides to
the Committee such information and documentation with respect to his or her
financial emergency and hardship as may be requested by the Committee.

                                       6
<PAGE>

         Section 3.8 ELECTIVE WITHDRAWALS AND FORFEITURES. At the end of any
month during a Plan Year, a Participant may withdraw from the Plan:

                  (a) All or any portion of the amount credited to any Matching
         Account maintained by an Employer for such Participant which relates to
         a Plan Year that ended at least 2 years prior to the beginning of the
         Plan Year that includes the effective date of such withdrawal; and

                  (b) All or any portion of the amount credited to any Deferral
         Account maintained by an Employer for such Participant;

provided, however, that any provision of this Plan to the contrary
notwithstanding, (i) no such withdrawal may be made unless written notice of
such withdrawal is given by the withdrawing Participant to the Committee at
least 15 days prior to the effective date thereof, and (ii) upon making a
withdrawal from any Account maintained by an Employer, the withdrawing
Participant (A) shall thereupon forfeit to such Employer 10% of the amount such
Participant elected to withdraw from such Account, and (B) shall be ineligible
to defer any base salary or cash bonus otherwise payable by an Employer to him
or her after the effective date of such withdrawal and prior to the beginning of
the third Plan Year commencing after the end of the Plan Year that includes the
effective date of such withdrawal.

                                   ARTICLE IV.

                            AMENDMENT AND TERMINATION

         Section 4.1 AMENDMENT AND TERMINATION. The Board of Directors of the
Company shall have the right and power at any time and from time to time to
amend this Plan, in whole or in part, on behalf of all Employers, and at any
time to terminate this Plan or any Employer's participation hereunder; provided,
however, that no such amendment or termination shall reduce the amounts actually
credited to a Participant's Accounts as of the date of such amendment or
termination, or further defer the dates for the payment of such amounts, without
the consent of the affected Participant.

                                       7
<PAGE>

                                   ARTICLE V.

                            MISCELLANEOUS PROVISIONS

         Section 5.1 NATURE OF PLAN AND RIGHTS. This Plan is unfunded and
maintained by the Employers primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees of
the Employers. The Units credited and Accounts maintained under this Plan are
fictional devices used solely for the accounting purposes of this Plan to
determine an amount of money to be paid and a number of shares of Company common
stock to be delivered by an Employer to a Participant pursuant to this Plan, and
shall not be deemed or construed to create a trust fund or security interest of
any kind for or to grant a property interest of any kind to any Participant,
designated beneficiary or estate. The amounts credited by an Employer to
Accounts maintained under this Plan are and for all purposes shall continue to
be a part of the general liabilities of such Employer, and to the extent that a
Participant, designated beneficiary or estate acquires a right to receive a
payment or payments from such Employer pursuant to this Plan, such right shall
be no greater than the right of any unsecured general creditor of such Employer.

         Section 5.2 SPENDTHRIFT PROVISION. No Account balance or other right or
interest under this Plan of a Participant, designated beneficiary or estate may
be assigned, transferred or alienated, in whole or in part, either directly or
by operation of law, and no such balance, right or interest shall be liable for
or subject to any debt, obligation or liability of such Participant, designated
beneficiary or estate.

         Section 5.3 EMPLOYMENT NONCONTRACTUAL. The establishment of this Plan
shall not enlarge or otherwise affect the terms of any Participant's employment
with an Employer, and such Employer may terminate the employment of such
Participant as freely and with the same effect as if this Plan had not been
established.

         Section 5.4 CLAIMS PROCEDURE. If any person (hereinafter called the
"Claimant") feels that he or she is being denied a benefit to which he or she is
entitled under this Plan, such Claimant may file a written claim for said
benefit with the Committee. Within 60 days of the receipt of such claim (or
within 120 days of the receipt of such claim if special circumstances require an
extension of the time for processing the claim, in which event the Committee or
its designated representative will furnish the Claimant with a written notice
indicating the special circumstances and the time by which a determination with
respect to the claim will be made), the Committee or its designated
representative shall determine and notify the Claimant as to whether he or she
is entitled to such benefit. Such notification shall be in writing and, if
denying the claim for benefit, shall set forth the specific reason or reasons
for the denial, make specific reference to the pertinent provisions of this
Plan, and advise the Claimant that he or she may, within 60 days of the receipt
of such notice, in writing request the Committee to review such denial. In
connection with such request for review, the Claimant and/or his or her duly
authorized representative may examine copies of any relevant documents and
submit

                                       8
<PAGE>

information and comments in writing to support the granting of the benefit
being claimed. The final decision of the Committee with respect to the claim
being reviewed shall be made within 60 days following the receipt of the
Claimant's request for review unless special circumstances require an
extension of time for reviewing the claim, in which event (i) the Committee
or its designated representative will furnish a written notice of such
extension to the Claimant, and (ii) the final decision of the Committee shall
be made as soon as possible but in no event later than 120 days after the
receipt of the Claimant's request for review. The Committee shall in writing
notify the Claimant of its final decision, again specifying the reasons
therefor and the pertinent provisions of this Plan upon which such decision
is based. The final decision of the Committee with respect to a claim shall
be conclusive and binding upon the Claimant and all other parties having or
claiming to have an interest in such claim.

         Section 5.5 APPLICABLE LAW. This Plan shall be governed and construed
in accordance with the internal laws (and not the principles relating to
conflicts of laws) of the State of Texas, except where superseded by federal
law.

         IN WITNESS WHEREOF, this Plan, as amended and restated, has been
executed on this 26th day of May, 2000, to be effective as of June 1, 2000.

                                      LONE STAR TECHNOLOGIES,INC.

                                      By: /s/ Rhys J. Best
                                         --------------------------------------
                                         Title:  Chairman of the Board,
                                                 Chief Executive Officer
                                                 and President

                                       9

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