EXHIBIT 10.3

 
SCHNITZER STEEL INDUSTRIES, INC.
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
 
John D. Carter – Executive
 
Schnitzer Steel Industries, Inc. – Company
3200 NW Yeon Avenue
Portland, Oregon 97210
 
In consideration of the mutual covenants contained herein, and other good and
valuable consideration, the Company and Executive agree as follows.
 
1.    Effective Date and Term. The effective date of this Amended and Restated
Employment Agreement (the “Agreement”) is December 1, 2008 (the “Effective
Date”) and this Agreement governs the terms and conditions of Executive’s
employment through December 1, 2011 (the “Term”).  This Agreement amends  and
restates the Employment Agreement, dated as of February 17, 2006, between the
Company and Executive (the “Prior Agreement”).  This Agreement has been approved
by the Compensation Committee (the “Committee”) of the Company’s Board of
Directors (the “Board”).
 
2.    Employment At Will.  During the Term, the Company will employ Executive as
the Chairman of the Board on the terms and conditions set forth in this
Agreement.  Executive will serve in such position at the pleasure of the
Board.  Executive’s employment is at will and may be terminated at any time, for
any reason or no reason, upon notice by either the Company or Executive, subject
to the obligations of the Company and Executive as provided in this Agreement
and any other agreement between Executive and the Company then in
effect.  Unless otherwise terminated in accordance with the terms and conditions
set forth in this Agreement, Executive’s employment with the Company shall
terminate upon the expiration of the Term. Termination of Executive for any
reason, shall constitute the resignation by Executive, effective upon such
termination as a director and officer of the Company.  Upon request, Executive
shall provide the Company with additional written evidence of any such
resignation.  At any time during the Term, Executive may request that the Board
reduce his duties and time commitment to the Company.  If the Board agrees to
any such request, Executive’s Base Salary (as defined in Section 4 below) shall
be proportionally reduced by a mutually agreed upon amount that appropriately
reflects the extent by which Executive’s duties and time commitment to the
Company have been reduced.
 
3.    Change In Control Severance Agreement.  In connection with the execution
of this Agreement, the Company and the Executive also entered into an Amended
and Restated Change in Control Severance Agreement dated October 29, 2008 (the
“Change in Control Agreement”).
 
4.    Annual Salary and Bonus.
 
(a)    Base Salary.  Beginning on the Effective Date, Executive’s base salary
(the “Base Salary”) shall be at the annual rate of $720,000.  Base Salary shall
be payable in installments on regular Company paydays, subject to withholding
for taxes and other proper
 

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deductions.  Base Salary for any partial period of employment shall be
prorated.  Executive’s performance and the amount of the Base Salary shall be
reviewed annually in connection with the Company’s normal compensation review
and bonus cycle for executive officers, and the Base Salary may be increased
(but not decreased) from time to time in the sole discretion of the Committee.
 
(b)    Annual Performance Bonus.
 
(i)    For each fiscal year during the Term, the Committee will establish a
bonus program at the beginning of such fiscal year (and in any event no later
than 90 days into the fiscal year) that will have two components: a component
based on objective Company financial measures and a component based on
management objectives (“MBO”).  The first component will set forth objective
Company financial performance criteria that will determine the amount of
Executive’s bonus.  The plan will specify bonus amounts higher and lower than
the target for Company performance based on the predetermined objectives.  The
second component will be based on MBO performance criteria.  At the beginning of
each fiscal year the Committee, in consultation with Executive, will establish
MBO performance criteria for Executive which will be clearly understood and
measurable. The plan will specify bonus amounts higher or lower than the target
for performance based on the objectives. At the end of each applicable fiscal
year, the Committee will review Executive’s performance, and determine the
extent to which the objectives have been met and the applicable bonus amount.
 
(ii)    For each applicable fiscal year, (A) the target annual bonus under the
combined bonus plan will be 100% of the Base Salary at the rate in effect on the
last day of such fiscal year (the “Target Bonus”), (B) the Company financial
performance component will apply to 50% of the Target Bonus and the MBO
component will apply to 50% of the Target Bonus, (C) with respect to any fiscal
year, the minimum bonus payable to Executive shall be $0 and the maximum bonus
payable to Executive shall be three times the amount of the Target Bonus
allocated to the Company financial performance component and three times the
amount of Target Bonus allocated to the MBO component, and (D) with respect to
both the Company financial performance component and the MBO component, the
amount of bonus payable to Executive if the level of performance achieved falls
between (x) the level required to receive a payout of the minimum amount for
such component and the level required to receive a payout of the target amount
for such component or (y) the level required to receive a payout of the target
amount for such component and the level required to receive a payout of the
maximum amount for such component, shall be determined by linear interpolation
between the applicable points.  The bonus earned for a fiscal year shall be
payable to Executive on a date selected by the Company prior to the expiration
of the period beginning on the first day after the end of the applicable fiscal
year and ending on the date which is two and one-half months after the end of
the applicable fiscal year, and shall be subject to withholding for taxes and
other proper deductions.
 
5.    Stock Award and Other Benefits.
 
(a)    Stock Award.  Subject to Executive’s continued employment or service with
the Company on such date or an earlier termination by the Company without Cause
(as defined below) or by Executive for Good Reason (as defined below), the
Company shall grant
 
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Executive on or before December 31, 2008 a fully vested stock award having an
aggregate grant date fair market value of $2,400,000.  For the avoidance of
doubt, a termination due to Executive’s death or Disability shall not constitute
a termination without Cause.  Executive hereby acknowledges and agrees that,
effective as of the date of this Agreement, he shall no longer participate in
the Company’s long term incentive program, other than with respect to any awards
thereunder that are outstanding on the date of this Agreement.
 
(b)    Benefits. Executive shall be entitled to participate in the Company’s
employee benefit plans, insurance, executive medical coverage, sick leave,
holidays, auto allowance and such other benefits as the Company from time to
time may generally provide to its most senior officers, including, without
limitation, the Company’s Supplemental Executive Retirement Bonus Plan
(“SERBP”).
 
6.    Definitions. The following terms shall have the following meanings for
purposes of this Agreement:
 
(a)    “Cause” shall mean (i) the willful and continued failure by Executive to
perform substantially Executive’s assigned duties with the Company (other than
any such failure resulting from Executive’s incapacity due to physical or mental
illness) after a demand for substantial performance is delivered to Executive by
the Board which specifically identifies the manner in which the Board believes
that Executive has not substantially performed Executive’s duties or (ii) the
willful engaging by Executive in illegal conduct which is materially and
demonstrably injurious to the Company.  For purposes of Section 6(a)(ii), no
act, or failure to act, on Executive’s part shall be considered “willful” unless
done, or omitted to be done, by Executive in knowing bad faith and without
reasonable belief that his action or omission was in, or not opposed to, the
best interests of the Company.  Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board or based upon the
advice of counsel for the Company shall be conclusively presumed to be done, or
omitted to be done, by Executive in good faith and in the best interests of the
Company. Notwithstanding the foregoing, Executive shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board (excluding
Executive) at a meeting of the Board called and held for the purpose (after
reasonable notice to Executive and an opportunity for Executive, together with
Executive’s counsel, to be heard before the Board), finding that in its good
faith opinion Executive was guilty of the conduct set forth above in (i) or (ii)
of this Section 6(a)) and specifying the particulars thereof in detail.
 
(b)    “Disability” shall mean Executive’s absence from his duties with the
Company on a full-time basis for one hundred eighty (180) consecutive days as a
result of his incapacity due to physical or mental illness, unless within thirty
(30) days after notice of termination is given to Executive following such
absence he shall have returned to the full-time performance of his duties.
 
(c)    “Good Reason” shall mean termination by Executive of Executive’s
employment with the Company based on any of the following events:
 
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(i)    an adverse change or diminution in Executive’s status, title, positions
or responsibilities as Chairman of the Board, as applicable, or the assignment
to Executive of any duties, reporting requirements or responsibilities which are
inconsistent with such status, title or positions, or any removal of Executive
from or any failure to reappoint or reelect Executive to such positions, in each
case except in connection with the termination of Executive’s employment for
Cause or Disability or as a result of Executive’s death or by Executive other
than for Good Reason;
 
(ii)    a reduction by the Company in the Base Salary;
 
(iii)    a failure by the Company to provide to Executive the compensation and
benefits as provided in Section 4 or Section 5 of this Agreement;
 
(iv)    a failure by the Company to provide and credit Executive with the number
of paid vacation days to which Executive is then entitled in accordance with the
Company’s normal vacation policy;
 
(v)    the Company’s requiring Executive to be based more than 30 miles from
where Executive’s office is located as of the date of this Agreement except for
required travel on the Company’s business to an extent substantially consistent
with the business travel obligations which Executive undertook as of the
Effective Date;
 
(vi)    a failure by the Company to obtain from any Successor (as defined in
Section 10 of this Agreement) the assent to this Agreement contemplated by
Section 10; or
 
(vii)    a failure by the Company to pay Executive any portion of Executive’s
current compensation, to credit any deferred compensation plan account of
Executive in accordance with Executive’s previous election, or to pay Executive
any portion of an installment of deferred compensation under any plan in which
Executive participated, within seven days of the date such compensation is due.
 
Notwithstanding any provision in this Agreement to the contrary, Executive may
terminate his employment for Good Reason only if (1) within 90 days after the
first occurrence of the circumstances giving rise to Good Reason, Executive
gives written notice to the Company of Executive’s belief that Good Reason
exists and of his intention to terminate his employment for Good Reason, (2)
within 30 days of such notice from Executive the circumstances giving rise to
Good Reason are not fully corrected, and (3) such termination occurs no later
than 180 days following the first occurrence of the circumstances giving rise to
Good Reason.
 
7.    Effect of Termination of Employment.
 
(a)    Termination by the Company for Cause or by Executive without Good
Reason.  If the Company terminates Executive’s employment for Cause or Executive
terminates his employment without Good Reason, Executive shall be entitled to
receive only (i) the Base Salary, any earned but unpaid bonus for the prior
fiscal year, and any other compensation or benefits which have been earned or
become payable as of the date of termination but which have not yet been paid to
Executive, (ii) all paid time off accrued but untaken through the effective date
of such termination, and (iii) reimbursement of expenses
 
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incurred through the effective date of such termination pursuant to the
Company’s normal expense reimbursement policy, which reimbursement shall be paid
promptly and in any event within 30 days after submission in accordance with
Company policy; provided that Executive shall submit all outstanding
unreimbursed business expenses no later than 15 days following the date of
termination.  The amounts described in clauses (i) through (iii) of the
foregoing are referred to as the “Accrued Obligations.”
 
(b)    Termination by the Company Without Cause or by Executive for Good
Reason.  If the Company terminates Executive’s employment without Cause (which,
for the avoidance of doubt, shall include any termination of Executive’s
employment upon the expiration of the Term as a result of the Company’s election
not to extend the Term in accordance with Section 1 of this Agreement) or
Executive terminates his employment for Good Reason at any time during the Term
and such termination does not occur under circumstances that would give rise to
severance payments to Executive under the Change in Control Agreement:
 
(i)    Executive shall be entitled to receive the Accrued Obligations;
 
(ii)    Executive shall be entitled to receive a severance payment (subject to
applicable taxes and withholding) in a lump sum in an amount equal to three
times Executive’s annualized rate of Base Salary in effect immediately prior to
the time of termination plus three times Executive’s target annual bonus in
effect immediately prior to the termination;
 
(iii)    Executive shall be paid an amount equal to the product of the annual
incentive bonus Executive would have received had Executive remained employed on
the last day of such fiscal year multiplied by the percentage of days during the
fiscal year prior to the Termination Date during which Executive was employed,
such amount to be paid at the same time as the annual incentive bonus would have
been paid to Executive if he had remained employed on the applicable payment
date for such annual incentive bonus;
 
(iv)    for a 24-month period after the date of termination, the Company shall
arrange to provide Executive, her spouse and dependents with life, accident and
health insurance benefits substantially similar to those which Executive was
receiving immediately prior to such termination; provided, that the Company
shall not provide any benefit otherwise receivable by Executive pursuant to this
Section 7(b)(iv) to the extent that a similar benefit is actually received by
Executive from a subsequent employer during such 24-month period, and any such
benefit actually received by Executive shall be reported to the Company; and
 
(v)    all options to purchase Company common stock then held by Executive shall
become immediately vested and exercisable in full, all restricted stock units
and restricted stock then held by Executive shall become immediately vested and
all related forfeiture provisions shall lapse, and all performance shares then
held by Executive shall vest to the extent provided in the applicable plan and
award agreement pursuant to which such performance shares were granted.
 
(c)    Death.  If Executive’s employment is terminated as a result of
Executive’s death, Executive shall be entitled to receive the Accrued
Obligations.
 
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(d)    Disability.  If Executive’s employment is terminated as a result of
Executive’s Disability, Executive shall be entitled to receive the Accrued
Obligations.
 
(e)    Date of Payment.  Except as otherwise provided in this Agreement, all
cash payments and lump-sum awards required to be made pursuant to the provisions
of this Section 7 shall be paid (i) in the case of the Accrued Obligations, no
later than the 30th day following such termination of employment, (ii) in the
case of the pro rata bonus, as provided in Section 7(b)(iii), and (iii) in the
case of the payments described in Sections 7(b)(ii), within 45 days of the date
of termination; provided that Executive has delivered an executed copy of a
release of claims in the form attached hereto as Exhibit B (and not revoked such
release) prior to the expiration of such 45-day period.
 
(f)    Options, Performance Shares and Restricted Stock. The options,
performance shares, restricted stock units and restricted stock awarded to
Executive by the Company shall, in the event of a termination of Executive’s
employment, be governed by the provisions of the applicable plan and award
agreement; provided that the accelerated vesting provisions of Section 7(b)(v)
shall, if triggered, control in the event of any inconsistency with any such
agreement.
 
(g)    No Obligation of Executive to Mitigate. The amount of any payment
provided for in this Section 7 shall not be reduced, offset or subject to
recovery by the Company by reason of any compensation earned by Executive as the
result of employment by another employer after the date of termination.
 
(h)    280G Excise Tax Gross Up Provision.  If any of the payments or benefits
provided for in Section 7 of this Agreement, under any other agreement between
Executive and the Company or otherwise (collectively, the “Payments”) will be
subject to the tax imposed by section 4999 of the Internal Revenue Code of 1986,
as amended (the “Code”), or any similar tax that may hereafter be imposed (the
“Excise Tax”), the Company shall pay to Executive at the time any such Payment
is paid an additional amount (the “Gross-Up Payment”) such that the net amount
retained by Executive, after deduction of any Excise Tax on the Payments and any
federal, state and local income tax and Excise Tax upon the Gross-Up Payment,
shall be equal to the Payments. For purposes of determining the amount of the
Gross-Up Payment, Executive shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation in the calendar year in which
the Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of Executive’s
personal residence on the date of termination, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and
local taxes. In the event that the Excise Tax is subsequently determined to be
less than the amount taken into account hereunder, Executive shall repay to the
Company at the time that the amount of such reduction in Excise Tax is finally
determined the portion of the Gross-Up Payment directly and indirectly
attributable to such reduction plus interest on the amount of such repayment at
the rate provided for in section 1274(d) of the Code. In the event that the
Excise Tax is determined to exceed the amount taken into account hereunder
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment in respect of such excess (plus any interest and
penalties payable to the taxing authorities with respect to such excess) at the
time that the amount of such
 
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excess is finally determined. The Company shall withhold the Excise Tax in
accordance with section 4999(b) of the Code, and shall withhold federal, state
and local income taxes from the Payments and Gross-Up Payments as required by
law.
 
(i)    Compliance with Code Section 409A.  Notwithstanding anything herein to
the contrary, (i) if at the time of Executive’s termination of employment with
the Company Executive is a “specified employee” as defined in Section 409A of
the Code and the deferral of the commencement of any payments or benefits
otherwise payable hereunder as a result of such termination of employment is
necessary in order to prevent any accelerated or additional tax under Section
409A of the Code, then the Company will defer the commencement of the payment of
any such payments or benefits hereunder (without any reduction in such payments
or benefits ultimately paid or provided to Executive) until the date that is six
months following Executive’s termination of employment with the Company (or the
earliest date as is permitted under Section 409A of the Code) and (ii) if any
other payments of money or other benefits due to Executive hereunder could cause
the application of an accelerated or additional tax under Section 409A of the
Code, such payments or other benefits shall be deferred if deferral will make
such payment or other benefits compliant under Section 409A of the Code, or
otherwise such payment or other benefits shall be restructured, to the extent
possible, in a manner, determined by the Board, that does not cause such an
accelerated or additional tax.  In the event that payments under this Agreement
are deferred pursuant to this Section 7(i) in order to prevent any accelerated
tax or additional tax under Section 409A of the Code, then such payments shall
be paid at the time specified under this Section 7(i) (together with interest
for any additional deferral period resulting from this Section 7(i) at the
applicable federal rate under Section 7872(f)(2)(A) of the Code in effect on the
date of termination).  The Company shall consult with Executive in good faith
regarding the implementation of this Section 7(i).  For purposes of Section 409A
of the Code, the right to a series of installment payments under this Agreement
shall be treated as a right to a series of separate payments.  Notwithstanding
anything to the contrary herein, a termination of employment shall not be deemed
to have occurred for purposes of any provision of this Agreement providing for
the payment of amounts or benefits upon or following a termination of employment
unless such termination is also a “Separation from Service” within the meaning
of Section 409A of the Code and, for purposes of any such provision of this
Agreement, references to a “resignation,” “termination,” “termination of
employment” or like terms shall mean Separation from Service.
 
8.    Restrictive Covenants.
 
(a)    Noncompetition.  In consideration of the payments, benefits and other
obligations of the Company to Executive pursuant to this Agreement, including,
without limitation, the Company’s obligation to provide Executive with
Confidential Information pursuant to Section 8(c), and in order to protect the
such Confidential Information and preserve the goodwill of the Company and its
subsidiaries (collectively, the “Company Group”), Executive hereby covenants and
agrees that, during the “Restricted Period” (as defined below), Executive shall
not, anywhere in the world where any member of the Company Group conducts
business, directly or indirectly, own any interest in, manage, control,
participate in (whether as an officer, director, manager, employee, partner,
equity holder, member, agent, representative or otherwise), consult with, render
services for, or in any other manner engage in any business in which a member of
the Company Group is materially engaged at the time of such termination
 
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(collectively, a “Competing Business”); provided that nothing herein shall
prohibit Executive from (i) investing in stocks, bonds, or other securities in
any business if such stocks, bonds, or other securities are listed on any United
States securities exchange or are publicly traded in an over the counter market,
and such investment does not exceed, in the case of any capital stock of any one
issuer two percent (2%) of the issued and outstanding capital stock or in the
case of bonds or other securities, two percent (2%) of the aggregate principal
amount thereof issued and outstanding or (ii) working for a subsidiary,
affiliate or division of a Competing Business if such subsidiary, affiliate or
division is not itself engaged in a Competing Business and Executive does not
provide services to such Competing Business.  For purposes of this Section 8(a),
the “Restricted Period” shall mean all times during which Executive is employed
by the Company and the period commencing on the date of the termination of
Executive’s employment with the Company for any reason and ending on the first
anniversary of the date of such termination.
 
(b)    Nonsolicitation.  In further consideration of the payments by the Company
to Executive pursuant to this Agreement, Executive hereby covenants and agrees
that, during Executive’s employment with the Company and for the two-year period
following the date of Executive’s termination for any reason, Executive shall
not attempt to influence, persuade or induce, or assist any other person in so
influencing, persuading or inducing, (i) any customer of the Company Group to
give up, or to not commence, a business relationship with the Company Group and
shall not otherwise directly or indirectly solicit any such customer except on
behalf of the Company Group, and (ii) any employee of the Company Group to cease
such employee’s employment with the Company Group and shall not otherwise
directly or indirectly solicit for employment any such employee.
 
(c)    Confidential Information.  Executive acknowledges that the Company Group
has a legitimate and continuing proprietary interest in the protection of its
confidential information and that it has invested substantial sums and will
continue to invest substantial sums to develop, maintain and protect such
confidential information.  During the Term and at all times thereafter,
Executive shall not, except with the written consent of the Company or in
connection with carrying out Executive’s duties or responsibilities hereunder,
furnish or make accessible to anyone or use for Executive’s own benefit any
trade secrets, confidential or proprietary information of the Company Group (all
such information, “Confidential Information”), including its business plans,
marketing plans, strategies, systems, programs, methods, employee lists,
computer programs, insurance profiles and client lists; provided, that
Confidential Information shall not include information known to the public or
otherwise in the public domain without violation by Executive of this
Section 8(c).  Notwithstanding the foregoing, Executive may disclose
Confidential Information when required to do so by a court of competent
jurisdiction, by any governmental agency having supervisory authority over the
business of the Company Group or by any administrative body or legislative body
(including a committee thereof) with jurisdiction to order Executive to divulge,
disclose or make accessible such information; provided, further, that in the
event that Executive is ordered by a court or other government agency to
disclose any Confidential Information, Executive shall (i) promptly notify the
Company of such order, (ii) at the written request of the Company, diligently
contest such order at the sole expense of the Company as expenses occur, and
(iii) at the written request of the Company, seek to obtain, at the sole expense
of the Company, such confidential treatment as may be available under applicable
laws for any information disclosed under such order.
 
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(d)    Enforcement.  Executive acknowledges and agrees that the Company’s
remedies at law for a breach or threatened breach of any of the provisions of
Sections 8(a), (b) or (c) herein would be inadequate and, in recognition of this
fact, Executive agrees that, in the event of such a breach or threatened breach,
in addition to any remedies at law, the Company shall be entitled to obtain
equitable relief in the form of specific performance, temporary restraining
order, temporary or permanent injunction or any other equitable remedy which may
then be available.  It is expressly understood and agreed that although
Executive and the Company consider the restrictions contained in Sections 8(a)
and 8(b) to be reasonable, if a judicial determination is made by a court of
competent jurisdiction that the time or territory or any other restriction
contained in this Agreement is an unenforceable restriction against Executive,
the provisions of this Agreement shall not be rendered void but shall be deemed
amended to apply as to such maximum time and territory and to such maximum
extent as such court may judicially determine or indicate to be
enforceable.  Alternatively, if any court of competent jurisdiction finds that
any restriction contained in this Agreement is unenforceable, and such
restriction cannot be amended so as to make it enforceable, such finding shall
not affect the enforceability of any of the other restrictions contained herein.
 
9.    Withholding.  Payment of all compensation under this Agreement, including
but not limited to the Base Salary and annual performance bonus, shall be
subject to all applicable federal, state and local tax withholding.
 
10.    Attorneys’ Fees.  The Company shall pay to Executive all reasonable legal
fees and related expenses incurred by Executive in good faith as a result of
Executive seeking to obtain or enforce in good faith any right or benefit
provided by this Agreement.
 
11.    Successors; Binding Agreement.
 
(a)    Upon Executive’s written request, the Company will seek to have any
Successor (as hereinafter defined), by agreement in form and substance
satisfactory to Executive, assent to the fulfillment by the Company of its
obligations under this Agreement. For purposes of this Agreement, “Successor”
shall mean any Person that succeeds to, or has the practical ability to control
(either immediately or with the passage of time), the Company’s business
directly, by merger, consolidation or purchase of assets, or indirectly, by
purchase of the Company’s voting securities or otherwise.
 
(b)    This Agreement shall inure to the benefit of and be enforceable by
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Executive should die
while any amount would still be payable to Executive hereunder if Executive had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to Executive’s devisee,
legatee or other designee or, if there be no such designee, to Executive’s
estate.
 
12.    Survival. The respective obligations of, and benefits afforded to, the
Company and Executive as provided in Sections 7-13 and 16 of this Agreement
shall survive termination of Executive’s employment and this Agreement.
 
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13.    Notice. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid and addressed to the
address of the Company as set forth on the first page of this Agreement or to
Executive as set forth in the Company’s records, provided that all notices to
the Company shall be directed to the attention of the Secretary of the Company,
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notice of change of address shall be
effective only upon receipt.
 
14.    Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such modification, waiver or discharge is agreed to in a
writing signed by Executive and a duly authorized officer of the Company (other
than Executive).  No waiver by either party hereto at any time of any breach by
the other party hereto of, or of compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.  No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either
party that are not expressly set forth in this Agreement or the Change in
Control Agreement.  The validity, interpretation, construction and performance
of this Agreement shall be governed by the internal laws of the State of Oregon,
without regard to conflicts of law principles.
 
15.    Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
 
16.    Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in Portland,
Oregon by three arbitrators in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrators’ award, which award shall be a final and binding determination of
the dispute or controversy, in any court having jurisdiction; provided, that
Executive shall be entitled to seek specific performance of Executive’s right to
be paid until the date of termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement. The Company
shall bear all costs and expenses of the arbitrators arising in connection with
any arbitration proceeding pursuant to this Section 16.
 
17.    Related Agreements. To the extent that any provision of any other
agreement between the Company or any of its subsidiaries and Executive, other
than the Change in Control Agreement, shall limit, qualify or be inconsistent
with any provision of this Agreement, then for purposes of this Agreement, while
the same shall remain in force, the provision of this Agreement shall control
and such provision of such other agreement shall be deemed to have been
superseded, and to be of no force or effect, as if such other agreement had been
formally amended to the extent necessary to accomplish such purpose.
 
 
 
 
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18.    Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original, but all of which together will
constitute one and the same instrument.
 
Dated:  October 29, 2008
 
SCHNITZER STEEL INDUSTRIES, INC.
 
 
By:   /s/ Judith Johansen

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Name: Judith Johansen
Title:  Acting Chair, Compensation Committee of the Board of Directors
 
 
/s/ John D. Carter

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John D. Carter

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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