Exhibit
10.22


 





 


Rhys J. Best

Chief Executive Officer


 


May 7, 2004


CONFIDENTIAL


 


Mr. Joe Alvarado

1441 Oak Park Drive

Munster, IN 46321-2622


 


Dear Joe:


 


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


 


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


 


Joe, we are very pleased
that 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


 





















 





CONFIDENTIAL


 


Lone Star
Technologies


Position/Compensation
Outline


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

  	
   

  	
   

  



 





















 


	
  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

  



 





















 


	
  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.