[schnitzer-logo_14077.jpg]   SCHNITZER STEEL INDUSTRIES, INC. 
3200 NW Yeon Avenue
Phone (503) 224-9900 
P.O. Box 10047
Fax (503) 321-2649  Portland, Oregon 97296-0047 

 
Exhibit 10.1
 
 
January 6, 2006

Gregory (Greg) J. Witherspoon
PO Box 10047
Portland, OR 97296
 
Dear Greg:
 
This letter serves to outline those areas related to your transfer from a
temporary employee to a regular full-time employee with Schnitzer Steel
Industries, Inc. (“Company”) effective January 9, 2006 (“Effective Date”):
 
Position:
 
Chief Financial Officer for Schnitzer Steel Industries, Inc.
 
Compensation:
 
Your salary will be $450,000 per annum on the Effective Date
Reporting To:
 
John D. Carter, President and Chief Executive Officer
Schnitzer Steel Industries, Inc.
 
Seniority Date:
You will be granted Company seniority based on your hire date as a temporary
employee as of August 23, 2005 (“Seniority Date”). Further, your status as an
employee will become that of a Regular, Full-Time employee, as defined by the
Company’s Human Resources Policy Manual, on the Effective Date.
 
Bonus Eligibility:
 
You are eligible for participation in the Company’s Economic Value Added (EVA®)
bonus program as of the Effective Date. Your EVA target is 65% of your EVA
earnings (that accrue beginning with the Effective Date), which is then adjusted
by the EVA center multiple that you will be assigned. You will participate 100%
in the “SSI without Joint Ventures” EVA Center. Bonus amounts, as formulated,
are payable following the Company’s fiscal year-end on August 31st, and are
based on Company performance and are not guaranteed.
 
Performance and Salary Review:
Normally, performance appraisals are conducted during the second calendar
quarter of each year (usually in April or May). Salary reviews are normally
conducted in June of each year. Increases, if any, depend upon individual
performance and company financial considerations and are not automatic in
nature. You will be eligible to participate in the June 2006 salary review.
 
Auto Allowance:
You will be granted Auto Allowance, Level C, Oregon, which is currently at $700
per month. You will also receive a Company gas card. The auto allowance and gas
card are pursuant to Human Resources Policy #640, and are considered taxable
income to employees.
 
Relocation:
The Company will provide a relocation package to include packing, insurance,
shipment, storage and unpacking for your household goods at the final
destination for you and your immediate family (those living at the same
residence). Please understand that some portion of this relocation package will
likely be taxable to you and you should consult your personal tax advisor for
more information.
 

 

 

Gregory J. Witherspoon
Page 2

 
 
 
 
Long-Term Incentive Program
You will be eligible for participation in the Schnitzer Steel Industries, Inc.
Long-Term Incentive Program (“LTIP”) at a level commensurate with your position
as a member of the executive team. Final details on this program will be
confirmed following approval of the recent plan amendments by the Company’s
shareholders at the annual meeting in January, 2006. Actual award levels under
the LTIP are subject to approval by the Compensation Committee of the Board of
Directors.
 
Benefits Effective:
 
 
 
 
 
The effective date of your benefits will be determined by the waiting periods,
if any, contained in each of the plans for which you are eligible. Other
benefits are effective per plans and coverages as currently exist or as modified
in the future for the salary group of which you are a part. The Company reserves
the right to amend, alter or eliminate coverages. In addition to benefits under
the Schnitzer self-insured health plan, coverage will also be provided under the
Executive medical reimbursement plan.
 
Based on your Seniority Date, you will be eligible to enroll into the health and
welfare medical plans on the Effective Date.
 
Paid Time Off (“PTO”)
PTO will accrue on an accelerated schedule. You will begin accruing PTO at the
four (4) year rate of 6.16 hours per pay period or 160 hours per year. Your
accrual rate will remain the same until at such time in the future you become
eligible for the next highest accrual level, which is currently at 9 years of
service. PTO guidelines are provided under Human Resources Policy #525.
 

 
Upon your acceptance of this letter and commencement of your full time
employment your employment as interim Chief Financial Officer under the letter
dated August 31, 2005 shall terminate and the terms of your employment shall be
governed by this letter.
 
The foregoing does not constitute a contract since the Company is an "at-will"
employer. "At-will" means that employment and compensation can be terminated,
with or without cause and with or without notice, at any time, at the option of
the Company or yourself. This offer is made contingent on your successfully
passing a drug screen provided by the Company.
 
Greg, we all join in congratulating you on your position with the Company and
wish you a continuing successful career.
 
Sincerely,
Accepted,

 
/S/ John D. Carter
/S/ Gregory J. Witherspoon

 
John D. Carter
Gregory J. Witherspoon
President and Chief Executive Officer
Employee
 

 
cc: Employee File