EMPLOYMENT AGREEMENT

This Employment Agreement (the Agreement) dated this 18th day of February, 2003 by and between Metals USA, Inc., a Delaware corporation (the Company), and Celso Loureno Gonalves (Executive).

RECITALS

A.            As of the date hereof, the Company is engaged primarily in the business of providing metals processing, metals fabricating, and/or specialty metals services; and

B.            Executive and the Company desire that Executive shall be employed by the Company under the terms and provisions of this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, it is hereby agreed as follows:

1.             Employment and Duties.

(a)           The Company hereby employs Executive as President and Chief Executive Officer of the Company.  As such, Executive shall have the responsibilities, duties and authority reasonably accorded to and expected of, and consistent with Executives position(s) and will report directly to the Board of Directors of the Company (the Board).  Executive hereby accepts employment by the Company upon the terms and conditions herein contained and, subject to Section 3 hereof, agrees to devote Executives full business time, attention and efforts to promote and further the business of the Company.

(b)           Executive shall faithfully adhere to, execute and fulfill all policies established by the Company, as such policies may be changed from time to time by the Company, including the Companys Code of Conduct.

2.             Compensation.  For all services rendered by Executive, the Company shall compensate Executive as follows as of February 24, 2003 (the Effective Date):

(a)           Base Salary.  The initial base salary payable to Executive shall be $375,000 per year, payable on a regular basis in accordance with the Companys standard payroll procedures.  On an annual basis, the Company will review Executives performance and may make increases to such base salary if, in its discretion, any such increase is warranted.

(b)           Executive Perquisites, Benefits, Annual Bonus and Other Compensation.  Executive shall be entitled to receive additional benefits and compensation from the Company in such form and to such extent as specified below:

(i)            In the discretion of the Compensation Committee of the Board, (the Compensation Committee), Executive shall be eligible for an annual bonus which may be payable in either cash or shares of the Companys common stock (Company Stock).  Payment of a bonus shall be contingent upon such terms and conditions as the Compensation Committee shall decide in its sole discretion.

(ii)           The Company shall pay Executive a one-time sign-on bonus of $50,000.

(iii)          Upon the Effective Date, the Compensation Committee shall grant Executive an option to purchase 100,000 shares of Common Stock at a strike price of $4.75 per share, an option to purchase 100,000 shares of Common Stock at a strike price of $9.50 per share, and an option to purchase 100,000 shares of Common Stock at a strike price of $14.25 per share (the Options).  The Options will each have a five-year term and one-third of the shares subject to the Options will vest on each of the first three anniversaries of the Effective Date.  To the extent not previously vested, the Options shall become completely vested upon a termination of employment or other service by the Company without Cause or upon a termination by Executive for Good Reason or upon a Change in Control.  Upon termination of employment or other service with the Company and its subsidiaries for any reason other than Cause, Executive may exercise the vested portion of the Options during the three-month period following such termination of employment or other service; the portions of the Options that are not vested on or prior to the date of termination shall be forfeited upon the date of termination.  Upon a termination for Cause, all Options, vested and unvested, shall be forfeited on the date of termination.

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