Exhibit 10.3

LONE STAR TECHNOLOGIES, INC.
FORM OF EMPLOYEE OPTION AGREEMENT

WITH ONE-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 will become exercisable as to the total number of shares covered by the Option on the first anniversary of the Date of Grant, subject to the Optionee’s remaining in the continuous employment of LST or one of its subsidiaries (“ employment ”) through such anniversary 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 Option will become fully exercisable if, before the first anniversary of the Date of Grant, (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 (a) 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, (b) 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(b) shall shorten any longer period to which the Optionee is entitled under Section 4(a)), (c) the date of the termination of the Optionee’s employment for Cause (as defined in the Plan), and (d) the date 90 days after the date of the termination of the Optionee’s employment for any reason other