Document:

Exhibit 4.5

 

FORTY-FIRST SUPPLEMENTAL INDENTURE FOR
 ADDITIONAL SUBSIDIARY GUARANTEES

 

FORTY-FIRST SUPPLEMENTAL INDENTURE (this “Supplemental Indenture for Additional Guarantees”), dated as of December 15, 2010, among Cottonwood Development LLC, Cottonwood Generating Partners II LLC, Cottonwood Generating Partners I LLC, Cottonwood Generating Partners III LLC, Cottonwood Energy Company LP, Cottonwood Technology Partners LP and Green Mountain Energy Company (each a “Guaranteeing Subsidiary” and together the “Guaranteeing Subsidiaries”), each an indirect subsidiary of NRG Energy, Inc., a Delaware corporation (the “Company”), the Company, the Existing Guarantors set forth on the signature page hereto (the “Existing Guarantors”) and Law Debenture Trust Company of New York, as trustee under the indentures referred to below (the “Trustee”).

 

W I T N E S S E T H

 

WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the “Base Indenture”), dated as of February 2, 2006, between the Company and the Trustee, as amended by a Thirty-Sixth Supplemental Indenture (the “Thirty-Sixth Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), dated as of August 20, 2010, among the Company, the Guarantors named therein and the Trustee, providing for the original issuance of an aggregate principal amount of $1,100 million of 8.25% Senior Notes due 2020 (the “Initial  Notes”), and, subject to the terms of the Thirty-Sixth Supplemental Indenture, future unlimited issuances of 8.25% Senior Notes due 2020 (the “Additional Notes,” and together with the Initial Notes, the “Notes”);

 

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiaries shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiaries shall unconditionally guarantee all of the Company’s Obligations under the Notes and the Indenture (the “Additional Guarantees”); and

 

WHEREAS, pursuant to Section 4.17 of the Thirty-Sixth Supplemental Indenture, the Trustee, the Company and the Existing Guarantors are authorized and required to execute and deliver this Supplemental Indenture for Additional Guarantees.

 

NOW THEREFORE, in consideration of the foregoing and for good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiaries, the Trustee, the Company and the Existing Guarantors mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

 

1.             Capitalized Terms.  Unless otherwise defined in this Supplemental Indenture for Additional Guarantees, capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

 

2.             Agreement to be Bound; Guarantee.  The Guaranteeing Subsidiaries hereby become parties to the Supplemental Indenture as Guarantors and as such will have all of the rights and be subject to all of the Obligations and agreements of a Guarantor under the Indenture.  The Guaranteeing Subsidiaries hereby agree to be bound by all of the provisions of the Supplemental Indenture applicable to a Guarantor and to perform all of the Obligations and agreements of a Guarantor under the Supplemental Indenture.  In furtherance of the foregoing, the Guaranteeing Subsidiaries shall be deemed Guarantors for purposes of Article 10 of the Supplemental Indenture, including, without limitation, Section 10.02 thereof.

 

1

 

3.             NEW YORK LAW TO GOVERN.  THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE FOR ADDITIONAL GUARANTEES BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

4.             Counterparts.  The parties may sign any number of copies of this Supplemental Indenture for Additional Guarantees.  Each signed copy shall be an original, but all of them together represent the same agreement.

 

5.             Effect of Headings.  The Section headings herein are for convenience only and shall not affect the construction hereof.

 

6.             The Trustee.  The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture for Additional Guarantees or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiaries and the Company.

 

7.             Ratification of Indenture; Supplemental Indenture for Additional Guarantees Part of Indenture.  Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect.  This Supplemental Indenture for Additional Guarantees shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered shall by bound hereby.

 

2

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture for Additional Guarantees to be duly executed and attested, all as of the date first above written.

 

 

	
 
  	
GUARANTEEING SUBSIDIARIES:
  
	
 
  	
 
  
	
 
  	
COTTONWOOD ENERGY COMPANY LP
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ Jeffrey M. Baudier
  
	
 
  	
Name:
  	
Jeffrey M. Baudier
  
	
 
  	
Title:
  	
President
  
	
 
  	
 
  
	
 
  	
COTTONWOOD TECHNOLOGY PARTNERS LP
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ Jeffrey M. Baudier
  
	
 
  	
Name:
  	
Jeffrey M. Baudier
  
	
 
  	
Title:
  	
President
  
	
 
  	
 
  
	
 
  	
COTTONWOOD DEVELOPMENT LLC
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ Jeffrey M. Baudier
  
	
 
  	
Name:
  	
Jeffrey M. Baudier
  
	
 
  	
Title:
  	
President
  
	
 
  	
 
  
	
 
  	
COTTONWOOD GENERATING PARTNERS I LLC
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ Jeffrey M. Baudier
  
	
 
  	
Name:
  	
Jeffrey M. Baudier
  
	
 
  	
Title:
  	
President
  
	
 
  	
 
  
	
 
  	
COTTONWOOD GENERATING PARTNERS II LLC
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ Jeffrey M. Baudier
  
	
 
  	
Name:
  	
Jeffrey M. Baudier
  
	
 
  	
Title:
  	
President
  
	
 
  	
 
  
	
 
  	
COTTONWOOD GENERATING PARTNERS III LLC
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ Jeffrey M. Baudier
  
	
 
  	
Name:
  	
Jeffrey M. Baudier
  
	
 
  	
Title:
  	
President
  

 

Signature Page to Forty-First Supplemental Indenture

 

 

	
 
  	
GREEN MOUNTAIN ENERGY COMPANY
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ Robert P. Thomas
  
	
 
  	
Name:
  	
Robert P. Thomas
  
	
 
  	
Title:
  	
Chief Legal Officer and Secretary
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
ISSUER:
  
	
 
  	
 
  
	
 
  	
NRG ENERGY, INC.
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ Christopher Sotos
  
	
 
  	
Name:
  	
Christopher Sotos
  
	
 
  	
Title:
  	
Vice President & Treasurer
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
EXISTING GUARANTORS:
  
	
 
  	
 
  
	
 
  	
ARTHUR KILL POWER LLC
  
	
 
  	
ASTORIA GAS TURBINE POWER LLC
  
	
 
  	
BERRIANS I GAS TURBINE POWER LLC
  
	
 
  	
BIG CAJUN II UNIT 4 LLC
  
	
 
  	
CABRILLO POWER I LLC
  
	
 
  	
CABRILLO POWER II LLC
  
	
 
  	
CARBON MANAGEMENT SOLUTIONS LLC
  
	
 
  	
CLEAN EDGE ENERGY LLC
  
	
 
  	
CONEMAUGH POWER LLC
  
	
 
  	
CONNECTICUT JET POWER LLC
  
	
 
  	
DEVON POWER LLC
  
	
 
  	
DUNKIRK POWER LLC
  
	
 
  	
EASTERN SIERRA ENERGY COMPANY
  
	
 
  	
ELBOW CREEK WIND POWER LLC
  
	
 
  	
EL SEGUNDO POWER LLC
  
	
 
  	
EL SEGUNDO POWER II LLC
  
	
 
  	
HUNTLEY IGCC LLC
  
	
 
  	
HUNTLEY POWER LLC
  
	
 
  	
INDIAN RIVER IGCC LLC
  
	
 
  	
INDIAN RIVER OPERATIONS INC.
  
	
 
  	
INDIAN RIVER POWER LLC
  
	
 
  	
JAMES RIVER POWER LLC
  
	
 
  	
KEYSTONE POWER LLC
  
	
 
  	
LANGFORD WIND POWER, LLC
  
	
 
  	
LOUISIANA GENERATING LLC
  
	
 
  	
MIDDLETOWN POWER LLC
  
	
 
  	
MONTVILLE IGCC LLC
  
	
 
  	
MONTVILLE POWER LLC
  
	
 
  	
NEO CORPORATION
  
	
 
  	
NEO FREEHOLD-GEN LLC
  

 

Signature Page to Forty-First Supplemental Indenture

 

 

	
 
  	
NEO POWER SERVICES INC.
  
	
 
  	
NEW GENCO GP, LLC
  
	
 
  	
NORWALK POWER LLC
  
	
 
  	
NRG AFFILIATE SERVICES INC.
  
	
 
  	
NRG ARTESIAN ENERGY LLC
  
	
 
  	
NRG ARTHUR KILL OPERATIONS INC.
  
	
 
  	
NRG ASTORIA GAS TURBINE OPERATIONS, INC.
  
	
 
  	
NRG BAYOU COVE LLC
  
	
 
  	
NRG CABRILLO POWER OPERATIONS INC.
  
	
 
  	
NRG CALIFORNIA PEAKER OPERATIONS LLC
  
	
 
  	
NRG CEDAR BAYOU DEVELOPMENT COMPANY, LLC
  
	
 
  	
NRG CONNECTICUT AFFILIATE SERVICES INC.
  
	
 
  	
NRG DEVON OPERATIONS INC.
  
	
 
  	
NRG DUNKIRK OPERATIONS INC.
  
	
 
  	
NRG EL SEGUNDO OPERATIONS INC.
  
	
 
  	
NRG GENERATION HOLDINGS, INC.
  
	
 
  	
NRG HUNTLEY OPERATIONS INC.
  
	
 
  	
NRG INTERNATIONAL LLC
  
	
 
  	
NRG MIDATLANTIC AFFILIATE SERVICES INC.
  
	
 
  	
NRG MIDDLETOWN OPERATIONS INC.
  
	
 
  	
NRG MONTVILLE OPERATIONS INC.
  
	
 
  	
NRG NEW JERSEY ENERGY SALES LLC
  
	
 
  	
NRG NEW ROADS HOLDINGS LLC
  
	
 
  	
NRG NORTH CENTRAL OPERATIONS INC.
  
	
 
  	
NRG NORTHEAST AFFILIATE SERVICES INC.
  
	
 
  	
NRG NORWALK HARBOR OPERATIONS INC.
  
	
 
  	
NRG OPERATING SERVICES, INC.
  
	
 
  	
NRG OSWEGO HARBOR POWER OPERATIONS INC.
  
	
 
  	
NRG POWER MARKETING LLC
  
	
 
  	
NRG RETAIL LLC
  
	
 
  	
NRG SAGUARO OPERATIONS INC.
  
	
 
  	
NRG SOUTH CENTRAL AFFILIATE SERVICES INC.
  
	
 
  	
NRG SOUTH CENTRAL GENERATING LLC
  
	
 
  	
NRG SOUTH CENTRAL OPERATIONS INC.
  
	
 
  	
NRG TEXAS C&I SUPPLY LLC
  
	
 
  	
NRG TEXAS LLC
  
	
 
  	
NRG TEXAS HOLDING INC.
  
	
 
  	
NRG TEXAS POWER LLC
  
	
 
  	
NRG WEST COAST LLC
  
	
 
  	
NRG WESTERN AFFILIATE SERVICES INC.
  
	
 
  	
OSWEGO HARBOR POWER LLC
  
	
 
  	
PENNYWISE POWER LLC
  
	
 
  	
RELIANT ENERGY POWER SUPPLY, LLC
  
	
 
  	
RELIANT ENERGY RETAIL HOLDINGS, LLC
  
	
 
  	
RELIANT ENERGY RETAIL SERVICES, LLC
  
	
 
  	
RELIANT ENERGY TEXAS RETAIL, LLC
  
	
 
  	
RE RETAIL RECEIVABLES, LLC
  
	
 
  	
RERH HOLDINGS, LLC
  
	
 
  	
SAGUARO POWER LLC
  
	
 
  	
SOMERSET OPERATIONS INC.
  
	
 
  	
SOMERSET POWER LLC
  

 

Signature Page to Forty-First Supplemental Indenture

 

 

	
 
  	
TEXAS GENCO FINANCING CORP.
  
	
 
  	
TEXAS GENCO GP, LLC
  
	
 
  	
TEXAS GENCO HOLDINGS, INC.
  
	
 
  	
TEXAS GENCO OPERATING SERVICES, LLC
  
	
 
  	
VIENNA OPERATIONS INC.
  
	
 
  	
VIENNA POWER LLC
  
	
 
  	
WCP (GENERATION) HOLDINGS LLC
  
	
 
  	
WEST COAST POWER LLC
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ Christopher Sotos
  
	
 
  	
Name:
  	
Christopher Sotos
  
	
 
  	
Title:
  	
Treasurer
  
	
 
  	
 
  
	
 
  	
GCP FUNDING COMPANY, LLC
  
	
 
  	
TEXAS GENCO LP, LLC
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ Christopher Sotos
  
	
 
  	
Name:
  	
Christopher Sotos
  
	
 
  	
Title:
  	
Management Board Member
  
	
 
  	
 
  
	
 
  	
NRG ENERGY SERVICES LLC
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ Michael R. Carroll
  
	
 
  	
Name:
  	
Michael R. Carroll
  
	
 
  	
Title
  	
President
  
	
 
  	
 
  
	
 
  	
NRG SOUTH TEXAS LP
  
	
 
  	
 
  
	
 
  	
By: Texas Genco GP, LLC, its General Partner
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ Christopher Sotos
  
	
 
  	
Name:
  	
Christopher Sotos
  
	
 
  	
Title:
  	
Vice President & Treasurer
  
	
 
  	
 
  
	
 
  	
TEXAS GENCO SERVICES, LP
  
	
 
  	
 
  
	
 
  	
By: New Genco GP, LLC, its General Partner
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ Christopher Sotos
  
	
 
  	
Name:
  	
Christopher Sotos
  
	
 
  	
Title:
  	
Vice President & Treasurer
  

 

Signature Page to Forty-First Supplemental Indenture

 

 

	
 
  	
 
  	
NRG CONSTRUCTION LLC
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
By:
  	
/s/ Rachel Smith
  
	
 
  	
 
  	
Name:
  	
Rachel Smith
  
	
 
  	
 
  	
Title:
  	
Treasurer
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  
	
Attest:
  	
 
  	
 
  
	
 
  	
 
  	
 
  
	
By:
  	
/s/ Tanuja M. Dehne
  	
 
  	
 
  
	
Name:
  	
Tanuja M. Dehne
  	
 
  	
 
  
	
Title:
  	
Corporate Secretary
  	
 
  	
 
  

 

Signature Page to Forty-First Supplemental Indenture

 

 

	
 
  	
LAW DEBENTURE TRUST COMPANY OF NEW YORK,
  
	
 
  	
  as Trustee
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ James D. Heaney
  
	
 
  	
Name:
  	
James D. Heaney
  
	
 
  	
Title:
  	
Managing Director
  

 

Signature Page to Forty-First Supplemental IndentureExhibit 4.3

 

 

GERDAU
S.A.

 

Equity
Incentive Plan

 

Effective
August 30, 2010

 

 

 

Gerdau
S.A.

 

Equity
Incentive Plan

 

ARTICLE 1

PURPOSE

 

1.1          Purpose

 

The purpose of this
Plan is to assist the Company, a subsidiary of Gerdau S.A., to attract, retain
and motivate key employees, directors, officers and consultants through
retention and performance related incentives, thereby advancing the interests
of the Company and its shareholders.

 

ARTICLE 2

INTERPRETATION

 

2.1          Definitions

 

When used herein,
unless the context otherwise requires, the following terms have the indicated
meanings, respectively:

 

“ADS”
means
an American Depositary Share of Gerdau S.A. which represents a right to receive
a preferred share of Gerdau S.A.

 

“Affiliate”
means
an entity which is an “affiliate” of the Company for the purposes of National
Instrument 45-106 Prospectus and Registration Exemptions as amended or replaced
from time to time.

 

“Associate”
has
the meaning set forth in the Securities Act
(Ontario), as amended from time to time.

 

“Award” means any Option, Stock
Appreciation Right, Deferred Share Unit, Restricted Share Unit, Performance
Share Unit, Restricted Stock, or Other Share-Based Award granted under this
Plan.

 

“Award
Agreement” means an agreement between a Participant and the Company in the form
used by the Company from time to time in accordance with its policies and
practices, including forms sent and/or received electronically, subject to any
amendments or additions in the discretion of the Committee evidencing the terms
and conditions on which an Award has been granted under this Plan.

 

“Black
Out Period” means a time when, pursuant to the policies of Gerdau S.A., any
securities of Gerdau S.A. may not be traded by certain persons designated by
Gerdau S.A., including any holder of an Award, but does not include any period
when a regulator has halted trading in securities of Gerdau S.A.

 

 

“Board”
means
the board of directors of Gerdau S.A.

 

“Business
Day”
means a day, other than a Saturday or Sunday, on which the New York Stock
Exchange is open for trading.

 

“CBCA”
means
the Canada Business Corporations Act and the
regulations promulgated thereunder, both as amended from time to time.

 

“Change
in Control” means the happening of any of the following events:

 

(i)            any transaction pursuant to
which (A) the Company goes out of existence by any means, except for a
corporate transaction or reorganization in which the Gerdau SA Shareholders
continue to hold more than 50% of the then issued and outstanding voting
securities or in which the proportionate voting power among holders of
securities of the entity resulting from such corporate transaction or
reorganization is substantially the same as the proportionate voting power of
such holders of Company voting securities immediately prior to such corporate
transaction or reorganization or (B) any Person or any group of two or
more Persons acting jointly or in concert (other than the Gerdau SA
Shareholders, the Company, a wholly-owned Subsidiary of the Company, an
employee benefit plan of the Company or of any of its wholly-owned
Subsidiaries, including the trustee of any such plan acting as trustee),
hereafter acquires the direct or indirect “beneficial ownership” (as defined by
the CBCA) of, or acquires the right to exercise control or direction over,
securities of the Company representing more than 50% of the then issued and
outstanding voting securities in any manner whatsoever, including, without
limitation, as a result of a take-over bid, an exchange of securities, an
amalgamation of the Company with any other entity, an arrangement, a capital
reorganization or any other business combination or reorganization;

 

(ii)           the sale, assignment or
other transfer of all or substantially all of the assets of the Company to a
Person other than to the Gerdau SA Shareholders or to a wholly-owned Subsidiary
of the Company;

 

(iii)          the dissolution or
liquidation of the Company except in connection with the distribution of assets
of the Company to the Gerdau SA Shareholders or to one or more Persons which
were wholly-owned Subsidiaries of the Company immediately prior to such event;

 

(iv)          the occurrence of a
transaction requiring approval of the Company’s shareholders whereby the
Company is acquired through consolidation, merger, exchange of securities,
purchase of assets, amalgamation, arrangement or otherwise by any other Person
(other than a short form amalgamation or exchange of securities with a
wholly-owned Subsidiary of the Company) provided such event constitutes a
change in control for purposes of Section 409A of the Code; or

 

2

 

(v)           the Committee passes a
resolution to the effect that, for the purposes of some or all of the Award
Agreements, an event set forth in (i), (ii), (iii) or (iv) above has
occurred or is about to occur provided such event constitutes a change in
control for purposes of Section 409A of the Code.

 

“Code” means the U.S. Internal
Revenue Code of 1986, as amended from time to time, and the regulations
promulgated under it.

 

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

 

“Company”
means
Gerdau Ameristeel Corporation.

 

“Consultant” means an individual or a
consultant company, other than an Employee or a Director that:

 

(i)            is engaged to provide
services to the Company or a Subsidiary other than services provided in
relation to a distribution of securities of the Company or a Subsidiary;

 

(ii)           provides the services under
a written contract with the Company or a Subsidiary; and

 

(iii)          spends or will spend a
significant amount of time and attention on the affairs and business of the
Company or a Subsidiary,

 

For the purposes of
this definition, “consultant company”
means, with respect to an individual consultant a company of which the
individual consultant is the sole shareholder.

 

“controlled”
means:

 

(i)            in the case of a Person,

 

(A)          voting securities of the
first-mentioned Person carrying more than 50% of the votes for the election of
directors are held, directly or indirectly, otherwise than by way of security
only, by or for the benefit of the other Person; and

 

(B)           the votes carried by the
securities are entitled, if exercised, to elect a majority of the directors of
the first-mentioned Person;

 

(ii)           in the case of a
partnership that does not have directors, other than a limited partnership, the
second-mentioned Person holds more than 50% of the interests in the
partnership; and

 

(iii)          in the case of a limited
partnership, the general partner is the second-mentioned Person.

 

“Covered
Employee”
has the meaning set out in Section 162(m)(3) of the Code.

 

3

 

“Date
of Grant”
means, for any Award, the date specified by the Committee at the time it grants
the Award (which, for greater certainty, shall be no earlier than the date on
which the Committee approves the grant of such Award) or if no such date is
specified, the date upon which the Award was granted.

 

“Deferred
Share Unit” means a unit equivalent in value to an ADS, credited by means of a
bookkeeping entry in the books of the Company in accordance with Article 6.

 

“Director”
means
a member of the Board who is not an Employee or a Consultant.

 

“Disabled”
or “Disability” means, for U.S. Taxpayers, “disability” for
purposes set forth in Treasury Regulations Section 1.409A-3(i)(4) and
means, for other Participants, a state of permanent and total incapacity,
resulting from illness or accidental injury, which wholly prevents an employee
from performing all material functions of his/her regular employment as
evidenced by receipt of disability payments under an employing entity long-term
disability program or a government provided disability program.

 

“Distribution
Date”
means the Termination Date for a U.S. Taxpayer, and for any other Participant (i) the
Termination Date; or (ii) such later date as elected by the Participant
provided that in no event shall a Participant be permitted to elect a date
which is later than the last Business Day of the calendar year following the
calendar year in which the Termination Date occurs.  An election for a Distribution Date described
in (ii) above will only be valid if it is delivered to the Corporate
Secretary of the Company prior to the Termination Date in the form prescribed
for such purposes by the Company.

 

“Eligible
Person”
means an Employee, Consultant or Director.

 

“Employee” means a current full-time
or part-time  employee or officer of the
Company or a Subsidiary (other than a Director or a Consultant).

 

“Exchange
Act”
means the United States Securities Exchange Act of 1934, as amended from time
to time.

 

“Exercise
Notice” means
a notice in the form used by the Company from time to time in accordance with
its policies and practices, including forms sent and/or received electronically
stating the Participant’s intention to exercise a particular Option or Stock
Appreciation Right subject to any amendments or additions in the discretion of
the Committee.

 

“Exercise
Price” means
the price at which an ADS may be purchased pursuant to the exercise of an
Option and is the amount used to determine the SAR Amount of a Stock
Appreciation Right.

 

“Exercise
Period” means
the period of time during which an Option or Stock Appreciation Right granted
under this Plan may be exercised.

 

“Fair
Market Value” means, with respect to any ADS at a particular date, the closing price
on the New York Stock Exchange on such date (or if such date is not a trading
day, the trading day immediately prior to such date or if ADSs did not trade on
such exchange 

 

4

 

on such day, the
average of the bid and ask prices of such ADSs at the close of trading on such
day); provided that if such ADSs are not then listed on such stock exchange,
the Fair Market Value shall be determined based on the closing price of such
ADSs on any stock exchange on which such ADSs are then listed on the particular
date (or if such date is not a trading day, the trading day immediately prior
to such date or if such ADSs did not trade on such exchange on such day, the
average of the bid and ask prices of such ADSs at the close of trading on such
day); and further provided that if such ADSs are not then listed on any stock
exchange, the Fair Market Value shall be the fair market value determined by
the Committee through the reasonable application of a reasonable valuation
method.

 

“Gerdau
SA Shareholders” means the current Gerdau shareholders.

 

“Incentive
Stock Option” means an option granted under Section 4.6 of the Plan that meets
the requirements of Section 422 of the Code or any successor provision and
is designated as such in the applicable Award Agreement.

 

“Insider”
has
the meaning set forth in the Securities Act,
as amended from time to time, and includes Associates and Affiliates of such
Person.

 

“Market
Price”
means the trading price of an ADS on the New York Stock Exchange at the time at
which ADS’s are traded which is the closest time after the exercise of an
Option or Stock Appreciation Right provided that if such ADS’s are not then
listed on such stock exchange, the Market Price shall be determined based on
the trading price of such ADS’s on any stock exchange on which such ADSs are
then listed at the time closest to and after the time of exercise (or if such
ADS’s did not trade on such exchange on the day of such exercise, the average
of the bid and ask prices of such ADS’s at the close of trading on the last
trading day prior to the particular day); and further provided that if such ADS’s
are not then listed on any stock exchange, the Market Price shall be the fair
market value determined by the Committee through the reasonable application of
a reasonable valuation method.

 

“NI
45-106” means
National Instrument 45-106 Prospectus and Registration Exemptions of the Canadian
Securities Administrators, as amended from time to time.

 

“Non
Qualified Stock Option” means an Option that is not intended to be or does
not meet the requirements of an Incentive Stock Option.  Any Option granted by the Committee that is
not designated as an Incentive Stock Option in the applicable Award Agreement
will be deemed a Non Qualified Stock Option.

 

“Option”
means
a right to purchase ADSs for the Exercise Price under this Plan.

 

“Optionee” means a Participant who
has been granted one or more Options under this Plan.

 

“Other
Share-Based Award” means any right granted in accordance with Article 10.

 

“Parent Corporation” has the meaning set forth in Section 424(e) of
the Code.

 

5

 

“Participant” means an Employee,
Consultant or a Director who has received an Award under this Plan.

 

“Performance
Goals”
means performance goals set by the Committee from time to time.  Performance Goals may be expressed in terms
of attaining a specified level of the particular criteria or the attainment of
a percentage increase or decrease in a particular criteria, and may be applied
to one or more of the Company, a Subsidiary, or a division or strategic
business unit of the Company, or may be applied to the performance of the
Company relative to a market index, a group of other companies or a combination
thereof, all as determined by the Committee. 
The Performance Goals may include a threshold level of performance below
which no payment will be made (or no vesting will occur), levels of performance
at which specified payments will be made (or specified vesting will occur), and
a maximum level of performance above which no additional payment will be made
(or at which full vesting will occur). 
The Committee shall have the authority to make adjustments to the
Performance Goals in recognition of unusual or non-recurring events affecting
the Company or any Subsidiary or the financial statements of the Company or any
Subsidiary, in response to changes in applicable laws or regulations, or to
account for items of gain, loss or expense determined to be extraordinary or
unusual in nature or infrequent in occurrence or related to a change in
accounting principle.

 

“Performance
Share Unit” means a unit equivalent in value to an ADS credited by means of a
bookkeeping entry in the books of the Company in accordance with Article 8.

 

“Person”
includes
an individual, sole proprietorship, partnership, unincorporated association,
unincorporated syndicate, unincorporated organization, trust, body corporate,
and a natural person in his or her capacity as trustee, executor, administrator
or other legal representative.

 

“Plan”
means
this Gerdau Ameristeel Corporation Equity Incentive Plan.

 

“Restricted
Share Unit” means a unit equivalent in value to an ADS, credited by means of a
bookkeeping entry in the books of the Company in accordance with Article 7.

 

“Restricted
Stock” has
the meaning set out in Section 9.1.

 

“Retirement”
means
retirement from active employment with the Company or a Subsidiary at a time
when the Participant (i) is not
less than 55 years of age and  has  not less than 20 years of service
with the Company, participating subsidiaries, or affiliated companies or (ii) is not less than 65 years of age.  “Retires”
has a corresponding meaning.

 

“SAR
Amount”
has the meaning set out in Section 5.2.

 

“Securities
Act” means
the United States Securities Act of 1933, as
amended from time to time.

 

“Security
Based Compensation Arrangement” has the meaning given to that term in the TSX
Rules.

 

6

 

“Share
Units”
means Deferred Share Units, Performance Share Units and Restricted Share Units.

 

“Stock
Appreciation Right” means a right equivalent in value to the increase
in value of an ADS credited by means of a bookkeeping entry in the books of the
Company in accordance with Article 5.

 

“Subsidiary” means a Person that:

 

(i)            it is controlled by,

 

(A)          another Person, or

 

(B)           another Person and one or
more Persons, each of which is controlled by that other Person, or

 

(C)           two or more Persons, each
of which is controlled by another Person; or

 

(ii)           it is a Subsidiary of a
Person that is another Person’s Subsidiary.

 

“Subsidiary
Corporation” has the meaning set forth in Section 424(f) of the Code.

 

“Termination
Date” means
where employment or term of office, directorship or engagement with the Company
or an Affiliate terminates:

 

(i)            by reason of the death, the date of death;
and

 

(ii)           for any reason other than Death, the last day
of such employment, office, directorship or consulting.

 

and does not include
any period of statutory, contractual or reasonable notice or any period of
salary continuance or deemed employment.

 

“TSX
Rules” means
Part VI of the Company Manual of the Toronto Stock Exchange, as amended
from time to time.

 

“U.S.
Taxpayer”
shall mean a Participant who is a U.S. citizen, U.S. permanent resident or U.S.
tax resident for purposes of the Code.

 

2.2          Interpretation

 

(a)           Whenever the Committee is
to exercise discretion in the administration of this Plan, the term “discretion”
means the sole and absolute discretion of the Committee.

 

(b)           As used herein, the terms “Article”
and “Section” mean and refer to the specified Article or Section of
this Plan, respectively.

 

7

 

(c)           Words importing the
singular include the plural and vice versa and words importing any gender
include any other gender.

 

(d)           Whenever any payment is to
be made or action is to be taken on a day which is not a Business Day, such
payment shall be made or such action shall be taken on the next following
Business Day.

 

(e)           Unless otherwise specified,
all references to money amounts are to U.S. currency.

 

ARTICLE 3

ADMINISTRATION

 

3.1          Administration

 

This Plan will be
administered by the Board which retains ultimate authority under the Plan.  The Board has delegated all of its authority
under the Plan to the Committee which has sole and complete authority, in its
discretion, to:

 

(a)           determine to which Eligible
Persons grants under the Plan are made;

 

(b)           make grants of Awards under
the Plan in such amounts and in such combinations, to such Eligible Persons
and, subject to the provisions of this Plan, on such terms and conditions as it
determines including without limitation:

 

(i)            the time or times at which
Awards may be granted;

 

(ii)           the conditions under which:

 

(A)          Awards may be granted to
Participants; or

 

(B)           Awards may be forfeited,

 

including any conditions relating to the attainment of specified
Performance Goals;

 

(iii)          the Exercise Price, and/or
price to be paid by a Participant in connection with the granting of Awards;

 

(iv)          the time or times when each
Option becomes exercisable and, subject to Section 4.3, the duration of
the Exercise Period;

 

(v)           whether restrictions or
limitations are to be imposed on the ADSs issuable pursuant to grants of
Awards, and the nature of such restrictions or limitations, if any; and

 

(vi)          any acceleration of
exercisability or vesting, or waiver of termination regarding any Award, based
on such factors as the Committee may determine;

 

8

 

(c)           interpret this Plan and
adopt, amend and rescind administrative guidelines and other rules and
regulations relating to this Plan; and

 

(d)           make all other
determinations and take all other actions necessary or advisable for the
implementation and administration of this Plan.

 

The Committee’s
determinations and actions within its authority under this Plan are conclusive
and binding on the Company and all other persons.  The day-to-day administration of the Plan may
be delegated to such officers and employees of the Company or of a Subsidiary
as the Committee determines.

 

3.2          Delegation to Committee

 

Notwithstanding any
delegation or any reference to the Committee in this Plan, the Board may also
take any action and exercise any powers that the Committee is authorized to
take or has power to exercise under this Plan. 
To the extent applicable in respect of certain Awards granted to a Participant
who is a Covered Employee, the Committee shall be composed of not less than two
directors of Gerdau S.A., neither of whom shall be employees of the Gerdau S.A.
or its Affiliates and each of whom shall otherwise be “outside directors” for
the purposes of Section 162(m) of the Code.  To the extent Gerdau S.A. is not a “foreign
private issuer” as defined in Exchange Act Rule 3b-4, such Committee shall
be composed of not less than two directors of Gerdau S.A., each of whom are “non-employee
directors” for purposes of Section 16 of the Exchange Act and Rule 16b-3
thereunder.

 

3.3          Eligibility

 

Eligibility to
participate in this Plan does not confer upon any Eligible Person any right to
receive any grant of an Award pursuant to the Plan.  The extent to which any Participant is
entitled to receive a grant of an Award pursuant to the Plan will be determined
in the sole and absolute discretion of the Committee, provided however that the
following restrictions shall also apply to this Plan, together with all other
Security Based Compensation Arrangements of the Company:

 

(a)           the number of ADSs issuable
to Insiders, at any time, under all Security Based Compensation Arrangements,
shall not exceed 10% of issued and outstanding ADSs; and

 

(b)           the number of ADSs issued
to Insiders or to any one Insider, within any one year period, under all
Security Based Compensation Arrangements, shall not exceed 10% of issued and
outstanding ADSs.

 

If Gerdau S.A.
repurchases ADSs for cancellation such that the tests in Section 3.3(a) or
(b) are not met following such repurchase, this shall not constitute
non-compliance under the Plan for any Awards then outstanding.

 

3.4          Total ADSs Available

 

(a)           The maximum number of ADSs
that may be issued pursuant to the Plan is 12,788,363 ADSs representing
approximately 6.4 percent of the outstanding issue

 

9

 

 

as at the date of approval of this Plan.  No grant may be made under the Plan if such
grant would result in the issuance of ADSs in excess of the above-noted
limit.  The maximum number of ADSs that
may be issued under this Plan pursuant to the exercise of Incentive Stock
Options is 1,000,000. Subject to applicable law, the requirements of any stock
exchange upon which the ADSs may then be listed and any shareholder or other
approval which may be required, the Committee may in its discretion amend the
Plan to increase such limit without notice to any Participants.

 

(b)           For purposes of computing
the total number of ADSs available for grant under the Plan, ADSs subject to
any Award (or any portion thereof) that has expired or is forfeited,
surrendered, cancelled or otherwise terminated prior to the issuance or
transfer of such ADSs shall again be available for grant under the Plan.

 

3.5          Award Agreements

 

All grants of Awards
under this Plan will be evidenced by Award Agreements.  Award Agreements will be subject to the
applicable provisions of this Plan and will contain such provisions as are
required by this Plan and any other provisions that the Committee may
direct.  Any one officer of the Company
is authorized and empowered to execute and deliver, for and on behalf of the
Company, an Award Agreement to each Participant granted an Award pursuant to
this Plan.

 

3.6          Conditions of Grant

 

Each Participant
will, when requested by the Company, deliver all such documents relating to the
grant of Awards or exercise of Options which the Company deems necessary or
desirable.

 

3.7          Non-transferability of Awards

 

Subject to Section 11.1,
Awards granted under this Plan may only be exercised during the lifetime of the
Participant by such Participant personally. 
Subject to Section 11.1, no assignment or transfer of Awards,
whether voluntary, involuntary, by operation of law or otherwise, vests any
interest or right in such Awards whatsoever in any assignee or transferee and
immediately upon any assignment or transfer, or any attempt to make the same,
such Awards will terminate and be of no further force or effect.

 

ARTICLE 4

GRANT OF OPTIONS

 

4.1          Grant of Options

 

The Committee may,
from time to time, subject to the provisions of this Plan and such other terms
and conditions as the Committee may prescribe, grant Options to any Eligible
Person.

 

4.2          Exercise Price

 

The Exercise Price
will be as determined by the Committee but in any event will be no less than
the Fair Market Value on the Date of Grant.

 

10

 

4.3          Term of Options

 

Subject to any
accelerated termination or as otherwise set forth in this Plan, each Option,
unless otherwise specified by the Committee, expires on the tenth (10th) anniversary of the Date of Grant provided that if
such expiry would otherwise be during or within ten (10) Business Days
following a Black Out Period, then the expiry of such Option (other than an
Incentive Stock Option) shall be extended until ten (10) Business Days
following the expiration of the Black Out Period.

 

The Committee shall
have the authority to condition the grant or vesting of Options upon the
attainment of specified Performance Goals, or such other factors (which may
vary as between Options) as the Committee may determine in its sole discretion.

 

4.4          Exercise of Options

 

Except as otherwise
provided in this Plan, the Committee will determine when each Option will vest
and be exercisable.

 

Once an instalment
of an Option vests and becomes exercisable, it remains exercisable until expiration
or termination of the Option, unless otherwise specified by the Committee in
connection with the grant of such Option or otherwise as specified herein.  Each Option may be exercised at any time or
from time to time, in whole or in part, for up to the total number of ADSs with
respect to which it is then exercisable. 
The Committee has the right to accelerate the date upon which any
instalment of any Option becomes exercisable.

 

Subject to the
provisions of this Plan and any Award Agreement, Options shall be exercised by
delivery of an Exercise Notice to the Company.

 

4.5          Payment of Exercise Price

 

The Exercise Notice
must be accompanied by payment in full of the Exercise Price in respect of the
ADSs to be purchased.  The Exercise Price
must be fully paid by electronic transfer, cash, certified cheque, bank draft
or money order payable to Gerdau S.A.  No
ADSs will be issued or transferred until full payment therefor has been
received by Gerdau S.A.  As soon as
practicable after receipt of any Exercise Notice and full payment of the
Exercise Price, Gerdau S.A. will, subject to Section 14.5, deliver to the
Participant, a certificate or certificates representing the acquired ADSs.

 

4.6          Incentive Stock Options

 

The following
provisions will apply only to Incentive Stock Options granted under the Plan:

 

(a)           No Incentive Stock Option
may be granted to any Participant who, at the time such Option is granted, (i) is
not an employee of the Company or any Parent Corporation or Subsidiary
Corporation of the Company or (ii) owns securities possessing more than
ten percent (10%) of the total combined voting power of all classes of
securities of the Company or any Parent Corporation or Subsidiary Corporation
of the Company, except that with respect to provision (ii) hereof such an
Option may be granted to an Employee if, at the time the Option is granted, the

 

11

 

exercise price is at least one hundred ten percent
(110%) of the Fair Market Value of the ADSs subject to the Option, and the
Option by its terms is not exercisable after the expiration of five (5) years
from the date the Option is granted; and

 

(b)           To the extent that the
aggregate Fair Market Value of the ADSs with respect to which Incentive Stock
Options (without regard to this Section) are exercisable for the first time by
any individual during any calendar year (under all plans of the Company or any
Parent Corporation or Subsidiary Corporation of the Company) exceeds U.S.
$100,000, such Options will be treated as Non Qualified Stock Options.  This Section will be applied by taking
Options into account in the order in which they were granted.  If some but not all Options granted on any
one day are subject to this Section, then such Options will be apportioned between
Incentive Stock Option and Non Qualified Stock Option treatment in such manner
as the Committee will determine.

 

(c)           No Incentive Stock Option
shall be granted more than ten (10) years from the date the Plan is
adopted or the date the Plan is approved by shareholders, whichever is earlier.

 

4.7          Special Rule Applicable to U.S. Taxpayers

 

With respect to
Options granted to Participants who are U.S. Taxpayers, ADSs shall constitute “stock
of the service recipient” within the meaning of Section 409A of the Code
if such Participant performs services for any affiliate that is at least fifty
percent owned by Gerdau S.A.

 

ARTICLE 5

GRANT OF STOCK APPRECIATION RIGHTS

 

5.1          Grant of Stock Appreciation Rights

 

The Committee may
grant Stock Appreciation Rights to any Eligible Person either on a stand alone
basis or in relation to any Option. 
Where a Stock Appreciation Right is granted in relation to an Option, it
shall be a right in respect of the same number of ADSs and shall have the same
Exercise Price as the Option.  Where a
Stock Appreciation Right is granted on a stand alone basis, the Committee shall
designate the number of ADSs in respect of which the Stock Appreciation Right
is granted and shall designate the Exercise Price.  No more than 6,394,181 ADSs may be issued
under the Plan pursuant to Stock Appreciation Rights granted on a stand alone
basis.

 

5.2          Stock Appreciation Rights

 

A Stock Appreciation
Right is the right to the excess, if any, of:

 

(a)           the Market Price of an ADS
at the time such Stock Appreciation Right is exercised over

 

(b)           the Exercise Price less any
amount required to be withheld by applicable law,

 

12

 

multiplied by the
number of ADSs in respect of which the Stock Appreciation Right is being
exercised (the “SAR Amount”).

 

5.3          Terms of Stock Appreciation Rights Granted in
Connection with an Option

 

Stock Appreciation
Rights granted in relation to an Option shall be exercisable only at the same
time, by the same persons and to the same extent, that the related Option is
exercisable.  Upon exercise of any Stock
Appreciation Right related to an Option, the corresponding portion of the
related Option shall be surrendered to Gerdau S.A. and cancelled.

 

5.4          Terms of Stock Appreciation Rights Granted on a
Stand Alone Basis

 

Stock Appreciation
Rights granted on a stand alone basis shall be granted on such terms as shall
be determined by the Committee and set out in the Award Agreement, provided
that the Exercise Price shall not be less than the Fair Market Value on the
Date of Grant and provided that any such grant to a Canadian taxpayer shall be
on such terms as do not make the grant a salary deferral arrangement.  Subject to any accelerated termination or as
otherwise set forth in this Plan, each Stock Appreciation Right, unless
otherwise specified by the Committee, expires on the tenth (10th) anniversary of the Date of Grant provided that if
such expiry would otherwise be during or within ten (10) Business Days
following a Black Out Period, then the expiry of such Stock Appreciation Right
shall be extended until ten (10) Business Days following the expiration of
the Black Out Period.  The Committee
shall have the authority to condition the grant or vesting of Stock
Appreciation Rights upon the attainment of specified Performance Goals, or such
other factors (which may vary as between Stock Appreciation Rights) as the
Committee may determine in its sole discretion. 
Once an instalment of an Stock Appreciation Right vests and becomes
exercisable, it remains exercisable until expiration or termination of the
Stock Appreciation Right, unless otherwise specified by the Committee in
connection with the grant of such Stock Appreciation Right or otherwise as
specified herein.  Each Stock
Appreciation Right may be exercised at any time or from time to time, in whole
or in part, for up to the total number of ADSs with respect to which it is then
exercisable.  The Committee has the right
to accelerate the date upon which any instalment of any Stock Appreciation Right
becomes exercisable.

 

5.5          Exercise of Stand Alone Stock Appreciation Rights

 

Subject to the
provisions of the Plan and Award Agreement, a Stock Appreciation Right may be
exercised from time to time by delivery to the Company of an Exercise
Notice.  Upon receipt of the Exercise
Notice and subject to the terms of this Plan, the Company shall within ten (10) business
days pay to the Participant the SAR Amount, less the amount required to satisfy
withholding tax obligations.

 

5.6          Satisfying Stock Appreciation Rights

 

In the sole
discretion of the Committee, determined either at the Date of Grant or the date
of exercise, the Committee may determine to satisfy the exercise of a Stock
Appreciation Right in whole or in part by issuing to the Participant ADSs, subject
to Section 14.5, which have a Market Price as at the time of exercise of
the Stock Appreciation Right, equal to the SAR Amount.

 

13

 

ARTICLE 6

GRANT OF DEFERRED SHARE UNITS

 

6.1          Grant of Deferred Share Units

 

The Committee may,
from time to time, subject to the provisions of this Plan and such other terms
and conditions as the Committee may prescribe, grant Deferred Share Units to
any Participant.  No more than 799,272 ADSs
may be issued under the Plan pursuant to Deferred Share Units.

 

All Deferred Share
Units received by a Participant shall be credited to an account maintained for
the Participant on the books of the Company, as of the Date of Grant.  The award of Deferred Share Units to a
Participant shall be evidenced by an Award Agreement.

 

6.2          Distribution of Deferred Share Units

 

A Participant shall
receive, on the Distribution Date, a lump sum payment in cash equal to the
number of Deferred Share Units recorded in the Participant’s account on the Distribution
Date multiplied by the Fair Market Value, less the amount required to satisfy
withholding tax obligations.

 

6.3          Satisfying Deferred Share Units

 

In the discretion of
the Committee, the Company may determine to settle the Deferred Share Units, in
whole or in part, by issuing to the Participant one (1) ADS, subject to
Section 14.5, for each Deferred Share Unit.  Such determination may be made at the Date of
Grant or the date of settlement.  Upon
payment or transfer in full of the value of the Deferred Share Units, the
Deferred Share Units shall be cancelled.

 

ARTICLE 7

GRANT OF RESTRICTED SHARE UNITS

 

7.1          Grant of Restricted Share Units

 

The Committee may,
from time to time, subject to the provisions of this Plan and such other terms
and conditions as the Committee may prescribe, grant Restricted Share Units to
any Participant.  No more than 1,998,181
ADSs may be issued under the Plan pursuant to Restricted Share Units.

 

All Restricted Share
Units received by a Participant shall be credited to an account maintained for
the Participant on the books of the Company, as of the Date of Grant.  The award of Restricted Share Units to a
Participant shall be evidenced by an Award Agreement.

 

7.2          Vesting of Restricted Share Units

 

The Committee shall
have the authority to determine at the Date of Grant, in its sole discretion,
the duration of the vesting period and other vesting terms applicable to the
grant of Restricted Share Units, provided that all Restricted Share Units
granted to Canadian taxpayers (other than Restricted Share Units settled by the
issuance of ADSs from treasury) shall vest and be payable 

 

14

 

not later than December 31
of the third year following the year in respect of which the Restricted Share
Units were granted.

 

7.3          Distribution of Restricted Share Units

 

A Participant shall
receive as soon as practicable following the expiry of the applicable vesting
period, or at such later date as may be determined by the Committee in its sole
discretion, a lump sum payment in cash equal to the number of Restricted Share
Units recorded in the Participant’s account on the vesting date multiplied by
the Fair Market Value on the vesting date, less the amount required to satisfy
withholding tax obligations, provided, however, that all payments in respect of
an Award of Restricted Share Units to a U.S. Taxpayer shall be made no later
than the date that is the later of (i) the 15th day of the third month of
the year following the end of the U.S. Taxpayer’s first taxable year in which
payment of the Award is no longer subject to a substantial risk of forfeiture,
or (ii) the 15th day of the third month following the end of the Company’s
(or relevant Subsidiary’s) first taxable year in which payment of the Award is no
longer subject to a substantial risk of forfeiture; provided further, however
that if the Award is subject to Section 409A of the Code (i.e., because the Award was granted to a U.S. Taxpayer who
could become eligible to satisfy the Retirement eligibility requirements during
the vesting period applicable to the Award), payment in respect of such
Restricted Share Units shall be paid on the applicable vesting date pursuant to
the vesting schedule set forth in the Award Agreement (notwithstanding anything
to the contrary in Section 11.2, hereof and regardless of whether the U.S.
Taxpayer ceases to be an Eligible Person by reason of Retirement).

 

7.4          Satisfying Restricted Share Units

 

In the discretion of
the Committee, the Company may determine to settle the Restricted Share Units,
in whole or in part, by issuing to the Participant one (1) ADS, subject to
Section 14.5, for each Restricted Share Unit.  Such determination may be made at the Date of
Grant or the date of settlement.  Upon
payment or transfer in full of the value of the Restricted Share Units, the
Restricted Share Units shall be cancelled.

 

ARTICLE 8

GRANT OF PERFORMANCE SHARE UNITS

 

8.1          Grant of Performance Share Units

 

The Committee may,
from time to time, subject to the provisions of this Plan and such other terms
and conditions as the Committee may prescribe, grant Performance Share Units to
any Participant payable to, or exercisable by, the holder of the Performance
Share Unit, in whole or in part, upon the achievement of such Performance Goals
during such performance periods as the Committee establishes.

 

All Performance
Share Units received by a Participant shall be credited to an account
maintained for the Participant on the books of the Company, as of the Date of
Grant.  The award of Performance Share
Units to a Participant shall be evidenced by an Award Agreement.

 

8.2          Terms of Performance Share Units

 

The Committee shall
have the authority to determine, at the Date of Grant, in its sole discretion 

 

15

 

the Performance
Goals to be achieved during any performance period, the length of any
performance period and the number of Performance Share Units which vest.

 

8.3          Performance Goals

 

The Committee will
set Performance Goals, or the methodology for establishing Performance Goals
not later than sixty (60) days following the commencement of the performance
period to which such Performance Goals pertain and prior to the grant of the
award.  The Performance Goals may be
based upon the achievement of corporation-wide, divisional or individual goals,
or any other basis determined by the Committee. 
The Committee may modify the Performance Goals as necessary to align
them with the Company’s corporate objectives if there is a subsequent material
change in the Company’s business, operations or capital or corporate structure.

 

8.4          Distribution of Performance Share Units

 

A Participant shall
receive as soon as practicable following the expiry of the applicable vesting
period, or at such later date as may be determined by the Committee in its sole
discretion and to the extent Performance Goals are achieved a lump sum payment
in cash equal to the number of Performance Share Units recorded in the
Participant’s account on the vesting date to the extent Performance Goals are
achieved, multiplied by the Fair Market Value on the vesting date, less the
amount required to satisfy withholding tax obligations, provided, however, that
all payments in respect of an Award of Performance Share Units to a U.S.
Taxpayer shall be made no later than the date that is the later of (i) the
15th day of the third month of the year following the end of the U.S. Taxpayer’s
first taxable year in which payment of the Award is no longer subject to a
substantial risk of forfeiture, or (ii) the 15th day of the third month
following the end of the Company’s (or relevant Subsidiary’s) first taxable
year in which payment of the Award is no longer subject to a substantial risk
of forfeiture; provided further, however that if the Award is subject to Section 409A
of the Code (i.e., because the Award was
granted to a U.S. Participant who could become eligible to satisfy the
Retirement eligibility requirements during the vesting period applicable to the
Award), payment in respect of such Performance Share Units shall be paid on the
applicable vesting date pursuant to the vesting schedule set forth in the Award
Agreement (notwithstanding anything to the contrary in Section 11.2 hereof
and regardless of whether the U.S. Participant ceases to be an Eligible Person
by reason of Retirement).

 

8.5          Satisfying Performance Share Units

 

In the discretion of
the Committee, the Company may determine to settle the vested Performance Share
Units, in whole or in part, by issuing to the Participant one (1) ADS,
subject to Section 14.5, for each such Performance Share Unit.  Such determination may be made at the Date of
Grant or the date of settlement.  Upon
payment or transfer in full of the value of the Performance Share Units, the
Performance Share Units shall be cancelled.

 

ARTICLE 9

RESTRICTED STOCK

 

9.1          Grants of Restricted Stock

 

The Committee may,
from time to time, subject to the provisions of this Plan, Section 14.3
and 

 

16

 

such other terms and
conditions as the Committee may prescribe, grant ADSs subject to specified
restrictions (“Restricted Stock”) to Eligible
Persons.  No more than [1,000,000] [Draft Note:  To be
multiplied by the Exchange Ratio] ADSs  may
be issued under the Plan as Restricted Stock.

 

The award of
Restricted Stock to a Participant shall be evidenced by an Award Agreement.

 

9.2          Restricted Stock

 

Restricted Stock is
an ADS subject to restrictions which lapse based on the achievement of
Performance Goals, the passage of time or both.

 

9.3          Terms of Restricted Stock

 

The Committee shall
have the authority to determine at the Date of Grant, in its sole discretion,
the duration of the period of restriction and any other terms applicable to the
grant of Restricted Stock.  Restricted
Stock shall be granted on such terms as shall be determined by the Committee
and set out in the Award Agreement.

 

9.4          Lapse of Restrictions

 

Subject to the
provisions of the Plan and Award Agreement, Restricted Stock may be sold,
transferred or otherwise dealt with, only when all restrictions have lapsed.

 

ARTICLE 10

OTHER ADS-BASED AWARDS

 

10.1        Other ADS-Based Awards

 

The Committee may,
from time to time, subject to the provisions of this Plan and such other terms
and conditions as the Committee may prescribe, grant Other ADS-Based Awards to
any Participant.  Each Other ADS-Based
Award will consist of a right other than an Award described in Article 4, Article 5,
Article 6, Article 7, Article 8 or Article 9 which is
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, ADS (including, without limitation,
securities convertible into ADSs) as are deemed by the Committee to be
consistent with the purposes of the Plan; provided, however, that such right
will comply with applicable law.  Subject
to the terms of the Plan and any applicable Award Agreement, the Committee will
determine the terms and conditions of Other ADS-Based Awards.  ADSs or other securities delivered pursuant
to a purchase right granted under this Section 10.1 will be purchased for
such consideration, which may be paid by such method or methods and in such
form or forms, including, without limitation, cash, ADSs, other securities,
other Awards, other property, or any combination thereof, as the Committee
determines.

 

17

 

ARTICLE 11

TERMINATION OF EMPLOYMENT

 

11.1        Treatment of Awards on Death or Disability

 

Subject to the
provisions of the Award Agreement, if a Participant dies, or becomes Disabled
while an Eligible Person:

 

(a)           The executor or
administrator of the Participant’s estate or the Participant may exercise
Options and Stock Appreciation Rights of the Participant.  All outstanding Options and Stock
Appreciation Rights shall vest on the Termination Date.  The right to exercise such Options and Stock
Appreciation Rights terminates on the earlier of: (i) the date that is
twelve months after the Termination Date; and (ii) the date on which the
Exercise Period of the particular Option or Stock Appreciation Right expires.

 

(b)           All Awards, other than
Options or Stock Appreciation Rights, continue to vest and shall be satisfied
at the same time and on the same conditions as if the Participant had not died
or become Disabled.

 

(c)           The Participant’s
eligibility to receive further grants of Awards under the Plan ceases as of the
Termination Date.

 

11.2        Treatment of Awards on Retirement

 

Subject to the
provisions of the Award Agreement, if a Participant Retires while an Eligible
Person:

 

(a)           The Participant may
exercise Options and Stock Appreciation Rights which are exercisable at the
Termination Date plus a pro-rata portion of those Options and Stock
Appreciation Rights which are not exercisable at the Termination Date based on
the number of months from the Date of Grant to the end of the month in which
the Termination Date occurs divided by the total number of months from the Date
of Grant to the last date of vesting of the particular instalment of the
Options and Stock Appreciation Rights. 
The right to exercise such Options and Stock Appreciation Rights
terminates on the earlier of: (i) the date that is five years after
Termination Date (except that in the case of Retirement of a U.S. Taxpayer, any
Incentive Stock Option shall expire on the date that is three months after the
Termination Date); and (ii) the date on which the Exercise Period of the
Particular Option or Stock Appreciation Right expires.

 

(b)           All Awards, other than
Options or Stock Appreciation Rights, which have vested at the Termination Date
will be satisfied and a pro-rata portion of all Awards which were not vested at
the Termination Date shall vest and be satisfied based on the number of months
from the Date of Grant to the end of the month in which the Termination Date
occurs divided by the total number of months from the Date of Grant to the last
date of vesting of the particular instalment of the Awards.  Such pro-rata portion of the Awards shall be
satisfied at the same time and on the same conditions as if the Participant had
not Retired.

 

18

 

(c)           The Participant’s
eligibility to receive further grants of Awards under the Plan ceases as of the
Termination Date.

 

11.3        Treatment of Awards on Termination of Employment
or Services

 

Subject to the
provisions of the Award Agreement, if the employment of a Participant is
terminated while an Eligible Person:

 

(a)           Where  a
Participant’s employment or term of office or engagement terminates by reason
of a Participant’s resignation or termination of employment whether for cause
or without cause then all Options and Stock Appreciation Rights held by the
Participant which are vested and exercisable at the Termination Date shall be
exercisable for three months following the Termination Date and all Options and
Stock Appreciation Rights which are not vested and exercisable at the
Termination Date immediately expire and are cancelled on the Termination Date,
and any other Awards held by the Participant that are not yet vested or have
not had restrictions lapse at the Termination Date are immediately forfeited to
the Company on the Termination Date.

 

(b)           The eligibility of a
Participant to receive further grants under the Plan ceases as of the date that
the Company or an Affiliate, as the case may be, provides the Participant with
written notification that the Participant’s employment or term of office,
directorship or consultancy is terminated, notwithstanding that such date may
be prior to the Termination Date.

 

(c)           Unless the Committee, in
its sole discretion, otherwise determines, at any time and from time to time,
Awards are not affected by a change of employment arrangement within or among
the Company or a Subsidiary for so long as the Participant continues to be an
employee of the Company or a Subsidiary, including without limitation a change
in the employment arrangement of a Participant whereby such Participant becomes
a Director in addition to or instead of being an Employee.

 

11.4        Discretion to Permit Exercise

 

Notwithstanding the
provisions of Sections 11.1, 11.2 and 11.3, the Committee may, in its
discretion, at any time prior to or following the events contemplated in such
Sections, permit the exercise of any or all Options held by a Participant or
permit the acceleration of vesting or lapse of restrictions of any or all
Awards, all in the manner and on the terms as may be authorized by the
Committee, provided that the Committee will not, in any case, authorize the
exercise of an Option pursuant to this Section beyond the expiration of
the Exercise Period of the particular Option.

 

11.5        Incentive Stock Options

 

Notwithstanding
anything to the contrary in this Article 11, any Incentive Stock Options
held by a U.S. Taxpayer that are exercisable at the Termination Date continue
to be exercisable by the U.S. Taxpayer until the earlier of: (A) the date
that is three months after the Termination Date; (B) the date on which the
Exercise Period of the particular Incentive Stock Option expires, or (C)

 

19

 

 

 

any shorter
post-Termination Date exercise period as is set forth in this Article 11
or in the U.S. Taxpayer’s Award Agreement.

 

ARTICLE 12

CHANGE IN CONTROL

 

12.1        Change in Control

 

Awards outstanding
immediately prior to the occurrence of a Change in Control shall become fully
vested (as if all Performance Goals had been achieved) and exercisable and be
satisfied and have restrictions lapse immediately prior to a Change in
Control.  The Committee may provide for
the conversion or exchange of any Award into or for rights or other securities
in any entity participating in or resulting from the Change in Control.  In addition, and notwithstanding this
Section, the Committee may determine, in its sole discretion, that Options and
Stock Appreciation Rights outstanding which are not exercised prior to or in
connection with the Change of Control shall be cashed out for an amount equal
to the excess, if any, of the Fair Market Value immediately prior to the Change
of Control minus the Exercise Price, multiplied by the number of Options and
Stock Appreciation Rights for which there is such an excess and all Options and
Stock Appreciation Rights for which there is no such excess shall be cancelled
without payment and shall be forfeited to the Company.

 

12.2        Parachute Payments

 

If a Participant is
entitled to receive payments that would qualify as excess “parachute payments”
under Section 280G of the Code, those payments shall be reduced by the
necessary amount so that the Participant is not subject to excise tax under Section 4999
of the Code if such reduction would result in the Participant receiving a
greater after-tax payment.

 

ARTICLE 13

SHARE CAPITAL ADJUSTMENTS

 

13.1        General

 

The existence of any
Awards does not affect in any way the right or power of the Company or its
shareholders to make, authorize or determine any adjustment, recapitalization,
reorganization or any other change in the Company’s capital structure or its
business, or any amalgamation, combination, arrangement, merger or
consolidation involving the Company, to create or issue any bonds, debentures,
ADSs or other securities of the Company or to determine the rights and
conditions attaching thereto, to effect the dissolution or liquidation of the
Company or any sale or transfer of all or any part of its assets or business,
or to effect any other corporate act or proceeding, whether of a  similar character or otherwise, whether or
not any such action referred to in this Section would have an adverse
effect on this Plan or on any Award granted hereunder.

 

13.2        Reorganization of Gerdau S.A.’s Capital

 

Should Gerdau S.A.
effect a subdivision or consolidation of ADS’s or any similar capital
reorganization or a payment of a stock dividend (other than a stock dividend
that is in lieu of a cash dividend), or should any other change be made in the
capitalization of Gerdau S.A. and that, in the opinion of the Committee, would
warrant the amendment or replacement of any existing 

 

20

 

Awards in order to
adjust: (a) the number of ADSs that may be acquired on the vesting of
outstanding Awards or the exercise of any outstanding Options; and/or (b) the
Exercise Price of any outstanding Options and/or (c) the terms of any
other Award in order to preserve proportionately the rights and obligations of
the Participants holding such Awards, the Committee will authorize such steps
to be taken as it may consider to be equitable and appropriate to that end.

 

13.3        Other Events Affecting Gerdau S.A.

 

In the event of an
amalgamation, combination, arrangement, merger or other transaction or
reorganization involving Gerdau S.A. and occurring by exchange of ADSs, by sale
or lease of assets or otherwise and that, in the opinion of the Committee,
warrants the amendment or replacement of any existing Awards in order to
adjust: (a)  the number of ADSs that may be acquired on the vesting of
outstanding Awards or the exercise of any outstanding Options; or (b) the
Exercise Price of any outstanding Options and/or (c) the terms of any
other Award in order to preserve proportionately the rights and obligations of
the Participants holding such Awards, the Committee will authorize such steps
to be taken as it may consider to be equitable and appropriate to that end
provided that no such amendment or replacement shall be made that would cause a
U.S. Taxpayer to be subject to tax under Section 409A of the Code.

 

13.4        Immediate Exercise of Awards

 

Where the Committee
determines that the steps provided in Sections 13.2 and 13.3 would not preserve
proportionately the rights, value and obligations of the Participants holding
such Awards in the circumstances or otherwise determines that it is appropriate
the Committee may permit the immediate exercise of any outstanding Options that
are not otherwise exercisable, and the immediate vesting of any unvested Awards
provided that no such accelerated vesting or payment shall be made that would
cause a U.S. Taxpayer to be subject to tax under Section 409A of the Code.

 

13.5        Issue by Gerdau S.A. of Additional ADSs

 

Except as expressly
provided in this Article 13, neither the issue by Gerdau S.A. of shares of
any class or securities convertible into or exchangeable for shares of any
class, nor the conversion or exchange of such shares or securities, affects,
and no adjustment by reason thereof is to be made with respect to: (a) the
number of ADSs that may be acquired as a result of a grant of Awards or upon
the exercise of any outstanding Options; or (b) the Exercise Price of any
outstanding Options.

 

13.6        Fractions

 

No fractional ADSs
will be issued on the exercise of an Option or Stock Appreciation Right or the
satisfaction of an Award.  Accordingly,
if a Participant would become entitled to a fractional ADSs, the Participant has
the right to acquire only the adjusted number of full ADSs and a payment will
be made with respect to any fractional ADSs based on Fair Market Value at the
relevant time.

 

21

 

ARTICLE 14

GENERAL PROVISIONS

 

14.1        Legal Requirement

 

The Company is not
obligated to grant any Awards, issue any ADSs or other securities, make any
payments or take any other action if, in the opinion of the Committee, in its
sole discretion, such action would constitute a violation by a Participant or
the Company of any provision of any applicable statutory or regulatory
enactment of any government or government agency or the requirements of any
stock exchange upon which the ADSs may then be listed.

 

14.2        Participants’ Entitlement

 

Except as otherwise
provided in this Plan, Options (whether or not exercisable) and other Awards
previously granted under this Plan are not affected by any change in the
relationship between, or ownership of, the Company and an Affiliate.  For greater certainty, all grants of Awards
remain valid and all Options remain valid and exercisable in accordance with
the terms and conditions of this Plan and are not affected by reason only that,
at any time, an Affiliate ceases to be an Affiliate.

 

14.3        Dividends

 

When dividends are
paid on ADSs, additional Share Units shall be credited to the Participant’s
account as of the dividend payment date. 
The number of additional Share Units (including fractional Share Units)
to be credited to the Participant’s account shall be determined by dividing the
dollar amount of dividends payable in respect of the Share Units credited to
the Participant’s account by the Fair Market Value of an ADS on the date
credited.  Such additional Share Units
shall vest at the same time and in the same proportion as the associated Share
Units.

 

14.4        Delay of Issuance and Vesting

 

The Committee may,
in its discretion, delay the vesting of an Award or the issuance of ADS
thereunder until three Business Days following the end of a Black Out Period or
a period during which a Participant has material undisclosed information.

 

14.5        Withholding Taxes

 

The granting or
vesting of each Award and exercise of each Option and Stock Appreciation Right
under this Plan is subject to the satisfaction of any withholding tax
obligations.  The Company may withhold
the amount of withholding tax obligations from any cash amount being paid to a
Participant and may direct that a number of ADSs be sold which have a Fair
Market Value equal to the amount of withholding tax obligations or may withhold
the number of ADSs which have a Fair Market Value equal to the amount of the
withholding tax obligation from any ADSs being issued to a Participant.

 

14.6        Rights of Participant

 

No Participant has
any claim or right to be granted an Award and the granting of any Award is not
to be construed as giving a Participant a right to remain as an employee,
officer, consultant or 

 

22

 

director of the
Company or an Affiliate.  No Participant
has any rights as a shareholder of the Company in respect of ADSs issuable on
the exercise of any Option or issuable pursuant to any other Award until the
allotment and issuance to such Participant of certificates representing such
ADSs.

 

14.7        Other Incentive Awards

 

The Committee shall
have the right to grant other incentive awards based upon ADSs under this Plan
to Participants in accordance with applicable laws and regulations and subject
to regulatory approval, including without limitation the approval of any
applicable stock exchange, having such terms and conditions as the Committee
may determine, including without limitation the grant of ADSs based upon
certain conditions and the grant of securities convertible into ADSs.

 

14.8        Termination

 

The Plan may be
terminated by the Committee at any time, provided that such termination will
not affect Awards which are outstanding at the time of termination.  This Plan will automatically terminate on the
date upon which no further ADSs remain available for issuance under the Plan
and no Options or other Awards remain outstanding.

 

14.9        Amendment

 

(a)           Subject to the rules and
policies of any stock exchange on which the ADSs are listed and applicable law,
the Committee may, without notice or shareholder approval, at any time or from
time to time, amend the Plan in any matter whatsoever including, but not
limited to amendments for the purposes of:

 

(i)            making any amendments to
the general vesting provisions of each Option or Award;

 

(ii)           making any amendments to
the general term of each Option provided that no Option held by an Insider may
be extended beyond its original expiry date and, subject to Section 4.3,
no Option may be exercised after the tenth (10th)
anniversary of the Date of Grant;

 

(iii)          making any amendments to
the provisions set out in Article 11;

 

(iv)          making any amendments to
add covenants of the Company for the protection of Participants provided that
the Committee shall be of the good faith opinion that such additions will not
be prejudicial to the rights or interests of the Participants;

 

(v)           making any amendments not
inconsistent with the Plan as may be necessary or desirable with respect to
matters or questions which, in the good faith opinion of the Committee, having
in mind the best interests of the Participants, it may be expedient to make,
including amendments that are desirable as a result of changes in law in any
jurisdiction where a Participant resides, provided that the Committee shall be
of the opinion 

 

23

 

that such amendments and modifications will not be
prejudicial to the interests of the Participants; or

 

(vi)          making such changes or
corrections which, on the advice of counsel to the Company, are required for
the purpose of curing or correcting any ambiguity or defect or inconsistent
provision or clerical omission or mistake or manifest error, provided that the
Committee shall be of the opinion that such changes or corrections will not be
prejudicial to the rights and interests of the Participants.

 

(b)           Subject to Section 12.1,
the Committee shall not alter or impair any rights or increase any obligations
with respect to an Award previously granted under the Plan without the consent
of the Participant.

 

(c)           Notwithstanding any other
provision of this Plan, none of the following amendments shall be made to this
Plan without approval of shareholders:

 

(i)            amendments to the Plan
which would increase the number of ADSs issuable under the Plan, otherwise than
in accordance with the terms of this Plan;

 

(ii)           amendments to the Plan which
would increase the number of ADSs issuable to Insiders, otherwise than in
accordance with the terms of this Plan;

 

(iii)          amendments to the Plan
which would increase the number of ADSs issuable pursuant to any form of Award
for which a maximum is specified in the Plan.

 

(iv)          amendments that would
extend the Exercise Period of any Options held by Insiders beyond the Exercise
Period otherwise determined in accordance with this Plan;

 

(v)           amendments that would
reduce the Exercise Price of any Options held by Insiders, otherwise than in
accordance with the terms of this Plan; and

 

(vi)          the addition of any form of
financial assistance to a Participant.

 

Any amendment that
would cause an Award held by a U.S. Taxpayer to fail to comply with Section 409A
of the Code shall be null and void ab initio.

 

14.10      Section 409A of the Code

 

This Plan is
intended to comply with Section 409A of the Code (“Section 409A”) and
will be administered, construed and interpreted to so comply to the extent
required to preserve the intended tax consequences of this Plan.  The Company reserves the right to amend this
Plan to the extent it reasonably determines is necessary in order to preserve
the intended tax consequences of this Plan in light of Section 409A and
any guidance under that section. In no event will the Company be responsible if
Awards under this Plan result in tax or penalties to a 

 

24

 

U.S. Taxpayer under Section 409A.  In no event shall a U.S. Taxpayer, directly
or indirectly, designate the calendar year in which payments under this Plan
will be made.  Notwithstanding any
provisions of the Plan to the contrary, (i) the acceleration of the time
or schedule of any payment of deferred compensation under the Plan is
prohibited except as permitted under Section 409A, and (ii) in the
case of any “specified employee” within the meaning of Section 409A who is
a U.S. Taxpayer, distributions of deferred compensation made in connection with
a “separation from service” within the meaning of Section 409A may not be
made prior to the date which is 6 months after the date of separation from
service (or, if earlier, the date of death of the U.S. Taxpayer).  Any amounts subject to a delay in payment
pursuant to the preceding sentence shall be paid on the first Business Day of
the seventh month following such separation from service.

 

14.11      Requirement of Notification of Election Under Section 83(b) of
the Code

 

If a Participant, in
connection with the acquisition of ADSs under the Plan, is permitted under the
terms of the Award Agreement to make the election permitted under Section 83(b) of
the Code and the Participant makes such an election, the Participant shall
notify the Company of such election within ten (10) days of filing notice
of the election with the Internal Revenue Service, in addition to any filing
and notification required pursuant to regulations issued under Section 83(b) of
the Code.

 

14.12      Requirement of Notification Upon Disqualifying
Disposition Under Section 421(b) of the Code

 

If any Participant
shall make any disposition of ADSs issued pursuant to the exercise of an
Incentive Stock Option under the circumstances described in Section 421(b) of
the Code (relating to certain disqualifying dispositions), such Participant
shall notify the Company of such disposition within ten (10) days thereof.

 

14.13      Indemnification

 

Every member of the
Committee will at all times be indemnified and saved harmless by the Company
from and against all costs, charges and expenses whatsoever including any
income tax liability arising from any such indemnification, that such member
may sustain or incur by reason of any action, suit or proceeding, taken or
threatened against the member, otherwise than by the Company, for or in respect
of any act done or omitted by the member in respect of this Plan, such costs,
charges and expenses to include any amount paid to settle such action, suit or
proceeding or in satisfaction of any judgment rendered therein.

 

14.14      Participation in the Plan

 

The participation of
any Participant in the Plan is entirely voluntary and not obligatory and shall
not be interpreted as conferring upon such Participant any rights or privileges
other than those rights and privileges expressly provided in the Plan. In
particular, participation in the Plan does not constitute a condition of
employment or engagement nor a commitment on the part of the Company to ensure
the continued employment or engagement of such Participant. The Plan does not
provide any guarantee against any loss which may result from fluctuations in
the market value of the ADSs. The Company does not assume responsibility for
the income or other tax consequences for the Participants and they are advised
to consult with their own tax advisors.

 

25

 

14.15      International Participants

 

With respect to
Participants who do not reside or work in either Canada or the United States,
the Committee may, in its sole discretion, amend, or otherwise modify, without
shareholder approval, the terms of the Plan or Awards with respect to such
Participants in order to conform such terms with the provisions of local law,
and the Committee may, where appropriate, establish one or more sub-plans to
reflect such amended or otherwise modified provisions.

 

14.16      Effective Date

 

This Plan became
effective on August 30, 2010.

 

14.17      Governing Law

 

This Plan is created
under and is to be governed, construed and administered in accordance with the
laws of the State of Florida and the federal laws applicable therein.

 

26

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