Exhibit 10.28
LONE STAR TECHNOLOGIES, INC.
PHANTOM STOCK DEFERRED COMPENSATION PLAN
PURPOSE: The purpose of the Plan is to set forth the terms and conditions of
the phantom stock deferred compensation arrangement that Lone Star Technologies,
Inc. (the "Company") has made available to its non-employee directors since
1986. The Plan and the attached form of deferred compensation agreement
incorporated herein in its entirety fix in advance the specific terms of the
grant and cash settlement of phantom stock rights in satisfaction of the
requirements of Rule 16b-3 of the Securities and Exchange Commission. That rule
exempts all transactions contemplated by the Plan from the short-swing profits
liability provisions of Section 16(b) of the Securities Exchange Act of 1934.
PARTICIPATION: Any director of the Company who is entitled to receive
compensation from the Company for serving on its Board of Directors may
participate in the Plan. An eligible director who elects to have his
compensation deferred under the Plan shall notify the Company's Secretary of his
election. The first calendar quarter's compensation that can be deferred by an
electing director will be the calendar quarter in which that director gives his
notification to the Secretary; provided, however, that if the notification is
given after the date of the last scheduled Board of Directors meeting in a
calendar quarter, the director's compensation for the next calendar quarter will
be the first to be deferred under the Plan. Upon receiving the director's
notification, the Company and the director will enter into a deferred
compensation agreement in the form attached to the Plan (the "Agreement"), all
of the terms and conditions of which are hereby incorporated into the Plan. The
form of the Agreement shall not be modified in any way without the prior
approval of the Board of Directors.
DIRECTOR'S ACCOUNT AND DIRECTOR'S ACCOUNT PAYMENTS: A Director's Account, as
defined in the Agreement, shall be credited with deferred compensation units
("Units") in the manner set forth in the Agreement, and adjustments to the Units
in the event of a stock split, dividend, combination or reclassification shall
be made in accordance with the Agreement. Payments to a director or his estate
upon his ceasing to be a director of the Company shall be made in accordance
with the Agreement.
CESSATION OF DEFERRALS: A director may elect to cease deferring his
compensation under the Plan in the manner specified in the Agreement.
AMENDMENT AND TERMINATION OF THE PLAN: The Board of Directors of the Company
reserves the right at any time to modify or terminate the Plan, except that the
Board of Directors may not impair any deferrals of compensation already made
under the Plan.
Adopted by LST Board on September 22, 1998.
PHANTOM STOCK
DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT, made and executed to be effective as of ____________,
_____, by and between LONE STAR TECHNOLOGIES, INC., a Delaware corporation (the
"Company"), and _________________________ ("Director"), sets out the terms and
conditions for the deferred payment by the Company to Director of compensation
Director is to receive for his services as a member of the Board of Directors of
the Company after ____________________, ______. This Agreement is subject to
all of the terms and conditions of the Lone Star Technologies, Inc. Phantom
Stock Deferred Compensation Plan, as it may be modified from time to time or
terminated at any time by the Board of Directors of the Company.
1. DIRECTOR'S ACCOUNT. Company shall establish and maintain on its books
a deferred compensation account in the name of Director (the "Director's
Account"). On ____________________, _____, and on the last day of each
succeeding calendar quarter with respect to which Director's compensation is
deferred, Director's Account shall be credited with the number of deferred
compensation units ("Units") which results from dividing all of the compensation
Director is entitled to receive for his services rendered during the calendar
quarter then ended as a member of the Board of Directors, including Board and
committee meeting fees, by the closing price per share of the Company's Common
Stock in the open market as of such date (if such stock was traded in the open
market on such date, but if not, then the closing price per share of such stock
in the open market as of the earliest preceding date such stock was traded in
the open market). If the Company effects a split of its shares of Common Stock
or pays a dividend in the form of shares of the Company's Common Stock, or if
the outstanding shares of the Company's Common Stock are combined into a smaller
number of shares, the Units then credited to Director's Account shall be
increased or decreased to reflect proportionately the increase or decrease in
the number of outstanding shares of the Company's Common Stock resulting from
such split, dividend or combination. In the event of a reclassification of
shares of the Company's Common Stock not covered by the foregoing, or in the
event of the liquidation or reorganization of the Company, the Board of
Directors of the Company shall make such adjustments, if any, to Director's
Account as such Board may deem appropriate.
2. DIRECTOR'S ACCOUNT PAYMENTS. On the last day of the calendar quarter
during which Director ceases to be a member of the Board of Directors, the
Company shall pay to Director (or his estate, in the event of his death) the
value of all Units then credited to Director's Account. For the purposes of
this Agreement, the value on a specified date of a Unit credited to Director's
Account shall be equal to the closing price per share of the Company's Common
Stock in the open market on such date (if such stock was traded in the open
market on such date, but if not, then the closing price per share of
such stock in the open market as of the earliest preceding date such stock
was traded in the open market).
3. CESSATION OF DEFERRALS. Before the last day of any calendar quarter
Director may elect to cease deferring his compensation which would otherwise
become subject to this Agreement by filing written notice of such election with
the Company's Secretary. Such an election shall cease the deferral of
compensation under this Agreement, effective as of the first day of the calendar
quarter in which the election is made, but shall not affect the terms and
conditions of this Agreement with respect to the Units credited to Director's
Account as of the date such election becomes effective.
4. NONASSIGNABILITY. No right or interest of Director under this
Agreement may be assigned, transferred or alienated, in whole or in part, either
directly or by operation of law, and no such right or interest shall be liable
for or subject to any debt, obligation or liability of Director.
5. NATURE OF AGREEMENT. The Units credited to Director's Account under
this Agreement are only fictional devices for determining an amount of
compensation to be paid in cash to or with respect to Director. The obligation
to pay such compensation to or with respect to Director which arises under this
Agreement is unfunded and no provision of this Agreement shall be deemed or
construed to create a trust fund of any kind or to grant Director an actual
interest in any share of the Company's Common Stock or a security interest of
any kind. All payments under this Agreement shall be made by the Company out of
its general assets, and to the extent that Director or his estate acquires any
right to receive payments from the Company hereunder, such right shall be no
greater than the right of any unsecured general creditor of the Company.
IN WITNESS WHEREOF, this Agreement has been executed on _________________,
_____, to be effective as of the date first written above.
LONE STAR TECHNOLOGIES, INC.
By
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Name:
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Title:
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[Name of Director]
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