Exhibit 10.4
LONE STAR TECHNOLOGIES, INC.
FORM OF EMPLOYEE OPTION AGREEMENT
WITH FOUR-YEAR VESTING
Non-Qualified Stock Option
Granted Pursuant to the
2004 Long-Term Incentive Plan
OPTION granted
[ ],
20[ ] (the “ Date of Grant
”) by Lone Star Technologies, Inc. (“ LST
”) to
[ ]
(“ Optionee ”) pursuant to LST’s 2004
Long-Term Incentive Plan (the “ Plan
”).
1.
Option Grant
. LST hereby grants to the
Optionee the option (“ Option ”) to purchase a
total of
[ ]
shares of Common Stock, $1.00 par value, of LST (“ Common
Stock ”) at the exercise price per share of
$[ ] , upon
the terms and conditions hereinafter stated. This Option shall not
be treated as an “incentive stock option” within the
meaning of section 422 of the Internal Revenue Code of 1986, as
amended.
2.
Portions of Option
Exercisable .
Except as specifically provided herein, the Option becomes
exercisable with respect to one-fourth of the total number of
shares subject to the Option on each of the dates that are twelve,
twenty-four, thirty-six and forty-eight months, respectively, after
the Date of Grant, subject to the Optionee’s remaining in the
continuous employment of LST or one of its subsidiaries (“
employment ”) through such date. The Option will
expire upon the termination of the Optionee's employment if and to
the extent the Option has not then become exercisable.
3.
Acceleration of
Vesting . The
unvested and unexercised shares under the Option will become fully
exercisable if (a) the Optionee’s employment terminates by
reason of the Optionee’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
Optionee’s employment terminates by reason of his removal
without Cause (within the meaning of Section 5(e)(ii) of the Plan)
or is terminated by the Optionee as a result of a reduction of his
compensation or any material change in location, authority, duties
or other working conditions of his employment.
4.
Periods in which Option
Exercisable . If and
to the extent the Option becomes exercisable, it may be exercised
in whole or in part until the earliest to occur of the following
events (a) the tenth anniversary of the Date of Grant, (b) the
third anniversary of the termination of the Optionee’s
employment in the case of a termination described in Section 3,
whether or not such termination occurred before the first
anniversary of the Date of Grant, (c) the first anniversary of the
Optionee’s death if the Optionee dies after the termination
of his employment, but only to the extent the Option was otherwise
exercisable at the time of his death (provided that nothing in this
Section 4(c) shall shorten any longer period to which the Optionee
is entitled under Section 4(b)), (d) the date of the termination of
the Optionee’s employment for Cause (as defined in the Plan),
and (e) the dat
