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                                                                     EXHIBIT 4.4

                           FRIEDMAN INDUSTRIES, INC.

                        1989 INCENTIVE STOCK OPTION PLAN


                 1.       Purpose.  This 1989 Incentive Stock Option Plan of
Friedman Industries, Incorporated, for key employees of the Company who are not
members of the Board of Directors is intended to advance the best interest of
the Company by providing those persons who have a substantial responsibility
for its growth with additional incentive and by increasing their proprietary
interest in the success of the Company -- thereby encouraging them to continue
their employment.

                 2.       Definitions.  As used herein the words and phrases
next below set out shall have the meaning next below attributed to them unless
the context in which any such word or phrase appears reasonably a broader,
narrower, or different meaning:

                 (a)      "Affiliate" shall mean any parent corporation and any
         subsidiary corporation.  The term "parent corporation" means any
         corporation (other than the Company) in an unbroken chain of
         corporations ending with the Company if, at the time of the granting
         of the Option, each of the corporations other than the Company owns
         stock possessing 50 percent or more of the total combined voting power
         of all classes of stock in one of the other corporations in such
         chain.  The term "subsidiary corporation" means any corporation (other
         than the Company) in an unbroken chain of corporations beginning with
         the Company, if, at the time of the granting of the Option, each of
         the corporations other than the last corporation in the unbroken chain
         owns stock possessing 50 percent or more of the total combined voting
         power of all classes of stock in one of the other corporations in such
         chain.

                 (b)      "Board of Directors" shall mean the board of
         directors of the Company.

                 (c)      "Code" shall mean the Internal Revenue Code of 1986,
         as amended.

                 (d)      "Committee" shall mean the Committee appointed by the
         Board of Directors pursuant to the provisions of Paragraph 3 of the
         Plan.

                 (e)      "Company" shall mean Friedman Industries,
         Incorporated, a Texas corporation.

                 (f)      "Disinterested Person" shall mean a "disinterested
         person" as that term is defined in Rule 16b- 3 under the Securities
         Exchange Act of 1934.

                 (g)      "Fair Market Value" of the Stock as of any date shall
         mean (i) the average of the high and low sale prices of the Stock on
         such date on the principal securities exchange on which the Stock is
         listed; or (ii) if the Stock is not listed on a securities exchange,
         the average of the high and low sale prices of the Stock on





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         such date as reported on the NASDAQ National Market System; or (iii)
         if the Stock is not listed on the NASDAQ National Market System, the
         average of the high and low bid quotations for the Stock on such date
         as reported by the National Quotation Bureau Incorporated; or (iv) if
         none of the foregoing is applicable, as determined by the Committee.

                 (h)      "Option" shall mean an option granted under the terms
         of the Plan to purchase shares of Stock.

                 (i)      "Option Agreement" shall mean the written agreement
         which sets forth the terms of an Option.

                 (j)      "Optionee" shall mean the person to whom an Option is
         granted.

                 (k)      "Plan" shall mean the 1989 Incentive Stock Option
         Plan of Friedman Industries, Incorporated, as herein set forth and as
         hereafter amended.

                 (l)      "Stock" shall mean the Common Stock of the Company,
         $1.00 par value.

                 (m)      "Ten-Percent Shareholder" shall mean an individual
         who, at the time the Option is granted, owns stock possessing more
         than 10 percent of the total combined voting power of all classes of
         stock of the Company or of any Affiliate.  For purposes of the
         immediately preceding sentence, an individual shall be considered as
         owning the stock owned, directly or indirectly, by or for his brothers
         and sisters (whether by the whole or half blood), spouse, ancestors,
         and lineal descendants; and stock owned, directly or indirectly, by or
         for a corporation, partnership, estate, or trust, shall be considered
         as being owned proportionately by or for its shareholders, partners,
         or beneficiaries.

                 3.       Administration.  The Plan shall be administered by a
committee to be appointed by the Board of Directors; and all questions of
interpretation and application of the Plan or of Options shall be subject to
the determination, which shall be final and binding, of the Committee.  The
Committee shall consist of not less than three members of the Board of
Directors, all of whom shall be Disinterested Persons.  A majority of the
members of the Committee will constitute a quorum.  All determinations of the
Committee will be made by a majority of its members.  Any decision or
determination reduced to writing and signed by a majority of the members will
be as effective as if it had been made by a majority vote at a meeting properly
called and held.  The Plan shall be administered in such a manner as to permit
the Options granted hereunder to qualify as incentive stock options within the
meaning of Section 422A of the Code.

                 4.       Option Shares.  The total amount of the Stock with
respect to which Options may be granted shall be 150,000 shares; provided, that
such aggregate number of shares shall be subject to adjustment in accordance
with the provisions of Paragraph 18 hereof.  Such shares may be treasury shares
or authorized but unissued shares.





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                 In the event that any outstanding Option for any reason shall
expire or terminate by reason of the death or severance of employment or
affiliation of the Optionee, the surrender of any such Option, or any other
cause, the shares of Stock allocable to the unexercised portion of such Option
may again be subject to an Option under the Plan.

                 5.       Authority to Grant Options.  The Committee may grant
from time to time to such eligible individuals as it shall from time to time
determine an Option, or Options, to buy a stated number of shares of Stock
under the terms and conditions of the Plan.  Subject only to any applicable
limitations set forth elsewhere in the Plan, the number of shares of Stock to
be covered by any Option shall be as determined by the Committee.

                 6.       Eligibility.  The individuals who shall be eligible
to receive Options shall be such key employees of the Company who are not
members of the Board of Directors as the Committee shall determine from time to
time.  Notwithstanding the preceding provisions of this Paragraph, the Board of
Directors may designate one or more individuals who shall not be eligible to
receive options under the Plan or under other similar plans of the Company.  No
member of the Committee shall be eligible to receive stock, stock options, or
stock appreciation rights under any plan of the Company or any of its
Affiliates if such receipt would cause such individual not to be a
Disinterested Person.

                 7.       Option Price.  The price at which shares may be
purchased pursuant to Options shall be not less than the greater of: (i) one
hundred percent of the Fair Market Value of the shares of Stock on the date the
Option is granted or (ii) the aggregate par value of such shares on the date
the Option is granted, and the Committee in its discretion may provide that the
price at which shares may be so purchased shall be more than one hundred
percent of such Fair Market Value.  In the case of any Ten-Percent Shareholder,
the price at which shares may be so purchased under an Option shall be not less
than 110 percent of the Fair Market Value of the Stock on the date the Option
is granted.

                 8.       Duration of Options.  No Option shall be exercisable
after the expiration of ten years from the date such Option is granted.  In the
case of any Ten-Percent Shareholder, no Option shall be exercisable after the
expiration of five years from the date such Option is granted.

                 9.       Amount Exercisable.  Each Option may be exercised so
long as it is valid and outstanding, from time to time, in part or as a whole,
in such manner and subject to such conditions, as the Committee in its
discretion may provide in the Option Agreement.  Notwithstanding the
immediately preceding sentence, the aggregate Fair Market Value (determined as
of the time an Option is granted) of the Stock with respect to which such
Option is exercisable for the first time by the Optionee during any calendar
year (under this Plan and any other incentive stock option plan(s) of the
Company or any Affiliate) shall not exceed $100,000.





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                 10.      Exercise of Options.  Options shall be exercised by
the delivery of written notice to the Committee setting forth the number of
shares with respect to which the Option is to be exercised and the address to
which the certificates representing shares of the Stock issuable upon the
exercise of such Option shall be mailed.  In order to be effective, such
written notice shall be accompanied, at the time of its actual receipt by the
Committee, by payment of the option price of such shares, which payment shall
be made by check in an amount equal to the option price of such shares.
Notwithstanding the immediately preceding sentence, if at the time of actual
receipt by the Committee of such written notice, (i) the Company has
unrestricted earned surplus in an amount not less than the option price of such
shares, (ii) all accrued cumulative preferential dividends and other current
preferential dividends on all outstanding preferred stock of the Company have
been fully paid, (iii) the reacquisition by the Company of its own shares of
Stock for the purpose of enabling the Optionee to exercise such Option is
otherwise permitted by applicable law and without any vote or consent of any
shareholder of the Company, and (iv) there shall have been adopted, and there
is in full force and effect, a resolution of the Board of Directors authorizing
the reacquisition by the Company of its own shares of Stock for such purpose,
then such Optionee may deliver to the Committee, in payment of the option price
of the shares with respect to which such Option is exercised, (a) certificates
registered in the name of such Optionee representing a number of shares of
Stock legally and beneficially owned by such Optionee, free of all liens,
claims and encumbrances of every kind, and having a Fair Market Value on the
date of actual receipt by the Committee of such written notice that is not
greater than the option price of the shares with respect to which such Option
is to be exercised, such certificates to be accompanied by stock powers duly
endorsed in blank by the record holder of the shares represented by such
certificates, with the signature of such record holder guaranteed by an
institution acceptable to the Committee, and (b) if the option price of the
shares with respect to which such Option is to be exercised exceeds such Fair
Market Value, a check payable to the order of the Company in an amount equal to
the amount of such excess.  Notwithstanding the foregoing provisions of this
Paragraph 10, the Committee, in its sole discretion, may refuse to accept
shares of Stock in payment of the option price of the shares with respect to
which such Option is to be exercised and, in that event, any certificates
representing shares of Stock which were delivered to the Committee with such
written notice shall be returned to such Optionee together with notice to such
Optionee of the refusal of the Committee to accept such shares of Stock.  If,
within fourteen business days after the receipt by such Optionee of such
written notice, such Optionee shall not have delivered to the Committee a check
in an amount equal to the option price of the shares with respect to which such
Option is to be exercised, such written notice from the Optionee to the
Committee shall be ineffective to exercise such Option.  In its sole and
absolute discretion, the Committee may require, as an additional condition to
the issuance of Stock upon exercise of an Option, that the Optionee furnish the
Committee with an executed copy of a stock purchase agreement, in such form as
may be required by the Committee, at the time notice of exercise is delivered
to the Company or within three business days after the proposed agreement is
presented to the Optionee, if later.  As promptly as practicable after the
receipt by the Committee of (i) such written notice from the Optionee setting
forth the number of shares with respect to which such Option is to be
exercised, (ii) payment of the option price of such shares in the form required
by the foregoing provisions of this Paragraph 10, and (iii) a fully-executed
stock purchase agreement in the





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form required by the Committee, if any is so required, the Company shall cause
to be delivered to such Optionee (or to a specified escrow agent, if so
required under the terms of any applicable stock purchase agreement)
certificates representing the number of shares with respect to which such
Option has been so exercised, such certificates to be registered in the name of
such Optionee, provided that such delivery shall be considered to have been
made when such certificates shall have been mailed, postage prepaid, to such
Optionee at the address specified for such purpose in such written notice from
the Optionee to the Committee.

                 11.      Transferability of Options.  Options shall not be
transferable by the Optionee otherwise than by will or under the laws of
descent and distribution, and shall be exercisable, during his lifetime, only
by him.

                 12.      Termination of Employment of Optionee.  Except as
otherwise expressly provided herein or in the Option Agreement, Options shall
terminate immediately upon severance of employment of the Optionee from the
Company for any reason, with or without cause, other than death or retirement
for age or disability under the then established rules of the Company.  Whether
authorized leave of absence or absence on military or government service shall
constitute severance of the employment relationship between the Company and the
Optionee shall be determined by the Committee at that time.

                 If, before the expiration of an Option, the Optionee shall be
retired in good standing from the employ of the Company because of his age
under the then established rules of the Company, the Option shall terminate on
the earlier of such date of expiration or one day less than three months after
is retirement.  In the event of retirement for age, the Optionee shall have the
right prior to the termination of the Option to exercise the Option to the
extent to which he was entitled to exercise it immediately prior to his
retirement for age.

                 If, before the expiration of an Option, the Optionee shall be
retired or severed from the employ of the Company for disability under the then
established rules of the Company, the Option shall terminate on the earlier of
such date of expiration or one day less than one year after the date he retired
or was severed because of disability.  In the event that the Optionee shall be
retired or severed from the employ of the Company for disability under the then
established rules of the Company, the Optionee shall have the right prior to
the termination of the Option to exercise the Option to the extent to which he
was entitled to exercise it immediately prior to his retirement or severance of
employment for disability.

                 In the event of the death of a holder of an Option while in
the employ of the Company or during the period after the employee has retired
for age or disability or was severed for disability and before the date of
expiration of the Option, such Option will terminate on the earlier of the date
of expiration or one year following the date of his death.  After the death of
the Optionee holding an Option, his executors, administrators or any persons to
whom his Option may be transferred by will or by the laws of descent





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and distribution shall have the right, at any time prior to such termination,
to exercise the Option to the extent to which he was entitled to exercise it
immediately prior to the death.

                 For the purpose of determining the employment relationship
between the Company and the Optionee, employment by any Affiliate shall be
considered employment by the Company, as shall employment by a corporation
issuing or assuming a stock option in a transaction to which section 425(a) of
the Internal Revenue Code of 1986, as amended, applies, or by a parent
corporation or subsidiary corporation of such corporation issuing or assuming a
stock option (and for this purpose, the phrase "corporation issuing or assuming
a stock option" shall be substituted for the word "Company" in the definitions
of parent corporation and subsidiary corporation specified in Paragraph 2(a),
and the parent-subsidiary relationship shall be determined at the time of the
corporate action described in section 425(a)).

                 13.      Requirements of Law.  The Company shall not be
required to sell or issue any shares under any Option if the issuance of such
shares shall constitute or result in a violation by the Optionee or the Company
of any provision of any law,  statute, or regulation of any governmental
authority.  Specifically in connection with any applicable statute or
regulation relating to the registration of securities, upon exercise of any
Option, the Company shall not be required to issue such shares unless the
Committee has received evidence satisfactory to it to the effect that the
holder of such Option will not transfer such shares except in accordance with
applicable law, including receipt of an opinion of counsel satisfactory to the
Company to the effect that any proposed transfer complies with applicable law.
Any determination in this connection by the Committee shall be final, binding
and conclusive.  The Company may, but shall in no event be obligated to,
register any shares covered hereby pursuant to applicable securities laws of
any country or political subdivision thereof.  In the event the shares issuable
on exercise of an Option are not so registered, the Company may imprint on the
certificate evidencing such shares any legend that counsel for the Company
considers necessary or advisable to comply with applicable law.  The Company
shall not be obligated to take any other affirmative action in order to cause
the exercise of an Option or the issuance of shares pursuant thereto to comply
with any law or regulation of any governmental authority.

                 14.      No Rights as Stockholder.  No Optionee shall have
rights as a Stockholder with respect to shares covered by his Option until the
date of issuance of a stock certificate for such shares; and, except as
otherwise provided in Paragraph 18 hereof, no adjustment for dividends, or
otherwise, shall be made if the record date therefor is prior to the date of
issuance of such certificate.

                 15.      Employment or Affiliation Obligation.  The granting
of any Option shall not impose upon the Company or Affiliate any obligation to
employ or become affiliated with, or continue to employ or be affiliated with,
any Optionee; and the right of the Company or any Affiliate to terminate the
employment or affiliation of any person shall not be diminished or affected by
reason of the fact that an Option has been granted to him.





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                 16.      Forfeiture for Competition.  Notwithstanding any
other provision of the Plan, the Committee may provide in the Option Agreement
that if at any time during the term of an Option granted hereunder the
Committee finds by a majority vote, after full consideration of the facts
presented on behalf of the Company and the Optionee, that such Optionee,
without the written consent of the Company, directly or indirectly owns,
operates, manages, controls or participates in the ownership, management,
operation or control of, or is employed by or is paid as a consultant or as an
independent contractor by a business which competes with the Company or any
Affiliate in the trade area served by the Company or any Affiliate at any time
during the term of the Option but prior to its exercise in full and in which
area the Optionee had performed services for the Company or any Affiliate while
employed by it, the Optionee shall forfeit all unexercised Options and all
exercised Options under which the Company has not yet delivered the
certificates.  The preceding provisions of this Paragraph 16 shall not be
deemed to have been violated solely by reason of the Optionee's ownership of
stock or securities of any publicly owned corporation, provided that such
ownership does not result in effective control of such corporation, and
provided further that written notice of such ownership is given to the
Committee within sixty (60) days after the later of (i) the date on which the
Optionee is notified of the award of an Option, or (ii) the date on which such
ownership is acquired.

                 17.      Forfeiture for Dishonesty.  Notwithstanding anything
to the contrary in the Plan, the Committee may provide in the Option Agreement
that if the Committee finds by a majority vote, after full consideration of the
facts presented on behalf of both the Company and the Optionee, that the
Optionee has been engaged in fraud, embezzlement, theft, commission of a
felony, or proven dishonesty in the course of his employment by or affiliation
with the Company or any Affiliate which damaged the Company or any Affiliate,
or for disclosing trade secrets of the Company or any Affiliate, the Optionee
shall forfeit all unexercised Options and all exercised Options under which the
Company has not yet delivered the certificates.  The decision of the Committee
as to the cause of an Optionee's discharge and the damage done to the Company
or any Affiliate shall be final.  No decision of the Committee, however, shall
affect the finality of the discharge of such Optionee by the Company or any
Affiliate in any manner.

                 18.      Changes in the Company's Capital Structure.  The
existence of outstanding Options shall not affect in any way the right or power
of the Company or its stockholders to make or authorize any and all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or prior preference
stock ahead of or affecting the Stock or the rights thereof, or the dissolution
or liquidation of the Company, or any sale or transfer of all or any part of
its assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

                 If the Company shall effect a subdivision or consolidation of
shares or other capital readjustment, the payment of a stock dividend, or other
increase or reduction of the number of shares of the Stock outstanding, without
receiving compensation therefor in money, services or property, then (a) the
number, class, and per share price of shares of stock subject to outstanding
Options hereunder shall be appropriately adjusted in such





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a manner as to entitle an Optionee to receive upon exercise of an Option, for
the same aggregate cash consideration, the same total number of and class of
shares as he would have received had he exercised his Option in full
immediately prior to the event requiring the adjustment; and (b) the number and
class of shares then reserved for issuance under the Plan shall be adjusted by
substituting for the total number and class of shares of Stock then reserved
that number and class of shares of stock that would have been received by the
owner of an equal number of outstanding shares of each class of stock as the
result of the event requiring the adjustment.

                 If the Company is merged or consolidated with another
corporation or if the Company is liquidated or sells or otherwise disposes of
substantially all its assets while unexercised Options remain outstanding under
the Plan, (i) subject to the provisions of clause (iii) below, after the
effective date of such merger, consolidation, liquidation, sale or other
disposition, as the case may be, each holder of an outstanding Option shall be
entitled, upon exercise of such Option, to receive, in lieu of shares of Common
Stock, the number and class or classes of shares of such stock or other
securities or property to which such holder would have been entitled if,
immediately prior to such merger, consolidation, liquidation, sale or other
disposition, such holder had been the holder of record of a number of shares of
Common Stock equal to the number of shares as to which such Option shall be so
exercised; (ii) the Board of Directors may waive any limitations set forth in
or imposed pursuant to Paragraph 9 hereof so that all Options, from and after a
date prior to the effective date of merger, consolidation, liquidation, sale or
other disposition, as the case may be, specified by the Board of Directors,
shall be exercisable in full; and (iii) all outstanding Options may be
cancelled by the Board of Directors as of the effective date of any such
merger, consolidation, liquidation, sale or other disposition, provided that
(A) notice of such cancellation shall be given to each holder of an Option and
(B) each holder of an Option shall have the right to exercise such Option in
full (without regard to any limitations set forth in or imposed pursuant to
Paragraph 9 hereof) during a period set by the Board of Directors preceding the
effective date of such merger, consolidation, liquidation, sale or other
disposition and, provided further, that in the event all outstanding Options
may not be exercised in full under applicable securities laws without
registration of the shares of Common Stock issuable on exercise of such
Options, the Board of Directors may limit the exercise of such Options to such
number of shares of Common Stock, if any, as may be issued without such
registration, the method of choosing which Options may be exercised and the
number of shares of Common Stock for which such Options may be exercised to be
solely within the discretion of the Board of Directors.

                 Except as hereinbefore expressly provided, the issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, for cash or property, or for labor or services either
upon direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number, class,
or price of shares of Stock then subject to outstanding Options.

                 19.      Substitution Options.  Options may be granted under
this Plan from time to time in substitution for stock options held by employees
of other corporations who





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are about to become employees of or affiliated with the Company or any
Affiliate as the result of a merger of consolidation of the employing
corporation with the Company or any Affiliate, or the acquisition by the
Company or any Affiliate of the assets of the employing corporation, or the
acquisition by the Company or any Affiliate of stock of the employing
corporation as the result of which it becomes an Affiliate of the Company.  The
terms and conditions of the substitute Options so granted may vary from the
terms and conditions set forth in this Plan to such extent as the Board of
Directors of the Company at the time of grant may deem appropriate to conform,
in whole or in part, to the provisions of the stock options in substitution for
which they are granted.

                 20.      Amendment or Termination of Plan.  The Board of
Directors may modify, revise or terminate this Plan at any time and from time
to time.  Notwithstanding the immediately preceding sentence, without the
further approval of the holders of at least a majority of the outstanding
shares of Stock or if the provisions of the corporate charter, by-laws or
applicable state law prescribes a greater degree of stockholder approval for
this action, without the degree of stockholder approval thus required, the
Board of Directors may not (a) change the aggregate number of shares which may
be issued under Options pursuant to the provisions of the Plan, (b) change the
class of individuals eligible to receive Options, (c) increase the aggregate
fair market value (determined at the time an Option is granted) of the Common
Stock with respect to which an Option is exercisable for the first time by an
Optionee during any calendar year (under this Plan and any other incentive
stock option plan(s) of the Company or any Affiliate) to an amount greater than
$100,000; and without the affirmative votes of the holders of a majority of the
securities of the Company present, or represented, and entitled to vote at a
meeting duly held in accordance with applicable laws, or the written consent of
the holders of a majority of the securities of the Company entitled to vote,
the Board of Directors may not materially increase the benefits accruing to
participants under the Plan.  The Board shall have the power to make such
changes in the Plan and in the regulations and administrative provisions
hereunder or in any outstanding Option as in the opinion of counsel for the
Company may be necessary or appropriate from time to time to enable any Option
granted pursuant to the Plan to qualify as an incentive stock option or such
other stock option as may be defined under the Code so as to receive
preferential federal income tax treatment.

                 21.      Tax Withholding.  The Company or any Affiliate shall
be entitled to deduct from other compensation payable to each Optionee any sums
required by federal, state, or local tax law to be withheld with respect to the
grant or exercise of an Option; but, in the alternative, the Company may
require the Optionee (or other person exercising the Option) to pay such sums
directly to the employer corporation.  If the Optionee (or other person
exercising the Option) is required to pay such sums directly, payment in cash
or by check of such sums for taxes shall be delivered within 10 days after the
date of exercise.  The Company shall not be obligated to issue shares to the
Optionee (or such other person) upon exercise of any Option until such payment
has been received, unless withholding (or offset against a cash payment) as of
or prior to the date of such exercise is sufficient to cover all such sums due
with respect to such exercise.  The Company shall not be obligated to advise an
Optionee of the existence of the tax or the amount which the employer
corporation will be so required to withhold.





                                     -9-
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                 22.      Written Agreement.  Each Option granted hereunder
shall be embodied in a written Option Agreement, which shall be subject to the
terms and conditions prescribed above and shall be signed by the Optionee and
by the Chairman of the Board, Chief Executive Officer, President or any Vice
President of the Company for and in the name and on behalf of the Company.
Such an Option Agreement shall contain such other provisions as the Committee
as its discretion shall deem advisable.

                 23.      Indemnification of the Committee and the Board of
Directors.  With respect to administration of the Plan, the Company shall
indemnify each present and future member of the Committee and the Board of
Directors against, and each member of the Committee and the Board of Directors
shall be entitled without further act on his part to indemnity from the Company
for, all expenses (including the amount of judgments and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than the amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of any action, suit, or proceeding in which he
may be involved by reason of his being or having been a member of the Committee
and the Board of Directors, whether or not he continues to be such member of
the Committee and the Board of Directors at the time of incurring such
expenses; provided, however, that such indemnity shall not include any expenses
incurred by any such member of the Committee and the Board of Directors (i) in
respect of matters as to which he shall be finally adjudged in any such action,
suit or proceeding to have been guilty of gross negligence or willful
misconduct in the performance of his duty as such member of the Committee and
the Board of Directors, or (ii) in respect of any matter in which any
settlement is effected, to an amount in excess of the amount approved by the
Company on the advice of its legal counsel; and provided further, that no right
of indemnification under the provisions set forth herein shall be available to
or enforceable by any such member of the Committee and the Board of Directors
unless, within sixty (60) days after institution of any such action, suit or
proceeding, he shall have offered the Company, in writing, the opportunity to
handle and defend same at its own expense.  The foregoing right of
indemnification shall inure to the benefit of the heirs, executors or
administrators of each such member of the Committee and the Board of Directors
and shall be in addition to all other rights to which such member of the
Committee and the Board of Directors may be entitled as a matter of law,
contract, or otherwise.

                 24.      Effective Date of Plan.  The Plan shall become
effective and shall be deemed to have been adopted on December 1, 1989, if
within one year of that date it shall have been approved by the holders of at
least a majority of the outstanding shares of voting stock of the Company
voting in person or by proxy at a duly held stockholders' meeting, or if the
provisions of the corporate character, by-laws or applicable state law
prescribes a greater degree of stockholder approval for this action, the
approval by the holders of that percentage, at a duly held meeting of
stockholders.  No Option shall be granted pursuant to the Plan after November
30, 1999.





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                                FIRST AMENDMENT
                                       TO
                       FRIEDMAN INDUSTRIES, INCORPORATED
                        1989 INCENTIVE STOCK OPTION PLAN


         1.      Section 2(f) of the Friedman Industries, Incorporated 1989
Incentive Stock Option Plan (the "Plan") is hereby deleted in its entirety and
replaced by the following:

                 "(f)     "Non-Employee Director" shall mean a "Non-Employee
         Director" as that term is defined in Rule 16b-3 under the Securities
         Exchange Act of 1934."

         2.      The second sentence of Section 3 of the Plan is hereby deleted
in its entirety and replaced by the following:

                 "The Committee shall consist of not less than two members of
         the Board of Directors, all of whom shall be Non-Employee Directors."

         3.      The last sentence of Section 6 of the Plan is hereby deleted
in its entirety and replaced by the following:

                 "No member of the Committee shall be eligible to receive
         stock, stock options or stock appreciation rights under any plan of
         the Company or any of its Affiliates if such receipt would cause such
         individual not to be a Non-Employee Director."

         4.      The last sentence of Section 24 of the Plan is hereby deleted
in its entirety and replaced by the following:

                 "No Option shall be granted pursuant to the Plan after August
         22, 1997.

         5.      Except as expressly amended by this First Amendment, the Plan
shall continue in full force and effect in accordance with its terms.

         6.      The effective date of this First Amendment shall be August 22,
1997.


Board of Directors Approval:  September 25, 1997