Document:

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                                                              EXHIBIT 10(iii)(a)

                              EMPLOYMENT AGREEMENT

      This Employment Agreement (the "Agreement") is entered into this 23rd day
of May, 2005 by and between COMMERCIAL METALS COMPANY, a Delaware corporation
(the "Employer") and MURRAY R. MCCLEAN (the "Executive"). The Employer and
Executive are collectively referred to as the "Parties," and individually as a
"Party."

                                R E C I T A L S:

      WHEREAS, Employer has promoted Executive to the position of Executive Vice
President and Chief Operating Officer effective September 20, 2004; and

      WHEREAS, the existing employment agreement between Executive and Employer
dated September 1, 1999, as amended July 10, 2000, October 2, 2000 and March 28,
2001 terminates on August 31, 2005 and the Parties desire to assure Executive's
continued employment with Employer by terminating that agreement and entering
into this Agreement to better reflect the responsibilities of Executive's new
position; and

      WHEREAS, Executive desires to be employed by Employer in this new position
pursuant to all of the terms and conditions hereinafter set forth.

      NOW, THEREFORE, in consideration of the mutual covenants herein contained,
it is agreed as follows:

      1. PURPOSE. The purpose of this Agreement is to formalize the terms and
conditions of Executive's employment with Employer as Executive Vice President
and Chief Operating Officer. This Agreement cannot be amended except by a
writing signed by both Parties.

      2. DEFINITIONS. For the purposes of this Agreement, the following words
shall have the following meanings:

            (a) "AFFILIATE" or "AFFILIATES" shall mean any corporation,
      partnership, joint venture, association, unincorporated organization or
      any other legal entity that directly, or indirectly through one or more
      intermediaries, controls or is controlled by, or is under common control
      with, the Employer.

            (b) "CAUSE" shall mean: (1) any breach by Executive of any material
      provision of this Agreement; (2) any act by Executive constituting a
      felony or otherwise involving theft, embezzlement, fraud, or gross
      dishonesty; (3) any act by Executive involving moral turpitude or willful
      misconduct that, in the good faith judgment of Board of Directors of the
      Employer either (i) causes material economic harm to the Employer or its
      Affiliates (ii) brings substantial discredit to the reputation of the
      Employer or any Affiliate, or (iii) damages or interferes with the
      relationships of the Employer or any Affiliate with any of their
      customers, suppliers, employees or other agents; (4) gross

EMPLOYMENT AGREEMENT                                                      PAGE 1

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      negligence on the part of Executive in the performance of his duties as an
      employee, officer, or director of Employer or any Affiliate; (5)
      Executive's breach of his fiduciary obligations to Employer, or (6) any
      chemical dependence of the Executive which adversely affects the
      performance of his duties and responsibilities to Employer.

            (c) "CHANGE OF CONTROL" shall mean any of the following: (i) any
      consolidation, merger or share exchange of the Employer in which the
      Employer is not the continuing or surviving corporation or pursuant to
      which shares of the Employer's Common Stock would be converted into cash,
      securities or other property, other than a consolidation, merger or share
      exchange of the Employer in which the holders of the Employer's Common
      Stock immediately prior to such transaction have the same proportionate
      ownership of Common Stock of the surviving corporation immediately after
      such transaction; (ii) any sale, lease, exchange or other transfer
      (excluding transfer by way of pledge or hypothecation) in one transaction
      or a series of related transactions, of all or substantially all of the
      assets of the Employer; (iii) the stockholders of the Employer approve any
      plan or proposal for the liquidation or dissolution of the Employer; (iv)
      the cessation of control (by virtue of their not constituting a majority
      of directors) of the Board by the individuals (the "Continuing Directors")
      who (x) at the date of this Agreement were directors or (y) become
      directors after the date of this Agreement and whose election or
      nomination for election by the Employer's stockholders, was approved by a
      vote of at least two-thirds of the directors then in office who were
      directors at the date of this Agreement or whose election or nomination
      for election was previously so approved; (v) the acquisition of beneficial
      ownership (within the meaning of Rule 13d-3 under the 1934 Act) of an
      aggregate of 20% of the voting power of the Employer's outstanding voting
      securities by any person or group (as such term is used in Rule 13d-5
      under the 1934 Act) who beneficially owned less than 15% of the voting
      power of the Employer's outstanding voting securities on the date of this
      Agreement, or the acquisition of beneficial ownership of an additional 5%
      of the voting power of the Employer's outstanding voting securities by any
      person or group who beneficially owned at least 15% of the voting power of
      the Employer's outstanding voting securities on the date of this
      Agreement, provided, however, that notwithstanding the foregoing, an
      acquisition shall not constitute a Change of Control hereunder if the
      acquiror is (x) a trustee or other fiduciary holding securities under an
      employee benefit plan of the Employer and acting in such capacity, (y) a
      Subsidiary of the Employer or a corporation owned, directly or indirectly,
      by the stockholders of the Employer in substantially the same proportions
      as their ownership of voting securities of the Employer or (z) any other
      person whose acquisition of shares of voting securities is approved in
      advance by a majority of the Continuing Directors; or (vi) in a Title 11
      bankruptcy proceeding, the appointment of a trustee or the conversion of a
      case involving the Employer to a case under Chapter 7.

            (d) "CONFIDENTIAL INFORMATION" means information (1) disclosed to or
      known by Executive as a consequence of or through his employment with
      Employer or Affiliate; (2) not generally known outside Employer or its
      Affiliates; and (3) which relates to any aspect of Employer's or
      Affiliate's business, research, or development. "Confidential Information"
      includes, but is not limited to, Employer's and Affiliate's trade secrets,
      proprietary information, business plans, marketing plans, financial
      information, compensation and benefit information, cost and pricing
      information, customer contacts,

EMPLOYMENT AGREEMENT                                                      PAGE 2

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      suppliers, vendors, and information provided to Employer or Affiliate by a
      third Party under restrictions against disclosure or use by Employer or
      others.

            (e) "CONFLICT OF INTEREST" means any situation in which the
      Executive has two or more duties or interests which are mutually
      incompatible and may tend to conflict with the proper and impartial
      discharge of the Executive's duties, responsibilities or obligations to
      Employer, including but not limited to those described in Employer's
      Policy of Business Conduct and Ethics (the "Policy") which Executive has
      either not disclosed to Employer's Board of Directors or has disclosed and
      not been granted a waiver under the provisions of such Policy.

            (f) "GOOD REASON" shall mean the occurrence, without Executive's
      written consent, of any of the following events: (1) a breach of any
      material provision of this Agreement by Employer; (2) a significant
      reduction in the authorities, duties, responsibilities, and title of the
      Executive as set forth in this Agreement; or (3) Employer's requiring the
      Executive, without his consent, to be employed at a location more than
      fifty (50) miles from the Employer's present office location in Dallas,
      Texas

        3. DURATION. This Agreement shall, unless terminated as hereinafter
provided, continue through August 31, 2009. Unless Executive or Employer gives
notice of his or its intent not to renew this Agreement no later than ninety
(90) days prior to its expiration, this Agreement shall automatically continue
in effect for successive additional one (1) year terms subject to all other
terms and conditions contained herein.

        4. DUTIES AND RESPONSIBILITIES. Upon execution of this Agreement,
Executive shall diligently render his services to Employer as Executive Vice
President and Chief Operating Officer in accordance with Employer's directives,
and shall use his best efforts and good faith in accomplishing such directives.
Executive shall report directly to the Chief Executive Officer. Executive agrees
to devote his full-time efforts, abilities, and attention (defined to mean not
normally less than forty (40) hours/week) to the business of Employer, and shall
not engage in any activities which will interfere with such efforts. Attached as
Appendix 1 is the Executive's job description.

        5. COMPENSATION AND BENEFITS. In return for the services to be provided
by Executive pursuant to this Agreement, Employer agrees to pay Executive as
follows:

            (a) SALARY. Executive shall receive an annual base salary of four
      hundred thousand dollars ($400,000.00) during the term of this Agreement
      This salary may be increased at the sole discretion of Employer's Board of
      Directors, but cannot be decreased without Executive's written consent.

            (b) DISCRETIONARY BONUS. Executive shall be eligible to receive a
      bonus (the "Discretionary Bonus") for each fiscal year of Employer ending
      August 31 during the term of this Agreement. The amount of the
      Discretionary Bonus shall be determined by, and in the sole discretion of,
      Employer's Board of Directors and shall be based upon its evaluation of
      Executive's performance during the fiscal year and such other factors or
      criteria as it may, in its sole discretion, consider.

EMPLOYMENT AGREEMENT                                                      PAGE 3

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            (c) PAYMENT AND REIMBURSEMENT OF EXPENSES. Employer shall pay or
      reimburse the Executive for all reasonable travel and other expenses
      incurred by Executive in performing his obligations under this Agreement
      in accordance with the policies and procedures of Employer provided that
      Executive properly accounts therefore in accordance with such policies and
      procedures.

            (d) FRINGE BENEFITS AND PERQUISITES. Executive shall be entitled to
      participate in or receive benefits under any plan or arrangement generally
      made available to the employees or executive officers of Employer,
      including the Employer's Key Employee Long-Term Performance and Annual
      Incentive Plans and 1996 Long-Term Incentive Plan for equity including
      periodic grants of stock options, stock appreciation rights, and/or
      restricted stock, all subject to and on a basis consistent with the terms,
      conditions, and overall administration of such plans and arrangements and
      as approved by Employer's Board of Directors in its sole discretion. To
      the extent permitted by law and the terms of Employer's benefit plans,
      including Employer's Profit Sharing and 401(k) Plan and Benefit
      Restoration Plan, prior service by Executive with a subsidiary of Employer
      shall be credited as service with Employer for purposes of vesting of any
      benefit. Employer shall furnish Executive with an automobile for the
      duration of this Agreement consistent with Employer's policies on
      automobiles furnished senior corporate executives.

            (e) VACATIONS. In accordance with the policies of Employer,
      Executive shall be entitled to the number of paid vacation days in each
      calendar year determined by Employer from time to time for its employees
      generally, but not fewer than twenty (20) business days in any calendar
      year (prorated in any calendar year in which Executive is employed
      hereunder for less than the entire year in accordance with the number of
      days in such calendar year during which Executive is so employed).

            (f) INSURANCE. Employer shall (to the extent Executive elects to
      participate in such coverage where optional) provide life insurance
      coverage, disability insurance, and hospital, surgical, medical, and
      dental benefits for Executive and his qualified dependents, all on such
      terms as Employer normally provides such benefits for its salaried
      employees and dependents.

        6. TERMINATION.

            (a) Executive's employment will terminate upon his death, or if he
      is unable to perform the functions of his position with reasonable
      accommodation for four (4) consecutive months, or for a total of six (6)
      months during any twelve (12) month period.

            (b) Employer may terminate Executive's employment at any time
      without notice for Cause or, following thirty (30) days written notice to
      Executive, without Cause.

            (c) Executive may terminate his employment upon thirty (30) days
      written notice to Employer. In the event Executive terminates his
      employment in this manner, he shall remain in Employer's employ subject to
      all terms and conditions of this Agreement for the entire thirty (30) day
      period unless instructed otherwise by Employer.

EMPLOYMENT AGREEMENT                                                      PAGE 4

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            (d) Executive may terminate this Agreement for Good Reason. Prior to
      terminating the Agreement for Good Reason, Executive must give Employer
      thirty (30) days advance written notice of his intent to terminate for
      Good Reason and the grounds therefore, such that Employer has the
      opportunity to cure and/or rectify the alleged breach. Only if Employer
      does not cure the alleged breach at the end of thirty (30) days may
      Executive terminate for Good Reason.

        7. SEVERANCE. Executive shall be entitled to the following compensation
upon termination of his employment resulting from:

            (a) TERMINATION RESULTING FROM DEATH OR DISABILITY. In the event
      Executive's employment is terminated as a result of his death or
      disability, Executive or his estate shall be entitled to the following:

                  (i) such life insurance or disability benefits as Executive
            may be entitled to pursuant to any life or disability insurance then
            maintained by the Employer for the benefit of its employees and
            executive officers and, in addition thereto, Employer shall pay a
            lump sum payment of fifty thousand dollars ($50,000.00) to Executive
            or his estate;

                  (ii) a pro-rata share of Discretionary Bonus in an amount as
            determined by Employer's Board of Directors in their sole
            discretion, payable no later than November 1 following the end of
            Employer's fiscal year during which termination occurs;

                  (iii) pursuant to the terms and conditions of the Employer's
            Key Employee Long-Term Incentive Plan, payment, at such time as all
            other participants in that plan receive payment, of any cash
            incentive attributable to periods during which Executive was
            employed;

                  (iv) to the extent permitted by the terms and conditions of
            Employer's 1996 Long-Term Incentive Plan or other applicable equity
            incentive plan(s) and to the extent authorized by the terms of each
            of Executive's outstanding award or grant agreements entered into
            pursuant to such plan(s), immediate vesting of all stock
            appreciation rights, restricted stock, and/or stock options
            previously awarded Executive; and

                  (v) to the extent permitted by the terms and conditions of the
            Profit Sharing and 401(k) Plan and Benefit Restoration Plan
            maintained by the Employer, crediting of any Employer contribution
            to the Executive's account attributable to the plan year during
            which termination occurs and accelerated full vesting of any
            previously unvested Employer contributions to the Executive's
            account in such plans.

            (b) TERMINATION WITHOUT CAUSE BY EMPLOYER OR FOR GOOD REASON BY
      EXECUTIVE. In the event Executive's employment is terminated without Cause
      by the Employer or for Good Reason by the Executive, Executive shall be
      entitled to the following:

EMPLOYMENT AGREEMENT                                                      PAGE 5

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                  (i) lump sum payment of an amount equal to 1.5 times
            Executive's then current annual base salary;

                  (ii) a cash payment in lieu of Discretionary Bonus equal to
            1.5 times the average annual Discretionary Bonus received by
            Executive for the five year period ended with Employer's last
            complete fiscal year prior to termination without Cause by the
            Employer or for Good Reason by the Executive; and

                  (ii) all those additional amounts described above in 7(a)ii,
            iii, iv and v.

            (c) TERMINATION FOR CAUSE. In the event Executive's employment is
      terminated for Cause the Executive shall not be entitled to compensation.

            (d) TERMINATION WITHOUT CAUSE BY EMPLOYER OR FOR GOOD REASON BY
      EXECUTIVE WITHIN TWELVE MONTHS FOLLOWING A CHANGE OF CONTROL. If, within
      twelve months following a Change in Control, Executive's employment is
      terminated by the Employer for any reason other than for Cause, Death or
      Disability or if Executive terminates employment for Good Reason during
      such twelve month period, Executive shall be entitled to the following:

                  (i) lump sum payment of two times Executive's then current
            annual base salary;

                  (ii) a cash payment in lieu of Discretionary Bonus equal to
            two times the average annual Discretionary Bonus received by
            Executive for the five year period ended with Employer's last
            complete fiscal year prior to the Change of Control; and

                  (iii) all those additional amounts described above in 7
            (a)iii, iv and v.

            (e) EMPLOYER'S NON-RENEWAL OF AGREEMENT. In the event, pursuant to
      Paragraph 3, the Employer elects not to renew this Employment Agreement,
      either at the end of the initial term or any successive one year
      extension, Executive shall receive a lump sum payment of one hundred
      thousand dollars ($100,000.00).

      8. NON-COMPETITION, NON-SOLICITATION, AND CONFIDENTIALITY. Employer and
Executive acknowledge and agree that while Executive is employed pursuant to
this Agreement, he will have access to Confidential Information of Employer and
its Affiliates, will be provided with specialized training on how to perform his
duties; and will be provided contact with Employer's and Affiliates' customers
and potential customers. In consideration of all of the foregoing, Employer and
Executive agree as follows:

            (a) NON-COMPETITION DURING EMPLOYMENT. Executive agrees that for the
      duration of this Agreement, he will not compete with Employer by engaging
      in the conception, design, development, production, marketing, sourcing or
      servicing of any product or service that is substantially similar to the
      products or services which Employer or Affiliates provides, and that he
      will not work for, in any capacity, assist, or become

EMPLOYMENT AGREEMENT                                                      PAGE 6

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      affiliated with as an owner, partner, etc., either directly or indirectly,
      any individual or business which offers or performs services, or offers or
      provides products substantially similar to the services and products
      provided by Employer or Affiliates.

            (b) NON-COMPETITION AFTER EMPLOYMENT. Executive agrees that for a
      period of eighteen months after termination of his employment with
      Employer for any reason other than for Executive's termination for Good
      Cause or Employer's non-renewal of this Agreement, he will not compete
      with Employer or Affiliates by engaging in the conception, design,
      development, production, marketing, sourcing or servicing of any product
      or service that is substantially similar to the products or services which
      Employer or Affiliates provides, and that he will not work for, in any
      capacity, assist, or become affiliated with as an owner, partner, etc.,
      either directly or indirectly, any individual or business which offers or
      performs services, or offers or provides products substantially similar to
      the services and products provided by Employer or Affiliates .

            (c) CONFLICTS OF INTEREST. Executive agrees that for the duration of
      this Agreement, he will not engage, either directly or indirectly, in any
      Conflict of Interest, and that Executive will promptly inform the Chairman
      of the Audit Committee of Employer's Board of Directors as to each offer
      received by Executive to engage in any such activity. Executive further
      agrees to disclose to Employer any other facts of which Executive becomes
      aware which might involve or give rise to a Conflict of Interest or
      potential Conflict of Interest.

            (d) NON-SOLICITATION OF CUSTOMERS AND EMPLOYEES. Executive further
      agrees that for a period of eighteen months after the termination of this
      Agreement for any reason other than for Employer's non-renewal of this
      Agreement he will not either directly or indirectly, on his own behalf or
      on behalf of others (i) solicit or accept any business from any customer
      or supplier or prospective customer or supplier with whom Executive
      personally dealt or solicited at any time on or after September 1, 1999 on
      behalf of Employer or Affiliates, or (ii), solicit, attempt to hire, or
      hire any employees of Employer or Affiliates to work for Executive or for
      any other entity, firm, corporation, or individual..

            (e) CONFIDENTIAL INFORMATION. Executive further agrees that he will
      not, except as Employer may otherwise consent or direct in writing, reveal
      or disclose, sell, use, lecture upon, publish, or otherwise disclose to
      any third party any Confidential Information or proprietary information of
      Employer or Affiliates, or authorize anyone else to do these things at any
      time either during or subsequent to his employment with Employer. If
      Executive becomes legally compelled by deposition, subpoena or other court
      or governmental action to disclose any Confidential Information, then the
      Executive shall give Employer prompt notice to that effect, and will
      cooperate with Employer if Employer seeks to obtain a protective order
      concerning the Confidential Information. Executive will disclose only such
      Confidential Information as his counsel shall advise is legally required.
      Executive agrees to deliver to Employer, at any time Employer may request,
      all documents, memoranda, notes, plans, records, reports, and other
      documentation, models, components, devices, or computer software, whether
      embodied in electronic format on a computer hard drive, disk or in other
      form (and all copies of all of the foregoing), relating to the businesses,
      operations or affairs of Employer or any Affiliates and any other
      Confidential

EMPLOYMENT AGREEMENT                                                      PAGE 7

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      Information that Executive may then possess or have under his control.
      This section shall continue in full force and effect after termination of
      Executive's employment and after the termination of this Agreement for any
      reason, including expiration of this Agreement. Executive's obligations
      under this section of this Agreement with respect to any specific
      Confidential Information and proprietary information shall cease when that
      specific portion of Confidential Information and proprietary information
      becomes publicly known, in its entirety and without combining portions of
      such information obtained separately and without breach by Executive of
      his obligations under this Agreement. It is understood that such
      Confidential Information and proprietary information of Employer and
      Affiliates includes matters that Executive conceives or develops, as well
      as matters Executive learns from other employees of Employer or
      Affiliates.

            (f) BREACH. Executive agrees that any breach of Paragraphs 8(a),
      (b), (c), (d) or (e) above cannot be remedied solely by money damages, and
      that in addition to any other remedies Employer may have, Employer is
      entitled to obtain injunctive relief against Executive. Nothing herein,
      however, shall be construed as limiting Employer's right to pursue any
      other available remedy at law or in equity, including recovery of damages
      and termination of this Agreement. If the Executive is found to have
      violated Paragraph 8 (b), the Parties agree that the duration of the
      non-competition period set forth therein shall be automatically extended
      by the same period of time that Executive is determined to have been in
      violation of the restriction.

        9. ASSIGNMENT. This Agreement may be assigned by Employer, but cannot be
assigned by Executive.

        10. BINDING AGREEMENT. Executive understands that his obligations under
this Agreement are binding upon Executive's heirs, successors, personal
representatives, and legal representatives.

        11. NOTICES. All notices pursuant to this Agreement shall be in writing
and sent certified mail, return receipt requested, addressed as follows:

IF TO EXECUTIVE:                         IF TO EMPLOYER:

      Murray R. McClean                        Stanley A. Rabin - Chairman, CEO,
      5323 Tennington Park                       and President
      Dallas, Texas  75287                     Commercial Metals Company
                                               6565 N. MacArthur Blvd.
WITH A COPY TO:                                Suite 800
                                               Irving, Texas  750397

      Dan C. Dargene, Esq.
      Winstead Sechrest & Minick P.C.    WITH A COPY TO:
      5400 Renaissance Tower
      1201 Elm Street                          David M. Sudbury, Esq.
      Dallas, Texas  75270                     Commercial Metals Company
                                               6565 N. MacArthur Blvd.
                                               Suite 800
                                               Irving, Texas  750397

EMPLOYMENT AGREEMENT                                                      PAGE 8

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      12. WAIVER. No waiver by either Party to this Agreement of any right to
enforce any term or condition of this Agreement, or of any breach hereof, shall
be deemed a waiver of such right in the future or of any other right or remedy
available under this Agreement.

      13. SEVERABILITY. If any provision of this Agreement is determined to be
void, invalid, unenforceable, or against public policy, such provisions shall be
deemed severable from the Agreement, and the remaining provisions of the
Agreement will remain unaffected and in full force and effect. Furthermore, any
breach by Employer of any provision of this Agreement shall not excuse
Executive's compliance with the requirements of Paragraph 8 to the extent
otherwise enforceable.

      14. ENTIRE AGREEMENT AND UNDERSTANDING. The terms and provisions contained
herein shall constitute the entire agreement between the Parties with respect to
Executive's employment with Employer during the time period covered by this
Agreement. This Agreement replaces and supersedes any and all existing
agreements, including that employment agreement dated September 1, 1999. as
amended, entered into between the Parties. The Parties represent and warrant
that they have read and understood each and every provision of this Agreement,
and that they are free to obtain advice from legal counsel of choice, if
necessary and desired, in order to interpret any and all provisions of this
Agreement, and that both Parties have voluntarily entered into this Agreement.

      15. EFFECTIVE DATE. It is understood that this Agreement shall be
effective as of the date hereof and that the terms of this Agreement shall
remain in full force and effect both during Executive's employment and where
applicable thereafter.

      16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.

      IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first written above.

EXECUTIVE                              EMPLOYER

MURRAY R. McCLEAN                      COMMERCIAL METALS COMPANY

/s/ MURRAY R. MCCLEAN                  By: /s/ STANLEY A. RABIN
--------------------------------           -----------------------------------
                                           Stanley A. Rabin
                                           Chairman, President & Chief Executive
                                           Officer

EMPLOYMENT AGREEMENT                                                      PAGE 9exv10wiiiwi

Exhibit 10(iii)(i)

COMMERCIAL METALS COMPANY

1996 LONG-TERM INCENTIVE PLAN

     The Commercial Metals Company 1996 Long-Term Incentive Plan (hereinafter called the “Plan”)
was adopted by the Board of Directors of Commercial Metals Company, a Delaware corporation
(hereinafter called the “Company”), effective as of December 9, 1996, and was approved by the
Company’s stockholders on January 23, 1997.

ARTICLE 1

PURPOSE

     The purpose of the Plan is to attract and retain the services of key management employees of
the Company and its Subsidiaries and to provide such persons with a proprietary interest in the
Company through the granting of incentive stock options, non-qualified stock options, stock
appreciation rights, or restricted stock, whether granted singly, or in combination, or in tandem,
that will

	 	(a)  	increase the interest of such persons in the Company’s welfare;
	 
	 	(b)  	furnish an incentive to such persons to continue their services
for the Company; and
	 
	 	(c)  	provide a means through which the Company may attract able
persons as employees.

     With respect to Reporting Participants, the Plan and all transactions under the Plan are
intended to comply with all applicable conditions of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934 (the “1934 Act”). To the extent any provision of the Plan or action by the
Committee fails to so comply, it shall be deemed null and void ab initio, to the extent permitted
by law and deemed advisable by the Committee.

ARTICLE 2

DEFINITIONS

     For the purpose of the Plan, unless the context requires otherwise, the following terms shall
have the meanings indicated:

     2.1 “Award” means the grant of any Incentive Stock Option, Non-qualified Stock Option,
Restricted Stock or SAR whether granted singly, in combination or in tandem (each individually
referred to herein as an “Incentive”).

 

 

     2.2 “Award Agreement” means a written agreement between a Participant and the Company which
sets out the terms of the grant of an Award.

     2.3 “Award Period” means the period during which one or more Incentives granted under an Award
may be exercised.

     2.4 “Board” means the board of directors of the Company.

     2.5 “Change of Control” means any of the following: (i) any consolidation, merger or share
exchange of the Company in which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company’s Common Stock would be converted into cash, securities or
other property, other than a consolidation, merger or share exchange of the Company in which the
holders of the Company’s Common Stock immediately prior to such transaction have the same
proportionate ownership of Common Stock of the surviving corporation immediately after such
transaction; (ii) any sale, lease, exchange or other transfer (excluding transfer by way of pledge
or hypothecation) in one transaction or a series of related transactions, of all or substantially
all of the assets of the Company; (iii) the stockholders of the Company approve any plan or
proposal for the liquidation or dissolution of the Company; (iv) the cessation of control (by
virtue of their not constituting a majority of directors) of the Board by the individuals (the
“Continuing Directors”) who (x) at the date of this Plan were directors or (y) become directors
after the date of this Plan and whose election or nomination for election by the Company’s
stockholders, was approved by a vote of at least two-thirds of the directors then in office who
were directors at the date of this Plan or whose election or nomination for election was previously
so approved; (v) the acquisition of beneficial ownership (within the meaning of Rule 13d-3 under
the 1934 Act) of an aggregate of 20% of the voting power of the Company’s outstanding voting
securities by any person or group (as such term is used in Rule 13d-5 under the 1934 Act) who
beneficially owned less than 15% of the voting power of the Company’s outstanding voting securities
on the date of this Plan, or the acquisition of beneficial ownership of an additional 5% of the
voting power of the Company’s outstanding voting securities by any person or group who beneficially
owned at least 15% of the voting power of the Company’s outstanding voting securities on the date
of this Plan, provided, however, that notwithstanding the foregoing, an acquisition
shall not constitute a Change of Control hereunder if the acquiror is (x) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company and acting in such
capacity, (y) a Subsidiary of the Company or a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their ownership of voting
securities of the Company or (z) any other person whose acquisition of shares of voting securities
is approved in advance by a majority of the Continuing Directors; or (vi) in a Title 11 bankruptcy
proceeding, the appointment of a trustee or the conversion of a case involving the Company to a
case under Chapter 7.

     2.6 “Code” means the Internal Revenue Code of 1986, as amended.

     2.7 “Committee” means the committee appointed or designated by the Board to administer the
Plan in accordance with Article 3 of this Plan.

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     2.8 “Common Stock” means the common stock, par value $5.00 per share, which the Company is
currently authorized to issue or may in the future be authorized to issue.

     2.9 “Company” means Commercial Metals Company, a Delaware corporation, and any successor
entity.

     2.10 “Date of Grant” means the effective date on which an Award is made to a Participant as
set forth in the applicable Award Agreement; provided, however, that solely for purposes of Section
16 of the 1934 Act and the rules and regulations promulgated thereunder, the Date of Grant of an
Award shall be the date of stockholder approval of the Plan if such date is later than the
effective date of such Award as set forth in the Award Agreement.

     2.11 “Employee” means common law employee (as defined in accordance with the Regulations and
Revenue Rulings then applicable under Section 3401(c) of the Code) of the Company or any Subsidiary
of the Company.

     2.12 “Fair Market Value” of a share of Common Stock is the mean of the highest and lowest
prices per share on the New York Stock Exchange Consolidated Tape, or such reporting service as the
Committee may select, on the appropriate date, or in the absence of reported sales on such day, the
most recent previous day for which sales were reported.

     2.13 “Incentive Stock Option” or “ISO” means an incentive stock option within the meaning of
Section 422 of the Code, granted pursuant to this Plan.

     2.14 “Non-employee Director” means a member of the Board who is not an Employee and who
satisfies the requirements of Rule 16b-3(b)(3) promulgated under the 1934 Act or any successor
provision.

     2.15 “Non-qualified Stock Option” or “NQSO” means a non-qualified stock option, granted
pursuant to this Plan.

     2.16 “Option Price” means the price which must be paid by a Participant upon exercise of a
Stock Option to purchase a share of Common Stock.

     2.17 “Participant” shall mean an Employee of the Company or a Subsidiary to whom an Award is
granted under this Plan.

     2.18 “Plan” means this Commercial Metals Company 1996 Long-Term Incentive Plan, as amended
from time to time.

     2.19 “Reporting Participant” means a Participant who is subject to the reporting requirements
of Section 16 of the 1934 Act.

     2.20 “Restricted Stock” means shares of Common Stock issued or transferred to a Participant
pursuant to Section 6.4 of this Plan which are subject to restrictions or limitations set forth in
this Plan and in the related Award Agreement.

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     2.21 “Retirement” means any Termination of Service solely due to retirement upon attainment of
age 62, or permitted early retirement as determined by the Committee.

     2.22 “SAR” means the right to receive a payment, in cash and/or Common Stock, equal to the
excess of the Fair Market Value of a specified number of shares of Common Stock on the date the SAR
is exercised over the SAR Price for such shares.

     2.23 “SAR Price” means the Fair Market Value of each share of Common Stock covered by an SAR,
determined on the Date of Grant of the SAR.

     2.24 “Stock Option” means a Non-qualified Stock Option or an Incentive Stock Option.

     2.25 “Subsidiary” means (i) any corporation in an unbroken chain of corporations beginning
with the Company, if each of the corporations other than the last corporation in the unbroken chain
owns stock possessing a majority of the total combined voting power of all classes of stock in one
of the other corporations in the chain, (ii) any limited partnership, if the Company or any
corporation described in item (i) above owns a majority of the general partnership interest and a
majority of the limited partnership interests entitled to vote on the removal and replacement of
the general partner, and (iii) any partnership or limited liability company, if the partners or
members thereof are composed only of the Company, any corporation listed in item (i) above or any
limited partnership listed in item (ii) above. “Subsidiaries” means more than one of any such
corporations, limited partnerships, partnerships or limited liability companies.

     2.26 “Termination of Service” occurs when a Participant who is an Employee of the Company or
any Subsidiary shall cease to serve as an Employee of the Company and its Subsidiaries, for any
reason.

     2.27 “Total and Permanent Disability” means a Participant is qualified for long-term
disability benefits under the Company’s disability plan or insurance policy; or, if no such plan or
policy is then in existence, that the Participant, because of ill health, physical or mental
disability or any other reason beyond his or her control, is unable to perform his or her duties of
employment for a period of six (6) continuous months, as determined in good faith by the Committee;
provided that, with respect to any Incentive Stock Option, Total and Permanent
Disability shall have the meaning given it under the rules governing Incentive Stock Options under
the Code.

ARTICLE 3

ADMINISTRATION

     The Plan shall be administered by a committee appointed by the Board (the “Committee”). The
Committee shall consist of not fewer than two persons. Any member of the Committee may be removed
at any time, with or without cause, by resolution of the Board. Any vacancy occurring in the membership of the Committee may be filled by appointment by the
Board.

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     Membership on the Committee shall be limited to those members of the Board who are
Non-employee Directors and who are “outside directors” under Section 162(m) of the Code. The
Committee shall select one of its members to act as its Chairman. A majority of the Committee
shall constitute a quorum, and the act of a majority of the members of the Committee present at a
meeting at which a quorum is present shall be the act of the Committee.

     The Committee shall determine and designate from time to time the eligible persons to whom
Awards will be granted and shall set forth in each related Award Agreement the Award Period, the
Date of Grant, and such other terms, provisions, limitations, and performance requirements, as are
approved by the Committee, but not inconsistent with the Plan. The Committee shall determine
whether an Award shall include one type of Incentive, two or more Incentives granted in
combination, or two or more Incentives granted in tandem (that is, a joint grant where exercise of
one Incentive results in cancellation of all or a portion of the other Incentive).

     The Committee, in its discretion, shall (i) interpret the Plan, (ii) prescribe, amend, and
rescind any rules and regulations necessary or appropriate for the administration of the Plan, and
(iii) make such other determinations and take such other action as it deems necessary or advisable
in the administration of the Plan. Any interpretation, determination, or other action made or
taken by the Committee shall be final, binding, and conclusive on all interested parties.

     With respect to restrictions in the Plan that are based on the requirements of Rule 16b-3
promulgated under the 1934 Act, Section 422 of the Code, Section 162(m) of the Code, the rules of
any exchange or inter-dealer quotation system upon which the Company’s securities are listed or
quoted, or any other applicable law, rule or restriction (collectively, “applicable law”), to the
extent that any such restrictions are no longer required by applicable law, the Committee shall
have the sole discretion and authority to grant Awards that are not subject to such mandated
restrictions and/or to waive any such mandated restrictions with respect to outstanding Awards.

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ARTICLE 4

ELIGIBILITY

     Any Employee (including an Employee who is also a director or an officer) whose judgment,
initiative, and efforts contributed or may be expected to contribute to the successful performance
of the Company is eligible to participate in the Plan; provided that only Employees shall be
eligible to receive Incentive Stock Options. The Committee, upon its own action, may grant, but
shall not be required to grant, an Award to any Employee of the Company or any Subsidiary. Awards
may be granted by the Committee at any time and from time to time to new Participants, or to then
Participants, or to a greater or lesser number of Participants, and may include or exclude previous
Participants, as the Committee shall determine. Except as required by this Plan, Awards granted at
different times need not contain similar provisions. The Committee’s determinations under the Plan
(including without limitation determinations of which Employees, if any, are to receive Awards, the
form, amount and timing of such Awards, the terms and provisions of such Awards and the agreements
evidencing same) need not be uniform and may be made by it selectively among Employees who receive,
or are eligible to receive, Awards under the Plan.

ARTICLE 5

SHARES SUBJECT TO PLAN

     Subject to adjustment as provided in Articles 13 and 14, the maximum number of shares of
Common Stock that may be delivered pursuant to Awards granted under the Plan is (a) Seven Hundred
Fifty Thousand (750,000) shares; plus (b) shares of Common Stock previously subject to Awards which
are forfeited, terminated, settled in cash in lieu of Common Stock, or exchanged for Awards that do
not involve Common Stock, or expired unexercised; plus (c) without duplication for shares counted
under the immediately preceding clause, a number of shares of Common Stock equal to the number of
shares repurchased by the Company in the open market or otherwise and having an aggregate
repurchase price no greater than the amount of cash proceeds received by the Company from the sale
of shares of Common Stock under the Plan; plus (d) any shares of Common Stock surrendered to the
Company in payment of the exercise price of options issued under the Plan.

     Shares to be issued may be made available from authorized but unissued Common Stock, Common
Stock held by the Company in its treasury, or Common Stock purchased by the Company on the open
market or otherwise. During the term of this Plan, the Company will at all times reserve and keep
available the number of shares of Common Stock that shall be sufficient to satisfy the requirements
of this Plan.

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ARTICLE 6

GRANT OF AWARDS

     6.1 In General. The grant of an Award shall be authorized by the Committee and shall be
evidenced by an Award Agreement setting forth the Incentive or Incentives being granted, the total
number of shares of Common Stock subject to the Incentive(s), the Option Price (if applicable), the
Award Period, the Date of Grant, and such other terms, provisions, limitations, and performance
objectives, as are approved by the Committee, but not inconsistent with the Plan. The Company
shall execute an Award Agreement with a Participant after the Committee approves the issuance of an
Award. Any Award granted pursuant to this Plan must be granted within ten (10) years of the date
of adoption of this Plan. The Plan shall be submitted to the Company’s stockholders for approval;
however, the Committee may grant Awards under the Plan prior to the time of stockholder approval.
Any such Award granted prior to such stockholder approval shall be made subject to such stockholder
approval. The grant of an Award to a Participant shall not be deemed either to entitle the
Participant to, or to disqualify the Participant from, receipt of any other Award under the Plan.

     If the Committee establishes a purchase price for an Award, the Participant must accept such
Award within a period of 30 days (or such shorter period as the Committee may specify) after the
Date of Grant by executing the applicable Award Agreement and paying such purchase price.

     6.2 Maximum ISO Grants. The Committee may not grant Incentive Stock Options under the Plan to
any Employee which would permit the aggregate Fair Market Value (determined on the Date of Grant)
of the Common Stock with respect to which Incentive Stock Options (under this and any other plan of
the Company and its Subsidiaries) are exercisable for the first time by such Employee during any
calendar year to exceed $100,000. To the extent any Stock Option granted under this Plan which is
designated as an Incentive Stock Option exceeds this limit or otherwise fails to qualify as an
Incentive Stock Option, such Stock Option shall be a Non-qualified Stock Option.

     6.3 Maximum Individual Grants. No Participant may receive during any fiscal year of the
Company Awards covering an aggregate of more than One Hundred Thousand (100,000) shares of Common
Stock.

     6.4 Restricted Stock. If Restricted Stock is granted to a Participant under an Award, the
Committee shall set forth in the related Award Agreement: (i) the number of shares of Common Stock
awarded, (ii) the price, if any, to be paid by the Participant for such Restricted Stock, (iii) the
time or times within which such Award may be subject to forfeiture, (iv) specified performance
goals of the Company, a Subsidiary, any division thereof or any group of Employees of the Company,
or other criteria, which the Committee determines must be met in order to remove any restrictions
(including vesting) on such Award, and (v) all other terms, limitations, restrictions, and
conditions of the Restricted Stock, which shall be consistent with this Plan. The provisions of
Restricted Stock need not be the same with respect to each Participant.

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     (a) Legend on Shares. Each Participant who is awarded Restricted Stock shall be issued a stock
certificate or certificates in respect of such shares of Common Stock. Such certificate(s) shall
be registered in the name of the Participant, and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Restricted Stock, substantially as provided
in Section 17.9 of the Plan. The Committee may require that the stock certificates evidencing
shares of Restricted Stock be held in custody by the Company until the restrictions thereon shall
have lapsed, and that the Participant deliver to the Committee a stock power or stock powers,
endorsed in blank, relating to the shares of Restricted Stock.

     (b) Restrictions and Conditions. Shares of Restricted Stock shall be subject to the following
restrictions and conditions:

     (i) Subject to the other provisions of this Plan and the terms of the particular Award
Agreements, during such period as may be determined by the Committee commencing on the Date
of Grant (the “Restriction Period”), the Participant shall not be permitted to sell,
transfer, pledge or assign shares of Restricted Stock. Except for these limitations, the
Committee may in its sole discretion, remove any or all of the restrictions on such
Restricted Stock whenever it may determine that, by reason of changes in applicable laws or
other changes in circumstances arising after the date of the Award, such action is
appropriate.

     (ii) Except as provided in sub-paragraph (i) above, the Participant shall have, with
respect to his or her Restricted Stock, all of the rights of a stockholder of the Company,
including the right to vote the shares, and the right to receive any dividends thereon.
Certificates for shares of Common Stock free of restriction under this Plan shall be
delivered to the Participant promptly after, and only after, the Restriction Period shall
expire without forfeiture in respect of such shares of Common Stock. Certificates for the shares of Common Stock forfeited under the provisions of the Plan and the applicable Award
Agreement shall be promptly returned to the Company by the forfeiting Participant. Each
Award Agreement shall require that (x) each Participant, by his or her acceptance of
Restricted Stock, shall irrevocably grant to the Company a power of attorney to transfer any shares so forfeited to the Company and agrees to execute any documents requested by the
Company in connection with such forfeiture and transfer, and (y) such provisions regarding
returns and transfers of stock certificates with respect to forfeited shares of Common Stock
shall be specifically performable by the Company in a court of equity or law.

     (iii) The Restriction Period of Restricted Stock shall commence on the Date of Grant
and, subject to Article 14 of the Plan, unless otherwise established by the Committee in the
Award Agreement setting forth the terms of the Restricted Stock, shall expire upon
satisfaction of the conditions set forth in the Award Agreement; such conditions may provide
for vesting based on (i) length of continuous service, (ii) achievement of specific business
objectives, (iii) increases in specified indices, (iv) attainment of specified growth rates,
or (v) other comparable measurements of Company performance, as may be determined by the
Committee in its sole discretion.

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     (iv) Subject to the provisions of the particular Award Agreement, upon Termination of
Service for any reason during the Restriction Period, the nonvested shares of Restricted
Stock shall be forfeited by the Participant. In the event a Participant has paid any
consideration to the Company for such forfeited Restricted Stock, the Company shall, as soon
as practicable after the event causing forfeiture (but in any event within 5 business days),
pay to the Participant, in cash, an amount equal to the total consideration paid by the
Participant for such forfeited shares. Upon any forfeiture, all rights of a Participant with
respect to the forfeited shares of the Restricted Stock shall cease and terminate, without
any further obligation on the part of the Company.

     6.5 SAR. An SAR shall entitle the Participant at his election to surrender to the Company the
SAR, or portion thereof, as the Participant shall choose, and to receive from the Company in
exchange therefor cash in an amount equal to the excess (if any) of the Fair Market Value (as of
the date of the exercise of the SAR) per share over the SAR Price per share specified in such SAR,
multiplied by the total number of shares of the SAR being surrendered. In the discretion of the
Committee, the Company may satisfy its obligation upon exercise of an SAR by the distribution of
that number of shares of Common Stock having an aggregate Fair Market Value (as of the date of the
exercise of the SAR) equal to the amount of cash otherwise payable to the Participant, with a cash
settlement to be made for any fractional share interests, or the Company may settle such obligation
in part with shares of Common Stock and in part with cash.

     6.6 Tandem Awards. The Committee may grant two or more Incentives in one Award in the form of
a “tandem award,” so that the right of the Participant to exercise one Incentive shall be canceled
if, and to the extent, the other Incentive is exercised. For example, if a Stock Option and an SAR
are issued in a tandem Award, and the Participant exercises the SAR with respect to 100 shares of
Common Stock, the right of the Participant to exercise the related Stock Option shall be canceled
to the extent of 100 shares of Common Stock.

ARTICLE 7

OPTION PRICE; SAR PRICE

     The Option Price for any share of Common Stock which may be purchased under a Stock Option and
the SAR Price for any share of Common Stock subject to an SAR shall be at least One Hundred Percent
(100%) of the Fair Market Value of the share on the Date of Grant. If an Incentive Stock Option is
granted to an Employee who owns or is deemed to own (by reason of the attribution rules of Section
424(d) of the Code) more than 10% of the combined voting power of all classes of stock of the
Company (or any parent or Subsidiary), the Option Price shall be at least 110% of the Fair Market
Value of the Common Stock on the Date of Grant.

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ARTICLE 8

AWARD PERIOD; VESTING

     8.1 Award Period. Subject to the other provisions of this Plan, the Committee may, in its
discretion, provide that an Incentive may not be exercised in whole or in part for any period or
periods of time or beyond any date specified in the Award Agreement. Except as provided in the
Award Agreement, an Incentive may be exercised in whole or in part at any time during its term.
The Award Period for an Incentive shall be reduced or terminated upon Termination of Service in
accordance with this Article 8 and Article 9. No Incentive granted under the Plan may be exercised
at any time after the end of its Award Period. No portion of any Incentive may be exercised after
the expiration of ten (10) years from its Date of Grant. However, if an Employee owns or is deemed
to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10% of the
combined voting power of all classes of stock of the Company (or any parent or Subsidiary) and an
Incentive Stock Option is granted to such Employee, the term of such Incentive Stock Option (to the
extent required by the Code at the time of grant) shall be no more than five (5) years from the
Date of Grant.

     8.2 Vesting. The Committee, in its sole discretion, may determine that an Incentive will be
immediately exercisable, in whole or in part, or that all or any portion may not be exercised until
a date, or dates, subsequent to its Date of Grant, or until the occurrence of one or more specified
events, subject in any case to the terms of the Plan. If the Committee imposes conditions upon
exercise, then subsequent to the Date of Grant, the Committee may, in its sole discretion,
accelerate the date on which all or any portion of the Incentive may be exercised.

ARTICLE 9

TERMINATION OF SERVICE

     In the event of Termination of Service of a Participant, an Incentive may only be exercised as
determined by the Committee and provided in the Award Agreement.

ARTICLE 10

EXERCISE OF INCENTIVE

     10.1 In General. A vested Incentive may be exercised during its Award Period, subject to
limitations and restrictions set forth therein and in Article 9. A vested Incentive may be
exercised at such times and in such amounts as provided in this Plan and the applicable Award
Agreement, subject to the terms, conditions, and restrictions of the Plan.

     In no event may an Incentive be exercised or shares of Common Stock be issued pursuant to an
Award if a necessary listing or quotation of the shares of Common Stock on a stock exchange or
inter-dealer quotation system or any registration under state or federal securities laws required
under the circumstances has not been accomplished. No Incentive may be exercised for a fractional
share of Common Stock. The granting of an Incentive shall impose no obligation upon the
Participant to exercise that Incentive.

10

 

     (a) Stock Options. Subject to such administrative regulations as the Committee may from time
to time adopt, a Stock Option may be exercised by the delivery of written notice to the Committee
setting forth the number of shares of Common Stock with respect to which the Stock Option is to be
exercised and the date of exercise thereof (the “Exercise Date”) which shall be at least three (3)
days after giving such notice unless an earlier time shall have been mutually agreed upon. On the
Exercise Date, the Participant shall deliver to the Company consideration with a value equal to the
total Option Price of the shares to be purchased, payable as follows: (a) cash, check, bank draft,
or money order payable to the order of the Company, (b) Common Stock (including Restricted Stock)
owned by the Participant on the Exercise Date, valued at its Fair Market Value on the Exercise
Date, (c) by delivery (including by FAX) to the Company or its designated agent of an executed
irrevocable option exercise form together with irrevocable instructions from the Participant to a
broker or dealer, reasonably acceptable to the Company, to sell certain of the shares of Common
Stock purchased upon exercise of the Stock Option or to pledge such shares as collateral for a loan
and promptly deliver to the Company the amount of sale or loan proceeds necessary to pay such
purchase price, and/or (d) in any other form of valid consideration that is acceptable to the
Committee in its sole discretion. In the event that shares of Restricted Stock are tendered as
consideration for the exercise of a Stock Option, a number of shares of Common Stock issued upon
the exercise of the Stock Option equal to the number of shares of Restricted Stock used as
consideration therefor shall be subject to the same restrictions and provisions as the Restricted
Stock so submitted.

     Upon payment of all amounts due from the Participant, the Company shall cause certificates for
the Common Stock then being purchased to be delivered as directed by the Participant (or the person
exercising the Participant’s Stock Option in the event of his death) at its principal business
office promptly after the Exercise Date; provided that if the Participant has exercised an
Incentive Stock Option, the Company may at its option retain physical possession of the certificate
evidencing the shares acquired upon exercise until the expiration of the holding periods described
in Section 422(a)(1) of the Code. The obligation of the Company to deliver shares of Common Stock
shall, however, be subject to the condition that if at any time the Committee shall determine in
its discretion that the listing, registration, or qualification of the Stock Option or the Common
Stock upon any securities exchange or inter-dealer quotation system or under any state or federal
law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the Stock Option or the issuance or purchase of shares of
Common Stock thereunder, the Stock Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent, or approval shall have been effected or obtained
free of any conditions not acceptable to the Committee.

     If the Participant fails to pay for any of the Common Stock specified in such notice or fails
to accept delivery thereof, the Participant’s right to purchase such Common Stock may be terminated
by the Company.

     (b) SARs. Subject to the conditions of this Section 10.1(b) and such administrative
regulations as the Committee may from time to time adopt, an SAR may be exercised by the delivery
(including by FAX) of written notice to the Committee setting forth the number of shares of Common
Stock with respect to which the SAR is to be exercised and the date of

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exercise thereof (the “Exercise Date”) which shall be at least three (3) days after giving
such notice unless an earlier time shall have been mutually agreed upon. On the Exercise Date, the
Participant shall receive from the Company in exchange therefor cash in an amount equal to the
excess (if any) of the Fair Market Value (as of the date of the exercise of the SAR) per share of
Common Stock over the SAR Price per share specified in such SAR, multiplied by the total number of
shares of Common Stock of the SAR being surrendered. In the discretion of the Committee, the
Company may satisfy its obligation upon exercise of an SAR by the distribution of that number of
shares of Common Stock having an aggregate Fair Market Value (as of the date of the exercise of the
SAR) equal to the amount of cash otherwise payable to the Participant, with a cash settlement to be
made for any fractional share interests, or the Company may settle such obligation in part with
shares of Common Stock and in part with cash.

     10.2 Disqualifying Disposition of ISO. If shares of Common Stock acquired upon exercise of an
Incentive Stock Option are disposed of by a Participant prior to the expiration of either two (2)
years from the Date of Grant of such Stock Option or one (1) year from the transfer of shares of
Common Stock to the Participant pursuant to the exercise of such Stock Option, or in any other
disqualifying disposition within the meaning of Section 422 of the Code, such Participant shall
notify the Company in writing of the date and terms of such disposition. A disqualifying
disposition by a Participant shall not affect the status of any other Stock Option granted under
the Plan as an Incentive Stock Option within the meaning of Section 422 of the Code.

ARTICLE 11

AMENDMENT OR DISCONTINUANCE

     Subject to the limitations set forth in this Article 11, the Board may at any time and from
time to time, without the consent of the Participants, alter, amend, revise, suspend, or
discontinue the Plan in whole or in part; provided, however, that no amendment which requires
stockholder approval in order for the Plan and Incentives awarded under the Plan to continue to
comply with Section 162(m) of the Code, including any successors to such Section, shall be
effective unless such amendment shall be approved by the requisite vote of the stockholders of the
Company entitled to vote thereon. Any such amendment shall, to the extent deemed necessary or
advisable by the committee, be applicable to any outstanding Incentives theretofore granted under
the Plan, notwithstanding any contrary provisions contained in any stock option agreement. In the
event of any such amendment to the Plan, the holder of any Incentive outstanding under the Plan
shall, upon request of the Committee and as a condition to the exercisability thereof, execute a
conforming amendment in the form prescribed by the Committee to any Award Agreement relating
thereto. Notwithstanding anything contained in this Plan to the contrary, unless required by law,
no action contemplated or permitted by this Article 11 shall adversely affect any rights of
Participants or obligations of the Company to Participants with respect to any Incentive
theretofore granted under the Plan without the consent of the affected Participant.

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ARTICLE 12

TERM

     The Plan shall be effective from the date that this Plan is approved by the Board. Unless
sooner terminated by action of the Board, the Plan will terminate on December 9, 2006, but
Incentives granted before that date will continue to be effective in accordance with their terms
and conditions.

ARTICLE 13

CAPITAL ADJUSTMENTS

     If at any time while the Plan is in effect, or Incentives are outstanding, there shall be any
increase or decrease in the number of issued and outstanding shares of Common Stock resulting from
(1) the declaration or payment of a stock dividend, (2) any recapitalization resulting in a stock
split-up, combination, or exchange of shares of Common Stock, or (3) other increase or decrease in
such shares of Common Stock effected without receipt of consideration by the Company, then and in
such event:

     (i) An appropriate adjustment shall be made in the maximum number of shares of Common
Stock then subject to being awarded under the Plan and in the maximum number of shares of
Common Stock that may be awarded to a Participant to the end that the same proportion of the
Company’s issued and outstanding shares of Common Stock shall continue to be subject to
being so awarded.

     (ii) Appropriate adjustments shall be made in the number of shares of Common Stock and
the Option Price thereof then subject to purchase pursuant to each such Stock Option
previously granted and unexercised, to the end that the same proportion of the Company’s
issued and outstanding shares of Common Stock in each such instance shall remain subject to
purchase at the same aggregate Option Price.

     (iii) Appropriate adjustments shall be made in the number of SARs and the SAR Price
thereof then subject to exercise pursuant to each such SAR previously granted and
unexercised, to the end that the same proportion of the Company’s issued and outstanding
            shares of Common Stock in each instance shall remain subject to exercise at the same
aggregate SAR Price.

     (iv) Appropriate adjustments shall be made in the number of outstanding shares of
Restricted Stock with respect to which restrictions have not yet lapsed prior to any
such change.

     Except as otherwise expressly provided herein, the issuance by the Company of shares of its
capital stock of any class, or securities convertible into shares of capital stock of any class,
either in connection with 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 (i) the number of or Option Price of shares of Common Stock then subject to

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outstanding Stock Options granted under the Plan, (ii) the number of or SAR Price or SARs then
subject to outstanding SARs granted under the Plan, or (iii) the number of outstanding shares of
Restricted Stock.

     Upon the occurrence of each event requiring an adjustment with respect to any Incentive, the
Company shall mail to each affected Participant its computation of such adjustment which shall be
conclusive and shall be binding upon each such Participant.

ARTICLE 14

RECAPITALIZATION, MERGER AND

CONSOLIDATION; CHANGE IN CONTROL

     (a) The existence of this Plan and Incentives granted hereunder shall not affect in any
way the right or power of the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital
structure and its business, or any merger or consolidation of the Company, or any issue of
bonds, debentures, preferred or preference stocks ranking prior to or otherwise affecting
the Common Stock or the rights thereof (or any rights, options, or warrants to purchase
same), 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.

     (b) Subject to any required action by the stockholders, if the Company shall be the
surviving or resulting corporation in any merger, consolidation or share exchange, any
Incentive granted hereunder shall pertain to and apply to the securities or rights
(including cash, property, or assets) to which a holder of the number of shares of Common
Stock subject to the Incentive would have been entitled.

     (c) In the event of any merger, consolidation or share exchange pursuant to which the
Company is not the surviving or resulting corporation, there shall be substituted for each
share of Common Stock subject to the unexercised portions of such outstanding Incentives,
that number of shares of each class of stock or other securities or that amount of cash,
property, or assets of the surviving, resulting or consolidated company which were
distributed or distributable to the stockholders of the Company in respect to each share of
Common Stock held by them, such outstanding Incentives to be thereafter exercisable for such
stock, securities, cash, or property in accordance with their terms. Notwithstanding the
foregoing, however, all such Incentives may be canceled by the Company as of the effective
date of any such reorganization, merger, consolidation, share exchange or any dissolution or
liquidation of the Company by giving notice to each holder thereof or his personal
representative of its intention to do so and by permitting the purchase during the thirty
(30) day period next preceding such effective date of all of the shares of Common Stock
subject to such outstanding Incentives.

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     (d) In the event of a Change of Control, then, notwithstanding any other provision in
this Plan to the contrary, all unmatured installments of Incentives outstanding shall
thereupon automatically be accelerated and exercisable in full and all Restriction Periods
applicable to Awards of Restricted Stock shall automatically expire. The determination of
the Committee that any of the foregoing conditions has been met shall be binding and
conclusive on all parties.

ARTICLE 15

LIQUIDATION OR DISSOLUTION

     In case the Company shall, at any time while any Incentive under this Plan shall be in force
and remain unexpired, (i) sell all or substantially all of its property, or (ii) dissolve,
liquidate, or wind up its affairs, then each Participant shall be thereafter entitled to receive,
in lieu of each share of Common Stock of the Company which such Participant would have been
entitled to receive under the Incentive, the same kind and amount of any securities or assets as
may be issuable, distributable, or payable upon any such sale, dissolution, liquidation, or winding
up with respect to each share of Common Stock of the Company. If the Company shall, at any time
prior to the expiration of any Incentive, make any partial distribution of its assets, in the
nature of a partial liquidation, whether payable in cash or in kind (but excluding the distribution
of a cash dividend payable out of earned surplus and designated as such) then in such event the
Option Prices or SAR Prices then in effect with respect to each Stock Option or SAR shall be
reduced, on the payment date of such distribution, in proportion to the percentage reduction in the
tangible book value of the shares of the Company’s Common Stock (determined in accordance with
generally accepted accounting principles) resulting by reason of such distribution.

ARTICLE 16

INCENTIVES IN SUBSTITUTION FOR

INCENTIVES GRANTED BY OTHER CORPORATIONS

     Incentives may be granted under the Plan from time to time in substitution for similar
instruments held by employees of a corporation who become or are about to become management
Employees of the Company or any Subsidiary as a result of a merger or consolidation of the
employing corporation with the Company or the acquisition by the Company of stock of the employing
corporation. The terms and conditions of the substitute Incentives so granted may vary from the
terms and conditions set forth in this Plan to such extent as the Board at the time of grant may
deem appropriate to conform, in whole or in part, to the provisions of the Incentives in
substitution for which they are granted.

ARTICLE 17

MISCELLANEOUS PROVISIONS

     17.1 Investment Intent. The Company may require that there be presented to and filed with it
by any Participant under the Plan, such evidence as it may deem necessary to establish that the
Incentives granted or the shares of Common Stock to be purchased or transferred are being acquired
for investment and not with a view to their distribution.

15

 

     17.2 No Right to Continued Employment. Neither the Plan nor any Incentive granted under the
Plan shall confer upon any Participant any right with respect to continuance of employment by the
Company or any Subsidiary.

     17.3 Indemnification of Board and Committee. No member of the Board or the Committee, nor any
officer or Employee of the Company acting on behalf of the Board or the Committee, shall be
personally liable for any action, determination, or interpretation taken or made in good faith with
respect to the Plan, and all members of the Board or the Committee and each and any officer or
employee of the Company acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company in respect of any such action, determination, or
interpretation.

     17.4 Effect of the Plan. Neither the adoption of this Plan nor any action of the Board or the
Committee shall be deemed to give any person any right to be granted an Award or any other rights
except as may be evidenced by an Award Agreement, or any amendment thereto, duly authorized by the
Committee and executed on behalf of the Company, and then only to the extent and upon the terms and
conditions expressly set forth therein.

     17.5 Compliance With Other Laws and Regulations. Notwithstanding anything contained herein
to the contrary, the Company shall not be required to sell or issue shares of Common Stock under
any Incentive if the issuance thereof would constitute a violation by the Participant or the
Company of any provisions of any law or regulation of any governmental authority or any national
securities exchange or inter-dealer quotation system or other forum in which shares of Common Stock
are quoted or traded (including without limitation Section 16 of the 1934 Act and Section 162(m) of
the Code); and, as a condition of any sale or issuance of shares of Common Stock under an
Incentive, the Committee may require such agreements or undertakings, if any, as the Committee may
deem necessary or advisable to assure compliance with any such law or regulation. The Plan, the
grant and exercise of Incentives hereunder, and the obligation of the Company to sell and deliver
shares of Common Stock, shall be subject to all applicable federal and state laws, rules and
regulations and to such approvals by any government or regulatory agency as may be required.

     17.6 Tax Requirements. The Company shall have the right to deduct from all amounts hereunder
paid in cash or other form, any Federal, state, or local taxes required by law to be withheld with
respect to such payments. The Participant receiving shares of Common Stock issued under the Plan
shall be required to pay the Company the amount of any taxes which the Company is required to
withhold with respect to such shares of Common Stock. Notwithstanding the foregoing, in the event
of an assignment of a Non-qualified Stock Option or SAR pursuant to Section 17.7, the Participant
who assigns the Non-qualified Stock Option or SAR shall remain subject to withholding taxes upon
exercise of the Non-qualified Stock Option or SAR by the transferee to the extent required by the
Code or the rules and regulations promulgated thereunder. Such payments shall be required to be
made prior to the delivery of any certificate representing such shares of Common Stock. Such
payment may be made in cash, by check, or through the delivery of shares of Common Stock owned by
the Participant (which may be effected by the actual delivery of shares of Common Stock by the
Participant or by the

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Company’s withholding a number of shares to be issued upon the exercise of a Stock Option, if
applicable), which shares have an aggregate Fair Market Value equal to the required minimum
withholding payment, or any combination thereof.

     17.7 Assignability. Incentive Stock Options may not be transferred or assigned other than by
will or the laws of descent and distribution and may be exercised during the lifetime of the
Participant only by the Participant or the Participant’s legally authorized representative, and
each Award Agreement in respect of an Incentive Stock Option shall so provide. The designation by
a Participant of a beneficiary will not constitute a transfer of the Stock Option. The Committee
may waive or modify any limitation contained in the preceding sentences of this Section 17.7 that
is not required for compliance with Section 422 of the Code. The Committee may, in its discretion,
authorize all or a portion of a Non-qualified Stock Option or SAR to be granted to a Participant to
be on terms which permit transfer by such Participant to (i) the spouse, children or grandchildren
of the Participant (“Immediate Family Members”), (ii) a trust or trusts for the exclusive benefit
of such Immediate Family Members, or (iii) a partnership in which such Immediate Family Members are
the only partners, (iv) an entity exempt from federal income tax pursuant to Section 501(c)(3) of
the Code or any successor provision, or (v) a split interest trust or pooled income fund described
in Section 2522(c)(2) of the Code or any successor provision, provided that (x) there shall
be no consideration for any such transfer, (y) the Award Agreement pursuant to which such
Non-qualified Stock Option or SAR is granted must be approved by the Committee and must expressly
provided for transferability in a manner consistent with this Section, and (z) subsequent transfers
of transferred Non-qualified Stock Options or SARs shall be prohibited except those by will or the
laws of descent and distribution or pursuant to a qualified domestic relations order as defined in
the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended. Following
transfer, any such Non-qualified Stock Option and SAR shall continue to be subject to the same
terms and conditions as were applicable immediately prior to transfer, provided that for purposes
of Articles 10, 11, 13, 15 and 17 hereof the term “Participant” shall be deemed to include the
transferee. The events of Termination of Service shall continue to be applied with respect to the
original Participant, following which the Non-qualified Stock Options and SARs shall be exercisable
by the transferee only to the extent and for the periods specified in the Award Agreement. The
Committee and the Company shall have no obligation to inform any transferee of a Non-qualified
Stock Option or SAR of any expiration, termination, lapse or acceleration of such Option. The
Company shall have no obligation to register with any federal or state securities commission or
agency any Common Stock issuable or issued under a Non-qualified Stock Option or SAR that has been
transferred by a Participant under this Section 17.7.

     17.8 Use of Proceeds. Proceeds from the sale of shares of Common Stock pursuant to Incentives
granted under this Plan shall constitute general funds of the Company.

     17.9 Legend. Each certificate representing shares of Restricted Stock issued to a Participant
shall bear the following legend, or a similar legend deemed by the Company to constitute an
appropriate notice of the provisions hereof (any such certificate not having such legend shall be
surrendered upon demand by the Company and so endorsed):

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     On the face of the certificate:

“Transfer of this stock is restricted in accordance with
conditions printed on the reverse of this certificate.”

     On the reverse:

“The shares of stock evidenced by this certificate are
subject to and transferrable only in accordance with that
certain Commercial Metals Company 1996 Long-Term Incentive
Plan, a copy of which is on file at the principal office of
the Company in Dallas, Texas. No transfer or pledge of the
            shares evidenced hereby may be made except in accordance
with and subject to the provisions of said Plan. By
acceptance of this certificate, any holder, transferee or
pledgee hereof agrees to be bound by all of the provisions
of said Plan.”

     The following legend shall be inserted on a certificate evidencing Common Stock issued under
the Plan if the shares were not issued in a transaction registered under the applicable federal and
state securities laws:

“Shares of stock represented by this certificate have been
acquired by the holder for investment and not for resale,
transfer or distribution, have been issued pursuant to
exemptions from the registration requirements of applicable
state and federal securities laws, and may not be offered
for sale, sold or transferred other than pursuant to
effective registration under such laws, or in transactions
otherwise in compliance with such laws, and upon evidence
satisfactory to the Company of compliance with such laws, as
to which the Company may rely upon an opinion of counsel
satisfactory to the Company.”

     A copy of this Plan shall be kept on file in the principal office of the Company in Dallas,
Texas.

* * * * * * * * * * * * * * *

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     IN WITNESS WHEREOF, the Company has caused this instrument to be executed as of December 9,
1996, by its President and Secretary pursuant to prior action taken by the Board.

	 	 	 	 	 
	 	Commercial Metals Company

 	 
	 	By:  	/s/ Stanley A. Rabin
 	 
	 	 	President 	 
	 	 	 	 
	 

Attest:

/s/
David M. Sudbury

Secretary

19

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