EXHIBIT 4.02
                                   GERDAU S.A.
                         CNPJ/MF N(0) 33.611.500/0001-19
                              NIRE N(0) 33300032266
                            A PUBLICLY LISTED COMPANY


                  EXECUTIVE STOCK OPTION PLAN TO BE DENOMINATED
                THE `LONG-TERM INCENTIVE PROGRAM' - FOR APPROVAL
   BY THE EXTRAORDINARY SHAREHOLDER'S MEETINGS TO BE HELD ON APRIL 30, 2003.


                          1. OBJECTIVES OF THE PROGRAM
                             -------------------------

                  1.1. THE LONG-TERM INCENTIVE PROGRAM (hereafter the
"PROGRAM"), which grants call options for the purchase of shares of GERDAU S.A.
(hereafter, "GERDAU"), has the objectives of:

                  a - Attracting and retaining strategic executives;

                  b - Offering a long-term system of remuneration;

                  c - Sharing the growth and success of GERDAU and its directly
and indirectly controlled subsidiaries;

                  d - Strengthening the feeling of participation and
collaboration in the company's business.


                                2. ADMINISTRATION
                                   --------------

                  2.1. The administration of the PROGRAM shall be the
responsibility of the Compensation and Succession Committee (the "COMMITTEE").

                  2.2. The COMMITTEE shall have full authority power regarding
the organization, execution and administration of the PROGRAM, in accordance
with the terms and basic conditions of this plan, the directives of the Board of
Directors of GERDAU and legislation.

                  2.3. The COMMITTEE's powers shall include the right to
establish the rules relating to the granting of stock options on a year-to-year
basis.

                  2.4. The COMMITTEE shall be responsible for the indication of
individuals who fulfill the requirements and are in the position to be selected
as participants of the PROGRAM, who will be receiving call options to purchase
shares, as well as the relevant number of shares forming the object of the
options within the time limits established herein.

                  2.5. In exercising its attributions and its authority with
regards to the PROGRAM, the COMMITTEE shall be subject only to the limits
established in item 2.2 above, not being obliged by analogy or rule of isonomy
to extend to other directors, officers or employees in similar situations and
conditions it understands are applicable only to one or more specific
beneficiaries.


                                 3. ELIGIBILITY
                                    -----------

                  3.1. Individuals eligible for the PROGRAM shall include
directors, executive officers and high-level employees of GERDAU and its
directly or indirectly controlled subsidiaries (which are included in the
concept of the Company for the purposes of this plan). The selection of
directors, executive officers and employees (hereafter, "EXECUTIVE" or
"EXECUTIVES") that may be entitled to stock options shall be made exclusively by
the COMMITTEE.

<PAGE>
                            4. ENTRY TO THE PROGRAM
                               --------------------

                  4.1. Admission to the PROGRAM by eligible EXECUTIVES, as
defined in the preceding item, shall, in general, take place during the month of
December of each year unless, exceptionally, the COMMITTEE decides otherwise.

                  4.2. The COMMITTEE shall establish, in each case, the periods
and conditions for the right to exercise call options on the basis of the terms
stated in the "Option Contract for the Purchase of Shares under the terms of the
Long-Term Incentive Program for Executives of Gerdau" (The "OPTION CONTRACT"),
to be signed by the EXECUTIVE, in which the following points shall be defined:

                  a) the number of shares object of each option and the purchase
price per share;

                  b) the periods and conditions for the exercise of the call
options;

                  c) other terms and conditions that the COMMITTEE considers to
be relevant that have not been specified herein.

                  4.3. The contracts to which this item refers shall be executed
under the specification hereby determined and in accordance with the terms of
Art. 118 of Law No. 6,404/76 and shall be recorded in the Company's registers.


                        5. SHARES INCLUDED IN THE PROGRAM
                           ------------------------------

                  5.1. The granting of call options shall only apply to GERDAU
preferred shares, in an amount equivalent to 20% (twenty per cent) per year of
the basic annual salary of each of the EXECUTIVES selected to take part in the
PROGRAM. For this program, the basic annual salary of these EXECUTIVES shall be
defined as equal to 13 (thirteen) times the monthly salary paid by the company
in the month of December. In the case of directors, the strike price of the call
options may be equivalent to up to 100% (one hundred per cent) of their annual
compensation paid by the Company. The underlying shares of the option shall be
valued at the average market price on the date of the granting of the option.


                 6. ACQUISITION OF THE RIGHT TO EXERCISE OPTIONS
                    --------------------------------------------

                  6.1. As a general rule that may be altered by the COMMITTEE,
in each case, the acquisition of the right to exercise options shall take the
following form and refer to the following periods:

                  a) After 5 (five) years elapsed from the first day of the
month following the date of granting of the call options, the EXECUTIVE may
exercise his call options. To this end, he/she shall pay, in accordance with the
terms of Item 5.1, a price per share equivalent to the average market price of
the same shares on the date of the granting of the option.

                  b) The exercise of the call option must happen within a
maximum period of 5 (five) years, after which the EXECUTIVE shall no longer be
entitled to the right to this specific tranche of the option.

                  c) In the event that GERDAU issues stock bonus during the
period until the effective exercise of the right to buy, the number of shares
relating to the right of exercise of the options shall be increased in
proportion to the stock bonus issues, diluting the price of exercise of the
option in the same proportion.

                  d) During the year of admission of any executive officer to
the PROGRAM, GERDAU shall award additional call options, corresponding to 30%
(thirty per cent) of the annual salary the same executive officer paid by the
Company; the same option may be exercised three years after the date of
granting. The exercise of the additional options detailed herein may take place
no later than the 10th (tenth) year after the year of inclusion.

                  e) During this first year of the PROGRAM, call options on
company's shares shall be granted in the month of April, with the starting date
for the grace period set retroactively at January 1, 2003.

                                      2
<PAGE>
                            7. EXERCISE OF THE OPTION
                               ----------------------

                  7.1. The Option may be exercised by the EXECUTIVE in full or
in part, in accordance with the terms of Item 7.2. below.

                  7.2. In the event of the partial exercise of the option, the
exercising EXECUTIVE may exercise the remaining portion of his/her rights within
the period and in accordance with the conditions specified in the OPTION
CONTRACT.


                            8. CONDITIONS OF PAYMENT
                               ---------------------

                  8.1. The price of the acquired shares shall be immediately
due, in Brazilian national currency, unless the COMMITTEE establishes provisions
to the contrary, as specified in the OPTION CONTRACT.


                                    9. TAXES
                                       -----

                  9.1. Operations to be effected as part of the PROGRAM shall be
subject to taxation in the form established in the law.


                          10. EXPIRATION OF THE OPTION
                              ------------------------

                  10.1. The option shall be considered to have expired for all
intents and purposes:

                  a) as a result of its exercise in full, as established in this
PROGRAM;

                  b) as a result of the expiration of the exercise period;

                  c) as a result of the EXECUTIVE's departure from the Company.

                  10.2. In the event of the involuntary departure of the
EXECUTIVE from the Company:

                  a) when the EXECUTIVE is dismissed by decision of the Company
with no due cause, the EXECUTIVE that has already acquired the right to exercise
as a result of the ending of the grace period, shall retain this right of
exercise for the contractual period;

                  b) when the EXECUTIVE is dismissed with due cause, the
EXECUTIVE shall lose the right to receive any amount relating to the PROGRAM,
regardless of whether the grace period has ended or not.


                         11. RETIREMENT OF THE EXECUTIVE
                             ---------------------------

                  11.1. In the event of retirement of the EXECUTIVE, as part of
the Company's retirement plan, the same EXECUTIVE shall be granted the right to
exercise the call options attributed to him/her immediately after the end of
his/her work contract.


                          12. DECEASE OF THE EXECUTIVE
                              ------------------------

                  12.1. In the event of the decease of the EXECUTIVE, his/her
heirs/heiresses shall immediately be granted the right to exercise the call
options assigned to the deceased individual, which must be exercised within 2
(two) years of the date of passing away. In the event of option rights the grace
period for which has already ended in full on a date prior to his/her death, the
corresponding period for the exercise of the options shall be maintained.

                                      3
<PAGE>
                             13.  PERIOD OF VALIDITY
                                  -------------------

                  13.1. The PROGRAM shall take effect after it is approved by
Gerdau's General Shareholder's Meeting, becoming retroactive to January 1, 2003.
It may be terminated at any time by decision of the Board of Directors, albeit
honoring the OPTION CONTRACTS that have already been signed.


                  14. ALTERATIONS OR TERMINATION OF THE PROGRAM
                      -----------------------------------------

                  14.1. By decision of the Board of Directors, alterations may
be made to the PROGRAM, in the event that the gains proposed under the
Compensation Policy diverge significantly from the objective established for
Direct Remuneration.

                  14.2. In the event that it is necessary to implement changes
or to terminate the PROGRAM, such events shall be announced to the EXECUTIVES in
writing with at least 30 (thirty) days' prior notice, as of the date of
modification or termination.

                  14.3. The modifications to or termination of the PROGRAM shall
not affect OPTION CONTRACTS that have already been signed.

                  14.4. In the event of modifications to or the termination of
the PROGRAM:

                  a) GERDAU shall not be under any obligation to reestablish the
PROGRAM or compensate the EXECUTIVES for expected future gains or losses;

                  b) in the event that the PROGRAM is modified, any subsequent
profit opportunity may be implemented in accordance with terms that differ from
those previously established.


                             15. GENERAL CONDITIONS
                                 ------------------

                  15.1. In the event of a change in control of GERDAU, options
attributed to EXECUTIVES more than 12 months prior to the event shall be
considered as free for exercise, regardless of whether their respective grace
period has ended.

                  15.2. Whenever the EXECUTIVE decides to sell shares of his/her
property, the Company shall have priority in buying these shares at the market
price of the day of the operation. When the EXECUTIVE decides to divest his/her
shares, he/she must give 2 (two) business days prior notice to GERDAU, the
Company having a preferential right to purchase these shares until the
immediately preceding business day, with the Company undertaking to pay the
EXECUTIVE the purchase price within 2 (two) business days of the date of
exercise of its preferential right.

                  15.3. EXECUTIVES who are beneficiaries of the PROGRAM shall be
subject to restrictive rules on the use of privileged information applying to
publicly listed companies in general, as well as to rules for the trading of
securities of publicly listed companies within the special segment of the Sao
Paulo Stock Exchange ("BOVESPA") that apply to GERDAU.

                  15.4. In the event of the granting and subsequent exercise of
the call options object of this PROGRAM, shareholders shall not enjoy preference
rights in accordance with the terms of Art. 171, ss.3 of Law 6,404/76.

                                      4
<PAGE>