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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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