**Exhibit10.22**

 

 

Rhys J. BestChief Executive Officer

 

May 7, 2004

CONFIDENTIAL

 

Mr. Joe Alvarado1441 Oak Park DriveMunster, IN 46321-2622

 

Dear Joe:

 

As we discussed yesterday(subject to completion of satisfactory medical exam or review and standard drugtest), I am pleased to offer you the new position of President and ChiefOperating Officer of Lone Star Technologies, Inc.

 

The attached position/compensationoutline dated May 7, 2004 details the compensation and related benefits wediscussed. This replaces my previous letter. Please initial one copy and returnto me. Also enclosed is a summary response to the questions you asked and the preliminarycalendar dates we discussed.

 

Joe, we are very pleasedthat you will be joining Lone Star. I am looking forward to working with you.Please call should you have any questions.

 
|   | Sincerely,      |
|--------|-----------------|
|   |            |
|   | /s/Rhys J. Best |   |

 

 

RJB: cbm

Enclosures
| cc:    |   | Fredrick Hegi, Presiding  Director                       |   |
|--------|--------|----------------------------------------------------------|--------|
|   |   | Lone Star Technologies, Inc.                             |   |
|   |   | Robert Spears, Vice  President, General Counsel for file |   |

 

P.O. Box 803546 | Dallas,Texas 75380-3546

 

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CONFIDENTIAL

 

Lone StarTechnologies

Position/CompensationOutline

May 7, 2004

 
| **Company:**                |   | Lone Star Technologies,  Inc. (Lone Star)                                                                                                                                                                      |
|-----------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                        |   |                                                                                                                                                                                                           |
| **Function:**               |   | Responsible for the  profitable leadership of Lone Star’s operating units: Lone Star Steel  Company; Star Energy Group; Fintube Technologies, Inc. Other operating units  may be added from time to time. |
|                        |   |                                                                                                                                                                                                           |
| **Title:**                  |   | President and Chief  Operating Officer                                                                                                                                                                         |
|                        |   |                                                                                                                                                                                                           |
| **Reports to:**             |   | Rhys J. Best, Chairman,  and Chief Executive Officer of Lone Star Technologies, Inc.                                                                                                                           |
|                        |   |                                                                                                                                                                                                           |
| **Compensation:**           |   |                                                                                                                                                                                                           |
|                        |   |                                                                                                                                                                                                           |
| **Salary:**                 |   | $385,000 per annum                                                                                                                                                                                             |
|                        |   |                                                                                                                                                                                                           |
| **Incentive Compensation:** |   |                                                                                                                                                                                                           |
|                        |   |                                                                                                                                                                                                           |
| **Target Bonus:**           |   | Annual Cash Bonus  Target of 75% of salary, depending on corporate and personal performance, the  actual bonus may range from 0 percent of target to 200 percent of target.                                    |
|                        |   |                                                                                                                                                                                                           |
|                        |   | Actual bonuses are paid  based on individual performance relative to annual operating company plans  and corporate profitability.                                                                              |
|                        |   | All annual cash bonus  awards must be approved by the Board of Directors.                                                                                                                                      |

 
| /s/ JA  |   | Initial |
|---------|--------|---------|
|    |   |    |
| /s/ RJB |   |    |

 

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| **Common Stock:** | ** ** | **Common Stock Grant: 25,000  shares**                                                                                                                                                                                                                                               |
|-------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|              |       |                                                                                                                                                                                                                                                                                 |
|              |       | An initial award of restricted common stock grants  of 25,000 shares of Lone Star. See attached 2004 Strategic Incentive Plan for  vesting schedule                                                                                                                                  |
|              |       |                                                                                                                                                                                                                                                                                 |
|              |       | **Non-qualified Common Stock Options: 50,000  shares**                                                                                                                                                                                                                               |
|              |       |                                                                                                                                                                                                                                                                                 |
|              |       | An initial award of non-qualified common stock  options of 50,000 shares in Lone Star common stock. The shares will vest one  (1) year from date of employment and have an option term of five years. The  strike price of the option will be set as of the first day of employment. |
|              |       |                                                                                                                                                                                                                                                                                 |
|              |       | The incumbent will be eligible for future stock  grant and/or option awards as determined by the Board of Directors of Lone  Star. All common stock options and grants must be approved by the Board of  Directors.                                                                  |
|              |       |                                                                                                                                                                                                                                                                                 |
| **Benefits:**     |       | •                                                                                                                                                                                                                                                                               | Eligible for the Lone  Star sponsored nonqualified deferred compensation plan which allows for a  company match of 50% of the individual contribution to the plan up to a total  annual company match of 25,000.00. [See plan material for details.] |
|              |       |                                                                                                                                                                                                                                                                                 |   |   |
|              |       | •                                                                                                                                                                                                                                                                               | Eligible for Lone Star  qualified 401(k) plan which currently allows for a company match of 100% of  contribution by the employee up to 6% of salary subject to the statutory  limitations. Change in the plan contribution levels have occurred from time  to time. [See plan material for details.] |
|              |       |                                                                                                                                                                                                                                                                                 |   |   |
|              |       | •                                                                                                                                                                                                                                                                               | Eligible for the Lone  Star sponsored health care plan, life insurance, and disability plans  available to persons is similar positions. [See plan material for details.] |
|              |       |                                                                                                                                                                                                                                                                                 |   |   |
|              |       | •                                                                                                                                                                                                                                                                               | Four weeks vacation |

 

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| **Other  Compensation:**   | If  needed for business purposes the company will reimburse monthly dues and  documented business expenses incurred for one luncheon club and/or one  country club                                                                                                                                                                                                                   |
|----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                       |                                                                                                                                                                                                                                                                                                                                                                                 |
| **Change of Control:**     | This  position will be included in the Lone Star change of control policy. The  incumbent will receive twenty-four (24) months of income protection should  the person be terminated without cause within two (2) years after a change in  control of Lone Star. [See Employment Retention Policy.]                                                                                  |
|                       |                                                                                                                                                                                                                                                                                                                                                                                 |
| **Termination Allowance:** | As  special consideration for this new position the individual will be eligible  for twenty-four (24) months salary plus earned bonus if the individual is  terminated prior to 12/31/06 as a result of material reduction of activity,  liquidation or significant redeployment of the assets of Lone Star. The  medical benefit plan will be extended for twenty-four (24) months. |
|                       |                                                                                                                                                                                                                                                                                                                                                                                 |
| **Moving Allowance:**      | To  facilitate the family move and the transfer of personal assets to Dallas, a  moving allowances as follows:                                                                                                                                                                                                                                                                       |
|                       |                                                                                                                                                                                                                                                                                                                                                                                 |   |
|                       | •                                                                                                                                                                                                                                                                                                                                                                               | A  one time moving allowance of $32,000 to reimburse and supplement the cost of  the move, and incidental expenses. This allowance will be “grossed up” 35%  for tax adjustment. |
|                       |                                                                                                                                                                                                                                                                                                                                                                                 |   |
|                       | •                                                                                                                                                                                                                                                                                                                                                                               | Reimbursement  of reasonable temporary living expenses and new home purchase travel. The  temporary living is expected to range between 90 and 150 days. During that  period Lone Star will reimburse your airfare expense to return home two times  out of four weeks. |
|                       |                                                                                                                                                                                                                                                                                                                                                                                 |   |
|                       | •                                                                                                                                                                                                                                                                                                                                                                               | Sale  of personal residence. Should the current house not sell within 120 days of  joining the company. Lone Star will contract with a nationally recognized  home purchase company (e.g. Prudential) to effect a timely sale of the  residence. |
|                       |                                                                                                                                                                                                                                                                                                                                                                                 |   |
|                       | •                                                                                                                                                                                                                                                                                                                                                                               | Reimbursement  of standard closing expenses associated with the sale of the personal  residence and the purchase of comparable housing in Dallas. |

 

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