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<SEC-DOCUMENT>0000950134-03-014232.txt : 20031031
<SEC-HEADER>0000950134-03-014232.hdr.sgml : 20031031
<ACCEPTANCE-DATETIME>20031031075248
ACCESSION NUMBER:		0000950134-03-014232
CONFORMED SUBMISSION TYPE:	10-K/A
PUBLIC DOCUMENT COUNT:		17
CONFORMED PERIOD OF REPORT:	20020831
FILED AS OF DATE:		20031031

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			COMMERCIAL METALS CO
		CENTRAL INDEX KEY:			0000022444
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-METALS SERVICE CENTERS & OFFICES [5051]
		IRS NUMBER:				750725338
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0831

	FILING VALUES:
		FORM TYPE:		10-K/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-04304
		FILM NUMBER:		03968288

	BUSINESS ADDRESS:	
		STREET 1:		6565 N. MACARTHUR BLVD., SUITE 800
		STREET 2:		P O BOX 1046
		CITY:			IRVING
		STATE:			TX
		ZIP:			75039
		BUSINESS PHONE:		2146894300

	MAIL ADDRESS:	
		STREET 1:		6565 N. MACARTHUR BLVD., SUITE 800
		STREET 2:		PO BOX 1046
		CITY:			IRVING
		STATE:			TX
		ZIP:			75039
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K/A
<SEQUENCE>1
<FILENAME>d09793a1e10vkza.txt
<DESCRIPTION>AMENDMENT NO. 1 TO FORM 10-K
<TEXT>
<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             ---------------------
                                  FORM 10-K/A
                               (AMENDMENT NO. 1)
    (MARK
     ONE)

  X     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
 ---    THE SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED AUGUST 31, 2002

                                       OR

        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
 ---    EXCHANGE ACT OF 1934



              FOR THE TRANSITION PERIOD FROM          TO
                                             --------    --------

           COMMISSION FILE NO. 1-4304

                           COMMERCIAL METALS COMPANY
             (Exact name of registrant as specified in its Charter)

             DELAWARE                                    75-0725338
     (State or other jurisdiction                     (I.R.S. Employer
   of incorporation or organization)                 Identification No.)



   6565 MACARTHUR BLVD., IRVING, TEXAS                     75039
(Address of principal executive offices)                 (Zip Code)


      (Registrant's telephone number, including area code) (214) 689-4300

          Securities registered pursuant to Section 12(b) of the Act:

<Table>
<Caption>
                                                                          NAME OF EACH EXCHANGE
                  TITLE OF EACH CLASS                                      ON WHICH REGISTERED
                  -------------------                                     ---------------------
<S>                                                      <C>
               Common Stock, $5 par value                                New York Stock Exchange
      Rights to Purchase Series A Preferred Stock                        New York Stock Exchange
</Table>

          Securities registered pursuant to Section 12(g) of the Act:

                                      NONE

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.                           YES   X     NO
                                                                  ---        ---

INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K.  [ X ]

THE AGGREGATE MARKET VALUE OF THE COMMON STOCK ON NOVEMBER 15, 2002, HELD BY
NON-AFFILIATES OF THE REGISTRANT BASED ON THE CLOSING PRICE OF $16.05 PER SHARE
ON NOVEMBER 15, 2002, ON THE NEW YORK STOCK EXCHANGE WAS APPROXIMATELY
$426,312,958. (FOR PURPOSES OF DETERMINATION OF THIS AMOUNT, ONLY DIRECTORS,
EXECUTIVE OFFICERS AND 10% OR GREATER STOCKHOLDERS HAVE BEEN DEEMED AFFILIATES.)

THE NUMBER OF SHARES OUTSTANDING OF COMMON STOCK AS OF NOVEMBER 15, 2002 WAS
28,420,735.

                      DOCUMENTS INCORPORATED BY REFERENCE:

PORTIONS OF THE FOLLOWING DOCUMENT ARE INCORPORATED BY REFERENCE INTO THE LISTED
PART OF FORM 10-K:

REGISTRANT'S DEFINITIVE PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 23, 2003 -- PART III.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
This Amendment No. 1 to Commercial Metals Company's annual report on Form 10-K
for the year ended August 31, 2002 is being filed to include certain
reclassifications for improved disclosures on the Consolidated Balance Sheets
and the Consolidated Statements of Cash Flows. We have also revised the language
in Note 2, Sales of Accounts Receivable, expanded disclosures related to
accounting policies and made various other modifications, corrections and
clarifications, including the reconciliation of non-GAAP financial measures that
is now required by Regulation G.
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

     The table below sets forth a summary of our selected consolidated financial
information for the periods indicated. The per share amounts have been adjusted
to reflect a two-for-one stock split in the form of a stock dividend on our
common stock effective June 28, 2002. Net earnings, diluted earnings per share,
total assets and stockholders' equity have been restated as described in
Note 14 to the consolidated financial statements.

<Table>
<Caption>
                                           FOR THE YEARS ENDED AUGUST 31,
                              2002         2001         2000         1999         1998
                           ----------   ----------   ----------   ----------   ----------
                                   (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S>                        <C>          <C>          <C>          <C>          <C>
Net Sales                  $2,446,777   $2,441,216   $2,661,420   $2,251,442   $2,367,569

Net Earnings                   40,525       23,772       44,590       46,974       42,714

Diluted Earnings                 1.43         0.90         1.56         1.61         1.41
Per Share

Total Assets                1,230,076    1,081,946    1,170,092    1,079,074    1,002,617

Stockholders' Equity          501,306      433,094      418,805      418,312      381,389

Long-term Debt                255,969      251,638      261,884      265,590      173,789

Cash Dividends Per Share        0.275         0.26         0.26         0.26         0.26
</Table>






                                       1
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION


We manufacture, recycle, market and distribute steel and metal products through
a network of over 130 locations in the United States and internationally.

Manufacturing Operations

We conduct our manufacturing operations through the following:

   o 4 steel mills, commonly referred to as "minimills," that produce
     reinforcing bar, angles, flats, small beams, rounds, fence-post sections
     and other shapes

   o 29 steel plants that bend, cut and fabricate steel, primarily reinforcing
     bar and angles

   o 1 plant that produces copper tubing

   o 27 warehouses that sell or rent supplies for the installation of concrete

   o 6 plants that produce special sections for floors and ceiling support

   o 4 plants that produce steel fence posts

   o 1 plant that treats steel with heat to strengthen and provide flexibility

   o 1 plant that rebuilds railcars

   o 1 railroad salvage company

Recycling Operations

We conduct our recycling operations through 44 metal processing plants located
in the states of Texas, South Carolina, Florida, North Carolina, Oklahoma,
Kansas, Missouri, Tennessee, Louisiana and Georgia.

Marketing and Distribution Operations

We market and distribute steel, copper and aluminum coil, sheet and tubing,
ores, metal concentrates, industrial minerals, ferro alloys and chemicals
through our network of 16 marketing and distribution offices, 4 processing
facilities and joint ventures around the world. Our customers use these products
in a variety of industries.

You should read this management's discussion and analysis in connection with
your review of our consolidated audited financial statements and the
accompanying footnotes.

Critical Accounting Policies and Estimates

The following are important accounting policies, estimates and assumptions that
you should understand as you review our financial statements. We apply these
accounting policies and make these estimates and assumptions to prepare
financial statements under generally accepted accounting principles. Our use of
these accounting policies, estimates and assumptions affects our results of
operations and our reported amounts of assets and liabilities. Where we have
used estimates or assumptions, actual results could differ significantly from
our estimates.

REVENUE RECOGNITION Generally, we recognize sales when title passes. For a few
of our steel fabrication operations, we recognize net sales and profits from
certain long-term fixed price contracts by the percentage-of-completion method.
In determining the amount of net sales to recognize, we estimate the total costs
and profits expected to be recorded for the contract term, and the
recoverability of costs related to change orders. These estimates could change,
resulting in changes in our earnings.

CONTINGENCIES We make accruals as needed for litigation, administrative
proceedings, government investigations, including environmental matters, and
contract disputes. We base our environmental liabilities on estimates regarding
the number of sites for which we will be responsible, the scope and cost of work
to be performed at each site, the portion






                                       2
<PAGE>
of costs that we expect we will share with other parties and the timing of
the remediation. Where timing of expenditures can be reliably estimated, we
discount amounts to reflect our cost of capital over time. We record these and
other contingent liabilities when they are probable and when we can reasonably
estimate the amount of loss. Where timing and amounts cannot be precisely
estimated, we estimate a range, and we recognize the low end of the range
without undiscounting. Also, see footnote 10, Commitments and Contingencies, in
the consolidated financial statements for the year ended August 31, 2002.

INVENTORY COST We determine inventory cost for most domestic inventories by the
last-in, first-out method, or LIFO. At the end of each quarter, we estimate both
inventory quantities and costs that we expect at the end of the fiscal year for
these LIFO calculations, and we record an amount on a pro-rata basis. These
estimates could vary substantially from the actual year-end results, causing an
adjustment to cost of goods sold. See footnote 15, Quarterly Financial Data, to
the consolidated financial statements. We record all inventories at the lower of
their cost or market value.

PROPERTY, PLANT AND EQUIPMENT Our manufacturing and recycling businesses are
capital intensive. We evaluate the value of these assets and other long-lived
assets whenever a change in circumstances indicates that their carrying value
may not be recoverable. Some of the estimated values for assets that we
currently use in our operations utilize judgments and assumptions of future
undiscounted cash flows that the assets will produce. If these assets were for
sale, our estimates of their values could be significantly different because of
market conditions, specific transaction terms and a buyer's different viewpoint
of future cash flows. Also, we depreciate property, plant and equipment on a
straight-line basis over the estimated useful lives of the assets. Depreciable
lives are based on our estimate of the assets' economically useful lives. To the
extent that an asset's actual life differs from our estimate, there could be an
impact on depreciation expense or a gain/loss on the disposal of the asset in a
later period. We expense major maintenance costs as incurred.

OTHER ACCOUNTING POLICIES For additional information on our accounting policies,
see footnote 1, Summary of Significant Accounting Policies, to the consolidated
financial statements.

NEW ACCOUNTING PRONOUNCEMENTS See footnote 1, Summary of Significant Accounting
Policies, to the consolidated financial statements.

Consolidated Results of Operations

As discussed in Note 14, Restatement, we have restated the financial statements
and the financial information included in our management's discussion and
analysis.

<Table>
<Caption>
                                           Year ended August 31,
                                  ---------------------------------------
(in millions except share data)      2002          2001           2000
                                  ----------    ----------     ----------
<S>                               <C>           <C>            <C>
Net sales                         $    2,447    $    2,441     $    2,661
Net earnings                            40.5          23.8           44.6
International sales                      776           755            879
     As % of total                        32%           31%            33%
LIFO effect on net earnings
     expense (income)                    1.0          (1.1)           3.4
     Per diluted share*                 0.04         (0.04)          0.12
LIFO reserve                             8.1           6.5            8.2
     % of inventory on LIFO               72%           70%            71%
</Table>

* Adjusted for stock split

Our management uses a non-GAAP measure, adjusted operating profit, to compare
and evaluate the financial performance of our segments. See Note 13, Business
Segments, to the consolidated financial statements. We define adjusted operating
profit, as referred to in our Management's Discussion and Analysis, as the sum
of our earnings before income taxes and financing costs. Adjusted operating
profit provides a core operational earnings measurement that compares segments
without the need to adjust for federal, but more specifically state and local
taxes which have considerable variation between domestic jurisdictions. Tax
regulations in international operations add additional complexity. Also, we
exclude interest cost in our calculation of adjusted operating profit. The
results are therefore without consideration of financing alternatives of capital
employed. In the following tables, we are providing a reconciliation of adjusted
operating profit (loss) to net earnings (loss), the nearest comparable GAAP
measure (in millions).

<Table>
<Caption>
                                                                        MARKETING AND     CORPORATE AND
SEGMENT                               MANUFACTURING      RECYCLING       DISTRIBUTION      ELIMINATIONS         TOTAL
- -------------------------------       -------------      ---------      -------------     -------------         -----
<S>                                   <C>                <C>            <C>               <C>                   <C>
YEAR ENDED AUGUST 31, 2002:
Net earnings (loss)                     $  45.0          $   3.7           $   8.1          $  (16.3)         $  40.5
Income taxes                               25.7              1.2               3.8              (8.1)            22.6
Interest expense                             .3               --               2.0              16.4             18.7
Discounts on sales of accounts
receivable                                   .4               .2                .3               (.1)              .8
                                        -------          -------           -------          --------          -------
Adjusted operating profit (loss)        $  71.4          $   5.1           $  14.2          $   (8.1)         $  82.6
                                        =======          =======           =======          ========          =======

YEAR ENDED AUGUST 31, 2001:
Net earnings (loss)                     $  34.8          $(  1.5)          $   3.6          $  (13.1)         $  23.8
Income taxes                               21.1              (.9)              2.1              (7.7)            14.6
Interest expense                             .4               --               1.8              25.4             27.6
Discounts on sales of accounts
receivable                                   .4               .1                .3                .2              1.0
                                        -------          -------           -------          --------          -------
Adjusted operating profit (loss)        $  56.7          $  (2.3)          $   7.8          $    4.8          $  67.0
                                        =======          =======           =======          ========          =======

YEAR ENDED AUGUST 31, 2000:
Net earnings (loss)                     $  44.8          $   3.8           $  11.5          $  (15.5)         $  44.6
Income taxes                               27.1              2.0               5.5              (8.5)            26.1
Interest expense                             .2               --               2.2              24.9             27.3
                                        -------          -------           -------          --------          -------
Adjusted operating profit (loss)        $  72.1          $   5.8           $  19.2          $     .9          $  98.0
                                        =======          =======           =======          ========          =======
</Table>

Our results in fiscal 2002 reflect the impact of significant external factors.
Our fiscal year began on September 1, 2001, only 10 days before the September 11
terrorist attacks, which dramatically affected United States commercial
activity. Capital markets also suffered during our fiscal 2002 period due to the
collapse of the technology market bubble and corporate financial and accounting
scandals. Following signs of an economic recovery during the first


                                       3
<PAGE>

calendar quarter of 2002, the growth of the U.S. economy instead slowed during
the second and third calendar quarters. Economic activity also lost momentum in
most global markets, perhaps except for non-Japan Asia.

Our 2002 results reflect notable weakness in business investment. We saw big
declines in key markets such as nonresidential construction spending for
factories, offices and other commercial buildings. Public works outlays for
institutional buildings, highways and bridges remained strong, but did not
offset reduced expenditures in the private sector. Residential construction
activity fell, although it remains at a historically high level. Hotel/motel
building also fell. Consequently, we experienced lower margins in our
manufacturing segment, especially during our fiscal fourth quarter.

The weakening of the U.S. dollar during the latter part of our fiscal year
helped our results, although the impact was not as strong as we expected. We
believe that one reason is that world production and supply of many steel
products and nonferrous metals remained excessive.

During fiscal 2002, the U.S. government implemented tariffs on imported steel
products that compete with most of the products manufactured by our minimills.
However, because production by our U.S. competitors remained constant, we have
not seen a significant increase in prices. Conditions in our important end use
markets generally showed little improvement and in some instances deteriorated.

The following financial events were significant this year:

     1.   2002 earnings were much higher than 2001, even excluding the $5.4
          million after-tax litigation accrual recorded last year in the
          manufacturing segment.

     2.   At year end 2002, we had no short-term financing needs and had, in
          fact, significant cash and cash equivalents.

     3.   Steel minimill earnings were higher in 2002 due to increased
          production and shipments in spite of lower selling prices and higher
          scrap costs.

     4.   During the current year, our steel group received a nonrecurring
          graphite electrode litigation settlement of $1.6 million after-tax.

     5.   Our steel group realized a $3.4 million after-tax gain from the sale
          of the assets of SMI-Owen Steel Company in 2002.

     6.   We discovered a theft and accounting fraud and accounting errors at
          two rebar fabrication operations totalling $3.0 million after-tax. See
          Note 14, Restatement, to the consolidated financial statements.

     7.   Copper tube adjusted operating profits decreased in spite of record
          production and shipments because of lower selling prices and margins.

     8.   Our recycling segment returned to profitability during 2002 mostly due
          to the recently improved ferrous scrap market.

     9.   Our marketing and distribution group's adjusted operating profit was
          higher than last year, but some markets remained weak. Our acquisition
          of the Coil Steels Group in September 2001 significantly contributed
          to adjusted operating profits.

     10.  Financing costs decreased due to lower requirements, reduced interest
          rates and the beneficial effect of an interest rate swap.

     11.  A lower effective income tax rate, due primarily to the favorable
          completion of IRS audits, added $1.0 million to net earnings in 2002.






                                       4
<PAGE>
Segments

Unless otherwise indicated, all dollars below are pre-tax. Financial results for
our reportable segments are consistent with the basis and manner in which we
internally disaggregate financial information for making operating decisions. We
have three reportable segments: manufacturing, recycling, and marketing and
distribution. The following table shows net sales and adjusted operating profit
(loss) by business segment (in millions).


<Table>
<Caption>
                                       Year ended August 31,
                                  -------------------------------
                                    2002       2001        2000
                                  --------   --------    --------
<S>                               <C>        <C>         <C>
Net sales:
     Manufacturing                $  1,333   $  1,321    $  1,357
     Recycling                         378        394         463
     Marketing and distribution        777        771         903
Adjusted operating profit (loss):
     Manufacturing                    71.4       56.7        72.1
     Recycling                         5.1       (2.3)        5.8
     Marketing and distribution       14.2        7.8        19.2
</Table>

2002 COMPARED TO 2001

MANUFACTURING We include our steel group and our copper tube division in our
manufacturing segment. Adjusted operating profit is equal to earnings before
income taxes for our four steel minimills, our copper tube mill and the steel
group's fabrication operations.

Our manufacturing adjusted operating profit in 2002 increased $14.7 million
(26%) as compared to 2001 on marginally more ($12 million) net sales. We
achieved this increase in adjusted operating profit for two primary reasons in
2002:(i) the nonrecurrence of the prior year litigation accrual in the amount of
$8.3 million, and (ii) the current year gain on the sale of the steel group's
heavy structural fabrication operation, SMI-Owen, in the amount of $5.2 million.
Excluding those items, our manufacturing segment's adjusted operating profit was
slightly higher than last year.

Increased production and shipments at our steel group's minimills more than
offset lower selling prices, increased scrap purchase costs and lower copper
tube earnings. Also, we spent less in 2002 on utilities, and we recorded lower
depreciation and amortization expense. However, fiscal 2002 was not a good year
in the steel group's downstream steel fabrication and related businesses due to
lower adjusted operating profits in rebar fabrication and structural steel
fabrication, excluding SMI-Owen.

The table below reflects steel and scrap prices per ton:

<Table>
<Caption>
                                                    August 31,
                                                 ---------------
(dollars per ton)                                 2002     2001
                                                 ------   ------
<S>                                              <C>      <C>
Average mill selling price-total sales           $  269   $  284
Average mill selling price-finished goods only      275      290
Average fabrication selling price                   608      646
Average ferrous scrap purchase price                 80       74
</Table>

MINIMILLS During 2002, adjusted operating profit for our four steel minimills
rose 27% compared with 2001, despite lower selling prices. SMI South Carolina
had a $2.8 million  adjusted operating profit in 2002 compared to a $1.6 million
loss in 2001. SMI Alabama turned around as well with a $2.5 million adjusted
operating profit in 2002 compared to a $2.2 million adjusted operating loss in
2001. Adjusted operating profits at SMI Arkansas were up 4% in the current year
period. These improvements more than offset a 7% decline in  adjusted operating
profits at SMI Texas as compared to 2001. A major reason for the minimills'
improved profitability was a 14% increase in shipments because of continued
public projects infrastructure construction. Shipments were 2,171,000 tons in
2002 compared to 1,903,000 in 2001. Mill production also increased over last
year. Tons rolled were up 19% to 2,026,000 in 2002. Tons melted were up 17% to
2,100,000 in 2002. Even though demand was strong, the average total mill selling


                                       5
<PAGE>

price at $269 per ton was $15 (5%) below last year. Also, in 2002, we sold more
semi-finished billets, a product with a lower selling price than our average.
Average scrap purchase costs were $6 per ton (8%) higher than in 2001, resulting
in smaller margins. Utility expenses declined by $2.4 million as compared to
2001. Decreases in natural gas costs more than offset higher electricity costs.
Also, depreciation and amortization expenses decreased by $5.2 million in 2002,
primarily because SMI-South Carolina fully depreciated its mill rolls and guides
as well as certain melt shop equipment. The mills also received $2.5 million
from a nonrecurring graphite electrode litigation settlement in 2002.

The U.S. government's new tariffs cover most of the steel minimills' products
and range from 15-30% the first year, declining over the next two years. An
import licensing and monitoring system and an anti-surge mechanism will further
strengthen these remedies. Also, the U.S. administration plans to continue
discussions with other steel producing nations to remove excess global capacity
and eliminate subsidies.

FABRICATION AND OTHER BUSINESSES Adjusted operating profit in the steel group's
fabrication and other businesses increased by $12.1 million (57%) in 2002 as
compared to 2001. Excluding the 2002 gain on the sale of SMI-Owen ($5.2 million)
and the 2001 litigation accrual ($8.3 million), adjusted operating profits in
2002 decreased by $1.3 million (4%) as compared to 2001.

Near the end of fiscal 2002, we discovered two significant, but unrelated
events, requiring retroactive writedowns at two rebar fabrication operations.
The total amount of the adjustments required to correct the August 31, 2002
balance sheets of these two facilities was $4.6 million. These adjustments
affect four fiscal years from 1999 to 2002. In August 2002, we uncovered a theft
and an accounting fraud which occurred over four years at a rebar fabrication
plant in South Carolina. The total adjustment required to revert the accounting
records to their proper balances was $2.7 million. In September 2002, we
discovered accounting errors related to losses on rebar fabrication and
placement jobs at one facility in California, some of which date back to its
acquisition in fiscal 2000. The resulting charge was $1.9 million. The South
Carolina incident resulted in a $900 thousand expense in fiscal 2002. The
remaining $3.7 million for both instances was attributed $885 thousand to fiscal
2001, $2.6 million to fiscal 2000, and $227 thousand to 1999, resulting in prior
period adjustments to these previously reported financial statements. We took
immediate action to strengthen compliance with our internal control policies in
the areas of segregation of duties, personnel, and management review and
oversight. Controllers at both locations were replaced as well as the general
manager of the rebar fabrication plant in South Carolina. The steel group has
increased the level of detail, the frequency of submission, and the amount of
review of its operating locations' reporting. The Company has renewed emphasis
on periodic and timely internal balance sheet audits at all operating locations
and completed audits of all its operating locations in fiscal 2003. No major
areas of noncompliance were noted. Senior management and area managers of all
the Company's locations attended internal meetings led by the CEO and CFO
regarding management's responsibility for internal control, dealing with
noncompliance issues and the Company's commitment to only the highest ethical
standards of conduct.


Fabrication plant shipments totaled 984,000 tons, down fractionally from 986,000
tons shipped in 2001. The average fabrication selling price in 2002 decreased
$38 per ton (6%) as compared to 2001. Rebar fabrication markets were softer in
2002 as a result of intense competition, and several plants reported losses.
During the fourth quarter 2002, we acquired the real estate, equipment,
inventory and work in process of Varmicon, Inc. in Harlingen, Texas. We now
operate this rebar fabrication facility under the name of SMI-Valley Steel. The
steel joist operations, which includes cellular and castellated beams, were
breakeven in 2002, an improvement over the adjusted operating loss in 2001. Both
prices and shipments decreased, but lower operating costs and shop efficiencies
helped significantly. Also, in 2001 these operations incurred $8.9 million in
start-up costs. Structural steel fabrication adjusted operating profits,
excluding SMI-Owen and the prior year litigation accrual, were down in 2002
compared to 2001. However, our concrete-related products operations were more
profitable in 2002. We continued to expand this business through the acquisition
in the fourth quarter of Dowel Assembly Manufacturing Company, or DAMCO, in
Jackson, Mississippi. DAMCO manufactures dowel baskets and has an epoxy coating
business.

In 2002, the steel group started Spray Forming International, a stainless steel
cladding operation located in South Carolina. Spray Forming International will
use a patented process to produce stainless clad billets.

COPPER TUBE Our copper tube division's adjusted operating profit decreased 59%
with 7% less net sales as compared to 2001. Copper tube shipments increased 3%
from 2001 to a record 59.3 million pounds, and production increased 5% from 2001
to a record 56.2 million pounds. However, average sales prices dropped 10% in
2002 to $1.24 per pound as compared to $1.38 per pound in 2001. The biggest
factor was lower apartment and hotel/motel construction. Consequently, demand
for plumbing and refrigeration tube was not as strong. The 2002 product mix
included increased quantities of HVAC products and line sets. In the
marketplace, we continued to adapt to the consolidation among our buyers. The
difference between sales price and copper scrap purchase cost (commonly referred
to as "the metal spread"), declined 8% in 2002 compared to 2001. Lower raw
material purchase costs did not fully compensate for the decline in selling
prices.





                                       6
<PAGE>
RECYCLING Our recycling segment reported an adjusted operating profit of $5.1
million in 2002 compared with an adjusted operating loss of $2.3 million in
2001. Net sales in 2002 were 4% lower at $378 million as compared to 2001.
However, gross margins were 11% above last year, primarily because we shipped 8%
more total tons. Demand for ferrous scrap improved both in the U.S. and
internationally. The segment processed and shipped 1,494,000 tons of ferrous
scrap in 2002, 10% more than in 2001. Ferrous sales prices were on average $81
per ton, an increase of $6 from 2001. Nonferrous shipments were flat at 238,000
tons. The average 2002 nonferrous scrap sales price of $947 per ton was 9% lower
than in 2001. Increased productivity, higher asset turnover and reduced costs
contributed to the improved 2002 results. The total volume of scrap processed,
including the steel group's processing plants, was 2,568,000 tons, an increase
of 11% from the 2,308,000 tons processed in 2001.

In June 2002, we acquired most of the transportation assets of Sampson Steel
Corporation in Beaumont, Texas. These assets will be combined with our existing
scrap processing facility in Beaumont. Earlier in the year we closed our
Midland, Texas facility, resulting in a writedown of $455,000 on certain
equipment.

MARKETING AND DISTRIBUTION Net sales in 2002 for our marketing and distribution
segment increased 1% to $777 million as compared to 2001. Adjusted operating
profit in 2002 increased 82% to $14.2 million as compared to 2001, mostly due to
better results from our Australian operations. International steel prices and
volumes for steel and nonferrous semifinished products improved during the
second half of 2002, primarily in the distribution and processing businesses.
However, depressed economies, oversupply in most markets and intense competition
from domestic suppliers in the respective markets caused compressed margins for
numerous steel products, nonferrous metal products and industrial raw materials
and products. The U.S. dollar weakened against major currencies, a beneficial
development.

In September 2001, we completed our acquisition of Coil Steels Group, an
Australian service center in which we already owned a 22% share. This
acquisition provided $2.2 million of additional adjusted operating profits and
$69.0 million in net sales during 2002. Sales and profits for the Company's
pre-existing business in Australia also improved significantly. However, this
increase in net sales was more than offset by decreased sales in our U.S.
operations due to fewer imports into the United States.

Adjusted operating profits for the U.S. divisions improved significantly due to
Cometals which returned to more historical levels, and Dallas Trading which
benefited from the U.S. tariff legislation. Lower margins at Commonwealth on
semi-finished products almost offset these improvements. Our European
operations' net sales decreased slightly in 2002 as compared to 2001, but
adjusted operating profits improved significantly. The segment's recent strategy
of growing its downstream marketing and distribution business offset the
continuing very difficult trading conditions.

OTHER Selling, general and administration as well as employee's retirement plans
expenses were higher in 2002 as compared to 2001, mostly due to the acquisition
of Coil Steels Group and discretionary items, such as bonuses and profit
sharing. This increase was consistent with the improvement in our operating
profitability. Interest expense decreased by $8.9 million (32%) from 2001
largely due to lower interest rates and much lower average short-term
borrowings. Also, during 2002 we entered into two interest rate swaps (see
footnote 4, Credit Arrangements, to the consolidated financial statements) which
resulted in interest expense savings. During 2002, we favorably resolved all
issues for our federal income tax returns through 1999. Due to the lack of any
material adjustments, we have reevaluated the tax accruals and, consequently,
reduced the net tax expense by $1.0 million during 2002.

Near-Term Outlook

We expect that fiscal 2003 will be weaker than 2002. The global economy slowed
in 2002 amid considerable uncertainty, and economic growth in the United States
remains slow and uneven. Our specific markets reflect the soft demand and remain
very competitive. The outlook for our markets generally is weaker, in some cases
significantly so. The manufacturing sector continues to grow slowly. We do not
expect private, nonresidential construction to improve before mid-calendar year
2003, but we expect public construction to hold steady.

Residential building slowed in 2002, but housing sales and starts remain at a
historically high level because of the lowest mortgage rates in three decades.
Economic growth outside the United States also slowed, especially in Europe. On
the other hand, most analysts don't expect the global economy to fall into a
double-dip recession.





                                       7
<PAGE>

The fiscal 2003 quarterly results are likely to be erratic and the first half of
fiscal 2003 could be relatively weak. In addition to market conditions, we face
a number of other challenges including increased insurance costs and higher
energy costs. By segment, we anticipate a decrease in operating profit for
manufacturing, little change in recycling and an increase in marketing and
distribution. We expect fiscal 2003 diluted earnings per share to decrease
because diluted average shares will rise further. Our balance sheet should
remain strong.

During 2002, we had capital spending of $47 million plus $7 million for the
acquisition of the remaining shares of Coil Steels Group, compared to capital
spending of $53 million in fiscal 2001. We have focused on reducing short-term
financing needs during the past two fiscal years. We plan to increase capital
expenditures to $88 million for fiscal 2003. Fiscal 2003 capital expenditures
will include expansion in downstream rebar fabrication and concrete-related
products operations in the steel group and the acquisition of the flat-rolled
assets of Horans, a small service center in Australia. We have no major projects
planned at the steel mills for fiscal 2003, only smaller enhancements and
maintenance expenditures. All segments will continue to focus on improving or
disposing of under performing operations, especially if they no longer fit our
strategic direction.

Long-Term Outlook

We are well-positioned to exploit long-term opportunities. Our challenge is to
continue growing in a manner which increases our earnings per share and return
on capital and generates free cash flows over time. Further consolidation is a
virtual certainty in the industries in which we participate, and we plan to
participate in a prudent way. The reasons for further consolidation include an
inadequate return on capital for most companies, numerous bankruptcies, a high
degree of fragmentation, the need to eliminate non-competitive capacity and more
effective marketing.

The outlook section contains forward-looking statements regarding the outlook
for our financial results including net earnings, product pricing and demand,
production rates, energy expense, insurance expense, interest rates, inventory
levels, acquisitions and general market conditions. These forward-looking
statements can generally be identified by phrases such as we or our management
"expects," "anticipates," "believes," "plans to," "ought," "could," "should,"
"likely," "appears," "projects," "forecasts," or other similar words or phrases.
There is inherent risk and uncertainty in any forward-looking statements.
Variances will occur and some could be materially different from our current
opinion. Developments that could impact our expectations include the following:

   o interest rate changes

   o construction activity

   o litigation claims and settlements

   o difficulties or delays in the execution of construction contracts resulting
     in cost overruns or contract disputes

   o metals pricing over which we exert little influence

   o increased capacity and product availability from competing steel minimills
     and other steel suppliers including import quantities and pricing

   o court decisions

   o industry consolidation or changes in production capacity or utilization

   o global factors including credit availability

   o currency fluctuations

   o energy and insurance prices

   o decisions by governments impacting the level of steel imports and the pace
     of overall economic activity.





                                       8
<PAGE>

2001 COMPARED TO 2000

Segments

MANUFACTURING Our manufacturing net sales for 2001 for the manufacturing segment
decreased by 3% compared to 2000. Despite an increase in both mill and
fabrication shipments, net sales decreased due to lower selling prices. Adjusted
operating profit as restated decreased $15.4 million (21%) in 2001 as compared
to 2000. The adverse charge for litigation of $8.3 million caused more than half
of the decrease. Also, 2001 copper tube adjusted operating profits dropped from
their record levels in 2000. Steel group adjusted operating profits, excluding
the litigation accrual, decreased slightly as well. We recorded pre-tax LIFO
income of $1.7 million in 2001 compared to LIFO expense of $5.2 million in 2000,
primarily in the manufacturing segment.

<Table>
<Caption>
                                                    August 31,
                                                 ---------------
(dollars per ton)                                 2001     2000
                                                 ------   ------
<S>                                              <C>      <C>
Average mill selling price-total sales           $  284   $  306
Average mill selling price-finished goods only      290      314
Average fab selling price                           646      647
Average ferrous scrap purchase price                 74       91
</Table>

MINIMILLS Our steel minimills recovered in the second half of 2001 despite very
weak markets throughout the year. The four steel mills' adjusted operating
profit decreased 27% as compared to 2000. An adjusted operating loss at the
Alabama mill and lower adjusted operating profits in Texas and Arkansas
contributed significantly to the decrease. The lower adjusted operating profits
were partially offset by significantly lower losses at South Carolina. Tons
melted and rolled decreased 3% to 1.8 and 1.7 million tons, respectively.
Shipments rose by 3% to 1.9 million tons. The average mill selling price
decreased $22 (7%) in 2001 as compared to 2000. The average selling price for
finished goods decreased $24 per ton (8%) in 2001 as compared to 2000. The
average scrap purchase cost for the mills decreased $17 per ton (19%) in 2001,
which offset the decreases in selling prices. However, utility costs rose $9.8
million (13%) as compared to 2000. Import levels and more aggressive competition
caused sales prices to drop.

Excluding prior year graphite electrode settlements, adjusted operating profit
in 2001 at SMI-Texas decreased 16% and at SMI-Arkansas decreased 24% as compared
to 2000. SMI-Alabama reported an adjusted operating loss in 2001 as compared to
an adjusted operating profit in 2000. The price drops especially hurt
SMI-Alabama. Record shipments at the SMI-South Carolina mill caused adjusted
operating losses to decrease by $8.1 million in 2001 to $1.6 million. This mill
was profitable in the second half of 2001. Selling prices continued to be
significantly lower, and utility and scrap purchase costs were down as well.

FABRICATION AND OTHER BUSINESSES In 2001, our downstream steel fabrication
businesses had another solid year. We have restated 2001 adjusted operating
results by $885 thousand for the accounting fraud at the South Carolina rebar
facility. Also, we reduced fiscal 2000 adjusted operating profits by $677
thousand and $1.9 million, respectively, for the accounting fraud at the South
Carolina rebar facility and the accounting errors at the California rebar
manufacturing and placement operation. We discovered both events near the end of
fiscal 2002. Excluding a net pre-tax gain of $5.5 million from the sale of land
and improvements in fiscal 2000, net sales remained the same in 2001 as compared
to 2000. Adjusted operating profits increased 30% as compared to 2000, excluding
the 2001 litigation accrual of $8.3 million for an adverse court ruling and the
2000 $5.5 million gain on the sale. Fabricated steel shipments of 986,000 tons
increased 3% as compared to 2000; however, this included new capacity. Although
prices were mixed, the annual average fab selling price remained unchanged.
Steel joist and cellular beam manufacturing operations incurred $8.9 million in
startup costs for four projects. A major turnaround in large structural steel
jobs fabricated by SMI-Owen more than offset these costs.

COPPER TUBE Our copper tube division's adjusted operating profit decreased 29%
in 2001 as compared to 2000. Shipments decreased less than 1% in 2001 to 57.3
million pounds, and metal spreads declined 13% in 2001 as compared to 2000. Our
copper tube selling prices decreased 8 cents (6%) per pound to $1.38 in 2001 as
compared to $1.46 in 2000. Production at the plant decreased consistently with
shipments. Although the housing sector of the U.S. economy remained relatively
strong, demand for plumbing and refrigeration tube was softer than in the prior
year. In the second half of 2001, we added line sets to our product mix,
although shipments of this new product were not yet significant.



                                       9
<PAGE>

CAPITAL IMPROVEMENTS Our capital improvements decreased significantly to $53
million as compared to $70 million in 2000, primarily in the manufacturing
segment. The $70 million included the expansion at the copper tube mill and the
installation of a ladle metallurgical station at SMI-South Carolina. In fiscal
2001, we substantially completed the copper tube mill expansion.

RECYCLING Our recycling segment incurred an adjusted operating loss of $2.3
million in 2001 as compared to a $5.8 million adjusted operating profit in 2000.
Tons processed and shipped decreased 4% as compared to 2000; however, net sales
decreased 15% as compared to 2000. Due to high scrap imports, weak domestic
steel mills and the strong U.S. dollar, ferrous prices fell $21 per ton (22%) as
compared to $75 per ton in 2000, and shipments fell 5%. A sharp drop in terminal
market values resulted in lower nonferrous margins. The average nonferrous scrap
price was 5% lower on volumes which were 2% higher as compared to 2000.
Increased productivity, high asset turnover and reduced expenses mitigated the
effects of weak markets.

The total volume of scrap processed and shipped in 2001, including our steel
group operations, decreased slightly to 2.3 million tons from 2.4 million tons
in fiscal 2000.

MARKETING AND DISTRIBUTION Our marketing and distribution segment's net sales
decreased in 2001 by 15% to $771 million, and  adjusted operating profits were
59% lower as compared to 2000. Depressed global economies, oversupply in most
markets and intense competition from domestic suppliers in the respective
markets contributed significantly to the decline. Also, the strong U.S. dollar
continued to hamper the segment's results in various parts of the world. Margins
were compressed for most steel products, nonferrous metal products and
industrial raw materials and products. Our strategy in recent years to enhance
regional businesses helped in the difficult market and currency conditions.

Most importantly, we achieved profitability even as we continued a major
commitment to develop quality people in sales and administration to provide for
long-term growth. We continued to diversify and build business by adding product
and geographic areas. We expanded regional trade as well, and continued to
increase our operations in the processing of the materials and products we buy
and sell.

2002 Liquidity and Capital Resources

We discuss liquidity and capital resources on a consolidated basis. Our
discussion includes the sources and uses of our three operating segments and
centralized corporate functions. We have a centralized treasury function and use
inter-company loans to efficiently manage the short-term cash needs of our
operating divisions. We invest any excess funds centrally.

We rely upon cash flows from operating activities, and to the extent necessary,
external short-term financing sources. Our short-term financing sources include
the issuance of commercial paper, sales of accounts receivable and borrowing
under our bank credit facilities. From time to time, we have issued long-term
public debt. Our investment grade credit ratings and general business conditions
affect our access to external financing on a cost-effective basis. Depending on
the price of our common stock, we may realize significant cash flows from the
exercise of stock options.

Moody's Investors Service (P-2), Standard & Poor's Corporation (A-2) and Fitch
(F-2) rate our $174.5 million commercial paper program, which is up from $135
million in 2001, in the second highest category. To support our commercial paper
program, we have unsecured revolving credit agreements with a group of eight
banks. Our $129.5 million facility expires in August 2003 and our $45 million
facility expires in August 2004. We plan to continue our commercial paper
program and the revolving credit agreements in comparable amounts to support the
commercial paper program.

For added flexibility, we may secure financing from the sale of certain accounts
receivable in an amount not to exceed $130 million. We may continually sell
accounts receivable on an ongoing basis to replace those receivables that we
have collected from our customers. Our long-term public debt, which was $255
million at August 31, 2002, is investment





                                       10
<PAGE>

grade rated by Standard & Poor's Corporation (BBB), Fitch (BBB) and by Moody's
Investors Services (Baa1). We have access to the public markets for potential
refinancing or the issuance of additional long term debt. Also, we have numerous
informal, uncommitted credit facilities available from domestic and
international banks. These credit facilities are priced at bankers' acceptance
rates or on a cost of funds basis.

Credit ratings affect our ability to obtain short- and long-term financing and
the cost of such financing. If the rating agencies were to reduce our credit
ratings, we would pay higher financing costs and possibly would have less
availability of the informal, uncommitted facilities. In determining our credit
ratings, the rating agencies consider a number of both quantitative and
qualitative factors. Such factors include earnings, fixed charges such as
interest, cash flows, total debt outstanding, off balance sheet obligations and
other commitments, total capitalization and various ratios calculated from these
factors. The rating agencies also consider predictability of cash flows,
business strategy, industry condition and contingencies. We are committed to
maintaining our investment grade credit ratings.

Certain of our financing agreements include various covenants. The most
restrictive of these covenants requires us to maintain an interest coverage
ratio of greater than three times and a debt to capitalization ratio of 55% as
defined in the financing agreement. A few of the agreements provide that if we
default on the terms of another financing agreement, it is considered a default
under these agreements. We have complied with the requirements, including the
covenants of our financing agreement as of and for the year ended, August 31,
2002.

Our unsecured revolving credit agreements and accounts receivable securitization
agreement include ratings triggers. The trigger in the revolving credit
agreements is solely a means to reset pricing for facility fees and, if a
borrowing occurs, on loans. Within the accounts receivable securitization
agreement, the ratings trigger is contained in a "termination event," but the
trigger is set at catastrophic levels. The trigger requires a combination of
ratings actions on behalf of two independent rating agencies and is set at
levels seven ratings categories below our current rating.

Our manufacturing and recycling businesses are capital intensive. Our capital
requirements include construction, purchases of equipment and maintenance
capital at existing facilities. We plan to invest in new operations. We also
plan to invest in working capital to support the growth of our businesses,
maintain our ability to repay maturing long-term debt when due at its earliest
maturity in 2005 and pay dividends to our stockholders.

Our management continues to assess alternative means of raising capital,
including potential dispositions of under-performing or non-strategic assets.
Any potential future major acquisitions could require additional financing from
external sources such as the sale of common stock.

CASH FLOWS Our cash flows from operating activities primarily result from sales
of steel and related products and, to a lesser extent, from sales of nonferrous
metal products. We have a diverse and generally stable customer base. We use
futures or forward contracts as needed to mitigate the risks from fluctuations
in foreign currency exchange rates and metals commodity prices (see footnote 5,
Financial Instruments, Market and Credit Risk, in the consolidated financial
statements).

The volume and price of the orders from our U.S. customers in the manufacturing
and construction sectors affect our cash flows from operating activities. Our
international marketing and distribution operations also significantly affect
our cash flows from operating activity. The weather can influence the volume of
products we ship in any given period. Also, the general economy, the strength of
the U.S. dollar, governmental action, and various other factors beyond our
control influence our volumes and prices. These periodic fluctuations in our
prices and volumes can result in variations in cash flows from operations.
Despite these fluctuations, we have historically relied on operating activities
as a steady source of cash.







                                       11
<PAGE>

Net cash flows from operating activities decreased to $96.6 million in 2002 as
compared to $192.7 million in 2001, primarily as a result of decreased funding
from sales of accounts receivable. Net working capital in 2002 increased to $379
million from $274 million in 2001, primarily due to increased cash and cash
equivalents and higher receivables. Increases in accounts payable more than
offset the increase in inventories. The ratio of current assets to current
liabilities was 1.9 at August 31, 2002, increased from 1.8 at August 31, 2001.
Excluding Coil Steels Group, CSG, and SMI-Owen, which were facilities acquired
and sold in 2002, accounts receivable at August 31, 2002 were $48.7 million more
than at August 31, 2001. The increase resulted because we did not request as
much funding from the accounts receivable that we sold to financial
institutions. Excluding CSG and SMI-Owen, inventories and accounts payable,
accrued expenses, other payables and income taxes at August 31, 2002 increased
by $37.2 million and $66.9 million, respectively, as compared to 2001.
Inventories in the steel group, excluding SMI-Owen, increased $22.3 million. The
majority of the increase occurred at the minimills because of higher scrap
purchase costs and higher inventory quantities. Steel fabrication and post
inventories increased as well. Inventories in marketing and distribution,
excluding CSG, increased $15.1 million in 2002 mostly due to shipments in
transit and customer delays. Accounts payable in marketing and distribution,
excluding CSG, increased by $65.5 million in 2002 due to higher inventory
purchases and extended terms with vendors. Accounts payable in the steel group
at the minimills increased $9.9 million in 2002. Also, during 2002, we received
$15.0 million from a litigation settlement (see footnote 10, Commitments and
Contingencies, to the consolidated financial statements). Increased profits
resulted in an increase of $5.7 million in income taxes payable. During 2002, we
received $5.2 million for the contract balance and settlement of disputed change
orders on an old large structural steel fabrication contract at SMI-Owen. Higher
net earnings in 2002 as compared to 2001 partially offset the increased working
capital. Depreciation and amortization expense decreased $5.7 million in 2002
primarily because SMI South Carolina fully depreciated its mill rolls and guides
as well as certain melt shop equipment. We realized a $4.1 million increase in
the tax benefits from stock issued under option and purchase plans during 2002.
Our cash flows increased by $2.4 million in 2002 as a result of deferred income
taxes, due largely to additional depreciation which was granted under new tax
legislation.

We invested $47.2 million in property, plant and equipment in 2002, which was
$5.8 million less than in 2001. In addition, in 2002, we acquired the remaining
shares of CSG for $6.8 million, net of cash. We received $19.7 million during
2002 for the sale of the assets of SMI-Owen. We expect capital spending for
fiscal 2003 to be $88 million, including both new construction and acquisitions
to expand our downstream businesses.

We needed much less short-term financing during 2002 than during 2001, primarily
due to better management of working capital, higher earnings, the litigation
settlement, the sale of SMI-Owen and cash from stock issued under incentive and
purchase plans. These events enabled us to repay all of our short-term
borrowings. In 2002, we also made our final payment on the 8.49% long-term
notes.

In May 2002, our Board of Directors declared a two-for-one stock split in the
form of a stock dividend on our common stock payable June 28, 2002 to our
shareholders of record on June 7, 2002 (see footnote 7, Capital Stock, to the
consolidated financial statements). On June 28, 2002, we issued 16,132,583
additional shares of common stock. At August 31, 2002, 28,518,453 shares of
common stock were issued and outstanding, and 3,746,713 were held in our
treasury. Also, we issued 2,361,265 additional shares of common stock during
2002 because more employees exercised stock options, and we issued more shares
than last year under our employee stock purchase plan because of the significant
increase in our average market price per share. We issued all shares from
treasury shares. As a result of this activity, our cash flows increased by $30.2
million in 2002 as compared to $4.4 million from such activity in 2001.

We paid dividends of $7.5 million during 2002, slightly more than the $6.8
million we paid during 2001. On May 20, 2002, our directors declared a quarterly
cash dividend of eight cents per share on common stock. We paid this quarterly
cash dividend on July 19 to stockholders of record at July 5, 2002. This new
cash dividend rate on the after-split shares represents a 23% increase in our
cash dividend. This was the 151st consecutive quarterly cash dividend we have
paid.

We believe that we have sufficient liquidity for fiscal year 2003 and the
foreseeable future.





                                       12
<PAGE>

Contractual Obligations

The following table represents our contractual obligations as of August 31, 2002
(dollars in thousands):

<Table>
<Caption>
                                              Payments Due Within*
                           --------------------------------------------------------
                                                     2-3         4-5         After
                             Total      1 Year      Years       Years       5 Years
                           ---------   --------   ---------   ---------   ---------
<S>                        <C>         <C>        <C>         <C>         <C>
Contractual Obligations:
Long-term debt(1)          $ 256,600   $    631   $ 105,859   $  50,033   $ 100,077
Operating leases(2)           23,986      9,347       8,996       3,953       1,690
Unconditional purchase
      obligations(3)          53,698     17,388      12,345       7,102      16,863
                           =========   ========   =========   =========   =========

Total contractual cash
      obligations          $ 334,284   $ 27,366   $ 127,200   $  61,088   $ 118,630
</Table>

*We have not discounted the cash obligations in this table.

(1) Total amounts are included in the August 31, 2002 consolidated balance
    sheet. See footnote 4, Credit Arrangements, to the consolidated financial
    statements.

(2) Includes minimum lease payment obligations for noncancelable equipment and
    real-estate leases in effect as of August 31, 2002. See footnote 10,
    Commitments and Contingencies, to the consolidated financial statements.

(3) About 35% of these purchase obligations are for inventory items to be sold
    in the ordinary course of business; most of the remainder are for freight
    and supplies associated with normal revenue-producing activities.

At August 31, 2002, we received $2,141,000 of net funding from the sales of
accounts receivable. If we terminated the accounts receivable program on August
31, 2002, we would have to pay the first $2.1 million of collections from these
accounts to third party financial institutions. We complied with the terms of
this program as of, and for the year ended August 31, 2002.

Other Commercial Commitments

We maintain stand-by letters of credit to provide support for certain
transactions that our customers or suppliers request. At August 31, 2002, we had
committed $20.9 million under these arrangements. A cash deposit included in
current other assets on the consolidated balance sheet collateralized $6 million
of these commitments. All commitments expire within one year.

At the request of a customer and its surety bond issuer, we have agreed to
indemnify the surety against all costs the surety may incur should our customer
fail to perform its obligations under construction contracts covered by payment
and performance bonds issued by the surety. We are the customer' primary
supplier of steel, and steel is a substantial portion of our customer' cost to
perform the contracts. We believe we have adequate controls to monitor the
customer' performance under the contracts including payment for the steel we
supply. As of August 31, 2002, the surety had issued bonds in the total amount
(without reduction for work performed to that date) of $2,193,000 which are
subject to our guaranty obligation under the indemnity agreement.

Contingencies

In the ordinary course of conducting our business, we become involved in
litigation, administrative proceedings, government investigations including
environmental matters, and contract disputes. We may incur settlement, fines,
penalties or judgments because of some of these matters. While we are unable to
estimate precisely the ultimate dollar amount of exposure or loss in connection
with these matters, we make accruals we deem necessary. The amounts we accrue
could vary substantially from amounts we pay due to several factors including
the following: evolving remediation technology, changing regulations, possible
third-party contributions, the inherent shortcomings of the estimation process,
and the uncertainties involved in litigation. Accordingly, we cannot always
estimate a meaningful range of possible exposure. We believe that we have
adequately provided in our financial statements for the estimable potential
impact of these contingencies. We also believe that the outcomes will not
significantly affect the long-term results of operations or our financial
position. However, they may have a material impact on earnings for a particular
period.





                                       13
<PAGE>

CONSTRUCTION CONTRACT DISPUTES See footnote 10, Commitments and Contingencies,
to the consolidated financial statements.

ENVIRONMENTAL AND OTHER MATTERS We are subject to federal, state and local
pollution control laws and regulations in all locations where we have operating
facilities. We anticipate that compliance with these laws and regulations will
involve continuing capital expenditures and operating costs.

Our original business and one of our core businesses for over eight decades is
metals recycling. In the present era of conservation of natural resources and
ecological concerns, we are committed to sound ecological and business conduct.
Certain governmental regulations regarding environmental concerns, however well
intentioned, are contrary to the goal of greater recycling. Such regulations
expose us and the industry to potentially significant risks.

We believe that recycled materials are commodities that are diverted by
recyclers, such as us, from the solid waste streams because of their inherent
value. Commodities are materials that are purchased and sold in public and
private markets and commodities exchanges every day around the world. They are
identified, purchased, sorted, processed and sold in accordance with carefully
established industry specifications.

Environmental agencies at various federal and state levels classify certain
recycled materials as hazardous substances and subject recyclers to material
remediation costs, fines and penalties. Taken to extremes, such actions could
cripple the recycling industry and undermine any national goal of material
conservation. Enforcement, interpretation, and litigation involving these
regulations are not well developed.

The U.S. Environmental Protection Agency, or EPA, or an equivalent state agency
notified us that we are considered a potentially responsible party, or PRP, at
fourteen sites, none owned by us. We may be obligated under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, or CERCLA, or a
similar state statute to conduct remedial investigation, feasibility studies,
remediation and/or removal of alleged releases of hazardous substances or to
reimburse the EPA for such activities. We are involved in litigation or
administrative proceedings with regard to several of these sites in which we are
contesting, or at the appropriate time we may contest, our liability at the
sites. In addition, we have received information requests with regard to other
sites which may be under consideration by the EPA as potential CERCLA sites.

In fiscal 2002, we incurred environmental expense of $12.1 million. This expense
included the cost of environmental personnel at various divisions, permit and
license fees, accruals and payments for studies, tests, assessments,
remediation, consultant fees, baghouse dust removal and various other expenses.
Approximately $507 thousand of our capital expenditures for 2002 related to
costs directly associated with environmental compliance. At August 31, 2002,
$5.0 million was accrued for environmental liabilities of which $1.5 million is
classified as other long-term liabilities.

Dividends

We have paid quarterly cash dividends in each of the past 39 consecutive years.
We paid dividends in 2002 at the rate of 0.065 cents per share each quarter for
the first three quarters, and 0.08 cents per share for the fourth quarter.






                                       14
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA


Commercial Metals Company and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS

<Table>
<Caption>
                                                                 Year ended August 31,
                                                    ----------------------------------------------
(in thousands, except share data)                      2002          2001*              2000*
                                                    ----------   ---------------   ---------------
<S>                                                 <C>          <C>               <C>
Net sales                                           $2,446,777   $     2,441,216   $     2,661,420

Costs and expenses:
     Cost of goods sold                              2,129,378         2,143,900         2,333,930
     Selling, general and administrative expenses      220,868           212,424           211,403
     Employees' retirement plans                        14,685            10,611            18,108
     Interest expense                                   18,708            27,608            27,319
     Litigation accrual                                     --             8,258                --
                                                    ----------   ---------------   ---------------
                                                     2,383,639         2,402,801         2,590,760
                                                    ----------   ---------------   ---------------
Earnings before income taxes                            63,138            38,415            70,660

Income taxes                                            22,613            14,643            26,070
                                                    ----------   ---------------   ---------------
Net earnings                                        $   40,525   $        23,772   $        44,590
                                                    ==========   ===============   ===============
Basic earnings per share                            $     1.48   $          0.91   $          1.59
                                                    ==========   ===============   ===============
Diluted earnings per share                          $     1.43   $          0.90   $          1.56
                                                    ==========   ===============   ===============
</Table>

* As restated, see Note 14.



                                 See notes to consolidated financial statements.





                                       15
<PAGE>

Commercial Metals Company and Subsidiaries

CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
                                                                     August 31,
                                                          -------------------------------
(in thousands, except share data)                            2002*             2001*
                                                          ------------    ---------------
<S>                                                       <C>             <C>
ASSETS

Current assets:
     Cash and cash equivalents                            $    124,397    $        56,021
     Accounts receivable (less allowance for collection
       losses of $8,877 and $7,958)                            350,885            297,611
     Inventories                                               268,040            223,859
     Other                                                      50,930             45,522
                                                          ------------    ---------------
       Total current assets                                    794,252            623,013


Property, plant and equipment:
     Land                                                       29,099             29,315
     Buildings                                                 119,592            109,549
     Equipment                                                 727,650            704,469
     Leasehold improvements                                     34,637             33,213
     Construction in process                                    10,801             20,350
                                                          ------------    ---------------
                                                               921,779            896,896
     Less accumulated depreciation and amortization           (543,624)          (501,045)
                                                          ------------    ---------------
                                                               378,155            395,851

Other assets                                                    57,669             63,082
                                                          ------------    ---------------
                                                          $  1,230,076    $     1,081,946
                                                          ============    ===============
</Table>

* As restated, see Note 14.



                                 See notes to consolidated financial statements.




                                       16
<PAGE>
<Table>
<Caption>
                                                                                           August 31,
                                                                                -------------------------------
(in thousands, except share data)                                                  2002*             2001*
                                                                                ------------    ---------------
<S>                                                                             <C>             <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Short-term borrowings                                                      $         --    $         3,793
     Accounts payable                                                                275,232            201,271
     Accrued expenses and other payables                                             133,608            133,847
     Income taxes payable                                                              5,676                 --
     Current maturities of long-term debt                                                631             10,288
                                                                                ------------    ---------------
       Total current liabilities                                                     415,147            349,199


Deferred income taxes                                                                 32,813             30,405

Other long-term liabilities                                                           24,841             17,610

Long-term debt                                                                       255,969            251,638

Commitments and contingencies
Stockholders' equity:
     Capital stock:
       Preferred stock                                                                    --                 --
       Common stock, par value $5.00 per share:
       authorized 40,000,000 shares; issued 32,265,166 and 16,132,583 shares;
       outstanding 28,518,453 and 13,078,594 shares                                  161,326             80,663
     Additional paid-in capital                                                          170             13,930
     Accumulated other comprehensive loss                                             (1,458)            (1,961)
     Retained earnings                                                               392,004            422,309
                                                                                ------------    ---------------
                                                                                     552,042            514,941
     Less treasury stock 3,746,713 and 3,053,989 shares at cost                      (50,736)           (81,847)
                                                                                ------------    ---------------
                                                                                     501,306            433,094
                                                                                ------------    ---------------
                                                                                $  1,230,076    $     1,081,946
                                                                                ============    ===============
</Table>

* As restated, see Note 14.



                                 See notes to consolidated financial statements.





                                       17
<PAGE>

Commercial Metals Company and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                                                         August 31,
                                                                   ----------------------------------------------------
(in thousands)                                                          2002*             2001*              2000*
                                                                   ---------------   ---------------    ---------------
<S>                                                                  <C>             <C>                <C>
Cash Flows From (Used By) Operating Activities:
     Net Earnings                                                    $     40,525    $        23,772    $        44,590
     Adjustments to earnings not requiring cash:
         Depreciation and amortization                                     61,579             67,272             66,583
         Provision for losses on receivables                                3,985              4,371                948
         Deferred income taxes                                              2,408               (726)             7,868
         Tax benefits from stock plans                                      4,467                404                274
         Gain on sale of SMI-Owen                                          (5,234)                --                 --
         Other                                                               (307)              (148)            (5,570)

     Changes in Operating Assets and Liabilities, net of effect of
       Coil Steels Group Acquisition and Sale of SMI-Owen:
         Decrease (increase) in accounts receivable                       (48,690)            (8,276)           (55,488)
         Funding from accounts receivable sold                                 --             58,498                 --
         Decrease (increase) in inventories                               (37,206)            46,508            (23,213)
         Decrease (increase) in other assets                                  912              5,837            (36,433)
         Increase (decrease) in accounts payable,
           accrued expenses, other payables and income taxes               66,927             (2,389)             3,269
         Increase (decrease) in other long-term liabilities                 7,231             (2,431)             5,780
                                                                     ------------    ---------------    ---------------
Net Cash Flows From Operating Activities                                   96,597            192,692              8,608

Cash Flows From (Used By) Investing Activities:
     Purchases of property, plant and equipment                           (47,223)           (53,022)           (69,627)
     Acquisition of Coil Steels Group, net of cash received                (6,834)                --                 --
     Sale of Assets of SMI-Owen                                            19,705                 --                 --
     Sales of property, plant and equipment                                 3,496              2,866              9,323
     Other investments                                                         --                 --             (2,966)
                                                                     ------------    ---------------    ---------------
Net Cash Used By Investing Activities                                     (30,856)           (50,156)           (63,270)

Cash Flows From (Used by) Financing Activities:
     Short-term borrowings-net change                                      (9,981)           (88,673)            78,084
     Payments on long-term debt                                           (10,101)            (8,786)            (4,750)
     Stock issued under incentive and purchase plans                       30,238              4,383              5,958
     Treasury stock acquired                                                   --             (6,716)           (41,934)
     Dividends paid                                                        (7,521)            (6,780)            (7,304)
                                                                     ------------    ---------------    ---------------
Net Cash From (Used by) Financing Activities                                2,635           (106,572)            30,054
                                                                     ------------    ---------------    ---------------
Increase (Decrease) in Cash and Cash Equivalents                           68,376             35,964            (24,608)

Cash and Cash Equivalents at Beginning of Year                             56,021             20,057             44,665
                                                                     ------------    ---------------    ---------------
Cash and Cash Equivalents at End of Year                             $    124,397    $        56,021    $        20,057
                                                                     ============    ===============    ===============

</Table>

* As restated, see Note 14.



                                 See notes to consolidated financial statements.




                                       18
<PAGE>

Commercial Metals Company and Subsidiaries

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<Table>
<Caption>

                                                         Common Stock                                       Accumulated
                                               --------------------------------        Additional               Other
                                                Number of                               Paid-In             Comprehensive
(in thousands, except share data)                Shares               Amount            Capital                 Loss
                                               ----------          ------------        ----------          --------------
<S>                                            <C>                 <C>                 <C>                 <C>
Balance, September 1, 1999,
  as previously reported                       16,132,583          $   80,663          $   14,131          $       (774)

Prior period adjustments
  (see footnote 14)
                                               ----------          ----------          ----------          ------------

Balance, September 1, 1999,
  as restated                                  16,132,583              80,663              14,131                  (774)

  Comprehensive income:
    Net earnings*
    Other comprehensive
        loss-
      Foreign currency
        translation adjustment,
        net of taxes of $440                                                                                       (817)

  Comprehensive income

  Cash dividends
  Treasury stock acquired
  Stock issued under incentive
    and purchase plans                                                                        100
                                               ----------          ----------          ----------          ------------
Balance, August 31, 2000                       16,132,583              80,663              14,231                (1,591)
                                               ----------          ----------          ----------          ------------

  Comprehensive income:
    Net earnings*

    Other comprehensive
        loss-
      Unrealized loss on
        derivatives, net of
        taxes of $7                                                                                                 (14)
      Foreign currency
        translation adjustment,
        net of taxes of $192                                                                                       (356)

  Comprehensive income

  Cash dividends
  Treasury stock acquired
  Stock issued under
    incentive and purchase
    plans                                                                                    (301)
                                               ----------          ----------          ----------          ------------
Balance, August 31, 2001                       16,132,583              80,663              13,930                (1,961)
                                               ----------          ----------          ----------          ------------

  Comprehensive income:
    Net earnings

    Other comprehensive
      income (loss)-
      Foreign currency
        translation adjustment,
        net of taxes of $276                                                                                        513
      Unrealized loss on
        derivatives, net of
        taxes of $(5)                                                                                               (10)

  Comprehensive income

  Cash dividends
  2-for-1 stock split                          16,132,583              80,663             (17,354)
  Stock issued under
    incentive and purchase plans                                                             (873)
  Tax benefits from stock plans                                                             4,467
                                               ----------          ----------          ----------          ------------
Balance, August 31, 2002                       32,265,166          $  161,326          $      170          $     (1,458)
                                               ==========          ==========          ==========          ============

<Caption>


                                                                                Treasury Stock
                                                                      ---------------------------------
                                               Retained               Number of
(in thousands, except share data)              Earnings                 Shares                Amount                  Total
                                             ------------             ----------           ------------           ------------
<S>                                          <C>                      <C>                  <C>                    <C>
Balance, September 1, 1999,
  as previously reported                     $    368,177             (1,726,323)          $    (43,739)          $    418,458

Prior period adjustments
  (see footnote 14)                                  (146)                                                                (146)
                                             ------------             ----------           ------------           ------------

Balance, September 1, 1999,
  as restated                                     368,031             (1,726,323)               (43,739)               418,312

  Comprehensive income:
    Net earnings*                                  44,590                                                               44,590
    Other comprehensive
        loss-
      Foreign currency
        translation adjustment,
        net of taxes of $440                                                                                              (817)
                                                                                                                  ------------
  Comprehensive income                                                                                                  43,773

  Cash dividends                                   (7,304)                                                              (7,304)
  Treasury stock acquired                                             (1,465,100)               (41,934)               (41,934)
  Stock issued under incentive
    and purchase plans                                                   231,515                  5,858                  5,958
                                             ------------             ----------           ------------           ------------
Balance, August 31, 2000                          405,317             (2,959,908)               (79,815)               418,805
                                             ------------             ----------           ------------           ------------
  Comprehensive income:
    Net earnings*                                  23,772                                                               23,772
    Other comprehensive
        loss-
      Unrealized loss on
        derivatives, net of
        taxes of $7                                                                                                        (14)
      Foreign currency
        translation adjustment,
        net of taxes of $192                                                                                              (356)
                                                                                                                  ------------
  Comprehensive income                                                                                                  23,402

  Cash dividends                                   (6,780)                                                              (6,780)

  Treasury stock acquired                                               (271,500)                (6,716)                (6,716)
  Stock issued under
    incentive and purchase
    plans                                                                177,419                  4,684                  4,383
                                             ------------             ----------           ------------           ------------
Balance, August 31, 2001                          422,309             (3,053,989)               (81,847)               433,094
                                             ------------             ----------           ------------           ------------

  Comprehensive income:
    Net earnings                                   40,525                                                               40,525
    Other comprehensive
      income (loss)-
      Foreign currency
        translation adjustment,
        net of taxes of $276                                                                                               513
      Unrealized loss on
        derivatives, net of
        taxes of $(5)                                                                                                      (10)
                                                                                                                  ------------
  Comprehensive income                                                                                                  41,028
  Cash dividends                                   (7,521)                                                              (7,521)
  2-for-1 stock split                             (63,309)            (3,053,989)
  Stock issued under
    incentive and purchase plans                                       2,361,265                 31,111                 30,238
  Tax benefits from stock plans                                                                                          4,467
                                             ------------             ----------           ------------           ------------
Balance, August 31, 2002                     $    392,004             (3,746,713)          $    (50,736)          $    501,306
                                             ============             ==========           ============           ============
</Table>

* As restated-see footnote 14.

                                 See notes to consolidated financial statements.



                                       19
<PAGE>

Commercial Metals Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 Summary of Significant Accounting Policies

NATURE OF OPERATIONS The Company manufactures, recycles and markets steel and
metal products and related materials. Its manufacturing and recycling facilities
and primary markets are located in the Sunbelt from the mid-Atlantic area
through the West. Through its global marketing offices, the Company markets and
distributes steel and nonferrous metal products and other industrial products
worldwide. As more fully discussed in note 13, the manufacturing segment is the
most dominant in terms of capital assets and operating profit.

CONSOLIDATION The consolidated financial statements include the accounts of the
Company and its subsidiaries. All significant intercompany transactions and
balances are eliminated in consolidation. Investments in 20% to 50% owned
affiliates are accounted for on the equity method. All investments under 20% are
accounted for under the cost method, unless the Company has the ability to
exercise significant influence over the investee.

REVENUE RECOGNITION Generally, sales are recognized when title passes to the
customer. Some of the revenues related to the steel fabrication operations are
recognized on the percentage of completion method. Due to uncertainties inherent
in the estimation process, it is at least reasonably possible that completion
costs for certain projects will be further revised in the near-term.

CASH AND CASH EQUIVALENTS The Company considers temporary investments that are
short-term (generally with original maturities of three months or less) and
highly liquid to be cash equivalents.

INVENTORIES Inventories are stated at the lower of cost or market. Inventory
cost for most domestic inventories is determined by the last-in, first-out
(LIFO) method; cost of international and remaining inventories is determined by
the first-in, first-out (FIFO) method.

Elements of cost in finished goods inventory in addition to the cost of
material include depreciation and amortization, utilities, consumable
production supplies, maintenance and production wages. Also, the costs of
departments that support production including materials management and quality
control are allocated to inventory.

PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment is recorded at cost
and is depreciated on a straight-line basis over the estimated useful lives of
the assets. Provision for amortization of leasehold improvements is made at
annual rates based upon the estimated useful lives of the assets or terms of the
leases, whichever is shorter. At August 31, 2002, the useful lives used for
depreciation and amortization were as follows:

   Buildings                7 to 40 years
   Equipment                3 to 15 years
   Leasehold improvements   3 to 10 years

We evaluate the carrying value of property, plant and equipment whenever a
change in circumstances indicates that the carrying value may not be recoverable
from the undiscounted future cash flows from operations. If we determine that
impairment exists, we reduce the net book values as warranted. Major maintenance
is expensed as incurred.

START-UP COSTS Start-up costs associated with the acquisition and expansion of
manufacturing and recycling facilities are expensed as incurred.

ENVIRONMENTAL COSTS The Company accrues liabilities for environmental
investigation and remediation costs based upon estimates regarding the number of
sites for which the Company will be responsible, the scope and cost of work to
be performed at each site, the portion of costs that will be shared with other
parties and the timing of remediation. Where amounts and timing can be reliably
estimated, amounts are discounted. Where timing and amounts cannot be reasonably
determined, a range is estimated and the lower end of the range is recognized on
an undiscounted basis.

INCOME TAXES The Company and its U.S. subsidiaries file a consolidated federal
income tax return, and federal income taxes are allocated to subsidiaries based
upon their respective taxable income or loss. Deferred income taxes are provided
for temporary differences between financial and tax reporting. The principal
differences are described in footnote 6, Income Taxes. Benefits from tax credits
are reflected currently in earnings. The Company provides for taxes on
unremitted earnings of foreign subsidiaries.

FOREIGN CURRENCY The functional currency of the Company's international
subsidiaries in Australia, the United Kingdom, and Germany is the local
currency. The remaining international subsidiaries' functional currency is the
United States dollar. Translation adjustments are reported as a component of
accumulated other comprehensive loss.





                                       20
<PAGE>




Effective September 1, 2002, most of the Company's subsidiaries in Europe
changed their functional currency to the Euro. The Company does not anticipate
that this change will have a material impact on its financial condition or
results of operation.

USE OF ESTIMATES The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make significant
estimates regarding assets and liabilities and associated revenues and expenses.
Management believes these estimates to be reasonable; however, actual results
may vary.

DERIVATIVES The Company records derivatives on the balance sheet as assets or
liabilities, measured at fair value. Gains or losses from the changes in the
values of the derivatives are recorded in the statement of earnings, or are
deferred if they are highly effective in achieving offsetting changes in fair
values or cash flows of the hedged items during the term of the hedge.

RECLASSIFICATIONS Certain reclassifications have been made in the 2001 and 2000
financial statements to conform to the classifications used in the current year.

RECENTLY ISSUED ACCOUNTING STANDARDS Statement of Financial Accounting Standards
(SFAS) No.142, Goodwill and Other Intangible Assets, must be adopted by the
Company in the first quarter of its fiscal year 2003, and will be applied to all
goodwill and other intangible assets recognized on the balance sheet, regardless
of when those assets were initially recognized. Goodwill will no longer be
amortized, but must be tested for impairment as of the beginning of the fiscal
year of adoption and annually thereafter. Goodwill was $6.8 million at August
31, 2002. Management does not believe that the implementation of SFAS 142 will
result in an impairment charge.

In August 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations, effective for the Company in fiscal 2003. This standard requires
entities to record the fair value of a liability for an asset retirement
obligation when it is incurred by increasing the carrying amount of the related
long-lived asset. The liability is accreted to its present value each period,
and the capitalized cost is depreciated over the useful lives of the assets.

In October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, that refines criteria for assets classified as
held for sale, further refines rules regarding impairment of long-lived assets
and changes the reporting of discontinued operations. SFAS No. 144 is effective
for the Company's fiscal 2003.

SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities,
was issued in June 2002. It is effective for all such activities initiated after
December 31, 2002. SFASNo. 146 requires that a liability for a cost associated
with an exit or disposal activity be recognized at fair value only when
incurred.

Management believes that the adoption of SFAS Nos.143, 144 and 146 will have no
significant impact on the results of operations or financial position of the
Company.

NOTE 2 Sales of Accounts Receivable

The Company has an accounts receivable securitization program (Securitization
Program) which it utilizes as a cost-effective, short-term financing
alternative. Under the Securitization Program, the Company and several of its
subsidiaries (the Originators) periodically sell accounts receivable to the
Company's wholly-owned consolidated special purpose subsidiary (CMCR). CMCR is
structured to be a bankruptcy-remote entity. CMCR, in turn, sells an undivided
percentage ownership interest (Participation Interest) in the pool of
receivables to an affiliate of a third party financial institution (Buyer). CMCR
may sell undivided interests of up to $130 million, depending on the Company's
level of financing needs.

This Program is designed to enable receivables sold by the Company to CMCR to
constitute true sales under US Bankruptcy Laws, and the Company has received an
opinion from counsel relating to the "true sale" nature of the program. As a
result, these receivables are available to satisfy CMCR's own obligations to its
third party creditors. The Company accounts for the Securitization Program in
accordance with SFAS No. 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities." The transfers meet all of
the criteria for a sale under SFAS No. 140. At the time a Participation Interest
in the pool of receivables is sold, the amount sold is removed from the
consolidated balance sheet and the proceeds from the sale are reflected as cash
provided by operating activities.

At August 31, 2002 and 2001, uncollected accounts receivable of $146 million and
$138 million, respectively, had been sold to CMCR, and the Company's undivided
interest in these receivables was subordinate to any interest owned by the
Buyer. At August 31, 2002 and 2001, $0 and $40 million, respectively of
participation interests in CMCR's accounts receivable pool were owned by the
Buyer and therefore reflected as a reduction in accounts receivable on the
Company's consolidated balance sheets.

Discounts (losses) on the sales of accounts receivable to the Buyer under this
Securitization Program were $793 thousand and $976 thousand for the years ended
August 31, 2003 and 2002, respectively. These losses, representing primarily the
costs of funds, were included in selling, general and administrative expenses.
At August 31, 2002, the carrying amount of the Company's retained interest
(representing the Company's interest in the receivable pool) was $146 million
(100%) in the revolving pool of receivables of $146 million. The carrying amount
of the Company's retained interest was $98 million in the revolving pool of
receivables of $138 million at August 31, 2001. The carrying amount of the
Company's retained interest in the receivables approximated fair value due to
the short-term nature of the collection period. The retained interest is
determined reflecting 100% of any allowance for collection losses on the entire
receivables pool. No other material assumptions are made in determining the fair
value of the retained interest. The Company is responsible for servicing the
entire pool of receivables.

In addition to the Securitization Program described above, the Company's
international subsidiaries periodically sell accounts receivable. These
arrangements also constitute true sales and, once the accounts are sold, they
are no longer available to satisfy the Company's creditors in the event of
bankruptcy. Uncollected accounts receivable that had been sold under these
arrangements and removed from the consolidated balance sheets were $2.1 million
and $18.5 million at August 31, 2002 and 2001, respectively.



                                       21
<PAGE>




NOTE 3 Inventories

Before deduction of LIFO reserves of $8,074,000 and $6,476,000 at August 31,
2002 and 2001, respectively, inventories valued under the first-in, first-out
method approximated replacement cost.

At August 31, 2002 and 2001, 72% and 70%, respectively, of total inventories
were valued at LIFO. The remainder of inventories, valued at FIFO, consisted
mainly of material dedicated to the marketing and distribution business.

The majority of the Company's inventories are in the form of finished goods,
with minimal work in process. Approximately $15.3 million and $10.8 million were
in raw materials at August 31, 2002 and 2001, respectively.

NOTE 4 Credit Arrangements

In August 2002, the Company increased its commercial paper program to permit
maximum borrowings of up to $174.5 million, an increase from the prior year $135
million level. It is the Company's policy to maintain contractual bank credit
lines equal to 100% of the amount of all commercial paper outstanding.

On August 8, 2002, the Company arranged an unsecured revolving credit agreement
with a group of eight banks consisting of a 364-day, $129.5 million facility.
This facility is in addition to the previously existing $45 million facility
that matures August 14, 2004. These agreements provide for borrowing in United
States dollars indexed to LIBOR. Facility and other fees of 0.150% and 0.125%
per annum are payable on the 364-day and multi-year credit lines, respectively.
No compensating balances are required.

The Company has numerous informal credit facilities available from domestic and
international banks. These credit facilities are priced at bankers' acceptance
rates or on a cost of funds basis. No compensating balances or commitment fees
are required under these credit facilities.

Long-term debt and amounts due within one year as of August 31, are as follows:

<Table>
<Caption>

(in thousands)                                    2002              2001
- --------------                                  --------          --------
<S>                                             <C>               <C>
7.20% notes due July 2005                       $104,775          $100,000
6.75% notes due February 2009                    100,000           100,000
6.80% notes due August 2007                       50,000            50,000
8.49% notes due December 2001                         --             7,142
Other                                              1,825             4,784
                                                --------          --------
                                                 256,600           261,926
Less current maturities                              631            10,288
                                                --------          --------
                                                $255,969          $251,638
                                                ========          ========
</Table>

Interest on these notes is payable semiannually.

On April 9, 2002, the Company entered into two interest rate swaps to convert a
portion of its fixed interest rate long-term debt commitment to a floating
interest commitment. These arrangements adjust the Company's fixed to floating
interest rate exposure as well as reduce overall financing costs. The swaps
effectively convert interest on the $100 million debt due July 2005 from a fixed
rate of 7.20% to a six month LIBOR (determined in arrears) plus 2.02%. The
floating rate was 3.88% at July 15, 2002, the most recent reset date. The total
fair value of both swaps was $4,775,000 at August 31, 2002 and is recorded in
other long-term assets, with a corresponding increase in the 7.20% long-term
notes, representing the change in fair value of the hedged debt.

Certain of the note agreements include various covenants. The most restrictive
of these requires maintenance of an interest coverage ratio of greater than
three times and a debt/capitalization ratio of 55% (as defined).

The aggregate amounts of all long-term debt maturities for the five years
following August 31, 2002 are (in thousands): 2003-$631; 2004-$563;
2005-$105,296; 2006-$17; 2007-$50,016 and thereafter-$100,077.





                                       22
<PAGE>
Interest expense is comprised of the following:

<Table>
<Caption>
                                           Year ended August 31,
                              -----------------------------------------------
(in thousands)                   2002               2001              2000
- --------------                ---------          ---------          ---------
<S>                           <C>                <C>                <C>
Long-term debt                $  16,499          $  17,532          $  18,419
Commercial paper                    145              7,076              4,816
Notes payable                     2,064              3,000              4,084
                              ---------          ---------          ---------
                              $  18,708          $  27,608          $  27,319
                              =========          =========          =========
</Table>

Interest of $447,000, $1,111,000, and $808,000 was capitalized in the cost of
property, plant and equipment constructed in 2002, 2001, and 2000, respectively.
Interest of $18,879,000, $28,704,000, and $27,536,000 was paid in 2002, 2001,
and 2000, respectively.

NOTE 5 Financial Instruments, Market and Credit Risk

Generally accepted accounting principles require disclosure of an estimate of
the fair value of the Company's financial instruments as of year end. These
estimated fair values disregard management intentions concerning these
instruments and do not represent liquidation proceeds or settlement amounts
currently available to the Company. Differences between historical presentation
and estimated fair values can occur for many reasons including taxes,
commissions, prepayment penalties, make-whole provisions and other restrictions
as well as the inherent limitations in any estimation technique.

Due to near-term maturities, allowances for collection losses, investment grade
ratings and security provided, the following financial instruments' carrying
amounts are considered equivalent to fair value:

    o    Cash and cash equivalents

    o    Accounts receivable/payable

    o    Short-term borrowings

The Company's long-term debt is predominantly publicly held. Fair value was
determined by indicated market values.

<Table>
<Caption>


(in thousands)                         2002                2001
- --------------                      ----------          ----------
<S>                                 <C>                 <C>
Long-Term Debt:
   Carrying amount                  $  256,600          $  261,926
   Estimated fair value                259,656             252,531
                                    ==========          ==========
</Table>

The Company maintains both corporate and divisional credit departments. Limits
are set for customers and countries. Credit insurance is used for some of the
Company's divisions. Letters of credit issued or confirmed by sound financial
institutions are obtained to further ensure prompt payment in accordance with
terms of sale; generally, collateral is not required.

In the normal course of its marketing activities, the Company transacts business
with substantially all sectors of the metals industry. Customers are
internationally dispersed, cover the spectrum of manufacturing and distribution,
deal with various types and grades of metal and have a variety of end markets in
which they sell. The Company's historical experience in collection of accounts
receivable falls within the recorded allowances. Due to these factors, no
additional credit risk, beyond amounts provided for collection losses, is
believed inherent in the Company's accounts receivable.

The Company's worldwide operations and product lines expose it to risks from
fluctuations in foreign currency exchange rates and metals commodity prices. The
objective of the Company's risk management program is to mitigate these risks
using futures or forward contracts (derivative instruments). The Company enters
into metal commodity forward contracts to mitigate the risk of unanticipated
declines in gross margin due to the volatility of the commodities' prices, and
enters into foreign currency forward contracts which match the expected
settlements for purchases and sales denominated in foreign currencies. The
Company designates as hedges for accounting purposes only those contracts which
closely match the terms of the underlying transaction. These hedges resulted in
substantially no ineffectiveness in the statements of earnings for the years
ended August 31, 2002 and 2001. Certain of the foreign currency and all of the
commodity contracts were not designated as hedges for accounting purposes,
although management believes they are essential economic hedges. The changes in
fair value of these instruments resulted in a



                                       23
<PAGE>




$208 thousand decrease and a $452 thousand increase in cost of goods sold for
the years ended August 31, 2002 and 2001, respectively. All of the instruments
are highly liquid and none are entered into for trading purposes or speculation.

See footnote 4, Credit Arrangements, regarding the Company's interest rate
hedges.

NOTE 6 Income Taxes

The provisions for income taxes include the following:

<Table>
<Caption>

                                                 Year ended August 31,
                                     ---------------------------------------------
(in thousands)                         2002              2001               2000
- --------------                       --------          --------           --------
<S>                                  <C>               <C>                <C>
Current:
     United States                   $ 15,173          $ 13,498           $ 14,731
     Foreign                            1,670                80                573
     State and local                      644             1,863              2,637
                                     --------          --------           --------
                                       17,487            15,441             17,941
Deferred                                5,126              (798)             8,129
                                     --------          --------           --------
                                     $ 22,613          $ 14,643           $ 26,070
                                     ========          ========           ========
</Table>

During 2002, the Company favorably resolved all issues for its federal income
tax returns through 1999. Management has reevaluated the tax accruals resulting
in a net decrease of approximately $1,000,000.

Taxes of $11,016,000, $8,691,000 and $26,363,000 were paid in 2002, 2001 and
2000, respectively.

Deferred taxes arise from temporary differences between the tax basis of an
asset or liability and its reported amount in the financial statements. The
sources and deferred long-term tax liabilities (assets) associated with these
differences are:

<Table>
<Caption>

                                                             August 31,
                                                    ---------------------------
(in thousands)                                        2002               2001
- -------------                                       --------           --------
<S>                                                 <C>                <C>
Tax on difference between tax
     and book depreciation                          $ 38,457           $ 33,873
U.S. taxes provided on foreign
     income and foreign taxes                         11,857             11,586
Net operating losses
     (less allowances of $780 and $2,035)               (561)            (1,090)
Alternative minimum tax credit                        (1,713)            (1,713)
Other accruals                                        (9,183)            (6,330)
Other                                                 (6,044)            (5,921)
                                                    --------           --------
Total                                               $ 32,813           $ 30,405
                                                    ========           ========
</Table>

Current deferred tax assets of $12.3 and $11.0 million at August 31, 2002 and
2001, respectively, were included in other assets on the consolidated balance
sheets. These deferred taxes were largely due to different book and tax
treatments of various allowances and accruals. No valuation allowances were
required at August 31, 2002 or 2001 for the current deferred tax assets.

The Company uses substantially the same depreciable lives for tax and book
purposes. Changes in deferred taxes relating to depreciation are mainly
attributable to differences in the basis of underlying assets recorded under the
purchase method of accounting. As noted above, the Company provides United
States taxes on unremitted foreign earnings. Net operating losses consist of
$120 million of state net operating losses that expire during the tax years
ending from 2006 to 2022. These assets will be reduced as tax expense is
recognized in future periods. The $1.7 million alternative minimum tax credit is
available indefinitely. The FSC Repeal and Extraterritorial Income Exclusion Act
of 2000 replaced the Foreign Sales Corporation (FSC) tax benefits with the
"extraterritorial income" exemption (ETI) for fiscal year 2002 and the years
thereafter. The ETI exclusion maintains the same level of tax benefit for
current FSC users.





                                       24
<PAGE>




The Company's effective tax rates were 35.8% for 2002, 38.1% for 2001 and 36.9%
for 2000. Reconciliations of the United States statutory rates to the effective
rates are as follows:

<Table>
<Caption>

                                                      Year ended August 31,
                                            ----------------------------------------
                                            2002              2001              2000
                                            ----              ----              ----
<S>                                         <C>               <C>               <C>
Statutory rate                              35.0%             35.0%             35.0%
State and local taxes                        1.0               3.1               2.3
ETI                                         (1.2)             (1.1)             (0.6)
Other                                        1.0               1.1               0.2
                                            ----              ----              ----
Effective tax rate                          35.8%             38.1%             36.9%
                                            ====              ====              ====
</Table>

NOTE 7 Capital Stock

On May 20, 2002, the Company's Board of Directors declared a two-for-one stock
split in the form of a 100% stock dividend on its common stock. This stock split
was effective June 28, 2002 to shareholders of record on June 7, 2002. On June
28, 2002, the Company issued 16,132,583 additional shares of common stock and
transferred $17,354,000 from paid-in capital and $63,309,000 from retained
earnings to common stock. All applicable share and per share amounts in the
accompanying consolidated financial statements have been restated to reflect
this stock split. Following the stock split, the Company also instituted a
quarterly cash dividend of eight cents per share on the increased number of
shares.

STOCK PURCHASE PLAN Almost all employees may participate in the Company's
employee stock purchase plan. The Directors have authorized the annual purchase
of up to 200 shares per employee at a discount of 25% from the stock's market
price. Yearly activity of the stock purchase plan was as follows:

<Table>

                               2002                2001               2000
                         --------------      --------------      --------------
<S>                      <C>                 <C>                 <C>
Shares subscribed               282,780             347,640             330,000
  Price per share        $        12.48      $         9.48      $        11.74
Shares purchased                257,860              74,480             273,980
  Price per share        $         9.48      $        11.74      $         9.75
Shares available                366,446
</Table>

The Company recorded compensation expense for this plan of $815,000, $291,000
and $890,000 in 2002, 2001 and 2000, respectively.

STOCK OPTION PLANS The 1986 Stock Incentive Plan (1986 Plan) ended November 23,
1996, except for awards outstanding. Under the 1986 Plan, stock options were
awarded to full-time salaried employees. The option price was the fair market
value of the Company's stock at the date of grant, and the options are
exercisable two years from date of grant. The outstanding awards under this Plan
are 100% vested and expire through 2006.

The 1996 Long-Term Incentive Plan (1996 Plan) was approved in December 1996.
Under the 1996 Plan, stock options, stock appreciation rights, and restricted
stock may be awarded to employees. The option price for both the stock options
and the stock rights will not be less than the fair market value of the
Company's stock at the date of grant. The outstanding awards under the 1996 Plan
vest 50% after one year and 50% after two years from date of grant and will
expire seven years after grant. The terms of the 1996 Plan resulted in
additional authorized shares of 52,126 in 2000, 67,270 in 2001, and 1,073,782 in
2002. In addition, the Company's shareholders authorized an additional 1,000,000
shares during 2002.

In January 2000, the Company's stockholders approved the 1999 Non-Employee
Director Stock Option Plan and authorized 400,000 shares to be made available
for grant. Under this Plan, each outside director of the Company will receive
annually an option to purchase 3,000 shares of the Company's stock. In addition,
any outside director may elect to receive all or part of fees otherwise payable
in the form of a stock option. The price of these options is the fair market
value of the Company's stock at the date of the grant. The options granted
automatically vest 50% after one year and 50% after two years from the grant
date. Options granted in lieu of fees are immediately vested. All options expire
seven years from the date of grant.





                                       25
<PAGE>


Combined share information for the three plans is as follows:

<Table>
<Caption>

                                                            Weighted
                                                             Average                 Price
                                                            Exercise                 Range
                                       Number                 Price                Per Share
                                     ----------           -------------           ------------
<S>                                  <C>                  <C>                     <C>
September 1, 1999
     Outstanding                      3,821,522           $       12.98           $ 6.31-14.91
     Exercisable                      3,424,636                   12.78             6.31-14.91
     Granted                            773,800                   15.45            15.44-15.97
     Exercised                         (201,732)                  11.49             6.31-14.91
     Forfeited                          (42,730)                  14.85            12.25-15.44
     Increase authorized                452,126
                                     ----------           -------------           ------------
August 31, 2000
     Outstanding                      4,350,860           $       13.47           $ 6.31-15.97
     Exercisable                      3,559,810                   13.06             6.31-15.44
     Granted                            803,672                   11.71            10.95-13.23
     Exercised                         (320,422)                  10.70             6.31-15.44
     Forfeited                          (99,932)                  13.82            10.99-15.97
     Increase authorized                 67,270
                                     ----------           -------------           ------------
August 31, 2001
     Outstanding                      4,734,178           $       13.36           $ 9.21-15.97
     Exercisable                      3,608,052                   13.47             9.21-15.97
     Granted                            805,380                   17.28            17.17-21.42
     Exercised                       (2,212,903)                  13.13             9.21-15.97
     Forfeited                          (80,920)                  14.00            11.76-17.17
     Increase authorized              2,073,782
                                     ----------           -------------           ------------

August 31, 2002
     Outstanding                      3,245,735           $       14.46           $10.10-21.42
     Exercisable                      2,111,744                   13.94            10.10-18.05
     Authorized
       Shares remaining               1,938,738
                                     ----------           -------------           ------------
</Table>

Share information for options at August 31, 2002:

<Table>
<Caption>

                                     Outstanding                                                         Exercisable
- ----------------------------------------------------------------------------------             ---------------------------------
                                                      Weighted
                                                       Average        Weighted                                       Weighted
    Range of                                          Remaining        Average                                       Average
    Exercise                Number                   Contractual      Exercise                   Number              Exercise
     Price                Outstanding                 Life (Yrs)        Price                  Exercisable             Price
- -------------             -----------                -----------     -------------             -----------         -------------
<S>                       <C>                        <C>             <C>                       <C>                 <C>
$ 10.10-12.25                 828,579                        4.4     $       11.72                476,224          $       11.70
  13.13-14.91               1,197,768                        2.6             14.13              1,166,462                  14.14
  15.44-21.42               1,219,388                        5.6             16.65                469,058                  15.70
- -------------             -----------                -----------     -------------             ----------          -------------
$ 10.10-21.42               3,245,735                        4.2     $       14.46              2,111,744          $       13.94
</Table>

The Company has maintained its historical method for accounting for stock
options, which recognizes no compensation expense for fixed options granted at
current market values. Generally accepted accounting principles require
disclosure of an estimate of the weighted-average grant date fair value of
options granted during the year and pro forma disclosures of the effect on
earnings if compensation expense had been recorded.

The Black-Scholes option pricing model used requires the following assumptions
as of August 31:

<Table>
<Caption>

                                  2002              2001           2000
                               ----------        ----------     ----------
<S>                            <C>               <C>            <C>
Risk-free interest rate        4.42%             4.84%          6.34%
Expected life                  5.44 years        4.60 years     4.06 years
Expected volatility            .250              .232           .248
Expected dividend yield         1.7%              1.7%           1.9%
</Table>





                                       26
<PAGE>




Management believes that the results have limited relevance as characteristics
of the Company's options such as nontransferability, forfeiture provisions and
long lives are inconsistent with the option model's basic purpose of valuing
traded options. For purposes of pro forma earnings disclosures, the assumed
compensation expense is amortized over the option's vesting period. The pro
forma information includes options granted in preceding years.

<Table>
<Caption>

                                               2002                2001            2000
                                           ----------          ----------       ----------
<S>                                        <C>                 <C>              <C>
Net earnings (in thousands)
     As reported                           $   40,525          $   23,772       $   44,590
     Pro forma                                 38,888              22,577           43,097

Diluted earnings per share
     As reported                           $     1.43          $     0.90       $     1.56
     Pro forma                                   1.37                0.86             1.51
</Table>

The weighted-average fair value of options granted in 2002, 2001 and 2000 was
$4.52, $2.77 and $3.89, respectively.

PREFERRED STOCK Preferred stock has a par value of $1.00 a share, with 2,000,000
shares authorized. It may be issued in series, and the shares of each series
shall have such rights and preferences as fixed by the Board of Directors when
authorizing the issuance of that particular series. There are no shares of
preferred stock outstanding.

STOCKHOLDER RIGHTS PLAN On July 28, 1999, the Company's Board of Directors
adopted a stockholder rights plan pursuant to which stockholders were granted
preferred stock rights (Rights) to purchase one one-thousandth of a share of the
Company's Series A Preferred Stock for each share of common stock held. In
connection with the adoption of such plan, the Company designated and reserved
100,000 shares of preferred stock as Series A Preferred Stock and declared a
dividend of one Right on each outstanding share of the Company's common stock.
Rights were distributed to stockholders of record as of August 9, 1999.

The Rights are represented by and traded with the Company's common stock. The
Rights do not become exercisable or trade separately from the common stock
unless at least one of the following conditions are met: a public announcement
that a person has acquired 15% or more of the common stock of the Company or a
tender or exchange offer is made for 15% or more of the common stock of the
Company. Should either of these conditions be met and the Rights become
exercisable, each Right will entitle the holder (other than the acquiring person
or group) to buy one one-thousandth of a share of the Series A Preferred Stock
at an exercise price of $150.00. Each fractional share of the Series A Preferred
Stock will essentially be the economic equivalent of one share of common stock.
Under certain circumstances, each Right would entitle its holder to purchase the
Company's stock or shares of the acquirer's stock at a 50% discount. The
Company's Board of Directors may choose to redeem the Rights (before they become
exercisable) at $0.001 per Right. The Rights expire July 28, 2009.

NOTE 8 Employees' Retirement Plans

Substantially all employees of the Company and its subsidiaries are covered by
defined contribution profit sharing and savings plans. Company contributions,
which are discretionary, to all plans were $14,685,000, $10,611,000, and
$18,108,000, for 2002, 2001 and 2000, respectively.

NOTE 9 Postretirement Benefits Other Than Pensions/Postemployment Benefits

The Company has no significant postretirement obligations. The Company's
historical costs for postemployment benefits have not been significant and are
not expected to be in the future.





                                       27
<PAGE>




NOTE 10 Commitments and Contingencies

Minimum lease commitments payable by the Company and its consolidated
subsidiaries for noncancelable operating leases in effect at August 31, 2002,
are as follows for the fiscal periods specified:

<Table>
<Caption>

                                                     Real
(in thousands)                     Equipment        Estate
- --------------                     ---------      ---------
<S>                                <C>            <C>
2003                               $  6,169       $   3,178
2004                                  3,499           1,723
2005                                  2,529           1,245
2006                                  1,749             823
2007 and thereafter                   2,088             983
                                   --------       ---------
                                   $ 16,034       $   7,952
                                   ========       =========
</Table>

Total rental expense was $11,774,000, $11,483,000 and $10,664,000 in 2002, 2001
and 2000, respectively.

CONSTRUCTION CONTRACT DISPUTES During 2001, the Company increased its litigation
accrual (included in accrued expenses and other payables) by $8.3 million due to
an adverse judgment from a trial. At August 31, 2002 and 2001, $9.8 million and
$9.4 million, respectively, were accrued (including interest). The Company has
appealed the judgment.

In another matter, a subsidiary of the Company entered into a fixed price
contract with the design/builder general contractor (D/B) to furnish, erect and
install structural steel, hollow core pre-cast concrete planks, fireproofing,
and certain concrete slabs along with related design and engineering work for
the construction of a large hotel and casino complex. In connection with the
contract, the D/B secured insurance under a subcontractor/vendor default
protection policy which named the Company as an insured in lieu of performance
and payment bonds. A large subcontractor to the Company defaulted, and the
Company incurred unanticipated costs to complete the work. The Company made a
claim against the insurance company for all losses, costs, and expenses incurred
or arising from the default. A portion of the claim, $6.6 million, was recorded
as a claim receivable in other assets at August 31, 2001. During May 2002, the
Company and the insurance company settled litigation filed by the Company
following the insurer' refusal to pay the claim. The Company recovered $15
million from the insurance company, which included recovery of the $6.6 million
claim receivable, receipt of an additional amount ($7.4 million), the release of
the balance of $1 million of previously escrowed funds for payment of certain
claims by subcontractors to the Company and, subject to certain contingencies,
reimbursement of an additional amount (up to $3 million). The $7.4 million in
excess of the claim receivable and escrow amount released was recorded as
deferred insurance proceeds (in other long-term liabilities at August 31, 2002)
pending final resolution of the Company's disputes with the D/B. The Company has
also filed a lawsuit against the insurance broker for insurance benefits not
received due to the broker's acts, errors and omissions.

Disputes between the Company and the D/B have been submitted to binding
arbitration. Depending upon future rulings in the arbitration, a portion of the
Company's recovery from the insurance company may be credited toward the
Company's claim against the D/B. The Company has filed a claim for approximately
$27 million against the D/B. The claims seeks recovery of unpaid contract
receivables, amounts for delay claims and change orders all of which have not
been paid by the D/B. At August 31, 2002 and 2001, the Company maintained
contract receivables of $7.2 million from the D/B. Such amounts are included
within other assets on the accompanying balance sheets. The D/B has not disputed
certain amounts owed under the contract, but contends that other deductive
items, disputed by the Company, reduce the contract balance by approximately
$6.3 million which together with other D/B claims (discussed below) exceed the
unpaid contract balance. The Company disputes the deductive items in the D/B's
claim and intends to vigorously pursue recovery of the contract balance in
addition to all amounts not recovered under insurance program coverage as a
result of misrepresentations or omissions of the D/B.

The owner of the Project and the D/B have filed joint claims in the arbitration
proceeding against the Company, primarily for alleged delay damages, totaling
approximately $144 million which includes alleged delay damages in construction
of a retail area adjacent to the Project. Management believes the claims are
generally unsubstantiated, and the Company has valid legal defenses against such
claims and intends to vigorously defend these claims. Man-





                                       28
<PAGE>



agement is unable to determine a range of potential loss related to such claims,
and therefore no losses have been accrued; however, it believes the ultimate
resolution will not have a material effect on the Company's consolidated
financial statements. Due to the uncertainties inherent in the estimating
process, it is at least reasonably possible that a change in the Company's
estimate of its collection of amounts receivable and possible liability could
occur in the near term.

The Company is involved in various other claims and lawsuits incidental to its
business. In the opinion of management, these claims and suits in the aggregate
will not have a material adverse effect on the results of operations or the
financial position of the Company.

ENVIRONMENTAL AND OTHER MATTERS In the ordinary course of conducting its
business, the Company becomes involved in litigation, administrative proceedings
and governmental investigations, including environmental matters. Management
believes that adequate provision has been made in the financial statements for
the potential impact of these issues, and that the outcomes will not
significantly impact the results of operations or the financial position of the
Company, although they may have a material impact on earnings for a particular
quarter.

The Company has received notices from the U.S. Environmental Protection Agency
(EPA) or equivalent state agency that it is considered a potentially responsible
party (PRP) at fourteen sites, none owned by the Company, and may be obligated
under the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980 (CERCLA) or similar state statute to conduct remedial investigations,
feasibility studies, remediation and/or removal of alleged releases of hazardous
substances or to reimburse the EPA for such activities. The Company is involved
in litigation or administrative proceedings with regard to several of these
sites in which the Company is contesting, or at the appropriate time may
contest, its liability at the sites. In addition, the Company has received
information requests with regard to other sites which may be under consideration
by the EPA as potential CERCLA sites.

Some of these environmental matters or other proceedings may result in fines,
penalties or judgments being assessed against the Company. While the Company is
unable to estimate precisely the ultimate dollar amount of exposure to loss in
connection with the above-referenced matters, it makes accruals as warranted.
Due to evolving remediation technology, changing regulations, possible
third-party contributions, the inherent shortcomings of the estimation process
and other factors, amounts accrued could vary significantly from amounts paid.
Accordingly, it is not possible to estimate a meaningful range of possible
exposure. It is the opinion of the Company's management that the outcome of
these proceedings, individually or in the aggregate, will not have a material
adverse effect on the results of operations or the financial position of the
Company.

NOTE 11 Earnings Per Share

In calculating earnings per share, there were no adjustments to net earnings to
arrive at income for any years presented. The stock options granted June 7,
2002, with total outstanding share commitments of 10,000 at year end, are
antidilutive.

<Table>
<Caption>

                                                             August 31,
                                        --------------------------------------------------
                                           2002                2001                2000
                                        ----------          ----------          ----------
<S>                                     <C>                 <C>                 <C>
Shares outstanding
     for basic
     earnings per share                 27,377,083          26,059,122          28,036,052

Effect of dilutive securities:
     Stock options/
     purchase plans                        898,208             261,866             464,118
                                        ----------          ----------          ----------
Shares outstanding for
     diluted earnings
     per share                          28,275,291          26,320,988          28,500,170
                                        ==========          ==========          ==========
</Table>





                                       29
<PAGE>




NOTE 12 Accrued Expenses and Other Payables

<Table>
<Caption>

                                               August 31,
                                         ---------------------
(in thousands)                             2002         2001
- --------------                           --------     --------
<S>                                      <C>          <C>
Salaries, wages and commissions          $ 31,544     $ 30,844
Litigation accruals                        16,416       16,048
Employees' retirement plans                15,086       11,749
Insurance                                  12,987       10,401
Taxes other than income taxes               9,470       10,359
Advance billings on contracts               7,855       15,621
Freight                                     5,980        4,467
Environmental                               3,437        2,675
Accrual for contract losses                 2,506        3,278
Interest                                    1,901        2,491
Contributions                               1,788          935
Other                                      24,638       24,979
                                         --------     --------
                                         $133,608     $133,847
                                         ========     ========
</Table>

NOTE 13 Business Segments

The Company's reportable segments are based on strategic business areas, which
offer different products and services. These segments have different lines of
management responsibility as each business requires different marketing
strategies and management expertise.

The Company has three reportable segments consisting of manufacturing,
recycling, and marketing and distribution. Manufacturing consists of the CMC
steel group's minimills, steel and joist fabrication operations, fence post
manufacturing plants, heat treating, railcar rebuilding and concrete-related
products, as well as Howell Metal Company's copper tube manufacturing facility.
The manufacturing segment's business operates primarily in the southern and
western United States. Recycling consists of the Secondary Metals Processing
Division's scrap processing and sales operations primarily in Texas, Florida and
the southern United States. Marketing and distribution includes both domestic
and international operations for the sales and distribution of both ferrous and
nonferrous metals and other industrial products. The segment's activities
consist only of physical transactions and not speculation.

The Company uses adjusted operating profit to measure segment performance.
Intersegment sales are generally priced at prevailing market prices. Certain
corporate administrative expenses are allocated to segments based upon the
nature of the expense. The accounting policies of the segments are the same as
those described in the summary of significant accounting policies.





                                       30
<PAGE>




The following presents information regarding the Company's domestic operations
and operations outside of the United States:

<Table>
<Caption>

                                          External Net Sales for the
                                             Year ended August 31,
                              --------------------------------------------------
(in thousands)                    2002               2001                2000
- --------------                ----------          ----------          ----------
<S>                           <C>                 <C>                 <C>
United States                 $1,670,497          $1,685,981          $1,782,189
Non United States                776,280             755,235             879,231
                              ----------          ----------          ----------
Total                         $2,446,777          $2,441,216          $2,661,420
                              ==========          ==========          ==========
</Table>


<Table>
<Caption>

                                                 Long-Lived Assets
                                                 as of August 31,
                                    --------------------------------------------
(in thousands)                        2002              2001               2000
- --------------                      --------          --------          --------
<S>                                 <C>               <C>               <C>
United States                       $421,332          $449,121          $457,204
Non United States                     14,492             9,812            10,483
                                    --------          --------          --------
Total                               $435,824          $458,933          $467,687
                                    ========          ========          ========
</Table>


Summarized data for the Company's international operations located outside of
the United States (principally in Europe, Australia and the Far East) are as
follows:

<Table>
<Caption>

                                                Year ended August 31,
                                    --------------------------------------------
(in thousands)                        2002              2001              2000
- --------------                      --------          --------          --------
<S>                                 <C>               <C>               <C>
Net sales-unaffiliated
customers                           $378,745          $266,609          $343,805
                                    ========          ========          ========
Total assets                         124,870            83,743            68,556
                                    ========          ========          ========
</Table>

The following is a summary of certain financial information by reportable
segment:






                                       31
<PAGE>

NOTE 13 Business Segments (Continued):

<Table>
<Caption>


                                                                                                     Adjustments
                                                                        Marketing                       and
2002 (dollars in thousands)           Manufacturing    Recycling    and Distribution   Corporate     Eliminations   Consolidated
- ---------------------------           -------------   ----------    ----------------  ----------     ------------   ------------
<S>                                   <C>             <C>           <C>               <C>            <C>            <C>
Net sales-unaffiliated customers       $1,329,159     $  354,387       $  762,584     $      647      $       --     $2,446,777
Intersegment sales                          3,587         23,667           14,428             --         (41,682)            --
                                       ----------     ----------       ----------     ----------      ----------     ----------
  Net sales                             1,332,746        378,054          777,012            647         (41,682)     2,446,777
                                       ==========     ==========       ==========     ==========      ==========     ==========
Adjusted operating profit (loss)           71,447          5,098           14,196         (8,102)             --         82,639
                                       ==========     ==========       ==========     ==========      ==========     ==========
Interest expense                            3,949          1,011            1,050         13,145            (447)        18,708
                                       ==========     ==========       ==========     ==========      ==========     ==========
Capital expenditures                       39,046          4,723            9,323            965              --         54,057
                                       ==========     ==========       ==========     ==========      ==========     ==========
Depreciation and
    amortization                           49,538          9,650            1,609            782              --         61,579
                                       ==========     ==========       ==========     ==========      ==========     ==========
Total assets                              720,450         98,847          262,111        148,668              --      1,230,076
                                       ==========     ==========       ==========     ==========      ==========     ==========

2001 (dollars in thousands)
- ---------------------------

Net sales-unaffiliated customers       $1,315,700     $  371,298       $  752,723     $    1,495      $       --     $2,441,216
Intersegment sales                          5,375         22,539           18,433             --         (46,347)            --
                                       ----------     ----------       ----------     ----------      ----------     ----------
  Net sales                             1,321,075        393,837          771,156          1,495         (46,347)     2,441,216
                                       ==========     ==========       ==========     ==========      ==========     ==========
Adjusted operating profit (loss)           56,700         (2,324)           7,833          4,790              --         66,999
                                       ==========     ==========       ==========     ==========      ==========     ==========
Interest expense                           10,585          2,165            1,332         14,637          (1,111)        27,608
                                       ==========     ==========       ==========     ==========      ==========     ==========
Capital expenditures                       45,979          5,587            1,208            248              --         53,022
                                       ==========     ==========       ==========     ==========      ==========     ==========
Depreciation and
    amortization                           54,402         11,005            1,124            741              --         67,272
                                       ==========     ==========       ==========     ==========      ==========     ==========
Total assets                              739,625         93,268          188,405         60,648              --      1,081,946
                                       ==========     ==========       ==========     ==========      ==========     ==========

2000 (dollars in thousands)
- ---------------------------

Net sales-unaffiliated customers       $1,348,994     $  432,115       $  881,238     $     (927)     $       --     $2,661,420
Intersegment sales                          7,732         30,496           22,055             --         (60,283)            --
                                       ----------     ----------       ----------     ----------      ----------     ----------
  Net sales                             1,356,726        462,611          903,293           (927)        (60,283)     2,661,420
                                       ==========     ==========       ==========     ==========      ==========     ==========
Adjusted operating profit (loss)           72,135          5,841           19,244            759              --         97,979
                                       ==========     ==========       ==========     ==========      ==========     ==========
Interest expense                           11,007          2,811            1,741         12,568            (808)        27,319
                                       ==========     ==========       ==========     ==========      ==========     ==========
Capital expenditures                       61,538          6,220            1,260            609              --         69,627
                                       ==========     ==========       ==========     ==========      ==========     ==========
Depreciation and
    amortization                           52,688         12,152            1,061            682              --         66,583
                                       ==========     ==========       ==========     ==========      ==========     ==========
Total assets                              769,536        115,532          242,568         42,456              --      1,170,092
                                       ==========     ==========       ==========     ==========      ==========     ==========
</Table>


In the following table we are providing a reconciliation of our non-GAAP
measure, adjusted operating profit (loss), to net earnings (loss), the most
comparable GAAP measure (in thousands):

<Table>
<Caption>
                                                                        MARKETING AND     CORPORATE AND
SEGMENT                               MANUFACTURING      RECYCLING       DISTRIBUTION      ELIMINATIONS         TOTAL
- -------------------------------       -------------      ---------      -------------     -------------         -----
<S>                                   <C>                <C>            <C>               <C>                   <C>
YEAR ENDED AUGUST 31, 2002:
Net earnings (loss)                     $45,026          $ 3,741           $ 8,085          $(16,327)         $40,525
Income taxes                             25,739            1,187             3,769            (8,082)          22,613
Interest expense                            291                4             2,039            16,374           18,708
Discounts on sales of accounts
receivable                                  391              166               303               (67)             793
                                        -------          -------           -------          --------          -------
Adjusted operating profit (loss)        $71,447          $ 5,098           $14,196          $ (8,102)         $82,639
                                        =======          =======           =======          ========          =======

YEAR ENDED AUGUST 31, 2001:
Net earnings (loss)                     $34,826          $(1,579)          $ 3,612          $(13,087)         $23,772
Income taxes                             21,150             (903)            2,139            (7,743)          14,643
Interest expense                            357               12             1,798            25,441           27,608
Discounts on sales of accounts
receivable                                  367              146               284               179              976
                                        -------          -------           -------          --------          -------
Adjusted operating profit (loss)        $56,700          $(2,324)          $ 7,833          $  4,790          $66,999
                                        =======          =======           =======          ========          =======

YEAR ENDED AUGUST 31, 2000:
Net earnings (loss)                     $44,794          $ 3,836           $11,548          $(15,588)         $44,590
Income taxes                             27,135            1,971             5,469            (8,505)          26,070
Interest expense                            206               34             2,227            24,852           27,319
                                        -------          -------           -------          --------          -------
Adjusted operating profit (loss)        $72,135          $ 5,841           $19,244          $    759          $97,979
                                        =======          =======           =======          ========          =======
</Table>




                                       32
<PAGE>

NOTE 14 Restatement


In August 2002, the Company uncovered a theft and accounting fraud which had
occurred over four years at a rebar fabrication facility in South Carolina. The
total adjustment required to restate the accounting records to their proper
balances was $2.7 million pre-tax. In a second, unrelated incident, the Company
discovered accounting errors related to losses on rebar fabrication and
placement jobs at one facility in California, some of which dated from the
acquisition of the facility in May 2000. The resulting charge was $1.9 million
pre-tax. The South Carolina incident resulted in a $900 thousand pre-tax expense
in fiscal 2002. The remaining $3.7 million pre-tax for both instances was
attributed $885 thousand in 2001, $2.6 million in 2000 and $227 thousand in
1999. All reported periods have been restated. The effects of the restatement
were as follows:

<Table>
<Caption>

                                                    2001                                    2000
                                      -------------------------------         -------------------------------
                                      As Previously            As             As Previously            As
($ in thousands, except per share)      Reported            Restated            Reported            Restated
- ----------------------------------    -------------        ----------         -------------        ----------
<S>                                   <C>                  <C>                <C>                  <C>
At August 31:
Cash                                   $   33,289          $   32,921          $   20,067          $   20,057
Accounts receivable                       204,032             202,095             354,045             352,203
Inventories                               236,679             223,859             277,455             270,368
Total assets                            1,084,800           1,081,671           1,172,862           1,170,092
Accounts payable                          201,292             201,114             194,538             194,205
Other payables and
     accrued expenses                     133,464             133,895             142,680             142,732
Income taxes payable                        1,105                  --                 678                  --
Retained earnings                         424,688             422,309             407,128             405,317
Total stockholders' equity                435,473             433,094             420,616             418,805

For the year ended August 31:
Selling, general and
     administrative
     expenses                          $  211,539          $  212,424          $  208,808          $  211,403
Earnings before
     income taxes                          39,300              38,415              73,255              70,660
Net earnings                               24,340              23,772              46,255              44,590
Basic EPS                                    0.93                0.91                1.65                1.59
Diluted EPS                                  0.92                0.90                1.62                1.56
</Table>

In addition to the above, beginning retained earnings as of September 1, 1999
was reduced by $146 thousand.

In October 2003, the Company determined that the amounts previously reported in
2002 and 2001 as temporary investments should have been classified as "cash
equivalents" and combined with the amounts reported as cash on its consolidated
balance sheets. Also, the Company has determined that it should have
consolidated its interests in CMCR, the primary effect of which is to combine
the amounts previously reported as notes receivables from affiliate with
accounts receivable on the consolidated balance sheets. As a result, cash and
cash equivalents shown in the accompanying consolidated balance sheets as of
August 31, 2002 and 2001 have been increased by $91 million and $23 million,
respectively, from the amounts previously reported as cash (as shown in the
table above), and the previously reported temporary investments line has been
removed. As a result of consolidating CMCR, accounts receivable as of August 31,
2002 and 2001 have been increased by $143 million and $95.5 million,
respectively, from the amounts previously reported (as shown in the table
above), and the previously reported notes receivable from affiliates line has
been removed. In conjunction with these balance sheet changes, cash flows used
by investing activities in the accompanying statements of cash flows for the
years ended August 31, 2002 and 2001 have been changed from ($99) million and
($73) million, respectively, to ($31) million and ($50) million. In addition,
the disclosures in Note 2, Sales of Accounts Receivable, have been revised.
Other changes were also made to the consolidated balance sheets and statements
of cash flows and accompanying notes as a result of the consolidation of CMCR,
none of which are material to the financial statements.




                                       33
<PAGE>




NOTE 15 Quarterly Financial Data (Unaudited)


Summarized quarterly financial data for fiscal 2002, 2001 and 2000 are as
follows (in thousands except per share data):

<Table>
<Caption>

                                               Three Months Ended 2002
                    ----------------------------------------------------------------------------------
                    As Previously          As
                      Reported          Restated
                       Nov. 30           Nov. 30           Feb. 28           May 31            Aug. 31
                    -------------       --------          --------          --------          --------
<S>                 <C>                 <C>               <C>               <C>               <C>
Net sales             $564,880          $564,880          $566,419          $642,908          $672,570
Gross profit            78,095            78,095            74,872            92,116            72,316
Net earnings             8,832             8,482             6,572            16,433             9,038
Basic EPS                 0.34              0.32              0.24              0.59              0.32
Diluted EPS               0.33              0.32              0.24              0.56              0.31
</Table>

<Table>
<Caption>

                                                                 Three Months Ended 2001
                      -------------------------------------------------------------------------------------------------------------
                      As Previously       As     As Previously       As      As Previously       As       As Previously       As
                        Reported      Restated      Reported      Restated      Reported      Restated       Reported      Restated
                         Nov. 30       Nov. 30      Feb. 28        Feb. 28       May 31        May 31        Aug. 31       Aug. 31
                      -------------   ---------  -------------    --------   -------------    --------    -------------    --------
<S>                   <C>             <C>        <C>              <C>        <C>              <C>         <C>              <C>
Net sales              $ 594,540      $ 594,540     $578,330      $578,330      $622,090      $622,090       $646,256      $646,256
Gross profit              70,844         70,844       58,253        58,253        82,893        82,893         85,326        85,326
Net earnings (loss)       (2,233)        (2,421)       1,662         1,590        10,721        10,569         14,190        14,034
Basic EPS (loss)           (0.09)         (0.09)        0.06          0.06          0.41          0.41           0.54          0.54
Diluted EPS (loss)         (0.09)         (0.09)        0.06          0.06          0.41          0.40           0.53          0.53
</Table>

<Table>
<Caption>

                                                               Three Months Ended 2000
                      -------------------------------------------------------------------------------------------------------------
                      As Previously       As     As Previously       As      As Previously       As       As Previously       As
                        Reported      Restated      Reported      Restated      Reported      Restated       Reported      Restated
                         Nov. 30       Nov. 30      Feb. 28        Feb. 28       May 31        May 31        Aug. 31       Aug. 31
                      -------------   ---------  -------------    ---------  -------------    ---------   -------------    --------
<S>                   <C>             <C>        <C>              <C>        <C>              <C>         <C>              <C>
Net sales             $ 612,427       $ 612,427    $ 637,624      $ 637,624   $ 701,209       $ 701,209     $ 710,160      $710,160
Gross profit             77,434          77,434       79,132         79,132      87,076          87,076        83,848        83,848
Net earnings             10,233           9,972       10,358         10,317      12,961          12,453        12,703        11,848
Basic EPS                  0.36            0.35         0.36           0.36        0.46            0.45          0.47          0.44
Diluted EPS                0.35            0.34         0.35           0.35        0.46            0.44          0.47          0.44
</Table>

The quantities and costs used in calculating cost of goods sold on a quarterly
basis include estimates of the annual LIFO effect. The actual effect cannot be
known until the year end physical inventory is completed and quantity and price
indices are developed. The quarterly cost of goods sold above includes such
estimates. The final determination of inventory quantities and prices resulted
in $1.1 million after-tax expense in the fourth quarter 2002. Fourth quarter
2001 net earnings were not significantly impacted. Fourth quarter 2000 net
earnings decreased $1.2 million after the final determination of quantities and
prices was made.

In recording accruals for workers' compensation expense, management relies on
prior years' experience and information from third party administrators in
making estimates. Results at the end of fiscal year 2002, 2001 and 2000
indicated a decline in the number of claims resulting in a $1.0 million, $2.1
million and $2.6 million reduction, respectively, in the accrual during the
fourth quarters.

Following a revised Court ruling, the Company reduced its litigation accrual by
$2.5 million during the fourth quarter 2001 (see note 10).





                                       34
<PAGE>




INDEPENDENT AUDITORS' REPORT




Board of Directors and Stockholders
Commercial Metals Company
Dallas, Texas



We have audited the consolidated balance sheets of Commercial Metals Company and
subsidiaries at August 31, 2002 and 2001, and the related consolidated
statements of earnings, stockholders' equity, and cash flows for each of the
three years in the period ended August 31, 2002. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Commercial Metals Company and
subsidiaries at August 31, 2002 and 2001, and the results of their operations
and their cash flows for each of the three years in the period ended August 31,
2002 in conformity with accounting principles generally accepted in the United
States of America.

As discussed in Note 14, the accompanying 2002, 2001 and 2000 financial
statements have been restated.


/s/ DELOITTE & TOUCHE LLP

Dallas, Texas
November 22, 2002
(October 29, 2003 as to the effects of the restatement discussed in the last
paragraph of Note 14)





                                       35
<PAGE>



                                     PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)  The following documents are filed as a part of this report:

     1.  All financial statements are included at Item 8 above.

     2.  Commercial Metals Company and Subsidiaries Consolidated Financial
         Statement Schedule

         Independent Auditors' Report as to Schedule Valuation and qualifying
         accounts (Schedule VIII)

         All other schedules have been omitted because they are not applicable,
         are not required, or the required information is shown in the financial
         statements or notes thereto.

     3.  The following is a list of the Exhibits required to be filed by Item
         601 of Regulation S-K:

<Table>
<S>                  <C>    <C>                                                                             <C>
         (3)(i)      -      Restated Certificate of Incorporation (Filed
                            herewith).

         (3)(i)a     -      Certificate of Amendment of Restated Certificate of
                            Incorporation dated February 1, 1994 (Filed
                            herewith).

         (3)(i)b     -      Certificate of Amendment of Restated Certificate of
                            Incorporation dated February 17, 1995 (Filed
                            herewith).

         (3)(i)c     -      Certificate of Designation, Preferences and Rights
                            of Series A Preferred Stock (Filed as Exhibit 2 to
                            Commercial Metals' Form 8-A filed August 3, 1999 and
                            incorporated herein by reference).

         (3)(ii)     -      By-Laws (Filed herewith).

         (4)(i)a     -      Indenture between Commercial Metals and Chase
                            Manhattan Bank dated as of July 31, 1995 (Filed as
                            Exhibit 4.1 to Commercial Metals' Registration
                            Statement No. 33-60809 on July 18, 1995 and
                            incorporated herein by reference).

         (4)(i)b     -      Rights Agreement dated July 28, 1999 by and between
                            Commercial Metals and ChaseMellon Shareholder
                            Services, LLC, as Rights Agent (Filed as Exhibit 1
                            to Commercial Metals' Form 8-A filed August 3, 1999
                            and incorporated herein by reference).
</Table>




                                       36
<PAGE>
<Table>
<S>                  <C>    <C>                                                           <C>

            4(i)c    -      Form of Note for Commercial Metals' 7.20% Senior
                            Notes due 2005 (filed herewith).

            4(i)d    -      Form of Note for Commercial Metals' 6.80% Senior
                            Notes due 2007 (filed herewith).

            4(i)e    -      Officers' Certificate, dated August 4, 1997,
                            pursuant to the Indenture dated as of July 31, 1995,
                            relating to the 6.80% Senior Notes due 2007 (filed
                            herewith).

            4(i)f    -      Form of Note for Commercial Metals' 6.75% Senior
                            Notes due 2009 (filed herewith).

            4(i)g    -      Officers' Certificate, dated February 23, 1999,
                            pursuant to the Indenture dated as of July 31, 1995,
                            relating to the 6.75% Senior Notes due 2009 (filed
                            herewith).

         (10)(i)a    -      Purchase and Sale Agreement dated June 20, 2001,
                            between various entities listed on Schedule 1 as
                            Originators and CMC Receivables, Inc. (Filed as
                            Exhibit (10)(a) to Commercial Metals' Form 10-Q for
                            the period ended May 31, 2001, and incorporated
                            herein by reference).

         (10)(i)b    -      Receivables Purchase Agreement dated June 20, 2001,
                            among CMC Receivables, Inc., as Seller, Three Rivers
                            Funding Corporation, as Buyer, and Commercial Metals
                            Company as Servicer (Filed as Exhibit (10)(b) to
                            Commercial Metals' Form 10-Q for the period ended
                            May 31, 2001, and incorporated herein by reference).

         (10)(i)c    -      $45,000,000 3 Year Revolving Credit Agreement dated
                            as of August 15, 2001 (Filed as Exhibit (10)(i)c to
                            Commercial Metals' Form 10-K for the fiscal year
                            ended August 31, 2001, and incorporated hereby by
                            reference).

         (10)(i)d    -      $129,500,000 Amended and Restated 364-Day Revolving
                            Credit Agreement dated as of August 8, 2002 (Filed
                            as Exhibit 10(i)(d) to Commercial Metals' Form 10-K
                            for the fiscal year ended August 31, 2002, and
                            incorporated herein by reference).

       (10)(iii)a*   -      Employment Agreement of Murray R. McClean as amended
                            through October 2, 2000 (Filed as Exhibit (10)(iii)
                            to Commercial Metals' Form 10-K for the fiscal year
                            ended August 31, 2000, and Incorporated herein by
                            reference).

       (10)(iii)b*   -      Amendment to Employment Agreement of Murray R.
                            McClean dated March 28, 2001, (Filed as Exhibit
                            (10)(iii)b to Commercial Metals' Form 10-K for the
                            fiscal year ended August 31, 2001, and incorporated
                            herein by reference).

       (10)(iii)c*   -      Key Employee Long-Term Performance Plan description
                            (Filed as Exhibit (10)(iii)c to Commercial Metals'
                            Form 10-K for the fiscal year ended August 31, 2001,
                            and incorporated hereby by reference).

       (10)(iii)d*   -      Key Employee Annual Incentive Plan description
                            (Filed as Exhibit (10)(iii)d to Commercial Metals'
                            Form 10-K for the fiscal year ended August 31, 2001,
                            and incorporated hereby by reference).

       (10)(iii)e*   -      Employment and Consulting Agreement of Marvin Selig
                            dated as of June 7, 2002 (Filed as Exhibit 10(iii)e
                            to Commercial Metals' Form 10-K for the fiscal year
                            ended August 31, 2002, and incorporated herein by
                            reference).

       (10)(iii)f*          1999 Non-Employee Director Stock Option Plan (filed
                            herewith).

         (12)               Statement re computation of earnings to fixed
                            charges (filed herewith).

         (21)               Subsidiaries of Registrant (Filed as Exhibit 21 to
                            Commercial Metals' Form 10-K for the fiscal year
                            ended August 31, 2002 and incorporated herein by
                            reference).

         (23)               Independent Auditors' consent to incorporation by
                            reference of report dated November 22, 2002 (October
                            29, 2003, as to the effects of the restatement
                            discussed in the last paragraph of Note 14),
                            accompanying the consolidated financial statements
                            of Commercial Metals Company and subsidiaries for
                            the year ended August 31, 2002, into previously
                            filed Registration Statements No. 033-61073, No.
                            033-61075, No. 333-27967 and No. 333-42648 on Form
                            S-8 and Registration Statements No. 33-60809 and
                            No. 333-61379 on Form S-3 (filed herewith).
</Table>



                                       37
<PAGE>

<Table>
<S>                  <C>    <C>                                                           <C>
          (31)a       -     Certification of Stanley A. Rabin, Chairman of the
                            Board, President and Chief Executive Officer of
                            Commercial Metals Company, pursuant to Section 302
                            of the Sarbanes-Oxley Act of 2002 (filed herewith).

          (31)b       -     Certification of William B. Larson, Vice President
                            and Chief Financial Officer of Commercial Metals
                            Company, pursuant to Section 302 of the
                            Sarbanes-Oxley Act of 2002 (filed herewith).

          (32)a       -     Certification of Stanley A. Rabin, Chairman of the
                            Board, President and Chief Executive Officer of
                            Commercial Metals Company, pursuant to 18 U.S.C.
                            1350, as adopted pursuant to Section 906 of the
                            Sarbanes-Oxley Act of 2002 (filed herewith).

          (32)b       -     Certification of William B. Larson, Vice President
                            and Chief Financial Officer of Commercial Metals
                            Company, pursuant to 18 U.S.C. 1350, as adopted
                            pursuant to Section 906 of the Sarbanes-Oxley Act of
                            2002 (filed herewith).

</Table>

- ----------
* denotes management contract or compensatory plan.

          A Form 8-K was filed on June 13, 2002, under Item 5, announcing Marvin
          Selig's retirement effective August 31, 2002 and his resignation from
          our board of directors. We also announced Clyde Selig's election as a
          director to fill the vacancy created by Marvin Selig's resignation and
          Clyde Selig's appointment as President and Chief Executive Officer of
          the CMC Steel Group.





                                       38
<PAGE>



                                   SIGNATURES



     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                         COMMERCIAL METALS COMPANY

                                         /s/ WILLIAM B. LARSON
                                         --------------------------------------
                                         William B. Larson,
                                         Vice President and
                                         Chief Financial Officer

                                         Date: October 31, 2003








                                       39

<PAGE>

INDEPENDENT AUDITOR'S REPORT

Board of Directors and Stockholders of
Commercial Metals Company
Dallas, Texas

We have audited the consolidated financial statements of Commercial Metals
Company and subsidiaries as of August 31, 2002 and 2001, and for each of the
three years in the period ended August 31, 2002, and have issued our report
thereon dated November 22, 2002 (October 29, 2003 as to the effects of the
restatement discussed in the last paragraph of Note 14). Such financial
statements and report are included in Item 8 herein. Our audits also included
the consolidated financial statement schedule of Commercial Metals Company
listed in Item 15. This consolidated financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such financial statement schedule,
when considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly in all material respects the information set forth
therein.

As discussed in Note 14, the financial statements have been restated.


/s/ DELOITTE & TOUCHE LLP

Dallas, Texas
November 22, 2002
(October 29, 2003 as to the effects of the restatement discussed in the last
paragraph of Note 14)







<PAGE>


                                  SCHEDULE VIII


                   COMMERCIAL METALS COMPANY AND SUBSIDIARIES

                                   ----------

                        VALUATION AND QUALIFYING ACCOUNTS

                                   ----------

                   YEARS ENDED AUGUST 31, 2002, 2001 AND 2000

                                   ----------

                                 (In thousands)


Allowance for collection
losses deducted from
accounts receivable:

<Table>
<Caption>

                                Charged to        Charged          Deductions
              Balance,          profit and        to other            from            Balance
             beginning           loss or          accounts          reserves            end
Year          of year            income             (A)              (B)              of year
- ----         ---------          --------          --------         ----------         --------
<S>            <C>              <C>               <C>               <C>               <C>
2000           7,714               948              567              1,361             7,868

2001           7,868             4,371              264              4,545             7,958

2002           7,958             3,985              591              3,657             8,877
</Table>

(A)  Recoveries of accounts written off and acquired allowance.

(B)  Write-off of uncollectible accounts.

<PAGE>



                                INDEX TO EXHIBITS


<Table>
<Caption>

EXHIBIT
  NO.                       DESCRIPTION
- -------                     -----------
<S>                  <C>    <C>                                                                          <C>
         (3)(i)      -      Restated Certificate of Incorporation (Filed
                            herewith).

         (3)(i)a     -      Certificate of Amendment of Restated Certificate of
                            Incorporation dated February 1, 1994 (Filed
                            herewith).

         (3)(i)b     -      Certificate of Amendment of Restated Certificate of
                            Incorporation dated February 17, 1995 (Filed
                            herewith).

         (3)(i)c     -      Certificate of Designation, Preferences and Rights
                            of Series A Preferred Stock (Filed as Exhibit 2 to
                            Commercial Metals' Form 8-A filed August 3, 1999 and
                            incorporated herein by reference).

         (3)(ii)     -      By-Laws (Filed herewith).

         (4)(i)a     -      Indenture between Commercial Metals and Chase
                            Manhattan Bank dated as of July 31, 1995 (Filed as
                            Exhibit 4.1 to Commercial Metals' Registration
                            Statement No. 33-60809 on July 18, 1995 and
                            incorporated herein by reference).

         (4)(i)b     -      Rights Agreement dated July 28, 1999 by and between
                            Commercial Metals and ChaseMellon Shareholder
                            Services, LLC, as Rights Agent (Filed as Exhibit 1
                            to Commercial Metals' Form 8-A filed August 3, 1999
                            and incorporated herein by reference).
</Table>

<PAGE>
<Table>

<S>                  <C>    <C>                                                           <C>

            4(i)c    -      Form of Note for Commercial Metals' 7.20% Senior
                            Notes due 2005 (filed herewith).

            4(i)d    -      Form of Note for Commercial Metals' 6.80% Senior
                            Notes due 2007 (filed herewith).

            4(i)e    -      Officers' Certificate, dated August 4, 1997,
                            pursuant to the Indenture dated as of July 31, 1995,
                            relating to the 6.80% Senior Notes due 2007 (filed
                            herewith).

            4(i)f    -      Form of Note for Commercial Metals' 6.75% Senior
                            Notes due 2009 (filed herewith).

            4(i)g    -      Officers' Certificate, dated February 23, 1999,
                            pursuant to the Indenture dated as of July 31, 1995,
                            relating to the 6.75% Senior Notes due 2009 (filed
                            herewith).

         (10)(i)a    -      Purchase and Sale Agreement dated June 20, 2001,
                            between various entities listed on Schedule 1 as
                            Originators and CMC Receivables, Inc. (Filed as
                            Exhibit (10)(a) to Commercial Metals' Form 10-Q for
                            the period ended May 31, 2001, and incorporated
                            herein by reference).

         (10)(i)b    -      Receivables Purchase Agreement dated June 20, 2001,
                            among CMC Receivables, Inc., as Seller, Three Rivers
                            Funding Corporation, as Buyer, and Commercial Metals
                            Company as Servicer (Filed as Exhibit (10)(b) to
                            Commercial Metals' Form 10-Q for the period ended
                            May 31, 2001, and incorporated herein by reference).

         (10)(i)c    -      $45,000,000 3 Year Revolving Credit Agreement dated
                            as of August 15, 2001 (Filed as Exhibit (10)(i)c to
                            Commercial Metals' Form 10-K for the fiscal year
                            ended August 31, 2001, and incorporated hereby by
                            reference).

         (10)(i)d    -      $129,500,000 Amended and Restated 364-Day Revolving
                            Credit Agreement dated as of August 8, 2002 (Filed
                            as Exhibit 10(i)(d) to Commercial Metals' Form 10-K
                            for the fiscal year ended August 31, 2002, and
                            incorporated herein by reference).

       (10)(iii)a*   -      Employment Agreement of Murray R. McClean as amended
                            through October 2, 2000 (Filed as Exhibit (10)(iii)
                            to Commercial Metals' Form 10-K for the fiscal year
                            ended August 31, 2000, and Incorporated herein by
                            reference).

       (10)(iii)b*   -      Amendment to Employment Agreement of Murray R.
                            McClean dated March 28, 2001, (Filed as Exhibit
                            (10)(iii)b to Commercial Metals' Form 10-K for the
                            fiscal year ended August 31, 2001, and incorporated
                            herein by reference).

       (10)(iii)c*   -      Key Employee Long-Term Performance Plan description
                            (Filed as Exhibit (10)(iii)c to Commercial Metals'
                            Form 10-K for the fiscal year ended August 31, 2001,
                            and incorporated hereby by reference).

       (10)(iii)d*   -      Key Employee Annual Incentive Plan description
                            (Filed as Exhibit (10)(iii)d to Commercial Metals'
                            Form 10-K for the fiscal year ended August 31, 2001,
                            and incorporated hereby by reference).

       (10)(iii)e*   -      Employment and Consulting Agreement of Marvin Selig
                            dated as of June 7, 2002 (Filed as Exhibit 10(iii)e
                            to Commercial Metals' Form 10-K for the fiscal year
                            ended August 31, 2002, and incorporated herein by
                            reference).

       (10)(iii)f*          1999 Non-Employee Director Stock Option Plan (filed
                            herewith).

         (12)               Statement re computation of earnings to fixed
                            charges (filed herewith).

         (21)               Subsidiaries of Registrant (Filed as Exhibit 21 to
                            Commercial Metals' Form 10-K for the fiscal year
                            ended August 31, 2002 and incorporated herein by
                            reference).

         (23)               Independent Auditors' consent to incorporation by
                            reference of report dated November 22, 2002 (October
                            29, 2003, as to the effects of the restatement
                            discussed in the last paragraph of Note 14),
                            accompanying the consolidated financial statements
                            of Commercial Metals Company and subsidiaries for
                            the year ended August 31, 2002, into previously
                            filed Registration Statements No. 033-61073, No.
                            033-61075, No. 333-27967 and No. 333-42648 on Form
                            S-8 and Registration Statements No. 33-60809 and
                            No. 333-61379 on Form S-3 (filed herewith).
</Table>

<PAGE>

<Table>
<S>                  <C>    <C>                                                           <C>
          (31)a       -     Certification of Stanley A. Rabin, Chairman of the
                            Board, President and Chief Executive Officer of
                            Commercial Metals Company, pursuant to Section 302
                            of the Sarbanes-Oxley Act of 2002 (filed herewith).

          (31)b       -     Certification of William B. Larson, Vice President
                            and Chief Financial Officer of Commercial Metals
                            Company, pursuant to Section 302 of the
                            Sarbanes-Oxley Act of 2002 (filed herewith).

          (32)a       -     Certification of Stanley A. Rabin, Chairman of the
                            Board, President and Chief Executive Officer of
                            Commercial Metals Company, pursuant to 18 U.S.C.
                            1350, as adopted pursuant to Section 906 of the
                            Sarbanes-Oxley Act of 2002 (filed herewith).

          (32)b       -     Certification of William B. Larson, Vice President
                            and Chief Financial Officer of Commercial Metals
                            Company, pursuant to 18 U.S.C. 1350, as adopted
                            pursuant to Section 906 of the Sarbanes-Oxley Act of
                            2002 (filed herewith).

</Table>

- ----------
* denotes management contract or compensatory plan.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.(I)
<SEQUENCE>3
<FILENAME>d09793a1exv3wxiy.txt
<DESCRIPTION>RESTATED CERTIFICATE OF INCORPORATION
<TEXT>
<PAGE>

                                                                    EXHIBIT 3(i)

                                    RESTATED

                          CERTIFICATE OF INCORPORATION

                                       OF

                            COMMERCIAL METALS COMPANY


         COMMERCIAL METALS COMPANY, a corporation duly organized and existing

under the laws of the State of Delaware, DOES HEREBY CERTIFY:

         THAT the original Certificate of Incorporation of Commercial Metals
Company was filed with the Secretary of State of the State of Delaware on the
twenty-ninth day of August, 1946, at 10:00 A.M.;

         THAT this Restated Certificate of Incorporation of Commercial Metals
Company was duly adopted by the Board of Directors of Commercial Metals Company
in accordance with the provisions of Section 245 of the General Corporation Laws
of the State of Delaware;

         THAT this Restated Certificate of Incorporation only restates and
integrates and does not further amend the provisions of the Certificate of
Incorporation of Commercial Metals Company as heretofore amended and
supplemented; and

         THAT there is no discrepancy between the provisions of the Certificate
of Incorporation of Commercial Metals Company as heretofore amended and
supplemented and the provisions of this Restated Certificate of Incorporation.

                                  * * * * * * *

         FIRST.  The name of the corporation is COMMERCIAL METALS COMPANY.

         SECOND. Its principal office in the State of Delaware is located at
1209 Orange Street, Corporation Trust Center, Wilmington, Delaware 19801. The
name and address of its resident agent is The Corporation Trust Company, 1209
Orange Street, Corporation Trust Center, Wilmington, Delaware 19801.

         THIRD. The nature of the business, or objects of purposes to be
transacted, promoted or carried on are:

         To buy, sell and generally deal in and with ferrous and non-ferrous
metals.

         To buy and sell goods, wares and merchandise of any description, by
wholesale or wholesale and retail.

<PAGE>

         To manufacture, buy, sell, import, export, construct, erect, fabricate,
treat and generally deal and traffic in and with iron and steel, and the
products and by-products thereof of every kind and description; and to
manufacture, buy, sell, deal in, and traffic in all or any articles,
commodities, devices or things consisting or partly consisting of iron, steel,
carbon, tungsten, silicon, manganese, copper, zinc, tin, aluminum, lead and
other metals and all alloys or any products and by-products thereof.

         To buy, lease, construct, own, control, operate, and maintain mills,
works, and plants for the crushing, sampling, milling, smelting, reduction, and
concentration of minerals and metal-bearing ores, and the extraction therefrom
of all kinds of metals and mineral products and by-products, on its own account
and as factor and agent for others.

         To carry on the business of mining, milling, concentrating, converting,
smelting, treating, preparing for market, reducing, buying, selling, and
merchandising in iron, steel, and other metals and metallic compounds, coal,
coke, charcoal, and other fuels, and all products and by-products of all ores
and minerals.

         To engage in the business of fabricating, stamping, pressing, drawing
and spinning, heating, treating, annealing, hardening and working of metals and
metallic compounds.

         To receive on consignment or commission, and to sell, rent, lease,
license the use of, handle, pledge, mortgage or otherwise utilize, prepare for
market and market or in any way dispose of any and all of the above mentioned
articles of commerce.

         To purchase or otherwise acquire, lease, build, construct, improve,
maintain, manage, develop, control, operate, sell or otherwise dispose of, let,
license to use, and mortgage, mills, smelters, factories, furnaces, plants,
warehouses, shops, buildings, boats, ships, barges and all other works and
conveniences necessary or incident to carrying out the objects and purposes of
this corporation.

         To acquire, and pay for in cash, stock or bonds of this corporation or
otherwise, the good will, rights, assets and property, and to undertake or
assume the whole or any part of the obligations or liabilities of any person,
firm, association or corporation.

         To acquire, hold, use, sell, assign, lease, grant licenses in respect
of, mortgage or otherwise dispose of letters patent of the United States or any
foreign country, patent rights, licenses and privileges, inventions,
improvements and processes, copyrights, trade-marks and trade names, relating to
or useful in connection with any business of this corporation.

         To acquire by purchase, subscription or otherwise, and to receive,
hold, own, guarantee, sell, assign, exchange, transfer, mortgage, pledge or
otherwise dispose of or deal in and with any of the shares of the capital stock,
or any voting trust certificates in respect of the shares of capital stock,
scrip, warrants, rights, bonds, debentures, notes, trust receipts, and other
securities, obligations, choses in action and evidences of indebtedness or
interest issued or created by any corporation, joint stock companies,
syndicates, associations, firms, trusts or persons, public or private, or by the
government of the United States of America, or by any foreign government, or by
any state, territory, province, municipality or other political subdivision or
by any governmental agency, and as owner thereof to possess and exercise all the
rights, powers and privileges of ownership, including the right to execute
consents and vote thereon, and to do any and all acts and things necessary or
advisable for the preservation, protection, improvement and enhancement in value
thereof.

                                       2
<PAGE>

         To enter into, make and perform contracts of every kind and description
with any person, firm, association, corporation, municipality, county, state,
body politic or government or colony or dependency thereof.

         To borrow or raise moneys for any of the purposes of the corporation
and, from time to time, without limit as to amount to draw, make, accept,
endorse, execute and issue promissory notes, drafts, bills of exchange,
warrants, bonds, debentures and other negotiable or non-negotiable instruments
and evidences of indebtedness, and to secure the payment of any thereof and of
the interest thereon by mortgage upon or pledge, conveyance or assignment in
trust of the whole or any part of the property of the corporation, whether at
the time owned or thereafter acquired, and to sell, pledge or otherwise dispose
of such bonds or other obligations of the corporation for its corporate
purposes.

         To buy, sell or otherwise deal in notes, open accounts, and other
similar evidences of debt, or to loan money and take notes, open accounts, and
other similar evidences of debt as collateral security therefor.

         To purchase, hold, sell and transfer the shares of its own capital
stock; provided it shall not use its funds or property for the purchase of its
own shares of capital stock when such use would cause any impairment of its
capital except as otherwise permitted by law, and provided further that shares
of its own capital stock belonging to it shall not be voted upon directly or
indirectly.

         To have one or more offices, to carry on all or any of its operations
and business and without restriction or limit as to amount to purchase or
otherwise acquire, hold, own, mortgage, sell, convey, or otherwise dispose of
real and personal property of every class and description in any of the States,
Districts, Territories or Colonies of the United States, and in any and all
foreign countries, subject to the laws of such State, District, Territory,
Colony or Country.

         In general, to carry on any other business in connection with the
foregoing, and to have and exercise all the powers conferred by the laws of
Delaware upon corporations formed under the General Corporation Law of the State
of Delaware, and to do any or all of the things hereinbefore set forth to the
same extent as natural persons might or could do.

         The objects and purposes specified in the foregoing clauses shall,
except where otherwise expressed, be in nowise limited or restricted by
reference to, or inference from, the terms of any other clause in this
certificate of incorporation, but the objects and purposes specified in each of
the foregoing clauses of this article shall be regarded as independent objects
and purposes.

         FOURTH. The aggregate number of shares of capital stock which the
corporation shall have authority to issue is Twenty-two Million (22,000,000) of
which Twenty Million (20,000,000) shares shall be common stock at the par value
of Five Dollars ($5.00) per share and Two Million (2,000,000) shares shall be
preferred stock of the par value of the One Dollar ($1.00) per share.

         Shares of Preferred Stock may be issued from time to time in one or
more series, each such series to have such distinctive designation or title as
may be fixed by the Board of Directors


                                       3
<PAGE>

prior to the issuance of any shares thereof. Each share of any series of
Preferred Stock shall be identical with all other shares of such series, except
as to the date from which accumulated preferred dividends, if any, shall be
cumulative. Each such series shall have such voting powers, if any, and such
preferences and relative, participating, optional or other special rights, with
such qualifications, limitations or restrictions of such preferences and/or
rights as shall be stated in the resolution or resolutions adopted by the Board
of Directors providing for the issue of such series of Preferred Stock,
including, but without limiting the generality of the foregoing, the following:

         (a) The rate and times at which, and the terms and conditions on which;
dividends on Preferred Stock or series thereof shall be paid;

         (b) The right, if any, of the holders of Preferred Stock or series
thereof to convert the same into or exchange the same for, shares of other
classes or series of stock of the corporation and the terms and conditions of
such conversion or exchange;

         (c) The redemption price or prices and the time or times at which, and
the terms and conditions on which, Preferred Stock or series thereof may be
redeemed;

         (d) The rights of the holders of Preferred Stock or series thereof upon
the voluntary or involuntary liquidation, merger, consolidation, distribution or
sale of assets, dissolution or winding-up, of the corporation; and

         (e) The terms of the sinking fund or redemption or purchase account, if
any, to be provided for the Preferred Stock or series thereof.

         After the requirements with respect to preferential dividends on the
Preferred Stock (fixed in accordance with the provisions of this Article Fourth)
shall have been met and after the corporation shall have complied with all the
requirements, if any, with respect to the setting aside of sums as sinking funds
or redemption or purchase accounts (fixed in accordance with the provisions of
this Article Fourth), then and not otherwise the holders of Common Stock shall
be entitled to receive such dividends as may be declared from time to time by
the Board of Directors.

         After distribution in full of the preferential amount (fixed in
accordance with the provisions of this Article Fourth) to be distributed to the
holders of Preferred Stock in the event of the voluntary or involuntary
liquidation, distribution or sale of assets, dissolution or winding-up, of the
corporation, the holders of the Common Stock shall be entitled to receive
ratably all of the remaining assets of the corporation available for
distribution to stockholders.

         Except as may otherwise be required by law, each holder of Common Stock
shall have one vote in respect of each share of stock held by him on all matters
voted upon by stockholders.

         No holder of stock of any class of the corporation shall be entitled as
of right to subscribe for or purchase any shares of stock of any class whether
now or hereafter authorized, or any bonds, debentures, or other evidences of
indebtedness whether or not convertible into or exchangeable for stock.

         FIFTH. The minimum amount of capital with which the corporation will
commence business is One Thousand Dollars ($1,000.00).


                                       4
<PAGE>

         SIXTH. The names and places of residence of the incorporators are as
follows:

<Table>
<Caption>
                  NAMES                     RESIDENCES
                  -----                     ----------
<S>                                         <C>
                  Walter Lenz               Wilmington, Delaware
                  S. M. Brown               Wilmington, Delaware
                  H. K. Webb                Wilmington, Delaware
</Table>

         SEVENTH. The corporation is to have perpetual existence.

         EIGHTH. The private property of the stockholders shall not be subject
to the payment of corporate debts to any extent whatever.

         NINTH. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:

         To make, alter or repeal the by-laws of the corporation.

         To authorize and cause to be executed mortgages and liens upon the real
and personal property of the corporation.

         To set apart out of any of the funds of the corporation available for
dividends a reserve or reserves for any proper purpose and to abolish any such
reserve in the manner in which it was created.

         By resolution or resolutions passed by a majority of the whole board,
to designate one or more committees, each committee to consist of two or more of
the directors of the corporation, which, to the extent provided in said
resolution or resolutions or in the by-laws of the corporation, shall have and
may exercise the powers of the Board of Directors in the management of the
business and affairs of the corporation, and may have power to authorize the
seal of the corporation to be affixed to all papers which may require it. Such
committee or committees shall have such name or names as may be stated in the
by-laws of the corporation or as may be determined from time to time by
resolution adopted by the Board of Directors.

         When and as authorized by the affirmative vote of the holders of a
majority of the stock issued and outstanding having voting power given at a
stockholders' meeting duly called for that purpose, or when authorized by the
written consent of the holders of a majority of the voting stock issued and
outstanding, to sell, lease or exchange all of the property and assets of the
corporation, including its good will and its corporate franchises, upon such
terms and conditions and for such consideration, which may be in whole or in
part shares of stock in, and/or other securities of, any other corporation or
corporations, as its Board of Directors shall deem expedient and for the best
interests of the corporation.

         TENTH. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them, and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this corporation under
the provisions of Section 3883 of the Revised Code of 1915 of said State, or on
the application of trustees in


                                       5
<PAGE>

dissolution or of any receiver or receivers appointed for this corporation under
the provisions of Section 43 of the General Corporation Law of the State of
Delaware, order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the case may be,
to be summoned in such manner as the said Court directs. If a majority in number
representing three fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of
this corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the Court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation as the case may be, and also on this
corporation.

         ELEVENTH. Meetings of stockholders may be held without the State of
Delaware, if the by-laws so provide. The books of the corporation may be kept
(subject to any provisions contained in the statutes) outside of the State of
Delaware at such place or places as may be from time to time designated by the
Board of Directors or in the by-laws of the corporation.

         TWELFTH. Notwithstanding any other provisions of this Restated
Certificate of Incorporation or any provision of law which might otherwise
permit a lesser vote or no vote, but in addition to any affirmative vote of the
holders of any particular class or series of capital stock of the corporation
entitled to vote generally in the election of directors (hereinafter referred to
as the "Voting Stock") required by law or this Restated Certificate of
Incorporation, the affirmative vote of the holders of at least 70% of the voting
power of all of the then-outstanding shares of the Voting Stock, voting together
as a single class, shall be required to alter, amend, repeal, or adopt any
provision inconsistent with Article Fifteenth, Article Sixteenth, Article
Seventeenth, or this Article Twelfth; except that an amendment to extend the
duration of Article Seventeenth may be adopted by the affirmative vote of the
holders of at least a majority of such voting power.

         THIRTEENTH. (a) The corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful; provided, however, that in any action brought by or in the
right of the corporation, there shall be no indemnification in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or is equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he


                                       6
<PAGE>

reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.

         (b) Any indemnification under subarticle (a) (unless ordered by a
court) shall be made by the corporation only as authorized in the specific case
upon a determination that indemnification of the director, officer, employee or
agent is proper in the circumstances because he has met the applicable standard
of conduct set forth in subarticle (a). Such determination shall be made (1) by
the Board of Directors by a majority vote of a quorum consisting of directors
who were not parties to such action, suit or proceeding, or (2) if such a quorum
is not obtainable, or, even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (3) by the
stockholders.

         (c) Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the corporation in advance of the final disposition of
such action, suit or proceeding as authorized by the Board of Directors in the
specific case upon receipt of an undertaking by or on behalf of the director,
officer, employee or agent to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the corporation as
authorized in this Article.

         (d) The indemnification provided for in this Article shall not be
deemed exclusive of any other rights to which those indemnified may be entitled,
under any by-law, agreement, vote of stockholders, or otherwise.

         FOURTEENTH. To the fullest extent permitted by the Delaware General
Corporation Law, as it now exists or may hereafter be amended, a director of the
Corporation shall not be liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director. Any repeal or
modification of this Article by the stockholders of the Corporation shall be
prospective only and shall not adversely affect any limitation on the personal
liability of a director of the Corporation existing at the time of such repeal
or modification.

         FIFTEENTH. Except as otherwise fixed by or pursuant to the provisions
of Article Fourth of the Restated Certificate of Incorporation relating to the
rights of the holders of the Preferred Stock to elect additional directors under
specified circumstances, the number of directors which shall constitute the
whole Board of Directors shall be not less than three and shall be fixed from
time to time exclusively by the Board of Directors pursuant to a resolution
adopted by a majority of the total number of authorized directors (whether or
not there exist any vacancies in the previously authorized directorships at the
time any such resolution is presented to the Board of Directors for adoption).
At the Annual Meeting of Stockholders at which this Article is adopted, the
directors shall be divided into three classes, designated Class I, Class II and
Class III (which at all times shall be as nearly equal in number as possible),
with the term of office of Class I directors to expire at the 1990 Annual
Meeting of Stockholders, the term of office of Class II directors to expire at
the 1991 Annual Meeting of Stockholders, and the term of office of Class III
directors to expire at the 1992 Annual Meeting of Stockholders. At each annual
meeting of stockholders following such initial classification and election,
directors elected to succeed those directors whose terms expire shall be elected
for a term of office to expire at the third succeeding annual meeting of
stockholders after their election.


                                       7
<PAGE>

         Subject to the right of the holders of any class or series of Voting
Stock then outstanding, any director, or the entire board of directors, may be
removed from office at any time, but only for cause and only by the affirmative
vote of the holders of at least a majority of the voting power of all of the
then-outstanding shares of the Voting Stock, voting together as a single class.
Except as may otherwise be provided by law, cause for removal shall be construed
to exist only if the director whose removal is proposed has been convicted of a
felony by a court of competent jurisdiction and such conviction is no longer
subject to direct appeal, has failed to attend twelve consecutive meetings of
the Board of Directors, or has been adjudged by a court of competent
jurisdiction to be liable for negligence or misconduct in the performance of his
duty to the corporation in a matter of substantial importance to the
corporation, and such adjudication is no longer subject to direct appeal.

         Subject to the rights of the holders of any class or series of the
Voting Stock then outstanding, newly created directorships resulting from any
increase in the authorized number of directors or any vacancies on the Board of
Directors resulting from death, resignation, retirement, disqualification,
removal from office or other cause may be filled by a majority vote of the
directors then in office, though less than a quorum, and directors so chosen
shall hold office for a term expiring at the annual meeting of stockholders at
which the term of office of the class to which they have been elected expires.
No decrease in the number of authorized directors constituting the entire Board
of Directors shall shorten the term of any incumbent director.

         Notwithstanding the foregoing, whenever the holders of the Preferred
Stock shall have the right to elect directors at an annual or special meeting of
stockholders, the election, term of office, filling of vacancies, and other
features of such directorships shall be governed by the terms of this Restated
Certificate of Incorporation applicable thereto, and such directors so elected
shall not be divided into classes pursuant to this Article unless expressly
provided by such terms.

         SIXTEENTH. Any action required or permitted to be taken by the
stockholders of the corporation must be effected at a duly called annual or
special meeting of stockholders of the corporation and may not be effected by
any consent in writing by such stockholders. Special meetings of stockholders of
the corporation may be called only by the Board of Directors pursuant to a
resolution adopted by a majority of the total number of authorized directors
(whether or not there exist any vacancies in previously authorized directorships
at the time such resolution is presented to the Board for adoption), by holders
of not less than a majority of the voting power of all of the then-outstanding
shares of Voting Stock or by The Jacob Feldman and Sara B. Feldman Grantor Trust
Dated September 24, 1985 and the trustees of that trust acting solely in their
capacities as trustees of that trust (collectively, the "Trust") as long as the
Trust is the beneficial owner of ten percent or more of the corporation's Voting
Stock.

         SEVENTEENTH. The stockholder vote required to approve any Business
Combination (as hereinafter defined) shall be as set forth in this Article
Seventeenth.

         (a) (1) Except as otherwise expressly provided in paragraph (b) of this
Article Seventeenth:

                  (A) Any merger or consolidation of the corporation or any
Subsidiary (as hereinafter defined) with (i) any Interested Stockholder (as
hereinafter defined) or (ii) any


                                       8
<PAGE>

other corporation (whether or not itself an Interested Stockholder) which is, or
after such merger or consolidation would be, an Affiliate (as hereinafter
defined) of an Interested Stockholder; or

                  (B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to or with
any Interested Stockholder or any Affiliate of any Interested Stockholder of any
assets of the corporation or any Subsidiary having an aggregate Fair Market
Value (as hereinafter defined) of $25,000,000 or more; or

                  (C) the issuance or transfer by the corporation or any
Subsidiary (in one transaction or a series of transactions) of any securities of
the corporation or any Subsidiary to any Interested Stockholder or any affiliate
of any Interested Stockholder in exchange for cash, securities or other property
(or a combination thereof) having an aggregate Fair Market Value of $25,000,000
or more; or

                  (D) the adoption of any plan or proposal for the liquidation
or dissolution of the corporation proposed by or on behalf of any Interested
Stockholder or any Affiliate of any Interested Stockholder; or

                  (E) any reclassification of securities (including any reverse
stock split) or recapitalization of the corporation, or any merger or
consolidation of the corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving any Interested
Stockholder) which has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of equity or
convertible securities of the corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder or any Affiliate of any
Interested Stockholder;

shall require the affirmative vote of the holders of at least 70% of the voting
power of all of the then-outstanding shares of the Voting Stock, voting together
as a single class (it being understood that for purposes of this Article
Seventeenth, each share of the Voting Stock shall have the number of votes
granted to it pursuant to Article Fourth of this Restated Certificate of
Incorporation). Such affirmative vote shall be required notwithstanding the fact
that no vote may be required, or that a lesser percentage may be specified, by
law or in any agreement with any national securities exchange or otherwise, and
shall be required in addition to any affirmative vote of the holders of any
particular class or series of Voting Stock required by law or this Restated
Certificate of Incorporation.

            (2) The term "Business Combination" as used in this Article
Seventeenth shall mean any transaction which is referred to in any one or more
of subsections (A) through (E) of subparagraph (1) of this section (a).

         (b) The provisions of section (a) of this Article Seventeenth shall not
be applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative vote as is required by law, by
any other provision of this Restated Certificate of Incorporation or by any
agreement with any national securities exchange, if, in the case of a Business
Combination that does not involve any cash or other consideration being received
by the stockholders of the corporation, solely in their respective capacities as
stockholders of the corporation, the condition specified in the following
subparagraph (1) is met, or in the case of any other Business Combination, the
conditions specified in either of the following subparagraphs (1) or (2) are
met:


                                       9
<PAGE>

            (1) The Business Combination shall have been approved by a majority
of the Disinterested Directors (as hereinafter defined), it being understood
that this condition shall not be capable of satisfaction unless there is at
least one Disinterested Director.

            (2) All of the following conditions shall have been met:

                  (A) The consideration to be received by holders of shares of a
particular class of outstanding Voting Stock shall be in cash or in the same
form as the Interested Stockholder has paid for shares of such class of Voting
Stock within the two-year period ending on and including the date on which the
Interested Stockholder became an Interested Stockholder (the "Determination
Date"). If, within such two-year period, the Interested Stockholder has paid for
shares of any class of Voting Stock with varying forms of consideration, the
form of consideration to be received per share by holders of shares of such
class of Voting Stock shall be either cash or the form used to acquire the
larger number of shares of such class of Voting Stock acquired by the Interested
Stockholder within such two-year period.

                  (B) The aggregate amount of (x) the cash and (y) the Fair
Market Value, as of the date (the "Consummation Date") of the consummation of
the Business Combination, of the consideration other than cash to be received
per share by holders of Common Stock in such Business Combination shall be at
least equal to the higher of the following (it being intended that the
requirements of this subparagraph (2)(B) shall be required to be met with
respect to all shares of Common Stock outstanding whether or not the Interested
Stockholder has previously acquired any shares of Common Stock):

                           (i) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by the Interested Stockholder for any shares of Common Stock acquired
by it within the two-year period immediately prior to the date of the first
public announcement of the proposal of the Business Combination (the
"Announcement Date") or in the transaction in which it became an Interested
Stockholder, whichever is higher, plus interest compounded annually from the
Determination Date through the Consummation Date at the prime rate of interest
of Citibank, N.A. (or such other bank as may be selected by the Disinterested
Directors), in effect from time to time, less the aggregate amount of any cash
dividends paid, and the Fair Market Value of any dividends paid in other than
cash, on each share of Common Stock from the Determination Date through the
Consummation Date, in an amount up to but not exceeding the amount of interest
so payable per share of Common Stock; or

                           (ii) The Fair Market Value per share of Common Stock
on the Announcement Date.

                  (C) The aggregate amount of (x) the cash and (y) the Fair
Market Value, as of the Consummation Date, of the consideration other than cash
to be received per share by holders of shares of any class, other than Common
Stock, of outstanding Voting Stock shall be at least equal to the highest of the
following (it being intended that the requirements of this subparagraph (2)(C)
shall be required to be met with respect to every such class of outstanding
Voting Stock, whether or not the Interested Stockholder has previously acquired
any shares of a particular class of Voting Stock):

                           (i) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by the Interested

                                       10
<PAGE>

Stockholder for any shares of such class of Voting Stock acquired by it within
the two-year period immediately prior to the Announcement Date or in the
transaction in which it became an Interested Stockholder, whichever is higher,
plus interest compounded annually from the Determination Date through the
Consummation Date at the prime rate of interest of Citibank, N.A. (or such other
bank as may be selected by the Disinterested Directors), in effect from time to
time, less the aggregate amount of any cash dividends paid, and the Fair Market
Value of any dividends paid in other than cash, on each share of such class of
Voting Stock from the Determination Date through the Consummation Date in an
amount up to but not exceeding the amount of interest so payable per share of
such class of Voting Stock; or

                           (ii) the Fair Market Value per share of such class of
Voting Stock on the Announcement Date; or

                           (iii) the highest preferential amount per share to
which the holders of shares of such class of Voting Stock are entitled in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the corporation.

                  (D) After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business Combination: (x)
except as approved by a majority of the Disinterested Directors, there shall
have been no failure to declare and pay at the regular date therefor any full
quarterly dividends (whether or not cumulative) on any outstanding Preferred
Stock; (y) there shall have been (i) no reduction in the annual rate of
dividends paid on the Common Stock (except as necessary to reflect any
subdivision of the Common Stock), except as approved by a majority of the
Disinterested Directors, and (ii) an increase in such annual rate of dividends
as necessary to reflect any reclassification (including any reverse stock
split), recapitalization, reorganization or any similar transaction which has
the effect of reducing the number of outstanding shares of the Common Stock,
unless the failure so to increase such annual rate is approved by a majority of
the Disinterested Directors; and (z) such Interested Stockholder shall have not
become the beneficial owner of any additional shares of Voting Stock except as
part of the transaction which results in such Interested Stockholder's becoming
an Interested Stockholder.

                  (E) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received the benefit,
directly or indirectly (except proportionately as a stockholder of the
corporation), of any loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantages, provided by the
corporation, whether in anticipation of or in connection with such Business
Combination or otherwise.

                  (F) A proxy or information statement describing the proposed
Business Combination and complying with the requirements of the Securities
Exchange Act of 1934 and the rules and regulations thereunder (or any subsequent
provisions replacing such Act, rules or regulations) shall be mailed to all
stockholders of the corporation at least 30 days prior to the consummation of
such Business Combination (whether or not such proxy or information statement is
required to be mailed pursuant to such Act or subsequent provisions).

         (c) For the purposes of this Article Seventeenth:

            (1) A "person" shall mean any individual, firm, corporation or other
entity.


                                       11
<PAGE>


            (2) "Interested Stockholder" shall mean any person (other than the
corporation or any Subsidiary) who or which:

                  (A) is the beneficial owner, directly or indirectly, of more
than 10% of the voting power of the outstanding Voting Stock; or

                  (B) is an Affiliate of the corporation and at any time within
the two-year period immediately prior to the date in question was the beneficial
owner, directly or indirectly, of 10% or more of the voting power of the
then-outstanding Voting Stock; or

                  (C) is an assignee of or has otherwise succeeded to any shares
of Voting Stock which were at any time within the two-year period immediately
prior to the date in question beneficially owned by an Interested Stockholder,
if such assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public offering within the
meaning of the Securities Act of 1933.;

provided that the Trust shall not be an Interested Stockholder until such time
as the Trust shall become the beneficial owner of any shares of Voting Stock in
addition to the shares of Voting Stock of which it was the beneficial owner on
January 26, 1989; provided further that the Trust shall not become an Interested
Stockholder solely as a result of action taken solely by the corporation that
benefits all holders of Voting Stock pro rata based on their ownership of Voting
Stock.

            (3) A person shall be a "beneficial owner" of any Voting Stock:

                  (A) which such person or any of its Affiliates or Associates
(as hereinafter defined) beneficially owns, directly or indirectly; or

                  (B) which such person or any of its Affiliates or Associates
has (x) the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (y) the right to vote pursuant to any
agreement, arrangement or understanding; or

                  (C) which are beneficially owned, directly or indirectly, by
any other person with which such person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of Voting Stock.

            (4) For the purposes of determining whether a person is an
Interested Stockholder pursuant to subparagraph (2) of this paragraph (c), the
number of shares of Voting Stock deemed to be outstanding shall include shares
deemed owned through application of subparagraph (3) of this paragraph (c), but
shall not include any other shares of Voting Stock which may be issuable
pursuant to any agreement, arrangement, or understanding, or upon exercise of
conversion rights, warrants or options, or otherwise.

            (5) "Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as in effect on January 1, 1989.


                                       12
<PAGE>

            (6) "Subsidiary" means any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by the corporation;
provided, however, that for the purposes of the definition of Interested
Stockholder set forth in subparagraph (2) of this paragraph (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the corporation.

            (7) "Disinterested Director" means any member of the Board of
Directors of the corporation (the "Board") who is unaffiliated with the
Interested Stockholder and was a member of the Board prior to the time that the
Interested Stockholder became an Interested Stockholder, and any successor of a
Disinterested Director who is unaffiliated with the Interested Stockholder and
is recommended to succeed a Disinterested Director by a majority of
Disinterested Directors then on the Board.

            (8) "Fair Market Value" means: (x) in the case of stock, the highest
closing sale price during the 30-day period immediately preceding the date in
question of a share of such stock on the Composite Tape for New York Stock
Exchange - Listed Stocks, or, if such stock is not quoted on the Composite Tape,
on the New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Securities Act of 1934 on which such stock is listed, or, if such stock is
not listed on any such exchange, on the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotations System, or if such
stock is not quoted on the National Market System, the highest closing bid
quotation with respect to a share of such stock during the 30-day period
preceding the date in question on the National Association of Securities
Dealers, Inc. Automated Quotations System or any system then in use, or, if no
such quotations are available, the fair market value on the date in question of
a share of such stock as determined by the Board in good faith; and (y) in the
case of property other than cash or stock, the fair market value of such
property on the date in question as determined by the Board in good faith.

            (9) In the event of any Business Combination in which the
corporation survives, the phrase "consideration other than cash to be received"
as used in subparagraphs (2)(A) and (2)(C) of paragraph (b) of this Article
Seventeenth shall include the shares of Common Stock and/or the shares of any
other class of outstanding Voting Stock retained by the holders of such shares.

         (d) A majority of the total number of Disinterested Directors (whether
or not there exist any vacancies in previously authorized directorships at the
time any such determination as is hereinafter in this paragraph (d) specified is
to be made by the Board) shall have the power and duty to determine, on the
basis of information known to them after reasonable inquiry, all facts necessary
to determine compliance with this Article Seventeenth, including, without
limitation, (1) whether a person is an Interested Stockholder, (2) the number of
shares of Voting Stock beneficially owned by any person, (3) whether a person is
an Affiliate or Associate of another, (4) whether the applicable conditions set
forth in subparagraph (2) of paragraph (b) have been met with respect to any
Business Combination, and (5) whether the assets which are the subject of any
Business Combination have, or the consideration to be received for the issuance
or transfer of securities by the corporation or any Subsidiary in any Business
Combination has, an aggregate Fair Market Value of $25,000,000 or more.

         (e) Nothing contained in this Article Seventeenth shall be construed to
relieve any Interested Stockholder from any fiduciary obligation imposed by law.


                                       13
<PAGE>

         (f) Unless extended pursuant to Article Twelfth of this Restated
Certificate of Incorporation, the provisions of this Article Seventeenth shall
expire and no longer be of any effect after 12 noon Central time on January 27,
1994.

         IN WITNESS WHEREOF, the said Commercial Metals Company has caused this
Restated Certificate of Incorporation of Commercial Metals Company to be signed
by Stanley A. Rabin, its President, and attested by David M. Sudbury, its
Secretary, on this 2nd day of March, 1989.

                                             COMMERCIAL METALS COMPANY


                                             /s/ Stanley A. Rabin
                                             ---------------------------------
                                             Stanley A. Rabin
                                             President

ATTEST:


/s/ David M. Sudbury
- --------------------------------------
David M. Sudbury
Secretary



STATE OF TEXAS

COUNTY OF DALLAS

         BE IT REMEMBERED that on this 2nd day of March, 1989, personally came
before me, a Notary Public in and for the State of Texas and County of Dallas,
Stanley A. Rabin, President of Commercial Metals Company, a corporation duly
organized and existing under the laws of the State of Delaware, and he duly
executed the Restated Certificate of Incorporation of Commercial Metals Company
before me and acknowledged that the said certificate be his act and deed of the
said corporation and the facts stated therein are true, that the seal affixed to
the said certificate and attested by the Secretary of the said corporation is
the common or corporate seal of the said corporation.

         IN WITNESS WHEREOF, I have hereunto set my hand and seal of office the
day and year aforesaid.

                                      [illegible]
                                      -------------------------
                                      NOTARY PUBLIC in and for
                                      Dallas County, Texas

                                      My Commission Expires: December 5, 1990
                                                             ----------------



                                       14





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.(I)A
<SEQUENCE>4
<FILENAME>d09793a1exv3wxiya.txt
<DESCRIPTION>RESTATED CERTIFICATE OF INCORPORATION - 2/1/94
<TEXT>
<PAGE>

                                                                   EXHIBIT 3(i)a

                            CERTIFICATE OF AMENDMENT

                                       OF

                      RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                            COMMERCIAL METALS COMPANY


         COMMERCIAL METALS COMPANY, a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation", DOES
HEREBY CERTIFY:

         FIRST: That the Board of Directors of the Corporation, at a meeting
duly held, adopted resolutions setting forth the following amendment to the
Corporation's Restated Certificate of Incorporation, declaring this amendment to
be advisable and designating the next annual meeting of the stockholders of the
Corporation for consideration thereof:

         The present Article Seventeenth of the Corporation's Restated
Certificate of Incorporation shall be replaced in its entirety by the following:

         SEVENTEENTH: The stockholder vote required to approve any Business
Combination (as hereinafter defined) shall be as set forth in this Article
Seventeenth:

         (a)(1) Except as otherwise expressly provided in paragraph (b) of this
         Article Seventeenth:

                  (A) Any merger or consolidation of the corporation or any
         Subsidiary (as hereinafter defined) with (i) any Interested Stockholder
         (as hereinafter defined) or (ii) any other corporation (whether or not
         itself an Interested Stockholder) which is, or after such merger or
         consolidation would be, an Affiliate (as hereinafter defined) of an
         Interested Stockholder; or

                  (B) any sale, lease, exchange, mortgage, pledge, transfer or
         other disposition (in one transaction or a series of transactions) to
         or with any Interested Stockholder or any Affiliate of any Interested
         Stockholder of any assets of the corporation or any



<PAGE>

         Subsidiary having an aggregate Fair Market Value (as hereinafter
         defined) of $25,000,000 or more; or

                  (C) the issuance or transfer by the corporation or any
         Subsidiary (in one transaction or a series of transactions) of any
         securities of the corporation or any Subsidiary to any Interested
         Stockholder or any Affiliate of any Interested Stockholder in exchange
         for cash, securities or other property (or a combination thereof)
         having an aggregate Fair Market Value of $25,000,000 or more; or

                  (D) the adoption of any plan or proposal for the liquidation
         or dissolution of the corporation proposed by or on behalf of any
         Interested Stockholder or any Affiliate of any Interested Stockholder;
         or

                  (E) any reclassification of securities (including any reverse
         stock split) or recapitalization of the corporation, or any merger or
         consolidation of the corporation with any of its Subsidiaries or any
         other transaction (whether or not with or into or otherwise involving
         any Interested Stockholder) which has the effect, directly or
         indirectly, of increasing the proportionate share of the outstanding
         shares of any class of equity or convertible securities of the
         corporation or any Subsidiary which is directly or indirectly owned by
         any Interested Stockholder or any Affiliate of any Interested
         Stockholder;

shall require the affirmative vote of the holders of at least 70% of the voting
power of all of the then-outstanding shares of the Voting Stock, voting together
as a single class (it being understood that for purposes of this Article
Seventeenth, each share of the Voting Stock shall have the number of votes
granted to it pursuant to Article Fourth of this Restated Certificate of
Incorporation). Such affirmative vote shall be required notwithstanding the fact
that no vote may be required, or that a lesser percentage may be specified, by
law or in any agreement with any national securities exchange or otherwise, and
shall be required in addition to any affirmative vote of the holders of any
particular class or series of Voting Stock required by law or this Restated
Certificate of Incorporation.

         (2) The term "Business Combination" as used in this Article Seventeenth
shall mean any transaction which is referred to in any one or more of
subsections (A) through (E) of subparagraph (1) of this section (a).

         (b) The provisions of section (a) of this Article Seventeenth shall not
be applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative vote as is required by law, by
any other provision of this Restated Certificate of Incorporation or by any
agreement with any national securities exchange, if, in the case of a Business
Combination that does not involve any cash or other consideration being received
by the stockholders of the corporation, solely in their respective capacities as
stockholders of the corporation, the condition specified in the following
subparagraph (1) is met, or, in the case of any other Business Combination, the
conditions specified in either of the following subparagraphs (1) or (2) are
met:



                                       2
<PAGE>

                  (1) The Business Combination shall have been approved by a
         majority of the Disinterested Directors (as hereinafter defined), it
         being understood that this condition shall not be capable of
         satisfaction unless there is at least one Disinterested Director.

                  (2) All of the following conditions shall have been met:

                           (A) The consideration to be received by holders of
                  shares of a particular class of outstanding Voting Stock shall
                  be in cash or in the same form as the Interested Stockholder
                  has paid for shares of such class of Voting Stock within the
                  two-year period ending on and including the date on which the
                  Interested Stockholder became an Interested Stockholder (the
                  "Determination Date"). If, within such two-year period, the
                  Interested Stockholder has paid for shares of any class of
                  Voting Stock with varying forms of consideration, the form of
                  consideration to be received per share by holders of shares of
                  such class of Voting Stock shall be either cash or the form
                  used to acquire the largest number of shares of such class of
                  Voting stock acquired by the Interested Stockholder within
                  such two-year period.

                           (B) The aggregate amount of (x) the cash and (y) the
                  Fair Market Value, as of the date (the "Consummation Date") of
                  the consummation of the Business Combination, of the
                  consideration other than cash to be received per share by
                  holders of Common Stock in such Business Combination shall be
                  at least equal to the higher of the following (it being
                  intended that the requirements of this subparagraph (2)(B)
                  shall be required to be met with respect to all shares of
                  Common Stock outstanding whether or not the Interested
                  Stockholder has previously acquired any shares of Common
                  Stock):

                                    (i) (if applicable) the highest per share
                           price (including any brokerage commissions, transfer
                           taxes and soliciting dealers' fees) paid by the
                           Interested Stockholder for any shares of Common Stock
                           acquired by it within the two-year period immediately
                           prior to the date of the first public announcement of
                           the proposal of the Business Combination (the
                           "Announcement Date") or in the transaction in which
                           it became an Interested Stockholder, whichever is
                           higher, plus interest compounded annually from the
                           Determination Date through the Consummation Date at
                           the prime rate of interest of Citibank, N.A. (or such
                           other bank as may be selected by the Disinterested
                           Directors), in effect from time to time, less the
                           aggregate amount of any cash dividends paid, and the
                           Fair Market Value of any dividends paid in other than
                           cash, on each share of Common Stock from the
                           Determination Date through the Consummation Date, in
                           an amount up to but not exceeding the amount of
                           interest so payable per share of Common Stock; or

                                    (ii) the Fair Market Value per share of
                           Common Stock on the Announcement Date.



                                       3
<PAGE>

                           (C) The aggregate amount of (x) the cash and (y) the
                  Fair Market Value, as of the Consummation Date, of the
                  consideration other than cash to be received per share by
                  holders of shares of any class, other than Common Stock, of
                  outstanding Voting Stock shall be at least equal to the
                  highest of the following (it being intended that the
                  requirements of this subparagraph (2)(C) shall be required to
                  be met with respect to every such class of outstanding Voting
                  Stock, whether or not the Interested Stockholder has
                  previously acquired any shares of a particular class of Voting
                  Stock):

                                    (i) (if applicable) the highest per share
                           price (including any brokerage commissions, transfer
                           taxes and soliciting dealers' fees) paid by the
                           Interested Stockholder for any shares of such class
                           of Voting Stock acquired by it within the two-year
                           period immediately prior to the Announcement Date or
                           in the transaction in which it became an Interested
                           Stockholder, whichever is higher, plus interest
                           compounded annually from the Determination Date
                           through the Consummation Date at the prime rate of
                           interest of Citibank, N.A. (or such other bank as may
                           be selected by the Disinterested Directors), in
                           effect from time to time, less the aggregate amount
                           of any cash dividends paid, and the Fair Market Value
                           of any dividends paid in other than cash, on each
                           share of such class of Voting Stock from the
                           Determination Date through the Consummation Date in
                           an amount up to but not exceeding the amount of
                           interest so payable per share of such class of Voting
                           Stock; or

                                    (ii) the Fair Market Value per share of such
                           class of Voting Stock on the Announcement Date; or

                                    (iii) the highest preferential amount per
                           share to which the holders of shares of such class of
                           Voting Stock are entitled in the event of any
                           voluntary or involuntary liquidation, dissolution or
                           winding up of the corporation.

                           (D) After such Interested Stockholder has become an
                  Interested Stockholder and prior to the consummation of such
                  Business Combination: (x) except as approved by a majority of
                  the Disinterested Directors, there shall have been no failure
                  to declare and pay at the regular date therefor any full
                  quarterly dividends (whether or not cumulative) on any
                  outstanding Preferred Stock; (y) there shall have been (i) no
                  reduction in the annual rate of dividends paid on the Common
                  Stock (except as necessary to reflect any subdivision of the
                  Common Stock), except as approved by a majority of the
                  Disinterested Directors, and (ii) an increase in such annual
                  rate of dividends as necessary to reflect any reclassification
                  (including any reverse stock split), recapitalization,
                  reorganization or any similar transaction which has the effect
                  of reducing the number of outstanding shares of the Common
                  Stock, unless the failure so to increase such annual rate is
                  approved by a majority of the Disinterested Directors; and (z)
                  such Interested Stockholder shall have not become the
                  beneficial owner of any



                                       4
<PAGE>

                  additional shares of Voting Stock except as part of the
                  transaction which results in such Interested Stockholder's
                  becoming an Interested Stockholder.

                           (E) After such Interested Stockholder has become an
                  Interested Stockholder, such Interested Stockholder shall not
                  have received the benefit, directly or indirectly (except
                  proportionately as a stockholder of the corporation), of any
                  loans, advances, guarantees, pledges or other financial
                  assistance or any tax credits or other tax advantages provided
                  by the corporation, whether in anticipation of or in
                  connection with such Business Combination or otherwise.

                           (F) A proxy or information statement describing the
                  proposed Business Combination and complying with the
                  requirements of the Securities Exchange Act of 1934 and the
                  rules and regulations thereunder (or any subsequent provisions
                  replacing such Act, rules or regulations) shall be mailed to
                  all stockholders of the corporation at least 30 days prior to
                  the consummation of such Business Combination (whether or not
                  such proxy or information statement is required to be mailed
                  pursuant to such Act or subsequent provisions).

         (c) For the purposes of this Article Seventeenth:

                  (1) A "person" shall mean any individual, firm, corporation or
         other entity.

                  (2) "Interested Stockholder" shall mean any person (other than
         the corporation or any Subsidiary) who or which:

                           (A) is the beneficial owner, directly or indirectly,
                  of more than 10% of the voting power of the outstanding Voting
                  Stock; or

                           (B) is an Affiliate of the corporation and at any
                  time within the two-year period immediately prior to the date
                  in question was the beneficial owner, directly or indirectly,
                  of 10% or more of the voting power of the then-outstanding
                  Voting Stock; or

                           (C) is an assignee of or has otherwise succeeded to
                  any shares of Voting Stock which were at any time within the
                  two-year period immediately prior to the date in question
                  beneficially owned by an Interested Stockholder, if such
                  assignment or succession shall have occurred in the course of
                  a transaction or series of transactions not involving a public
                  offering within the meaning of the Securities Act of 1933;

provided that the Trust shall not be an Interested Stockholder until such time
as the Trust shall become the beneficial owner of any shares of Voting Stock in
addition to the shares of Voting Stock of which it was the beneficial owner on
January 27, 1994; provided further that the Trust shall not become an Interested
Stockholder solely as a result of action taken solely by the corporation that
benefits all holders of Voting Stock pro rata based on their ownership of Voting
Stock.



                                       5
<PAGE>

                  (3) A person shall be a "beneficial owner" of any Voting
         Stock:

                           (A) which such person or any of its Affiliates or
                  Associates (as hereinafter defined) beneficially owns,
                  directly or indirectly; or

                           (B) which such person or any of its Affiliates or
                  Associates has (x) the right to acquire (whether such right is
                  exercisable immediately or only after the passage of time),
                  pursuant to any agreement, arrangement or understanding or
                  upon the exercise of conversion rights, exchange rights,
                  warrants or options, or otherwise, or (y) the right to vote
                  pursuant to any agreement, arrangement or understanding; or

                           (C) which are beneficially owned, directly or
                  indirectly, by any other person with which such person or any
                  of its Affiliates or Associates has any agreement, arrangement
                  or understanding for the purpose of acquiring, holding, voting
                  or disposing of any shares of Voting Stock.

                  (4) For the purposes of determining whether a person is an
         Interested Stockholder pursuant to subparagraph (2) of this paragraph
         (c), the number of shares of Voting Stock deemed to be outstanding
         shall include shares deemed owned through application of subparagraph
         (3) of this paragraph (c), but shall not include any other shares of
         Voting Stock which may be issuable pursuant to any agreement,
         arrangement, or understanding, or upon exercise of conversion rights,
         warrants or options, or otherwise.

                  (5) "Affiliate" or "Associate" shall have the respective
         meanings ascribed to such terms in Rule 12b-2 of the General Rules and
         Regulations under the Securities Exchange Act of 1934, as in effect on
         January 1, 1994.

                  (6) "Subsidiary" means any corporation of which a majority of
         any class of equity security is owned, directly or indirectly, by the
         corporation; provided, however, that for the purposes of the definition
         of Interested Stockholder set forth in subparagraph (2) of this
         paragraph (c), the term "Subsidiary" shall mean only a corporation of
         which a majority of each class of equity security is owned, directly or
         indirectly, by the corporation.

                  (7) "Disinterested Director" means any member of the board of
         directors of the corporation (the "Board") who is unaffiliated with the
         Interested Stockholder and was a member of the Board prior to the time
         that the Interested Stockholder became an Interested Stockholder, and
         any successor of a Disinterested Director who is unaffiliated with the
         Interested Stockholder and is recommended to succeed a Disinterested
         Director by a majority of Disinterested Directors then on the Board.

                  (8) "Fair Market Value" means: (x) in the case of stock, the
         highest closing sales price during the 30-day period immediately
         preceding the date in question of a share



                                       6
<PAGE>

         of such stock on the Composite Tape for New York Stock Exchange-Listed
         Stocks, or, if such stock is not quoted on the Composite Tape, on the
         New York Stock Exchange, or, if such stock is not listed on such
         Exchange, on the principal United States securities exchange registered
         under the Securities Exchange Act of 1934 on which such stock is
         listed, or, if such stock is not listed on any such exchange, on the
         National Market System of the National Association of Securities
         Dealers, Inc. Automated Quotations System, or if such stock is not
         quoted on the National Market System, the highest closing bid quotation
         with respect to a share of such stock during the 30-day period
         preceding the date in question on the National Association of
         Securities Dealers, Inc. Automated Quotations System or any system then
         in use, or, if no such quotations are available, the fair market value
         on the date in question of a share of such stock as determined by the
         Board in good faith; and (y) in the case of property other than cash or
         stock, the fair market value of such property on the date in question
         as determined by the Board in good faith.

                  (9) In the event of any Business Combination in which the
         corporation survives, the phrase "consideration other than cash to be
         received" as used in subparagraphs (2) (A) and (2) (C) of paragraph (b)
         of this Article Seventeenth shall include the shares of Common Stock
         and/or shares of any other class of outstanding Voting Stock retained
         by the holders of such shares.

         (d) A majority of the total number of Disinterested Directors (whether
or not there exist any vacancies in previously authorized directorships at the
time any such determination as is hereinafter in this paragraph (d) specified is
to be made by the Board) shall have the power and duty to determine, on the
basis of information known to them after reasonable inquiry, all facts necessary
to determine compliance with this Article Seventeenth, including, without
limitation, (1) whether a person is an Interested Stockholder, (2) the number of
shares of Voting Stock beneficially owned by any person, (3) whether a person is
an Affiliate or Associate of another, (4) whether the applicable conditions set
forth in subparagraph (2) of paragraph (b) have been met with respect to any
Business Combination, and (5) whether the assets which are the subject of any
Business Combination have, or the consideration to be received for the issuance
or transfer of securities by the corporation or any Subsidiary in any Business
Combination has, an aggregate Fair Market Value of $25,000,000 or more.

         (e) Nothing contained in this Article Seventeenth shall be construed to
relieve any Interested Stockholder from any fiduciary obligation imposed by law.

         (f) Unless extended pursuant to Article Twelfth of this Restated
Certificate of Incorporation, the provisions of this Article Seventeenth shall
expire and no longer be of any effect after 12 noon, Central time, on January
28, 1999.

         SECOND: That thereafter, pursuant to a resolution of the Board of
Directors of the Corporation, an annual meeting of stockholders of the
Corporation was duly called and held, upon notice in accordance with Section 222
of the General Corporation Law of the State of



                                       7
<PAGE>

Delaware, at which meeting the necessary number of shares as required by statute
were voted in favor of the amendment.

         THIRD: That said amendment was duly adopted in accordance with the
applicable provisions of Section 242 of the General Corporation Law of the State
of Delaware.

         IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Stanley A. Rabin, its President, and attested by David M. Sudbury, its
Secretary this 1st day of February, 1994.

                                             COMMERCIAL METALS COMPANY



                                             By: /s/ Stanley A. Rabin
                                                 -------------------------------
                                                 Stanley A. Rabin
                                                 President



ATTEST:

By:      /s/ David M. Sudbury
   -----------------------------------
         David M. Sudbury
         Secretary



                                       8


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.(I)B
<SEQUENCE>5
<FILENAME>d09793a1exv3wxiyb.txt
<DESCRIPTION>RESTATED CERTIFICATE OF INCORPORATION - 2/17/95
<TEXT>
<PAGE>
                                                                 EXHIBIT (3)(i)b

                            CERTIFICATE OF AMENDMENT

                                       OF

                      RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                            COMMERCIAL METALS COMPANY


         COMMERCIAL METALS COMPANY, a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"), DOES
HEREBY CERTIFY:

         FIRST: That the Board of Directors of the Corporation, at a meeting
duly held, adopted resolutions setting forth the following amendment to the
Corporation's Restated Certificate of Incorporation, declaring this amendment to
be advisable and designating the next annual meeting of the stockholders of the
Corporation for consideration thereof:

         The first paragraph of the present Article Fourth of the Corporation's
Restated Certificate of Incorporation shall be replaced in its entirety by the
following paragraph with the remainder of the present Article Fourth remaining
unchanged:

         FOURTH: The aggregate number of shares of capital stock which the
         corporation shall have authority to issue is Forty Two Million
         (42,000,000) of which Forty Million (40,000,000) shares shall be Common
         Stock at the Par Value of Five Dollars ($5.00) per share and Two
         Million (2,000,000) shares shall be Preferred Stock of the Par Value of
         One Dollar ($1.00).

         SECOND: That thereafter, pursuant to a resolution of the Board of
Directors of the Corporation, an annual meeting of stockholders of the
Corporation was duly called and held,

<PAGE>

upon notice in accordance with Section 222 of the General Corporation Law of the
State of Delaware, at which meeting necessary number of shares as required by
statute were voted in favor of the amendment.

         THIRD: That said amendment was duly adopted in accordance with the
applicable provisions of Section 242 of the General Corporation Law of the State
of Delaware.

         IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Stanley A. Rabin, its President, and attested by David M. Sudbury, its
Secretary this 17th day of February, 1995.

                                       COMMERCIAL METALS COMPANY


                                       By:  /s/ Stanley A. Rabin
                                          -------------------------------
                                            Stanley A. Rabin
                                            President


ATTEST:


By:  /s/ David M. Sudbury
   ------------------------------------
     David M. Sudbury
     Secretary






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.(II)
<SEQUENCE>6
<FILENAME>d09793a1exv3wxiiy.txt
<DESCRIPTION>BY-LAWS
<TEXT>
<PAGE>
                                                                   EXHIBIT 3(ii)



                                 RESTATED BYLAWS

                                       OF

                            COMMERCIAL METALS COMPANY

<PAGE>



                                 RESTATED BYLAWS
                                       OF
                            COMMERCIAL METALS COMPANY




                                    ARTICLE I

                                     OFFICES

                  Section 1. Principal Office.

                  The principal and registered office shall be in the City of
Wilmington, County of New Castle, State of Delaware.

                  Section 2. Other Offices.

                  The corporation may also have offices in the City of Dallas,
State of Texas, and also offices at such other places as the board of directors
may from time to time determine or the business of the corporation may require.

                                   ARTICLE II

                            MEETINGS OF SHAREHOLDERS

                  Section 1. Place of Meetings.

                  All meetings of the shareholders shall be held at the office
of the corporation in Dallas, Texas, or at such other place as shall be
determined by the board of directors and stated in the notice of the meeting or
in a duly executed waiver of notice thereof.

                  Section 2. Annual Meeting.

                  An annual meeting of shareholders, commencing with the year
1947, shall be held on the fourth Thursday of January in each year if not a
legal holiday, and if a legal holiday, then on the next full business day
following, at 10:00 A.M., at which the shareholders shall elect a board of
directors and transact such other business as may properly be brought before the
meeting.

                  Section 3. Notice of Annual Meeting.

                  Written or printed notice of the annual meeting, stating the
place, day and hour thereof, shall be served upon or mailed to each shareholder
entitled to vote thereat at such address as appears on the books of the
corporation, not less than ten days nor more than fifty days before the date of
the meeting.



<PAGE>

                  Section 4. Special Meetings.

                  Special meetings of shareholders of the corporation, for any
purpose or purposes, unless otherwise prescribed by statute or the restated
certificate of incorporation, may be called only by the board of directors
pursuant to a resolution adopted by a majority of the total number of authorized
directors (whether or not there exist any vacancies in previously authorized
directorships at the time such resolution's presented to the board for
adoption), by the holders of not less than a majority of the voting power of all
of the then-outstanding shares of any class or series of capital stock of the
corporation entitled to vote generally in the election of directors ("Voting
Stock"), or by The Jacob Feldman and Sara B. Feldman Grantor Trust dated
September 24, 1985 and the trustees of that trust acting solely in their
capacities as trustees of that trust (collectively, the "Trust"), as long as the
Trust is the beneficial owner of ten percent or more of the Voting Stock. As a
prerequisite to calling a special meeting, the holders of a majority of the
voting power of the Voting Stock or the Trust must submit a request in writing
to the president or secretary of the corporation stating the purpose or purposes
of the proposed meeting.

                  Section 5. Notice of Special Meeting.

                  Written or printed notice of a special meeting of
shareholders, stating the place, day and hour, and purpose or purposes thereof,
shall be served upon or mailed to each shareholder entitled to vote thereat at
such address as appears on the books of the corporation, not less than ten days
nor more than fifty days before the date of the meeting.

                  Section 6. Business at Special Meeting.

                  Business transacted at all special meetings shall be confined
to the purpose or purposes stated in the notice.

                  Section 7. Shareholder List.

                  At least ten days before each meeting of shareholders, a
complete list of the shareholders entitled to vote at such meeting or any
adjournment thereof, arranged in alphabetical order, with the address of and the
number of shares held by each, shall be prepared by the secretary. Such list
shall be open to the examination of any shareholder, for any purpose germane to
the meeting, during ordinary business hours, for such ten day period, either at
a place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. Such list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any shareholder during the whole time of the meeting.

                  Section 8. Quorum.

                  The holders of a majority of the shares of capital stock
issued and outstanding and entitled to vote thereat, represented in person or by
proxy, shall constitute a quorum at all meetings of the shareholders for the
transaction of business except as otherwise provided by





<PAGE>

statute, the restated certificate of incorporation, or these bylaws. The
shareholders present may adjourn the meeting despite the absence of a quorum.
When a meeting is adjourned for less than thirty days in any one adjournment, it
shall not be necessary to give any notice of the adjourned meeting if the time
and place to which the meeting is adjourned are announced at the meeting at
which the adjournment is taken, and at the adjourned meeting any business may be
transacted that might have been transacted on the original date of the meeting.
When a meeting is adjourned for thirty days or more, notices of the adjourned
meeting shall be given as in the case of an original meeting.

                  Section 9. Majority Vote.

                  When a quorum is present at any meeting, the vote of the
holders of a majority of the shares having voting power represented in person or
by proxy shall decide any question brought before such meeting, unless the
question is one upon which, by express provision of statute, the restated
certificate of incorporation, or these bylaws, a different vote is required, in
which case such express provision shall govern and control the decision of such
question.

                  Section 10. Proxies.

                  At any meeting of the shareholders every shareholder having
the right to vote shall be entitled to vote in person or by proxy appointed by
an instrument in writing subscribed by such shareholder or his duly authorized
attorney in fact and bearing a date not more than eleven months prior to said
meeting, unless said instrument provides for a longer period.

                  Section 11. Voting.

                  Unless otherwise provided by statute, the restated certificate
of incorporation, or these bylaws, each shareholder shall have one vote for each
share of stock having voting power, registered in his name on the books of the
corporation.

                  Section 12. No Action By Written Consent.

                  Any action required or permitted to be taken by the
stockholders of the corporation must be effected at a duly called annual or
special meeting of stockholders of the corporation and may not be effected by
any consent in writing by such stockholders.

                                   ARTICLE III

                               BOARD OF DIRECTORS

                  Section 1. Powers.

                  The business and affairs of the corporation shall be managed
by a board of directors. The board may exercise all such power of the
corporation and do all such lawful acts and things as are not by statute, by the
restated certificate of incorporation, or these bylaws directed to be exercised
or done by the shareholders.



<PAGE>

                  Section 2. Number of Directors.

                  Except as otherwise fixed by or pursuant to the provisions of
Article Fourth of the restated certificate of incorporation relating to the
rights of the holders of the preferred stock to elect additional directors under
specified circumstances, the number of directors which shall constitute the
whole board of directors shall be not less than three and shall be fixed from
time to time exclusively by the board of directors pursuant to a resolution
adopted by a majority of the total number of authorized directors (whether or
not there exist any vacancies in previously authorized directorships at the time
any such resolution is presented to the board of directors for adoption).

                  Section 3. Election and Term.

                  The board of directors shall be divided into three classes
serving for those initial terms as provided in Article Fifteenth of the restated
certificate of incorporation. Except as provided in Section 4 of this Article
III, at each annual meeting of shareholders following such initial
classification and election, directors elected to succeed those directors whose
terms expire shall be elected for a term of office to expire at the third
succeeding annual meeting of shareholders. Directors need not be shareholders.
Notwithstanding any provision of this Section 3 or Section 4 of this Article
III, whenever the holders of the preferred stock shall have the right to elect
directors at an annual or special meeting of stockholders, the election term of
office, filling of vacancies, and other features of such directorships shall be
governed by the terms of the restated certificate of incorporation applicable
thereto, and such directors so elected shall not be divided into classes
pursuant to Article Fifteenth of the restated certificate of incorporation
unless expressly provided by the terms of the preferred stock.

                  Section 4. Vacancies and Newly Created Directorships.

                  Subject to the rights of the holders of any class or series of
Voting Stock then outstanding, newly created directorships resulting from any
increase in the authorized number of directors, or any vacancies on the board of
directors resulting from death, resignation, retirement, disqualification,
removal from office or other cause may be filled by a majority vote of the
directors then in office, though less than a quorum, and directors so chosen
shall hold office for a term expiring at the annual meeting of shareholders at
which the term of office of the class to which they have been elected expires.
No decrease in the number of authorized directors constituting the entire board
of directors shall shorten the term of any incumbent director.

                  Section 5. Resignation, Removal.

                  Any director may resign at any time. Subject to the right of
the holders of any class or series of Voting Stock then outstanding, any
director, or the entire board of directors, may be removed from office at any
time, but only for cause and only by the affirmative vote of the holders of at
least a majority of the voting power of all of the then-outstanding shares of
the Voting Stock, voting together as a single class. Except as may otherwise be
provided by law, cause for removal shall exist only if the director whose
removal is proposed has been convicted





<PAGE>

of a felony by a court of competent jurisdiction and such conviction is no
longer subject to direct appeal, has failed to attend twelve consecutive
meetings of the board of directors, or has been adjudged by a court of competent
jurisdiction to be liable for negligence or misconduct in the performance of his
duty to the corporation in a matter of substantial importance to the
corporation, and such adjudication is no longer subject to direct appeal.

                                   ARTICLE IV

                              MEETINGS OF THE BOARD

                  Section 1. First Meeting.

                  The first meeting of each newly elected board shall be held at
the location of and immediately following the annual meeting of shareholders,
and no notice of such meeting shall be necessary to the newly elected directors
in order legally to constitute the meeting provided a quorum shall be present;
or the board may meet at such place and time as shall be fixed by the consent in
writing of all the directors.

                  Section 2. Regular Meeting.

                  Regular meetings of the board may be held at such time and
place either within or without of the State of Delaware and with such notice as
shall be determined from time to time by the board.

                  Section 3. Special Meetings.

                  Special meetings of the board may be called by the president
on one day's notice to each director, either personally or by mail or telegram.
Special meetings shall be called by the president or the secretary in like
manner and on like notice on the written request of any two directors.

                  Section 4. Quorum and Voting.

                  At all meetings of the board a majority of the directors shall
be necessary and sufficient to constitute a quorum for the transaction of
business; and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the board of directors, except as
may be otherwise specifically provided by statute, the restated certificate of
incorporation, or these bylaws. If a quorum shall not be present at any meeting
of directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.

                  Section 5. Telephone Meetings.

                  At any meeting of the board, a member may attend by telephone,
radio, television, or similar means of communication which permits him to
participate in the meeting, and a





<PAGE>

director so attending shall be deemed present at the meeting for all purposes
including the determination of whether a quorum is present.

                  Section 6. Action by Written Consent.

                  Any action required or permitted to be taken by the board of
directors or executive committee, under the applicable provisions of these
statutes, the restated certificate of incorporation, or these bylaws, may be
taken without a meeting If a consent in writing, setting forth the action so
taken, is signed by all members of the board of directors or executive
committee, as the case may be.

                                   ARTICLE V.

                                   COMMITTEES

                  Section 1. Executive Committee.

                  The board of directors, by resolution adopted by a majority of
the whole board, may designate two or more directors and such officers as the
board deems necessary, to constitute an executive committee, which committee, to
the extent provided in such resolution, shall have and may exercise all of the
authority of the board of directors in the business and affairs of the
corporation, and may have the power to authorize the seal of the corporation to
be affixed to all papers which may require it, except where action by the board
of directors is specified by statute. The executive committee shall keep regular
minutes of its proceedings and report the same to the board when required.

                  Section 2. Other Committees.

                  The board of directors may similarly create other committees
for such terms and with such powers and duties as the board deems appropriate.

                                   ARTICLE VI

                            COMPENSATION OF DIRECTORS

                  Section 1. Attendance Fees.

                  Directors, as such, shall not receive any stated salary for
their services, but by resolution of the board a fixed sum and expenses of
attendance may be allowed for attendance at each regular or special meeting of
the board; however, the provision shall not preclude any director from serving
the corporation in any other capacity and receiving compensation therefor.
Members of committees may be allowed like compensation for attending committee
meetings.



<PAGE>


                                   ARTICLE VII

                                     NOTICES

                  Section l. Methods of Notice.

                  Whenever any notice is required to be given to any shareholder
or director under the provisions of any statute, the restated certificate of
incorporation, or these bylaws, it shall not be construed to require personal
notice, but such notice may be given in writing by mail addressed to such
shareholder or director at such address as appears on the books of the
corporation, and such notice shall be deemed to be given at the time when the
same shall be deposited in the United States mail with postage thereon prepaid.
Notice to directors may also be given by telegram, and notice given by such
means shall be deemed given at the time it is delivered to the telegraph office.

                  Section 2. Waiver of Notice.

                  Whenever any notice is required to be given to any shareholder
or director under the provisions of any statute, the restated certificate of
incorporation, or these bylaws, a waiver thereof in writing signed by the person
or persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice. Attendance at
any meeting shall constitute a waiver of notice thereof except as otherwise
provided by statute.

                                  ARTICLE VIII

                                    OFFICERS

                  Section 1. Executive Officers.

                  The officers of the corporation shall consist of a president,
a vice president, a secretary, and a treasurer, each of whom shall be elected by
the board of directors. The board of directors may also elect a chairman of the
board, additional vice presidents, and one or more assistant secretaries and
assistant treasurers.

                  Section 2. Election and Qualification.

                  The board of directors at its first meeting after each annual
meeting of shareholders shall elect the president, one or more vice presidents,
a secretary, and a treasurer, none of whom need to be a member of the board.

                  Section 3. Other Officers and Agents.

                  The board may elect or appoint such other officers, assistant
officers, and agents as it shall deem necessary, who shall hold their offices
for such terms and shall exercise such powers and perform such duties as shall
be determined from time to time by the board.





<PAGE>

                  Section 4. Salaries.

                  The salaries of all officers of the corporation shall be fixed
by the board of directors except as otherwise directed by the board.

                  Section 5. Term, Removal, and Vacancies.

                  The officers of the corporation shall hold office until their
successors are chosen and qualify. Any officer, agent or member of the executive
committee elected or appointed by the board of directors may be removed, with or
without cause, at any time by the board of directors. If any such office becomes
vacant for any reason, the vacancy shall be filled by the board of directors.

                  Section 6. President.

                  The president shall be the chief executive officer of the
corporation. He shall preside at all meetings of the shareholders and the board
of directors unless such duties shall have been assigned to a chairman of the
board by the board of directors. He shall be ex-officio a member of all standing
committees, shall have general powers of oversight, supervision and management
of the business and affairs of the corporation, and shall see that all orders
and resolutions of the board of directors are carried into effect.

                  Section 7. Vice Presidents.

                  The vice presidents in the order determined by he board of
directors shall, in the absence or disability of the president, perform the
duties and exercise the powers of the president, and shall perform such other
duties as the board of directors and president may prescribe.

                  Section 8. Secretary.

                  The secretary shall attend all meetings of the board of
directors and all meetings of the shareholders and record all votes and the
minutes of all proceedings in a book to be kept for that purpose and shall
perform like duties for the standing committees when required. He shall give, or
cause to be given, notice of all meetings of the shareholders and special
meetings of the board of directors, and shall perform such other duties as may
be prescribed by the board of directors and president. He shall keep in safe
custody the seal of the corporation and, when authorized by the board, affix the
same to any instrument requiring it, and when so affixed it shall be attested by
his signature or by the signature of the assistant secretary.

                  Section 9. Assistant Secretaries.

                  The assistant secretaries in the order determined by the board
of directors shall, in the absence or disability of the secretary, perform the
duties and exercise the powers of the secretary and shall perform such other
duties as the board of directors and president may prescribe.



<PAGE>

                  Section 10. Treasurer.

                  The treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all monies
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors. He shall
disburse the funds of the corporation as may be ordered by the board, taking
proper vouchers for such disbursements, and shall render to the board of
directors and president, whenever they may require it, an account of all of his
transactions as treasurer and of the financial condition of the corporation.

                  Section 11. Assistant Treasurers.

                  The assistant treasurers in the order determined by the board
of directors shall, in the absence or disability of the treasurer, perform the
duties and exercise the powers of the treasurer and shall perform such other
duties as the board of directors and president may prescribe.

                  Section 12. Officer's Bond.

                  If required by the board of directors, any officer shall give
the corporation a bond (which shall be renewed as the board may require) in such
sum and with such surety or sureties as shall be satisfactory to the board for
the faithful performance of the duties of his office and for the restoration to
the corporation, in case of his death, resignation, retirement, or removal from
office, of all books, papers, vouchers, money, and other property of whatever
kind in his possession or under his control belonging to the corporation.

                                   ARTICLE IX

                             SHARES AND SHAREHOLDERS

                  Section 1. Certificates Representing Shares.

                  The certificates representing shares of the corporation shall
be numbered and shall be entered in the books of the corporation as they are
issued. They shall exhibit the holder's name and number of shares and shall be
signed by the president or a vice president and the treasurer or an assistant
treasurer or the secretary or an assistant secretary, and may be sealed with the
seal of the corporation or a facsimile thereof. The signature of any such
officer may be facsimile if the certificate is countersigned by a transfer agent
or registered by a registrar, other than the corporation itself or an employee
of the corporation. In case any officer who has signed or whose facsimile
signature has been placed upon such certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by the corporation
with the same effect as if he were such officer at the date of its issuance.




<PAGE>

                  Section 2. Transfer of Shares.

                  Subject to valid transfer restrictions and to stop-transfer
orders directed in good faith by the corporation to any transfer agent to
prevent possible violations of federal or state securities laws, rules or
regulations, or for any other lawful purpose, upon surrender to the corporation
of a certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment, or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.

                  Section 3. Fixing Record Date.

                  For the purpose of determining shareholders entitled to notice
of or to vote at any meeting of shareholders or any adjournment thereof, or
entitled to receive payment of any dividend, or in order to make a determination
of shareholders for any other proper purpose, the board of directors may provide
that the stock transfer books shall be closed for a stated period but not to
exceed, in any case, sixty days. If the stock transfer books shall be closed for
the purpose of determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be closed for at least ten days
immediately preceding such meeting. In lieu of closing the stock transfer books,
the board of directors may fix in advance a date as the record date for any such
determination of shareholders, such date, in any case, to be not more than sixty
days and, in case of a meeting of shareholders, not less than ten days prior to
the date on which the particular action requiring such determination of
shareholders is to be taken. If the stock transfer books are not closed and no
record date is fixed, the record date for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders shall be the date
next preceding the date on which the notice is mailed, and the record date for
the determination of shareholders for any other purpose shall be the date on
which the board of directors adopts the resolution relating thereto. When a
determination of shareholders entitled to vote at any meeting of shareholders
has been made as herein provided, such determination may apply to any
adjournment thereof except where the determination has been made through the
closing of stock transfer books and the stated period of closing has expired.

                  Section 4. Registered Shareholders.

                  The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of the share to receive
dividends, and to vote as such owner, and for all other purposes as such owner;
and the corporation shall not be bound to recognize any equitable or other claim
to or interest in such share or shares on the part of any other person, whether
or not it shall have express or other notice thereof, except as otherwise
provided by the laws of Delaware.

                  Section 5. Lost Certificate.

                  The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost or destroyed,
upon the making of an affidavit of that fact by the person claiming the




<PAGE>

certificate of stock to be lost or destroyed. When authorizing such issue of a
new certificate or certificates, the board of directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or give the
corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost or destroyed.


                                    ARTICLE X

                                     GENERAL

                  Section 1. Dividends.

                  The board of directors may from time to time declare, and the
corporation may pay, dividends on its outstanding shares of capital stock in
cash, in property, or in its own shares, except when the declaration or payment
thereof would be contrary to statute or the restated certificate of
incorporation. Such dividends may be declared at any regular or special meeting
of the board, and the declaration and payment shall be subject to all applicable
provisions of law, the restated certificate of incorporation, and these bylaws.

                  Section 2. Reserves.

                  Before payment of any dividend, there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, deem proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.

                  Section 3. Directors' Annual Statement.

                  The board of directors shall present at such annual meeting
and when called for by vote of the shareholders at any special meeting of the
shareholders, a full and clear statement of the business and condition of the
corporation.

                  Section 4. Checks.

         All checks or demands for money and notes of the corporation shall be
signed by such officer or officers or such other person or persons as the board
of directors may from time to time designate.

                  Section 5. Corporate Records.

                  The corporation shall keep at its registered office or
principal place of business, or at the office of its transfer agent or
registrar, a record of its shareholders giving the names and addresses of all
shareholders and the number and class of shares held by each. All other books



<PAGE>

and records of the corporation may be kept at such place or places within or
without the State of Delaware as the board of directors may from time to time
determine.

                  Section 6. Seal.

                  The corporate seal shall have inscribed thereon the name of
the corporation. The seal may be used by causing it or a facsimile thereof to be
impressed, affixed or reproduced.

                  Section 7. Amendment.

                  These bylaws may be altered, amended or repealed, or new
bylaws may be adopted at any annual meeting of the shareholders or at any
special meeting of the shareholders at which a quorum is present or represented,
by the affirmative vote of the holders of a majority of the shares entitled to
vote at such meeting and present or represented thereat, or by the affirmative
vote of a majority of the board of directors at any regular meeting of the board
or at any special meeting of the board. Notwithstanding the foregoing, the
affirmative vote of the holders of at least seventy percent (70%) of the voting
power of all of the Voting Stock then outstanding, voting together as a single
class, shall be required to alter, amend, repeal, or adopt any provision
inconsistent with Section 4 of Article II, Section 12 of Article II, Section 2
of Article III Section 3 of Article III, Section 4 of Article III, Section 5 of
Article III, this Section 7 of Article X, or Article Twelfth, Article Fifteenth,
Article Sixteenth, or Article Seventeenth of the restated certificate of
incorporation; except that an amendment to extend the duration of Article
Seventeenth may be adopted by the affirmative vote of the holders of at least a
majority of such voting power.







</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.(I)C
<SEQUENCE>7
<FILENAME>d09793a1exv4wxiyc.txt
<DESCRIPTION>FORM OF NOTE FOR 7.20% SENIOR NOTES DUE 2005
<TEXT>
<PAGE>

                                                                   Exhibit 4(i)c

         Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation (the "Depositary"), to the
Company or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of the Depositary (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of the Depositary), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.

         UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL
SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY.


                            COMMERCIAL METALS COMPANY

                                   ----------

No. 1                                                               $100,000,000

         Commercial Metals Company, a corporation duly organized and existing
under the laws of Delaware (herein called the "Company"), which term includes
any successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to CEDE & CO. or registered assigns, the
principal sum of One Hundred Million Dollars ($100,000,000) on July 15, 2005 and
to pay interest hereon from July 15, 1995 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
on January 15, and July 15 in each year, commencing January 15, 1996, at the
rate of 7.20% per annum, until the principal hereof is paid or made available
for payment. The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the January 1 or July 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.

         Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.


<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated: July 31, 1995                         COMMERCIAL METALS COMPANY


                                             By: /s/ Stanley A. Rabin
                                                 -------------------------------

ATTEST:

/s/ David M. Sudbury
- -----------------------------------




                                        2
<PAGE>

         This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated July 31, 1995 (herein called the "Indenture"),
between the Company and The Chase Manhattan Bank, N.A., as Trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered.

         If an Event of Default with respect to Securities to this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange hereof or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

         As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any interest hereof on or
after the respective due dates expressed herein.

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more
Securities of this Series and of



                                        3
<PAGE>

like tenor, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.

         The Securities of this series are issuable only in registered form
without coupons only in minimum denominations of $100,000 and any integral
multiple of $1,000 in excess thereof. As provided in the Indenture and subject
to certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.

         No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

         Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

         All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.




                                        4


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.(I)D
<SEQUENCE>8
<FILENAME>d09793a1exv4wxiyd.txt
<DESCRIPTION>FORM OF NOTE FOR 6.80% SENIOR NOTES DUE 2007
<TEXT>
<PAGE>
                                                                   EXHIBIT 4(i)d

         Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation (the "Depositary"), to the
Company or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of the Depositary (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of the Depositary), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.

         UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL
SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY.

                            COMMERCIAL METALS COMPANY
                              --------------------

No. 1                                                                $50,000,000
                                                             CUSIP NO. 201723AB9

         Commercial Metals Company, a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company"), which
term includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to CEDE & CO. or registered assigns,
the principal sum of Fifty Million Dollars ($50,000,000) on August l, 2007 and
to pay interest thereon from August 1, 1997 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
on February 1 and August 1 in each year, commencing February 1, 1998, at the
rate of 6.80% per annum, until the principal hereof is paid or made available
for payment. The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the January 15 or July 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.

         Payment of the principal (and premium if any) and any such interest on
this Security will be made at the office or agency of the Company maintained for
that purpose in New York, New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided however that at the option of the Company
payment of interest may be made by check mailed on or prior to an Interest
Payment Date to the address of the Person entitled thereto as such address shall
appear in the Security Register.

         Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.





<PAGE>

         Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated: August 4, 1997                       COMMERCIAL METALS COMPANY


                                            By:  /s/ Lawrence A. Engels
                                               --------------------------------

ATTEST:

 /s/ David M. Sudbury
- ---------------------------------



This is one of the Securities of
the series designated therein
referred to in the within-mentioned
Indenture.

Dated: August 4, 1997

THE CHASE MANHATTAN BANK,
as Trustee


By:  /s/ Authorized Signatory
   ------------------------------



                                       2
<PAGE>


         This Security is one of a duly authorized issue of securities of the
Company (herein the "Securities"), issued and to be issued in one or more series
under an Indenture, dated July 31, 1995 (herein called the "Indenture"), between
the Company and The Chase Manhattan Bank, as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $50,000,000.

         If an Event of Default with respect to Securities to this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange hereof or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

         As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any interest hereof on or
after the respective due dates expressed herein.

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more
Securities of this Series and of





                                       3
<PAGE>

like tenor, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.

         The Securities of this series are issuable only in registered form
without coupons only in minimum denominations of $100,000 and any integral
multiple of $1,000 in excess thereof. As provided in the Indenture and subject
to certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.

         No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

         Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

         All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.




                                       4






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.(I)E
<SEQUENCE>9
<FILENAME>d09793a1exv4wxiye.txt
<DESCRIPTION>OFFICERS' CERTIFICATE PURSUANT TO THE INDENTURE
<TEXT>
<PAGE>
                                                                   EXHIBIT 4(i)e

                            COMMERCIAL METALS COMPANY

                              OFFICERS' CERTIFICATE

         Pursuant to the Indenture dated as of July 31, 1995 (the "Indenture")
by and between Commercial Metals Company, a Delaware corporation (the
"Company"), and The Chase Manhattan Bank, as trustee (the "Trustee"), and
resolutions adopted by the Pricing Committee of the Company's Board of Directors
as of July 30, 1997, this Officers' Certificate is being delivered to the
Trustee to establish the terms of a series of Securities in accordance with
Section 301 of the Indenture and to establish the form of the Securities of such
series in accordance with Section 201 of the Indenture.

         Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Indenture.

A.       Establishment of Series of Securities Pursuant to Section 301 of the
         Indenture.

         The Company hereby establishes, pursuant to Section 301 of the
Indenture, a series of Securities that shall have the following terms:

         1. The series of Securities being authorized hereby shall bear the
title "6.80% Notes due August 1, 2007" (the "Notes").

         2. The aggregate principal amount of the Notes which may be
authenticated and delivered under the Indenture shall be limited to $50,000,000
(except for Notes authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Notes pursuant to Sections 304, 305,
306, 906 or 1107 of the Indenture and except for any Notes which, pursuant to
Section 303 of the Indenture, are deemed never to have been authenticated and
delivered under the Indenture).

         3. Interest on each Note shall be payable to the person in whose name
the Note (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be January 15
or July 15 (whether or not a Business Day) as the case may be, next preceding
the relevant Interest Payment Date (as defined in the paragraph 5 hereof).

         4. The Notes shall mature on August 1, 2007, at which time the entire
principal amount of the Notes and all accrued but unpaid interest on the Notes
will be due and payable.

         5. Each Note shall bear interest at the annual rate of 6.80% commencing
on August 1, 1997. Interest on the Notes shall be payable semi-annually on
February 1 and August 1 in each year, commencing February 1, 1998 (each an
"Interest Payment Date"), subject to the provisions of Section 113 of the
Indenture, with such interest computed in accordance with Section 310 of the
Indenture.




<PAGE>

         6. Notes may not be redeemed by the Company at the option of the
Company prior to maturity.

         7. The Company shall have no obligation to redeem or purchase Notes at
the option of a Holder thereof or pursuant to any sinking fund or analogous
provisions.

         8. The Notes shall be issued only in minimum denominations of $100,000
and integral multiples of $1,000 in excess thereof.

         9. Payments of the principal of and any premium and interest on the
Notes shall be made in the currency of the United States of America.

         10. Neither the amount of payments of principal of, or any premium or
interest on, any Notes shall be determined by reference to an index.

         11. The Notes shall initially be issued as book-entry notes in the form
of one fully registered Global Security which will be deposited with, or on
behalf of The Depository Trust Company, as depositary (the "Depositary"), and
registered in the name of the Depositary's nominee. Beneficial interests in the
Notes will be shown on, and transfers thereof will be effected only through,
records maintained by the Depositary and its participants. Except as described
in Section 305 of the Indenture, Notes in definitive certificated form shall not
be issuable to any Person other than the Depositary and such Global Security may
not be exchanged for Notes registered in the name of, nor may any transfer of
such Global Security be registered to, any Person other than the Depositary or
its nominee.

         12. Payment of the principal of (and premium if any) and any interest
on the Notes shall be made at the office or agency of the Company maintained for
that purpose in New York, New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for the payment of
public and private debts; provided however that at the option of the Company
payment of interest may be made by check mailed on or prior to an Interest
Payment Date to the address of the Person entitled thereto as such address shall
appear in the Security Register.

         13. The entire principal amount of the Notes shall be payable upon
declaration of acceleration of the Maturity of the Notes pursuant to Section 502
of the Indenture.

         14. The Notes shall be unsecured and unsubordinated obligations of the
Company.

         15. The Notes will be issued only in fully registered form, without
coupons.

B.       Establishment of Form of Note Pursuant to Section 201 of the Indenture.

         The Company hereby establishes, pursuant to Section 201 of the
Indenture, that the Notes shall be substantially in the form attached as Exhibit
A hereto.




                                       2
<PAGE>

C.       Compliance.

         The undersigned have read the pertinent sections of the Indenture
relating to the establishment of (i) a series of Securities, and (ii) the forms
of such series of Securities, including the related definitions contained
therein. The undersigned have examined the resolutions (i) adopted by the Board
of Directors of the Company on June 28, 1995 and July 21, 1997, and (ii) adopted
by the Pricing Committee of the Board of Directors of the Company on July 30,
1997. In the opinion of each of the undersigned, each of the undersigned has
made such examination or investigation as is necessary to enable each of the
undersigned to express an informed opinion as to whether or not the conditions
to the establishment of (i) a series of Securities, and (ii) the forms of such
series of Securities have been complied with. In the opinion of each of the
undersigned, such conditions have been complied with.

Dated: August 4, 1997

                                 COMMERCIAL METALS COMPANY


                                 By:  /s/ Lawrence A. Engels
                                    -------------------------------------------
                                      Lawrence A. Engels
                                      Vice President, Treasurer and Chief
                                      Financial Officer




                                 By:  /s/ David M. Sudbury
                                    -------------------------------------------
                                      David M. Sudbury
                                      Vice President, General Counsel
                                      and Secretary




                                       3





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.(I)F
<SEQUENCE>10
<FILENAME>d09793a1exv4wxiyf.txt
<DESCRIPTION>FORM OF NOTE FOR 6.75% SENIOR NOTES DUE 2009
<TEXT>
<PAGE>

                                                                   Exhibit 4(i)f

         Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation (the "Depositary"), to the
Company or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of the Depositary (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of the Depositary), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.

         UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL
SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY.


                            COMMERCIAL METALS COMPANY

                                   ----------

No. 1                                                               $100,000,000
                                                             CUSIP NO. 201723AC7

         Commercial Metals Company, a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to CEDE & CO. or registered assigns, the
principal sum of One Hundred Million Dollars ($100,000,000) on February 15, 2009
and to pay interest thereon from February 23, 1999 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semiannually on February 15 and August 15 in each year, commencing August 15,
1999, at the rate of 6.75% per annum, until the principal hereof is paid or made
available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the February 1 or August 1 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture.

         Payment of the principal (and premium if any) and any such interest on
this Security will be made at the office or agency of the Company maintained for
that purpose in New York, New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided however that at the option of the Company
payment of interest may be made by check mailed on or prior to an Interest
Payment Date to the address of the Person entitled thereto as such address shall
appear in the Security Register.



<PAGE>

         Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated: February 23, 1999                     COMMERCIAL METALS COMPANY


                                             By: /s/ Stanley A. Rabin
                                                 -------------------------------

ATTEST:

/s/ David M. Sudbury
- ------------------------------------



This is one of the Securities of the series
designated therein referred to in the
within-mentioned Indenture.

Dated: February 23, 1999

THE CHASE MANHATTAN BANK,
as Trustee


By: /s/ Authorized Signatory
   ----------------------------------




                                       2
<PAGE>

         This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated July 31, 1995 (herein called the "Indenture"),
between the Company and The Chase Manhattan Bank, as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $100,000,000.

         The Securities of this series are subject to redemption, in whole or in
part, at the option of the Company at any time at a redemption price equal to
100% of the principal amount of such Securities plus accrued interest to the
Redemption Date plus the excess, if any, of (i) the aggregate present value as
of the Redemption Date of each dollar of principal of such Securities being
redeemed and the amount of interest (exclusive of interest accrued to the
Redemption Date) that would have been payable in respect of such dollar amount
if such redemption had not been made, determined by discounting, on a semiannual
basis, such principal and interest at a rate equal to the sum of the Treasury
Yield (as defined below) plus 0.25% per annum, from the respective dates on
which such principal and interest would have been payable if such redemption had
not been made, over (ii) the aggregate principal amount of such Securities being
redeemed. In no event will such redemption price ever be less than 100% of the
principal amount of the Securities plus accrued interest to the Redemption Date.

         "Treasury Yield" means a rate of interest per annum equal to the weekly
average yield to maturity of United States Treasury Notes that have a constant
maturity that corresponds to the remaining term to maturity of the Securities
calculated to the nearest 1/12 of a year, determined as of the third Business
Day immediately preceding the applicable Redemption Date.

         Any redemption shall be made pursuant to the provisions of Article
Eleven of the Indenture. Notice of redemption will be mailed at least 30 days
but not more than 60 days before a Redemption Date to each Holder whose
Securities are to be redeemed, at such Holder's address appearing in the
Security Register. On and after the Redemption Date, interest will cease to
accrue on Securities or portions thereof called for redemption.

         In the event of redemption of this Security in part only, a new
Security or Securities of this Series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.

         If an Event of Default with respect to Securities to this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in



                                       3
<PAGE>

exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Security.

         As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any interest hereof on or
after the respective due dates expressed herein.

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more
Securities of this Series and of like tenor, of authorized denominations and for
the same aggregate principal amount, will be issued to the designated transferee
or transferees.

         The Securities of this series are issuable only in registered form
without coupons only in minimum denominations of $100,000 and any integral
multiple of $1,000 in excess thereof. As provided in the Indenture and subject
to certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.

         No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

         Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

         All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.



                                       4


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.(I)G
<SEQUENCE>11
<FILENAME>d09793a1exv4wxiyg.txt
<DESCRIPTION>OFFICERS' CERTIFICATE PURSUANT TO THE INDENTURE
<TEXT>
<PAGE>

                                                                   Exhibit 4(i)g

                            COMMERCIAL METALS COMPANY

                              OFFICERS' CERTIFICATE

         Pursuant to the Indenture dated as of July 31, 1995 (the "Indenture")
by and between Commercial Metals Company, a Delaware corporation (the
"Company"), and The Chase Manhattan Bank, as trustee (the "Trustee"), and
resolutions adopted by the Pricing Committee of the Company's Board of Directors
as of February 18, 1999, this Officers' Certificate is being delivered to the
Trustee to establish the terms of a series of Securities in accordance with
Section 301 of the Indenture and to establish the form of the Securities of such
series in accordance with Section 201 of the Indenture.

         Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Indenture.

A.       Establishment of Series of Securities Pursuant to Section 301 of the
         Indenture.

         The Company hereby establishes, pursuant to Section 301 of the
Indenture, a series of Securities that shall have the following terms:

         1. The series of Securities being authorized hereby shall bear the
title "6.75% Notes due February 15, 2009" (the "Notes").

         2. The aggregate principal amount of the Notes which may be
authenticated and delivered under the Indenture shall be limited to $100,000,000
(except for Notes authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Notes pursuant to Sections 304, 305,
306, 906 or 1107 of the Indenture and except for any Notes which, pursuant to
Section 303 of the Indenture, are deemed never to have been authenticated and
delivered under the Indenture).

         3. Interest on each Note shall be payable to the person in whose name
the Note (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be February 1
or August 1 (whether or not a Business Day) as the case may be, next preceding
the relevant Interest Payment Date (as defined in the paragraph 5 hereof).

         4. The Notes shall mature on February 15, 2009, at which time the
entire principal amount of the Notes and all accrued but unpaid interest on the
Notes will be due and payable.

         5. Each Note shall bear interest at the annual rate of 6.75% commencing
on February 23, 1999. Interest on the Notes shall be payable semi-annually on
February 15 and August 15 in each year, commencing August 15, 1999 (each an
"Interest Payment Date"), subject to the provisions of Section 113 of the
Indenture, with such interest computed in accordance with Section 310 of the
Indenture.

         6. The Notes will be redeemable, at the Company's option, at any time
in whole, or from time to time in part, upon not less than 30 and not more than
60 days' notice mailed to each holder of Notes to be redeemed at the holder's
address appearing in the Note register, at a price equal to 100% of the
principal amount thereof plus accrued interest to the redemption date (subject
to the



<PAGE>

right of holders of record on the relevant record date to receive interest due
on an interest payment date that is on or prior to the redemption date) plus a
Make-Whole Premium, if any (the "Redemption Price"). In no event will the
Redemption Price ever be less than 100% of the principal amount of the Notes
plus accrued interest to the redemption date.

         The amount of the Make-Whole Premium with respect to any Note (or
portion thereof) to be redeemed will be equal to the excess, if any, of:

         (1)      the sum of the present values, calculated as of the redemption
                  date, of:

                  (a) each interest payment that, but for such redemption, would
                  have been payable on the Note (or portion thereof) being
                  redeemed on each interest payment date occurring after the
                  redemption date (excluding any accrued interest for the period
                  prior to the redemption date); and

                  (b) the principal amount that, but for such redemption, would
                  have been payable at the final maturity of the Note (or
                  portion thereof) being redeemed;

                  over

         (2)      the principal amount of the Note (or portion thereof) being
                  redeemed.

         The present value of interest and principal payments referred to in
clause (1) above will be determined in accordance with generally accepted
principles of financial analysis. Such present values will be calculated by
discounting the amount of each payment of interest or principal from the date
that each such payment would have been payable, but for the redemption, to the
redemption date at a discount rate equal to the Treasury Yield (as defined
below) plus 25 basis points.

         The Make-Whole Premium will be calculated by an independent investment
banking institution of national standing appointed by the Company. If the
Company fails to make such appointment at least 45 business days prior to the
redemption date, or if the institution so appointed is unwilling or unable to
make such calculation, Goldman, Sachs & Co. ("Goldman Sachs") will make such
calculation. If Goldman Sachs is unwilling or unable to make such calculation,
an independent investment banking institution of national standing appointed by
the trustee will make such calculation.

         For purposes of determining the Make-Whole Premium, "Treasury Yield"
means a rate of interest per annum equal to the weekly average yield to maturity
of United States Treasury Notes that have a constant maturity that corresponds
to the remaining term of maturity of the Notes, calculated to the nearest 1/12
of a year (the "Remaining Term"). The Treasury Yield will be determined as of
the third business day immediately preceding the applicable redemption date.

         The weekly average yields of United States Treasury Notes will be
determined by reference to the most recent statistical release published by the
Federal Reserve Bank of New York and designated "H.15(519) Selected Interest
Rates" or any successor release (the "H.15 Statistical Release"). If the H.15
Statistical Release sets forth a weekly average yield for United States Treasury
Notes having a constant maturity that is the same as the Remaining Term, then
the Treasury Yield



                                       2
<PAGE>

will be equal to such weekly average yield. In all other cases, the Treasury
Yield will be calculated by interpolation, on a straight-line basis, between the
weekly average yields on the United States Treasury Notes that have a constant
maturity closest to and greater than the Remaining Term and the United States
Treasury Notes that have a constant maturity closest to and less than the
Remaining Term (in each case as set forth in the H.15 Statistical Release). Any
weekly average yields so calculated by interpolation will be rounded to the
nearest 0.01% with any figure of 0.005% or more being rounded upward. If weekly
average yields for United States Treasury Notes are not available in the H.15
Statistical Release or otherwise, then the Treasury Yield will be calculated by
interpolation of comparable rates selected by the independent investment banking
institution.

         If less than all of the Notes are to be redeemed, the trustee will
select the Notes to be redeemed by such method as the trustee deems fair and
appropriate. The trustee may select for redemption Notes and portions of Notes
in amounts of $1,000 or whole multiples of $1,000.

         7. The Company shall have no obligation to redeem or purchase Notes at
the option of a Holder thereof or pursuant to any sinking fund or analogous
provisions. The Notes will not be entitled to the benefit of any sinking fund or
other mandatory redemption provisions.

         8. The Notes shall be issued only in minimum denominations of $100,000
and integral multiples of $1,000 in excess thereof.

         9. Payments of the principal of and any premium and interest on the
Notes shall be made in the currency of the United States of America.

         10. Neither the amount of payments of principal of, or any premium or
interest on, any Notes shall be determined by reference to an index.

         11. The Notes shall initially be issued as book-entry notes in the form
of one fully registered Global Security which will be deposited with, or on
behalf of The Depository Trust Company, as depositary (the "Depositary"), and
registered in the name of the Depositary's nominee. Beneficial interests in the
Notes will be shown on, and transfers thereof will be effected only through,
records maintained by the Depositary and its participants. Except as described
in Section 305 of the Indenture, Notes in definitive certificated form shall not
be issuable to any Person other than the Depositary and such Global Security may
not be exchanged for Notes registered in the name of, nor may any transfer of
such Global Security be registered to, any Person other than the Depositary or
its nominee.

         12. Payment of the principal of (and premium if any) and any interest
on the Notes shall be made at the office or agency of the Company maintained for
that purpose in New York, New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for the payment of
public and private debts; provided however that at the option of the Company
payment of interest may be made by check mailed on or prior to an Interest
Payment Date to the address of the Person entitled thereto as such address shall
appear in the Security Register.

         13. The entire principal amount of the Notes shall be payable upon
declaration of acceleration of the Maturity of the Notes pursuant to Section 502
of the Indenture.



                                       3
<PAGE>

         14. The Notes shall be unsecured and unsubordinated obligations of the
Company and will rank on a parity with all other unsecured and unsubordinated
debt of the Company.

         15. The Notes will be issued only in fully registered form, without
coupons.

B.       Establishment of Form of Note Pursuant to Section 201 of the Indenture.

         The Company hereby establishes, pursuant to Section 201 of the
Indenture, that the Notes shall be substantially in the form attached as Exhibit
A hereto.

C.       Compliance.

         The undersigned have read the pertinent sections of the Indenture
relating to the establishment of (i) a series of Securities, and (ii) the forms
of such series of Securities, including the related definitions contained
therein. The undersigned have examined the resolutions (i) adopted by the Board
of Directors of the Company on August 11, 1998 and on January 28, 1999, and (ii)
adopted by the Pricing Committee of the Board of Directors of the Company on
February 18, 1999. In the opinion of each of the undersigned, each of the
undersigned has made such examination or investigation as is necessary to enable
each of the undersigned to express an informed opinion as to whether or not the
conditions to the establishment of (i) a series of Securities, and (ii) the
forms of such series of Securities have been complied with. In the opinion of
each of the undesigned, such conditions have been complied with.

Dated: February 23, 1999

                                    COMMERCIAL METALS COMPANY


                                    By: /s/ Lawrence A. Engels
                                       -----------------------------------------
                                        Lawrence A. Engels
                                        Vice President, Treasurer and Chief
                                        Financial Officer


                                    By: /s/ David M. Sudbury
                                       -----------------------------------------
                                        David M. Sudbury
                                        Vice President, General Counsel and
                                        Secretary


                                       4


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(III)F
<SEQUENCE>12
<FILENAME>d09793a1exv10wxiiiyf.txt
<DESCRIPTION>1999 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
<TEXT>
<PAGE>
                                                                EXHIBIT 10(iii)f

                            COMMERCIAL METALS COMPANY

                  1999 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN


         The Commercial Metals Company 1999 Non-Employee Director Stock Option
Plan (hereinafter called the "Plan") was adopted by the Board of Directors of
Commercial Metals Company, a Delaware corporation (hereinafter called the
"Company"), effective as of November 22, 1999.

                                    ARTICLE 1

                                     PURPOSE

         The purpose of the Plan is to attract and retain Outside Directors of
Commercial Metals Company and to provide such persons with a proprietary
interest in the Company through the issuance of Common Stock that will

                  (a) increase the interest of such persons in the Company's
         welfare;

                  (b) furnish an incentive to such persons to continue their
         services for the Company; and

                  (c) provide a means through which the Company may attract able
         persons as directors.

                                    ARTICLE 2

                                   DEFINITIONS

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

         2.1 "Black-Scholes Value" means the value of a Stock Option granted
under the Plan to purchase one share of Common Stock determined pursuant to the
option pricing model commonly known as the Black-Scholes method.

         2.2 "Board" means the board of directors of the Company.

         2.3 "Change of Control" means any of the following: (i) any
consolidation, merger or share exchange of the Company in which the Company is
not the continuing or surviving corporation or pursuant to which shares of the
Company's Common Stock would be converted into cash, securities or other
property, other than a consolidation, merger or share exchange of the Company in
which the holders of the Company's Common Stock immediately prior to such
transaction have the same proportionate ownership of Common Stock of the
surviving corporation immediately after such transaction; (ii) any sale, lease,
exchange or other transfer (excluding transfer by way of pledge or
hypothecation) in one transaction or a series of related transactions, of all or
substantially all of the assets of the Company; (iii) the stockholders of the
Company approve any plan or proposal for the liquidation or dissolution of the
Company; (iv) the cessation of control (by virtue of their not constituting a
majority of directors) of the Board by the individuals (the "Continuing
Directors") who (x) at the date of this Plan were directors or (y) become
directors after the date of this Plan and whose election or nomination for
election by the Company's stockholders, was approved by a vote of at least
two-thirds of the directors then in office who

<PAGE>

were directors at the date of this Plan or whose election or nomination for
election was previously so approved; (v) the acquisition of beneficial ownership
(within the meaning of Rule 13d-3 under the 1934 Act) of an aggregate of 15% of
the voting power of the Company's outstanding voting securities by any person or
group (as such term is used in Rule 13d-5 under the 1934 Act), provided,
however, that notwithstanding the foregoing, an acquisition shall not constitute
a Change of Control hereunder if the acquirer is (w) Daniel E. Feldman, Moses
Feldman, Robert L. Feldman, or Sara B. Feldman (the "Feldmans"), or any of his
or her affiliates, so long as the Feldmans and their affiliates do not
beneficially own an aggregate of 25% or more of the shares of Common Stock then
outstanding, (x) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company and acting in such capacity, (y) a
Subsidiary of the Company or a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of voting securities of the Company or (z) any other person whose
acquisition of shares of voting securities is approved in advance by a majority
of the Continuing Directors; or (vi) in a Title 11 bankruptcy proceeding, the
appointment of a trustee or the conversion of a case involving the Company to a
case under Chapter 7. Under sub-clause (w) of clause (v) of the preceding
sentence, if a person or entity is an affiliate of one or more of the Feldmans
and of another person or entity, such sub-clause (w) shall not serve to exempt
such other person or entity in determining whether a Change of Control has
occurred.

         2.4 "Code" means the Internal Revenue Code of 1986, as amended.

         2.5 "Committee" means the committee appointed or designated by the
Board to administer the Plan in accordance with ARTICLE 3 of this Plan.

         2.6 "Common Stock" means the common stock which the Company is
currently authorized to issue or may in the future be authorized to issue.

         2.7 "Company" means Commercial Metals Company, a Delaware corporation,
and any successor entity.

         2.8 "Date of Grant" means the effective date on which a Stock Option is
awarded to an Outside Director as set forth in the applicable Stock Option
Agreement in accordance with the terms of the Plan.

         2.9 "Election Form" means a form approved by the Committee pursuant to
which an Outside Director elects a method of payment of Fees.

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

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

         2.12 "Fees" means the cash retainer payable by the Company to an
Outside Director for service as an Outside Director of the Company, as such
amount may be changed from time to time.

         2.13 "Optioned Shares" means the full shares of Common Stock which a
Participant may purchase pursuant to the exercise of a Stock Option granted
pursuant to this Plan.


                                       2
<PAGE>

         2.14 "Option Period" means the period during which a Stock Option may
be exercised.

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

         2.16 "Options Election Period" means the period beginning on October
1(st) (or, with respect to the first full calendar year during the term of the
Plan, November 22, 1999) of each year during the term of the Plan and ending on
the following December 31(st), or such other time period designated by the
Committee, during which Outside Directors may elect to receive Stock Options as
payment of some or all of their Fees. If a person becomes an Outside Director on
or after January 1(st) but before October 1(st), including a person serving as a
director and an Employee who becomes an Outside Director because such director's
employment with the Company terminates during such period, the Options Election
Period for such person for that year shall commence on the date such person
first becomes an Outside Director and end 30 days thereafter.

         2.17 "Outside Director" means a director of the Company who is not an
Employee.

         2.18 "Participant" shall mean an Outside Director of the Company.

         2.19 "Plan" means this Commercial Metals Company 1999 Outside Director
Stock Option Plan, as amended from time to time.

         2.20 "Plan Year" means a yearly period during the term of the Plan
beginning on the date of the Company's annual meeting of stockholders and ending
on the day before the Company's next annual meeting of stockholders.

         2.21 "Retirement" means Termination of Service as a Director at or
after attaining age 62.

         2.22 "Stock Option" means a non-qualified option to purchase Common
Stock granted under the Plan.

         2.23 "Stock Option Agreement" means a written agreement between a
Participant and the Company which sets out the terms of the grant of a Stock
Option.

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

         2.25 "Termination of Service as a Director" occurs when a Participant
who is an Outside Director of the Company shall cease to serve as a director of
the Company for any reason.

         2.26 "Total and Permanent Disability" means that the Participant,
because of ill health, physical or mental disability or any other reason beyond
his or her control, is unable to perform his or her duties as a director for a
period of six (6) continuous months, as determined in good faith by the
Committee.


                                       3
<PAGE>


                                    ARTICLE 3

                                 ADMINISTRATION

         The Plan shall be administered by a committee appointed by the Board
(the "Committee"). The Committee shall consist of not fewer than two persons,
each of whom must be a "Non-Employee Director", as defined in Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as such rule now exists
or may hereafter be amended. Any member of the Committee may be removed at any
time, with or without cause, by resolution of the Board. Any vacancy occurring
in the membership of the Committee may be filled by appointment by the Board.

         The Committee shall select one of its members to act as its Chairman
and shall make such rules and regulations for its operation as it deems
appropriate. A majority of the Committee shall constitute a quorum, and the act
of a majority of the members of the Committee present at a meeting at which a
quorum is present shall be the act of the Committee. The Committee, in its
discretion, shall (i) interpret the Plan, (ii) prescribe, amend, and rescind any
rules and regulations necessary or appropriate for the administration of the
Plan, and (iii) make such other determinations and take such other action as it
deems necessary or advisable in the administration of the Plan; provided,
however, that the Committee shall have no discretion with respect to the
eligibility or selection of Outside Directors to receive awards under the Plan
or the time at which any such awards are to be granted, and provided further,
that the Committee shall not have the authority to take any action or make any
determination that would materially increase the benefits accruing to
Participants under the Plan. Any interpretation, determination, or other action
made or taken by the Committee shall be final, binding, and conclusive on all
interested parties.

                                    ARTICLE 4

                          ELIGIBILITY; GRANT OF OPTIONS

         4.1 Automatic Grant of Options. On the first day of every Plan Year,
each Outside Director serving as such on that date shall automatically be
granted a Stock Option to purchase one thousand five hundred (1,500) shares of
Common Stock on such date, without further action by the Committee.

         If a person becomes an Outside Director during a Plan Year on a date
after the first day of a Plan Year, including a person serving as a director and
an Employee who becomes an Outside Director because such director's employment
with the Company terminates during such Plan Year, such Outside Director shall
automatically be granted a Stock Option to purchase that number of shares of
Common Stock equal to 1,500 multiplied by a fraction, the numerator of which
shall be the number of days until the end of such Plan Year and the denominator
of which shall be the total number of days in such Plan Year. In the event that
such calculation would result in a fractional share being subject to a Stock
Option, the number of shares that may be purchased under such Stock Option shall
be rounded up to the next whole number of shares. Stock Options granted under
this paragraph shall automatically be granted on the date such person becomes an
Outside Director, without further action by the Committee.

         4.2 Election to Receive Stock Options in Lieu of Cash Fees. A
Participant may elect to receive all or part of the Fees otherwise payable to
him or her during a calendar year in the form of a Stock Option to purchase the
number of shares of Common Stock determined as set forth below in this Section
4.2. An Outside Director who wishes to receive Fees for a calendar year in the
form of a Stock Option must irrevocably elect to do so by delivering a valid
Election Form during the Options Election


                                       4
<PAGE>

Period to the Secretary of the Company or such other person as the Committee may
designate. An Outside Director's timely election to receive a Stock Option in
lieu of cash Fees under this Section 4.2 will be effective as of the first day
of the calendar year covered by the Election Form. Elections to receive Stock
Options in lieu of cash Fees are irrevocable and shall be valid only for the
calendar year covered by such election. The Date of Grant for Stock Options
granted under this Section 4.2 will be the first day of the Plan Year
immediately following the calendar year covered by the Election Form.

         The Committee shall cause to be calculated the Black-Scholes Value as
of the first day of the Plan Year immediately following the calendar year
covered by the Election Form. The Committee shall have complete discretion to
assign such values to the factors utilized in the calculation of the
Black-Scholes Value as the Committee deems appropriate. The Committee may, but
shall not be required to, use the services of Employees, consultants or other
agents to assist the Committee in calculating the Black-Scholes Value. The
number of shares subject to a Stock Option granted pursuant to this Section 4.2
shall be the number of whole shares equal to (i) the dollar amount of the Fees
earned by the Outside Director that the Outside Director elected to receive in
the form of a Stock Option divided by (ii) the Black-Scholes Value. In
determining the number of Optioned Shares, any fraction of a share will be
rounded up to the next highest whole number of shares.

         For example:

                  Assume that an Outside Director has elected to receive $5,000
         of his or her Fees in the form of a Stock Option and that the
         Black-Scholes Value was determined to be $10. The Outside Director
         would be granted a Stock Option to purchase 500 shares of Common Stock
         as payment of the $5,000 compensation, calculated as follows: $5,000
         divided by $10 = 500 shares.

         4.3      Vesting; Time of Exercise.

                  (a) Stock Options granted pursuant to Section 4.1 will be
         exercisable in the following cumulative installments:

                  First Installment: A Stock Option will be exercisable for up
                  to 50% of the Optioned Shares (rounded down so that no
                  fractional share is exercisable) at any time following the
                  first anniversary of the Date of Grant.

                  Second Installment: A Stock Option will be exercisable for the
                  remainder of the Optioned Shares not exercisable in the first
                  installment at any time following the second anniversary of
                  the Date of Grant.

                  Notwithstanding the foregoing, the vesting of installments
         under Stock Options granted pursuant to Section 4.1 shall automatically
         accelerate and the Stock Options shall be exercisable in full upon (i)
         the Participant's death, (ii) the Participant's Termination of Service
         as a Director as a result of Total and Permanent Disability, or (iii)
         the occurrence of a Change of Control. The determination of the
         Committee that any of the foregoing conditions has been met shall be
         binding and conclusive on all parties.

                  (b) Stock Options granted pursuant to Section 4.2 will be
         fully vested and exercisable on the Date of Grant.

         4.4 Stock Option Agreement. The grant of a Stock Option shall be
evidenced by a Stock Option Agreement setting forth the total number of shares
of Common Stock subject to the Stock Option, the Option Price, the maximum term
of the Stock Option, the Date of Grant, and such other terms and


                                       5
<PAGE>

provisions as are approved by the Committee, but not inconsistent with the Plan.
The Company shall execute a Stock Option Agreement with a Participant promptly
after the Date of Grant of the Stock Option.

                                    ARTICLE 5

                             SHARES SUBJECT TO PLAN

         The maximum number of shares of Common Stock that may be issued under
the Plan is two hundred thousand (200,000) (as may be adjusted in accordance
with ARTICLES 11 and 12 hereof). All Stock Options granted under the Plan shall
be designated as non-qualified stock options. Shares of Common Stock to be
issued under the Plan may be made available from either authorized but unissued
Common Stock or Common Stock held by the Company in its treasury. Shares of
Common Stock previously subject to Stock Options that are forfeited, terminated,
or settled in cash in lieu of Common Stock, or expired unexercised shall
immediately become available for grants of Stock Options under the Plan.

         During the term of this Plan, the Company will at all times reserve and
keep available the number of shares of Common Stock that shall be sufficient to
satisfy the requirements of this Plan.

                                    ARTICLE 6

                                  OPTION PRICE

         The Option Price for any share of Common Stock which may be purchased
under a Stock Option shall be One Hundred Percent (100%) of the Fair Market
Value of the share on the Date of Grant.

                                    ARTICLE 7

                            OPTION PERIOD; FORFEITURE

         No Stock Option granted under the Plan may be exercised at any time
after the end of its Option Period.

         The Option Period for each Stock Option will terminate on the first of
the following to occur:

                  (a) 5 p.m. on the seventh anniversary of the Date of Grant;

                  (b) 5 p.m. on the date which is one (1) year following the
         Participant's Termination of Service as a Director due to death or
         Total and Permanent Disability;

                  (c) 5 p.m. on the date that is two (2) years following the
         Participant's Termination of Service as a Director due to Retirement;
         provided that any installment not vested and exercisable on the
         Participant's Retirement shall terminate and be forfeited on such date;
         or

                  (d) 5 p.m. on the date that is thirty (30) days after any
         other Termination of Service as a Director; provided that any
         installment not vested and exercisable on the date of such Termination
         of Service as a Director shall terminate and be forfeited on such date.


                                       6
<PAGE>

                                    ARTICLE 8

                               EXERCISE OF OPTION

         Stock Options may be exercised during the Option Period. Stock Options
may be exercised at such times and in such amounts as provided in this Plan and
the applicable Stock Option Agreements, subject to the terms, conditions, and
restrictions of the Plan.

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

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

         Upon payment of all amounts due from the Participant, the Company shall
cause certificates for the Common Stock then being purchased to be delivered to
the Participant (or the person exercising the Participant's Stock Option in the
event of his death) at its principal business office promptly after the Exercise
Date. The obligation of the Company to deliver shares of Common Stock shall,
however, be subject to the condition that if at any time the Committee shall
determine in its discretion that the listing, registration, or qualification of
the Stock Option or the Common Stock upon any securities exchange or under any
state or federal law, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition of, or in connection with, the
Stock Option or the issuance or purchase of shares of Common Stock thereunder,
the Stock Option may not be exercised in whole or in part unless such listing,
registration, qualification, consent, or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee.

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


                                       7
<PAGE>

                                    ARTICLE 9

                           AMENDMENT OR DISCONTINUANCE

         Subject to the limitations set forth in this ARTICLE 9, the Board may
at any time and from time to time, without the consent of the Participants,
suspend or discontinue the Plan in whole or in part. The Board may amend the
Plan at any time and for any reason without stockholder approval; provided,
however, that the Board may condition any amendment on the approval of
stockholders of the Company if such approval is necessary or deemed advisable
with respect to tax, securities or other applicable laws, policies and
regulations.

         Subject to the forgoing, any such amendment shall, to the extent deemed
necessary or advisable by the Committee, be applicable to any outstanding Stock
Options theretofore granted under the Plan, notwithstanding any contrary
provisions contained in any Stock Option Agreement. In the event of any such
amendments to the Plan, the holder of any Stock Option outstanding under the
Plan shall, upon request of the Committee and as a condition to the
exercisability thereof, execute a conforming amendment in the form prescribed by
the Committee to any Stock Option Agreement relating thereto within such
reasonable time as the Committee shall specify in such request. Notwithstanding
anything contained in this Plan to the contrary, unless required by law, no
action contemplated or permitted by this ARTICLE 9 shall adversely affect any
rights of Participants or obligations of the Company to Participants with
respect to any Stock Options theretofore granted under the Plan without the
consent of the affected Participant.

                                   ARTICLE 10

                           STOCKHOLDER APPROVAL; TERM

         Anything in the Plan to the contrary notwithstanding, the effectiveness
of the Plan and of the grant of all Stock Options hereunder is in all respects
subject to the approval of the Plan by the affirmative vote of the holders of a
majority of the shares of the Common Stock present in person or by proxy and
entitled to vote at a meeting of stockholders at which the Plan is presented for
approval. Stock Options may be granted under the Plan prior to the time of
stockholder approval. Any such Stock Options granted prior to such stockholder
approval shall be subject to such stockholder approval. Unless sooner terminated
by action of the Board, the Plan will terminate on January 31, 2010, but Stock
Options granted before such date will continue to be effective in accordance
with their terms and conditions.

                                   ARTICLE 11

                               CAPITAL ADJUSTMENTS

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

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


                                       8
<PAGE>

                  (ii) Appropriate adjustments shall be made in the number of
         shares of Common Stock subject to purchase pursuant to Stock Options to
         be granted under ARTICLE 4 of the Plan, to the end that Stock Options
         to purchase the same proportion of the Company's issued and outstanding
         shares of Common Stock shall be granted under ARTICLE 4.

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

         Except as otherwise expressly provided herein, the issuance by the
Company of shares of its capital stock of any class, or securities convertible
into shares of capital stock of any class, either in connection with direct sale
or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number of or Option Price of shares of Common Stock
then subject to outstanding Stock Options granted under the Plan.

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

                                   ARTICLE 12

                   RECAPITALIZATION, MERGER AND CONSOLIDATION

         12.1 General. The existence of this Plan and Stock Options granted
hereunder shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations, or other changes in the Company's capital structure and its
business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or preference stocks ranking prior to or otherwise
affecting the Common Stock or the rights thereof (or any rights, options, or
warrants to purchase same), or the dissolution or liquidation of the Company, or
any sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.

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

         12.3 Adjustment; Company Does Not Survive. In the event of any
reorganization, merger, consolidation or share exchange pursuant to which the
Company is not the surviving or resulting corporation, there shall be
substituted for each share of Common Stock subject to the unexercised portions
of such outstanding Stock Options that number of shares of each class of stock
or other securities or that amount of cash, property or assets of the surviving,
resulting or consolidated company which were distributed or are to be
distributed to the stockholders of the Company in respect of each share of
Common Stock held by them, such outstanding Stock Options to be thereafter
exercisable for such stock, securities, cash or property in accordance with
their terms. Notwithstanding the foregoing, however, the Committee, in its sole
discretion, may cancel all such Stock Options as of the effective date of any
such reorganization, merger, consolidation, share exchange or of any dissolution
or liquidation of the Company


                                       9
<PAGE>

by giving notice to each holder thereof or his personal representative of its
intention to do so and by permitting the purchase, during the thirty (30) day
period next preceding such effective date, of all of the shares of Common Stock
subject to such outstanding Stock Options.

         12.4 Notice of Adjustment. Upon the occurrence of each event requiring
an adjustment of the Option Price or the number of shares of Common Stock
purchasable pursuant to Stock Options granted pursuant to the terms of this
Plan, the Company shall mail to each Participant its computation of such
adjustment, which shall be conclusive and shall be binding upon each such
Participant.

                                   ARTICLE 13

                           LIQUIDATION OR DISSOLUTION

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

                                   ARTICLE 14

                            MISCELLANEOUS PROVISIONS

         14.1 Assignability. No Stock Option granted under this Plan shall be
assignable or otherwise transferable by the Participant (or his or her
authorized legal representative) during the Participant's lifetime and, after
the death of the Participant, other than by will or the laws of descent and
distribution or as provided below in this ARTICLE 14. All or a portion of a
Stock Option granted to a Participant may be assigned by such Participant to (i)
the spouse, children or grandchildren of the Participant ("Immediate Family
Members"), (ii) a trust or trusts for the exclusive benefit of such Immediate
Family Members, or (iii) a partnership in which such Immediate Family Members
are the only partners, (iv) an entity exempt from federal income tax pursuant to
Section 501(c)(3) of the Code or any successor provision, or (v) a split
interest trust or pooled income fund described in Section 2522(c)(2) of the Code
or any successor provision, provided that (x) there shall be no consideration
for any such transfer, and (y) subsequent transfers of transferred Stock Options
shall be prohibited except those by will or the laws of descent and
distribution. Following transfer, any such Stock Option shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer, provided that for purposes of Articles 8, 9, 11, 12, 13 and 14 hereof
the term "Participant" shall be deemed to include the transferee. The events of
Termination of Service shall continue to be applied with respect to the original
Participant, following which the Stock Options shall be exercisable by the
transferee only to the extent and for the periods specified in the Plan and the
Stock Option Agreement. The Committee and the Company shall have no obligation
to inform any transferee of a Stock Option of any expiration, termination, lapse
or acceleration of such Option. The Company shall have no obligation to register
with any federal or state securities


                                       10
<PAGE>

commission or agency any Common Stock issuable or issued under a Stock Option
that has been transferred by a Participant under this Section 14.1.

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

         14.3 No Employment Relationship. Each Participant is not an Employee of
the Company. Nothing herein shall be construed to create an employer-employee
relationship between the Company and the Participant.

         14.4 Stockholders' Rights. The holder of a Stock Option shall have none
of the rights or privileges of a stockholder except with respect to shares which
have been actually issued.

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

         14.6 Indemnification of Board and Committee. No current or previous
member of the Board or the Committee, nor any officer or employee of the Company
acting on behalf of the Board or the Committee, shall be personally liable for
any action, determination, or interpretation taken or made in good faith with
respect to the Plan, and all such members of the Board and the Committee and
each and any officer or employee of the Company acting on their behalf shall, to
the extent permitted by law, be fully indemnified and protected by the Company
in respect of any such action, determination or interpretation. The foregoing
right of indemnification shall not be exclusive of any other rights of
indemnification to which such individuals may be entitled under the Company's
Certificate of Incorporation or Bylaws, by contract, as a matter of law, or
otherwise.

         14.7 Restrictions. This Plan, and the granting and exercise of Stock
Options hereunder, and the obligation of the Company to sell and deliver Common
Stock under such Stock Options, shall be subject to all applicable foreign and
United States laws, rules and regulations, and to such approvals on the part of
any governmental agencies or stock exchanges or transaction reporting systems as
may be required. No Common Stock or other form of payment shall be issued with
respect to any Stock Option unless the Company shall be satisfied based on the
advice of its counsel that such issuance will be in compliance with applicable
federal and state securities laws and the requirements of any regulatory
authority having jurisdiction over the securities of the Company. Unless the
Stock Options and Common Stock covered by this Plan have been registered under
the Securities Act of 1933, as amended, each person exercising a Stock Option
under this Plan may be required by the Company to give a representation in
writing in form and substance satisfactory to the Company to the effect that he
is acquiring such shares for his own account for investment and not with a view
to, or for sale in connection with, the distribution of such shares or any part
thereof. If any provision of this Plan is found not to be in compliance with
such rules, such provision shall be null and void to the extent required to
permit this Plan to comply with such rules. Certificates evidencing shares of
Common Stock delivered under this Plan may be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable under the
rules, regulations and other requirements of the Securities and Exchange
Commission, any securities exchange or transaction reporting system upon which
the Common Stock is then listed or quoted, and any applicable federal, foreign
and state securities law. The Committee may cause a legend or legends to be
placed upon any such certificates to make appropriate reference to such
restrictions.


                                       11
<PAGE>

         14.8 Gender and Number. Where the context permits, words in the
masculine gender shall include the feminine and neuter genders, the plural form
of a word shall include the singular form, and the singular form of a word shall
include the plural form.

         14.9 Tax Requirements. The Company shall have the right to deduct from
all amounts hereunder paid in cash or other form, any Federal, state, or local
taxes required by law to be withheld with respect to such payments. The
Participant receiving shares of Common Stock issued upon exercise of Stock
Options granted under the Plan shall be required to pay the Company the amount
of any taxes which the Company is required to withhold with respect to such
shares of Common Stock. Such payments shall be required to be made prior to the
delivery of any certificate representing such shares of Common Stock. Such
payment may be made in cash, by check or through the delivery of shares of
Common Stock owned by the Participant (which may be effected by the actual
delivery of shares of Common Stock by the Participant or by the Company's
withholding a number of shares to be issued upon the exercise of a Stock Option,
if applicable), which shares have an aggregate Fair Market Value equal to the
required minimum withholding payment, or any combination thereof.

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




                                       12





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>13
<FILENAME>d09793a1exv12.txt
<DESCRIPTION>STATEMENT RE: COMPUTATION OF EARNINGS TO CHARGES
<TEXT>
<PAGE>
                                                                      EXHIBIT 12

                   COMMERCIAL METALS COMPANY AND SUBSIDIARIES
                       RATIOS OF EARNINGS TO FIXED CHARGES
                      (DOLLARS IN THOUSANDS, EXCEPT RATIOS)

<Table>
<Caption>
                                                                         YEAR ENDED AUGUST 31,
                                                 ----------------------------------------------------------------------
                                                    1998           1999           2000           2001           2002
                                                 ----------     ----------     ----------     ----------     ----------
<S>                                              <C>            <C>            <C>            <C>            <C>

EARNINGS:
     Earnings before income taxes                $   68,069     $   74,803     $   70,660     $   38,415     $   63,138
     Interest expense                                18,055         19,650         27,319         27,608         18,708
     Interest imputed on rent                         3,211          3,033          3,555          3,828          3,925
     Amortization of capitalized interest               417            602          1,367          1,370          1,307
                                                 ----------     ----------     ----------     ----------     ----------

          Total Earnings                         $   89,752     $   98,088     $  102,901     $   71,221     $   87,078

FIXED CHARGES:
     Interest expense                            $   18,055     $   19,650     $   27,319     $   27,608     $   18,708
     Interest capitalized                             1,622          4,547            808          1,111            447
     Interest imputed on rent                         3,211          3,033          3,555          3,828          3,925
                                                 ----------     ----------     ----------     ----------     ----------

          Total Fixed Charges                    $   22,888     $   27,230     $   31,682     $   32,547     $   23,080

Ratio of Earnings to Fixed Charges                     3.92           3.60           3.25           2.19           3.77
</Table>


Note: Fixed charges represent interest expense, the portion of operating rent
expense that management believes is representative of the appropriate interest
component of rent expense and capitalized interest.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>14
<FILENAME>d09793a1exv23.txt
<DESCRIPTION>INDEPENDENT AUDITORS' CONSENT TO INCORPORATION
<TEXT>
<PAGE>
                                                                      EXHIBIT 23



INDEPENDENT AUDITOR'S CONSENT

We consent to the incorporation by reference in the Registration Statement Nos.
033-60809 and 333-61379 on Form S-3 and Registration Statement Nos. 033-61073,
033-61075, 333-27967 and 333-42648 on Form S-8 of Commercial Metals Company of
our report dated November 22, 2002 (October 29, 2003 as to the effects of the
restatement discussed in the last paragraph of Note 14), (which expresses an
unqualified opinion and includes an explanatory paragraph relating to the
restatement described in Note 14) appearing in the Annual Report on Form 10-K/A
of Commercial Metals Company for the year ended August 31, 2002.




/s/ DELOITTE & TOUCHE LLP

Dallas, Texas
November 22, 2002 (October 29, 2003 as
to the effects of the restatement discussed
in the last paragraph of Note 14)



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.A
<SEQUENCE>15
<FILENAME>d09793a1exv31wa.txt
<DESCRIPTION>CERTIFICATION OF STANLEY A. RABIN TO SECTION 302
<TEXT>
<PAGE>

                                                                     EXHIBIT 31a

                  CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Stanley A. Rabin, certify that:

1. I have reviewed this annual report on Form 10-K of Commercial Metals Company;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report.


Date: October 31, 2003


/s/ Stanley A. Rabin
- ------------------------------------
Stanley A. Rabin
Chairman of the Board, President and
Chief Executive Officer




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.B
<SEQUENCE>16
<FILENAME>d09793a1exv31wb.txt
<DESCRIPTION>CERTIFICATION OF WILLIAM B. LARSON TO SECTION 302
<TEXT>
<PAGE>

                                                                     EXHIBIT 31b

                  CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, William B. Larson, certify that:

1. I have reviewed this annual report on Form 10-K of Commercial Metals Company;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report; and

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report.


Date: October 31, 2003



/s/ William B. Larson
- ------------------------------------------
William B. Larson
Vice President and Chief Financial Officer




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.A
<SEQUENCE>17
<FILENAME>d09793a1exv32wa.txt
<DESCRIPTION>CERTIFICATION OF STANLEY A. RABIN TO SECTION 906
<TEXT>
<PAGE>

                                                                     EXHIBIT 32a

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Commercial Metals Company (the
"Company") on Form 10-K for the period ended August 31, 2002, as amended by the
Form 10-K/A that is accompanied by this certification (collectively with such
Form 10-K/A, the "Report"), I, Stanley A. Rabin, Chairman of the Board,
President and Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that to my knowledge:

         (1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended; and

         (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.



/s/ Stanley A. Rabin
- --------------------------------
Stanley A. Rabin
Chairman of the Board, President
and Chief Executive Officer


Date: October 31, 2003




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.B
<SEQUENCE>18
<FILENAME>d09793a1exv32wb.txt
<DESCRIPTION>CERTIFICATION OF WILLIAM B. LARSON TO SECTION 906
<TEXT>
<PAGE>

                                                                     EXHIBIT 32b

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Commercial Metals Company (the
"Company") on Form 10-K for the period ended August 31, 2002, as amended by the
Form 10-K/A that is accompanied by this certification (collectively with such
Form 10-K/A, the "Report"), I, William B. Larson, Vice President and Chief
Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my
knowledge:

         (1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended; and

         (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.



/s/ William B. Larson
- ------------------------------------------
William B. Larson
Vice President and Chief Financial Officer

Date: October 31, 2003





</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
