Document:

2007 EQUITY INCENTIVE PLAN, AS AMENDED

EXHIBIT 10.1

GELTECH SOLUTIONS, INC.

2007 EQUITY INCENTIVE PLAN, AS AMENDED

1.

Scope of Plan; Definitions. 

(a)

This 2007 Equity Incentive Plan (the “Plan”) is intended to advance the interests of GelTech Solutions, Inc. (the “Company”) and its Related Corporations by enhancing the ability of the Company to attract and retain qualified employees, consultants, Officers, directors and Director Advisors, by creating incentives and rewards for their contributions to the success of the Company and its Related Corporations. This Plan will provide to (a) Officers and other employees of the Company and its Related Corporations opportunities to purchase common stock (“Common Stock”) of the Company pursuant to Options granted hereunder which qualify as incentive stock options (“ISOs”) under Section 422(b) of the Internal Revenue Code of 1986 (the “Code”), (b) directors, Director Advisors, Officers, employees and consultants of the Company and Related Corporations opportunities to purchase Common Stock in the Company pursuant to options granted hereunder which do not qualify as ISOs (“Non-Qualified Options”); (c) directors, Director Advisors, Officers, employees and consultants of the Company and Related Corporations opportunities to receive shares of Common Stock of the Company which normally are subject to restrictions on sale (“Restricted Stock”); (d) directors, Director Advisors, Officers, employees and consultants of the Company and Related Corporations opportunities to receive grants of stock appreciation rights (“SARs”); and (e) directors, Director Advisors, Officers, employees and consultants of the Company and Related Corporations opportunities to receive grants of restricted stock units (“RSUs”). ISOs, Non-Discretionary Options and Non-Qualified Options are referred to hereafter as “Options.” Options, Restricted Stock, RSUs and SARs are sometimes referred to hereafter collectively as “Stock Rights.” Any of the Options and/or Stock Rights may in the Compensation Committee’s discretion be issued in tandem to one or more other Options and/or Stock Rights to the extent permitted by law.

This Plan is intended to comply in all respects with Rule 16b-3 (“Rule 16b-3”) and its successor rules as promulgated under Section 16(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) for participants who are subject to Section 16 of the Exchange Act. To the extent any provision of the Plan or action by the Plan administrators fails to so comply, it shall be deemed null and void to the extent permitted by law and deemed advisable by the Plan administrators. Provided, however, such exercise of discretion by the Plan administrators shall not interfere with the contract rights of any grantee. In the event that any interpretation or construction of the Plan is required, it shall be interpreted and construed in order to ensure, to the maximum extent permissible by law, that such grantee does not violate the short-swing profit provisions of Section 16(b) of the Exchange Act and that any exemption available under Rule 16b-3 or other rule is available.

(b)

For purposes of the Plan, capitalized words and terms shall have the following meaning:

“Advisory Board” means a board composed of individuals, appointed by the Board, who serve the Company’s Board in an advisory capacity but are not directors, Officers or employees of the Company.

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

“Bulletin Board” shall mean the Over-the-Counter Bulletin Board.

“Chairman” means the chairman of the Board.

“Change of Control” means the occurrence of any of the following events: (i) the consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets in a transaction which requires shareholder approval under applicable state law; or (ii) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

“Code” shall have the meaning given to it in Section 1(a).

“Common Stock” shall have the meaning given to it in Section 1(a).

“Company” shall have the meaning given to it in Section 1(a).

“Compensation Committee” means the compensation committee of the Board, if any, which shall consist of two or more members of the Board, each of whom shall be both an “outside director” within the meaning of Section 162(m) of the Code and a “non-employee director” within the meaning of Rule 16b-3.  All references in this Plan to the Compensation Committee shall mean the Board when (i) there is no Compensation Committee or (ii) the Board has retained the power to administer this Plan.

“Director Advisor” means a member of the Advisory Board.

“Disability” means “permanent and total disability” as defined in Section 22(e)(3) of the Code or successor statute.

“Disqualifying Disposition” means any disposition (including any sale) of Common Stock underlying an ISO before the later of (i) two years after the date of employee was granted the ISO or (ii) one year after the date the employee acquired Common Stock by exercising the ISO.

“Exchange Act” shall have the meaning given to it in Section 1(a).

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“Fair Market Value” shall be determined as of the last Trading Day before the date a Stock Right is granted and shall mean:

(1)

the closing price on the principal market if the Common Stock is listed on a national securities exchange or the Bulletin Board. 

(2)

if the Company’s shares are not listed on a national securities exchange or the Bulletin Board, then the closing price if reported or the average bid and asked price for the Company’s shares as published by Pink Sheets LLC; 

(3)

if there are no prices available under clauses (1) or (2), then Fair Market Value shall be based upon the average closing bid and asked price as determined following a polling of all dealers making a market in the Company’s Common Stock; or

(4)

if there is no regularly established trading market for the Company’s Common Stock, the Fair Market Value shall be established by the Board or the Compensation Committee taking into consideration all relevant factors including the most recent price at which the Company’s Common Stock was sold.

“ISO” shall have the meaning given to it in Section 1(a).

“Non-Discretionary Options” shall have the meaning given to it in Section 1(a).

“Non-Qualified Options” shall have the meaning given to it in Section 1(a).

“Officers” means a person who is an executive officer of the Company and is required to file ownership reports under Section 16(a) of the Exchange Act.

“Options” shall have the meaning given to it in Section 1(a).

“Plan” shall have the meaning given to it in Section 1(a).

“Qualifying Committee” means the Company’s audit committee, Compensation Committee, finance committee or any other committee of the Board that the compensation committee shall determine entitles its members to a grant of Stock Rights, as defined, under Section 3(b)(ii) (each such Committee, a “Qualifying Committee”).

“Related Corporations” shall mean a corporation which is a subsidiary corporation with respect to the Company within the meaning of Section 425(f) of the Code. 

“Restricted Stock” shall have the meaning contained in Section 1(a). 

“RSU” shall have the meaning given to it in Section 1(a).

“Rule 16b-3” shall have the meaning given to it in Section 1(a).

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“SAR” shall have the meaning given to it in Section 1(a).

“Securities Act” means the Securities Act of 1933.

“Stock Rights” shall have the meaning given to it in Section 1(a).

“Trading Day” shall mean a day on which the New York Stock Exchange is open for business

2.

Administration of the Plan.

(a)

The Plan may be administered by the entire Board or by the Compensation Committee. Once appointed, the Compensation Committee shall continue to serve until otherwise directed by the Board. A majority of the members of the Compensation Committee shall constitute a quorum, and all determinations of the Compensation Committee shall be made by the majority of its members present at a meeting. Any determination of the Compensation Committee under the Plan may be made without notice or meeting of the Compensation Committee by a writing signed by all of the Compensation Committee members. Subject to ratification of the grant of each Stock Right by the Board (but only if so required by applicable state law), and subject to the terms of the Plan, the Compensation Committee shall have the authority to (i) determine the employees of the Company and Related Corporations (from among the class of employees eligible under Section 3 to receive ISOs) to whom ISOs may be granted, and to determine (from among the class of individuals and entities eligible under Section 3 to receive Non-Qualified Options, Restricted Stock, RSUs and SARs) to whom Non-Qualified Options, Restricted Stock, RSUs and SARs may be granted; (ii) determine when Stock Rights may be granted; (iii) determine the exercise prices of Stock Rights other than Restricted Stock and RSUs, which shall not be less than the Fair Market Value; (iv) determine whether each Option granted shall be an ISO or a Non-Qualified Option; (v) determine when Stock Rights shall become exercisable, the duration of the exercise period and when each Stock Right shall vest; (vi) determine whether restrictions such as repurchase options are to be imposed on shares subject to or issued in connection with Stock Rights, and the nature of such restrictions, if any, and (vii) interpret the Plan and promulgate and rescind rules and regulations relating to it. The interpretation and construction by the Compensation Committee of any provisions of the Plan or of any Stock Right granted under it shall be final, binding and conclusive unless otherwise determined by the Board. The Compensation Committee may from time to time adopt such rules and regulations for carrying out the Plan as it may deem best.

No members of the Compensation Committee or the Board shall be liable for any action or determination made in good faith with respect to the Plan or any Stock Right granted under it. No member of the Compensation Committee or the Board shall be liable for any act or omission of any other member of the Compensation Committee or the Board or for any act or omission on his own part, including but not limited to the exercise of any power and discretion given to him under the Plan, except those resulting from his own gross negligence or willful misconduct.

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(b)

The Compensation Committee may select one of its members as its chairman and shall hold meetings at such time and places as it may determine. All references in this Plan to the Compensation Committee shall mean the Board if no Compensation Committee has been appointed. From time to time the Board may increase the size of the Compensation Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies however caused or remove all members of the Compensation Committee and thereafter directly administer the Plan.

(c)

Stock Rights may be granted to members of the Board, whether such grants are in their capacity as directors, Officers or consultants. All grants of Stock Rights to members of the Board shall in all other respects be made in accordance with the provisions of this Plan applicable to other eligible persons. Members of the Board who are either (i) eligible for Stock Rights pursuant to the Plan or (ii) have been granted Stock Rights may vote on any matters affecting the administration of the Plan or the grant of any Stock Rights pursuant to the Plan.

(d)

In addition to such other rights of indemnification as he may have as a member of the Board, and with respect to administration of the Plan and the granting of Stock Rights under it, each member of the Board and of the Compensation Committee shall be entitled without further act on his part to indemnification from the Company for all expenses (including advances of litigation expenses, the amount of judgment and the amount of approved settlements made with a view to the curtailment of costs of litigation) reasonably incurred by him in connection with or arising out of any action, suit or proceeding, including any appeal thereof, with respect to the administration of the Plan or the granting of Stock Rights under it in which he may be involved by reason of his being or having been a member of the Board or the Compensation Committee, whether or not he continues to be such member of the Board or the Compensation Committee at the time of the incurring of such expenses; provided, however, that such indemnity shall be subject to the limitations contained in any Indemnification Agreement between the Company and the Board member or Officer. The foregoing right of indemnification shall inure to the benefit of the heirs, executors or administrators of each such member of the Board or the Compensation Committee and shall be in addition to all other rights to which such member of the Board or the Compensation Committee would be entitled to as a matter of law, contract or otherwise. 

(e)

The Board may delegate the powers to grant Stock Rights to Officers to the extent permitted by the laws of the Company’s state of incorporation.

3.

Eligible Employees and Others. 

(a)

ISOs may be granted to any employee of the Company or any Related Corporation. Those Officers and directors of the Company who are not employees may not be granted ISOs under the Plan. Subject to compliance with Rule 16b-3 and other applicable securities laws, Non-Qualified Options, Restricted Stock, RSUs and SARs may be granted to any director (whether or not an employee), Director Advisors, Officers, employees or consultants of the Company or any Related Corporation. The Compensation Committee may take into consideration a recipient’s individual circumstances in determining whether to grant an ISO, a 

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Non-Qualified Option, Restricted Stock, RSUs or a SAR. Granting of any Stock Right to any individual or entity shall neither entitle that individual or entity to, nor disqualify him from participation in, any other grant of Stock Rights.

(b)

All directors of the Company who are not employees or 10% shareholders of the Company or Related Corporations and all Director Advisors shall automatically receive the following as appropriate:

(i)

Initial Grants. On the date on which a person is first elected or appointed, whether elected by the shareholders of the Company or appointed by the Board to fill a Board vacancy, he or she shall receive an automatic grant of non qualified options as follows:

				
	 
	(A)

	Chairman of the Board - 

	50,000 options;

	 
	(B)

	Director - 

	30,000 options;

	 
	(C)

	Chairman of a committee - 

	10,000 options; and

	 
	(D)

	Member of a committee - 

	5,000 options.

(ii)

Annual Grants. On July 1st of each year, each non-employee director shall receive an automatic grant of non-qualified options as follows:

				
	 
	(A) 

	Director - 

	100,000 options;

	 
	(B) 

	Chairman of a Qualifying Committee - 

	20,000 options; and

	 
	(C) 

	Member of a Qualifying Committee - 

	10,000 options.

 

(iii)

Vesting.  All initial grants under this Section 3(b) shall vest over a three-year period each 12 months following the date of the automatic grant, subject to service with the Company in the capacity in which the grant is received on the applicable vesting dates.  All annual grants shall vest on June 30th of the following year, subject to service with the Company in the capacity in which the grant is received on the applicable vesting date.

(iv)

All grants of non qualified options under this Section 3(b) are subject to adjustment under Section 14.

(c)

The exercise price of the Options or SARs under Section 3 shall be Fair Market Value or such higher price as may be established by the Compensation Committee, the Board or by the Code.

4.

Common Stock. The Common Stock subject to Stock Rights shall be authorized but unissued shares of Common Stock, par value $0.001, or shares of Common Stock reacquired by the Company in any manner, including purchase, forfeiture or otherwise. The aggregate number of shares of Common Stock which may be issued pursuant to the Plan is 15,000,000, less any Stock Rights previously granted or exercised subject to adjustment as provided in Section 14. Any such shares may be issued under ISOs, Non-Qualified Options, Restricted Stock, RSUs or SARs, so long as the number of shares so issued does not exceed the limitations in this Section. If any Stock Rights granted under the Plan shall expire or terminate for any reason without having been exercised in full or shall cease for any reason to be exercisable in 

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whole or in part, or if the Company shall reacquire any unvested shares, the unpurchased shares subject to such Stock Rights and any unvested shares so reacquired by the Company shall again be available for grants under the Plan.

5.

Granting of Stock Rights.

(a)

The date of grant of a Stock Right under the Plan will be the date specified by the Board or Compensation Committee at the time it grants the Stock Right; provided, however, that such date shall not be prior to the date on which the Board or Compensation Committee acts to approve the grant. The Board or Compensation Committee shall have the right, with the consent of the optionee, to convert an ISO granted under the Plan to a Non-Qualified Option pursuant to Section 17.

(b)

Except for automatic grants under Section 3(b), the Board or Compensation Committee shall grant Stock Rights to participants that it, in its sole discretion, selects. Stock Rights shall be granted on such terms as the Board or Compensation Committee shall determine except that ISOs shall be granted on terms that comply with the Code and regulations thereunder.

(c)

A SAR entitles the holder to receive, as designated by the Board or Compensation Committee, cash or shares of Common Stock, value equal to (or otherwise based on) the excess of: (a) the Fair Market Value of a specified number of shares of Common Stock at the time of exercise over (b) an exercise price established by the Board or Compensation Committee. The exercise price of each SAR granted under this Plan shall be established by the Compensation Committee or shall be determined by a method established by the Board or Compensation Committee at the time the SAR is granted, provided the exercise price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of the grant of the SAR, or such higher price as is established by the Board or Compensation Committee. A SAR shall be exercisable in accordance with such terms and conditions and during such periods as may be established by the Board or Compensation Committee. Shares of Common Stock delivered pursuant to the exercise of a SAR shall be subject to such conditions, restrictions and contingencies as the Board or Compensation Committee may establish in the applicable SAR agreement or document, if any. The Board or Compensation Committee, in its discretion, may impose such conditions, restrictions and contingencies with respect to shares of Common Stock acquired pursuant to the exercise of each SAR as the Board or Compensation Committee determines to be desirable. A SAR under the Plan shall be subject to such terms and conditions, not inconsistent with the Plan, as the Board or Compensation Committee shall, in its discretion, prescribe. The terms and conditions of any SAR to any grantee shall be reflected in such form of agreement as is determined by the Board or Compensation Committee. A copy of such document, if any, shall be provided to the grantee, and the Board or Compensation Committee may condition the granting of the SAR on the grantee executing such agreement.

(d)

An RSU gives the grantee the right to receive a number of shares of the Company’s Common Stock on applicable vesting or other dates. Delivery of the RSUs may be deferred beyond vesting as determined by the Board or Compensation Committee. RSUs shall be evidenced by an RSU agreement in the form determined by the Board or Compensation 

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Committee. With respect to an RSU, which becomes non-forfeitable due to the lapse of time, the Compensation Committee shall prescribe in the RSU agreement the vesting period. With respect to the granting of the RSU, which becomes non-forfeitable due to the satisfaction of certain pre-established performance-based objectives imposed by the Board or Compensation Committee, the measurement date of whether such performance-based objectives have been satisfied shall be a date no earlier than the first anniversary of the date of the RSU. A recipient who is granted an RSU shall possess no incidents of ownership with respect to such underlying Common Stock, although the RSU agreement may provide for payments in lieu of dividends to such grantee. 

(e)

Notwithstanding any provision of this Plan, the Board or Compensation Committee may impose conditions and restrictions on any grant of Stock Rights including forfeiture of vested Options, cancellation of Common Stock acquired in connection with any Stock Right and forfeiture of profits.

(f)

The Options and SARs shall not be exercisable for a period of more than 10 years from the date of grant.  All automatic grants to directors and committee members shall be for 10 years.

6.

Sale of Shares. The shares underlying Stock Rights granted to any Officers, director or a beneficial owner of 10% or more of the Company’s securities registered under Section 12 of the Exchange Act shall not be sold, assigned or transferred by the grantee until at least six months elapse from the date of the grant thereof.

7.

ISO Minimum Option Price and Other Limitations.

(a)

The exercise price per share relating to all Options granted under the Plan shall not be less than the Fair Market Value per share of Common Stock on the last trading day prior to the date of such grant. For purposes of determining the exercise price, the date of the grant shall be the later of (i) the date of approval by the Board or Compensation Committee or the Board, or (ii) for ISOs, the date the recipient becomes an employee of the Company. In the case of an ISO to be granted to an employee owning Common Stock which represents more than 10 percent of the total combined voting power of all classes of stock of the Company or any Related Corporation, the price per share shall not be less than 110% of the Fair Market Value per share of Common Stock on the date of grant and such ISO shall not be exercisable after the expiration of five years from the date of grant.

(b)

In no event shall the aggregate Fair Market Value (determined at the time an ISO is granted) of Common Stock for which ISOs granted to any employee are exercisable for the first time by such employee during any calendar year (under all stock option plans of the Company and any Related Corporation) exceed $100,000.  

8.

Duration of Stock Rights. Subject to earlier termination as provided in Sections 3, 5, 9, 10 and 11, each Option and SAR shall expire on the date specified in the original instrument granting such Stock Right (except with respect to any part of an ISO that is converted into a Non-Qualified Option pursuant to Section 17), provided, however, that such instrument must comply with Section 422 of the Code with regard to ISOs and Rule 16b-3 with regard to all 

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Stock Rights granted pursuant to the Plan to Officers, directors and 10% shareholders of the Company. 

9.

Exercise of Options and SARs; Vesting of Stock Rights. Subject to the provisions of Sections 3 and 9 through 13, each Option and SAR granted under the Plan shall be exercisable as follows:

(a)

The Options and SARs shall either be fully vested and exercisable from the date of grant or shall vest and become exercisable in such installments as the Board or Compensation Committee may specify.

(b)

Once an installment becomes exercisable it shall remain exercisable until expiration or termination of the Option and SAR, unless otherwise specified by the Board or Compensation Committee.

(c)

Each Option and SAR or installment, once it becomes exercisable, may be exercised at any time or from time to time, in whole or in part, for up to the total number of shares with respect to which it is then exercisable.

(d)

The Board or Compensation Committee shall have the right to accelerate the vesting date of any installment of any Stock Right; provided that the Board or Compensation Committee shall not accelerate the exercise date of any installment of any Option granted to any employee as an ISO (and not previously converted into a Non-Qualified Option pursuant to Section 17) if such acceleration would violate the annual exercisability limitation contained in Section 422(d) of the Code as described in Section 7(b). 

10.

Termination of Employment. Subject to any greater restrictions or limitations as may be imposed by the Board or Compensation Committee upon the granting of any Option, if an ISO optionee ceases to be employed by the Company and all Related Corporations other than by reason of death or Disability, no further installments of his ISOs shall become exercisable, and his ISOs shall terminate as provided for in the grant or on the day three months after the day of the termination of his employment, whichever is earlier, but in no event later than on their specified expiration dates. Employment shall be considered as continuing uninterrupted during any bona fide leave of absence (such as those attributable to illness, military obligations or governmental service) provided that the period of such leave does not exceed 90 days or, if longer, any period during which such optionee’s right to re-employment is guaranteed by statute. A leave of absence with the written approval of the Board shall not be considered an interruption of employment under the Plan, provided that such written approval contractually obligates the Company or any Related Corporation to continue the employment of the optionee after the approved period of absence. ISOs granted under the Plan shall not be affected by any change of employment within or among the Company and Related Corporations so long as the optionee continues to be an employee of the Company or any Related Corporation.

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11.

Death; Disability. Subject to any greater restrictions or limitations as may be imposed by the Board or Compensation Committee upon the granting of any Option or SAR:

(a)

If the holder of an Option or SAR ceases to be employed by the Company and all Related Corporations by reason of his death, any Options or SARs of such employee may be exercised to the extent of the number of shares with respect to which he could have exercised it on the date of his death, by his estate, personal representative or beneficiary who has acquired the Options or SARs by will or by the laws of descent and distribution, at any time prior to the earlier of the Options’ or SARs’ specified expiration date or three months from the date of the grantee’s death.

(b)

If the holder of an Option or SAR ceases to be employed by the Company and all Related Corporations, or a director or Director Advisor can no longer perform his duties, by reason of his Disability, he shall have the right to exercise any Option or SARs held by him on the date of termination of employment or ceasing to act as a director or Director Advisor until the earlier of (i) the Options’ or SARs’ specified expiration date or (ii) one year from the date of the termination of the person’s employment. 

12.

Assignment, Transfer or Sale.

(a)

No ISO granted under this Plan shall be assignable or transferable by the grantee except by will or by the laws of descent and distribution, and during the lifetime of the grantee, each ISO shall be exercisable only by him, his guardian or legal representative. 

(b)

Except for ISOs, all Stock Rights are transferable subject to compliance with applicable securities laws and Section 6 of this Plan. 

13.

Terms and Conditions of Stock Rights. Stock Rights shall be evidenced by instruments (which need not be identical) in such forms as the Board or Compensation Committee may from time to time approve. Such instruments shall conform to the terms and conditions set forth in Sections 5 through 12 hereof and may contain such other provisions as the Board or Compensation Committee deems advisable which are not inconsistent with the Plan. In granting any Stock Rights, the Board or Compensation Committee may specify that Stock Rights shall be subject to the restrictions set forth herein with respect to ISOs, or to such other termination and cancellation provisions as the Board or Compensation Committee may determine. The Board or Compensation Committee may from time to time confer authority and responsibility on one or more of its own members and/or one or more Officers of the Company to execute and deliver such instruments. The proper Officers of the Company are authorized and directed to take any and all action necessary or advisable from time to time to carry out the terms of such instruments.

14.

Adjustments Upon Certain Events.

(a)

Subject to any required action by the shareholders of the Company, the number of shares of Common Stock covered by each outstanding Stock Right, and the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which 

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no Stock Rights have yet been granted or which have been returned to the Plan upon cancellation or expiration of a Stock Right, as well as the price per share of Common Stock (or cash, as applicable) covered by each such outstanding Option or SAR, shall be proportionately adjusted for any increases or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company or the voluntary cancellation whether by virtue of a cashless exercise of a derivative security of the Company or otherwise shall not be deemed to have been “effected without receipt of consideration.”  Such adjustment shall be made by the Board or Compensation Committee, whose determination in that respect shall be final, binding and conclusive.  Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to a Stock Right. No adjustments shall be made for dividends or other distributions paid in cash or in property other than securities of the Company.

(b)

In the event of the proposed dissolution or liquidation of the Company, the Board or Compensation Committee shall notify each participant as soon as practicable prior to the effective date of such proposed transaction.  To the extent it has not been previously exercised, a Stock Right will terminate immediately prior to the consummation of such proposed action.

(c)

In the event of a merger of the Company with or into another corporation, or a Change of Control, each outstanding Stock Right shall be assumed (as defined below) or an equivalent option or right substituted by the successor corporation or a parent or subsidiary of the successor corporation.  In the event that the successor corporation refuses to assume or substitute for the Stock Rights, the participants shall fully vest in and have the right to exercise their Stock Rights as to which it would not otherwise be vested or exercisable.  If a Stock Right becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Board or Compensation Committee shall notify the participant in writing or electronically that the Stock Right shall be fully vested and exercisable for a period of at least 15 days from the date of such notice, and any Options or SARs shall terminate one minute prior to the closing of the merger or sale of assets.   

For the purposes of this Section 14(c), the Stock Right shall be considered “assumed” if, following the merger or Change of Control, the option or right confers the right to purchase or receive, for each share of Common Stock subject to the Stock Right immediately prior to the merger or Change of Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change of Control by holders of Common Stock for each share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or Change of Control is not solely common stock of the successor corporation or its parent, the Board or Compensation Committee may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Stock Right, for each share of Common 

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Stock subject to the Stock Right, to be solely common stock of the successor corporation or its parent equal in Fair Market Value to the per share consideration received by holders of Common Stock in the merger or Change of Control.

(d)

Notwithstanding the foregoing, any adjustments made pursuant to Section 14(a), (b) or (c) with respect to ISOs shall be made only after the Board or Compensation Committee, after consulting with counsel for the Company, determines whether such adjustments would constitute a “modification” of such ISOs (as that term is defined in Section 425(h) of the Code) or would cause any adverse tax consequences for the holders of such ISOs.  If the Board or Compensation Committee determines that such adjustments made with respect to ISOs would constitute a modification of such ISOs it may refrain from making such adjustments.

(e)

No fractional shares shall be issued under the Plan and the optionee shall receive from the Company cash in lieu of such fractional shares.

15.

Means of Exercising Stock Rights.

(a)

An Option or SAR (or any part or installment thereof) shall be exercised by giving written notice to the Company at its principal office address. Such notice shall identify the Stock Right being exercised and specify the number of shares as to which such Stock Right is being exercised, accompanied by full payment of the exercise price therefor (to the extent it is exercisable in cash) either (i) in United States dollars by check or wire transfer; or (ii) at the discretion of the Board or Compensation Committee, through delivery of shares of Common Stock having a Fair Market Value equal as of the date of the exercise to the cash exercise price of the Stock Right; or (iii) at the discretion of the Board or Compensation Committee, by any combination of (i) and (ii)  above. If the Board or Compensation Committee exercises its discretion to permit payment of the exercise price of an ISO by means of the methods set forth in clauses (ii) or  (iii)  of the preceding sentence, such discretion need not  be exercised in writing at the time of the grant of the Stock Right in question. The holder of a Stock Right shall not have the rights of a shareholder with respect to the shares covered by his Stock Right until the date of issuance of a stock certificate to him for such shares. Except as expressly provided above in Section 14 with respect to changes in capitalization and stock dividends, no adjustment shall be made for dividends or similar rights for which the record date is before the date such stock certificate is issued.

(b)

Each notice of exercise shall, unless the shares of Common Stock are covered by a then current registration statement under the Securities Act, contain the holder’s acknowledgment in form and substance satisfactory to the Company that (i) such shares are being purchased for investment and not for distribution or resale (other than a distribution or resale which, in the opinion of counsel satisfactory to the Company, may be made without violating the registration provisions of the Securities Act), (ii) the holder has been advised and understands that (1) the shares have not been registered under the Securities Act and are “restricted securities” within the meaning of Rule 144 under the Securities Act and are subject to restrictions on transfer and (2) the Company is under no obligation to register the shares under the Securities Act or to take any action which would make available to the holder any exemption from such registration, and (iii) such shares may not be transferred without compliance with all 

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applicable federal and state securities laws. Notwithstanding the above, should the Company be advised by counsel that issuance of shares should be delayed pending registration under federal or state securities laws or the receipt of an opinion that an appropriate exemption therefrom is available, the Company may defer exercise of any Stock Right granted hereunder until either such event has occurred.

16.

Term, Termination and Amendment.  

(a)

This Plan was adopted by the Board.  This Plan may be approved by the Company’s shareholders, which approval is required for ISOs.

(b)

The Board may terminate the Plan at any time.  Unless sooner terminated, the Plan shall terminate on January 31, 2017.  No Stock Rights may be granted under the Plan once the Plan is terminated.  Termination of the Plan shall not impair rights and obligations under any Stock Right granted while the Plan is in effect, except with the written consent of the grantee.

(c)

The Board at any time, and from time to time, may amend the Plan.  Provided, however, except as provided in Section 14 relating to adjustments in Common Stock, no amendment shall be effective unless approved by the shareholders of the Company to the extent (i) shareholder approval is necessary to satisfy the requirements of Section 422 of the Code or (ii) required by the rules of the principal national securities exchange or trading market upon which the Company’s Common Stock trades. Rights under any Stock Rights granted before amendment of the Plan shall not be impaired by any amendment of the Plan, except with the written consent of the grantee.

(d)

The Board at any time, and from time to time, may amend the terms of any one or more Stock Rights; provided, however, that the rights under the Stock Right shall not be impaired by any such amendment, except with the written consent of the grantee.

17.

Conversion of ISOs into Non-Qualified Options; Termination of ISOs. The Board or Compensation Committee, at the written request of any optionee, may in its discretion take such actions as may be necessary to convert such optionee’s ISOs (or any installments or portions of installments thereof) that have not been exercised on the date of conversion into Non-Qualified Options at any time prior to the expiration of such ISOs, regardless of whether the optionee is an employee of the Company or a Related Corporation at the time of such conversion.  Provided, however, the Board or Compensation Committee shall not reprice the Options or extend the exercise period or reduce the exercise price of the appropriate installments of such Options without the approval of the Company’s shareholders. At the time of such conversion, the Board or Compensation Committee (with the consent of the optionee) may impose such conditions on the exercise of the resulting Non-Qualified Options as the Board or Compensation Committee in its discretion may determine, provided that such conditions shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to give any optionee the right to have such optionee’s ISOs converted into Non-Qualified Options, and no such conversion shall occur until and unless the Board or Compensation Committee takes appropriate action. The 

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Compensation Committee, with the consent of the optionee, may also terminate any portion of any ISO that has not been exercised at the time of such termination.

18.

Application of Funds. The proceeds received by the Company from the sale of shares pursuant to Options or SARS (if cash settled) granted under the Plan shall be used for general corporate purposes.

19.

Governmental Regulations. The Company’s obligation to sell and deliver shares of the Common Stock under this Plan is subject to the approval of any governmental authority required in connection with the authorization, issuance or sale of such shares.

20.

Withholding of Additional Income Taxes. In connection with the granting, exercise or vesting of a Stock Right or the making of a Disqualifying Disposition the Company, in accordance with Section 3402(a) of the Code, may require the optionee to pay additional withholding taxes in respect of the amount that is considered compensation includable in such person’s gross income. 

To the extent that the Company is required to withhold taxes for federal income tax purposes as provided above, if any optionee may elect to satisfy such withholding requirement by (i) paying the amount of the required withholding tax to the Company; (ii) delivering to the Company shares of its Common Stock (including shares of Restricted Stock) previously owned by the optionee; or (iii) having the Company retain a portion of the shares covered by an Option exercise. The number of shares to be delivered to or withheld by the Company times the Fair Market Value of such shares shall equal the cash required to be withheld. 

21.

Notice to Company of Disqualifying Disposition. Each employee who receives an ISO must agree to notify the Company in writing immediately after the employee makes a Disqualifying Disposition of any Common Stock acquired pursuant to the exercise of an ISO. If the employee has died before such stock is sold, the holding periods requirements of the Disqualifying Disposition do not apply and no Disqualifying Disposition can occur thereafter.

22.

Continued Employment. The grant of a Stock Right pursuant to the Plan shall not be construed to imply or to constitute evidence of any agreement, express or implied, on the part of the Company or any Related Corporation to retain the grantee in the employ of the Company or a Related Corporation, as a member of the Company’s Board or in any other capacity, whichever the case may be.

23.

Governing Law; Construction. The validity and construction of the Plan and the instruments evidencing Stock Rights shall be governed by the laws of the Company’s state of incorporation. In construing this Plan, the singular shall include the plural and the masculine gender shall include the feminine and neuter, unless the context otherwise requires.

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24.

Forfeiture of Stock Rights. Notwithstanding any other provision of this Plan, all vested Stock Rights shall be immediately forfeited at the option of the Board in the event of:

(a)  Termination of the relationship with the grantee for cause including, but not limited to, fraud, theft, dishonesty and violation of Company policy;

(b)  Purchasing or selling securities of the Company without written authorization in accordance with the Company’s inside information guidelines then in effect;

(c)  Breaching any duty of confidentiality including that required by the Company’s inside information guidelines then in effect;

(d)  Competing with the Company;

(e)  Failure to execute the Company’s standard stock rights agreement; or

(f)  A finding by the Board that the grantee has acted against the interests of the Company.

The Board or the Compensation Committee may impose other forfeiture restrictions which are more or less restrictive and require a return of profits from the sale of Common Stock as part of said forfeiture provisions if such forfeiture provisions and/or return of provisions are contained in a Stock Rights agreement.

15CMC-8.31.2013-Ex 10(iii)(bb)

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TRANSITION AND SEPARATION AGREEMENT

This Transition and Separation Agreement (“Agreement”) is entered into this 28th day of October, 2013 by and between Commercial Metals Company, a Delaware corporation, with principal offices at 6565 N. MacArthur Blvd, Irving, Texas 75039 (the “Company”) and Ann J. Bruder, who resides at 701 Inwood Drive, Southlake, TX  76092 (“Executive”). The Company and the Executive are individually referred to herein as a “Party” and collectively as the “Parties”).

WHEREAS, the Company has employed Executive since September 17, 2007 through the present (the “Employment Relationship”), most recently as Senior Vice President of Law, Government Affairs and Global Compliance and General Counsel, and Executive has faithfully performed her responsibilities as an executive of the Company; and

WHEREAS, Executive and the Company entered into a Terms and Conditions of Stock Award, Employment and Separation agreement on June 1, 2010, as amended by that First Amendment to Employment Agreement dated February 1, 2013 (collectively, the “Employment Agreement”); and

WHEREAS, the Company and Executive entered into the Commercial Metals Company Executive Employment Continuity Agreement dated as of May 20, 2008 and amended and restated as of October 19, 2009 (collectively, the “EECA”); and

WHEREAS, Executive and the Company agree to Executive’s separation from employment effective November 25, 2013; and 

WHEREAS, the Parties now desire to enter into this Agreement to set forth the terms and conditions relating to the extinguishment of the Employment Relationship and the Parties herewith furthermore intend to settle all possible open issues in connection with the Employment Relationship and its termination; 

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth below, the Parties agree as follows:

1.    Executive and the Company have mutually agreed that Executive shall separate from her position as Senior Vice President of Law, Government Affairs and Global Compliance and General Counsel as well as any and all other officer and director positions with the Company and its subsidiaries effective as of October 22, 2013, and thereafter shall transition into, and continue employment with the Company, in a non-executive position until November 25, 2013 (the “Separation Date”), at which time her employment with the Company and its subsidiaries shall terminate.  The Company shall continue to employ Executive until the Separation Date; and her salary and all benefits will remain unchanged until such date, except as set forth in Paragraph 2(c) below.  Executive will not be required to be present in the company offices but agrees that her services shall be available to the Company as needed through the Separation Date and will be subject to the same standards of conduct and performance applicable to all officers and managers of the Company.  Other than as provided in this Agreement, Executive waives and agrees that she shall not receive any other compensation or benefits from the Company.   

2.    In consideration for (i) Executive’s release and waiver of claims and agreement to comply with the non-competition obligations referenced herein, (ii) Executive’s execution of this Agreement, (iii) an affirmation and release of claims (in the form of Attachment A) (the “Affirmation”) to be executed on or within 21 days after (but not before) the Separation Date, (iv) expiration of applicable revocation periods, and (vi) payroll tax withholding required by federal, state or local law, the Company shall pay Executive:

(a)        a payment in the gross amount of $830,000.00, which is equivalent to two years annual base salary, to be paid in a lump sum (and subject to payroll tax withholding required by applicable law), subject to Executive’s execution and non-revocation of this Agreement and the Affirmation, on the first regularly scheduled Company payroll date following the 40th day after the Separation Date (without any revocation of this Agreement or the Affirmation by Executive).  

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(b)        a payment in the gross amount of $111,000, which is equivalent to Executive’s annual performance bonus and based on the FY2013 Annual Performance Bonus Program as approved and amended by the Company’s Compensation Committee and paid on November 8, 2013, and subject to: (i) the Executive’s execution of this Agreement, (ii) appropriate revocation periods, and (iii) any and all applicable tax withholding.

(c)        health benefits and other perquisites the same as Executive presently receives through the Separation Date pursuant to the terms of the applicable plan documents as may be amended (except that Executive’s benefits with respect to the AAirpass program shall cease effective as of October 22, 2013), plus Company fully-subsidized COBRA coverage continuing for eighteen (18) months following the Separation Date.

(d)    To the extent permitted by the terms and conditions of the Commercial Metals Company’s Profit Sharing and 401(k) Plan, the Commercial Metals Companies 2005 Benefits Restoration Plan and the Commercial Metals Companies Benefit Restoration Plan established September 1, 1995, the Company shall credit Executive’s accounts in such plans for any employer contributions attributable to the plan year during which the Separation Date occurs that would have otherwise been made had she remained employed by the Company.  In addition, any previously unvested employer contributions to her account in such plans shall be vested in full on the Separation Date.

(e)        As approved by the Compensation Committee, the equity awards held by the Executive shall become vested and payable as shown below:
		
	(i)
	16,500 outstanding time-vested restricted stock units (“RSUs”) granted on June 3, 2010 shall become vested and the related shares of Company common stock shall be issued to Executive on the 40th day following the Separation Date, and deposited into Executive’s E*Trade account.

		
	(ii)
	2,509 of the 2,964 outstanding time-vested RSUs granted on January 18, 2011 shall become vested on a prorated basis through the Separation Date and the related shares of Company common stock shall be issued to Executive on the 40th day after the Separation Date (without any revocation of this Agreement or the Affirmation by Executive), and deposited into Executive’s E*Trade account, and the remaining RSUs shall be forfeited.

		
	(iii)
	In accordance with the terms of the Restricted Stock Unit Award Agreement dated November 23, 2011, Executive shall become vested on November 23, 2013 in 5,241 outstanding time-vested RSUs, and the related shares of Company common stock shall be issued to Executive, and deposited into Executive’s E*Trade account, and the remaining RSUs shall be forfeited.

		
	(iv)
	683 of the 16,073 outstanding time-vested RSUs granted on October 23, 2012 shall become vested on a prorated basis through the Separation Date and the related shares of Company common stock shall be issued to Executive on the 40th day after the Separation Date (without any revocation of this Agreement or the Affirmation by Executive), and deposited into Executive’s E*Trade account, and the remaining RSUs shall be forfeited.

		
	(v)
	Notwithstanding the provisions of Executive’s Performance Stock Unit Award Agreement dated November 23, 2011, mandating the forfeiture of unvested performance stock units (“PSUs”) upon Executive’s termination of employment with the Company, in the event the Company achieves all the performance-vesting criteria and the stock awards vest en mass, the Company will pay Executive the equivalent value of the prorated portion of the PSUs that are earned based on the achievement of such performance criteria, according to the calculation in the award agreement.  The Company agrees to use the closing price of Company common stock on the last day of the performance period ending on August 31, 2014 to value the prorated award and to pay the amount in cash no later than sixty (60) days following the last day of the performance period ending on August 31, 2014.  The actual number of PSUs that will vest will be based on the performance cycle results, and the remaining PSUs shall be forfeited.  For illustration purposes, should the Company’s performance achieve a target vesting, 

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Executive’s pro rata portion would yield a cash payment with respect to 13,993 shares, and Executive’s rights with respect to the remaining shares would be forfeited.

		
	(vi)
	Notwithstanding the provisions of Executive’s Performance Stock Unit Award Agreement dated October 23, 2012, mandating the forfeiture of unvested PSUs upon Executive’s termination of employment with the Company, in the event the Company achieves all of the performance-vesting criteria and the stock awards vest en mass, the Company will pay Executive the equivalent value of the prorated portion of the PSUs that are earned based on the achievement of such performance criteria, according to the calculation in the award agreement.  The Company agrees to use the closing price on the last day of the performance period ending on August 31, 2014 to value the prorated award and to issue the awards in stock payable no later than sixty (60) days following the last day of the performance period ending on August 31, 2015.  The actual number of PSUs that will vest will be based on the performance cycle results, and the remaining PSUs shall be forfeited.  For illustration purposes, should the Company’s performance achieve a target vesting, Executive’s pro rata portion would yield 8,727 shares, and Executive’s rights with respect to the remaining shares would be forfeited.

		
	(vii)
	In accordance with the terms of the Stock Appreciation Rights Agreement dated November 23, 2011, Executive shall become vested in 15,720 stock appreciation rights (“SARs”).  The remaining 15,721 SARs shall be forfeited. 

		
	(viii)
	The exercise period for the 13,000 SARs previously granted to Executive on May 20, 2008 which are now vested and outstanding shall expire at 5:00 p.m., Central time, on May 20, 2015.  

(f)    On or before the first regular payday following the Separation Date, the Company will pay Executive for twenty (20) days of accrued, unused vacation pay.

(g)    The Company and Executive agree that the EECA shall terminate and be of no further force or effect from and after the Separation Date.  Executive shall forfeit all entitlements she may have under the EECA as of the Separation Date.  Unless otherwise as stated below, the Employment Agreement shall terminate as of the Separation Date; provided however, that Paragraphs 9 through 17 of the Employment Agreement shall survive and continue in full force and effect.

3.    To the extent any benefits provided by the Company under Paragraph 2(c) are taxable to the Executive, such benefits, for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), shall be provided as separate monthly in-kind payments of those benefits. To the extent any such benefits are subject to and not otherwise exempt from Section 409A, the provision of such in-kind benefits during one calendar year shall not affect the in-kind benefits to be provided in another calendar year, and the rights to such in-kind benefits shall not be subject to liquidation or exchange for another benefit. With respect to reimbursement of expenses, the amount of expenses eligible for reimbursement during a calendar year shall not affect the expenses eligible for reimbursement in any other calendar year. The Company shall make all reimbursements and payments no later than the last day of the calendar year following the calendar year in which the expenses were incurred. 

4.    Executive agrees that the terms of her various restrictive covenants, as set forth in Paragraphs 9 through 15, are valid and enforceable. The Company shall have the right to discontinue all amounts payable under this Agreement, to recover all payments made under this Agreement from the date of any breach by Executive, and to obtain injunctive relief should Executive breach any of the covenants referenced herein.  

5.    In consideration of the mutual promises and covenants contained in this Agreement and after adequate opportunity to consult with legal counsel: 

(a)except as provided for in subpart (f) below or as otherwise prohibited by law, Executive for herself and each of her respective heirs, representatives, agents, successors, and assigns, irrevocably and unconditionally 

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releases and forever discharges the Company and its respective current and former officers, directors, shareholders, employees, representatives, heirs, attorneys, and agents, as well as its respective predecessors, parent companies, subsidiaries, affiliates, divisions, successors, and assigns and its respective current and former officers, directors, shareholders, employees, representatives, attorneys, and agents (collectively the “Released Parties”), from any and all causes of action, claims, actions, rights, judgments, obligations, damages, demands, accountings, or liabilities of whatever kind or character, which Executive may have against them, or any of them, by reason of or arising out of, touching upon, or concerning Executive’s employment with the Company or her separation from the Company or the Employment Agreement, that exist or may exist as of the date Executive signs this Agreement. Executive acknowledges that this release of claims specifically includes, but is not limited to, any and all claims for fraud; breach of contract; breach of the implied covenant of good faith and fair dealing; inducement of breach; interference with contractual rights; wrongful or unlawful discharge or demotion; violation of public policy; invasion of privacy; intentional or negligent infliction of emotional distress; intentional or negligent misrepresentation; conspiracy; failure to pay wages, benefits, vacation pay, expenses, severance pay, attorneys’ fees, or other compensation of any sort; defamation; unlawful effort to prevent employment; discrimination on the basis of race, color, sex, sexual orientation, national origin, ancestry, religion, age, disability, medical condition, or marital status; any whistleblower protection or retaliation claim; any claim under Title VII of the Civil Rights Act of 1964 (Title VII, as amended), 42 U.S.C. § 2000, et seq., the Civil Rights Act of 1991, the Age Discrimination in Employment Act (“ADEA’’), 29 U.S.C. § 621, et seq., the Older Workers Benefit Protection Act (“OWBPA”), 29 U.S.C. § 626(f), the Equal Pay Act, the Family and Medical Leave Act (“FMLA”), the Fair Labor Standards Act (“FLSA”), the Americans with Disabilities Act (“ADA”), the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Occupational Safety and Health Act (“OSHA”) or any other health and/or safety laws, statutes, or regulations, the Employee Retirement Income Security Act of 1974 (“ERISA”), the Internal Revenue Code of 1986, as amended; the Sarbanes-Oxley Act of 2002 (“SOX”), the Lilly Ledbetter Fair Pay Act of 2009, the Genetic Information and Nondiscrimination Act (“GINA”) and any and all other foreign, federal, state, or local laws, common law, or case law, including but not limited to all statutes, regulations, common law.  Notwithstanding the preceding sentence or any other provision of this Agreement, this release is not intended to interfere with Executive’s right to file a charge with the Equal Employment Opportunity Commission (the “EEOC”) in connection with any claim Executive believes she may have against the Company or its affiliates.  However, by executing this Agreement, Executive hereby waives the right to recover in any proceeding she may bring before the EEOC or any state human rights commission or in any proceeding brought by the EEOC or any state human rights commission (or any other agency) on Executive’s behalf.  This release shall not apply to any of the Company’s obligations under this Agreement, COBRA continuation coverage benefits or any accrued and vested benefits under an employee benefit plan subject to ERISA (other than any severance benefits).  

(b)Executive agrees that she shall not file a lawsuit or adversarial proceeding of any kind with any court, agency or arbitral forum against the Company or any Released Parties, asserting any claims that are released in this Agreement. Executive represents and agrees that, prior to signing this Agreement, she has not filed or pursued any complaints, charges, or lawsuits of any kind with any court, governmental or administrative agency, or arbitral forum against the Company, or any other person or entity released under Paragraph 5(a) above, asserting any claims whatsoever.  Executive understands and acknowledges that, in the event she commences any proceeding in violation of this Agreement, she waives and is estopped from receiving any monetary award or other legal or equitable relief in such proceeding. 

(c)Executive represents and warrants that Executive is not aware of any (i) violations, allegations or claims that the Company has violated any federal, state, local or foreign law or regulation of any kind, or (ii) any facts or circumstances relating to any alleged violations, allegations or claims that the Company has violated any federal, state, local or foreign law or regulation of any kind, of which Executive has not previously made the executive leadership team aware.  If Executive learns of any such information, Executive shall immediately inform the Company’s General Counsel.

(d)Executive represents and warrants that she has not assigned or subrogated any of her rights, claims, and/or causes of action, including any claims referenced in this Agreement, or authorized any other person or entity to assert such claim or claims on her behalf, and she agrees to indemnify and hold harmless the Company against any assignment of said rights, claims, and/or causes of action. 

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(e)If Executive should breach any of her obligations under this Agreement or the Employment Agreement, the Company shall have no further obligation to make the payments described in this Agreement. 

(f)Nothing in this Agreement shall affect or apply to Executive’s rights and benefits in and to: (i) the Commercial Metals Company’s Profit Sharing and 401(k) Plan, the Commercial Metals Companies 2005 Benefit Restoration Plan and the Commercial Metals Companies Benefit Restoration Plan established September 1, 1995. Executive will retain all rights and benefits in accordance with applicable plan documents. Executive understands and acknowledges that, consistent with the terms of the plans referenced above, she will be eligible for and entitled to all future payments or distributions to which Executive is or may be entitled to receive as a result of her participation in these plans for plan years or performance periods ending after the Separation Date. Executive’s active participation in all such plans and programs will cease on the Separation Date, however, consistent with the terms of the plans referenced above all benefits or compensation under such plans and programs that Executive has earned or in the future may be credited to Executive’s account or to which Executive will become entitled to receive under such plans and programs by virtue of her service through the Separation Date will be payable pursuant to the terms of such plans; and (ii) payment of accrued, unpaid salary and reimbursement of eligible business expenses through the Separation Date.

6.    Executive shall, immediately following execution of this Agreement, to the extent not previously returned or delivered: (a) return all equipment, records, files, documents, data, programs or other materials and property in Executive’s possession, custody or control which relates or belongs to the Company or any one or more of its affiliates, including, without limitation, all, Confidential Information (defined below), computer equipment, access codes, messaging devices, credit cards, cell phones, keys and access cards; and (b) deliver all original and copies of confidential information, electronic data, notes, materials, records, plans, data or other documents, files or programs (whether stored in paper form, computer form, digital form, electronically or otherwise, on Company equipment or Executive’s personal equipment) that relate or refer in any to (1) the Company or any one or more of its affiliates, its business or its employees, or (2) the Company’s Confidential Information or similar information.  By signing this Agreement, Executive represents and warrants that Executive has not retained and has or shall timely return and deliver all the items described or referenced in subsections (a) or (b) above; and, that should Executive later discover additional items described or referenced in subsections (a) or (b) above, Executive shall promptly notify the Company and return/deliver such items to the Company. Confidential Information means information (1) disclosed to or known by Executive as a consequence of or through her employment with the Company or one of its affiliates; and (2) which relates to any aspect of the Company’s or an affiliate’s business, research, or development. “Confidential Information” includes, but is not limited to, the Company’s or an affiliate’s trade secrets, proprietary information, business plans, marketing plans, financial information, employee performance, compensation and benefit information, cost and pricing information, identity and information pertaining to customers, suppliers and vendors, and their purchasing history with the Company, any business or technical information, design, process, procedure, formula, improvement, or any portion or phase thereof, that is owned by or has, at the time of termination, been used by the Company, any information related to the development of products and production processes, any information concerning proposed new products and production processes, any information concerning marketing processes, market feasibility studies, cost data, profit plans, capital plans and proposed or existing marketing techniques or plans, financial information, including, without limitation, information set forth in internal records, files and ledgers, or incorporated in profit and loss statements, fiscal reports, business plans or other financial or business reports, and information provided to the Company or an affiliate by a third party under restrictions against disclosure or use by the Company or others.  

7.    Executive shall not, directly or indirectly, disclose, communicate, or publish in any format any libelous, defamatory, or disparaging information concerning the Company, its executives, officers, Board of Directors, its parents, subsidiaries, affiliates, employees, operations, technology, proprietary or technical information, strategies or business whatsoever, or cause others to disclose, communicate, or publish any disparaging information concerning the same.  The Company agrees that the individuals who held positions on the Company’s “Senior Leadership Team” (as such term is utilized within the Company) as of October 22, 2013, will refrain at all times while they are employed by the Company, from directly or indirectly disclosing, communicating, or publishing in any format any libelous, defamatory, or disparaging information concerning Executive, directed to any person or entity other than a member of the Company’s Board of Directors or any member of the Senior Leadership Team.  Notwithstanding anything to the contrary in this Paragraph 7, nothing shall prohibit Executive, the Company or any member of the Senior Leadership Team from giving 

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truthful testimony or evidence to a governmental entity, or if properly subpoenaed or otherwise required to do so under applicable law.

8.    Executive hereby agrees to provide her full cooperation, at the request of the Company, with any of the Released Parties in the transitioning of her job duties and responsibilities, any and all investigations or other legal, equitable or business matters or proceedings which involve any matters for which Executive worked on or had responsibility during her employment with the Company.  Executive also agrees to be reasonably available to the Company or its representatives to provide general advice or assistance as requested by the Company.  This includes but is not limited to testifying (and preparing to testify) as a witness in any proceeding or otherwise providing information or reasonable assistance to the Company in connection with any investigation, claim or suit, and cooperating with the Company regarding any investigation, litigation, claims or other disputed items involving the Company that relate to matters within the knowledge or responsibility of Executive.  Specifically, Executive agrees (i) to meet with the Company’s representatives, its counsel or other designees at reasonable times and places with respect to any items within the scope of this provision; (ii) to provide truthful testimony regarding same to any court, agency or other adjudicatory body; (iii) to provide the Company with immediate notice of contact or subpoena by any non-governmental adverse party, and (iv) to not voluntarily assist any such non-governmental adverse party or such non-governmental adverse party’s representatives.  Executive acknowledges and understands that her obligations of cooperation under this Paragraph are not limited in time and may include, but shall not be limited to, the need for or availability for testimony.  Executive shall receive no additional compensation for time spent assisting the Company pursuant to this Paragraph 8.

9.    In consideration of the Company’s promises in Paragraph 2(e) and otherwise in this Agreement, Executive hereby reaffirms, and shall fully comply with and abide by, the covenants in Paragraph 9 (“Non-Competition, Non-Solicitation, and Confidentiality) of the Employment Agreement, and that Paragraphs 9, 10 (“Remedies”), 11 (“Reformation), 12 (“Tolling”) and 13 (“Notice to Future Employers”) of the Employment Agreement shall survive this Agreement (if applicable) and Executive’s termination from employment; Executive and the Company agree to the following:

(a)The restricted period for Executive’s agreement not to compete with the Company, contained in Paragraph 9(a) of the Employment Agreement, shall continue from the present through May 25, 2015. 

(b)For purposes of Paragraph 9 of the Employment Agreement, the competitive businesses referenced in Paragraph 9 of the Employment Agreement are all business entities engaged in the steel manufacturing, steel fabrication steel trading, steel distribution, metals heat treating or metals recycling industries, including but not limited to those companies identified as Peer Group members in the Company’s annual 2013 Proxy Statement.  

(c)Executive further agrees that from the present through May 25, 2015, she shall not, without the prior written consent of the Chief Executive Officer, consult with, provide information to, or perform services for any investment firm, financier, or other person or entity which Executive knows, after reasonable inquiry, is considering or pursuing acquisition of the Company or an investment in the Company of more than $25,000.00.

(d)The restricted period for Executive’s agreement not to solicit certain customers and employees, as contained in Paragraph 9(c) of the Employment Agreement, continue the present through November 25, 2015; and

(e)Without waiving the Company’s right to enforce the foregoing provisions of this Paragraph 9(a) and Paragraph 9 of the Employment Agreement, the Company agrees that Executive may request a reasonable waiver of these two provisions.

10.    If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect and such invalid or unenforceable provision shall be reformulated by such court to preserve the intent of the Parties hereto. 

11.    All of the terms and provisions contained in this Agreement shall inure to the benefit of and shall be binding upon the Parties hereto and their respective heirs, legal representatives, successors, and assigns.

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12.    This Agreement may be executed in counterparts, each of which shall be deemed an original. 

13.    This Agreement shall not in any way be construed as an admission that the Company, Executive, or any other individual or entity has any liability to or acted wrongfully in any way with respect to Executive, the Company, or any other person. 

14.    The Company represents that it has the authority to enter into this Agreement and has obtained all necessary corporate approvals necessary to do so. Executive represents and warrants that she has been advised in writing to consult with an attorney before signing this Agreement; that she has had an opportunity to be represented by independent legal counsel of her own choosing throughout all of the negotiations preceding the execution of this Agreement; that she has executed this Agreement after the opportunity for consultation with her independent legal counsel; that she is of sound mind and body, competent to enter into this Agreement, and is fully capable of understanding the terms and conditions of this Agreement; that she has carefully read this Agreement in its entirety; that she has had reasonable opportunity to have the provisions of the Agreement explained to her by her own counsel; that she fully understands the terms and significance of all provisions of this Agreement; that she voluntarily assents to all the terms and conditions contained in this Agreement; and that she is signing the Agreement of her own force and will, without any coercion or duress.

15.    Except as otherwise specifically provided herein, this Agreement and Paragraphs 9 (“Non-Competition, Non-Solicitation, and Confidentiality), 10 (“Remedies”), 11 (“Reformation), 12 (“Tolling”) and 13 (“Notice to Future Employers”) and the other surviving provisions of the Employment Agreement constitute the entire agreement and understanding of the Parties with respect to the subject matter hereof and with respect to Executive’s employment with the Company, contains all the covenants, promises, representations, warranties, and agreements between the Parties with respect to Executive’s separation from the Company and its subsidiaries and all positions therewith, and supersedes all prior employment or severance or other agreements between Executive and the Company and its subsidiaries, whether written or oral, or any of its predecessors or affiliates. Except as otherwise provided herein, Executive acknowledges that no representation, inducement, promise, or agreement, oral or written, has been made by either Party, or by anyone acting on behalf of either Party, which is not embodied herein, and that no agreement, statement, or promise relating to Executive’s separation from the Company and its subsidiaries that is not contained in this Agreement shall be valid or binding.  Executive represents and acknowledges that in executing this Agreement, she does not rely, and has not relied, upon any representation(s) by the Company or its agents except as expressly contained in this Agreement.  Any modification of this Agreement will be effective only if it is in writing and signed by both Parties. 

16.    No failure by either Party hereto at any time to give notice of any breach by the other Party of, or to require compliance with, any condition or provision of this Agreement shall (i) be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time or (ii) preclude insistence upon strict compliance in the future. 

17.    Executive agrees that, as a condition to receipt of the consideration described herein above, she shall sign an affirmation of the waiver and release contained in this Agreement on the Separation Date.  The form of affirmation to be signed by Executive is attached as Attachment A hereto. 

18.    This Agreement is entered into under, and shall be governed for all purposes by; the laws of the State of Texas without giving effect to any choice of law principles and venue over any claim relating to this Agreement shall rest exclusively in the state district courts of Dallas County, Texas or the United States District Court for the Northern District of Texas, Dallas Division.

19.    Executive, by Executive’s free and voluntary act of signing below, (i) acknowledges that she has been given a period of at least twenty-one (21) days to consider whether to agree to the terms contained herein, (ii) acknowledges that she has been advised in writing to consult with an attorney prior to executing this Agreement, (iii) acknowledges that she understands that this Agreement specifically releases and waives all rights and claims Executive may have under the ADEA on or prior to the date on which Executive signs this Agreement, and for valuable consideration to 

Execution Copy

which she otherwise would not be entitled, and (iv) agrees to all of the terms of this Agreement and intends to be legally bound thereby.  Furthermore, Executive acknowledges that the promises and benefits provided for in Paragraphs 2 of this Agreement will be delayed until this Agreement (including Attachment A) becomes effective, enforceable and irrevocable.  This Agreement will become effective, enforceable and irrevocable on the eighth day after the date on which it is executed by Executive.  During the seven-day period following the date on which Executive executes this Agreement, Executive may revoke her agreement to accept the terms hereof by indicating her revocation in writing to the General Counsel of the Company.  If Executive exercises her right to revoke hereunder, Executive shall not be eligible to receive and shall forfeit her right to receive any of the payments or benefits provided for herein, and to the extent such payments or benefits have already been made, Executive agrees that she will immediately reimburse the Company for the amounts of such promises and benefits.

[Signature Page to Follow]

Execution Copy

WHEREFORE, the Parties, by their signatures below, evidence their agreement to the provisions stated above: 

COMMERCIAL METALS COMPANY

/s/ Joseph Alvarado
                                            
Joseph AlvaradoPresident and Chief Executive Officer
Date:     October 28, 2013                

EXECUTIVE

/s/ Ann J. Bruder
                                            
Ann J. Bruder
                        
Date:     October 28, 2013                

Execution Copy

ATTACHMENT A

AFFIRMATION AND ADDITIONAL RELEASE 
(“AFFIRMATION”)

By my signature below, I hereby re-execute and affirm the Transition and Separation Agreement, originally signed by me on October  __, 2013 (the “Agreement”), including, but not limited to, the release and waiver of claims to the extent set forth in the Agreement.  Further, I hereby release and waive any and all claims described in Section 5 of the Agreement that exist or may exist on or prior to the date I sign this Affirmation (including, without limitation, claims under the ADEA).  I understand that I (a) may not sign this Affirmation until on or after my Separation Date and (b) must return a signed copy of this Affirmation to the Company within 21 days after my Separation Date.

Executive, by Executive’s free and voluntary act of signing below, (i) acknowledges that she has been given a period of at least twenty-one (21) days to consider whether to agree to the terms contained herein, (ii) acknowledges that she has been advised in writing to consult with an attorney prior to executing this Affirmation, (iii) acknowledges that she understands that this Agreement specifically releases and waives all rights and claims Executive may have under the ADEA on or prior to the date on which Executive signs this Affirmation, and for valuable consideration to which she otherwise would not be entitled, and (iv) agrees to all of the terms of this Affirmation and the Agreement and intends to be legally bound thereby.  

Furthermore, Executive acknowledges that the promises and benefits provided for in Paragraph 2 of the Agreement will be delayed until the Agreement and this Affirmation become effective, enforceable and irrevocable.  This Affirmation will become effective, enforceable and irrevocable on the eighth day after the date on which it is executed by Executive.  During the seven-day period following the date on which Executive executes this Affirmation,  Executive may revoke her agreement to accept the terms of this Affirmation by indicating her revocation in writing to the General Counsel of the Company.  If Executive exercises her right to revoke this Affirmation, Executive shall not be eligible to receive and shall forfeit her right to receive any of the payments or benefits provided in the Agreement, and to the extent such payments or benefits have already been made, Executive agrees that she will immediately reimburse the Company for the amounts of such promises and benefits.

Terms not defined in this Affirmation shall have the same meaning as defined in the Agreement.
     

EXECUTIVE

                                            
Ann J. Bruder
Date: __________, 2013

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