<PAGE> 1
As filed with the Securities and Exchange Commission on October 14, 1997
Registration No. 333-____________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------
FRIEDMAN INDUSTRIES, INCORPORATED
(Exact name of registrant as specified in its charter)
TEXAS 74-1504405
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
4001 HOMESTEAD ROAD
HOUSTON, TEXAS 77028
(Address of Principal Executive Offices) (Zip Code)
FRIEDMAN INDUSTRIES, INCORPORATED 1996 STOCK OPTION PLAN;
FRIEDMAN INDUSTRIES, INCORPORATED 1995 NON-EMPLOYEE DIRECTOR STOCK PLAN, AS
AMENDED;
AND
FRIEDMAN INDUSTRIES, INCORPORATED 1989 INCENTIVE STOCK OPTION PLAN, AS AMENDED
(Full title of the plans)
---------------
BENNY HARPER
SENIOR VICE PRESIDENT--FINANCE
FRIEDMAN INDUSTRIES, INCORPORATED
4001 HOMESTEAD ROAD
HOUSTON, TEXAS 77028
(Name and address of agent for service)
(713) 672-9433
(Telephone number, including area code, of agent for service)
With Copy to:
Fulbright & Jaworski L.L.P.
1301 McKinney, Suite 5100
Houston, Texas 77010-3095
(713) 651-5151
Attention: Robert E. Wilson
---------------
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box.[x]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED SHARE (1) PRICE (1) REGISTRATION FEE
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
Common Stock, $1.00
par value per share 461,650 shares(2) $9 5/16 $4,299,116 $1,303
======================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933 and based upon the
average of the high and low sales prices of a share of Common Stock as
reported by the American Stock Exchange, Inc. on October 10, 1997.
(2) Includes 262,500 shares to be issued upon the exercise of options granted
and to be granted under the Friedman Industries, Incorporated 1996 Stock
Option Plan; 6,000 shares issued and to be issued under the Friedman
Industries, Incorporated 1995 Non-Employee Director Stock Plan, as amended;
and 193,150 shares issued and to be issued upon the exercise of options
granted pursuant to the Friedman Industries, Incorporated 1989 Incentive
Stock Option Plan, as amended. Also includes an indeterminable number of
shares of Common Stock issuable as a result of the anti-dilution provisions
of such plans.
================================================================================
<PAGE> 2
PROSPECTUS
33,328 Shares
FRIEDMAN INDUSTRIES, INCORPORATED
Common Stock
------------------
This Prospectus has been prepared for use in connection with the
proposed sale by certain selling stockholders named herein (the "Selling
Stockholders") of Friedman Industries, Incorporated, a Texas corporation (the
"Registrant"), of an aggregate of 33,328 shares (the "Shares") of common stock,
$1.00 par value (the "Common Stock"), of the Registrant. The Shares may be
offered and sold by the Selling Stockholders from time to time from the date
hereof through September 30, 1998, directly or through broker-dealers
designated from time to time. The Shares may be sold from time to time in one
or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at prices determined on a negotiated or competitive
bid basis. Shares may be sold through a broker-dealer acting as agent or
broker for the Selling Stockholders, or to a broker-dealer acting as principal.
See "Plan of Distribution".
The Common Stock is traded on the American Stock Exchange (the "AMEX")
under the symbol "FRD". On October 10, 1997, the last reported sales price for
the Common Stock as reported on the AMEX was $9 1/4 per share.
The Registrant will receive no portion of the proceeds of the sale of
the Shares offered hereby and will bear certain of the expenses incident to
their registration.
The Shares have not been registered for sale under the securities laws
of any state or jurisdiction as of the date of this Prospectus. Brokers or
dealers effecting transactions in the Shares should confirm the existence of
any exemption from registration or the registration thereof under the
securities laws of the states in which such transactions occur.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------
The date of this Prospectus is October 14, 1997.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . . . . . . 3
THE REGISTRANT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SELLING STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . 3
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . 4
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
</TABLE>
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE REGISTRANT, THE SELLING
STOCKHOLDERS OR ANY UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY OF THE SHARES BY ANYONE IN
ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN
WHICH THE PERSON MAKING THE OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR
TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. UNDER
NO CIRCUMSTANCES SHALL THE DELIVERY OF THIS PROSPECTUS OR ANY SALE MADE
PURSUANT TO THIS PROSPECTUS CREATE ANY IMPLICATION THAT INFORMATION CONTAINED
IN THIS PROSPECTUS IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF THIS
PROSPECTUS.
AVAILABLE INFORMATION
The Registrant is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information
filed by the Registrant with the Commission can be inspected at the Public
Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and the Regional Offices of the
Commission at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511, and 7 World Trade Center, New York, New York 10048, or on
the Internet at http://www.sec.gov. Copies of such material can also be
obtained from the Public Reference Section of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Such reports, proxy and information statements and other information
concerning the Registrant can also be inspected and copied at the offices of
the AMEX, 86 Trinity Place, New York, New York 10006-1881, on which the Common
Stock is listed.
The Registrant has filed with the Securities and Exchange Commission
(the "Commission") a Registration Statement on Form S-8 under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to the Common
Stock offered hereby. This Prospectus, which constitutes a part of the
Registration Statement, does not contain all of the information set forth in
the Registration Statement, certain items of which are contained in exhibits to
the Registration Statement as permitted by the rules and regulations of the
Commission. For further information with respect to the Registrant and the
Common Stock offered hereby, reference is made to the Registration Statement,
including the exhibits thereto, which may be inspected without charge at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the Regional Offices of the Commission, and
copies of which may be obtained from the Commission at prescribed rates.
Statements made in this Prospectus concerning the contents of any document
referred to herein are not necessarily complete. With respect to each such
document filed with the Commission as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description of the matter
involved, and each such statement shall be deemed qualified in its entirety by
such reference.
2
<PAGE> 4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated herein by reference:
1. The Annual Report on Form 10-K of the Registrant for the
fiscal year ended March 31, 1997, filed with the Commission on June 30, 1997;
2. The Quarterly Report on Form 10-Q of the Registrant for the
quarterly period ended June 30, 1997, filed with the Commission on August 14,
1997; and
3. The description of the Registrant's Common Stock, $1.00 par
value, contained in a registration statement on Form 8-A, declared effective by
the Commission on May 1, 1975, including any amendment or report filed for the
purpose of updating such description.
All documents filed by the Registrant with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the Common Stock
pursuant hereto shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of the filing of such
documents. Any statement contained in this Prospectus or in a document
incorporated or deemed to be incorporated by reference in this Prospectus shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained in this Prospectus or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Registrant undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, upon the written or oral
request of any such person, a copy of any or all of the documents incorporated
by reference herein, other than the exhibits to such documents, unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates. Written or oral requests for such copies should
be directed to the Registrant at 4001 Homestead Road, Houston, Texas 77028,
Attention: Secretary (Telephone Number: (713) 672-9433).
THE REGISTRANT
The Registrant, a Texas corporation incorporated in 1965, is in the
steel processing and distribution business. The Registrant has two product
groups: coil processing (steel sheet and plate) and tubular products. The
Registrant purchases domestic and foreign hot-rolled steel coils, processes the
coils into steel sheet and plate and sells these products on a wholesale,
rapid-delivery basis in competition with steel mills, importers and steel
service centers. The Registrant also purchases, markets, processes and
manufactures tubular products. The Registrant's corporate headquarters
currently is located at 4001 Homestead Road, Houston, Texas 77028 (Telephone
Number: (713) 672-9433).
SELLING STOCKHOLDERS
This Prospectus constitutes a part of the Registration Statement filed
by the Registrant to register shares of Common Stock issued or reserved for
issuance under the Friedman Industries, Incorporated 1996 Stock Option Plan,
the Friedman Industries, Incorporated 1995 Non-Employee Director Stock Plan, as
amended, and the Friedman Industries, Incorporated 1989 Incentive Stock Option
Plan, as amended.
The following table sets forth certain information with respect to the
shares of Common Stock beneficially owned by each Selling Stockholder as of
September 30, 1997.
3
<PAGE> 5
<TABLE>
<CAPTION>
Beneficial
Beneficial Ownership(1) Ownership(1)
Prior to Offering Number of Subsequent to Offering
----------------------- Shares ----------------------
Name Shares Percent to be Sold Shares Percent
- ---- -------- --------- ---------- ------- -------
<S> <C> <C> <C> <C> <C>
Booker T. Anderson(2) 1,407 * 1,407 0 *
William E. Crow(3) 34,255 * 14,071 20,184 *
Charles W. Hall(4) 3,532 * 400 3,132 *
Benny Harper(5) 33,680 * 6,000 27,680 *
Alan M. Rauch(6) 27,023 * 400 26,623 *
Herschel M. Rich(7) 46,268 * 400 45,868 *
Henry Spira(8) 253,263 3.9 400 252,863 3.9
Thomas Thompson(9) 21,526 * 7,036 14,490 *
William B. Walker(10) 2,814 * 2,814 0 *
Kirk K. Weaver(11) 3,915 * 400 3,515 *
</TABLE>
- -----------------
* Less than 1%
(1) Each beneficial owner's percentage ownership is determined by assuming
that options, warrants and other convertible securities that are held
by such person (but not those held by any other person) and that are
exercisable or convertible within 60 days have been exercised or
converted. Unless otherwise noted, the Registrant believes that all
persons named in the above table have sole voting and investment power
with respect to all shares of Common Stock beneficially owned by them.
(2) Mr. Anderson has been an employee of the Registrant for over the past
three years.
(3) Mr. Crow has been President and Chief Operating Officer of the
Registrant since 1995 and was previously Vice President of the
Registrant since 1981 and President of Texas Tubular Products Division
of the Registrant since 1990.
(4) Mr. Hall has been a director and Assistant Secretary of the Registrant
for over the past three years.
(5) Mr. Harper has been Senior Vice President-Finance since 1995,
Treasurer since 1980 and Secretary since 1992 of the Registrant and
was previously Vice President of the Registrant since 1990.
(6) Mr. Rauch has been a director of the Registrant for over the past
three years.
(7) Mr. Rich has been a director of the Registrant for over the past three
years.
(8) Mr. Spira has been a director of the Registrant for over the past
three years.
(9) Mr. Thompson has been Senior Vice President-Sales and Marketing of the
Registrant since 1995 and was previously Vice President-Sales of the
Registrant since 1990.
(10) Mr. Walker has been an employee of the Registrant for over the past
three years.
(11) Mr. Weaver has been a director of the Registrant for over the past
three years.
PLAN OF DISTRIBUTION
The Shares may be sold pursuant to the methods described below from
time to time from the date hereof through September 30, 1998, by or for the
account of the Selling Stockholders on the AMEX or otherwise at prices and on
terms then prevailing or at prices related to the then current market price, or
in negotiated transactions. The Shares may be sold by any one or more of the
following methods: (a) a block trade (which may involve crosses) in which the
broker or dealer
4
<PAGE> 6
so engaged will attempt to sell the securities as agent but may position and
resell a portion of the block as principal to facilitate the transaction; (b)
purchases by a broker or dealer as principal; (c) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; and (d)
privately negotiated transactions. The Selling Stockholders may effect such
transactions by selling Shares through broker-dealers, and such broker-dealers
may receive compensation in the form of commissions from the Selling
Stockholders (which commissions will not exceed those customary in the types of
transactions involved). The Selling Stockholders and any broker-dealers that
participate in the distribution of the Shares may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales, and any profit on the sale of Shares by it and any fees and commissions
received by any such broker-dealers may be deemed to be underwriting discounts
and commissions.
At the time a particular offering of Common Stock is made hereunder,
to the extent required by law, a Prospectus Supplement will be distributed
which will set forth the amount of Common Stock being offered and the terms of
the offering, including the purchase price, the name or names of any dealers or
agents, the purchase price paid for Common Stock purchased from the Selling
Stockholders and any items constituting compensation from the Selling
Stockholders.
LEGAL MATTERS
In connection with the Common Stock offered hereby, the validity of
the shares being offered will be passed upon for the Registrant by Fulbright &
Jaworski L.L.P., Houston, Texas. Charles Hall, a partner of Fulbright &
Jaworski L.L.P., is a director and Assistant Secretary of the Registrant and
beneficially owns 3,532 shares of Common Stock.
EXPERTS
The consolidated financial statements of the Registrant incorporated by
reference in the Registrant's Annual Report (Form 10-K) for the fiscal year
ended March 31, 1997, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon incorporated by reference
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting an auditing.
With respect to the unaudited condensed consolidated interim financial
information for the three-month periods ended June 30, 1997 and June 30, 1996,
incorporated by reference in this Prospectus, Ernst & Young LLP here reported
that they have applied limited procedures in accordance with professional
standards for a review of such information. However, their separate report,
included in Registrant's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997, and incorporated herein by reference, states that they did not
audit and they do not express an opinion on that interim financial
information. Accordingly, the degree of reliance on their report on such
information should be restricted considering the limited nature of the review
procedures applied. The independent auditors are not subject to the liability
provisions of Section 11 of the Securities Act for their report on the
unaudited interim financial information because that report is not a "report"
or a "part" of the Registration Statement prepared or certified by the auditors
within the meaning of Sections 7 and 11 of the Securities Act.
5
<PAGE> 7
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are hereby incorporated by reference in
this Registration Statement:
1. The Annual Report on Form 10-K of Friedman Industries,
Incorporated, a Texas corporation (the "Registrant"), for the fiscal year ended
March 31, 1997, filed with the Securities and Exchange Commission (the
"Commission") on June 30, 1997;
2. The Quarterly Report on Form 10-Q of the Registrant for the
quarterly period ended June 30, 1997, filed with the Commission on August 14,
1997; and
3. The description of the Registrant's Common Stock, $1.00 par
value, contained in a registration statement on Form 8-A, declared effective by
the Commission on May 1, 1975, including any amendment or report filed for the
purpose of updating such description.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), subsequent to the date of the filing hereof and prior to the
filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Certain legal matters in connection with the securities offered
hereby are being passed upon for the Registrant by Fulbright & Jaworski L.L.P.,
Houston, Texas. Charles Hall, a partner of Fulbright & Jaworski L.L.P., is a
director and Assistant Secretary of the Registrant and beneficially owns 3,532
shares of Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act ("Article
2.02-1") provides that any director or officer of a Texas corporation may be
indemnified against judgments, penalties, fines, settlements, and reasonable
expenses actually incurred by him in connection with or in defending any
action, suit or proceeding in which he is a party by reason of his position.
With respect to any proceeding arising from actions taken in his official
capacity as a director or officer, he may be indemnified so long as it shall be
determined that he conducted himself in good faith and that he reasonably
believed that such conduct was in the corporation's best interests. In cases
not concerning conduct in his official capacity as a director or officer, a
director may be indemnified as long as he reasonably believed that his conduct
was not opposed to the corporation's best interests. In the case of any
criminal proceeding, such indemnification is mandatory. The Registrant's
Bylaws provide for indemnification of its present and former directors and
officers to the fullest extent provided by Article 2.02-1. The Registrant
currently maintains directors' and officers' insurance to reimburse the
Registrant in the event that indemnification of a director or officer is
required.
II-1
<PAGE> 8
The Registrant's Bylaws further provide for indemnification of
officers and directors of officers and directors against reasonable expenses
incurred in connection with the defense of any such action, suit, or proceeding
in advance of the final disposition of the proceeding.
The Registrant's Articles of Incorporation were amended on
September 22, 1987, to eliminate or limit liabilities of directors for breaches
of their duty of care. The amendment does not limit or eliminate the right of
the Registrant or any shareholder to pursue equitable remedies such as an
action to enjoin or rescind a transaction involving a breach of a director's
duty of care, nor does it affect director liability to parties other than the
Registrant or its shareholders. In addition, directors will be liable for (i)
breach of their duty of loyalty, (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of the law, (iii)
declaring an illegal dividend or stock repurchase, (iv) any transaction in
which the directors receive an improper personal benefit, or (v) acts or
omissions for which the liability of directors is expressly provided by
statute. In addition, the amendment applies only to claims under Texas law
against a director arising out of his or her role as a director and not, if he
or she is also an officer, his or her role as an officer or in any other
capacity and does not limit a director's liability under any other law, such as
federal securities law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The 33,328 shares of Common Stock to be reoffered or resold
pursuant to this Registration Statement were issued for an aggregate
consideration of $58,504 to various employees, officers and directors of the
Registrant pursuant to various stock option and stock award plans of the
Registrant. The Registrant considers these securities to have been offered and
sold in transactions not involving a public offering and, therefore, to be
exempted from registration under Section 4(2) of the Securities Act of 1933, as
amended (the "Securities Act").
ITEM 8. EXHIBITS.
3.1 Articles of Incorporation of the Registrant, as amended
(incorporated by reference to an exhibit to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended March 31, 1982).
3.2 Articles of Amendment to the Articles of Incorporation of
the Registrant, as filed with the Texas Secretary of State
on September 22, 1987 (incorporated by reference to an
exhibit to the Registrant's Annual Report on Form 10-K for
the fiscal year ended March 31, 1988).
3.3 By-laws of the Registrant, as adopted on March 27, 1992
(incorporated by reference to an exhibit to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended March 31, 1992).
4.1 Form of Common Stock Certificate (incorporated by reference
to an exhibit to the Registrant's Registration Statement on
Form 8-A, declared effective by the Commission on May 1,
1975, including any amendment or report filed for the
purpose of updating such description).
4.2 Friedman Industries, Incorporated 1996 Stock Option Plan.
4.3 Friedman Industries, Incorporated 1995 Non-Employee
Director Stock Plan and First Amendment thereto.
4.4 Friedman Industries, Incorporated 1989 Incentive Stock
Option Plan and First Amendment thereto.
5.1 Opinion of Fulbright & Jaworski L.L.P.
15.1 Consent of Ernst & Young LLP to unaudited interim financial
information.
II-2
<PAGE> 9
23.1 Consent of Ernst & Young LLP.
23.3 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit
5.1 to this Registration Statement).
24.1 Powers of Attorney (contained on page II-4 of this
Registration Statement).
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment hereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar volume of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this Registration
Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to
the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Act) that is
incorporated by reference in this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or
II-3
<PAGE> 10
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-4
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on October 14, 1997.
FRIEDMAN INDUSTRIES, INCORPORATED
By: /s/ HAROLD FRIEDMAN
------------------------------------
Harold Friedman
Vice Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints each of Jack Friedman, Harold Friedman
and Benny Harper his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
and all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his or their substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Chairman of the Board, October ___, 1997
------------------------------------ Chief Executive Officer and
Jack Friedman Director
(Principal Executive Officer)
/s/ HAROLD FRIEDMAN Vice Chairman of the Board and October 14, 1997
------------------------------------ Director
Harold Friedman
/s/ BENNY HARPER Senior Vice President--Finance and October 14, 1997
------------------------------------ Treasurer (Principal Financial and
Benny Harper Principal Accounting Officer)
/s/ HENRY SPIRA Director October 14, 1997
------------------------------------
Henry Spira
</TABLE>
II-5
<PAGE> 12
<TABLE>
<S> <C> <C>
/s/ CHARLES W. HALL Director October 14, 1997
------------------------------------
Charles W. Hall
/s/ KIRK K. WEAVER Director October 14, 1997
------------------------------------
Kirk K. Weaver
/s/ ALAN M. RAUCH Director October 14, 1997
------------------------------------
Alan M. Rauch
Director October ___, 1997
------------------------------------
Hershel M. Rich
</TABLE>
II-6
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- --------------------------------------------------
<S> <C>
3.1 Articles of Incorporation of the Registrant, as
amended (incorporated by reference to an exhibit
to the Registrant's Annual Report on Form 10-K
for the fiscal year ended March 31, 1982).
3.2 Articles of Amendment to the Articles of
Incorporation of the Registrant, as filed with the
Texas Secretary of State on September 22, 1987
(incorporated by reference to an exhibit to the
Registrant's Annual Report on Form 10-K for the
fiscal year ended March 31, 1988).
3.3 By-laws of the Registrant, as adopted on March 27,
1992 (incorporated by reference to an exhibit to
the Registrant's Annual Report on Form 10-K for
the fiscal year ended March 31, 1992).
4.1 Form of Common Stock Certificate (incorporated
by reference to an exhibit to the Registrant's
Registration Statement on Form 8-A, declared
effective by the Commission on May 1, 1975,
including any amendment or report filed for the
purpose of updating such description).
*4.2 Friedman Industries, Incorporated 1996 Stock Option
Plan.
*4.3 Friedman Industries, Incorporated 1995
Non-Employee Director Stock Plan and First
Amendment thereto.
*4.4 Friedman Industries, Incorporated 1989 Incentive
Stock Option Plan and First Amendment thereto.
*5.1 Opinion of Fulbright & Jaworski L.L.P.
*15.1 Consent of Ernst & Young LLP to unaudited interim
financial information.
*23.1 Consent of Ernst & Young LLP.
*23.2 Consent of Fulbright & Jaworski L.L.P. (included
in Exhibit 5.1 to this Registration Statement).
*24.1 Powers of Attorney (included on Page II-4 of this
Registration Statement).
</TABLE>
- ------------
* Filed herewith
<PAGE> 1
EXHIBIT 4.2
FRIEDMAN INDUSTRIES, INCORPORATED
1996 STOCK OPTION PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section
-------
<S> <C>
ARTICLE I - PLAN
Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Effective Date of Plan . . . . . . . . . . . . . . . . . . . . . 1.2
ARTICLE II - DEFINITIONS
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 2.2
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6
Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7
Fair Market Value . . . . . . . . . . . . . . . . . . . . . . . 2.8
Incentive Option . . . . . . . . . . . . . . . . . . . . . . . . 2.9
Non-Employee Director . . . . . . . . . . . . . . . . . . . . . 2.10
Nonqualified Option . . . . . . . . . . . . . . . . . . . . . . 2.11
Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.12
Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . 2.13
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.14
Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.15
10% Stockholder . . . . . . . . . . . . . . . . . . . . . . . . 2.16
ARTICLE III - ELIGIBILITY
ARTICLE IV - GENERAL PROVISIONS RELATING TO OPTIONS
Authority to Grant Options . . . . . . . . . . . . . . . . . . 4.1
Dedicated Shares . . . . . . . . . . . . . . . . . . . . . . . . 4.2
Non-Transferability . . . . . . . . . . . . . . . . . . . . . . 4.3
Requirements of Law . . . . . . . . . . . . . . . . . . . . . . 4.4
Changes in the Company's Capital Structure . . . . . . . . . . . 4.5
Election Under Section 83(b) of the Code . . . . . . . . . . . . 4.6
ARTICLE V - OPTIONS
Type of Option . . . . . . . . . . . . . . . . . . . . . . . . . 5.1
Option Price . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2
Duration of Options . . . . . . . . . . . . . . . . . . . . . . 5.3
Amount Exercisable--Incentive Options . . . . . . . . . . . . . 5.4
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
Exercise of Options . . . . . . . . . . . . . . . . . . . . . . 5.5
Exercise on Termination of Employment . . . . . . . . . . . . . 5.6
Substitution Options . . . . . . . . . . . . . . . . . . . . . . 5.7
No Rights as Stockholder . . . . . . . . . . . . . . . . . . . . 5.8
ARTICLE VI - ADMINISTRATION
ARTICLE VII - AMENDMENT OR TERMINATION OF PLAN
ARTICLE VIII - MISCELLANEOUS
No Establishment of a Trust Fund . . . . . . . . . . . . . . . . 8.1
No Employment Obligation . . . . . . . . . . . . . . . . . . . . 8.2
Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3
Tax Withholding . . . . . . . . . . . . . . . . . . . . . . . . 8.4
Written Agreement . . . . . . . . . . . . . . . . . . . . . . . 8.5
Indemnification of the Committee and the Board of Directors . . 8.6
Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.7
Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.8
Other Compensation Plans . . . . . . . . . . . . . . . . . . . . 8.9
Other Options or Awards . . . . . . . . . . . . . . . . . . . . 8.10
Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 8.11
</TABLE>
<PAGE> 3
ARTICLE I
PLAN
1.1 PURPOSE. This Plan is a plan for key employees (including
officers and employee directors) of the Company and its Affiliates and is
intended to advance the best interests of the Company, its Affiliates, and its
stockholders by providing those persons who have substantial responsibility for
the management and growth of the Company and its Affiliates with additional
incentives and an opportunity to obtain or increase their proprietary interest
in the Company, thereby encouraging them to continue in the employ of the
Company or any of its Affiliates.
1.2 EFFECTIVE DATE OF PLAN. This Plan is effective June 21, 1996,
if within one year of that date it shall have been approved by at least a
majority vote of stockholders voting in person or by proxy at a duly held
stockholders' meeting, or if the provisions of the corporate charter, 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 Incentive Option or Nonqualified Option shall be
granted pursuant to this Plan after June 21, 2006.
ARTICLE II
DEFINITIONS
The words and phrases defined in this Article shall have the meaning
set out in these definitions throughout this Plan, unless the context in which
any such word or phrase appears reasonably requires a broader, narrower, or
different meaning.
2.1 "AFFILIATE" means 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 action or transaction, each of the corporations other than
the Company owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the 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 action or transaction, each of the corporations other than the
last corporation in the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain.
2.2 "BOARD OF DIRECTORS" means the board of directors of the
Company.
2.3 "CODE" means the Internal Revenue Code of 1986, as amended.
2.4 "COMMITTEE" means the Compensation Committee of the Board of
Directors or such other committee designated by the Board of Directors. The
Committee shall comprise at least two members, all of whom are Non-Employee
Directors.
2.5 "COMPANY" means Friedman Industries, Incorporated, a Texas
corporation.
-1-
<PAGE> 4
2.6 "DISABILITY" means a physical or mental infirmity which, in
the opinion of a physician selected by the Committee, shall prevent the
Employee from earning a reasonable livelihood with the Company or any Affiliate
and which can be expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than 12 months and which:
(a) was not contracted, suffered or incurred while the Employee was engaged in,
or did not result from having engaged in, a felonious criminal enterprise; (b)
did not result from alcoholism or addiction to narcotics; and (c) did not
result from an injury incurred while a member of the Armed Forces of the United
States for which the Employee receives a military pension.
2.7 "EMPLOYEE" means a person employed by the Company or any
Affiliate to whom an Option is granted.
2.8 "FAIR MARKET VALUE" of the Stock as of any date means (a) the
average of the high and low sale prices of the Stock on that date (or, if there
was no sale on such date, on the last preceding date on which there was such a
sale) on the principal securities exchange on which the Stock is listed; or (b)
if the Stock is not listed on a securities exchange, the average of the high
and low sale prices of the Stock on that date (or, if there was no sale on such
date, on the last preceding date on which there was such a sale) as reported on
the NASDAQ National Market System; or (c) 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 that date as reported by the National Quotation Bureau
Incorporated; or (d) if none of the foregoing is applicable, an amount at the
election of the Committee equal to (x) the average between the closing bid and
ask prices per share of Stock on the last preceding date on which those prices
were reported or (y) an amount determined by the Committee in its sole
discretion.
2.9 "INCENTIVE OPTION" means an option granted under this Plan
which is designated as an "Incentive Option" and satisfies the requirements of
Section 422 of the Code.
2.10 "NON-EMPLOYEE DIRECTOR" means a member of the Board of
Directors serving on the Committee who satisfies the criteria of Section 162(m)
of the Code and the definition of Non-Employee Director as that term is defined
in Rule 16b-3 under the Securities Exchange Act of 1934.
2.11 "NONQUALIFIED OPTION" means an option granted under this Plan
other than an Incentive Option.
2.12 "OPTION" means either an Incentive Option or a Nonqualified
Option granted under this Plan to purchase shares of Stock.
2.13 "OPTION AGREEMENT" means the written agreement which sets out
the terms of an Option.
2.14 "PLAN" means the Friedman Industries, Incorporated 1996 Stock
Option Plan, as set out in this document and as it may be amended from time to
time.
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<PAGE> 5
2.15 "STOCK" means the common stock of the Company, $1.00 par
value, or, in the event that the outstanding shares of common stock are later
changed into or exchanged for a different class of stock or securities of the
Company or another corporation, that other stock or security.
2.16 "10% STOCKHOLDER" means an individual who, at the time the
Option is granted, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of any Affiliate. 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 stockholders, partners,
or beneficiaries.
ARTICLE III
ELIGIBILITY
The individuals who shall be eligible to receive Incentive Options and
Nonqualified Options shall be those key employees of the Company or any of its
Affiliates, including officers and employee directors, as the Committee shall
determine from time to time. However, Jack Friedman and Harold Friedman shall
not be eligible to receive Options under the Plan. In addition, no member of
the Committee shall be eligible to receive any Option or to receive stock,
stock options, or stock appreciation rights under any other plan of the Company
or any of its Affiliates, if to do so would cause the individual not to be a
Non-Employee Director. The Board of Directors may designate one or more
individuals who shall not be eligible to receive any Option under this Plan or
under other similar plans of the Company.
ARTICLE IV
GENERAL PROVISIONS RELATING TO OPTIONS
4.1 AUTHORITY TO GRANT OPTIONS. The Committee may grant to those
key employees of the Company or any of its Affiliates as it shall from time to
time determine Options under the terms and conditions of this Plan. Subject
only to any applicable limitations set out in this Plan, the number of shares
of Stock to be covered by any Option to be granted to an employee of the
Company or any of its Affiliates shall be as determined by the Committee.
4.2 DEDICATED SHARES. The total number of shares of Stock with
respect to which Options may be granted under the Plan shall be 250,000 shares.
The shares may be treasury shares or authorized but unissued shares. The
maximum number of shares subject to Options which may be issued to any Employee
under the Plan during any period of three consecutive years is 75,000 shares.
The number of shares stated in this Section 4.2 shall be subject to adjustment
in accordance with the provisions of Section 4.5.
In the event that any outstanding Option shall expire or terminate for
any reason or any Option is surrendered, the shares of Stock allocable to the
unexercised portion of that Option may again be subject to an Option under the
Plan.
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<PAGE> 6
4.3 NON-TRANSFERABILITY. Options shall not be transferable by the
Employee otherwise than by will or under the laws of descent and distribution,
and shall be exercisable, during the Employee's lifetime, only by him.
4.4 REQUIREMENTS OF LAW. The Company shall not be required to
sell or issue any Stock under any Option if issuing that Stock would constitute
or result in a violation by the Employee 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 any Stock unless the Committee has received evidence
satisfactory to it to the effect that the holder of that Option will not
transfer the Stock 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. The determination by the
Committee on this matter shall be final, binding and conclusive. The Company
may, but shall in no event be obligated to, register any Stock covered by this
Plan pursuant to applicable securities laws of any country or any political
subdivision. In the event the Stock issuable on exercise of an Option is not
registered, the Company may imprint on the certificate evidencing the Stock 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 and the issuance
of shares thereunder, to comply with any law or regulation of any governmental
authority.
4.5 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 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 its rights, 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 for it in money, services or property, then (a) the
number, class, and per share price of shares of Stock subject to outstanding
Options under this Plan shall be appropriately adjusted in such a manner as to
entitle an Employee to receive upon exercise of an Option, for the same
aggregate cash consideration, the equivalent total number and class of shares
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 of
Stock then reserved to be issued 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 such class of Stock as the
result of the event requiring the adjustment.
If the Company is merged or consolidated with another corporation and
the Company is not the surviving corporation, or if the Company is liquidated
or sells or otherwise disposes of substantially all its assets while
unexercised Options remain outstanding under this Plan, (a)
-4-
<PAGE> 7
subject to the provisions of clause (c) below, after the effective date of the
merger, consolidation, liquidation, sale or other disposition, as the case may
be, each holder of an outstanding Option shall be entitled, upon exercise of
the Option, to receive, in lieu of shares of Stock, the number and class or
classes of shares of stock or other securities or property to which the holder
would have been entitled if, immediately prior to the merger, consolidation,
liquidation, sale or other disposition, the holder had been the holder of
record of a number of shares of Stock equal to the number of shares as to which
the Option shall be so exercised; (b) the Committee may waive any limitations
set out in or imposed under this Plan so that all Options, from and after a
date prior to the effective date of the merger, consolidation, liquidation,
sale or other disposition, as the case may be, specified by the Committee,
shall be exercisable in full; and (c) all outstanding Options may be canceled
by the Committee as of the effective date of any merger, consolidation,
liquidation, sale or other disposition, if (i) notice of cancellation shall be
given to each holder of an Option and (ii) each holder of an Option shall have
the right to exercise that Option in full (without regard to any limitations
set out in or imposed under this Plan or the Option Agreement granting that
Option) during a period set by the Committee preceding the effective date of
the merger, consolidation, liquidation, sale or other disposition and, if in
the event all outstanding Options may not be exercised in full under applicable
securities laws without registration of the shares of Stock issuable on
exercise of the Options, the Committee may limit the exercise of the Options to
the number of shares of Stock, if any, as may be issued without registration.
The method of choosing which Options may be exercised, and the number of shares
of Stock for which Options may be exercised, shall be solely within the
discretion of the Committee.
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 for them, or upon conversion of shares or obligations
of the Company convertible into shares or other securities, shall not affect,
and no adjustment by reason of such issuance shall be made with respect to, the
number, class, or price of shares of Stock then subject to outstanding Options.
4.6 ELECTION UNDER SECTION 83(b) OF THE CODE. No Employee shall
exercise the election permitted under Section 83(b) of the Code without written
approval of the Committee. Any Employee doing so shall forfeit all Options
issued to him under this Plan.
ARTICLE V
OPTIONS
5.1 TYPE OF OPTION. The Committee shall specify whether a given
Option shall constitute an Incentive Option or a Nonqualified Option.
5.2 OPTION PRICE. The price at which Stock may be purchased under
an Option shall not be less than the greater of: (a) 100% of the Fair Market
Value of the shares of Stock on the date the Option is granted or (b) the
aggregate par value of the shares of Stock on the date the Option is granted.
The Committee in its discretion may provide that the price at which shares of
Stock may be purchased under an Option shall be more than 100% of Fair Market
Value. In the case of any 10% Stockholder, the price at which shares of Stock
may be purchased under an
-5-
<PAGE> 8
Incentive Option shall not be less than 110% of the Fair Market Value of the
Stock on the date the Incentive Option is granted.
5.3 DURATION OF OPTIONS. No Option shall be exercisable after the
expiration of 10 years from the date the Option is granted. In the case of a
10% Stockholder, no Incentive Option shall be exercisable after the expiration
of five years from the date the Incentive Option is granted.
5.4 AMOUNT EXERCISABLE--INCENTIVE OPTIONS. Each Option may be
exercised from time to time, in whole or in part, in the manner and subject to
the conditions the Committee, in its sole discretion, may provide in the Option
Agreement, as long as the Option is valid and outstanding, provided that no
Option may be exercisable within six (6) months of the date of grant. To the
extent that the aggregate Fair Market Value (determined as of the time an
Incentive Option is granted) of the Stock with respect to which Incentive
Options first become exercisable by the Optionee during any calendar year
(under this Plan and any other incentive stock option plan(s) of the Company or
any Affiliate) exceeds $100,000, the Incentive Options shall be treated as
Nonqualified Options. In making this determination, Incentive Options shall be
taken into account in the order in which they were granted.
5.5 EXERCISE OF OPTIONS. Each Option shall be exercised by the
delivery of written notice to the Committee setting forth the number of shares
of Stock with respect to which the Option is to be exercised, together with:
(a) cash, certified check, bank draft, or postal or express money order payable
to the order of the Company for an amount equal to the option price of the
shares, (b) Stock at its Fair Market Value on the date of exercise, and/or (c)
any other form of payment which is acceptable to the Committee, and specifying
the address to which the certificates for the shares are to be mailed. As
promptly as practicable after receipt of written notification and payment, the
Company shall deliver to the Employee certificates for the number of shares
with respect to which the Option has been exercised, issued in the Employee's
name. If shares of Stock are used in payment of the exercise price, the
aggregate Fair Market Value of the shares of Stock tendered must be equal to or
less than the aggregate exercise price of the shares being purchased upon
exercise of the Option, and any difference must be paid by cash, certified
check, bank draft, or postal or express money order payable to the Company.
Delivery of the shares shall be deemed effected for all purposes when a stock
transfer agent of the Company shall have deposited the certificates in the
United States mail, addressed to the Employee, at the address specified by the
Employee.
Whenever an Option is exercised by exchanging shares of Stock owned by
the Employee, the Employee shall deliver to the Company certificates registered
in the name of the Employee representing a number of shares of Stock legally
and beneficially owned by the Employee, free of all liens, claims, and
encumbrances of every kind, accompanied by stock powers duly endorsed in blank
by the record holder of the shares represented by the certificates, (with
signature guaranteed by a commercial bank or trust company or by a brokerage
firm having a membership on a registered national stock exchange). The
delivery of certificates upon the exercise of Options is subject to the
condition that the person exercising the Option provide the Company with the
information the Company might reasonably request pertaining to exercise, sale
or other disposition of an Option.
-6-
<PAGE> 9
5.6 EXERCISE ON TERMINATION OF EMPLOYMENT. Unless it is expressly
provided otherwise in the Option Agreement, Options shall terminate immediately
upon the severance of employment of the Employee from the Company and all
Affiliates for any reason, with or without cause, other than death, retirement
under the then established rules of the Company, or severance for Disability.
Whether authorized leave of absence or absence on military or government
service shall constitute severance of the employment of the Employee shall be
determined by the Committee at that time.
In determining the employment relationship between the Company and the
Employee, 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 424(a) of the Code applies, or by a
parent corporation or subsidiary corporation of the 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 in Section 2.1,
and the parent-subsidiary relationship shall be determined at the time of the
corporate action described in Section 424(a) of the Code).
DEATH. If, before the expiration of an Option, the Employee, whether
in the employ of the Company or after he has retired or was severed for
disability, dies, the Option shall continue until the earlier of the Option's
expiration date or one year following the date of his death, unless it is
expressly provided otherwise in the Option Agreement. After the death of the
Employee, his executors, administrators or any persons to whom his Option may
be transferred by will or by the laws of descent and distribution shall have
the right, at any time prior to the Option's expiration or termination,
whichever is earlier, to exercise it, to the extent to which he was entitled to
exercise it immediately prior to his death, unless it is expressly provided
otherwise in the Option Agreement.
RETIREMENT. If, before the expiration of an Option, the Employee
shall be retired in good standing from the employ of the Company under the then
established rules of the Company, the Option shall terminate on the earlier of
the Option's expiration date or one day less than three months after his
retirement. In the event of retirement, the Employee 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,
unless it is expressly provided otherwise in the Option Agreement.
DISABILITY. If, before the expiration of an Option, the Employee
shall be severed from the employ of the Company for Disability, the Option
shall terminate on the earlier of the Option's expiration date or one day less
than one year after the date he was severed because of Disability, unless it is
expressly provided otherwise in the Option Agreement. In the event that the
Employee shall be severed from the employ of the Company for disability, the
Employee 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,
unless it is expressly provided otherwise in the Option Agreement.
5.7 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 are about to
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<PAGE> 10
become employees of or affiliated with the Company or any Affiliate as the
result of a merger or 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 granted may vary from the terms and conditions set out in
this Plan to the extent the Committee, 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.
5.8 NO RIGHTS AS STOCKHOLDER. No Employee shall have any rights
as a stockholder with respect to Stock covered by his Option until the date a
stock certificate is issued for the Stock.
ARTICLE VI
ADMINISTRATION
This Plan shall be administered by the Committee. All questions of
interpretation and application of this Plan and Options shall be subject to the
determination of the Committee. A majority of the members of the Committee
shall constitute a quorum. All determinations of the Committee shall be made
by a majority of its members. Any decision or determination reduced to writing
and signed by a majority of the members shall be as effective as if it had been
made by a majority vote at a meeting properly called and held. This Plan shall
be administered in such a manner as to permit the Options granted under it
which are designated to be Incentive Options to qualify as Incentive Options.
In carrying out its authority under this Plan, and subject to the terms of this
Plan, the Committee shall have full and final authority and discretion,
including but not limited to the following rights, powers and authorities, to:
(a) determine the Employees to whom and the time or times
at which Options will be made,
(b) determine the number of shares and the purchase price
of Stock covered in each Option, subject to the terms of the Plan,
(c) determine the terms, provisions and conditions of
each Option, which need not be identical,
(d) accelerate the time at which any outstanding Option
may be exercised,
(e) define the effect, if any, on an Option of the death,
disability, retirement, or termination of employment of the Employee,
(f) prescribe, amend and rescind rules and regulations
relating to administration of this Plan, and
(g) make all other determinations and take all other
actions deemed necessary, appropriate, or advisable for the proper
administration of this Plan.
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<PAGE> 11
The actions of the Committee in exercising all of the rights, powers, and
authorities set out in this Article and all other Articles of this Plan, when
performed in good faith and in its sole judgment, shall be final, conclusive
and binding on all parties.
ARTICLE VII
AMENDMENT OR TERMINATION OF PLAN
The Board of Directors of the Company may amend, terminate or suspend
this Plan at any time, in its sole and absolute discretion; provided, however,
that to the extent required to qualify this Plan under Rule 16b-3 promulgated
under Section 16 of the Securities Exchange Act of 1934, as amended, no
amendment that would (a) materially increase the number of shares of Stock that
may be issued under this Plan, (b) materially modify the requirements as to
eligibility for participation in this Plan, or (c) otherwise materially
increase the benefits accruing to participants under this Plan, shall be made
without the approval of the Company's stockholders; and provided further, that
to the extent required to maintain the status of any Incentive Option under the
Code, no amendment that would (a) change the aggregate number of shares of
Stock which may be issued under Incentive Options, (b) change the class of
employees eligible to receive Incentive Options, or (c) decrease the exercise
price for Incentive Options below the Fair Market Value of the Stock at the
time it is granted, shall be made without the approval of the Company's
stockholders. Subject to the preceding sentence, the Board shall have the
power to make any changes in this Plan and in the regulations and
administrative provisions under it or in any outstanding Incentive Option as in
the opinion of counsel for the Company may be necessary or appropriate from
time to time to enable any Incentive Option granted under this Plan to continue
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.
ARTICLE VIII
MISCELLANEOUS
8.1 NO ESTABLISHMENT OF A TRUST FUND. No property shall be set
aside nor shall a trust fund of any kind be established to secure the rights of
any Employee under this Plan. All Employees shall at all times rely solely
upon the general credit of the Company for the payment of any benefit which
becomes payable under this Plan.
8.2 NO EMPLOYMENT OBLIGATION. The granting of any Option shall
not constitute an employment contract, express or implied, nor impose upon the
Company or any Affiliate any obligation to employ or continue to employ any
Employee. The right of the Company or any Affiliate to terminate the
employment of any person shall not be diminished or affected by reason of the
fact that an Option has been granted to him.
8.3 FORFEITURE. Notwithstanding any other provisions of this
Plan, if the Committee finds by a majority vote after full consideration of the
facts that the Employee, before or after termination of his employment with the
Company or an Affiliate for any reason (a) committed or engaged in fraud,
embezzlement, theft, commission of a felony, or proven dishonesty in the
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<PAGE> 12
course of his employment by the Company or an Affiliate, which conduct damaged
the Company or Affiliate, or disclosed trade secrets of the Company or an
Affiliate, or (b) participated, engaged in or had a material, financial or
other interest, whether as an employee, officer, director, consultant,
contractor, stockholder, owner, or otherwise, in any commercial endeavor in the
United States which is competitive with the business of the Company or an
Affiliate without the written consent of the Company or Affiliate, the Employee
shall forfeit all outstanding Options, including all exercised Options pursuant
to which the Company has not yet delivered a stock certificate. Clause (b)
shall not be deemed to have been violated solely by reason of the Employee's
ownership of stock or securities of any publicly owned corporation, if that
ownership does not result in effective control of the corporation, and if
written notice of the ownership is given the Committee by the Employee within
60 days after the later of the date on which the Employee is notified of a
grant of an Option under this Plan or the date on which the Employee acquires
the ownership.
The decision of the Committee as to the cause of the Employee's
discharge, the damage done to the Company or an Affiliate, and the extent of
the Employee's competitive activity shall be final. No decision of the
Committee, however, shall affect the finality of the discharge of the Employee
by the Company or an Affiliate in any manner.
8.4 TAX WITHHOLDING. The Company or any Affiliate shall be
entitled to deduct from other compensation payable to each Employee any sums
required by federal, state, or local tax law to be withheld with respect to the
grant or exercise of an Option. In the alternative, the Company may require
the Employee (or other person exercising the Option) to pay the sum directly to
the employer corporation. If the Employee (or other person exercising the
Option) is required to pay the sum directly, payment in cash or by check of
such sums for taxes shall be delivered within 10 days after the date of
exercise or lapse of restrictions. The Company shall have no obligation upon
exercise of any Option until payment has been received, unless withholding (or
offset against a cash payment) as of or prior to the date of exercise is
sufficient to cover all sums due with respect to that exercise. The Company
and its Affiliates shall not be obligated to advise an Employee of the
existence of the tax or the amount which the employer corporation will be
required to withhold.
8.5 WRITTEN AGREEMENT. Each Option shall be embodied in a written
Option Agreement which shall be subject to the terms and conditions of this
Plan and shall be signed by the Employee and by a member of the Committee on
behalf of the Committee and the Company. The Option Agreement may contain any
other provisions that the Committee in its discretion shall deem advisable
which are not inconsistent with the terms of this Plan.
8.6 INDEMNIFICATION OF THE COMMITTEE AND THE BOARD OF DIRECTORS.
With respect to administration of this 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 attorney's fees, the amount of judgments and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than 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
or the Board of Directors, whether or not he continues to be a member of the
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<PAGE> 13
Committee or the Board of Directors at the time of incurring the expenses,
including without limitation matters as to which he shall be finally adjudged
in any action, suit or proceeding to have been found to have been negligent in
the performance of his duty as a member of the Committee or the Board of
Directors. However, this indemnity shall not include any expenses incurred by
any member of the Committee or the Board of Directors in respect of matters as
to which he shall be finally adjudged in any action, suit or proceeding to have
been guilty of gross negligence or willful misconduct in the performance of his
duty as a member of the Committee or the Board of Directors. In addition, no
right of indemnification under this Plan shall be available to or enforceable
by any member of the Committee or the Board of Directors unless, within 60 days
after institution of any action, suit or proceeding, he shall have offered the
Company, in writing, the opportunity to handle and defend same at its own
expense. This right of indemnification shall inure to the benefit of the
heirs, executors or administrators of each member of the Committee or the Board
of Directors and shall be in addition to all other rights to which a member of
the Committee or the Board of Directors may be entitled as a matter of law,
contract, or otherwise.
8.7 GENDER. If the context requires, words of one gender when
used in this Plan shall include the others and words used in the singular or
plural shall include the other.
8.8 HEADINGS. Headings of Articles and Sections are included for
convenience of reference only and do not constitute part of this Plan and shall
not be used in construing the terms of this Plan.
8.9 OTHER COMPENSATION PLANS. The adoption of this Plan shall not
affect any other stock option, incentive or other compensation or benefit plans
in effect for the Company or any Affiliate, nor shall this Plan preclude the
Company from establishing any other forms of incentive or other compensation
for employees of the Company or any Affiliate.
8.10 OTHER OPTIONS. The grant of an Option shall not confer upon
the Employee the right to receive any future or other Options under this Plan,
whether or not Options may be granted to similarly situated Employees, or the
right to receive future Options upon the same terms or conditions as previously
granted.
8.11 GOVERNING LAW. The provisions of this Plan shall be
construed, administered, and governed under the laws of the State of Texas.
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<PAGE> 1
EXHIBIT 4.3
FRIEDMAN INDUSTRIES, INCORPORATED
1995 Non-Employee Director Stock Plan
SECTION 1. Purpose.
The purpose of the Friedman Industries, Incorporated 1995 Non-Employee
Director Stock Plan is to promote the interests of Friedman Industries,
Incorporated and its shareholders by providing it with a mechanism to enable
the Company to attract and retain persons with outstanding qualifications to
serve as directors of the Company and to provide the directors with a financial
interest in the Company through the ownership of stock of the Company.
SECTION 2. Definitions.
(A) "Award" shall mean an award of Common Stock pursuant to Section 6
of the Plan.
(B) "Board" shall mean the Board of Directors of the Company.
(C) "Committee" shall mean a committee of one or more Employee
Directors.
(D) "Common Stock" shall mean the Common Stock of the Company, $1.00
par value per share, subject to adjustment pursuant to Section 10 of the Plan.
(E) "Company" shall mean Friedman Industries, Incorporated, a Texas
corporation.
(F) "Employee Director" shall mean a member of the Board who is a
full-time employee of the Company.
(G) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(H) "Grant Date" shall mean the date on which an Award of Common
Stock is granted to an Outside Director pursuant to Section 6 of the Plan.
(I) "Outside Director" shall mean a member of the Board who is not a
full-time employee of the Company.
(J) "Plan" shall mean this Friedman Industries, Incorporated 1995
Non-Employee Director Stock Plan.
(K) "Securities Act" shall mean the Securities Act of 1933, as
amended.
<PAGE> 2
SECTION 3. Administration.
The Plan shall be administered by the Committee. The Committee shall
have full power, discretion and authority to interpret and administer the Plan,
except that the Committee shall have no power to determine the eligibility for,
the number of shares of Common Stock to be covered by or the timing of Awards
to be granted pursuant to the Plan. The Committee's interpretations and
actions, except as otherwise determined by the Board, shall be final,
conclusive and binding on all persons for all purposes. The Committee may
authorize any one or more of their number or any officer of the Company to
execute and deliver documents on behalf of the Committee.
No member of the Committee shall be liable for any action taken or
omitted to be taken by him or by any other member of the Committee in
connection with the Plan, except for his own willful misconduct or as expressly
provided by statute.
SECTION 4. Eligibility.
The only persons eligible to participate in the Plan shall be Outside
Directors. An Employee Director who retires from employment with the Company
shall become eligible to participate in the Plan and shall be entitled to
receive an award upon re-election as an Outside Director as provided in Section
6 hereof.
SECTION 5. Stock Subject to the Plan.
There shall be reserved for Awards under the Plan an aggregate of
10,000 shares of Common Stock. Such shares shall be, in whole or in part,
authorized but unissued shares of Common Stock or previously issued and
outstanding shares that have been reacquired by the Company.
SECTION 6. Grants of Awards.
Subject to shareholder approval of this Plan, on September 1, 1995,
each Outside Director shall be granted 400 shares of Common Stock without any
further action required to be taken by the Board or any committee of the Board.
On each September 1 thereafter, for so long as this Plan is in effect and
shares are available for the grant of Awards hereunder, there shall be granted
to each Outside Director who has served as a director of the Company for at
least the 12 immediately preceding calendar months, 400 shares of Common Stock.
Awards of Common Stock under this Plan shall be in consideration of
the past services of each such Outside Director to the Company, which services
are found to have a value in excess of the aggregate par value ($1.00 per
share) of the Common Stock subject to such Award.
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<PAGE> 3
SECTION 7. Mergers and Other Corporate Changes.
The existence of this Plan shall not affect in any way the right or
power of the Company or its shareholders to make or authorize any or 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 Common 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 merges or consolidates with another corporation and is
not a surviving corporation, or if the Company is liquidated or sells or
otherwise disposes of substantially all its assets, this Plan automatically
terminates on the effective date of such merger, consolidation, liquidation,
sale or other disposition, as the case may be.
SECTION 8. Requirements of Law.
The shares issued under this Plan have not been registered under the
Securities Act. Each certificate for such shares may bear the following legend
or any other legend which counsel for the Company considers necessary or
advisable to comply with the Securities Act:
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF1933 OR UNDER THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT UPON SUCH
REGISTRATION OR UPON RECEIPT BY THE CORPORATION OF AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION, IN FORM AND SUBSTANCE
SATISFACTORY TO THE CORPORATION, THAT REGISTRATION IS NOT REQUIRED FOR
SUCH SALE OR TRANSFER."
The Company may, but shall in no event be obligated to, register any securities
covered hereby pursuant to the Securities Act (as now in effect or as hereafter
amended) and, if any shares are so registered, the Company may remove any
legend on certificates representing such shares. The Company shall not be
obligated to take any other affirmative action to cause the issuance of shares
pursuant hereto to comply with any law or regulation of any governmental
authority.
Shares received under the Plan may be deemed "restricted securities"
for purposes of the Securities Act and, accordingly, sales by the recipient
thereof may be subject to satisfaction of a holding period specified in Rule
144 promulgated under the Securities Act.
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<PAGE> 4
SECTION 9. Withholding Taxes.
At the time of any Award hereunder, the Outside Director shall pay to
the Company, or the Company may deduct from any other compensation payable to
such Outside Director, the amount of any federal, state or local taxes of any
kind required by law to be withheld by the Company with respect thereto. If
any such amounts must be withheld by the Company and the Outside Director
elects to pay such sums directly, written notice of that election shall be
delivered to the Company prior to the grant of such Award, and payment in cash
or by check of such sums for taxes shall be delivered within ten days after the
date on which any taxes become due.
SECTION 10. Adjustment in the Event of Changes of Common Stock.
In the event of any change in the outstanding Common Stock of the
Company by reason of any stock split, stock dividend (other than stock
dividends of 5% or less, which shall not trigger an adjustment in the number of
shares constituting an Award), recapitalization or other similar change in
capitalization, the aggregate number and class of Common Stock available for
grant under the Plan, and the number or kind of shares that would constitute an
Award under Section 6, shall be appropriately adjusted by the Committee, whose
determination shall be conclusive.
SECTION 11. Amendments and Termination.
The Board may at any time terminate, modify or amend the Plan in such
respects as it shall deem advisable; provided, however, that the Board may not,
without approval or consent of the holders of a majority of the voting power of
the outstanding shares of Common Stock:
(a) increase (except as provided in Section 10) the maximum number
of shares which may be issued pursuant to Awards granted under
the Plan;
(b) materially modify the requirements for eligibility for
participation under the Plan; or
(c) materially increase the benefits accruing to participants
under the Plan, unless, in each such case, the Board of
Directors of the Company shall have obtained an opinion of
legal counsel to the effect that shareholder approval of the
amendment is not required (i) by law, (ii) by any applicable
rules and regulations of, or any agreement with, the American
Stock Exchange, Inc. or any other national securities exchange
on which the Common Stock may then be listed or (iii) in order
to make available to any recipient of an Award the benefits of
Rule 16b-3 of the Rules and Regulations under the Exchange Act
or any similar or successor rule.
In no event, however, may the Plan be amended more than once in a six-month
period.
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<PAGE> 5
SECTION 12. Miscellaneous Provisions.
(A) Nothing in the Plan or any grant shall confer upon any Outside
Director the right to be nominated for re-election to the Board.
(B) An Outside Director's rights and interest under the Plan may not
be assigned or transferred in whole or in part, either directly or by operation
of law or otherwise (except pursuant to a qualified domestic relations order
or, in the event of an Outside Director's death, by will or the laws of descent
and distribution), including, but not by way of limitation, execution, levy,
garnishment, attachment, pledge, bankruptcy or in any other manner, and no such
right or interest of any Outside Director in the Plan shall be subject to any
obligation or liability of such individual.
(C) No shares shall be granted hereunder unless counsel for the
Company shall be satisfied that such grant will be in compliance with
applicable federal, state or other securities laws.
(D) The expenses of the Plan shall be borne by the Company.
(E) By accepting any Award under the Plan, each Outside Director or
beneficiary claiming under or through him or her shall be conclusively deemed
to have indicated his or her acceptance and ratification of, and consent to,
any action taken under the Plan by the Committee or the Board.
(F) The appropriate officers of the Company shall cause to be filed
any reports, return or other information regarding Awards hereunder or any
Common Stock issued pursuant hereto as may be required by Section 13 or 15(d)
of the Exchange Act, or any other applicable statute, rule or regulation.
SECTION 13. Effectiveness of the Plan.
The Plan shall be submitted to the shareholders of the Company for
approval and adoption. The Plan shall not be effective unless and until the
Plan has been so approved and adopted by the Company's shareholders, or the
Committee shall have received an opinion of legal counsel to the effect that
such approval is not required by law or in order to make available to any
recipient of an Award the benefits of Rule 16b-3 promulgated under the Exchange
Act; provided, however, that grants of Awards under the Plan may be made prior
to such approval as long as such grants are made subject to such approval.
SECTION 14. Governing Law.
The provisions of this Plan shall be interpreted and construed in
accordance with the laws of the State of Texas.
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<PAGE> 6
FIRST AMENDMENT
TO
FRIEDMAN INDUSTRIES, INCORPORATED
1995 NON-EMPLOYEE DIRECTOR STOCK PLAN
1. Section 2(C) of the Friedman Industries, Incorporated 1995
Non-Employee Director Stock Plan (the "Plan") is hereby deleted in its entirety
and replaced by the following:
"(C) "Committee" shall mean a committee of one or more
members of the Board."
2. Except as expressly amended by this First Amendment, the Plan
shall continue in full force and effect in accordance with its terms.
3. The effective date of this First Amendment shall be August 22,
1997.
Board of Directors Approval: September 25, 1997
<PAGE> 1
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
<PAGE> 2
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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<PAGE> 3
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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<PAGE> 4
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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<PAGE> 5
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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<PAGE> 6
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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<PAGE> 7
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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<PAGE> 8
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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<PAGE> 9
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.
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<PAGE> 10
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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<PAGE> 11
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
<PAGE> 1
EXHIBIT 5.1
[FULBRIGHT & JAWORSKI L.L.P. LETTERHEAD]
October 14, 1997
Friedman Industries, Incorporated
4001 Homestead Road
Houston, Texas 77028
Gentlemen:
We have acted as counsel for Friedman Industries, Incorporated, a
Texas corporation (the "Registrant"), in connection with the registration under
the Securities Act of 1933 of 461,650 shares of the Registrant's common stock,
$1.00 par value (the "Shares"), 262,500 shares of which are to be offered upon
the terms and subject to the conditions set forth in the Registrant's 1996
Stock Option Plan (the "1996 Plan"), 6,000 shares of which have been issued or
are to be offered upon the terms and subject to the conditions set forth in the
Registrant's 1995 Non-Employee Director Stock Plan, as amended (the "1995
Plan"), and 193,150 shares of which have been issued or are to be offered upon
the terms and subject to the conditions set forth in the Registrant's 1989
Incentive Stock Option Plan, as amended (the "1989 Plan").
In connection therewith, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the Articles of
Incorporation of the Registrant, as amended, the amended Bylaws of the
Registrant, the 1996 Plan, the 1995 Plan, the 1989 Plan, the records of
relevant corporate proceedings with respect to the offering of the Shares and
such other documents and instruments as we have deemed necessary or appropriate
for the expression of the opinions contained herein. We also have examined the
Registrant's Registration Statement on Form S-8 (the "Registration Statement")
to be filed with the Securities and Exchange Commission with respect to the
Shares.
We have assumed the authenticity and completeness of all records,
certificates and other instruments submitted to us as originals, the conformity
to original documents of all records, certificates and other instruments
submitted to us as copies, the authenticity and completeness of the originals
of those records, certificates and other instruments submitted to us as copies
and the correctness of all statements of fact contained in all records,
certificates and other instruments that we have examined.
Based on the foregoing, and having regard for such legal
considerations as we have deemed relevant, we are of the opinion that the
Shares have been duly and validly authorized for issuance and, in respect of
Shares that have been issued, were duly authorized and validly issued and are
fully paid and nonassumable, and in respect of Shares to be offered, when
issued in accordance with the terms of the 1996 Plan, the 1995 Plan or the 1989
Plan, as the case may be, will be duly and validly issued, fully paid and
nonassessable.
The opinions expressed herein relate solely to, are based solely upon
and are limited exclusively to the laws of the State of Texas and the federal
laws of the United States of America, to the extent applicable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our name under the caption "Item
5. Interests of Named Experts and Counsel" in the Registration Statement and
under the caption "Legal Matters" in the prospectus filed as part of the
Registration Statement.
Very truly yours,
/s/ FULBRIGHT & JAWORSKI L.L.P.
Fulbright & Jaworski L.L.P.
<PAGE> 1
EXHIBIT 15.1
Board of Directors
Friedman Industries, Incorporated
We are aware of the incorporation by reference in the Registration
Statement (Form S-8) of Friedman Industries, Incorporated pertaining to the
1996 Stock Option Plan, 1995 Non-Employee Director Stock Plan, as amended, and
1989 Incentive Stock Option Plan, as amended, of our report dated August 11,
1997 relating to the unaudited condensed consolidated interim financial
statements of Friedman Industries, Incorporated that is included in its Form
10-Q for the quarter ended June 30, 1997.
ERNST & YOUNG LLP
Houston, Texas
October 18, 1997
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement on Form S-8 pertaining to the 1996 Stock Option
Plan, 1995 Non-Employee Director Stock Plan, as amended, and 1989 Incentive
Stock Option Plan, as amended, and to the incorporation by reference therein of
our report dated May 30, 1997, with respect to the consolidated financial
statements of Friedman Industries Incorporated incorporated by reference in its
Annual Report (Form 10-K) for the year ended March 31, 1997 and the related
financial statement schedule included therein, filed with the Securities and
Exchange Commission.
ERNST & YOUNG LLP
Houston, Texas
October 13, 1997
