Document:

Exhibit 4.4

 

GERDAU S.A.

 

EQUITY OWNERSHIP PLAN

 

ARTICLE 1

 

Establishment; Purpose

 

1.1                               Establishment. Gerdau S.A. (“Gerdau”)
hereby establishes an incentive compensation plan to be known as the “Gerdau
S.A. Equity Ownership Plan” (the “Plan”).

 

1.2                               Purpose. The purpose
of the Plan is to (a) attract, retain and motivate participating employees
of Gerdau AmeriSteel Corporation (the “Company”) and its subsidiaries through
awards of American Depositary Shares of Gerdau (“ADSs”) options to purchase
ADSs (the “Options”) and other equity-based awards, (b) encourage employee
ownership of ADSs and (c) encourage participating employees to think and
act like owners of the Company.

 

1.3                               Maximum
Number of ADSs. The maximum number of ADSs that may be offered
under the Plan is 350,762 subject to adjustment as provided in Section 10.1.
If an Option is surrendered or for any other reason ceases to be exercisable in
whole or in part, the ADSs that are subject to such Option, but as to which the
Option has not been exercised, shall again become available for offering under
the Plan. Any awards under the Plan made other than in ADSs or Options shall
not reduce the maximum number of ADSs covered by the Plan.

 

1.4                               Status. It is the
intention of the Company that ISOs granted under the Plan qualify as “incentive
stock options” under Section 422 of the Code, and the regulations
promulgated thereunder. The provisions of the Plan with respect to ISOs,
accordingly, shall be construed in a manner consistent with such requirements.
Except with respect to ISOs, no other Award under the Plan is intended to
qualify for special treatment or status under the Code.

 

ARTICLE 2

 

Definitions

 

2.1                               Definitions. The following
words and terms as used herein shall have that meaning set forth therefor in
this Article 2 unless a different meaning is clearly required by the
context.

 

2.1.1                               “Award” shall mean any Option, ADSs,
SAR or any cash payment granted or awarded under the Plan.

 

2.1.2                               “Award Agreement(s)” shall mean any
document, agreement or certificate deemed by the Board of Directors as
necessary or advisable to be entered into with or delivered to a Participant in
connection with or as a condition precedent to the valid completion of the
grant of an Award under the Plan.

 

2.1.3                               “Award ADS(s)” shall mean any ADSs
granted or awarded to a Participant in accordance with the provisions of
Article 8.

 

 

2.1.4                               “Board” or “Board of Directors”
shall mean the Board of Directors of Gerdau.

 

2.1.5                               “Chief Executive Officer” shall mean
the officer so designated from time to time by the Board of Directors, or if
the Board shall fail to so designate an officer to that position, the President
of the Company.

 

2.1.6                               “Code” shall mean the Internal
Revenue Code of 1986, as amended. Reference to a specific section of the Code
shall include a reference to any successor provision.

 

2.1.7                               “Committee” means the Human
Resources Committee of the Board of Directors of Gerdau, or such other
committee or person designated by the Board from time to time.

 

2.1.8                               “Company” shall mean AmeriSteel
Corporation, a Florida corporation, and its successors.

 

2.1.9                               “Effective Date” shall mean August 30,
2010.

 

2.1.10                        “Eligible Employee” shall mean any
individual employed by the Company or any Subsidiary. The Committee shall have
the sole power to determine if the eligibility requirements have been
satisfied.

 

2.1.11                        “Fair Market Value” of the ADSs
shall mean the closing price, on the date in question (or, if no ADSs are
traded on such day, on the next preceding day on which ADSs were traded), of
the ADSs as reported on the Composite Tape, or if not reported thereon, then
such price as reported in the trading reports of the principal securities
exchange in the United States on which such stock is listed, or if such stock
is not listed on a securities exchange in the United States, the mean between
the dealer closing “bid” and “ask” prices on the over-the-counter market as
reported by the National Association of Security Dealers Automated Quotation
System (NASDAQ), or NASDAQ’s successor, or if not reported on NASDAQ, the fair
market value of such stock as determined by the Board of Directors in good
faith and based on all relevant factors.

 

2.1.12                        “ISO” shall mean an incentive stock
option granted in accordance with the provisions of Article 5 of the Plan.

 

2.1.13                        “NSO” shall mean a nonqualified
stock option granted in accordance with the provisions of Article 6 of the
Plan.

 

2.1.14                        “Option” shall mean an ISO or an
NSO.

 

2.1.15                        “Optionee” shall mean an individual
employed by the Company or any Subsidiary to whom an Option is granted under
the Plan.

 

2.1.16                        “Participant” shall mean an Eligible
Employee, who in accordance with the terms of the Plan, is first recommended by
the Chief Executive Officer and then approved by 

 

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the Committee for participation in the Plan as a
recipient of an Award and who receives an Award.

 

2.1.17                        “Plan” shall mean the Gerdau S.A.
Equity Ownership Plan, as set forth herein and as amended from time to time.

 

2.1.18                        “Registration Date” shall mean the
effective date of the first registration statement that becomes effective under
the Securities Act of 1933 (excluding any offering to employees, whether under
the Plan or otherwise, registered under Form S-8) with respect to any
public offering of ADSs.

 

2.1.19                        “SAR” shall mean a Stock
Appreciation Right granted in accordance with the provisions of Article 7
of the Plan, which as to each SAR entitles the Participant to receive payment
equal to the excess of (1) the Fair Market Value of an ADS at the time of
payment or exercise over (2) a specified price or value set or established
at the time of grant of the SAR.

 

2.1.20                        “Subsidiary” shall mean any
corporation that at the time qualifies as a subsidiary of the Company under the
definition of “subsidiary corporation” contained in Section 424(f) of
the Code.

 

2.1.21                        “10% Stockholder” shall mean an
individual who owns more than 10% of the total combined voting power of all
classes of stock of the Company or of a parent or subsidiary corporation.

 

2.1.22                        “Merger” shall mean the merger of a
Florida corporation to be formed with and into the Company, pursuant to which
merger the holder of ADSs (other than Gerdau USA, Inc.) shall have such
ADSs exchanged for ADSs of Co-Steel Inc., a Canadian corporation proposed to be
renamed Gerdau AmeriSteel Corporation.

 

2.2                               Usage. Whenever
appropriate, words used in the singular shall be deemed to include the plural
and vice versa, and the masculine gender shall be deemed to include the
feminine gender.

 

ARTICLE 3

 

Administration

 

3.1                               Board
of Directors. The Plan shall be administered by the Committee,
subject to the overall supervision of the Board of Directors.

 

3.2                               Power
and Authority. Subject to the provisions of the Plan, the
Committee shall have full authority, in its discretion: (a) to determine
from among Eligible Employees those persons who shall become Participants; (b) to
determine the nature, amount and terms and conditions of all Awards under the
Plan, in accordance with and subject to the specific limitations and
requirements set forth in the Plan; and (c) to interpret the Plan, the
terms of all Awards and Award Agreements and any other agreement or instrument
awarded, issued or entered into under the Plan, and to prescribe, amend and
rescind rules and regulations with 

 

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respect the administration of the Plan. The
interpretation and construction by the Committee of any provision of the Plan,
any Award or any other agreement or instrument awarded, issued or entered into
under the Plan, and all other determinations and decisions of the Board of
Directors pursuant to the provisions of the Plan, shall be final, conclusive
and binding on all Participants and other affected persons. All actions and policies
of the Committee, to the extent they deal with ISOs, shall be consistent with
the qualification of ISOs as incentive stock options under Section 422 of
the Code.

 

3.3                               Discretionary
Authority. The Committee’s decision to authorize the grant of
an Award to an Eligible Employee at any time shall not require the Committee to
authorize the grant of an Award to that employee at any other time or to any
other employee at any time; nor shall its determination with respect to the
size, type or terms and conditions of the Award to be granted to an Eligible
Employee at any time require it to authorize the grant of an Award of the same
type or size or with the same terms and conditions to that employee at any
other time or to any other employee at any time. The Committee shall not be
precluded from authorizing the grant of an Award to any Eligible Employee
solely because the employee previously may have been granted an Award of any
kind under the Plan.

 

3.4                               No
Liability. No member of the Board of Directors or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan.

 

ARTICLE 4

 

Employees Eligible To
Participate

 

4.1                               Generally. Any person,
including any officer but not a person who is solely a director, who is in the
employ of the Company or any Subsidiary on the date of a grant of an Award
shall be an Eligible Employee, able to participate in the Plan in accordance
with the terms of the Plan.

 

4.2                               Participant
Status. The Chief Executive Officer, in his sole discretion,
from time to time may select from among Eligible Employees persons to recommend
to the Committee to become Participants in the Plan. Any Eligible Employee so
recommended to the Committee and who remains an Eligible Employee shall become
a Participant upon the approval of such status by the Committee, which approval
shall be conclusively evidenced by the award or grant of an Award to a
Participant.

 

4.3                               ISO
Eligibility Requirement. Notwithstanding any
provision of the Plan to the contrary, no person shall be eligible to receive
any ISOs under the Plan if such person would not be able qualify for the
benefits of incentive stock options under Section 422 of the Code.

 

ARTICLE 5

 

Terms and Conditions of
Incentive Stock Options

 

5.1                               Grant. Any ISO
granted pursuant to the Plan shall be authorized by the Committee and shall be
evidenced by certificates or agreements in such form as the Committee from time
to time shall approve, which certificates or agreements shall comply with and
be 

 

4

 

subject to the terms and conditions hereinafter
specified. Upon the granting of any ISO, the Committee shall promptly cause the
Optionee to be notified of the fact that such Option has been granted. The date
on which the Committee approves the grant of an ISO shall be considered to be
the date on which such Option is granted.

 

5.2                               Number
of ADSs. Each ISO shall state the number of ADSs to which
it pertains.

 

5.3                               Option
Price. Each ISO shall state the option price, which
option price shall be determined by the Committee in its discretion.
Notwithstanding the foregoing, the option price in no event shall be less than
100% of the Fair Market Value of the ADSs on the date of grant of the Option;
or, in the case of an ISO being issued to an Eligible Employee who is a 10%
Stockholder at the time an ISO is granted, 110% of the Fair Market Value of the
ADSs on the date of grant.

 

5.4                               Method
of Exercise. An Optionee may exercise an ISO during such time
as may be permitted by the Option and the Plan by providing written notice to
the Committee, tendering the purchase price in accordance with the provisions
of Section 5.4, and complying with any other exercise requirements
contained in the Option or promulgated from time to time by the Committee.

 

5.5                               Method
of Payment. Payment of the option price upon the exercise of
the ISO shall be in (a) United States dollars in cash or by check, bank
draft or money order payable to the order of the Company; (b) in the
discretion of and in the manner determined by the Committee, by the delivery of
ADSs already owned by the Optionee; (c) by any other legally permissible
means acceptable to the Committee at the time of grant of the Option (including
cashless exercise as permitted under the Federal Reserve Board’s Regulation T,
subject to applicable legal restrictions); or in the discretion of the
Committee, through a combination of (a), (b) and (c) of this Section 5.5.
If the option price is paid in whole or in part through the delivery of ADSs,
the decision of the Committee with respect to the fair market value of such
ADSs shall be final and conclusive.

 

5.6                               Term
and Exercise of Options.

 

5.6.1                               Unless
otherwise specified by the Committee, each ISO shall be exercisable, in whole
or in part, only in accordance with the following chart:

 

	
  Number of Years from Date

  Option is Granted

  	
   

  	
  Percentage

  of ADSs

  Exercisable

  	
   

  
	
  Less
  than 2 years

  	
   

  	
  0

  	
  %

  
	
  2
  years but less than 3 years

  	
   

  	
  331/3

  	
  %

  
	
  3
  years but less than 4 years

  	
   

  	
  662/3

  	
  %

  
	
  4
  years or more

  	
   

  	
  100

  	
  %

  

 

5

 

5.6.2                               Notwithstanding
the foregoing, an Optionee shall be 100% vested in the number of ADSs
originally covered by an ISO in the event the Optionee dies or becomes totally
and permanently disabled (as determined in the sole discretion of the
Committee) while still employed by the Company.

 

5.6.3                               To the extent
not exercised, exercisable installments of ISOs shall be exercisable, in whole
or in part, in any subsequent period, but not later than the expiration date of
the Option. The Committee shall determine the expiration date of the Option at
the time of the grant of the Option; provided, however, that no ISO shall be
exercisable after the expiration of ten (10) years from the date it is
granted; or, in the case of a 10% Stockholder, no ISO shall be exercisable
after the expiration of five (5) years from the date it is granted. Not
less than one hundred (100) ADSs may be exercised at any one time unless the
number exercised is the total number at the time exercisable under the Option.

 

5.6.4                               Within the
limits described above, the Committee may impose additional requirements on the
exercise of ISOs. When it deems special circumstances to exist, the Committee
in its discretion may accelerate the time at which an ISO may be exercised if,
under previously established exercise terms, such Option was not immediately
exercisable in full, even if the acceleration would permit the Option to be
exercised more rapidly than the vesting set forth above in the chart, or as
otherwise specified by the Committee, would permit.

 

5.7                               Additional
Limitations. The aggregate Fair Market Value (determined as of
the time an ISO is granted) of the ADSs with respect to which ISOs are
exercisable for the first time by any Optionee in any calendar year under the
Plan and under all other incentive stock option plans of the Company and any
parent and subsidiary corporations of the Company (as those terms are defined
in Section 424 of the Code) shall not exceed $100,000.

 

5.8                               Death
or Other Termination of Employment.

 

5.8.1                               In the event
that an Optionee shall cease to be employed by the Company or a Subsidiary for
any reason other than his or her death, subject to the conditions that no ISO
shall be exercisable after its expiration date, such Optionee shall have the
right to exercise the ISO at any time within thirty (30) days after such
termination of employment to the extent his or her right to exercise such
Option had accrued pursuant to this Article 5 at the date of such
termination and had not previously been exercised; such thirty (30) day period
shall be increased to ninety (90) days if the termination of employment was the
retirement or early retirement of the Optionee (as defined under the Company’s
qualified Retirement Plan) and to one (1) year for any Optionee who dies
during the thirty (30) day or ninety (90) day period, whichever may be
applicable, and the Option may be exercised within such extended time limit by
the Optionee or, in the case of death, the personal representative of the
Optionee or by any person or persons who shall have acquired the Option
directly from the Optionee by bequest or inheritance. Whether an authorized
leave of absence or absence for military or governmental service shall
constitute termination of employment for purposes of the Plan shall be
determined by the Committee, whose determination shall be final and conclusive.

 

5.8.2                               In the event
that an Optionee shall die while in the employ of the Company or a Subsidiary
and shall not have fully exercised any ISO, the ISO may be exercised, 

 

6

 

subject to the conditions that no ISO shall be
exercisable after its expiration date, to the extent that the Optionee’s right
to exercise such Option had accrued pursuant to this Article 5 at the time
of his or her death and had not previously been exercised, at any time within
one (1) year after the Optionee’s death, by the personal representative of
the Optionee or by any person or persons who shall have acquired the Option
directly from the Optionee by bequest or inheritance.

 

5.8.3                               No ISO shall be
transferable by the Optionee otherwise than by will or the laws of descent and
distribution.

 

5.8.4                               During the
lifetime of the Optionee, an ISO shall be exercisable only by him or her and
shall not be assignable or transferable, and no other person shall acquire any
rights therein.

 

5.9                               Delivery
of Certificates Representing ADSs.

 

5.9.1                               As soon as
practicable after the exercise of an ISO, Gerdau shall deliver or cause to be
delivered to the Optionee exercising the ISO a certificate or certificates
representing the ADSs purchased upon the exercise. Certificates representing
ADSs to be delivered to a Optionee will be registered in the name of the
Optionee.

 

5.9.2                               If determined
by the Company in its discretion appropriate to administer the right of first
refusal provisions of Article 9, but only for so long as such provisions
remain in effect, certificates representing ADSs shall not be delivered to
Participants but shall be delivered to the Company to be held by the Company as
safekeeping agent for the benefit of each Participant. A written safekeeping
receipt evidencing the ADSs so held in safekeeping, bearing the name of the
Participant, indicating the number of the certificate or certificates and the
number of ADSs so represented shall be delivered promptly to each Participant.
In its capacity as safekeeping agent for Participants, the Company shall act in
accordance with instructions received from such Participants, which
instructions are to be confirmed in writing if deemed appropriate by the
Company. The safekeeping agency shall not affect the rights of Participants as
owners of ADSs.

 

5.9.3                               Upon the
expiration of the right of first refusal provisions of Article 9, any
safekeeping agency arrangement adopted pursuant to Section 5.9.2 shall
terminate and the certificates representing the ADSs owned by Participants,
registered in the name(s) of the Participants, shall be delivered promptly
to such Participants.

 

5.10                        Rights
as a Stockholder. An Optionee shall have no rights as a stockholder
with respect to any ADSs covered by his or her ISO until the date on which he
or she becomes a record owner of the ADSs purchased upon the exercise of the
Option (the “record ownership date”). No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property),
distributions, or other rights for which the record date is prior to the record
ownership date, except as provided in Article 10.

 

5.11                        Modification,
Extension and Renewal of Options. Subject to the terms and
conditions and within the limitations of the Plan, the Committee may modify
outstanding ISOs granted under the Plan, or accept the surrender of outstanding
ISOs (to the extent not theretofore exercised) and authorize the granting of
new Options in substitution therefor (to the extent not 

 

7

 

theretofore exercised). The Committee shall not,
however, modify any outstanding ISO so as to specify a lower option price or
accept the surrender of outstanding ISOs and authorize the granting of new
Options in substitution therefor specifying a lower option price.
Notwithstanding the foregoing, however, no modification of an ISO shall,
without the consent of the Optionee, alter or impair any of the rights or
obligations under any ISO theretofore granted under the Plan.

 

5.12                        Listing
and Registration of ADSs. Each ISO shall be subject
to the requirement that if at any time the Committee shall determine, in its
discretion, that the listing, registration or qualification of the ADSs covered
thereby upon any securities exchange or under any state or federal laws, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of such ISO or
the issuance or purchase of ADSs thereunder, such ISO may not be exercised
unless and until such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Committee. Notwithstanding anything in the Plan to the contrary, if the
provisions of this Section 5.12 become operative, and if, as a result
thereof, the exercise of an ISO is delayed, then and in that event, the term of
the ISO shall not be affected.

 

5.13                        Other
Provisions. The ISO certificates or agreements authorized
under the Plan shall contain such other provisions, including, without
limitation, restrictions upon the exercise of the Option, as the Committee
shall deem advisable. Any such certificate or agreement shall contain such
limitations and restrictions upon the exercise of the ISO as shall be necessary
in order that such Option will be an incentive stock option as defined in Section 422
of the Code, or to conform to any change in the law.

 

ARTICLE 6

 

Terms and Conditions of
Nonqualified Stock Options

 

6.1                               Grant. Any NSO
granted pursuant to the Plan shall be authorized by the Committee and shall be
evidenced by certificates or agreements in such form as the Committee from time
to time shall approve, which certificates or agreements shall comply with and
be subject to the terms and conditions hereinafter specified. Upon the granting
of any NSO, the Committee shall promptly cause the Optionee to be notified of
the fact that such Option has been granted. The date on which the Committee
approves the grant of a NSO shall be considered to be the date on which such
Option is granted.

 

6.2                               Number
of ADSs. Each NSO shall state the number of ADSs to which
it pertains.

 

6.3                               Option
Price. Each NSO shall state the option price, which
option price shall be determined by the Board of Directors in its discretion.

 

6.4                               Method
of Exercise. An Optionee may exercise a NSO during such time as
may be permitted by the Option and the Plan by providing written notice to the
Committee, tendering the purchase price in accordance with the provisions of Section 6.4,
and complying with any other exercise requirements contained in the Option or
promulgated from time to time by the Committee.

 

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6.5                               Method
of Payment. Payment of the option price upon the exercise of
the NSO shall be (a) in United States dollars in cash or by check, bank
draft or money order payable to the order of the Company; (b) in the
discretion of and in the manner determined by the Committee, by the delivery of
ADSs already owned by the Optionee; (c) by any other legally permissible
means acceptable to the Committee at the time of grant of the Option (including
cashless exercise as permitted under the Federal Reserve Board’s Regulation T,
subject to applicable legal restrictions); or in the discretion of the
Committee, through a combination of (a), (b) and (c) of this Section 6.5.
If the option price is paid in whole or in part through the delivery of ADSs,
the decision of the Committee with respect to the fair market value of such
ADSs shall be final and conclusive.

 

6.6                               Term
and Exercise of Options.

 

6.6.1                               Unless
otherwise specified by the Committee, each NSO shall be exercisable, in whole
or in part, only in accordance with the following chart:

 

	
  Number of Years from Date

  Option is Granted

  	
   

  	
  Percentage

  of ADSs

  Exercisable

  	
   

  
	
  Less than 2 years

  	
   

  	
  0

  	
  %

  
	
  2 years but less than 3 years

  	
   

  	
  331/3

  	
  %

  
	
  3 years but less than 4 years

  	
   

  	
  662/3

  	
  %

  
	
  4 years or more

  	
   

  	
  100

  	
  %

  

 

6.6.2                               Notwithstanding
the foregoing, an Optionee shall be 100% vested in the number of ADSs
originally covered by a NSO in the event the Optionee dies or becomes totally
and permanently disabled (as determined in the sole discretion of the
Committee) while still employed by the Company.

 

6.6.3                               To the extent
not exercised, exercisable installments of NSOs shall be exercisable, in whole
or in part, in any subsequent period, but not later than the expiration date of
the Option. The Committee shall determine the expiration date of the Option at
the time of the grant of the Option; provided, however, that no NSO shall be
exercisable after the expiration of ten (10) years from the date it is
granted. Not less than one hundred (100) ADSs may be exercised at any one time
unless the number exercised is the total number at the time exercisable under
the Option.

 

6.6.4                               Within the
limits described above, the Committee may impose additional requirements on the
exercise of NSOs. When it deems special circumstances to exist, the Committee
in its discretion may accelerate the time at which a NSO may be exercised if,
under previously established exercise terms, such Option was not immediately
exercisable in full, even if the acceleration would permit the Option to be
exercised more rapidly than the vesting set forth above in the chart, or as
otherwise specified by the Committee, would permit.

 

9

 

6.7                               Death
or Other Termination of Employment.

 

6.7.1                               In the event
that an Optionee shall cease to be employed by the Company or a Subsidiary for
any reason other than his or her death, subject to the conditions that no NSO
shall be exercisable after its expiration date, such Optionee shall have the
right to exercise the NSO at any time within thirty (30) days after such
termination of employment to the extent his or her right to exercise the NSO
had accrued pursuant to this Article 6 at the date of such termination and
had not previously been exercised; such thirty (30) day period shall be increased
to such thirty (30) day limit shall be increased to ninety (90) days if the
termination of employment was the retirement or early retirement of the
Optionee (as defined under the Company’s qualified Retirement Plan) and to one (1) year
for any Optionee who dies during the thirty (30) day or ninety (90) day period,
whichever may be applicable, and the Option may be exercised within such
extended time limit by the Optionee or, in the case of death, the personal
representative of the Optionee or by any person or persons who shall have
acquired the Option directly from the Optionee by bequest or inheritance.
Whether an authorized leave of absence or absence for military or governmental
service shall constitute termination of employment for purposes of the Plan
shall be determined by the Committee, whose determination shall be final and
conclusive.

 

6.7.2                               No NSO shall be
transferable by the Optionee otherwise than by will or the laws of descent and
distribution.

 

6.7.3                               During the
lifetime of the Optionee, an NSO shall be exercisable only by him or her and
shall not be assignable or transferable, and no other person shall acquire any
rights therein.

 

6.8                               Delivery
of Certificates Representing ADSs.

 

6.8.1                               As soon as
practicable after the exercise of a NSO, Gerdau shall deliver or cause to be
delivered to the Optionee exercising the NSO a certificate or certificates
representing the ADSs purchased upon the exercise. Certificates representing
ADSs to be delivered to a Optionee will be registered in the name of the
Optionee.

 

6.8.2                               If determined
by the Company in its discretion appropriate to administer the right of first
refusal provisions of Article 9, but only for so long as such provisions
remain in effect, certificates representing ADSs shall not be delivered to
Participants but shall be delivered to the Company to be held by the Company as
safekeeping agent for the benefit of each Participant. A written safekeeping
receipt evidencing the ADSs so held in safekeeping, bearing the name of the
Participant, indicating the number of the certificate or certificates and the
number of ADSs so represented shall be delivered promptly to each Participant.
In its capacity as safekeeping agent for Participants, the Company shall act in
accordance with instructions received from such Participants, which
instructions are to be confirmed in writing if deemed appropriate by the
Company. The safekeeping agency shall not affect the rights of Participants as
owners of ADSs.

 

6.8.3                               Upon the
expiration of the right of first refusal provisions of Article 9, any
safekeeping agency arrangement adopted pursuant to Section 6.8.2 shall
terminate and the certificates representing the ADSs owned by Participants,
registered in the name(s) of the Participants, shall be delivered promptly
to such Participants.

 

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6.9                               Rights
as a Stockholder. An Optionee shall have no rights as a stockholder
with respect to any ADSs covered by his or her NSO until the date on which he
or she becomes a record owner of the ADSs purchased upon the exercise of the
Option (the “record ownership date”). No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property),
distributions, or other rights for which the record date is prior to the record
ownership date, except as provided in Article 10.

 

6.10                        Modification,
Extension and Renewal of Options. Subject to the terms and
conditions and within the limitations of the Plan, the Committee may modify
outstanding NSOs granted under the Plan, or accept the surrender of outstanding
NSOs (to the extent not theretofore exercised) and authorize the granting of
new Options in substitution therefor (to the extent not theretofore exercised).
The Board of Directors shall not, however, modify any outstanding NSO so as to
specify a lower option price or accept the surrender of outstanding NSOs and
authorize the granting of new Options in substitution therefor specifying a
lower option price. Notwithstanding the foregoing, however, no modification of
an NSO shall, without the consent of the Optionee, alter or impair any of the
rights or obligations under any NSO theretofore granted under the Plan.

 

6.11                        Listing
and Registration of ADSs. Each NSO shall be subject
to the requirement that if at any time the Committee shall determine, in its
discretion, that the listing, registration or qualification of the ADSs covered
thereby upon any securities exchange or under any state or federal laws, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of such NSO or
the issuance or purchase of ADSs thereunder, such NSO may not be exercised
unless and until such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Committee. Notwithstanding anything in the Plan to the contrary, if the
provisions of this Section 6.11 become operative, and if, as a result thereof,
the exercise of a NSO is delayed, then and in that event, the term of the NSO
shall not be affected.

 

6.12                        Other
Provisions. The NSO certificates or agreements authorized
under the Plan shall contain such other provisions, including, without
limitation, restrictions upon the exercise of the Option, as the Committee
shall deem advisable.

 

ARTICLE 7

 

Stock Appreciation Rights

 

7.1                               Grant. The
Committee, in its sole discretion, from time to time may authorize the grant of
SARs to a Participant. An SAR may be granted in connection with all or any
portion of a previously or contemporaneously granted Award (other than an SAR),
or by itself and not in connection with any other Award. An SAR may be granted
at the time of grant of the related Option and shall be subject to the same
terms and conditions as the related Option, except as this Article 7 may
otherwise provide. The grant of SAR shall be evidenced either by provisions in
the Option to which it relates or by a separate written agreement between the
Company and the Participant, which shall comply with and be subject to the
terms and conditions of the Plan and shall be in such form as the Committee
from time to time shall approve (an “SAR Agreement”). The SAR Agreement may
contain such additional terms, conditions or limitations, not 

 

11

 

inconsistent with the specific provisions of the
Plan, as may be approved by the Committee in it sole discretion.

 

7.2                               Terms
and Conditions. Each SAR granted under the Plan shall be
exercisable or payable at such time or times, or upon the occurrence of such
event or events, and in such amounts or types of consideration (including cash
or ADSs) as the Committee shall specify in the SAR Agreement. Subsequent to the
grant of an SAR, the Committee, at any time before complete termination of such
SAR, may accelerate the time or times at which such SAR may be exercised or
paid in whole or in part.

 

7.3                               Exercise.

 

7.3.1                               An SAR shall be
exercised by surrendering the SAR Agreement or, if the SAR was granted in
connection with an Option, the surrender of the related Option together with
any SAR Agreement, or the portion(s) thereof pertaining to the ADSs with
respect to which the SAR is exercised, and providing the Company with a written
notice in such form and containing such information (including the number of
ADSs with respect to which the SAR is being exercised) as the SAR Agreement or
the Committee may specify. The date on which the Company receives such
surrender and notice shall be the date on which the related Option, or portion
thereof, shall be deemed surrendered and the SAR shall be deemed exercised.

 

7.3.2                               An SAR granted
in connection with an Option shall be exercisable only at such time or times,
to such extent and by such persons as the Option to which it relates shall be
exercisable, provided that an SAR granted in connection with an ISO shall not
be exercisable on any date on which the Fair Market Value of an ADS is less
than or equal to the per ADS exercise price of the ISO. An SAR shall be
canceled when, and to the extent that, any related Option is exercised, and an
Option shall be canceled when, and to the extent that, the Option is
surrendered to the Company upon the exercise of a related SAR.

 

7.4                               Payment. To effect
payment or exercise of an SAR, the Company shall make payment to the
Participant in cash or ADSs (valued at their Fair Market Value on the date of
payment or exercise) or in combination of cash and ADSs as provided in the SAR
Agreement. If payment is to be made in ADSs, upon such exercise, the
Participant shall be entitled to receive that number of ADSs which have an
aggregate Fair Market Value on the exercise date equal to the amount by which
the Fair Market Value of one ADS on the exercise date exceeds the Option price
per ADS of any related Option or the Fair Market Value on the date of grant of
the SAR, as the case may be, multiplied by the number of ADSs covered by the
related Option or the SAR, as the case may be, or portion thereof, surrendered
in connection with the exercise of the SAR. Notwithstanding the foregoing, with
respect to any SARs outstanding at the time of the effectiveness of the Merger,
the amount to be paid upon the exercise thereof shall be the amount, if any,
equal to the product of (i) the number of SARs being exercised times (ii) the
amount by which (A) the product of (1) the Stock Exchange Ratio times (2) the
Currency Exchange Ratio times (3) the closing price of a Co-Steel Inc. share
the day before the date of exercise on the Toronto Stock Exchange (Canadian
Dollars) exceeds (B) the Fair Market Value of an ADS at the date of grant of
the SAR. For purposes of this Section 7.4, the “Stock Exchange Ratio” shall be
number of ADSs of Co-Steel Inc. issued pursuant to the Merger with respect to
an outstanding ADS of the Company (all as provided in the Agreement of Merger
entered into by the Company 

 

12

 

and other parties thereto); and the “Currency
Exchange Ratio” shall mean U.S. Dollar Equivalent of a Canadian Dollar as of
the day before the date of exercise as reported in the Exchange Rate chart in
the Wall Street Journal (or some comparable report as determined by the
Committee).

 

7.5                               Expiration. An SAR
granted in connection with or related to an Option, unless previously exercised
or canceled, shall expire upon the expiration of the Option to which it
relates. Any other SAR, unless previously exercised or canceled, shall expire
upon the tenth anniversary of its grant. The exercise of an SAR granted in
connection with an Option shall result in a pro rata surrender or cancellation of
any related Option to the extent the SAR has been exercised.

 

7.6                               Death
or Other Termination of Employment.

 

7.6.1                               In the event
that a Participant shall cease to be employed by the Company or a Subsidiary
for any reason other than his or her death, subject to the conditions that no
SAR shall be exercisable after its expiration date, such Participant shall have
the right to exercise the SAR at any time within thirty (30) days after such
termination of employment to the extent his or her right to exercise such SAR
had accrued pursuant to this Article 7 at the date of such termination and
had not previously been exercised; such thirty (30) day period shall be
increased to ninety (90) days if the termination of employment was the
retirement or early retirement of a Participant (as defined under the Company’s
qualified Retirement Plan) and to one (1) year for any Participant who dies
during the thirty (30) day or ninety (90) day period, whichever may be
applicable, and the SAR may be exercised within such extended time limit by a
Participant, or, in the case of death, the personal representative of a
Participant or by any person or persons who shall have acquired the SAR
directly from a Participant by bequest or inheritance. Whether an authorized
leave of absence or absence for military or governmental service shall
constitute termination of employment for purposes of the Plan shall be
determined by the Committee, whose determination shall be final and conclusive.

 

7.6.2                               In the event
that a Participant shall die while in the employ of the Company or a Subsidiary
and shall not have fully exercised any SAR, the SAR may be exercised, subject
to the conditions that no SAR shall be exercisable after its expiration date,
to the extent that a Participant’s right to exercise such SAR had accrued in
accordance with the provisions of this Article 7 at the time of his or her
death and had not previously been exercised, at any time within one (1) year
after a Participant’s death, by the personal representative of a Participant or
by any person or persons who shall have acquired the SAR directly from a
Participant by bequest or inheritance.

 

7.6.3                               No SAR shall be
transferable by a Participant otherwise than by will or the laws of descent and
distribution.

 

7.6.4                               During the
lifetime of a Participant, an SAR shall be exercisable only by him or her and
shall not be assignable or transferable, and no other person shall acquire any
rights therein.

 

13

 

7.7                               Delivery
of Certificates Representing ADSs.

 

7.7.1                               As soon as
practicable after the exercise or payment of an SAR payable in whole or in part
in ADSs, the Gerdau shall deliver or cause to be delivered to the Participant
exercising the SAR for ADSs a certificate or certificates representing the ADSs
issuable upon such purchase or exercise. Certificates representing ADSs to be
delivered to a Participant will be registered in the name of the Participant.

 

7.7.2                               If determined
by the Company in its discretion appropriate to administer the right of first
refusal provisions of Article 9, but only for so long as such provisions
remain in effect, certificates representing ADSs issued in respect of SAR
payment or exercise shall not be delivered to Participants but shall be
delivered to the Company to be held by the Company as safekeeping agent for the
benefit of each Participant. A written safekeeping receipt evidencing the ADSs
so held in safekeeping, bearing the name of the Participant, indicating the
number of the certificate or certificates and the number of ADSs so represented
shall be delivered promptly to each Participant. In its capacity as safekeeping
agent for Participants, the Company shall act in accordance with instructions
received from such Participants, which instructions are to be confirmed in
writing if deemed appropriate by the Company. The safekeeping agency shall not
affect the rights of Participants as owners of ADSs.

 

7.7.3                               Upon the
expiration of the right of first refusal provisions of Article 9, any
safekeeping agency arrangement adopted pursuant to Section 7.7.2 shall
terminate and the certificates representing the ADSs owned by Participants,
registered in the name(s) of the Participants, shall be delivered promptly to
such Participants.

 

7.8                               Listing
and Registration of ADSs. Each SAR shall be subject
to the requirement that if at any time the Board of Directors shall determine,
in its discretion, that the listing, registration or qualification of any ADSs
covered thereby upon any securities exchange or under any state or federal
laws, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting
of such Option or the issuance or purchase of ADSs thereunder, such SAR may not
be paid or exercised unless and until such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board of Directors. Notwithstanding
anything in the Plan to the contrary, if the provisions of this Section 7.8
become operative, and if, as a result thereof, the exercise of an SAR is
delayed, then and in that event, the term of the SAR shall not be affected.

 

7.9                               Rights
as a Stockholder. In general, the holder of an SAR shall have no
rights as a stockholder. The holder of an SAR under which ADSs are issuable
upon payment or exercise shall have no rights as a stockholder of the Company
until the date on which he or she becomes a record owner of the ADSs issued
upon the payment or exercise of the SAR (the “record ownership date”). No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property), distributions, or other rights for which
the record date is prior to the record ownership date, except as provided in
Article 10.

 

14

 

ARTICLE 8

 

Award ADSs

 

8.1                               General. The
Committee, in its sole discretion, from time to time may authorize the grant of
Award ADSs to a Participant. In making any such grant of Award ADSs, the
Committee may grant Award ADSs without the requirement of any cash payment or
may require a cash payment from a Participant in an amount no greater than the
aggregate Fair Market Value of the Award ADSs as of the date of grant in
exchange for, or as a condition precedent to, the completion of the grant and
the issuance of the Award ADSs.

 

8.2                               Restriction
Period. All Award ADSs issued under Article 8 shall
be subject to certain restrictions as set forth in Section 8.3, which
restrictions shall continue in effect for such period of time as is specified
in the Award Agreement entered into at the time of the grant (the “Restriction
Period”). The Award Agreement may contain such additional terms, conditions or
limitations, not inconsistent with the specific provisions of the Plan, as may
be approved by the Board of Directors in it sole discretion.

 

8.3                               Certain
Restrictions. Until the expiration of the Restriction Period,
Award ADSs shall be subject to the following restrictions and any additional
restrictions included in the Award Agreement that the Committee, in its sole
discretion, may from time to time deem desirable in furtherance of the
objectives of the Plan: (a) the Participant shall not be entitled to take
possession of the certificate or certificates representing the ADSs; (b) the
Award ADSs may not be sold, transferred, assigned, pledged, conveyed,
hypothecated or otherwise disposed of (other than by operation of law); and (c)
the ADSs may be forfeited immediately as provided in Section 8.4.

 

8.4                               Termination
of Employment. If the employment of a Participant is terminated
for any reason other than the retirement or early retirement (as defined under
the Company’s qualified Retirement Plan), disability or death of a Participant
in service before the expiration of the Restriction Period, the Award ADSs
shall be forfeited immediately and all rights of a Participant to such ADSs
shall terminate immediately without further obligation on the part of the
Company. If a Participant’s employment is terminated by reason of the
retirement or early retirement of a Participant (as defined under the Company’s
qualified Retirement Plan), disability or death of a Participant in service
before the expiration of the Restriction Period, (a) the number of Award ADSs held
by the Company for a Participant’s account pursuant to Section 8.6 shall be
reduced by partial forfeiture in an amount of Award ADSs in proportion equal to
the percentage of the total Restriction Period remaining after a Participant’s
termination of employment, (b) the restrictions on the unforfieted balance of
such Award ADSs shall lapse on the date a Participant’s employment terminated
and (c) subject to the safekeeping provisions of Section 8.6, the certificate
or certificates representing the ADSs upon which the restrictions have lapsed
shall be delivered to a Participant (or, in the event of a Participant’s death,
to his or her legal representative).

 

8.5                               Distribution
of Award ADSs. If a Participant to whom Award ADSs have been
issued pursuant to Article 8 remains in the continuous employment of the
Corporation or a Subsidiary until the expiration or waiver by the Committee of
the Restriction Period and the 

 

15

 

satisfaction of any other conditions imposed by the
Award Agreement, all restrictions applicable to the Restricted ADSs at that
time still outstanding and registered in the name of a Participant shall lapse
and, subject to the safekeeping provisions of Section 8.6, the certificate or
certificates representing the ADSs that were granted to the Participant shall
be delivered to the Participant.

 

8.6                               Delivery
of Certificates Representing ADSs.

 

8.6.1                               As soon as
practicable after a grant of Award ADSs, the Company shall issue certificates
representing the Award ADSs registered in the name of the holder of Award ADSs.

 

8.6.2                               To administer
the restrictions imposed on Award ADSs under the Plan and the Award Agreement
(and if determined in the discretion of the Committee, the right of first
refusal provisions of Article 9, but only for so long as such provisions
remain in effect), certificates representing Award ADSs shall not be delivered
to Participants but shall be delivered to the Company to be held by the Company
as safekeeping agent for the benefit of each Participant. A written safekeeping
receipt evidencing the ADSs so held in safekeeping, bearing the name of the
Participant, indicating the number of the certificate or certificates and the
number of ADSs so represented shall be delivered promptly to each Participant.
In its capacity as safekeeping agent for Participants, the Company shall act in
accordance with instructions received from such Participants, which
instructions are to be confirmed in writing if deemed appropriate by the
Company. The safekeeping agency shall not affect the rights of Participants as
owners of Award ADSs, nor shall such agency affect the restrictions imposed on
Award ADSs under the Plan or the Award Agreement.

 

8.6.3                               Upon the last
to occur of (a) the lapse, satisfaction or waiver of the Restriction Period and
any other restrictions imposed on Award ADSs under the Plan or the Award
Agreement and (b) the expiration of the right of first refusal provisions of
Article 9, any safekeeping agency arrangement adopted pursuant to Section
8.6.2 shall terminate and the certificates representing the ADSs owned by
Participants, registered in the name(s) of the Participants, shall be delivered
promptly to such Participants.

 

8.7                               Waiver
of Restrictions. The Board of Directors, in its sole discretion,
may at any time waive or accelerate the expiration of any or all restrictions
with respect to Award ADSs issued pursuant to this Article 8.

 

8.8                               Rights
as a Stockholder. A Participant receiving Award ADSs shall have no
rights as a stockholder with respect to any Award ADSs grant to him or her
under the Plan until the date on which he or she becomes a record owner of the
Award ADSs (the “record ownership date”). No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property), distributions, or other rights for which the record date is prior to
the record ownership date, except as provided in Article 10.

 

16

 

ARTICLE 9

 

Limitations on Transfer;
Repurchase of ADSs

 

9.1                               Right
of First Refusal. As a condition to receiving ADSs under the Plan,
each Participant shall agree that he or she will not sell, assign, transfer,
pledge, or otherwise dispose of any ADSs he or she may acquire under the Plan
(including by the exercise of an Option granted under Article 5 or
Article 6, upon payment or exercise of an SAR under Article 7, by the
receipt of Award ADSs under Article 8, or otherwise), or attempt to so,
without first offering to sell the ADSs to the Company in accordance with the
terms and conditions of this Article 9, and any disposition or attempted
disposition of ADSs in violation hereof shall be null and void.

 

9.2                               Voluntary
Disposition.

 

9.2.1                               If the record
owner of ADSs shall desire to sell, assign, transfer, pledge, or otherwise
dispose of any ADS, such owner shall first serve notice (the “Offer to Sell”)
to that effect upon the Company, offering to sell such ADSs to the Company in
accordance with the terms of this Article 9. The Company shall have the right
(but not the obligation) to purchase all or any part of the ADSs so offered
within thirty (30) days after receipt by the Company of the Offer to Sell;
provided, that if acceptance would result in a default by the Company under any
loan covenants applicable to it, the Company shall have one hundred eighty
(180) days rather than thirty (30) days within which to exercise its purchase
rights. Notwithstanding the provisions of the preceding sentence, with respect
to any Offer to Sell that is received by the Company after 5:00 p.m., Tampa
time, on September 27, 2002 and before the effective date of the Merger, the
period during which the Company may purchase any or all of the ADSs to which
the Offer to Sell relates shall run until the later of (A) the first to occur
of (i) the effective date of the Merger or (ii) the date that is ten (10) days
after the Committee makes a formal determination that the Merger will not take
place or (B) the last date the Company is permitted to purchase under the
provisions of the preceding sentence.

 

9.2.2                               Subject to the
right of the Committee in its sole discretion to discontinue or modify its
repurchase program, including solely with respect to a record owner, for any
reason or for no reason at any time, Gerdau agrees to repurchase any and all
ADSs held by a record owner at the request of the record owner within the time
specified in Section above. Subject to change or modification at any time and
from time to time by the Committee, the repurchase price shall be equal to the appraised
value of the ADSs as of the end of the immediately preceding fiscal year as
determined by the Committee based on an appraisal made at the request of the
Company (or based on the latest such appraised value if an appraisal has been
obtained by the Company as of a date after the end of the immediately preceding
fiscal year).

 

9.2.3                               If for any
reason the Company shall fail to exercise its right to purchase all of such
ADSs offered for sale pursuant to Section 9.2.1, the record owner may offer the
ADSs for sale to a third party and complete the sale within 60 (sixty) days
after he or she receives notice of Gerdau’s failure to repurchase. Any person
acquiring the ADSs from the record owner in such event will be required, among
other things, to consent to the imposition of the restrictions on resales
included in this Article 9 and to enter into a similar arrangement with
the Company.

 

17

 

9.3                               Termination
of Employment. If the employment of the record owner with the
Company shall terminate for any reason, whether by action of the Company, by
death of the employee, the resignation or retirement of the employee, or
otherwise, the record owner shall be deemed to have made an Offer to Sell under
the provisions of Section 9.2.1 as of the date the employee’s employment
terminates. If the termination occurs by reason of the death of the employee,
or if the employee should die after otherwise making or being deemed to have
made an Offer to Sell, the offer shall be binding upon his estate, and the
employee’s duly appointed and acting personal representative shall act in his
or her behalf.

 

9.4                               Expiration
of Provisions. The provisions of this Article 9 shall be
applicable only during the time prior to the Registration Date; and the
provisions of this Article 9 shall expire as of the Registration Date.

 

ARTICLE 10

 

Miscellaneous

 

10.1                        Stock
Adjustments.

 

10.1.1                        In the event of
any increase or decrease in the number of issued ADSs resulting from a stock
split or other division or consolidation of ADSs or the payment of a stock
dividend (but only on ADSs) or any other increase or decrease in the number of
ADSs effected without any receipt of consideration by Gerdau, then, in any such
event, the number of ADSs that remain available under the Plan, the number of
ADSs covered by each outstanding Option, the exercise price per ADS covered by
each outstanding Option, the number of ADSs covered by each outstanding SAR and
the price per ADS and the number and any purchase price for any Award ADSs
granted but not yet issued, in each case, shall be proportionately and
appropriately adjusted for any such increase or decrease.

 

10.1.2                        Subject to any
required action by the stockholders, if any change occurs in the ADSs by reason
of any recapitalization, reorganization, merger, consolidation, split-up,
combination or exchange of ADSs, or of any similar change affecting ADSs, then,
in any such event, the number and type of ADSs then covered by each outstanding
Option, the purchase price per ADS covered by each outstanding Option, the
number of ADSs covered by each outstanding SAR and the exercise price per ADS
and the number and any purchase price for any Award ADSs granted but not yet
issued, in each case, shall be proportionately and appropriately adjusted for
any such change.

 

10.1.3                        In the event of
a change in the ADSs as presently constituted that is limited to a change of
all of its authorized ADSs with par value into the same number of ADSs with a
different par value or without par value, the ADSs resulting from any change
shall be deemed to be ADSs within the meaning of the Plan.

 

10.1.4                        To the extent
that the foregoing adjustments relate to stock or securities of the Company,
such adjustments shall be made by, and in the discretion of, the Committee,
whose determination in that respect shall be final, binding and conclusive;
provided, however, that any Option granted pursuant to Article 5 shall not
be adjusted in a manner that causes such 

 

18

 

Option to fail to continue to qualify as an
incentive stock option within the meaning of Section 422 of the Code.

 

10.1.5                        Except as
hereinabove expressly provided in this Section 10.1, an Eligible Employee or a
Participant shall have no rights by reason of any division or consolidation of
ADSs of stock of any class or the payment of any stock dividend or any other
increase or decrease the number of ADSs of stock of any class or by reason of
any dissolution, liquidation, merger or consolidation, or spin-off of assets or
stock of another corporation; and any issuance by the Company of ADSs of stock
of any class, securities convertible into ADSs of stock of any class, or
warrants or options for ADSs of stock of any class shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of ADSs, any Option, any SAR or any Award ADSs granted but not yet issued.

 

10.1.6                        The existence
of the Plan, or the grant of an Option, SAR or Award ADSs under the Plan, shall
not affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate, or to dissolve, to liquidate, to sell,
or to transfer all or any part of its business or assets.

 

10.2                        Tax
Absorption Payments. The Company may, but is not required to,
make a cash payment, either directly to any Participant or on a Participant’s
behalf, in an amount that the Committee estimates to be equal (after taking
into account any federal and state taxes that the Committee estimates to be
applicable to such cash payment) to any additional federal and state income
taxes that are imposed upon a Participant as a result of the granting of any
Award under the Plan (a “Tax Absorption Payment”). In determining the amount of
any Tax Absorption Payment, the Committee may adopt such methods and
assumptions as it considers appropriate, and it shall not be required to
examine the individual tax liability of any Participant. The decision to make
any Tax Absorption Payment shall be made by the Committee at the same time as
the grant of the Award to which it relates.

 

10.3                        Amendment
of the Plan; Termination. The Board shall have the
right to revise, amend or terminate the Plan at any time without notice,
provided that no Participant’s existing rights are adversely affected thereby
without the consent of such person, and provided further that, without approval
of the stockholders of the Company, no such revision or amendment shall (a)
increase the total number of ADSs subject to the Plan; (b) decrease the price
at which Options may be granted; (c) materially modify the requirements as to
eligibility for participation in the Plan; (d) otherwise materially increase
the benefits under the Plan; or (e) remove the administration of the Plan from
the Board of Directors. In addition, the provisions of Article 5,
Article 6, Article 7 and Article 8 may not be amended more
frequently than once every six (6) months other than to comply with applicable
provisions of the Code or the Employee Retirement Income Security Act of 1974,
as amended, or the rules promulgated thereunder. The limitation specified in
the preceding sentence is intended to satisfy the requirements of Rule
16b-3(c)(2)(ii)(B) under the Securities Exchange Act of 1934, as currently in
effect. The foregoing prohibitions in this Section 10.4 shall not be affected
by adjustments in ADSs and purchase price made in accordance with the
provisions of Section 9.1.

 

19

 

10.4                        Application
of Funds. The proceeds received by Gerdau from the sale of
ADSs or the exercise of Options pursuant to the Plan will be used for general
corporate purposes.

 

10.5                        No
Implied Rights to Employees. The existence of the Plan
and the granting of Awards under the Plan shall in no way give any employee the
right to continued employment, give any employee the right to receive any
additional Awards or any additional compensation under the Plan, or otherwise
provide any employee any rights not specifically set forth in the Plan or in
any Option, SAR or Award Agreement.

 

10.6                        Withholding. Whenever the
Company proposes or is required to issue or transfer Awards under the Plan, the
Company shall have the right to require a Participant to remit to the Company
an amount sufficient to satisfy any federal, state or local withholding tax
liability prior to the delivery of any certificate or certificates for such
ADSs. Whenever under the Plan payments are to be made in cash, such payments
shall be made net of an amount sufficient to satisfy any federal, state or
local withholding tax liability.

 

10.7                        Conditions
Precedent to Effectiveness. The Plan shall become
effective upon the satisfaction of all the following conditions, with the
Effective Date of the Plan after the completion of such adoption procedures
being  August 30, 2010, regardless of the
date that the last of the following conditions is satisfied:

 

10.7.1                        the adoption of
the Plan by the Board of Directors; and

 

10.7.2                        the approval of
the Plan by the stockholders of the Company within twelve (12) months after its
adoption by the Board.

 

20Exhibit 4.5

 

Gerdau S.A.

 

Long-Term
Incentive Plan

Effective August 30,
2010

 

 

Plan Objectives

 

The goal of the Plan is to create added value
for Gerdau Ameristeel Corporation (the “Company”) shareholders and
participating employees.  The Plan is
part of the total compensation program, which includes base salary, annual
bonus opportunity, benefits, and long-term incentive opportunities.

 

An important objective of the long-term
incentive Plan is to ensure that management’s interests are congruent with those
of Gerdau S.A.  When the Company
prospers, shareholders profit, and participating employees will have an
opportunity to accumulate additional awards. 
The reasons for installing this Plan are to:

 

·                  share performance rewards with those most responsible,

 

·                  reward management’s leadership and dedication,

 

·                  enhance and encourage personal and corporate growth
opportunities,

 

·                  recruit, develop and retain high-calibre talent, and

 

·                  maximize return on capital employed.

 

Plan
Concept

 

The Plan is designed to reward employees with
additional compensation based on how well the Company achieves its budgeted
ROCE for the year and on how well the ADSs perform in the market.  Thus, an incentive is provided to management
to increase the profits and performance of the Company.

 

Summary of
Plan Terms

 

The following are some of the primary terms of
the Plan.  The Plan is discussed in
detail in the body of this document.  To
the extent of any conflict between the provisions of this Summary and the
provisions contained hereafter, the terms and conditions provided hereafter
shall control.

 

	
  Company

  	
  Gerdau Ameristeel Corporation.

  
	
   

  	
   

  
	
  ADS

  	
  American Depositary Share of Gerdau S.A.
  which represents a right to receive a preferred share of Gerdau S.A.

  
	
   

  	
   

  
	
  Plan

  	
  Gerdau Ameristeel Corporation Long-Term
  Incentive Plan.

  

 

2

 

	
  Governance

  	
  Human Resources Committee of the Board of
  Directors of Gerdau S.A. or such other committee or person designated by the
  Board of Directors of Gerdau S.A. from time to time (the “Committee”).

  
	
   

  	
   

  
	
  Documents

  	
  This Plan document governs the Plan.
  Individual Award Agreements (including Option Agreements and SAR Agreements)
  will be issued to specify the rights of each Participant with respect to his
  or her Award.

  
	
   

  	
   

  
	
  Effective Date

  	
  The Plan is effective August 30, 2010.

  
	
   

  	
   

  
	
  Plan Year

  	
  January 1 to December 31.

  
	
   

  	
   

  
	
  Eligibility

  	
  Participants in the plan for a year
  (“Participants”) shall be determined at the discretion of the Committee on a
  year-by-year basis. Participation is determined by the person’s position in
  the Company. Persons eligible shall be those who constitute a select group of
  management or highly compensated employees.

  
	
   

  	
   

  
	
  Grant Frequency

  	
  Annually.

  
	
   

  	
   

  
	
  Awards

  	
  Amounts granted to Participants for a Plan
  Year (subject to vesting) based on
  the Company’s achievement with respect to its budgeted ROCE for the Plan Year
  and other factors (including a Participant’s Participation Level), subject to
  Committee review and approval. Awards are made as of the end of each Plan
  Year.

  
	
   

  	
   

  
	
  ROCE

  	
  ROCE, or Return on Capital Employed, is the percentage
  determined by dividing Net Operating Profit for a Plan Year by the average
  Capital Employed for the Plan Year (based on the average of the Capital
  Employed as of the end of each fiscal quarter during the Plan Year).

  
	
   

  	
   

  
	
  Capital Employed

  	
  The Company’s total stockholders’ equity
  (book equity), plus total debt and accrued interest, less cash and deferred
  financing fees.

  
	
   

  	
   

  
	
  Net Operating Profit

  	
  The Company’s  net
  operating profits after taxes, determined in accordance with generally
  accepted accounting principles, which amount shall be equal to the Income
  from Operations plus the Earnings from Joint Venture lines on the Company’s
  Statement of Consolidated Income, less an implied 38% tax impact on the
  foregoing.

  
	
   

  	
   

  
	
  Participation Level

  	
  The percentage of a Participant’s Base Salary
  to be awarded to the Participant for achievement equalling the budgeted
  (target) ROCE for a Plan Year.

  

 

3

 

	
  Base Salary

  	
  Except as provided below, a Participant’s
  base salary in effect on the last day of a Plan Year annualized. In the event
  that a Participant is not an active Participant in the Plan on the last day
  of the Plan Year as a result of a leave of absence or demotion, Base Salary
  shall mean the annualized base salary in effect on the date the Participant
  ceased active participation in the Plan.

  
	
   

  	
   

  
	
  Change in Participants

  	
  Participants may be added or removed from
  participation in the Plan during a Plan Year with no effect on other
  Participants. The added or removed Participants may participate on a pro-rata
  basis in Awards for the year as provided in this Plan.

  
	
   

  	
   

  
	
  Form of Payment

  	
  Cash, stock appreciation rights (“SARs”),
  and/or non-qualified stock options (“Options”). The Committee will make the
  determination of the form of payment at the time an Award is made.

  
	
   

  	
   

  
	
  Vesting

  	
  Awards generally vest incrementally over a
  period of four years, beginning on the first anniversary of the date of a
  cash Award or date of a grant of Options or SARs, as applicable. A Change in
  Control or termination of employment for normal or early retirement (as such terms
  are defined under Gerdau
  Ameristeel US Inc.’s qualified Retirement Plan, whether or not the
  Participant is also a participant in such Retirement Plan), death or disability will result in earlier full
  or partial vesting for then unvested Awards.

  
	
   

  	
   

  
	
  Retirement

  	
  If a Participant’s employment is terminated
  by reason of normal or early retirement (as such terms are defined
  under Gerdau Ameristeel US
  Inc.’s qualified Retirement Plan, whether or not the Participant is also a
  participant in such Retirement Plan), unvested Awards vest pro rata based on number of full months of
  employment during the restricted period for each Award. (The amount to be
  vested is calculated separately for each previously unvested Award, and
  equals the portion of the total vesting period worked, divided by the total
  vesting period.)

  
	
   

  	
   

  
	
  Death/Disability

  	
  Unvested Awards vest immediately.

  
	
   

  	
   

  
	
  Termination

  	
  Unvested Awards are forfeited if employment
  is terminated for reasons other than normal or early retirement (as such terms
  are defined under Gerdau
  Ameristeel US Inc.’s qualified Retirement Plan, whether or not the
  Participant is also a participant in such Retirement Plan), death or disability. Termination shall be
  deemed to occur on the last day of the Participant’s active work and does not
  include any period of statutory or common law notice or deemed employment.
  Whether an authorized leave of absence or absence for military or
  governmental service shall constitute

  

 

4

 

	
   

  	
  termination
  of employment for purposes of the Plan shall be determined by the Committee,
  whose determination shall be final and conclusive.

  
	
   

  	
   

  
	
  Change in Control

  	
  An event that constitutes a
  “change in control event” with respect to the Company as defined in Treasury
  Regulations Section 1.409A-3(i)(5)  Unvested Awards vest in full upon a Change in Control.

  
	
   

  	
   

  
	
  Taxes

  	
  The amount to be paid with respect to any
  Cash Award or SAR will be reduced by any required income tax withholding and
  applicable employment taxes. Upon exercise of an Option, the Participant
  shall remit to the Company the amount of the required income tax withholding
  and applicable employment taxes.

  
	
   

  	
   

  
	
  Cash Award Valuation

  	
  The value of Cash Awards will be tied to
  changes in the value of the ADSs. A Participant receiving a Cash Award will
  be credited with Phantom Stock (based on the Fair Market Value of the ADSs as
  of the date of grant) at the time of grant. The value will be reflected in a
  bookkeeping Investment Account until such time as the Award is paid to a
  Participant or is forfeited.

  
	
   

  	
   

  
	
  Phantom Stock

  	
  Phantom Stock tracks the performance of the
  ADSs and their Fair Market Value. One share of Phantom Stock is an award of a
  notional, recordkeeping ADS.

  
	
   

  	
   

  
	
  Fair Market Value

  	
  For purposes of
  determining the number of shares of Phantom Stock, SARs and Options awarded
  under the Plan, the exercise price for any Options and the base price for any
  SARs awarded under the Plan, the amount of any Cash Award based on the price
  of the ADSs, or number of shares of Phantom Stock
  deemed to be purchased with any deemed dividend payable on Phantom Stock,
  Fair Market Value means the closing price of ADSs as reported on the
  New York Stock Exchange on the date of the Award or other calculation, as
  applicable, or if such stock is not traded on such exchange, such value as
  reported on any stock exchange on which such stock is traded, or if no such
  trading price is available, then the Fair Market Value shall be determined by
  the Committee in its sole discretion using a reasonable valuation method
  taking into consideration all available material information. For purposes of
  determining the dollar amount payable on a SARs Award based on the date the
  SARs Award is exercised, or the taxable amount related to the exercise of an
  Option Award, Fair Market Value means the price of the ADSs as reported on
  the New York Stock Exchange on the date and time of exercise rather than the
  closing price for such date (i.e. Fair Market Value shall be determined based
  upon the “real-time” price of the ADSs, or if such stock is

  

 

5

 

	
   

  	
  not traded on such exchange, such value as
  reported on any stock exchange on which such stock is traded, or if no such
  trading price is available, then the Fair Market Value shall be determined by
  the Committee in its sole discretion using a reasonable valuation method
  taking into consideration all available material information.

  
	
   

  	
   

  
	
  Cash Award Payments

  	
  Payment of Cash Awards will be made
  automatically based on the value of the Participant’s Investment Account at
  the time of vesting as soon as practicable following the vesting of the Award
  (and in no event later than 60 days thereafter).

  
	
   

  	
   

  
	
  Options

  	
  Option Awards will
  be non-qualified stock options for ADSs that will be issued at an option
  price equal to the Fair Market Value the ADSs on the date of grant and that
  will vest in accordance with the same rules as Cash Awards. In general,
  Options will be exercisable for 10 years after the date of grant except in
  the case of termination of employment, in which event they must be exercised
  within 90 days to five years thereafter (depending on the nature of the termination).

  
	
   

  	
   

  
	
  SARs

  	
  Stock Appreciation
  Awards (“SARs”) will be based on the change in value of ADSs. They
  will be issued with a base price equal to the Fair Market Value of ADSs on the date of grant and will vest in
  accordance with the same rules as Cash Awards. In general, SARs will be
  exercisable for 10 years after the date of grant except in the case of
  termination of employment, in which event they must be exercised within 90
  days to five years thereafter (depending on the nature of the termination).
  Payment for exercised, vested SARs will equal the amount by which the Fair
  Market Value of the ADSs on
  the date and time of exercise exceeds the Fair Market Value of the ADSs on the date of grant.

  

 

Plan Design
and Administration

 

Plan

 

The Plan contained in this document is the
Gerdau S.A. Long-Term Incentive Plan (the “Plan”).

 

Sponsor

 

The sponsor of the
Plan is Gerdau S.A.  References in this
Plan to financial results of the Company include the results of the Company and
its subsidiaries and other entities that are included in the Company’s
consolidated financial statements.

 

Governance

 

The Committee will be responsible for the
administration and governance of the Plan. 
The Committee may delegate authority for administering the program as it
deems fit.  In carrying out its
responsibilities and duties, the Committee may consult with the Board of
Directors of Gerdau 

 

6

 

S.A.
(the “Board”), Company officers, legal and financial advisors to the Company
and others, but nevertheless the Committee shall have the full authority to
act, and the Committee’s determinations, interpretations and actions shall be
final, conclusive and binding on all parties.

 

The Committee’s responsibilities, to be
undertaken in its sole discretion, in administering the Plan include, but are
not limited to:

 

At the beginning of the Plan Year, for such
Plan Year, determine the specific Company (including subsidiaries and
other affiliates) positions to be covered, Participation Level, Award sizes for
achievement either below or above budgeted ROCE, and the minimum performance
level required for any Award to be made.

 

At
the end of the Plan Year, conduct a formal review and make a final
determination on any adjustments to the individual Awards.

 

At
the end of the Plan Year, determine how the Award is to be paid (whether in
cash, SARs, Options or any combination thereof), and, if Options and/or SARs
are to be issued, the number of Options and/SARs to be issued.

 

The Committee may interpret the provisions of
the Plan during the Plan Year, and resolve discrepancies in this Plan document.

 

The Committee also may amend, modify, or
terminate the Plan at any time.  For
example, it may change grant frequency, vesting provisions, or treatment on
termination of employment for future Awards, or end the Plan altogether.  However, once an Award is granted, no such
amendment, modification, or termination, without the consent of the Participant
(or his or her beneficiary in the case of death of the Participant) will reduce
the right of a Participant (or beneficiary) to a payment or distribution in
accordance with the provisions of the Plan and Individual Award Agreements
already granted to participants.

 

It is understood and agreed that additional guidance
will be issued by the Treasury Department and the Internal Revenue Service with
respect to new Code Section 409A. 
Accordingly, without limitation on the foregoing, the Committee reserves
the right to amend the Plan, including with respect to outstanding Awards, without
the consent of any Participant or any other person in order to conform the Plan
provisions to the guidance provided under Code Section 409A, including
assuring that the Plan is not subject to Section 409A.

 

Provided
however that shareholder approval will be required for the following types of
amendments: amendments to the number of ADSs issuable under the Plan, including an increase to a fixed maximum
number of ADSs or a change
from a fixed maximum number of ADSs to a fixed
maximum percentage; any amendment to the Plan that increases the length of the
period after an Option Blackout Period or an SAR Blackout Period (each as
defined below and collectively a “Blackout Period”) during which Awards may be
exercised; any amendment which would result in the exercise price for any Award
granted under the Plan being lower than the fair market value of ADSs at the time the Award is granted (other than
adjustments pursuant to the 

 

7

 

“Equitable
Adjustments” provisions of the Plan); any amendment which reduces the exercise
price or purchase price of an Award (other than adjustments pursuant to the “Equitable
Adjustments” provisions of the Plan); any amendment expanding the categories of
Participants which would have the potential of broadening or increasing insider
participation; any amendment extending the term of an Award held by an insider
beyond its original expiry date except the automatic extension of the term of
an Award that would otherwise expire during a Blackout Period (as defined
below), as currently set out in the Plan; and amendments required to be
approved by shareholders under applicable law (including, without limitation,
the rules, regulations and policies of the Toronto Stock Exchange or the New York
Stock Exchange).

 

As of January 1, 2008,
the Internal Revenue Service has issued final regulations under Code Section 409A
and instituted a transition period related to Code Section 409A. The
Committee intends to administer the Plan to ensure that the Plan and all Awards
under the Plan do not provide for the deferral of compensation, as defined in
such final regulations, and thereby remain exempt from regulation under Section 409A.

 

Effective
Date

 

The Plan is adopted on August 30, 2010 and shall apply to the Plan Year beginning January 1,
2010.

 

Plan Year

 

In general, the Plan Year is the Company’s
fiscal year — January 1 to December 31.

 

Eligibility

 

Participation in the Plan is at the discretion
of the Committee and is based on a person’s position within the Company,
including subsidiaries and other affiliates. 
Persons eligible shall be those who constitute a select group of
management or highly compensated employees.

 

Partial Year Participation

 

If
the employment of a Participant terminates during a Plan Year for any reason,
including normal or early retirement (as such terms
are defined under Gerdau Ameristeel US
Inc.’s qualified Retirement Plan, whether or not the Participant is also a
participant in such Retirement Plan), disability or
death, the Participant shall not be eligible to receive an Award for such Plan
Year.  Termination shall be deemed to
occur on the last day of the Participant’s active work and does not include any
period of statutory or common law notice or deemed employment.

 

Participants
who spend a portion of a Plan Year on an approved unpaid leave of absence or on
a military leave of absence, and who remain employed on the last day of a Plan
Year, will be entitled to a pro-rata Award based on a fraction, the numerator
of which is the time of actual service during the Plan Year, not including the
leave of absence, and the denominator of which is 365.

 

If
a Participant is demoted to a position not covered by the Plan, the Participant
will be entitled to an Award for the Plan Year based on time spent in the
position covered by the Plan.  The Award
shall be otherwise calculated as provided in the foregoing paragraph related to
a leave of absence.

 

8

 

If
an employee becomes a Participant during a Plan Year, the Award payable to such
Participant for such Plan Year shall be calculated by multiplying the full year
Award that would have been payable to him had he participated in the Plan for
the full Plan Year by a fraction, the numerator of which is the number of days
during the Plan Year in which the Participant participated in the Plan and the
denominator of which is 365.

 

Participation
in the Plan in More than One Employment Position

 

If
as a result of a promotion, demotion or transfer, a Participant is employed in
more than one position with the Company that is subject to an Award under the
Plan, and consequently the Award target of the Participant is modified during a
Plan Year, any Awards granted to the Participant under the Plan shall be pro rated
based upon the days employed in each position. 
For example, if in 2009 a Participant is employed for 200 days in
Position 1 and 165 days in Position 2, the 2009 Award for the Participant will
equal the Award amount for Position 1 (Base Salary multiplied by the Award
target for Position 1 multiplied by 200/365) plus the Award amount for Position
2 (Base Salary multiplied by the Award target for Position 2 multiplied by
165/365).

 

Award
Calculations

 

The Committee shall establish the parameters
for Awards for each year.  These
parameters shall include establishing the Company (including subsidiaries and
other affiliates) positions to be covered for the year, the Participation Level
for each position, the minimum performance level required for any Award to be
made, and modifications to the Participation Level for achievement either below
or above budgeted ROCE.

 

The Participation Level for a Participant is
the percentage of the Participant’s Base Salary to be awarded to a Participant
if the ROCE achieved by the Company for the Plan Year exactly equals the
budgeted (target) ROCE for the year.  For
these purposes, Base Salary is a Participant’s base salary in
effect on the last day of a Plan Year annualized; provided, however, that in
the event that the Participant is not an active Participant in the Plan on the
last day of a Plan Year as a result of a leave of absence or demotion, Base
Salary shall mean the Participant’s base salary in effect on the date that the
Participant leaves active participation in the Plan.

 

ROCE, or Return on Capital Employed, is the percentage
determined by dividing Net Operating Profit for a Plan Year by the average
Capital Employed for the Plan Year (based on the average of the Capital
Employed as of the end of each fiscal quarter during the Plan Year).  For these purposes, Net Operating Profit is
the Company’s  net operating profits after taxes,
determined in accordance with generally accepted accounting principles, which
amount shall be equal to the Income from Operations plus the Earnings from
Joint Venture lines on the Company’s Statement of Consolidated Income, less an
implied 38% tax impact on the foregoing; and Capital Employed Company’s total stockholders’ equity (book equity),
plus total debt and accrued interest, less cash and deferred financing fees.

 

The
Committee shall also determine how a Participant’s Participation Level is to be
adjusted to reflect performance above or below the budgeted (target) ROCE for
the Plan Year.  Unless further action is
taken by the Committee to modify the following guidelines, which the Committee
may do in its sole discretion, a minimum of 50% of the target Award for a
Participant 

 

9

 

(such
target Award being equal to the Participant’s Participation Level for the year
times the Participant’s Base Salary for the year) shall be awarded to each
Participant if the minimum performance level is achieved; achievement of 80% of
the budgeted ROCE shall be required in order for an Award to be made in excess
of the minimum, and achievement of 120% or more of the budgeted ROCE shall
result in an Award equal to 150% of the target Award for the Participant, which
shall be the maximum Award; Awards for performance between 80% and 120% of
budgeted ROCE shall be calculated on a straight-line basis.

 

Notwithstanding any other
provision of the Plan, the Committee has the right at or following the
conclusion of a Plan Year to decrease (including to zero) the Award otherwise
awardable to a Participant.

 

Awards

 

Awards are to be made annually and are
calculated as of the end of each Plan Year. 
Awards shall be made after the conclusion of the Plan Year on the date
set forth in the minutes or resolutions of the Committee.  The Award may be made in cash (a “Cash Award”),
may be made by the granting of stock appreciation rights (“SARs”), may be made
by the granting of non-qualified options for ADSs (“Options”), or may be made
in any combination of the foregoing.  The
Committee will make this determination at the time the Award is made.

 

Cash Awards

 

Vesting

 

Except as the Committee may otherwise provide
at the time of the granting of an Award, Cash Awards generally will vest in 25%
increments over four years, beginning on the date of the first anniversary of
the date on which the Award is made.  For
example, for an Award for performance in the Plan Year ending December 31,
2008 that is made on April 1, 2009, 25% of the Award will vest on April 1,
2010, 25% on April 1, 2011, 25% on April 1, 2012, and the remaining
25% on April 1, 2013.

 

In addition, Awards may vest earlier in whole
or in part in the event of a Change in Control or termination of employment for
normal or early retirement (as such terms are defined under Gerdau Ameristeel US Inc.’s qualified Retirement Plan,
whether or not the Participant is also a participant in such Retirement Plan), death or disability, as provided in more detail in
this Plan.

 

Payment
Schedule

 

Payment of each Cash Award, as adjusted in
accordance with the valuation provisions related to the Investment Account set
forth below, will be made in cash as soon as practicable, but in no event later
than 60 days, after the date that a Cash Award vests, whether vesting is as a
result of the normal four-year vesting schedule or as the result of a specified
event.

 

Valuation

 

The value of Cash Awards will be tied to
changes in the value of ADSs.  A
Participant receiving a Cash Award will be credited with Phantom Stock (based
on the Fair Market Value of the ADSs as of the date of grant) at the time of
grant.  The initial value of the Award
and changes therein will be reflected in a bookkeeping Investment Account until
such time as the Award is paid to a Participant or is forfeited.

 

10

 

The number of shares of Phantom Stock credited
to an Investment Account will equal the Cash Award amount divided by the Fair
Market Value of one ADS on the date the Award is made.  The value of an Investment Account will
fluctuate with the notional value of the Phantom Stock, which shall directly
correlate to the Fair Market Value of the ADSs, and other economic events such
as dividends and stock splits, until such time as the full Investment Account
balance as of the final vesting date is distributed.  Accordingly, a Participant’s account will be
credited with additional Phantom Stock based on any dividend amount paid,
divided by the Fair Market Value of ADSs on the date of the dividend.  The Investment Account and Cash Awards may
reflect fractional shares of Phantom Stock, as determined by the Committee.

 

On the date a Cash Award vests, the total value
of the vested amount in the related Investment Account is taxable and
participants are responsible for any applicable taxes.  The Company shall withhold applicable income
and employment taxes from any cash payments otherwise due the Participant and
remit the net cash payment to the Participant and the withheld taxes to the tax
authorities.  Vested amounts remaining
after payment of taxes shall be paid out in cash.

 

The value of any Cash Award that is to be
distributed will be based on the Fair Market Value of the Phantom Stock and the
value of the Investment Account on the date of vesting.

 

Termination of Employment

 

Upon separation from service for any reason
other than normal or early retirement (as such terms are defined
under Gerdau Ameristeel US Inc.’s qualified
Retirement Plan, whether or not the Participant is also a participant in such
Retirement Plan), death, disability,
or a Change in Control, Participants will receive only Cash Award amounts that
have vested in the Plan.  Unvested Awards
will be forfeited.

 

If a Participant terminates due to death or
disability, all unvested Cash Award amounts vest immediately.  For these purposes, “disability” shall have
the meaning set forth in Treasury Regulations Section 1.409A-3(i)(4).

 

If a Participant terminates due to normal or
early retirement (as such terms are defined under Gerdau Ameristeel US Inc.’s qualified Retirement Plan,
whether or not the Participant is also a participant in such Retirement Plan), he or she will vest pro rata (based on the number
of full months during the restricted period for each Cash Award) in his
or her then unvested Cash Award amounts. 
This calculation is made separately for each previously unvested
portion, and equals the portion of the total vesting period worked, divided by
the total vesting period.  For example,
assume a Participant retires on May 10, 2009 and has $90,000 remaining
credited to his or her Investment Account from an original Cash Award on April 1,
2008 for 2007 performance of $120,000 (assume no Cash Award for 2008
performance and that the other $30,000 vested on April 1, 2009 and has
been paid out).  Thus, if the Participant
had not retired but had remained in the employment of his or her employer, 25%
of the Award or $30,000 (assuming a static stock value), would vest as of each
of April 1, 2010, April 1, 2011, and April 1, 2012.  Upon retirement, the Participant will vest in
13/24 of the $30,000 that would have otherwise vested in 2010, 13/36 of the
$30,000 that would have otherwise vested in 2011, and 13/48 of the $30,000 that
would have otherwise vested in 2012.

 

11

 

Change in Control

 

Upon
a Change in Control, all unvested Cash Awards shall vest immediately.  For purposes of the Plan, a Change in Control
is an event that constitutes a “change in control event” with respect to the
Company as defined in Treasury Regulations Section 1.409A-3(i)(5).

 

Taxes

 

The amount to be paid with respect to any Cash
Award will be reduced by any required income tax withholding and applicable
employment taxes.

 

Non-Transferable

 

Cash Awards made under the Plan are
non-transferable other than by will or under the laws of descent and
distribution.

 

Designation
of Beneficiary

 

Participants may designate a beneficiary or
beneficiaries to receive any Cash Award payments due under the Plan or held in
an Investment Account in the event of death while participating in the
Plan.  A Designation of Beneficiary form
must be completed and filed with the Company, or the Participant’s estate will
be deemed to be the beneficiary of any payments otherwise due to the
Participant.

 

Options

 

General

 

As indicated previously, an Award may be (in
whole or in part) in the form of non-qualified stock options (“Options”) for
ADSs.  Gerdau S.A. has reserved 4,795,636
ADSs for issuance upon the exercise of Options. 
The number of ADSs reserved for issuance upon the exercise of Options
may not be increased except with shareholder approval.  Awards of Options must comply with Company
guidelines that (a) 2% of the ADSs are available for issuance to insiders
and (b) no more than 2% of the ADSs may be issued to any one person or
corporation.

 

Grant of Options

 

The number of ADSs that may be purchased with
Options granted to an Optionee will equal (1) the amount of the Option
portion of an Award divided by (2) the value of an Option to purchase one
ADR at the applicable exercise price, as determined in the sole discretion of
the Committee by using the Black-Scholes methodology or another appropriate
valuation methodology.  The Committee
shall have the sole discretion to interpret the foregoing sentence and
calculate the number of Options granted thereunder.  Options will be granted only for whole ADSs,
and any fractional amount will be disregarded. 
The date the Award is made shall be the date of grant of the
Options.  The exercise price of an Option
shall not be less than the Fair Market Value of the ADSs at the date of the
grant.

 

The person to whom an Option is granted is
sometimes referred to in this document as an “Optionee.”

 

Upon the granting of any Option, the Committee
shall promptly cause the Optionee to be notified of the fact that such Option
was granted.

 

12

 

Award Agreements

 

Any Option granted shall be authorized by the
Committee in accordance with the terms of this Plan and shall be evidenced by
an Award Agreement, which Agreements shall comply with and be subject to the
terms and conditions hereinafter specified. 
Each Award Agreement for Options shall state the number of ADSs to which
it pertains and the exercise price per ADSs.

 

Term

 

To the extent not previously exercised, Options
shall be exercisable, in whole or in part, at any time after they have become
vested, but not later than the expiration date of the Option.  The Committee shall determine the expiration
date of the Option at the time of the grant of the Option; provided, however,
that no Option shall be exercisable after the expiration of ten (10) years
from the date it is granted. 
Notwithstanding the foregoing, if an Option would otherwise expire
during a period imposed by Gerdau S.A. during which the holder is not permitted
to exercise an Option in respect of the ADSs (which includes, but is not
limited to, a period during which the holder has material undisclosed
information) (other than any period during which a regulator has halted trading
in the Company’s ADSs) (an “Option Blackout Period”), the term of such Option
shall automatically be extended until 10 days after the end of the Option
Blackout Period.

 

Vesting

 

Except as the Committee may otherwise provide
at the time of the granting of an Award, Options generally will vest in 25%
increments over four years, beginning on the date of the first anniversary of
the date of the grant of the Options. 
For example, for an Option granted for performance in the Plan Year
ending December 31, 2008, if the date of the grant of the Option is April 1,
2009, 25% of the Options will vest on April 1, 2010, 25% on April 1,
2011, 25% on April 1, 2012, and the remaining 25% on April 1, 2013.

 

Notwithstanding the foregoing, an Optionee
shall become (1) 100% vested in any unexercised Option upon the Optionee’s
termination of employment by reason of his or her death or disability, (2) 100%
vested in any unexercised Option in the event of a Change in Control, and (3) pro-rata
vested in any unexercised Option upon his or her termination of employment due
to normal or early retirement (as such terms are defined under Gerdau
Ameristeel US Inc.’s qualified Retirement Plan, whether or not the Optionee is
a participant in such Retirement Plan), all as provided below.

 

When it deems special circumstances to exist,
the Committee in its discretion may accelerate the time at which an Option may
be exercised if, under previously established exercise terms, such Option was
not immediately exercisable in full, even if the acceleration would permit the
Option to be exercised more rapidly than the vesting set forth above, or as
otherwise specified by the Committee, would permit.

 

Method of Exercise

 

An Optionee may exercise an Option during such
time as may be permitted by the Option and this Plan by providing written or
electronic notice to the person or firm, which may be a third-party
administrator, designated by the Committee, tendering the purchase price for
the ADSs in accordance with the provisions set forth below and complying with
any other exercise 

 

13

 

requirements contained in the Option or
promulgated from time to time by the Committee or its delegate.  Options may be exercised only for full ADSs;
fractional ADSs will be disregarded.

 

Method of Payment and
Related Taxes

 

Payment of the option price upon the exercise
of the Option shall be (a) in Canadian (using the rate of exchange on the
day of exercise) or United States dollars in cash or by check, bank draft or
money order payable to the order of the Company; (b) in the discretion of
and in the manner determined by the Committee, by the delivery of ADSs already
owned by the Optionee; (c) by any other legally permissible means
acceptable to the Committee at the time of grant of the Option (including
cashless exercise as permitted under the Federal Reserve Board’s Regulation T,
subject to applicable legal restrictions); or (d) in the discretion of the
Committee, through a combination of (a), (b) and (c).  Upon exercise of an Option, the Participant
shall pay to the Company the amount of the required income tax withholding and
applicable employment taxes in a manner permitted under subsections (a) or
(b) in this paragraph, or a combination of (a) and (b).

 

Termination of Employment

 

Upon an Optionee’s separation from service for
any reason other than death, disability, or normal or early retirement (as such
terms are defined under Gerdau Ameristeel US Inc.’s qualified Retirement Plan,
whether or not the Optionee is a participant in such Retirement Plan), all
unvested Options will be forfeited.

 

If an Optionee’s employment terminates due to
death or disability, all of his or her unvested Options will vest
immediately.  For these purposes, “disability”
shall have the meaning set forth in Treasury Regulations Section 1.409A-3(i)(4).

 

If an Optionee’s employment terminates due to
normal or early retirement (as such terms are defined under Gerdau Ameristeel US Inc.’s qualified Retirement Plan,
whether or not the Optionee is a participant in such Retirement Plan), his or her unvested Options will vest pro rata
(based on the number of full months during the restricted period for
each Option).  This calculation is made
separately for each unvested Option, and equals the portion of the total
vesting period worked, divided by the total vesting period.  For example, assume an Optionee retires on May 10,
2009 and holds 900 unvested Options from an Award of Options on April 1,
2008 for 2007 performance for 1,200 ADSs (assume no Award for 2008 performance
and that the other 300 Options vested on April 1, 2009).  Thus, if the Optionee had not retired but had
remained in the employment of his or her employer, 25% of the Options
originally granted, or 300 ADSs, would vest as of each of April 1, 2010, April 1,
2011, and April 1, 2012.  Upon
retirement, the Optionee will vest in 13/24 of the 300 Options that would have
otherwise vested in 2010, 13/36 of the 300 Options that would have otherwise
vested in 2011, and 13/48 of the 300 Options that would have otherwise vested
in 2012.

 

In the event that an Optionee separates from
service, subject to the conditions that no Option shall be exercisable after
its expiration date, such Optionee shall have the right to exercise the Option
at any time within ninety (90) days after such termination of employment to the
extent his or her right to exercise the Option was vested at the date of such
termination and had not previously been exercised; provided, that such ninety
(90) day limit shall be increased to one (1) 

 

14

 

year if such termination was due to the death
or disability of the Optionee or if the Optionee dies during the ninety (90)
day period after termination and shall be increased to five (5) years if
such separation was due to the normal or early retirement (as such terms are
defined under Gerdau Ameristeel US Inc.’s qualified Retirement Plan, whether or
not the Optionee is a participant in such Retirement Plan) of the
Optionee.  In the event of the death of
the Optionee, any Option eligible for exercise may be exercised within such
extended time limit by the personal representative of the Optionee or by any
person or persons who shall have acquired the Option directly from the Optionee
by bequest or inheritance.  Whether an
authorized leave of absence or absence for military or governmental service
shall constitute termination of employment for purposes of the Plan shall be
determined by the Committee, whose determination shall be final and conclusive.

 

Change in Control

 

A Change in Control is defined for these
purposes in the same manner as it is for Cash Awards.  All of an Optionee’s unvested Options at the
date of a Change in Control shall become 100% vested at that time.

 

Non-Transferable

 

Unless the Committee provides otherwise at the
time of grant, Options granted under the Plan are non-transferable other than
by will or under the laws of descent and distribution.  During the lifetime of the
Optionee, an Option shall be exercisable only by him or her and shall not be
assignable or transferable, and no other person shall acquire any rights
therein.

 

Delivery
of Certificates

 

As soon as practicable after the exercise of an
Option, the Company shall deliver or cause to be delivered to the Optionee (or,
if permitted, other holder) exercising the Option a certificate or certificates
representing the ADSs purchased upon the exercise.  Such certificates will be registered in the
name of the Optionee (or, if permitted, other holder) exercising the Option.

 

Rights as
a Shareholder

 

An Optionee shall have no rights as a
shareholder with respect to any ADSs covered by his or her Option until the
date on which he or she becomes a record owner of the ADSs purchased upon the
exercise of the Option (the “record ownership date”).  Except as otherwise expressly provided in this
Plan, no adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property), distributions, or other rights
for which the record date is prior to the record ownership date.

 

Modification, Extension or
Renewal of Options

 

Subject to the terms and conditions and within
the limitations of the Plan, the Committee may modify outstanding Options
granted under the Plan, or accept the surrender of outstanding Options (to the
extent not theretofore exercised) and authorize the granting of new Options in
substitution therefor (to the extent not theretofore exercised).  The Committee shall not, however, modify any
outstanding Option so as to specify a lower option price or accept the
surrender of outstanding Options and authorize the granting of new Options in
substitution therefor specifying a lower option price, extend the term of any
Option beyond ten (10) years (except the extension provided under the Plan
for Options that would expire during an Option Blackout Period), or 

 

15

 

take any action that would cause the Options to
fail to remain exempt from the provisions of Code Section 409A.  Moreover, no modification of an Option shall,
without the consent of the Optionee, materially and adversely alter or impair
any of the rights or obligations under any Option theretofore granted under the
Plan.

 

Listing and Registration
of ADSs

 

Each Option shall be subject to the requirement
that if at any time the Committee shall determine, in its discretion, that the
listing, registration or qualification of the ADSs covered thereby upon any
securities exchange or under any state or federal laws, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such Option or the
issuance or purchase of ADSs thereunder, such Option may not be exercised
unless and until such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Committee.  Notwithstanding anything
in the Plan to the contrary, if the provisions of this paragraph become
operative, and if, as a result thereof, the exercise of an Option is delayed,
then and in that event, the term of the Option shall not be affected.

 

Other Provisions

 

The Award Agreements relating to Options
granted under the Plan shall contain such other provisions not inconsistent
with the specific provisions of this Plan, including, without limitation,
restrictions upon the exercise of the Options, as the Committee shall deem
advisable, but only to the extent that any such other provision does not cause
the Options or this Plan to become subject to the provisions of Code Section 409A.

 

Equitable Adjustments

 

Notwithstanding the foregoing, in the event of
a stock split (where the number of outstanding ADSs is increased by at least
25%) or other similar division or consolidation of such securities, or in the
event of any recapitalization, reorganization, merger, consolidation, split-up,
combination or exchange of securities or any similar change affecting ADSs, the
number and type of securities that remain available for Options under the Plan,
the number and type of securities covered by each outstanding Option and the
exercise price per ADS for each outstanding Option shall be proportionately and
appropriately adjusted for any such change. 
To the extent that the foregoing adjustments related to stock or securities
of Gerdau S.A. occur, such adjustments shall be made by, and in the discretion
of, the Committee, whose determination in that respect shall be final, binding
and conclusive; provided, however, that no Option shall be adjusted in a manner
that causes such Option, or this Plan, to become subject to the requirements of
Code Section 409A.

 

Stock Appreciation Rights

 

General

 

As indicated previously, an Award may be (in
whole or in part) in the form of stock appreciation rights (“SARs”).

 

Grant of SARs

 

The number of ADSs underlying the SARs granted
to a SAR Recipient will equal (1) the amount of the SAR portion of an
Award divided by (2) the value of a SAR covering one ADS at the 

 

16

 

applicable base price on the date of the grant,
as determined in the sole discretion of the Committee by using the
Black-Scholes methodology or another appropriate valuation methodology.  The Committee shall have the sole discretion
to interpret the foregoing sentence and calculate the number of SARs granted
thereunder.  SARs will be granted only
for whole ADSs, and any fractional amount will be disregarded.  The date the Award is made shall be the date
of grant of the SARs.  The base price of
a SAR shall not be less than the Fair Market Value of the ADSs at the date of
the grant.

 

The person to whom a SAR is granted is
sometimes referred to in this document as a “SAR Recipient.”

 

Upon the granting of any SAR, the Committee
shall promptly cause the SAR Recipient to be notified of the fact that such SAR
was granted.

 

SAR Certificates

 

Any SAR granted shall be authorized by the
Committee in accordance with the terms of this Plan and shall be evidenced by
an Award Agreement, which Agreements shall comply with and be subject to the
terms and conditions hereinafter specified. 
Each Award Agreement for a SAR shall state the number of SARs to which
it pertains as well as the exercise price of each SAR.

 

Term

 

To the extent not previously exercised, SARs
shall be exercisable, in whole or in part, at any time after they have become
vested, but not later than the expiration date of the SAR.  The Committee shall determine the expiration
date of the SAR at the time of the grant of the SAR; provided, however, that no
SAR shall be exercisable after the expiration of ten (10) years from the
date it is granted.  Notwithstanding the
foregoing, if a SAR would otherwise expire during a period imposed by Gerdau
S.A. during which the holder is not permitted to exercise an SAR in respect of
the ADRs (which includes, but is not limited to, any period during which the
holder has material undisclosed information) (other than any period during
which a regulator has halted trading in the Company’s ADSs) (“a SAR Blackout
Period”), the term of such SAR shall automatically be extended until 10 days after
the end of the SAR Blackout Period.

 

Vesting

 

Except as the Committee may otherwise provide
at the time of the granting of an Award, SARs generally will vest in 25%
increments over four years, beginning on the date of the first anniversary of
the date of the grant of the SARs.  For
example, for SARs granted for performance in the Plan Year ending December 31,
2008, if the date of the grant of the SARs is April 1, 2009, 25% of the
SARs will vest on April 1, 2010, 25% on April 1, 2011, 25% on April 1,
2012, and the remaining 25% on April 1, 2013.

 

Notwithstanding the foregoing, a SAR Recipient
shall become (1) 100% vested in any unexercised SAR upon the SAR Recipient’s
termination of employment by reason of his or her death or disability, (2) 100%
vested in any unexercised SAR in the event of a Change in Control, and (3) pro-rata
vested in any unexercised SAR upon his or her termination of employment due to
normal or early retirement (as such terms are defined under Gerdau Ameristeel
US Inc.’s 

 

17

 

qualified Retirement Plan, whether or not the
SAR Recipient is a participant in such Retirement Plan), all as provided below.

 

When it deems special circumstances to exist,
the Committee in its discretion may accelerate the time at which a SAR may be
exercised if, under previously established exercise terms, such SAR was not
immediately exercisable in full, even if the acceleration would permit the SAR
to be exercised more rapidly than the vesting set forth above, or as otherwise
specified by the Committee, would permit.

 

Method of Exercise

 

A SAR Recipient may exercise a SAR during such time as may be permitted by the SAR and
this Plan by providing written or electronic notice to the person or firm,
which may be a third-party administrator, designated by the Committee, and
complying with any other exercise requirements contained in the SAR or
promulgated from time to time by the Committee or its delegate.  SARs may be exercised only for full ADSs;
fractional ADSs will be disregarded.

 

Method of Payment

 

Payment of the amount due the SAR Recipient
upon the exercise of a SAR shall be equal to the amount by which the Fair
Market Value of the underlying ADSs on the date of exercise exceeds the Fair
Market Value of such ADSs on the date of grant. 
Payment shall be made in Canadian (using the rate of exchange on the day
of exercise) or United States dollars in cash or by check.

 

Termination of Employment

 

Upon a SAR Recipient’s separation from service
for any reason other than death, disability, or normal or early retirement (as
such terms are defined under Gerdau Ameristeel US Inc.’s qualified Retirement
Plan, whether or not the SAR Recipient is a participant in such Retirement
Plan), all unvested SARs will be forfeited.

 

If a SAR Recipient’ employment terminates due
to death or disability, all of his or her unvested SARs will vest
immediately.  For these purposes, “disability”
shall have the meaning set forth in Treasury Regulations Section 1.409A-3(i)(4).

 

If SAR Recipient’s employment terminates due to
normal or early retirement (as such terms are defined under Gerdau Ameristeel US Inc.’s qualified Retirement Plan,
whether or not the SAR Recipient is a participant in such Retirement Plan), his or her unvested SARs will vest pro rata (based
on the number of full months during the restricted period for each
SAR).  This calculation is made
separately for each unvested SAR, and equals the portion of the total vesting
period worked, divided by the total vesting period.  For example, assume a SAR Recipient retires
on May 10, 2009 and holds 900 unvested SARs from an Award on April 1,
2008 for 2007 performance of 1,200 SARs (assume no Award for 2008 performance
and that the other 300 SARs vested on April 1, 2009).  Thus, if the SAR Recipient had not retired
but had remained in the employment of his or her employer, 25% of the SARs
originally granted, or 300 SARs, would vest as of each of April 1, 2010, April 1,
2011, and April 1, 2012.  Upon
retirement, the SAR Recipient will vest in 13/24 of the 300 SARs that would
have otherwise vested in 2010, 13/36 of the 300 SARs that would have otherwise
vested in 2011, and 13/48 of the 300 SARs that would have otherwise vested in
2012.

 

18

 

In the event that a SAR Recipient separates
from service, subject to the conditions that no SAR shall be exercisable after
its expiration date, such SAR Recipient shall have the right to exercise the
SARs at any time within ninety (90) days after such termination of employment
to the extent his or her right to exercise the SAR was vested at the date of
such termination and had not previously been exercised; provided, that such
ninety (90) day limit shall be increased to one (1) year if such
termination was due to the death or disability of the SAR Recipient or if the
SAR Recipient dies within the ninety (90) day period after termination and
shall be increased to five (5) years if such termination was due to the
normal or early retirement (as such terms are defined under Gerdau Ameristeel
US Inc.’s qualified Retirement Plan, whether or not the SAR Recipient is a
participant in such Retirement Plan) of the SAR Recipient.  In the event of the event of death of the SAR
Recipient, any SARs eligible for exercise may be exercised within such extended
time limit by the personal representative of the SAR Recipient or by any person
or persons who shall have acquired the SAR directly from the SAR Recipient by
bequest or inheritance.  Whether an
authorized leave of absence or absence for military or governmental service
shall constitute termination of employment for purposes of the Plan shall be
determined by the Committee, whose determination shall be final and conclusive.

 

Change in Control

 

A Change in Control is defined for these
purposes in the same manner as it is for Cash Awards.  All of a SAR Recipient’s unvested SARs at the
date of a Change in Control shall become 100% vested at that time.

 

Taxes

 

Upon exercise of the SAR, the SAR Recipient
shall become responsible for any applicable taxes.  The amount to be paid upon the exercise of a
SAR will be reduced by any required income tax withholding and applicable
employment taxes and the Company shall make a net cash payment to the Participant
and remit the withheld taxes to the tax authorities.

 

Non-Transferable

 

Unless the Committee provides otherwise at the
time of grant, SARs granted under the Plan are non-transferable other than by
will or under the laws of descent and distribution.  During the lifetime of a SAR
Recipient, a SAR shall be exercisable only by him or her and shall not be
assignable or transferable, and no other person shall acquire any rights
therein.

 

No Rights
as a Shareholder

 

A SAR Recipient shall have no rights as a shareholder with respect to any SARs.

 

Modification, Extension or
Renewal of SARs

 

Subject to the terms and conditions and within
the limitations of the Plan, the Committee may modify outstanding SARs granted
under the Plan, or accept the surrender of outstanding SARs (to the extent not
theretofore exercised) and authorize the granting of new SARs in substitution
therefor (to the extent not theretofore exercised).  The Committee shall not, however, modify any
outstanding SARs so as to specify a lower base price or a different measure of
the amount to be paid, extend the term of any SAR beyond ten (10) years
(except the extension period provided under the Plan for SARs that would expire
during a SAR Blackout Period), or take any action that would cause the SARS to
fail to remain exempt from the provisions of Code Section 409A.  

 

19

 

Moreover, no modification of a SAR shall,
without the consent of the SAR Recipient, materially and adversely alter or
impair any of the rights or obligations under any SAR theretofore granted under
the Plan.

 

Other Provisions

 

The Award Agreement relating to SARs authorized
under the Plan shall contain such other provisions not inconsistent with
specific provisions of this Plan, including, without limitation, restrictions upon
the exercise of the SARs, as the Committee shall deem advisable, but only to
the extent that any such other provision does not cause the SARs or this Plan
to become subject to the provisions of Code Section 409A.

 

Equitable Adjustments

 

Notwithstanding the foregoing, in the event of
a stock split (where the number of outstanding ADSs is increased by at least
25%) or other similar division or consolidation of such securities, or in the
event of any recapitalization, reorganization, merger, consolidation, split-up,
combination or exchange of securities or any similar change affecting ADSs, the
number and type of securities covered by each outstanding SAR and the base
price for each outstanding SAR shall be proportionately and appropriately
adjusted for any such change.  To the
extent that the foregoing adjustments related to stock or securities of Gerdau
S.A. occur, such adjustments shall be made by, and in the discretion of, the
Committee, whose determination in that respect shall be final, binding and conclusive;
provided, however, that no SAR shall be adjusted in a manner that causes such
SAR, or this Plan, to become subject to the requirements of Code Section 409A.

 

Employment

 

Nothing in this Plan or any related material
shall give a Participant the right to continued employment by the Company or
its affiliates, or interfere with or limit in any way the Company’s right to
terminate a Participant’s employment, with or without cause, at any time.

 

Limited
Liability

 

In
administering the Plan, neither the Company nor any officer, director or
employee thereof, nor the Committee nor any member thereof, shall be liable for
any act or omission performed or omitted, as the case may be, by such person
with respect to the Plan, provided that the foregoing shall not relieve any
person of liability for action or inaction that constitutes gross negligence,
fraud or bad faith.  The Company and its
officers, directors and employees, and the Committee and its members, shall be
entitled to rely conclusively on all tables, valuations, certificates, opinions
and reports that shall be furnished by any actuary, accountant, trustee,
insurance company, consultant, counsel or other expert who shall be employed or
engaged by the Committee or the Company in good faith.

 

Assets
Property of Company

 

All
amounts determined under this Plan that have not been paid to Participants
shall remain the property of the Company and shall be subject to exclusive use
by the Company.  No trust shall be
established for such funds, and no person shall have any fiduciary
responsibility to Participants or their beneficiaries to hold these funds apart
from the general assets of the Company. 
All amounts held under this Plan shall remain fully subject to claims of
the Company’s creditors until such amounts are distributed to the Participants.

 

20

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