Document:

Document

DESCRIPTION OF THE REGISTRANT’S SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
As of August 31, 2020, Commercial Metals Company (“CMC,” the “Company,” “we,” “us,” and “our”) had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): our common stock, $0.01 par value per share (the “Common Stock”).
Description of Capital Stock
The following summary of our capital stock does not purport to be complete and is subject to and qualified in its entirety by reference to our Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), including the certificates of designations pursuant to which any outstanding series of preferred stock may be issued, our Fourth Amended and Restated Bylaws, or any supplement or amendment thereto (the “Bylaws”), and the General Corporation Law of the State of Delaware (“DGCL”). Copies of our Certificate of Incorporation and Bylaws have been filed with the Securities and Exchange Commission (the “SEC”) as Exhibits 3(i)(a)-(f) and 3(ii), respectively, to our Annual Report on Form 10-K.
Authorized Capital Stock
Under the Certificate of Incorporation, our authorized capital stock consists of:
•two hundred million (200,000,000) shares of Common Stock, par value $0.01 per share, and
•two million shares of preferred stock, par value $1.00 per share.
As of August 31, 2020, we had approximately 119,068,720 shares of Common Stock outstanding and no shares of preferred stock outstanding. As of August 31, 2020, we had reserved approximately 8,008,276 million additional shares of Common Stock for issuance under our various stock and compensation incentive plans.
Common Stock
Dividend Rights
Holders of Common Stock are entitled to receive dividends when, as and if declared by the Company’s board of directors (the “Board of Directors”), out of funds legally available for their payment (subject to the rights of holders of the preferred stock, if any). 
Voting Rights
Except as otherwise required by law, the Certificate of Incorporation or the Bylaws, each holder of Common Stock is entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders of the Company, including the election of directors. The holders of Common Stock do not have cumulative voting rights. 

Liquidation Rights
In the event of our voluntary or involuntary liquidation, dissolution or winding up, the holders of Common Stock will be entitled to share ratably in any of our assets available for distribution after the payment in full of all debts and distributions and after the holders of all series of outstanding preferred stock, if any, have received their liquidation preferences in full.
Miscellaneous
Holders of Common Stock have no sinking fund or redemption provisions, or conversion or preemptive rights. All outstanding shares of Common Stock are validly issued, fully paid and non-assessable. 
Exchange Listing
The Common Stock is listed on the New York Stock Exchange under the symbol “CMC.”
Transfer Agent
The transfer agent for our Common Stock is Broadridge Corporate Issuer Solutions, Inc.
Preferred Stock
The Company is authorized to issue preferred stock from time to time, in one or more series with such rights, preferences, privileges and restrictions, including dividend rights, voting rights, conversion rights, terms of redemption and liquidation preferences as may be fixed or designated by the Board of Directors without any further vote or action by the stockholders. Under certain circumstances, the issuance of preferred stock may discourage or make more difficult a merger, tender offer, other business combination or proxy contest, the assumption of control by a holder of a large block of the Company’s securities or the removal of incumbent management even if such event were favorable to the interests of stockholders. The Board of Directors, without stockholder approval, may issue Preferred Stock with voting and conversion rights and dividends and liquidation preferences which could adversely affect the holders of Common Stock. As of the date hereof, there are no shares of preferred stock outstanding.
Certain Provisions of the Certificate of Incorporation and Bylaws
The Certificate of Incorporation and Bylaws of the Company contain certain provisions that may delay, defer or prevent a change in control of the Company.
Classified Board; Vacancies and Removal of Directors
    Our Certificate of Incorporation and Bylaws classify the Board of Directors into three classes of directors as nearly equal in number as possible, each of which will serve for three years, with one class of directors being elected each year.

Our Certificate of Incorporation and Bylaws provide that directors may be removed only for cause (generally defined to include conviction of a felony, failure to attend 12 consecutive Board of Director meetings, or negligence or misconduct in the performance of the duties of a director) and only with the approval of the holders of at least a majority of the voting power of the then-outstanding shares of the Company’s capital stock entitled to vote generally in the election of directors (the “Voting Stock”). The number of directors shall be fixed and modified, but not reduced to less than three, from time to time by resolution of a majority of the authorized directors our Board of Directors. Any vacancy on the Board of Directors may be filled by the majority vote of the remaining directors then in office, though less than a quorum.
Stockholder Action by Written Consent
    Our Certificate of Incorporation and Bylaws provide that any action taken by the stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by written consent.
Special Meetings
Our Certificate of Incorporation and Bylaws provide that special meetings of our stockholders may be called only by the Board of Directors pursuant to a resolution adopted by a majority of the entire Board of Directors, by stockholders owning not less than a majority of the Voting Stock or by The Jacob Feldman and Sara B. Feldman Grantor Trust dated September 24, 1985 and the trustees of that trust as long as the Trust owns at least 10% of the Voting Stock.
Advance Notice Requirement
Our Bylaws set forth advance notice procedures with regard to stockholder nomination of persons for election to the Board of Directors or other business to be considered at an annual meeting of stockholders. These procedures provide that notice of such stockholder proposals must be timely given in writing to the secretary of the Company prior to the meeting at which the action is to be taken. Generally, to be timely, notice must be delivered to the secretary at the principal executive offices of the Company not less than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting of stockholders. The advance notice requirement does not give the Board of Directors any power to approve or disapprove stockholder director nominations or proposals but may have the effect of precluding the consideration of certain business at a meeting if the proper notice procedures are not followed. 
In addition, our Bylaws contain “proxy access” provisions, which permit a stockholder, or a group of up to 20 stockholders, that has continuously owned for no less than three years at least 3% of the Company’s outstanding shares of common stock, to nominate and include in the Company’s proxy materials up to the greater of two directors and 20% of the number of directors currently serving on the Company’s board, provided that the stockholder(s) and the nominee(s) satisfy the requirements specified in the Bylaws.
Business Combinations

    The Certificate of Incorporation also contains certain “fair price provisions” designed to provide safeguards for stockholders when an “interested stockholder” (defined as a stockholder owning 10% or more of the Voting Stock or its affiliate or associate) attempts to effect a “business combination” with the Company. The term “business combination” includes (i) any merger or consolidation of the Company involving the interested stockholder or an affiliate of the interested stockholder, (ii) certain dispositions of assets of the Company having an aggregate fair market value of $25 million or more to the interested stockholder or an affiliate of the interested stockholder, (iii) any issuance or transfer of securities of the Company to the interested stockholder having an aggregate fair market value of $25 million or more, (iv) the adoption of any plan of liquidation or dissolution of the Company by or on behalf of the interested stockholder or an affiliate of the interested stockholder and (v) any reclassification of securities or recapitalization of the Company or any merger or consolidation of the Company with any of its subsidiaries or any other transaction having the effect of increasing the proportionate share of ownership of the interested stockholder or an affiliate of the interested stockholder. In general, a business combination between the Company and the interested stockholder must be approved by the affirmative vote of 70% of the outstanding Voting Stock, excluding Voting Stock owned by such interested stockholder, unless the transaction is approved by a majority of the members of the Board of Directors continuing in office who are not affiliated with the interested stockholder and were directors before the interested stockholder became an interested stockholder, and certain minimum price and form of consideration requirements are satisfied. 
Limitation of Liability of Directors
The Certificate of Incorporation generally provides that, to the fullest extent permitted by the DGCL, no director shall be liable to the Company or its stockholders for monetary damages for breach of certain fiduciary duties as a director. Under the DGCL, a director’s liability may not be eliminated:
•for any breach(es) of the director’s duty of loyalty to us or to our stockholders;
•for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;
•for certain unlawful dividend payments or stock redemptions or repurchases; and
•for any transaction from which the director derives an improper personal benefit.
The effect of this provision is to restrict the rights of the Company and its stockholders to recover monetary damages against a director for breach of certain fiduciary duties as a director.
Supermajority Voting
The affirmative vote of the holders of 70% or more of the outstanding shares of Voting Stock is required to alter, amend, repeal or adopt any provision inconsistent with the provisions relating to the classified board, vacancy and removal of directors, right to call a special meeting 

and prohibition on stockholder consent, as well as certain other provisions of the Certificate of Incorporation and Bylaws.exhibit10iiibto8312020_f

                      AMENDED AND RESTATED                    COMMERCIAL METALS COMPANY          EXECUTIVE EMPLOYMENT CONTINUITY AGREEMENT         THIS AGREEMENT, dated as of _________________ (the “Agreement Date”), is  made  by  and  between COMMERCIAL  METALS  COMPANY (the “Company”),  a  Delaware corporation, and ____________________ (the “Executive”).        WHEREAS, the Company and the Executive entered into that certain Commercial  Metals  Company    Executive  Employment   Continuity  Agreement   dated  _________________ (the “Original Agreement”); and       WHEREAS, the Company and the Executive now desire to amend and restate the  Original Agreement to make certain changes as provided herein;        NOW THEREFORE, for good and valuable consideration, the receipt and adequacy  of which is hereby acknowledged, the Company and the Executive agree as follows:                                    ARTICLE I                                 PURPOSE         The Original Agreement is hereby Amended and Restated in its entirety as follows.            The Board of Directors of the Company (the “Board”) has determined that it is in the  best interests of the Company and its shareholders to assure that the Company will have  the continued services of the Executive, despite the possibility or occurrence of a Change  in Control of the Company. The Board believes that this objective may be achieved by  giving key management employees assurances of financial security in case of a pending or  threatened Change in Control, so that they will not be distracted by personal risks and will  continue to devote their full time and best efforts to the performance of their duties. The  Company and the Executive enter into this Agreement to induce the Executive to remain  an  employee  of  the  Company  and to continue to devote Executive’s full energy to the  Company’s affairs. This Agreement is not intended to provide the Executive with any right  to continued employment with the Company, except in the event of a Change in Control  of  the  Company  and  subject  to  the  provisions  of  this  Agreement. The effect of this  Agreement on other agreements and other rights of the Executive is explained in Article  IX below.                                    ARTICLE II                           CERTAIN DEFINITIONS         When used in this Agreement, the terms specified below shall have the following  meanings:          2.1  “Affiliate”  means  any  corporation  or  other  entity  that  is  directly  or  indirectly  through one or more intermediaries, controlled by the Company.     

 

     2.2 “Annual Base Salary” has the meaning set forth in Section 3.2(a).                2.3 “Annual Cash Incentive Plan” means the cash bonus plan as administered by the   compensation committee of the Company’s board of directors which establishes the criteria   for and amount of annual cash bonus payments for key executives.           2.4 “Auditor” has the meaning set forth in Section 6.1.            2.5 “Benefit Continuation Period” means the period beginning on the Termination   Date and ending on the second anniversary of the Termination Date.               2.6  “Benefit  Restoration  Plan”  means  the  Commercial  Metals  Companies  2005  Benefit Restoration Plan, as amended and restated.           2.7 “Capped Amount” has the meaning set forth in Section 6.1.           2.8 “Cash Bonus Opportunity” has the meaning set forth in Section 3.2(b).              2.9 “Cause” has the meaning set forth in Section 4.3.           2.10 “Change in Control” means any of the following events:               (a) any Person becomes the “beneficial owner” (as defined in Rule 13d-3 or Rule       13d-5 under the Exchange Act), directly or indirectly, of 30% or more of the combined       voting power of the Company’s then outstanding voting securities;               (b) the Incumbent Board ceases for any reason to constitute at least the majority       of the Board; provided, however, that any person becoming a director subsequent to       the Agreement Date whose election, or nomination for election by the Company’s       shareholders was approved by a vote of at least 75% of the directors comprising the       Incumbent Board (either by a specific vote or by approval of the proxy statement of       the  Company  in  which  such  person  is  named  as  a  nominee  for  director,  without       objection to such nomination) shall be, for purposes of this subsection (b), considered       as though such person were a member of the Incumbent Board;               (c) all or substantially all of the assets of the Company are sold, transferred or       conveyed and the transferee of such assets is not controlled by the Company (control       meaning the ownership of more than 50% of the combined voting power of such       entity’s then outstanding voting securities); or               (d) the Company is reorganized, merged or consolidated, and the shareholders       of the Company immediately prior to such reorganization, merger or consolidation       own in the aggregate 50% or less of the outstanding voting securities of the surviving       or resulting corporation or entity from such reorganization, merger or consolidation.                                                   - 2 - 

 

        For  purposes  of  this  Section  2.10,  the  term  “Incumbent  Board”  means  the      individuals who as of the Agreement Date constitute the Board, and the term “Person”      means  any  natural  person,  firm,  corporation,  government,  governmental  agency,      association, trust or partnership.             2.11 “Change in Control Arrangements” has the meaning set forth in Section 6.1.            2.12 “Change in Control Payment” has the meaning set forth in Section 6.1.        2.13 “Change in Control Date” means the date on which a Change in Control occurs.          2.14 “Code” means the Internal Revenue Code of 1986, as amended.          2.15 “Constructive Termination” has the meaning set forth in Section 4.4.          2.16 “Disabled” or “Disability” means that the Executive:              (a)  is  unable  to  engage  in  any  substantial  gainful  activity  by reason  of  any      medically  determinable  physical  or  mental  impairment  which  can be  expected  to      result in death or can be expected to last for a continuous period of not less than 12      months, or              (b) is, by reason of any medically determinable physical or mental impairment      which can be expected to result in death or can be expected to last for a continuous      period of not less than 12 months, receiving income replacement benefits for a period      of not less than 3 months under an accident and health plan covering employees of      the Company or an Affiliate.          2.17 “Disability Effective Date” has the meaning set forth in Section 4.1.          2.18 “Employment Period” means the period commencing on the Change in Control  Date and ending on the second anniversary of the Change in Control Date.             2.19  “Equity  Incentive  Plans”  means  the  Company’s  2013  Long-Term  Equity  Incentive Plan, the General Employee Stock Purchase Plan and any other equity incentive  plan, as each may be amended from time to time, and approved by the Company following  the date of this Agreement which is intended to provide a financial incentive to employees  of the Company based on the value of or utilizing the Company’s stock whether by means  of  grants  or  awards  of  incentive  stock  options,  non-qualified  stock  options,  stock  appreciation rights, restricted stock, performance share awards or any other equity based  incentives.              2.20 “Excess Change in Control Payment” means the dollar amount of excise tax  which the Executive would become obligated to pay pursuant to Code Section 4999 as a  result of receipt of any payment from the Company in excess of the Capped Amount.                                         - 3 - 

 

     2.21 “Exchange Act” means the Securities Exchange Act of 1934, as amended.             2.22 “Highest Annual Base Salary” means the highest annual base salary paid by the   Company  or  an  Affiliate  to  the  Executive  for  any  calendar  year during  the  sixty  (60)  consecutive month period immediately preceding the Termination Date. For purposes of  this determination, annual base salary shall be annualized for any period of less than one  complete calendar year.              2.23  “Long-Term Performance Plan” means a cash incentive plan administered by  the compensation committee of the Company’s board of directors which provides for cash  payments  to  key  employees  contingent  upon  the  attainment  of  multi-year  performance  goals.               2.24 “Make-Whole Payment” has the meaning set forth in Section 6.4.          2.25 “Payment Date” means the 30th day following the Executive’s Termination Date.            2.26 “Performance Period” has the meaning set forth in Section 3.2(b).            2.27 “Plans” has the meaning set forth in Section 3.2(c).           2.28  “Profit  Sharing  Plan”  means  the  Commercial  Metals  Companies  Retirement  Plan, including its supplemental contributions provisions, or any successor plan thereto.               2.29 “Short Fall Amount” has the meaning set forth in Section 6.4.          2.30 “Qualifying Termination” means a Constructive Termination of the Executive’s  employment pursuant to Section 4.4.           2.31  “Termination  Date”  means  the date  of  termination  of  the  Executive’s  employment;  provided,  however, that  if  the  Executive’s  employment  is  terminated  by  reason of Disability, then the Termination Date shall be the Disability Effective Date (as  defined in Section 4.1).           2.32 “Welfare Continuance Benefit” has the meaning set forth in Section 5.1(d).           2.33 “Welfare Plans” means the Company’s plans, practices, policies and programs  that provide welfare benefits including, but not limited to, medical, prescription, dental,  disability, group life, accidental death and travel accident insurance benefits.                                     ARTICLE III                EMPLOYMENT AFTER A CHANGE IN CONTROL          3.1 Employment. The Company hereby agrees to continue the Executive in its employ   during  the  Employment  Period  and, unless  the  Executive  provides  an  express  written   consent  otherwise,  the  Executive  will  have  duties  and  such  other  powers  that  are                                       - 4 - 

 

substantially  equivalent to  the duties  and  powers  which  the  Executive had  prior to  the  Change in Control. Subject to Article IV of this Agreement, the Executive agrees to remain  in the employ of the Company subject to the terms and conditions hereof and (i) will devote  his  knowledge,  skill  and  best  efforts  on  a  full-time  basis  to  performing  his  duties  and  obligations  to  the  Company  (with  the  exception  of  absences  on  account  of  illness  or  vacation in accordance with the Company’s policies, and civic and charitable commitments  not involving a conflict with the Company’s business), (ii) will comply with the directions  and orders of the Board with respect to the performance of his duties, and (iii) will comply  with the provisions of Article X.          3.2 Compensation and Benefits.              (a) Base Salary. During the Employment Period, the Executive shall receive an      annual base salary (“Annual Base Salary”), which shall be paid at a monthly rate at      least equal to the highest monthly base salary paid or payable to the Executive by the      Company  (including  any  base  salary  which  has  been  earned  but  deferred  by  the      Executive) in respect of the twelve-month period immediately preceding the month      in which the Change in Control Date occurs. During the Employment Period, the      Annual Base Salary shall be increased from time to time as substantially consistent      with  increases  in  base  salary  awarded  to  other  peer  executives of  the  Company.      Annual Base Salary shall not be reduced after any such increase, and the term Annual      Base Salary as used in this Agreement shall refer to Annual Base Salary as so adjusted.             (b) Cash Bonus Opportunity. In addition to the Annual Base Salary, during the      Employment Period the Company shall grant or cause to be granted to the Executive      cash bonus opportunities (each a “Cash Bonus Opportunity”) for each Performance      Period which ends or begins during the Employment Period. “Performance Period”      means  each  period  of  time  designated  in  accordance  with  any  cash  incentive      arrangement which is based upon performance, including the Annual Cash Incentive      Plan and the Long-Term Performance Plan. The Executive’s target and maximum      Cash Bonus Opportunity with respect to any Performance Period shall not be less than      the largest target and maximum established for the Executive under any Company      cash incentive arrangement, including the Annual Cash Incentive Plan and the Long-     Term Performance Plan, as in effect for a Performance Period immediately preceding      the Change in Control Date.              (c)  Other  Employee  Benefits.  During  the  Employment  Period,  the Executive      shall be eligible to participate in all employee benefit plans, practices, policies and      programs in place for other executives in similar positions at the Company (“Plans”).      These Plans include, but are not limited to, Welfare Plans, incentive, savings, deferred      compensation and retirement plans, vacation policies and use of a Company car or car      allowance.         3.3 Affiliates. If immediately prior to the Change in Control Date, the Executive was  on the payroll of and participated in the Plans of an Affiliate of the Company, the references                                      - 5 - 

 

 to the Company contained in Sections 3.1, 3.2 and the other sections of this Agreement   shall be read to refer to the Company and to such Affiliate, as applicable.            3.4  Termination  Prior  to  a  Change  in  Control.  Notwithstanding  anything  in  this   Agreement to the contrary, if a Change in Control occurs and the Executive’s employment   with the Company or an Affiliate was terminated by the Company or an Affiliate 6 months   prior to the Change in Control Date other than for Cause or Disability, then for all purposes   of  this  Agreement  the  Executive’s  termination  of  employment  shall  be  treated  as  an   involuntary termination of the Executive’s employment occurring immediately after the   Change in Control Date, and the Executive shall conclusively be entitled to receive the   amounts described in Section 5.1 of this Agreement.                                      ARTICLE IV                       TERMINATION OF EMPLOYMENT           4.1  Disability.  During  the  Employment  Period,  the  Company  may  terminate  the   Executive’s employment if the Executive becomes Disabled. The Executive’s employment   shall terminate effective on the 30th day after the Executive’s receipt of written notice of   termination from the Company (the “Disability Effective Date”).           4.2  Death.  The  Executive’s  employment  shall  terminate  automatically  upon  the   Executive’s death during the Employment Period.            4.3  Cause.  The  Company  may  terminate  the  Executive’s  employment  during  the   Employment  Period  for  Cause.  For  purposes  of  this  Agreement,  “Cause”  means  (a)   material  misappropriation  with  respect  to  the  business  or  assets  of  the  Company,  (b)   persistent  refusal  or  willful  failure  constituting  gross  dereliction  by  the  Executive  to  substantially perform the Executive’s duties and responsibilities to the Company, which  continues after the Executive receives written notice from the Company of such refusal or  failure and which is not remedied by the Executive within thirty (30) days following receipt  of  the  Company’s  written  notice,  (c)  conviction  of  a  felony  or crime  involving  fraud,  dishonesty or moral turpitude, or (d) the use of drugs or alcohol that interferes materially  with the Executive’s performance of his duties.           4.4  Constructive  Termination.  The  Executive  may  terminate  the  Executive’s   employment  for  Constructive  Termination  at  any  time  during  the Employment  Period.   “Constructive Termination”  means  any  material  breach  of  this  Agreement  by  the   Company during the Employment Period, including:                (a)  the  failure  to  maintain  the  Executive  in  the  office  or  position,  or  in  a       substantially equivalent office or position, held by the Executive immediately prior to       the Change in Control Date;                (b) a material adverse change in the nature or scope of the Executive’s position,       duties, powers, functions or responsibilities as compared to the nature or scope of such       office, position, duties, powers, functions or responsibilities immediately prior to the                                       - 6 - 

 

    Change  in  Control  Date;  provided,  however,  that  a  diminution  of the Executive’s      duties, functions or responsibilities attributable solely to the Company ceasing to be      a public company on or after the Change in Control Date shall not alone constitute a      material adverse change;              (c) any failure by the Company to provide the Executive with the compensation      and  benefits  described  in  Section  3.2,  including  any  reduction of  the  Executive’s      Annual Base Salary in violation of Section 3.2(a);              (d) the failure of any successor to the Company to assume this Agreement; or              (e) any requirement by the Company that the Executive relocate more than 50      miles from (i) the Executive’s workplace, or (ii) the principal offices of the Company      (if such offices are the Executive’s workplace), in each case without the consent of      the Executive. Constructive Termination shall be deemed to have occurred on the date      the Company communicates such requirement, either in writing or otherwise.      Notwithstanding  the  foregoing,  an  act  or  omission  shall  not  constitute  Constructive  Termination unless (1) the Executive gives written notice to the Company indicating that  the Executive intends to terminate employment under this Section 4.4; (2) the Executive’s  voluntary  termination  occurs  within  sixty  (60)  days  after  the  Executive  knows  or  reasonably should know of an event described above, or within sixty (60) days after the  last in a series of such events, and (3) the Company has failed to remedy the event described  above, as the case may be, within thirty (30) days after receiving the Executive’s written  notice. If the Company remedies the event described above, as the case may be, within  thirty  (30)  days  after  receiving  the  Executive’s  written  notice,  the  Executive  may  not  terminate  employment  under  this  Section  4.4  on  account  of  the  event  specified  in  the  Executive’s notice.                                    ARTICLE V            OBLIGATIONS OF THE COMPANY UPON TERMINATION         5.1 If by the Executive for a Qualifying Termination or by the Company Other Than  for Cause or Disability. If, during the Employment Period, the Company shall terminate  the Executive’s employment other than for Cause or Disability, or if the Executive shall  terminate employment for a Qualifying  Termination,  the  Company’s obligations to the  Executive shall be as follows:              (a) The Company shall pay to the Executive by no later than the Payment Date      a lump sum cash payment equal to the sum of the following amounts:                  (i) the Annual Base Salary and all earned but not used paid vacation time          through the Termination Date;                  (ii)  all  amounts  previously  deferred  by  the  Executive  under  any          nonqualified  deferred  compensation  plan  sponsored  by  the  Company  or  its                                      - 7 - 

 

    Affiliates (together with any accrued earnings thereon) which have not yet been      paid and which otherwise would be payable under the terms of such nonqualified      deferred  compensation  plan  on  account  of  the  Executive’s  termination  of      employment,  unless  payment  of  such  amounts  would  constitute  an invalid      acceleration of the time or schedule of a payment under Code Section 409A; and                              (iii) all amounts payable to the Executive under the terms of the Annual      Cash Incentive Plan and Long-Term Performance Plan to the extent that such      amounts  have  not  yet  been  paid, unless  payment  of  such  amounts would      constitute an invalid acceleration of the time or schedule of a payment under      Code Section 409A.                         (b) The Company shall pay to the Executive by no later than the Payment Date  a lump sum cash payment equal to two (2) times the sum of (i) the Executive’s Highest  Annual Base Salary and (ii) the Executive’s target Cash Bonus Opportunity for the  Performance Period in which the Termination Date occurs.                         (c) On the Termination Date, the Executive shall become fully vested in any and  all stock incentive awards granted to the Executive pursuant to any Equity Incentive  Plan or otherwise which have not become exercisable as of the Termination Date. On  the Termination Date, all stock options (including options vested as of the Change in  Control Date) shall remain exercisable until the last date on which the option was  scheduled  to  expire,  without  regard  to  whether  termination  of  the  Executive’s  employment  would  have  provided  for  a  shorter  exercise  period  following  such  termination of employment; provided, however, that the exercise period of an option  shall  be  extended  only  to  the  latest  date  on  which  it  may  be  exercised  without subjecting such option to the provisions of Code Section 409A or resulting in  treatment  of  the  option  as  a  new  grant  on  the  date  of  extension.  All  forfeiture  conditions  that  as  of  the  Termination  Date  are  applicable  to  any  restricted  stock,  restricted stock units, stock appreciation rights, performance grants or other incentive  awards granted to the Executive by the Company pursuant to any Equity Incentive  Plan or otherwise shall lapse immediately.                         (d) During the Benefit Continuation Period, the Executive and his dependents  will continue to be covered by all Welfare Plans in which he or his dependents were  participating immediately prior to the Termination Date (the “Welfare Continuance  Benefit”). The Company shall pay all the COBRA premium cost otherwise due from  Executive  for  continued  participation  of  the  Executive  and  dependents  in  the  Company’s medical welfare benefit plan.  The Company shall pay all or that portion  of  the  premium  costs  of  the  Welfare  Continuance  Benefit  for  the  Executive  and  dependents under Welfare Plans other than the Company’s medical welfare benefit  plan on the same basis as applicable under such Welfare Plans immediately preceding  the Termination Date, and the Executive will pay additional premium costs (if any)  as applicable immediately preceding the Termination Date.  In determining the level  of benefits to which the Executive is entitled under any of the Welfare Plans, the  Executive shall be deemed to be paid during the Benefit Continuation Period annual                                  - 8 - 

 

compensation no less than the Annual Base Salary in effect prior to the Termination  Date. If participation or continued participation under any one or more of the Welfare  Plans included in the Welfare Continuance Benefit is not possible under the terms of  the  Welfare  Plan  or  any  provision  of  law  or  if  such  participation  or  continued  participation  would  create  an  adverse  tax  consequence  for  the  Executive  or  the  Company due to such participation, the Company will provide substantially identical  benefits  directly  or  through  one  or  more  insurance  arrangements.  The  Welfare  Continuance Benefit as to a Welfare Plan will cease if and when the Executive has  obtained coverage under one or more welfare benefit plans of a subsequent employer  and such plan provides coverage to the Executive and his dependents of the same type  as provided under such Welfare Plan.                         (e) To the extent that the Executive would not otherwise be entitled to receive an  allocation  of  Employer  Contribution  under  the  Profit  Sharing  Plan  or  Benefit  Restoration Plan for the Plan Year in which the Termination Date occurs and for the  Plan Years including all or a portion of the Benefit Continuation Period, the Company  shall pay to the Executive on the Payment Date a lump sum cash payment equal to  the equivalent of the Employer Contribution that the Company would have allocated  to the Executive’s account in each of the Profit Sharing Plan and Benefit Restoration  Plan as if the Executive had satisfied all requirements under the Profit Sharing Plan  and Benefit Restoration Plan to be eligible to receive an allocation of the Employer  Contribution for the Plan Year in which the Termination Date occurs, and each Plan  Year or pro-rata portion thereof during the Benefit Continuation Period.  For purposes  of calculating this payment:                              (i) the eligible compensation of the Executive shall be deemed to be an      amount equal to the greatest of (i) twice the Executive’s Highest Annual Base      Salary,  (ii)  the  eligible  compensation  used  to  calculate  the  Employer      Contribution to the Executive’s account for the last Plan Year prior to the Plan      Year in which the Termination Date occurs or (iii) the eligible compensation      earned by the Executive during the Plan Year to the Termination Date including      the amounts described in Section 5.1 (a) (b) and (c); and                              (ii) the Executive shall be deemed to have deferred the maximum amount      of compensation permitted by law or terms of the plan which would result in a      credit  to  the  Executive’s  account  of  the  maximum  amount  of  Employer      Contribution in both the Profit Sharing Plan and Benefit Restoration Plan of the      maximum Employer Contribution; and                    (iii) the Employer Contribution calculated  as a percentage of the eligible      compensation shall be deemed to be the greater of the Employer Contribution      for  the last Plan Year prior to the Plan Year in which the Termination Date      occurs or the average of the Employer Contribution for the last five Plan Years.                                                      - 9 - 

 

     Capitalized terms contained in this subsection which are not otherwise defined in this       Agreement shall have the meaning assigned to such terms under the Profit Sharing       Plan or Benefit Restoration Plan.            5.2 If by the Company for Cause, Disability or Death or if by the Executive for Other   than  for  a  Qualifying  Termination.  If,  during  the  Employment  Period,  the  Company   terminates the Executive’s employment for Cause, Disability or the death of the Executive   or,  in  the  event  the  Executive  terminates  employment  for  any  reason  other  than  for  a   Qualifying Termination, this Agreement shall terminate without further obligation by the   Company to the Executive, other than:                (a) the obligation to immediately pay the Executive the amounts described in       Section 5.1(a), and               (b) the obligation, to the extent required by law or regulation or pursuant to the       terms of the Plans, to provide benefits under the terms of any of the Plans, Welfare       Plans and other employee benefit programs in which the Executive was participating       immediately prior to the Termination Date.                                     ARTICLE VI                                TAX MATTERS          6.1 Excise Tax Determination. If any benefit, payment or distribution by the Company   or an Affiliate to or for the benefit of the Executive or his legal  representatives  and   dependents, whether payable or distributable pursuant to the terms of this Agreement or   pursuant to any other plan, agreement, program or arrangement including, but not limited   to, the Annual Cash Incentive Plan, Long –Term Performance Plan, Benefit Restoration   Plan, or Equity Incentive Plans (collectively “Change in Control Arrangements”) would   be subject to the excise tax imposed on the Executive under Code Section 4999 on “excess   parachute payments” (all of such benefits, payments or distributions, whether or not subject   to the excise tax, in aggregate, the “Change in Control Payment”), the Company shall,   within twenty (20) days of the Termination Date, provide the Executive with a written   notice and explanation of such determination.  The notice shall include (i) a calculation  computing the amount of the excise tax to be owed by the Executive upon receipt of the  Change in Control Payment, detailing (a) the total amount of cash to be paid and the amount  of such cash subject to the excise tax, (b) the amount of and assumptions used to determine  the value of all non-cash benefits to be provided and such non-cash benefits subject to the   excise  tax,  (c)  the  Executive’s  base  amount  of  total  taxable  compensation  used  in  the   calculation, and (d) the total amount subject to the excise tax, (ii) a calculation of  the   maximum amount of the Change in Control Payment that could be paid by the Company   to the Executive without the imposition of the excise tax  (the “Capped Amount”), and (iii)   calculations showing whether the Executive would receive a larger amount, on an after-tax   basis (assuming, for United States taxpayers, payment by the Executive of the Code Section   4999 excise tax and on the portion in excess of the Capped Amount payment of taxes based   on the following: (A) the highest marginal federal personal income tax rate, (B) the highest   marginal state and local income tax rates for the state in which the Executive is domiciled,                                      - 10 - 

 

 and (C) the hospital insurance tax rate under Code Section 311 (b)), if the Company were   to pay the Executive (a) the Capped Amount or (b) the Change in Control Payment.   The   Company  shall  pay  to  the  Executive  on  the  Payment  Date  the  Capped  Amount  or  the   Change in Control Payment, whichever is determined to result in the larger amount as   calculated pursuant to clause (iii) of the preceding sentence.          The computations and explanation required under this subsection will be made by the   accounting  firm  which  was  serving  as  the  Company’s  independent auditor  as  of  the  Termination  Date,  or  if  that  firm  is  not  available  to  perform  the  computation,  the  computation shall be performed by a tax counsel or nationally recognized accounting firm  selected by mutual consent of the Company and the Executive (the “Auditor”). The fees  and expenses of the Auditor will be paid solely by the Company. The computations and  valuations required under this section will be performed in a manner consistent with the  requirements of Code Sections 280G and 4999, as in effect at the time the computations  and valuations are performed.          6.2 Funding for Certain Payments. Without affecting its obligations to or the rights of   the Executive under this Agreement, the Company shall, as soon as possible following the   Change  in  Control  but in  no  event later  than thirty (30)  days  following  the  Change  in   Control Date, establish an irrevocable grantor trust within the meaning of Code Sections   671  through  679  for  amounts  payable  under  this  Agreement  (if  such a trust has not   previously been established), and shall irrevocably deposit funds with the trustee of such   trust of an amount equal to the total cash payments to which the Executive would be entitled   under Article V of the Agreement if the Executive had a Qualifying Termination on the   Change in Control Date, without regard to whether the Executive actually had a Qualifying   Termination on that date. The funds deposited with the trustee of such trust and the earnings  thereon will be dedicated to the payment of the cash amounts payable under the Agreement,  but shall remain subject to the claims of the general creditors  of  the  Company.  The  expenses of establishing and maintaining such trust shall be paid solely by the Company.  When the Executive or the Executive’s survivors become eligible for payments under this  Agreement, such payments will be paid out of the trust fund. If the amounts credited to the  trust fund for the benefit of the Executive are not sufficient to satisfy the total amounts  payable to the Executive or the Executive’s survivors under this Agreement, the additional  amounts necessary to satisfy such payments shall be paid directly by the Company from  its general assets. In lieu of establishing an irrevocable grantor trust as described above,  the Company may establish an alternative funding arrangement mutually acceptable to the  Company and the Executive to fund the amounts payable under this Agreement. Once the  total  cash  payments  to  which  the  Executive  would  be  entitled  under  Article  V  of  this  Agreement have been paid from the trust, any remaining funds shall be returned to the  Company.         6.3  Compliance  with  Tax  Rules  for  Nonqualified  Deferred  Compensation  Plans.   Notwithstanding any provision of this Agreement to the contrary, and to the extent required  by  Code  Section  409A,  payments  or  provision  of  benefits  to  the Executive  under  this  Agreement shall be delayed for six (6) months following the Termination Date. To the  extent permitted under Code Section 409A, if the Executive shall be entitled to a payment                                      - 11 - 

 

 pursuant to this Agreement prior to the date at which a payment is permitted under Code   Section 409A to be made to the Executive solely because of the Code Section 409A six (6)   month delay in payment rule for key employees, the Executive shall be entitled to payment   by the Company of the applicable employee portion of the applicable withholding taxes   due on such payment, if any. Such a payment by the Company of withholding taxes shall   reduce the amount otherwise payable to the Executive under this Agreement. To the extent   permitted under Code section 409A, if benefits otherwise to be provided to the Executive,  such as for example, certain of the benefits provided for in Section 5.1(d), are delayed  because of the Code Section 409A six (6) month delay in payment rule for key employees,  in  order  for  the  Company  to  provide  those  benefits  during  such six-month  period,  the  Executive shall pay the full cost of those benefits for such six-month period.  On the first  day of the seventh month following the Termination Date, in addition to the Company  commencing  the  provision  of  those  benefits  in  accordance  with  the  terms  of  this  Agreement, the Company shall pay to the Executive, in a lump sum, the total amount the  Executive paid for those benefits during such first six-month period.                    6.4  Company  Obligation  to  Executive  With  Regard  to  Tax  Information.  If  the   computations and valuations required to be provided by the Company to the Executive   pursuant to Section 6.1 are on audit challenged by the Internal Revenue Service as having   been performed in a manner inconsistent with the requirements of Code Sections 280G and   4999 or if Code Section 409A is determined to apply to all or any part of the payments to   which the Executive or his survivors may be entitled under this Agreement and as a result   of such audit or determination, (i) the amount of cash and the benefits provided for in   Section 6.1 remaining to the Executive after completion of such audit or determination is   less  than  (ii)  the  amount  of  cash and  the  benefits  which  were  paid  or  provided  to  the  Executive  on  the  basis  of  the  calculations  provided  for  in  Section  6.1  (the  difference  between (i) and (ii) plus any legal or accounting fees or expenses incurred by the Executive  arising from the audit being referred to as the “Short Fall Amount”), then the Executive   shall be entitled to receive an additional payment (a “Make-Whole Payment”) in an amount  such that after payment by the Executive of all taxes (including additional excise taxes  under said Code Section 4999 and any interest, and penalties imposed with respect to any  taxes) imposed upon the Make-Whole Payment, the Executive retains an amount of the  Make-Whole Payment equal to the Short Fall Amount.  The Company shall pay the Make- Whole Payment to the Executive in a lump sum cash payment within ten (10) days of the  completion of such audit or determination.                                     ARTICLE VII                          EXPENSES AND INTEREST          7.1 Legal Fees and Other Expenses. The Company agrees to pay promptly as incurred,   to the full extent permitted by law, all legal fees and expenses which the Executive may   reasonably incur as a result of any action or proceeding by the Company, the Executive or  others concerning the validity or enforceability of, or liability under, any provision of this  Agreement or any guarantee of performance thereof (including as a result of any action or  proceeding  by  the  Executive  concerning  the  amount  of  any  payment  pursuant  to  this  Agreement).  The  Company  shall  be  obligated  to  pay  such  legal  fees  and  expenses                                      - 12 - 

 

 regardless  of  the  outcome  of  the  action  or  proceeding,  unless  a  court  of  competent   jurisdiction  determines  that  the  Executive  acted  in  bad  faith  in  initiating  the  action  or   proceeding.            7.2 Interest. If the Company does not pay any amount due to the Executive under this   Agreement within three (3) days after such amount became due and owing, including but   not limited to any legal fees or expenses, interest shall accrue on such amount from the   date it became due and owing until the date of payment at an annual rate equal to 200 basis   points above the prime commercial lending rate published in The Wall Street Journal in   effect from time to time during the period of such nonpayment.                                     ARTICLE VIII                         NO SET-OFF OR MITIGATION           8.1 No Set-off by Company. The Executive’s right to receive when due the payments   and other benefits provided for under this Agreement is absolute, unconditional and subject   to no set-off, counterclaim or legal or equitable defense, except for possible set-offs as   legally  permitted  and  required  under  certain  delineated  circumstances  pursuant  to  the   Company’s  Policy  on  Recoupment  of  Incentive  Compensation.  Any  claim  which  the   Company  may  have  against  the  Executive,  whether  for  a  breach  of  this  Agreement  or   otherwise, shall be brought in a separate action or proceeding and not as part of any action   or proceeding brought by the Executive to enforce any rights against the Company under   this Agreement.            8.2 No Mitigation. The Executive shall not have any duty to mitigate the amounts   payable by the Company under this Agreement by seeking new employment following   termination.  Except  as  specifically  provided  in  this  Agreement,  all  amounts  payable   pursuant to this Agreement shall be paid without reduction regardless of any amounts of   salary, compensation or other amounts which may be paid or payable to the Executive as   the result of the Executive’s employment with another employer.                                      ARTICLE IX                        NON-EXCLUSIVITY OF RIGHTS           9.1 Waiver of Other Severance Rights. To the extent that payments are made to the   Executive pursuant to Section 5.1 of this Agreement, the Executive hereby waives the right   to  receive  severance  benefits  under  any  plan  or  agreement  (including  an  offer  of   employment or employment contract) of the Company or its Affiliates which provides for  severance  benefits.  However,  no  waiver  of  severance  benefits  under  another  plan  or  agreement shall take effect pursuant to this Agreement until the Change in Control Date.           9.2  Other  Rights.  This  Agreement  shall  not  prevent  or  limit  the  Executive’s   continuing or  future  participation  in  any  Plans,  Welfare  Plans,  or  other  benefit,  bonus,  incentive or other plans provided by the Company or any of its Affiliates and for which the  Executive may qualify, nor shall this Agreement limit or otherwise affect such rights as the  Executive may have under any other agreements with the Company or any of its Affiliates.                                      - 13 - 

 

Amounts which are vested benefits or which the Executive is otherwise entitled to receive  under the terms of any plan or program of the Company or any of its Affiliates and any  other payment or benefit required by law at or after the Termination Date shall be payable  in accordance with such plan, program or applicable law except as expressly modified by  this Agreement.                                    ARTICLE X                     OBLIGATIONS OF THE EXECUTIVE         10.1 Confidentiality. The Company has provided and will provide the Executive with  secret or confidential information, knowledge or data relating to the Company or any of its  Affiliates and their respective businesses.  The Executive will hold in a fiduciary capacity  for the benefit of the Company all secret or confidential information, knowledge or data  relating to the Company or any of its Affiliates and their respective businesses, which will  have been obtained by the Executive during the Executive’s employment by the Company  or any Affiliate and which will not be or become public knowledge (other than by acts by  the Executive or representatives of the Executive in violation of this Agreement). After  termination of  the  Executive’s  employment  with  the  Company,  the Executive will not,  without the prior written consent of the Company or except as may otherwise be required  by law or legal process, communicate or divulge any such information, knowledge or data  to anyone other than the Company and those designated by it.          10.2 Non-Competition and Non-Solicitation. The Executive agrees that for a period  of one (1) year after the Termination Date, the Executive (i) will not directly or indirectly  compete with the business as conducted by the Company or any of its Affiliates on the  Termination Date within one hundred (100) miles of any office or facility of the Company  or any of its Affiliates, (ii) will not hire or otherwise employ or retain, or knowingly permit  (to the extent reasonably within the Executive’s control) any other entity or business which  employs the Executive or in which the Executive has any ownership interest or is otherwise  involved  to  hire  or  otherwise  employ  or  retain,  any  person  who was  employed  by  the  Company or any of its Affiliates as of the Termination Date, and (iii) will not solicit or in  any manner attempt to influence or induce any customer of the Company or any of its  Affiliates  to  transact  any  business  with  any  Person  that  competes  with  the  business  as  conducted by the Company or any of its Affiliates as of the Termination Date.          10.3 Enforcement. In the event of a breach or threatened breach of this Article X, the  Executive  agrees  that  the  Company  will  be  entitled  to  injunctive  relief  in  a  court  of  appropriate jurisdiction to remedy any such breach or threatened breach, and the Executive  acknowledges that damages would be inadequate and insufficient. If the Company obtains  a judicial determination that the Executive has breached the terms of this Article X, all  rights of the Executive under this Agreement will terminate.             10.4  Reformation.   If  any  court  holds  that  any  of  the  covenants  contained  in  this  Article X shall be effective in any particular area or jurisdiction only if such covenant is  modified to limit its duration or scope or in any other manner, the court shall have such  authority to so reform the covenant, and the parties hereto shall consider such covenant to                                     - 14 - 

 

be modified with respect to that particular area or jurisdiction so as to comply with the  order of such court and, as to all other jurisdictions, the covenants contained herein shall  remain in full force and effect as originally written.  If any court holds that any of the  covenants contained in this Article X is void or otherwise unenforceable in any particular  area or jurisdiction, the Company may consider such covenant to be amended and modified  so as to eliminate therefrom the particular area or jurisdiction as to which such covenant is  so held void or otherwise unenforceable, and, as to all other areas and jurisdictions covered  hereunder, the covenants contained herein shall remain in full force and effect as originally  written.                                      ARTICLE XI                             MISCELLANEOUS        11.1 No Assignment of Benefit. No interest of the Executive or any beneficiary under  this Agreement, or any right to receive any payment or distribution  hereunder,  will  be  subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or  other alienation or encumbrance of any kind, nor may such interest or right to receive a  payment or distribution be taken, voluntarily or involuntarily, for the satisfaction of the  obligations or debts of, or other claims against, the Executive or Beneficiary, including  claims for alimony, support, separate maintenance, and claims in bankruptcy proceedings.          11.2 Rights Under the Agreement. The right to receive benefits under the Agreement  will not give the Executive any proprietary interest in the Company, its Affiliates or any of  the assets of the Company or its Affiliates. Except to the extent otherwise provided in  Section 6.2 of this Agreement or under the terms of the Plans or Welfare Plans, amounts  payable under the Agreement will be paid from the general assets of the Company. The  Executive will for purposes of this Agreement be a general creditor of the Company.          11.3 Applicable Law. This Agreement will be construed and interpreted pursuant to  the laws of the State of Texas, without reference to its conflict of laws rules.          11.4  No  Employment  Contract.  Nothing  contained  in  this  Agreement  will  be  construed to be an employment contract between the Executive and the Company prior to  a Change in Control Date.          11.5  Severability.  In  the  event  any  provision  of  this  Agreement  is  held  illegal  or  invalid, the remaining provisions of this Agreement will not be affected thereby.          11.6 Successors. The Agreement will be binding upon and inure to the benefit of the  Company, the Executive and their respective heirs, representatives and successors. The  Company  will  require  any  successor  (whether  direct  or  indirect,  by  purchase,  merger,  consolidation or otherwise) to all or substantially all of the business and/or assets of the  Company to assume expressly and agree to perform this Agreement in the same manner  and  to  the  same  extent  that  the  Company  would  be  required  to  perform  it  if  no  such  succession had taken place. As used in this Agreement, the term “Company” means the                                     - 15 - 

 

 Company as hereinbefore defined and any successor to its business and/or assets which   assumes and agrees to perform this Agreement by operation of law, or otherwise.            11.7 Amendment; Waiver. No provision of this Agreement may be modified, waived   or discharged unless such waiver, modification or discharge is agreed to in writing and the   writing  is  signed  by  the  Executive  and  the  Company.  A  waiver  of  any  breach  of  or   compliance with any provision or condition of this Agreement is not a waiver of similar or   dissimilar  provisions  or  conditions.  This  Agreement  may  be  executed  in  one  or  more   counterparts, all of which will be considered one and the same agreement. Notwithstanding   any other provisions of this Agreement to the contrary, the parties agree that they will in   good faith amend this Agreement in any manner reasonably necessary to comply with Code   Section 409A, and the parties further agree that any provisions of this Agreement that shall  violate the requirements of Code Section 409A shall be of no force and effect after such  amendment.            11.8 Notices. All notices and other communications hereunder will be in writing and   will be given by hand delivery acknowledged in writing by the recipient personally, or   given  by  first-class  mail,  registered  or  certified,  with  return  receipt  requested,  postage   prepaid,  and  shall  be  deemed  to  have  been  duly  given  three  days  after  mailing  or   immediately  upon  duly  acknowledged  hand  delivery,  as  applicable,  to  the  respective  persons named below:                          If to the Company:   Commercial Metals Company                                         P.O. Box 1046                                                       Dallas, Texas 75221                                                Attn: General Counsel                                                                                                                      If to the Executive:                                 __________________                                             _________________                                 _________________                                                                       or  to  such  other  address  as  either  party  will  have  furnished  to the other in writing in   accordance herewith.            11.9 Tax Withholding. The Company shall withhold from any amounts payable under   this Agreement any federal, state or local taxes that are required to be withheld pursuant to   any applicable law or regulation.                                           [Signature Page to Follow]                                          - 16 - 

 

        IN WITNESS WHEREOF, the Executive and the Company have executed this  Agreement as of the date first above written.                                                                            COMMERCIAL METALS COMPANY                                                                                                                                                                                  By: /s/ Barbara R. Smith                                                     Barbara R. Smith                                      Chairman of the Board, President and                                      Chief Executive Officer                                                                                                                                                                                         EXECUTIVE                                                                                                          _________________________________                                                                                                                - 17 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00315-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00315-of-00352.parquet"}]]