WWW.EXFILE.COM, INC. -- 14197 -- SCHNITZER STEEL INDUSTRIES, INC. --  EXHIBIT 4.1 TO FORM 8-K


    EXHIBIT
      4.1

     

     

     

     

     

     

     

     

     

    RIGHTS
      AGREEMENT

     

    between

     

    SCHNITZER
      STEEL INDUSTRIES, INC.

     

    and

     

    WELLS
      FARGO BANK, N.A.,

     

    Rights
      Agent

     

    Dated
      as
      of March 21, 2006

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    

      
        
          	 	 Page
	
                  Section
                    1. Certain Definitions

                	
                  1

                
	
                  Section
                    2. Appointment of Rights Agent

                	
                  6

                
	
                  Section
                    3. Issue of Right Certificates

                	
                  7

                
	
                  Section
                    4. Form of Right Certificates

                	
                  8

                
	
                  Section
                    5. Countersignature and Registration

                	
                  9

                
	
                  Section
                    6. Transfer, Split Up, Combination, and Exchange of Right Certificates;
                    Mutilated, Destroyed, Lost, or Stolen Right Certificates

                	
                  10

                
	
                  Section
                    7. Exercise of Rights; Purchase Price; Expiration Date of
                    Rights

                	
                  10

                
	
                  Section
                    8. Cancellation and Destruction of Right Certificates

                	
                  12

                
	
                  Section
                    9. Reservation and Availability of Series A Shares;
                    Registration

                	
                  12

                
	
                  Section
                    10. Series A Shares Record Date

                	
                  14

                
	
                  Section
                    11. Adjustment of Purchase Price, Number and Kind of Shares or
                    Number of
                    Rights

                	
                  14

                
	
                  Section
                    12. Certificate of Adjusted Purchase Price or Number of
                    Shares

                	
                  21

                
	
                  Section
                    13. Consolidation, Merger, or Sale or Transfer of Assets or Earning
                    Power

                	
                  21

                
	
                  Section
                    14. Fractional Rights and Fractional Shares

                	
                  24

                
	
                  Section
                    15. Rights of Action

                	
                  25

                
	
                  Section
                    16. Agreement of Right Holders

                	
                  25

                
	
                  Section
                    17. Right Certificate Holder Not Deemed a Shareholder

                	
                  26

                
	
                  Section
                    18. Concerning the Rights of Agent

                	
                  26

                
	
                  Section
                    19. Merger or Consolidation or Change of Name of Rights
                    Agent

                	
                  27

                
	
                  Section
                    20. Duties of Rights Agent

                	
                  27

                
	
                  Section
                    21. Change of Rights Agent

                	
                  29

                
	
                  Section
                    22. Issuance of New Rights Certificates

                	
                  30

                


        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                  Section
                    23. Redemption and Termination

                	
                  31

                
	
                  Section
                    24. Exchange

                	
                  31

                
	
                  Section
                    25. Notice of Certain Events

                	
                  32

                
	
                  Section
                    26. Notices

                	
                  33

                
	
                  Section
                    27. Supplements and Amendments

                	
                  34

                
	
                  Section
                    28. Successors

                	
                  34

                
	
                  Section
                    29. Determination and Actions by the Board

                	
                  34

                
	
                  Section
                    30. Benefits of this Agreement

                	
                  35

                
	
                  Section
                    31. Severability

                	
                  35

                
	
                  Section
                    32. Governing Law

                	
                  35

                
	
                  Section
                    33. Counterparts

                	
                  35

                
	
                  Section
                    34. Descriptive Headings

                	
                  35

                


        

      

      


      


      
        	
                Exhibits

              	 
	
                A.

              	
                Form
                  of Articles of Amendment for Series A Participating Preferred
                  Stock

              
	
                B.

              	
                Form
                  of Class A Right Certificate

              
	
                C.

              	
                Form
                  of Class B Right Certificate

              
	
                D.

              	
                Summary
                  of Rights to Purchase Series A
                  Shares

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

    

    RIGHTS
      AGREEMENT

     

    This
      Rights Agreement, dated as of March 21, 2006 (the “Agreement”),
      by
      and between Schnitzer Steel Industries, Inc., an Oregon corporation (the
“Company”),
      and
      Wells Fargo Bank, N.A. (the “Rights
      Agent”).

     

    The
      Board
      of Directors of the Company has authorized and declared a dividend of one
      preferred share purchase right (a “Class A
      Right”)
      for
      each Class A Common Share (as hereinafter defined) of the Company
      outstanding at the close of business on April 4, 2006 (the “Record
      Date”)
      and
      one preferred share purchase right (a “Class B
      Right”)
      for
      each Class B Common Share (as hereinafter defined) of the Company
      outstanding at the Record Date (the Class A Rights and Class B Rights
      together, the “Rights”),
      each
      Right representing the right to purchase one one-thousandth of a share of Series
      A Participating Preferred Stock, par value $1.00 per share, of the Company
      (“Series
      A Preferred Stock”)
      having
      the rights and preferences set forth in the form of Articles of Amendment to
      the
      Restated Articles of Incorporation of the Company with respect to the Series
      A
      Preferred Stock, a copy of which is attached hereto as Exhibit A and
      incorporated herein. The Board of Directors has further authorized the issuance
      of one Class A Right (as such number may hereinafter be adjusted pursuant
      to the provisions of Section 11(p) hereof) with respect to each Class A
      Common Share and one Class B Right (as such number may hereinafter be
      adjusted pursuant to the provisions of Section 11(p) hereof) with respect to
      each Class B Common Share that shall become outstanding (whether originally
      issued or delivered from the Company’s treasury) after the Record Date and on or
      prior to the earliest of the Distribution Date, the Redemption Date, or the
      Final Expiration Date.

     

    Accordingly,
      in consideration of the premises and the mutual agreements herein set forth,
      the
      parties hereby agree as follows:

     

     

    Section
      1.   Certain
      Definitions.
      For
      purposes of this Agreement, the following terms have the meanings
      indicated:

     

    (a)  “Acquiring
      Person”
shall
      mean any Person (as such term is hereinafter defined) who or which, together
      with all Affiliates and Associates (as such terms are hereinafter defined)
      of
      such Person, shall after the date hereof become the Beneficial Owner (as such
      term is hereinafter defined) of Common Shares (as such term is hereinafter
      defined) representing either (x) 15% or more of the Voting Power or (y) 15%
      or
      more of the aggregate outstanding Common Shares. Notwithstanding the foregoing,
      the following Persons shall not be Acquiring Persons for purposes of this
      Agreement: 

     

    (i)  the
      Company, any Subsidiary (as such term is hereinafter defined) of the Company,
      any employee benefit plan of the Company or any Subsidiary of the Company,
      or
      any Person or entity organized, appointed, or established by the Company for
      or
      pursuant to any such plan;

     

    (ii)  the
      Schnitzer Steel Industries, Inc. Voting Trust (the “Schnitzer
      Voting Trust”),
      a
      voting trust governed by the Schnitzer Steel Industries, Inc. 2001 Restated
      Voting Trust and Buy-Sell Agreement, dated as of March 26, 2001 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (the
      “Voting
      Trust Agreement”),
      and
      any trustee of the Schnitzer Voting Trust in his or her capacity as such (each,
      a “Trustee”);
      and


     

    (iii)  any
      Person (other than the Schnitzer Voting Trust or any Trustee in his or her
      capacity as such) that, together with all Affiliates and Associates of such
      Person, is, as of the date hereof, the Beneficial Owner of Common Shares
      representing either (x) 15% or more of the Voting Power or (y) 15% or more
      of
      the aggregate outstanding Common Shares (an “Existing
      Holder”),
      unless and until such time as such Existing Holder, or such Existing Holder’s
      Affiliates or Associates, shall, after the date hereof, become the Beneficial
      Owner of one or more additional Common Shares of the Company (other than
      pursuant to a dividend or distribution paid or made by the Company on the
      outstanding Common Shares in Common Shares or pursuant to a split or subdivision
      of the outstanding Common Shares), unless, upon becoming the Beneficial Owner
      of
      such additional Common Share, such Existing Holder is not then the Beneficial
      Owner of Common Shares representing either (x) 15% or more of the Voting Power
      or (y) 15% or more of the aggregate outstanding Common Shares. 

     

    Notwithstanding
      the foregoing, no Person or group shall become an “Acquiring Person” as the
      result of either (A) an acquisition of Common Shares by the Company which,
      by
      reducing the outstanding number or Voting Power of Common Shares, either (x)
      increases the Voting Power of the Common Shares Beneficially Owned by such
      Person or group to 15% or more of the Voting Power or (y) increases the
      percentage Beneficially Owned by such Person or group to 15% or more of the
      outstanding Common Shares, (B) the elimination of the special 10:1 voting rights
      of the Class B Common Shares in accordance with the Company’s Restated Articles
      of Incorporation, as amended from time to time which, by reducing the Voting
      Power of the Class B Common Shares increases the Voting Power of the Common
      Shares Beneficially Owned by such Person or group to 15% or more of the Voting
      Power or (C) pursuant to the exercise of an option to purchase Class B Common
      Shares in accordance with Section 2.3 of the Voting Trust Agreement (each of
      (A), (B) and (C), an “Excluded
      Event”);
      provided,
      however,
      that if
      a Person or group shall become the Beneficial Owner of Common Shares
      representing either (x) 15% or more of the Voting Power or (y) 15% or more
      of
      the aggregate outstanding Common Shares by reason of an Excluded Event and
      shall, after such Excluded Event, become the Beneficial Owner of one or more
      additional Common Shares of the Company (other than pursuant to the exercise
      of
      any option to purchase Class B Common Shares in accordance with Section 2.3
      of
      the Voting Trust Agreement), then such Person or group shall be deemed to be
      an
“Acquiring Person” unless, upon becoming the Beneficial Owner of such additional
      Common Share, such Existing Holder is not then the Beneficial Owner of Common
      Shares representing either (x) 15% or more of the Voting Power or (y) 15% or
      more of the outstanding Common Shares. 

     

    Notwithstanding
      the foregoing, if the Board determines that a person who would otherwise be
      an
“Acquiring Person,” as defined pursuant to the foregoing provisions of this
      paragraph (a), has become such inadvertently, and such Person divests as
      promptly as practicable a sufficient number of Common Shares so that such Person
      would no longer be an “Acquiring Person,” as defined pursuant to the foregoing
      provisions of this 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    paragraph
      (a), then such Person shall not be deemed to be an “Acquiring Person” for any
      purposes of this Agreement.

     

    (b)  “Affiliate”
and
      “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 amended
      (the
“Exchange
      Act”),
      as in
      effect on the Record Date.

     

    (c)  A
      Person
      shall be deemed the “Beneficial
      Owner”
of
      and
      shall be deemed to “Beneficially Own” any securities:

     

    (i)  which
      such Person or any of such Person’s Affiliates or Associates Beneficially Owns,
      directly or indirectly;

     

    (ii)  which
      such Person or any of such Person’s Affiliates or Associates, directly or
      indirectly, has the right to acquire (whether such right is exercisable
      immediately or only after the passage of time) pursuant to any agreement,
      arrangement, or understanding (whether or not in writing) or upon the exercise
      of conversion rights, exchange rights, rights (other than the Rights at any
      time
      before the occurrence of a Triggering Event (as defined in Section 1(n) below)
      but thereafter including Rights acquired from and after the Distribution Date
      (as defined in Section 3(a) below) other than Rights acquired pursuant to
      Section 3(a), Section 11(i), or Section 22 hereof), warrants, or options, or
      otherwise; provided,
      however,
      that a
      Person shall not be deemed to be the Beneficial Owner of, or to Beneficially
      Own, securities tendered pursuant to a tender or exchange offer made by or
      on
      behalf of such Person or any of such Person’s Affiliates or Associates until
      such tendered securities are accepted for purchase or exchange, and provided,
      further,
      that a
      person shall not be deemed to be the Beneficial Owner of, or to Beneficially
      Own, securities that such Person has the right to acquire (whether such right
      is
      exercisable immediately or only after the passage of time) upon the exercise
      of
      conversion rights conferred in any class or series of preferred stock, par
      value
      $1.00 per share, of the Company issued prior to the Distribution Date (as
      defined in Section 3(a) hereof) if the resolutions of the Board (as hereafter
      defined) providing for the issuance of such class or series of preferred Stock
      shall specifically refer to this Rights Agreement and provide that the right
      to
      acquire securities upon the exercise of conversion rights so conferred shall
      not
      be deemed to constitute beneficial ownership of such securities;

     

    (iii)  which
      such Person or any of such Person’s Affiliates or Associates, directly or
      indirectly, has the right to vote or dispose or has “beneficial ownership” (as
      determined pursuant to Rule 13d-3 of the General Rules and Regulations under
      the
      Exchange Act, as in effect on the Record Date) of (including pursuant to any
      agreement, arrangement or understanding, whether or not in writing);
provided,
      however,
      that a
      Person shall not be deemed the Beneficial Owner of, or to Beneficially Own,
      any
      security under this subparagraph (iii) as a result of an agreement, arrangement,
      or understanding to 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    vote
      such
      security if such agreement, arrangement, or understanding (A) arises solely
      from
      a revocable proxy given in response to a public proxy or consent solicitation
      made pursuant to, and in accordance with, the applicable provisions of the
      General Rules and Regulations under the Exchange Act, (B) is not also then
      reportable by such person on Schedule 13D under the Exchange Act (or any
      comparable successor report) and (C) does not constitute a trust, proxy, power
      of attorney or other device with the purpose or effect of allowing two or more
      persons, acting in concert, to avoid being deemed “beneficial owners” of such
      security or otherwise avoid the status of “Acquiring Person” under the terms of
      this Agreement or as part of a plan or scheme to evade the reporting
      requirements under Schedule 13D or Section 13(d) or 13(g) of the Exchange Act;
      or

     

    (iv)  which
      are
      Beneficially Owned, directly or indirectly, by any other Person (or any
      Affiliate or Associate thereof) with which such Person (or any of such Person’s
      Affiliates or Associates) has any agreement, arrangement, or understanding
      (whether or not in writing), for the purpose of, or with respect to, acquiring,
      holding, voting (except pursuant to a revocable proxy as described in the
      proviso to subparagraph (iii) of this paragraph (c)), or disposing of any voting
      securities of the Company, provided,
      however,
      that
      nothing in this paragraph (c) shall cause a Person engaged in business as an
      underwriter of securities to be the “Beneficial Owner” of, or to “Beneficially
      Own,” any securities acquired through such Person’s participation in good faith
      in a firm commitment underwriting until the expiration of 40 days after the
      date
      of such acquisition, and then only if such securities continue to be owned
      by
      such Person at such expiration of forty days;

     

    provided,
      that no
      Person (other than the Voting Trust and the Trustees in their capacity as
      Trustees) shall be deemed to Beneficially Own or be the Beneficial Owner of
      securities solely as a result of such Person being a party to or bound by the
      Voting Trust Agreement.

     

    (d)  “Board”
means
      the Board of Directors of the Company.

     

    (e)  “Business
      Day”
shall
      mean any day other than a Saturday, Sunday, or a day on which banking
      institutions in the State of New York, the State of Oregon or the State in
      which
      the Rights Agent maintains its principal place of business are authorized or
      obligated by law or
      executive order to close.

     

    (f)  “Close
      of business”
on
      any
      given date shall mean 5:00 P.M.,
      New
      York City time, on such date; provided,
      however,
      that if
      such date is not a Business Day it shall mean 5:00 P.M., New York City time,
      on
      the next succeeding Business Day.

     

    (g)  “Class A
      Common Shares”
when
      used with reference to the Company shall mean shares of Class A Common
      Stock, par value $1.00 per share, of the Company.

     

    (h)  “Class B
      Common Shares”
when
      used with reference to the Company shall mean shares of Class B Common
      Stock, par value $1.00 per share, of the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i)  “Common
      Shares”
      when
      used
      with reference to the Company shall mean the Class A Common Shares and/or
      Class B Common Shares. “Common
      Shares”
      or“common
      shares”
      when
      used with reference to any Person other than the Company, shall mean the capital
      stock of such Person with the greatest voting power or the equity securities
      or
      other equity interest having power to control or direct the management of such
      Person.

     

    (j)  “Person”
shall
      mean any individual, firm, corporation, partnership or other entity and shall
      include any successor (by merger or otherwise) of such entity.

     

    (k)  “Section
      11(a)(ii) Event”
shall
      mean the event described in Section 11(a)(ii).

     

    (l)  “Section
      13(a) Event”
shall
      mean any event described in clause (x),
      (y)
      or
      (z) of Section 13(a).

     

    (m)  “Series
      A Shares”
shall
      mean shares of Series A Participating Preferred Stock, par value $1.00 per
      share, of the Company, including any authorized fraction of a Series A Share,
      unless the context otherwise requires.

     

    (n)  “Shares
      Acquisition Date”
shall
      mean the first date of public announcement (including, without limitation,
      a
      report filed pursuant to Section 13(d) or 14(d) under the Exchange Act) by
      the
      Company or an Acquiring Person indicating that an Acquiring Person has become
      such, or such earlier date as a majority of the Board shall become aware of
      the
      existence of an Acquiring Person.

     

    (o)  “Subsidiary”
shall
      mean, with reference to any Person, any corporation of which an amount of voting
      securities sufficient to elect at least a majority of the directors of such
      corporation is beneficially owned, directly or indirectly, by such Person,
      or
      otherwise controlled by such Person.

     

    (p)  “Triggering
      Event”
shall
      mean any Section 11(a)(ii) Event or Section 13(a) Event.

     

    (q)  “Voting
      Power”
      shall
      mean the total number of votes generally entitled to be cast for the election
      of
      directors of the Company by the holders of the Common Shares of the Company
      then
      outstanding.

     

    The
      following terms shall have the meanings indicated in the following Sections
      of
      this Agreement:

     

    (i)  “Act”
      —
      Section
      9(c). 

     

    (ii)  “Adjustment
      Shares”
—
      Section 11(a)(ii).

     

    (iii)  “Agreement”
      —
      Preamble.

     

    (iv)  “Class A
      Right”
—
      Preamble.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (v)  “Class A
      Rights Certificate”
—
      Section 3(a). 

     

    (vi)  “Class B
      Right”
—
      Preamble. 

     

    (vii)  “Class B
      Rights Certificate”
—
      Section 3(a). 

     

    (viii)  “Company”
      —
      Preamble
      and Section 13(a).

     

    (ix)  “Current
      Value”
—
      Section 11(a)(iii).

     

    (x)  “Distribution
      Date”
—
      Section 3(a).

     

    (xi)  “equivalent
      preference shares”
—
      Section 11(b).

     

    (xii)  “Exchange
      Ratio”
—
      Section 24(a).

     

    (xiii)  “Existing
      Holder”
—
      Section 1(a).

     

    (xiv)  “Final
      Expiration Date”
—
      Section 7(a).

     

    (xv)  “NASDAQ”
—
      Section 11(d)(i).

     

    (xvi)  “Principal
      Party”
—
      Section 13(b).

     

    (xvii)  “Purchase
      Price”
—
      Sections 4(a), 11(a)(ii) and 13(a).

     

    (xviii)  “Record
      Date”
—
      Preamble.

     

    (xix)  “Redemption
      Date”
—
      Section 7(a).

     

    (xx)  “Redemption
      Price”
—
      Section 23(a).

     

    (xxi)  “Right”
—
      Preamble.

     

    (xxii)  “Rights
      Agent”
—
      Preamble.

     

    (xxiii)  “Rights
      Certificate”
—
      Section 3(a). 

     

    (xxiv)  “Series
      A Preferred Stock”
—
      Preamble.

     

    (xxv)  “Spread”
—
      Section 11(a)(iii).

     

    (xxvi)  “Substitution
      Period”
—
      Section 11(a)(iii).

     

    (xxvii)  “Summary
      of Rights”
—
      Section 3(b).

     

    (xxviii)  “Trading
      Day”
—
      Section 11(d)(i).

     

     

    Section
      2.   Appointment
      of Rights Agent.
      The
      Company hereby appoints the Rights Agent to act as agent for the Company and
      the
      holders of the Rights (who, in accordance 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    with
      Section 3 hereof, shall prior to the Distribution Date also be the holders
      of
      the Common Shares) in accordance with the terms and conditions hereof, and
      the
      Rights Agent hereby accepts such appointment and agrees to act as Rights Agent
      under this Agreement. The Company may from time to time appoint such co-rights
      agents as it may deem necessary or desirable.

     

    Section
      3.   Issue
      of Right Certificates.
      (a)
      Until
      the earlier of (i) the close of business on the tenth day after the Shares
      Acquisition Date (or if such tenth day after the Shares Acquisition Date occurs
      before the Record Date, the close of business on the Record Date) or (ii) the
      close of business on the tenth Business Day (or such later date as may be
      determined by the Board) after the date on which a tender or exchange offer
      by
      any Person (other than the Company, any Subsidiary of the Company, any employee
      benefit plan of the Company or any Subsidiary of the Company, or any Person
      or
      entity organized, appointed, or established by the Company for or pursuant
      to
      the terms of any such plan) is first commenced within the meaning of Rule
      14d-2(a) of the General Rules and Regulations under the Exchange Act, if upon
      consummation thereof, such Person would become an Acquiring Person (the earlier
      of (i) and (ii) being herein referred to as the “Distribution
      Date”),
      (x)
      the Rights will be evidenced (subject to the provisions of paragraph (b) of
      this
      Section 3) by the certificates for Common Shares registered in the names of
      the
      holders thereof (which certificates shall also be deemed to be certificates
      for
      Rights) and not by separate certificates, and (y) the right to receive Right
      Certificates (as hereinafter defined) will be transferable only in connection
      with the transfer of Common Shares. As soon as practicable after the
      Distribution Date, the Rights Agent will send, by first-class, insured,
      postage-prepaid mail, (i) to each record holder of Class A Common Shares as
      of the close of business on the Distribution Date, at the address of such holder
      shown on the records of the Company, one or more certificates for Class A
      Rights, in substantially the form of Exhibit B hereto (the “Class
      A Rights
      Certificates”),
      evidencing one Class A Right for each Class A Common Share so held,
      subject to adjustment as provided herein and (ii) to each record holder of
      Class B Common Shares as of the close of business on the Distribution Date,
      at the address of such holder shown on the records of the Company, one or more
      certificates for Class B Rights, in substantially the form of Exhibit C
      hereto (the “Class B Rights
      Certificates”
and
      together with the Class A Rights Certificates, the “Rights
      Certificates”),
      evidencing one Class B Right for each Class B Common Share so held,
      subject to adjustment as provided herein. In the event that an adjustment in
      the
      number of Rights per Common Share has been made pursuant to Section 11(p)
      hereof, at the time of distribution of the Right Certificates, the Company
      shall
      make the necessary and appropriate rounding adjustments (in accordance with
      Section 14(a) hereof) so that Right Certificates representing only whole numbers
      of Rights are distributed and cash is paid in lieu of any fractional Rights.
      As
      of and after the Distribution Date, the Rights will be evidenced solely by
      such
      Right Certificates.

     

    (b)  As
      soon
      as practicable following the Record Date, the Company will send a copy of a
      Summary of Rights to Purchase Series A Preferred Stock, in substantially the
      form attached hereto as Exhibit D (the “Summary
      of Rights”),
      by
      first-class, postage-prepaid mail, to each record holder of Common Shares as
      of
      the close of business on the Record Date, at the address of such holder shown
      on
      the records of the Company. With respect to certificates for Common Shares
      outstanding as of the Record Date, until the earliest of the Distribution Date,
      Redemption Date, or Final Expiration Date, the Rights will be evidenced by
      such
      certificates registered in the names of the holders thereof and the registered
      holders of the Common Shares shall also be the registered holders of the
      associated Rights. Until the earliest of the Distribution 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Date,
      the
      Redemption Date, or the Final Expiration Date, the surrender for transfer of
      any
      certificate for Common Shares outstanding on the Record Date, shall also
      constitute the transfer of the Rights associated with such Common
      Shares.

     

    (c)  Rights
      shall be issued in respect of all Common Shares which are issued (whether
      originally issued or from the Company’s treasury) after the Record Date but
      prior to the earlier of the Distribution Date, Redemption Date or Final
      Expiration Date. Certificates for Common Shares issued after the Record Date
      but
      prior to the earliest of the Distribution Date, the Redemption Date, or the
      Final Expiration Date shall have impressed on, printed on, written on, or
      otherwise affixed to them the following legend:

     

    This
      certificate also evidences and entitles the holder hereof to certain Rights
      as
      set forth in a Rights Agreement between Schnitzer Steel Industries, Inc. and
      Wells Fargo Bank, N.A., dated as of March 21, 2006 (the “Rights
      Agreement”),
      the
      terms of which are hereby incorporated herein by reference and a copy of which
      is on file at the principal executive offices of Schnitzer Steel Industries,
      Inc. and the Rights Agent. Under certain circumstances, as set forth in the
      Rights Agreement, such Rights will be evidenced by separate certificates and
      will no longer be evidenced by this certificate. The Company or the Rights
      Agent, Wells Fargo Bank, N.A., or its successors and assigns, will mail to
      the
      holder of this certificate a copy of the Rights Agreement without charge
      promptly following receipt of a written request therefor. Under certain
      circumstances set forth in the Rights Agreement, Rights issued to, or held
      by,
      any Person who is, was or becomes an Acquiring Person or any Affiliate or
      Associate thereof (as such terms are defined in the Rights Agreement), whether
      currently held by or on behalf of such Person or by any subsequent holder,
      may
      become null and void.

     

    With
      respect to such certificates containing the foregoing legend, until the earlier
      of (i) the Distribution Date or (ii) the Final Expiration Date, the Rights
      associated with the Common Shares represented by such certificates shall be
      evidenced by such certificates alone and registered holders of Common Shares
      shall also be the registered holders of the associated Rights, and the transfer
      of any of such certificates shall also constitute the transfer of the Rights
      associated with the Common Shares represented by such certificates.

     

    Section
      4.   Form
      of Right Certificates.
      (a)
      The
      Right Certificates (and the forms of election to purchase Series A Shares and
      of
      assignment to be printed on the reverse thereof) shall be substantially the
      same
      as Exhibit B and Exhibit C hereto and may have such marks of identification
      or
      designation and such legends, summaries, or endorsements printed thereon as
      the
      Company may deem appropriate and as are not inconsistent with the provisions
      of
      this Agreement, or as may be required to comply with any applicable law or
      with
      any rule or regulation made pursuant thereto or with any rule or regulation
      of
      any stock exchange on which the Rights may from time to time be listed, or
      to
      conform to usage. Subject to the provisions of Section 11 and Section 22 hereof,
      the Right Certificates, whenever distributed, shall be dated as 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    of
      the
      Record Date and on their face shall entitle the holders thereof to purchase
      such
      number of one one-thousandths of a share of Series A Participating Preferred
      Stock as shall be set forth therein at the price per one one-thousandth of
      a
      Series A Share set forth therein (the “Purchase
      Price”),
      but
      the amount and kind of the securities purchasable upon the exercise of each
      Right and the Purchase Price thereof shall be subject to adjustment as provided
      herein.

     

    (b)  Any
      Right
      Certificate issued pursuant to Section 3(a), Section 11(i) or Section 22 hereof
      that represents Rights Beneficially Owned by (i) an Acquiring Person or any
      Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
      Person (or such Associate or Affiliate) who becomes a transferee after the
      Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
      (or
      such Associate or Affiliate) who becomes a transferee before or concurrently
      with the Acquiring Person’s becoming such and receives such Rights pursuant to
      either (A) a transfer (whether or not for consideration) from the Acquiring
      Person to holders of equity interests in such Acquiring Person or to any Person
      with whom the Acquiring Person has any continuing agreement, arrangement, or
      understanding regarding the transferred Rights or (B) a transfer which the
      Board
      has determined is part of a plan, arrangement, or understanding which has,
      as a
      primary purpose or effect, avoidance of Section 7(e) hereof, and any Right
      Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer,
      exchange, replacement, or adjustment of any other Right Certificate referred
      to
      in this sentence, shall contain (to the extent feasible) the following
      legend:

     

    The
      Rights represented by this Right Certificate are or were beneficially owned
      by a
      Person who was or became an Acquiring Person or an Affiliate or Associate of
      an
      Acquiring Person (as such terms are defined in the Rights Agreement).
      Accordingly, this Right Certificate and the Rights represented hereby may become
      void in the circumstances specified in Section 7(e) of such
      Agreement.

     

    Section
      5.   Countersignature
      and Registration.
      (a)
      The
      Right Certificates shall be executed on behalf of the Company by its President
      or any Vice President, either manually or by facsimile signature, and shall
      have
      affixed thereto the Company’s seal or a facsimile thereof, attested by the
      Secretary or any Assistant Secretary of the Company, or shall bear a facsimile
      thereof. The Right Certificates shall not be valid for any purpose unless
      countersigned (manually or by facsimile) by the Rights Agent. In case any
      officer of the Company who shall have signed any of the Right Certificates
      shall
      cease to be such officer of the Company before countersignature by the Rights
      Agent and issuance and delivery by the Company, such Right Certificates,
      nevertheless, may be countersigned by the Rights Agent, and issued and delivered
      by the Company with the same force and effect as though the person who signed
      such Right Certificates had not ceased to be such officer of the Company. Any
      Right Certificate may be signed on behalf of the Company by any person who,
      at
      the actual date of the execution of such Right Certificate, shall be a proper
      officer of the Company to sign such Right Certificate, although at the date
      of
      the execution of this Rights Agreement any such person was not such an
      officer.

     

    (b)  Following
      the Distribution Date, the Rights Agent will keep or cause to be kept, at its
      principal offices, books for registration and transfer of the Right Certificates
      issued 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    or
      to be
      issued hereunder. Such books shall show the names and addresses of the
      respective holders of the Right Certificates, the number of Rights evidenced
      on
      its face by each of the Right Certificates, the certificate number of each
      of
      the Right Certificates, and the date of each of the Right
      Certificates.

     

     

    Section
      6.   Transfer,
      Split Up, Combination, and Exchange of Right Certificates; Mutilated, Destroyed,
      Lost, or Stolen Right Certificates.
      (a)
      Subject
      to the provisions of Sections 4(b), 7(e), and 14 hereof, at any time after
      the
      close of business on the Distribution Date, and at or prior to the close of
      business on the earlier of the Redemption Date or the Final Expiration Date,
      any
      Right Certificate or Right Certificates (other than Rights Certificates
      representing Rights that may have been exchanged pursuant to Section 24 hereof)
      may be transferred, split up, combined, or exchanged for another Right
      Certificate or Right Certificates, entitling the registered holder to purchase
      a
      like number of Series A Shares (or, following a Triggering Event, Class A
      Common Shares, Class B Common Shares, other securities or property, as the
      case may be) as the Right Certificate or Right Certificates surrendered then
      entitled such holder (or former holder in the case of a transfer) to purchase.
      Any registered holder desiring to transfer, split up, combine, or exchange
      any
      Right Certificate shall make such request in writing delivered to the Rights
      Agent, and shall surrender the Right Certificate or Right Certificates to be
      transferred, split up, combined, or exchanged at the principal office of the
      Rights Agent designated for such purpose. Neither the Rights Agent nor the
      Company shall be obligated to take any action whatsoever with respect to the
      transfer of any such surrendered Right Certificate until the registered holder
      shall have completed and signed the certificate contained in the form of
      assignment on the reverse side of such Right Certificate and shall have provided
      such additional evidence of the identity of the Beneficial Owner (or former
      Beneficial Owner) or Affiliates or Associates thereof as the Company shall
      reasonably request. Thereupon the Rights Agent shall, subject to Sections 4(b),
      7(e), 14 and 24 hereof, countersign and deliver to the person entitled thereto
      a
      Right Certificate or Right Certificates, as the case may be, as so requested.
      The Company may require payment of a sum sufficient to cover any tax or
      governmental charge that may be imposed in connection with any transfer, split
      up, combination, or exchange of Right Certificates.

     

    (b)  Upon
      receipt by the Company and the Rights Agent of evidence reasonably satisfactory
      to them of the loss, theft, destruction, or mutilation of a Right Certificate,
      and, in case of loss, theft, or destruction, of indemnity or security reasonably
      satisfactory to them, and, at the Company’s request, reimbursement to the
      Company and the Rights Agent of all reasonable expenses incidental thereto,
      and
      upon surrender to the Rights Agent and cancellation of the Right Certificate
      if
      mutilated, the Company will execute and deliver a new Right Certificate of
      like
      tenor to the Rights Agent for countersignature and delivery to the registered
      owner in lieu of the Right Certificate so lost, stolen, destroyed, or
      mutilated.

     

    Section
      7.   Exercise
      of Rights; Purchase Price; Expiration Date of Rights.
      (a)
      Subject
      to Section 7(e) hereof, the registered holder of any Right Certificate may
      exercise the Rights evidenced thereby (except as otherwise provided herein
      including, without limitation, the restrictions on exercisability set forth
      in
      Sections 9(c), 11(a)(iii) and 23(a) hereof) in whole or in part at any time
      after the Distribution Date upon surrender of the Right Certificate, with the
      form of election to purchase on the reverse side thereof duly executed, to
      the
      Rights Agent at the principal office of the Rights Agent designated for such
      purpose, together with payment of the 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Purchase
      Price for each one one-thousandth of a Series A Share as to which the Rights
      are
      exercised, at or prior to the close of business on the earliest of (i) March
      21,
      2016 (the “Final
      Expiration Date”),
      or
      (ii) the date on which the Rights are redeemed or exchanged as provided in
      Sections 23 and 24 hereof (the “Redemption
      Date”).

     

    (b)  The
      Purchase Price for each one one-thousandth of a Series A Share pursuant to
      the
      exercise of a Right shall initially be One Hundred Ten Dollars ($110.00), shall
      be subject to adjustment from time to time as provided in Sections 11 and 13
      hereof and shall be payable in lawful money of the United States of America
      in
      accordance with paragraph (c) below.

     

    (c)  Upon
      receipt of a Right Certificate representing exercisable Rights, with the form
      of
      election to purchase duly executed, accompanied by payment of the Purchase
      Price
      for the Series A Shares (or other shares, securities, or property, as the case
      may be) to be purchased and an amount equal to any applicable transfer tax
      required to be paid by the holder of such Right Certificate in accordance with
      Section 9 hereof, in cash, or by certified check or cashier’s check payable to
      the order of the Company, the Rights Agent shall, subject to Section 20(k)
      hereof, thereupon promptly (i)(A) requisition from any transfer agent of the
      Series A Shares (or make available, if the Rights Agent is the transfer agent
      for such shares) certificates for the number of Series A Shares to be purchased
      (and the Company hereby irrevocably authorizes its transfer agent to comply
      with
      all such requests), or (B) if the Company shall have elected to deposit the
      Series A Shares issuable upon exercise of the Rights hereunder with a depositary
      agent, requisition from the depositary agent depositary receipts representing
      such number of one one-thousandths of a Series A Share as are to be purchased
      (in which case certificates for the Series A Shares represented by such receipts
      shall be deposited by the transfer agent with the depositary agent), and the
      Company hereby directs the depositary agent to comply with such request, (ii)
      when appropriate, requisition from the Company the amount of cash to be paid
      in
      lieu of issuance of fractional shares in accordance with Section 14 hereof,
      (iii) promptly after receipt of such certificates or depositary receipts, cause
      the same to be delivered to or, upon the order of the registered holder of
      such
      Right Certificate, registered in such name or names as may be designated by
      such
      holder, and (iv) when appropriate, after receipt, promptly deliver such cash
      to
      or upon the order of the registered holder of such Right Certificate. In the
      event that the Company is obligated to issue other securities (including Common
      Shares) or assets pursuant to Section 11(a) hereof, the Company will make all
      arrangements necessary so that such other securities or assets are available
      for
      distribution by the Rights Agent, if and when appropriate. The Company reserves
      the right to require before the occurrence of a Triggering Event that, upon
      any
      exercise of Rights, a number of Rights be exercised so that only whole shares
      of
      Preferred Stock would be issued.

     

    (d)  In
      case
      the registered holder of any Right Certificate shall exercise less than all
      the
      rights evidenced thereby, a new Right Certificate evidencing Rights equivalent
      to the Rights remaining unexercised shall be issued by the Rights Agent to
      the
      registered holder of such Right Certificate or to his duly authorized assigns
      subject to the provisions of Section 14 hereof.

     

    (e)  Notwithstanding
      anything in this Agreement to the contrary, from and after the first occurrence
      of a Section 11(a)(ii) Event, any Rights Beneficially Owned by (i) an Acquiring
      Person or an Associate or Affiliate of an Acquiring Person, (ii) a transferee
      from an 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Acquiring
      Person (or of any such Associate or Affiliate) who becomes a transferee after
      the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
      (or such Associate or Affiliate) who becomes a transferee prior to or
      concurrently with the Acquiring Person becoming such and receives such Rights
      pursuant to either (A) a transfer (whether or not for consideration) from the
      Acquiring Person to holders of equity interests in such Acquiring Person or
      to
      any Person with whom the Acquiring Person has any continuing agreement,
      arrangement or understanding regarding the transferred Rights or (B) a transfer
      that the Board has determined is part of a plan, arrangement, or understanding
      that has, as a primary purpose or effect, the avoidance of this Section 7(e),
      shall become null and void without any further action, and any holder of such
      Rights shall thereupon have no rights whatsoever with respect to such Rights,
      whether under any provision of this Agreement or otherwise. The Company shall
      use all reasonable efforts to insure that the provisions of this Section 7(e)
      and Section 4(b) hereof are complied with, but shall have no liability to any
      holder of Right Certificates or other Person as a result of its failure to
      make
      any determinations with respect to an Acquiring Person or its Affiliates,
      Associates, or transferees hereunder.

     

    (f)  Notwithstanding
      anything in this Agreement to the contrary, neither the Rights Agent nor the
      Company shall be obligated to undertake any action with respect to a registered
      holder of any Right Certificate upon the occurrence of any purported exercise
      as
      set forth in this Section 7 unless such registered holder shall have (i)
      completed and signed the certificate contained in the form of election to
      purchase set forth on the reverse side of the Right Certificate surrendered
      for
      such exercise, and (ii) provided such additional evidence of the identity of
      the
      Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
      thereof as the Company shall reasonably request.

     

    Section
      8.   Cancellation
      and Destruction of Right Certificates.
      All
      Right Certificates surrendered for the purpose of exercise, transfer, split
      up,
      combination, or exchange shall, if surrendered to the Company or to any of
      its
      agents, be delivered to the Rights Agent for cancellation or in canceled form,
      or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
      Certificates shall be issued in lieu thereof except as expressly permitted
      by
      any of the provisions of this Rights Agreement. The Company shall deliver to
      the
      Rights Agent for cancellation and retirement, and the Rights Agent shall so
      cancel and retire, any other Right Certificate purchased or acquired by the
      Company otherwise than upon the exercise thereof. In accordance with applicable
      law and regulation, the Rights Agent shall maintain, in a retrievable database,
      electronic records of all cancelled or destroyed rights certificates which
      have
      been cancelled or destroyed by the Rights Agent. The Rights Agent shall maintain
      such electronic records or physical records for the time period required by
      applicable law and regulation. Upon written request of the Company, the Rights
      Agent shall provide to the Company, copies of such electronic records or
      physical records relating to rights certificates cancelled or destroyed by
      the
      Rights Agent.

     

    Section
      9.   Reservation
      and Availability of Series A Shares; Registration.
      (a)
      The
      Company covenants and agrees that it will cause to be reserved and kept
      available out of its authorized and unissued Series A Shares and authorized
      and
      issued shares of Series A Shares held in its treasury the number of Series
      A
      Shares that will be sufficient to permit the exercise in full of all outstanding
      Rights. Prior to the occurrence of a Triggering Event, the Company shall not
      be
      obliged to cause to be reserved and kept available out of its authorized and
      unissued 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Common
      Shares or shares of preference stock (other than Series A Shares), any Common
      Shares or any shares of preference stock (other than the Series A Shares) to
      permit exercise of outstanding Rights.

     

    (b)  If
      the
      Series A Shares issuable upon the exercise of Rights may be listed on any
      national securities exchange, the Company shall use its best efforts to cause,
      from and after such time as the Rights become exercisable, all shares reserved
      for such issuance to be listed on such exchange upon official notice of issuance
      upon such exercise.

     

    (c)  If
      then
      required by applicable law, the Company shall use its best efforts to (i) file,
      as soon as practicable following the earliest date after the first occurrence
      of
      a Section 11(a)(ii) Event as to which the consideration to be delivered by
      the
      Company upon exercise of the Rights has been determined pursuant to this
      Agreement, or as soon as is required by law following the Distribution Date,
      as
      the case may be, a registration statement under the Securities Act of 1933
      (the
“Act”),
      with
      respect to the securities purchasable upon exercise of the Rights on an
      appropriate form, (ii) cause such registration statement to become effective
      as
      soon as practicable after such filing, and (iii) cause such registration
      statement to remain effective (with a prospectus at all times meeting the
      requirements of the Act) until the earlier of (A) the date as of which the
      Rights are no longer exercisable for such securities, and (B) the date of the
      expiration of the Rights. If then required by applicable law, the Company will
      also take such action as may be appropriate under, or to ensure compliance
      with,
      the securities or “blue sky” laws of the various states in connection with the
      exercisability of the Rights. The Company may temporarily suspend, for a period
      of time not to exceed 90 days after the date set forth in clause (i) of this
      Section 9(c), the exercisability of the Rights in order to prepare and file
      such
      registration statement and permit it to become effective or comply with such
      state securities or “blue sky” laws. Upon any such suspension, the Company shall
      issue a public announcement stating that the exercisability of the Rights has
      been temporarily suspended, as well as a public announcement at such time as
      the
      suspension is no longer in effect. Notwithstanding any provision of this
      Agreement to the contrary, the Rights shall not be exercisable in any
      jurisdiction if the requisite qualification in such jurisdiction shall not
      have
      been obtained, the exercise thereof shall not be permitted under applicable
      law,
      or a registration statement shall not have been declared effective.

     

    (d)  The
      Company covenants and agrees that it will take all such action as may be
      necessary to ensure that all Series A Shares (and, following the occurrence
      of a
      Triggering Event, Common Shares and/or other securities) delivered upon exercise
      of Rights shall, at the time of delivery of the certificates for such shares
      (subject to payment of the Purchase Price), be duly and validly authorized,
      issued and fully paid and nonassessable shares.

     

    (e)  The
      Company covenants and agrees that it will pay when due and payable any and
      all
      federal and state transfer taxes and charges which may be payable in respect
      of
      the issuance or delivery of the Right Certificates or of any Series A Shares
      (or
      Common Shares and/or other securities, as the case may be) upon the exercise
      of
      Rights. The Company shall not, however, be required to pay any transfer tax
      that
      may be payable in respect of any transfer or delivery of Right Certificates
      to a
      person other than, or the issuance or delivery of certificates for the Series
      A
      Shares (or Common Shares and/or other securities, as the case may be) in a
      name
      other than that of the registered holder of the Right Certificate evidencing
      Rights surrendered for 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    exercise
      or to issue or deliver any certificates for Series A Shares (or Common Shares
      and/or other securities, as the case may be) upon the exercise of any Rights
      until any such tax shall have been paid (any such tax being payable by the
      holder of such Right Certificate at the time of surrender) or until it has
      been
      established to the Company’s satisfaction that no such tax is due.

     

    Section
      10.   Series
      A Shares Record Date.
      Each
      person in whose name any certificate for Series A Shares (or Common Shares
      and/or other securities, as the case may be) is issued upon the exercise of
      Rights shall for all purposes be deemed to have become the holder of record
      of
      the Series A Shares (or Common Shares and/or other securities, as the case
      may
      be) represented thereby on, and such certificate shall be dated, the date upon
      which the Right Certificate evidencing such Rights was duly surrendered and
      payment of the Purchase Price (and any applicable transfer taxes) was made;
      provided,
      however,
      that if
      the date of such surrender and payment is a date upon which the Series A Shares
      (or Common Shares and/or other securities, as the case may be) transfer books
      of
      the Company are closed, such person shall be deemed to have become the record
      holder of such shares on, and such certificate shall be dated, the next
      succeeding Business Day on which the Series A Shares (or Common Shares and/or
      other securities, as the case may be) transfer books of the Company are open.
      Before the exercise of the Rights evidenced thereby, the holder of a Right
      Certificate shall not be entitled (in such holder’s capacity as such) to any
      rights of a shareholder of the Company with respect to shares for which the
      Rights shall be exercisable, including, without limitation, the right to vote
      any shares, to receive dividends or other distributions with respect to any
      shares or to exercise any preemptive rights with respect to any shares, and
      shall not be entitled to receive any notice of any proceedings of the Company,
      except as provided herein.

     

    Section
      11.   Adjustment
      of Purchase Price, Number and Kind of Shares or Number of Rights.
      The
      Purchase Price, the number and kind of shares covered by each Right, and the
      number of Rights outstanding are subject to adjustment from time to time as
      provided in this Section 11.

     

    (a)  (i)
      In
      the event the Company shall, at any time after the date of this Agreement,
      (A)
      declare a dividend on the Series A Shares payable in Series A Shares, (B)
      subdivide the outstanding Series A Shares, (C) combine the outstanding Series
      A
      Shares into a smaller number of Series A Shares, or (D) issue any shares of
      its
      capital stock in a reclassification of the Series A Shares (including any such
      reclassification in connection with a consolidation or merger in which the
      Company is the continuing or surviving corporation), except as otherwise
      provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price
      in
      effect at the time of the record date for such dividend or of the effective
      date
      of such subdivision, combination, or reclassification, and the number and kind
      of shares of capital stock issuable on such date, shall be proportionately
      adjusted so that the holder of any Right exercised after such time shall be
      entitled to receive the aggregate number and kind of shares of capital stock,
      which, if such Right had been exercised immediately prior to such date and
      at a
      time when the Series A Shares transfer books of the Company were open, such
      holder would have owned upon such exercise and been entitled to receive by
      virtue of such dividend, subdivision, combination, or reclassification. If
      an
      event occurs that requires an adjustment under both this Section 11(a)(i) and
      Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall
      be


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    in
      addition to, and shall be made prior to, any adjustment required pursuant to
      Section 11(a)(ii).

     

    (ii)  In
      the
      event that any Person (other than the Company, any Subsidiary of the Company,
      any employee benefit plan of the Company or of any Subsidiary of the Company,
      or
      any entity organized, appointed, or established by the Company for or pursuant
      to the terms of any such plan), alone or together with its Affiliates and
      Associates, shall on or after the date hereof become an Acquiring Person, unless
      the event causing such person to become an Acquiring Person is a transaction
      set
      forth in Section 13(a) hereof, then, in such case, proper provision shall be
      made so that each holder of a Right, except as provided below and in Section
      7(e) hereof, shall thereafter have a right to receive, upon exercise thereof
      at
      the then current Purchase Price in accordance with the terms of this Agreement,
      in lieu of Series A Shares, and subject to the provisions of Section 11(a)(iii)
      below, such number of Class A Common Shares of the Company (if such Right
      is a Class A Right) or Class B Common Shares (if such Right is a
      Class B Right) as shall equal the result obtained by (x) multiplying the
      then current Purchase Price by the then number of one one-thousandths of a
      Series A Share for which a Right was exercisable immediately prior to the first
      occurrence of an event set forth in this Section 11(a)(ii), and dividing that
      product (which product, following such first occurrence, shall be referred
      to as
      the “Purchase
      Price”
for
      each Right and for all purposes of this Agreement) by (y) 50% of the current
      per
      share market price of the Common Shares (determined pursuant to Section 11(d)
      hereof), but not less than the par value thereof, on the date of such first
      occurrence (such number of shares, being referred to herein as the “Adjustment
      Shares”).

     

    (iii)  In
      the
      event that the total of the Common Shares that are issued but not outstanding
      and authorized but unissued (excluding Common Shares reserved for issuance
      pursuant to the specific terms of any indenture, option plan, or other
      agreement) is not sufficient to permit the exercise in full of the Rights in
      accordance with Section 11(a)(ii) hereof, then the Board shall: (A) determine
      the excess of (1) the value of the Adjustment Shares issuable upon the exercise
      of a Right under Section 11(a)(ii)) hereof (the “Current
      Value”)
      over
      (2) the Purchase Price (such excess, the “Spread”),
      and
      (B) with respect to each Right (subject to Section 7(e) hereof), make adequate
      provision to substitute for, or provide an election to acquire in lieu of,
      the
      Adjustment Shares, upon payment of the applicable Purchase Price (as such price
      may thereafter be reduced pursuant to this Section 11(a)(iii), as set forth
      below) any combination of the following having an aggregate value equal to
      the
      Current Value (such aggregate value to be determined by the Board based upon
      the
      advice of a nationally-recognized investment banking firm selected by the
      Board): (1) common stock, preferred stock, notes, and/or other securities of
      one
      or more Subsidiaries of the Company, (2) a reduction in the current Purchase
      Price, (3) Common Shares, preferred shares and/or other equity securities of
      the
      Company, and/or (4) debt securities, cash, and/or other assets of the Company;
      provided,
      however,
      if this
      Section 11(a)(iii) is applicable and the Company shall not have made adequate
      provision to deliver value pursuant to clause (B) above within 30 days following
      the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y)
      the
      date on which the Company’s right of redemption pursuant to Section 23(a)
      expires, then the Company shall be obligated to deliver, upon the surrender
      for
      exercise 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    of
      a
      Right and without requiring payment of the Purchase Price, Class A Common
      Shares and/or Class B Common Shares, as applicable (in each case, to the
      extent available), and then, if necessary, cash in an aggregate amount equal
      to
      the Spread. If the Board shall determine in good faith that it is likely that
      sufficient additional Common Shares could be authorized for issuance upon
      exercise in full of the Rights, the 30-day period set forth above may be
      extended to the extent necessary, but not more than 90 days following the first
      occurrence of a Section 11(a)(ii) Event, in order that the Company may seek
      shareholder approval for the authorization of such additional shares (such
      period, as it may be extended, the “Substitution
      Period”).
      To
      the extent that the Company determines that some action need be taken pursuant
      to the first and/or second sentences of this Section 11(a)(iii), the Company
      (x)
      shall provide, subject to Section 7(e) hereof, that such action shall apply
      uniformly to all outstanding Rights, and (y) may suspend the exercisability
      of
      the Rights until the expiration of the Substitution Period in order to seek
      any
      authorization of additional shares and/or to decide the appropriate form of
      distribution to be made pursuant to such first sentence and to determine the
      value thereof. In the event of any such suspension, the Company shall issue
      a
      public announcement stating that the exercisability of the Rights has been
      temporarily suspended, as well as a public announcement at such time as the
      suspension is no longer in effect. For purposes of this Section 11(a)(iii),
      the
      value of the Common Shares shall be the current per share market price (as
      determined pursuant to Section 11(d) hereof) of the Common Shares on the date
      of
      the first occurrence of a Section 11(a)(ii) Event. The provisions of this
      Section 11(a)(iii) shall apply only to Class A Common Shares and
      Class B Common Shares of the Company and shall not apply to the securities
      of any other Person.

     

    (b)  In
      case
      the Company shall fix a record date for the issuance of rights, options, or
      warrants to all holders of Series A Shares entitling them (for a period expiring
      within 45 calendar days after such record date) to subscribe for or purchase
      Series A Shares (or shares having the same rights, privileges, and preferences
      as the Series A Shares (“equivalent
      preference shares”))
      or
      securities convertible into Series A Shares or equivalent preference shares
      at a
      price per Series A Share or equivalent preference share (or having a conversion
      price per share, if a security convertible into Series A Shares or equivalent
      preference shares) less than the current per share market price of the Series
      A
      Shares (as defined in Section 11(d) hereof) on such record date, the Purchase
      Price to be in effect after such record date shall be determined by multiplying
      the Purchase Price in effect immediately prior to such record date by a
      fraction, the numerator of which shall be the number of Series A Shares
      outstanding on such record date plus the number of Series A Shares which the
      aggregate offering price of the total number of Series A Shares and/or
      equivalent preference shares so to be offered (and/or the aggregate initial
      conversion price of the convertible securities so to be offered) would purchase
      at such current market price and the denominator of which shall be the number
      of
      Series A Shares outstanding on such record date plus the number of additional
      Series A Shares and/or equivalent preference shares to be offered for
      subscription or purchase (or into which the convertible securities so to be
      offered are initially convertible). In case such subscription price may be
      paid
      in a consideration part or all of which shall be in a form other than cash,
      the
      value of such consideration shall be as determined in good faith by the Board,
      whose determination shall be described in a statement filed with the Rights
      Agent and shall be binding on the holders of the Rights. Series A Shares owned
      by or 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    held
      for
      the account of the Company shall not be deemed outstanding for the purpose
      of
      any such computation. Such adjustment shall be made successively whenever such
      a
      record date is fixed; and in the event that such rights or warrants are not
      so
      issued, the Purchase Price shall be adjusted to be the Purchase Price which
      would then be in effect if such record date had not been fixed.

     

    (c)  In
      case
      the Company shall fix a record date for the distribution to all holders of
      the
      Series A Shares (including any such distribution made in connection with a
      consolidation or merger in which the Company is the continuing corporation)
      of
      any debt securities, cash, or assets (other than a regular periodic cash
      dividend or a dividend payable in Series A Shares) or subscription rights or
      warrants (excluding those referred to in Section 11(b) hereof), the Purchase
      Price to be in effect after such record date shall be determined by multiplying
      the Purchase Price in effect immediately prior to such record date by a
      fraction, the numerator of which shall be the current per share market price
      of
      the Series A Shares (as defined in Section 11(d) hereof) on such record date,
      less the fair market value (as determined in good faith by the Board, whose
      determination shall be described in a statement filed with the Rights Agent
      and
      binding on the holders of Rights) of the portion of the cash, assets, or debt
      securities so to be distributed or of such subscription rights or warrants
      applicable to one Series A Share and the denominator of which shall be such
      current per share market price of the Series A Shares (as determined pursuant
      to
      Section 11(d) hereof). Such adjustments shall be made successively whenever
      such
      a record date is fixed; and in the event that such distribution is not so made,
      the Purchase Price shall again be adjusted to be the Purchase Price that would
      then be in effect if such record date had not been fixed.

     

    (d)  (i)
      For the
      purpose of any computation hereunder, other than computations made pursuant
      to
      Section 11(a)(iii) hereof, the “current per share market price” of the Common
      Shares on any date shall be deemed to be the average of the daily closing prices
      per Class A Common Share for the 30 consecutive Trading Days immediately
      prior to such date, and for purposes of computations made pursuant to Section
      11(a)(iii) hereof, the “current per share market price” of a Common Share on any
      date shall be deemed to be the average of the daily closing prices per
      Class A Common Share for the ten (10) consecutive Trading Days immediately
      following such date; provided,
      however,
      that in
      the event that the current per share market price of the Common Shares is
      determined during a period following the announcement by the issuer of such
      Common Shares of a dividend or distribution on such Common Shares payable in
      such Common Shares or securities convertible into such Common Shares (other
      than
      the Rights), or any subdivision, combination, or reclassification of such Common
      Shares, and prior to the expiration of the requisite 30 Trading Day or 10
      Trading Day period after the ex-dividend date for such dividend or distribution
      or the record date for such subdivision, combination, or reclassification,
      then,
      and in each such case, the “current per share market price” shall be
      appropriately adjusted to take into account ex-dividend trading. The closing
      price for each day shall be the last sale price, regular way, or, in case no
      such sale takes place on such day, the average of the closing bid and asked
      prices, regular way, in either case as reported in the principal consolidated
      transaction reporting system with respect to securities listed on the principal
      national securities exchange, if any, on which the Class A Common Shares
      are then listed or admitted to trading or, if the Class A 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Common
      Shares are not listed or admitted to trading on any national securities
      exchange, the last quoted price or, if not so quoted, the average of the high
      bid and low asked prices in the over-the-counter market, as reported by the
      National Association of Securities Dealers, Inc., Automated Quotations System
      (“NASDAQ”)
      or
      such other system then in use, or, if on any such date the Class A Common
      Shares are not quoted by any such organization, the average of the closing
      bid
      and asked prices as furnished by a professional market maker making a market
      in
      the Class A Common Shares selected by the Board. If on any such date no
      market maker is making a market in Class A Common Shares, the fair value of
      such shares on such date as determined in good faith by the Board shall be
      used.
      The term “Trading
      Day”
shall
      mean a day on which the principal national securities exchange on which the
      Class A Common Shares are listed or admitted to trading is open for the
      transaction of business or, if the Class A Common Shares are not listed or
      admitted to trading on any national securities exchange, a Business Day. If
      the
      Class A Common Shares are not publicly held or not so listed or traded,
“current per share market price” shall mean the fair value per share as
      determined in good faith by the Board, whose determination shall be described
      in
      a statement filed with the Rights Agent and shall be conclusive for all
      purposes.

     

    (ii)  For
      the
      purpose of any computation hereunder, the “current per share market price” of
      the Series A Shares shall be determined in the same manner as set forth above
      for Common Shares in clause (i) of this Section 11(d). If the current per share
      market price of the Series A Shares cannot be determined in the manner provided
      above, the “current per share market price” of the Series A Shares shall be
      conclusively deemed to be the current per share market price of the Common
      Shares, multiplied by one thousand (appropriately adjusted to reflect any stock
      split, stock dividend, or similar transaction occurring after the date hereof).
      If neither the Common Shares nor the Series A Shares are publicly held or so
      listed or traded, “current per share market price” shall mean the fair value per
      share as determined in good faith by the Board, whose determination shall be
      described in a statement filed with the Rights Agent and binding on the holders
      of Rights.

     

    (e)  No
      adjustment in the Purchase Price shall be required unless such adjustment would
      require an increase or decrease of at least one percent in the Purchase Price;
      provided,
      however,
      that
      any adjustments which by reason of this Section 11(e) are not required to be
      made shall be carried forward and taken into account in any subsequent
      adjustment. All calculations under this Section 11 shall be made to the nearest
      cent or the nearest ten-thousandth of a Common Share or other share or
      one-millionth of a Series A Share, as the case may be. Notwithstanding the
      first
      sentence of this Section 11(e), any adjustment provided for in this Section
      11
      shall be made no later than the earlier of (i) three years from the date of
      the
      transaction which requires such adjustment or (ii) the date of the expiration
      of
      the right to exercise any Rights.

     

    (f)  If,
      as a
      result of an adjustment made pursuant to Section 11(a)(ii) or Section 13(a)
      hereof, the holder of any Right thereafter exercised shall become entitled
      to
      receive any property, other securities (other than shares of capital stock
      of
      the Company), or shares of capital stock of the Company other than Series A
      Shares, thereafter the amount of such property, other securities (other than
      shares of capital stock of the 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Company)
      and the number of such other shares of capital stock so receivable upon exercise
      of any Right (as well as any consideration to be paid therefor), shall be
      subject to adjustment from time to time in a manner and on terms as nearly
      equivalent as practicable to the provisions with respect to the Series A Shares
      (and the Purchase Price) contained in this Section 11, and the provisions of
      Sections 7, 9, 10, 13, and 14 with respect to the Series A Shares shall apply
      on
      like terms to any such property, other securities and other shares of capital
      stock.

     

    (g)  All
      Rights originally issued by the Company subsequent to any adjustment made to
      the
      Purchase Price hereunder shall evidence the right to purchase, at the adjusted
      Purchase Price, the number of Series A Shares purchasable from time to time
      hereunder upon exercise of the Rights, all subject to further adjustment as
      provided herein.

     

    (h)  Unless
      the Company shall have exercised its election as provided in Section 11(i)
      hereof, upon each adjustment of the Purchase Price as a result of the
      calculations made in Sections 11(b) and (c) hereof, each Right outstanding
      immediately prior to the making of such adjustment shall thereafter evidence
      the
      right to purchase, at the adjusted Purchase Price, that number of one
      one-thousandths of a Series A Share (calculated to the nearest one one-millionth
      of a Series A Share) obtained by (i) multiplying (x) the number of one
      one-thousandths of a share covered by a Right immediately prior to this
      adjustment by (y) the Purchase Price in effect immediately prior to such
      adjustment of the Purchase Price and (ii) dividing the product so obtained
      by
      the Purchase Price in effect immediately after such adjustment of the Purchase
      Price.

     

    (i)  The
      Company may elect on or after the date of any adjustment of the Purchase Price
      to adjust the number of Rights, in substitution for any adjustment in the number
      of Series A Shares purchasable upon the exercise of a Right. Each of the Rights
      outstanding after such adjustment of the number of Rights shall be exercisable
      for the number of one one-thousandths of a Series A Share for which a Right
      was
      exercisable immediately prior to such adjustment. Each Right held of record
      prior to such adjustment of the number of Rights shall become the number of
      Rights (calculated to the nearest one ten-thousandth) obtained by dividing
      the
      Purchase Price in effect immediately prior to adjustment of the Purchase Price
      by the Purchase Price in effect immediately after adjustment of the Purchase
      Price. The Company shall make a public announcement of its election to adjust
      the number of Rights, indicating the record date for the adjustment, and, if
      known at the time, the amount of the adjustment to be made. This record date
      may
      be the date on which the Purchase Price is adjusted or any day thereafter,
      but,
      if the Right Certificates have been issued, shall be at least 10 days later
      than
      the date of the public announcement. If Right Certificates have been issued,
      upon each adjustment of the number of Rights pursuant to this Section 11(i),
      the
      Company shall, as promptly as practicable, cause to be distributed to holders
      of
      record of Right Certificates on such record date Right Certificates evidencing,
      subject to Section 14 hereof, the additional Rights to which such holders shall
      be entitled as a result of such adjustment, or, at the option of the Company,
      shall cause to be distributed to such holders of record in substitution and
      replacement for the Right Certificates held by such holders prior to the date
      of
      adjustment, and upon surrender thereof, if required by the Company, new Right
      Certificates evidencing all the Rights to which such holders shall be entitled
      after such 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    adjustment.
      Right Certificates so to be distributed shall be issued, executed, and
      countersigned in the manner provided for herein (and may bear at the option
      of
      the Company, the adjusted Purchase Price) and shall be registered in the names
      of the holders of record of Right Certificates on the record date specified
      in
      the public announcement.

     

    (j)  Irrespective
      of any adjustment or change in the Purchase Price or the number of Series A
      Shares issuable upon the exercise of the Rights, the Right Certificates
      theretofore and thereafter issued may continue to express the Purchase Price
      per
      one one-thousandth of a share and the number of shares which were expressed
      in
      the initial Right Certificates issued hereunder.

     

    (k)  Before
      taking any action that would cause an adjustment reducing the Purchase Price
      below one one-thousandth of the then stated value, if any, of the Series A
      Shares issuable upon exercise of the Rights, the Company shall take any
      corporate action that may, in the opinion of its counsel, be necessary in order
      that the Company may validly and legally issue fully paid and nonassessable
      Series A Shares at such adjusted Purchase Price.

     

    (l)  In
      any
      case in which this Section 11 requires that an adjustment in the Purchase Price
      be made effective as of a record date for a specified event, the Company may
      elect to defer until the occurrence of such event the issuing to the holder
      of
      any Right exercised after such record date of the Series A Shares and other
      capital stock or securities of the Company, if any, issuable upon such exercise
      over and above the Series A Shares and other capital stock or securities of
      the
      Company, if any, issuable upon such exercise on the basis of the Purchase Price
      in effect prior to such adjustment; provided,
      however,
      that
      the Company shall deliver to such holder a due bill or other appropriate
      instrument evidencing such holder’s right to receive such additional shares upon
      the occurrence of the event requiring such adjustment.

     

    (m)  Anything
      in this Section 11 to the contrary notwithstanding, the Company shall be
      entitled to make such reductions in the Purchase Price, in addition to those
      adjustments expressly required or permitted by this Section 11, as and to the
      extent that in its good faith judgment the Board shall determine to be advisable
      in order that any (i) consolidation or subdivision of the Series A Shares,
      (ii)
      issuance wholly for cash of any of the Series A Shares at less than the current
      market price, (iii) issuance wholly for cash of Series A Shares or securities
      which by their terms are convertible into or exchangeable for Series A Shares,
      (iv) dividends on Series A Shares payable in Series A Shares or (v) issuance
      of
      rights, options, or warrants referred to in this Section 11, hereafter made
      by
      the Company to holders of its Series A Shares shall not be taxable to such
      shareholders.

     

    (n)  The
      Company covenants and agrees that it shall not, at any time after the
      Distribution Date, (i) consolidate with any other Person (other than a
      Subsidiary of the Company in a transaction that complies with Section 11(o)
      hereof), (ii) merge with or into any other Person (other than a Subsidiary
      of
      the Company in a transaction that complies with Section 11(o) hereof), or (iii)
      sell or transfer (or permit any Subsidiary to sell or transfer), in one or
      more
      transactions, assets or earning power aggregating more than 50% of the assets
      or
      earning power of the Company and its Subsidiaries (taken as a 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    whole)
      to
      any other Person (other than the Company and/or any of its Subsidiaries in
      one
      or more transactions each of which complies with Section 11(o) hereof) if (x)
      at
      the time of or immediately after such consolidation, merger or sale there are
      any rights, warrants, or other instruments or securities outstanding or
      agreements in effect which would substantially diminish or otherwise eliminate
      the benefits intended to be afforded by the Rights or (y) before, simultaneously
      with or immediately after such consolidation, merger or sale, the shareholders
      of the person who constitutes, or would constitute, the “Principal Party” for
      purposes of Section 13(a) hereof shall have received a distribution of Rights
      previously owned by such person or any of its Affiliates and
      Associates.

     

    (o)  The
      Company covenants and agrees that, after the Distribution Date, it shall not,
      except as permitted by Section 23 or 27 hereof, take (or permit any Subsidiary
      to take) any action which at the time it is reasonably foreseeable will diminish
      substantially or otherwise eliminate the benefits intended to be afforded by
      the
      Rights.

     

    (p)  Anything
      in this Agreement to the contrary notwithstanding, in the event that, at any
      time after the Record Date and prior to the Distribution Date, the Company
      shall
      (i) declare or pay any dividend on the Common Shares payable in Common Shares,
      or (ii) effect a subdivision, combination or consolidation of the Common Shares
      (by reclassification or otherwise than by payment of dividends in Common Shares)
      into a greater or lesser number of Common Shares, then, in any such case, (A)
      the number of one one-thousandths of a Series A Share purchasable after such
      event upon proper exercise of each Right shall be determined by multiplying
      the
      number of one one-thousandths of a Series A Share so purchasable immediately
      prior to such event by a fraction, the numerator of which is the number of
      Common Shares outstanding immediately before such event and the denominator
      of
      which is the number of Common Shares outstanding immediately after such event,
      and (B) each Common Share outstanding immediately after such event shall have
      issued with respect to it that number of Rights which each Common Share
      outstanding immediately prior to such event had issued with respect to it.
      The
      adjustments provided for in this Section 11(p) shall be made successively
      whenever such a dividend is declared or paid or such a subdivision, combination
      or consolidation is effected.

     

    Section
      12.   Certificate
      of Adjusted Purchase Price or Number of Shares.
      Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
      Company shall (a) promptly prepare a certificate setting forth such adjustment,
      and a brief statement of the facts accounting for such adjustment, (b) promptly
      file with the Rights Agent and with each transfer agent for the Common Shares
      or
      the Series A Shares a copy of such certificate, and (c) mail a brief summary
      thereof to each holder of a Right Certificate (or, if prior to the Distribution
      Date, to each holder of a certificate representing Common Shares) in accordance
      with Section 25 hereof. The Rights Agent shall be fully protected in relying
      on
      any such certificate and on any adjustment therein contained and shall not
      be
      obligated or responsible for calculating any adjustment nor shall it be deemed
      to have knowledge of such adjustment unless and until it shall have received
      such certificate.

     

    Section
      13.   Consolidation,
      Merger, or Sale or Transfer of Assets or Earning Power.
      (a)
      In the
      event that, following the Shares Acquisition Date, directly or indirectly (x)
      the 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Company
      shall consolidate with, or merge with and into, any other Person (other than
      a
      Subsidiary of the Company in a transaction that complies with Section 11(o)
      hereof) and the Company shall not be the continuing or surviving corporation
      of
      such consolidation or merger, (y) any Person (other than a Subsidiary of the
      Company in a transaction that complies with Section 11(o) hereof) shall
      consolidate with, or merge with or into, the Company, and the Company shall
      be
      the continuing or surviving corporation of such consolidation or merger and,
      in
      connection with such consolidation or merger, all or part of the Common Shares
      shall be changed into, or exchanged for stock or other securities of any other
      Person or cash or any other property, or (z) the Company shall sell or otherwise
      transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
      in a single transaction or a series of related transactions, assets or earning
      power aggregating more than 50% of the assets or earning power of the Company
      and its Subsidiaries (taken as a whole) to any Person or group of related
      Persons (other than the Company or any Subsidiary of the Company in one or
      more
      transactions each of which complies with Section 11(o) hereof), then, and in
      each such case (except as may be contemplated by Section 13(d) hereof), proper
      provision shall be made so that (i) each holder of a Right, except as provided
      in Section 7(e) hereof, shall thereafter have the right to receive, upon the
      exercise thereof at the current Purchase Price, such number of validly
      authorized and issued, fully paid, nonassessable and freely tradable Common
      Shares of the Principal Party (as hereinafter defined), free and clear of liens,
      encumbrances, or other adverse claims and not subject to any rights of call
      or
      first refusal, redemption, or repurchase, as shall be equal to the result
      obtained by (1) multiplying the then current Purchase Price by the number of
      one
      one-thousandths of a share of Series A Shares for which a Right was exercisable
      immediately prior to the first occurrence of a Section 13(a) Event (or if a
      Section 11(a)(ii) Event has occurred prior to the occurrence of a Section 13(a)
      Event, multiplying the number of such one-thousandths of a share of Series
      A
      Shares for which a Right is exercisable immediately prior to the first
      occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect
      immediately prior to such first occurrence) and dividing the product (which
      product, following such first occurrence, shall be referred to as the “Purchase
      Price” for each Right and for all purposes of this Agreement) by (2)
      50%
      of the current per share market price (determined pursuant to Section 11(d)
      hereof) per Common Share of such Principal Party on the date of consummation
      of
      such Section 13(a) Event; (ii) such Principal Party shall thereafter be liable
      for, and shall assume, by virtue of such Section 13(a) Event, all the
      obligations and duties of the Company pursuant to this Agreement; (iii) the
      term
“Company”
shall
      thereafter be deemed to refer to such Principal Party, it being specifically
      intended that the provisions of Section 11 hereof shall apply only to such
      Principal Party following the first occurrence of a Section 13(a) Event; (iv)
      such Principal Party shall take such- steps (including, but not limited to,
      the
      reservation of a sufficient number of its Common Shares) in connection with
      the
      consummation of any such transaction as may be necessary to assure that the
      provisions hereof shall thereafter be applicable, as nearly as reasonably may
      be, in relation to its Common Shares thereafter deliverable upon the exercise
      of
      the Rights; and (v) the provisions of Section 11(a)(ii) hereof shall thereafter
      be of no effect following the first occurrence of a Section 13(a)
      Event.

     

    (b)  “Principal
      Party”
shall
      mean:

     

    (i)  in
      the
      case of any transaction described in clause (x) or (y) of the first sentence
      of
      Section 13(a), the Person that is the issuer of any securities into which Common
      Shares of the Company are converted in such merger or 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    consolidation,
      and if no securities are so issued, the Person that is the other party to such
      merger or consolidation; and

     

    (ii)  in
      the
      case of any transaction described in clause (z) of the first sentence of Section
      13(a), the Person that is the party receiving the greatest portion of the assets
      or earning power transferred pursuant to such transaction or
      transactions;

     

    provided,
      however,
      that in
      any such case in subsections (b)(i) or (ii) of this Section 13: (1) if the
      Common Shares of such Person are not at such time and have not been continuously
      over the preceding twelve (12) month period registered under Section 12 of
      the
      Exchange Act, and such Person is a direct or indirect Subsidiary of another
      Person the Common Shares of which are and have been so registered, “Principal
      Party” shall refer to such other Person; (2) in case such Person is a
      Subsidiary, directly or indirectly, of more than one Person, the Common Shares
      of two or more of which are and have been so registered, “Principal Party” shall
      refer to whichever of such Persons is the issuer of the Common Shares having
      the
      greatest aggregate market value; and (3) in case such Person is owned, directly
      or indirectly, by a joint venture formed by two or more Persons that are not
      owned, directly or indirectly, by the same Person, the requirements set forth
      in
      clauses (1) and (2) of this subsection (b), above, shall apply to each of the
      chains of ownership having an interest in such joint venture as if such party
      were a “subsidiary” of both or all of such joint venturers, and the Principal
      Parties in each such chain shall bear the obligations set forth in this Section
      13 in the same ratio as their direct or indirect interests in such joint venture
      bear to the total of such interests.

     

    (c)  The
      Company shall not consummate any such consolidation, merger, sale, or transfer
      unless the Principal Party shall have a sufficient number of authorized Common
      Shares, which have not been issued or reserved for issuance, to permit the
      exercise in full of the Rights in accordance with this Section 13 and unless
      prior thereto the Company and such Principal Party shall have executed and
      delivered to the Rights Agent a supplemental agreement providing for the terms
      set forth in paragraphs (a) and (b) of this Section 13 and further providing
      that, as soon as practicable after the date of any consolidation, merger, or
      sale of assets mentioned in paragraph (a) of this Section 13, the Principal
      Party will:

     

    (i)  prepare
      and file a registration statement under the Act, with respect to the Rights
      and
      the securities purchasable upon exercise of the Rights on an appropriate form,
      and will use its best efforts to cause such registration statement to (A) become
      effective as soon as practicable after such filing and (B) remain effective
      (with a prospectus at all times meeting the requirements of the Act) until
      the
      Final Expiration Date; 

     

    (ii)  take
      all
      such other action as may be necessary to enable the Principal Party to issue
      the
      securities purchasable upon exercise of the Rights, including but not limited
      to
      the registration or qualification of such securities under all requisite
      securities laws of jurisdictions of the various states and the listing of such
      securities on such exchanges and trading markets as may be necessary or
      appropriate; and 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iii)  deliver
      to holders of the Rights historical financial statements for the Principal
      Party
      and each of its Affiliates which comply in all respects with the requirements
      for registration on Form 10 under the Exchange Act.

     

    The
      provisions of this Section 13 shall similarly apply to successive mergers or
      consolidations or sales or other transfers. In the event that one of the
      transactions described in Section 13(a) hereof shall occur at any time after
      the
      occurrence of a transaction described in Section 11(a)(ii) hereof, the Rights
      which have not theretofore been exercised shall thereafter become exercisable
      in
      the manner described in Section 13(a).

     

    Section
      14.   Fractional
      Rights and Fractional Shares.
      (a)
      The
      Company shall not be required to issue fractions of Rights except prior to
      the
      Distribution Date as provided in Section 11(p) hereof, or to distribute Right
      Certificates that evidence fractional Rights. In lieu of such fractional Rights,
      there shall be paid to the registered holders of the Right Certificates with
      regard to which such fractional Rights would otherwise be issuable, an amount
      in
      cash equal to the same fraction of the current market value of a whole Right.
      For the purposes of this Section 14(a), the current market value of a whole
      Right shall be the closing price of the Rights for the Trading Day immediately
      prior to the date on which such fractional Rights would have been otherwise
      issuable. The closing price for any day shall be the last sale price, regular
      way, or, in case no such sale takes place on such day, the average of the
      closing bid and asked prices, regular way, in either case as reported in the
      principal consolidated transaction reporting system with respect to securities
      listed on the principal national securities exchange, if any, on which the
      Rights are then listed or admitted to trading or, if the Rights are not listed
      or admitted to trading on any national securities exchange, the last quoted
      price or, if not so quoted, the average of the high bid and low asked prices
      in
      the over-the-counter market, as reported by NASDAQ or such other system then
      in
      use or, if on any such date the Rights are not quoted by any such organization,
      the average of the closing bid and asked prices as furnished by a professional
      market maker making a market in the Rights selected by the Board. If on any
      such
      date no such market maker is making a market in the Rights the fair value of
      the
      Rights on such date as determined in good faith by the Board shall be
      used.

     

    (b)  The
      Company shall not be required to issue fractions of Series A Shares (other
      than
      fractions which are integral multiples of one one-thousandth of a Series A
      Share) upon exercise of the Rights or to distribute certificates that evidence
      fractional Series A Shares (other than fractions which are integral multiples
      of
      one one-thousandth of a Series A Share). Fractions of Series A Shares in
      integral multiples of one one-thousandth of a Series A Share may, at the
      election of the Company, be evidenced by depositary receipts, pursuant to an
      appropriate agreement between the Company and a depositary selected by it,
      provided that such agreement shall provide that the holders of such depositary
      receipts shall have all the rights, privileges, and preferences to which they
      are entitled as beneficial owners of the Series A Shares. In lieu of fractional
      Series A Shares that are not integral multiples of one one-thousandth of a
      Series A Share, the Company shall pay to the registered holders of Right
      Certificates at the time such Rights are exercised as herein provided an amount
      in cash equal to the same fraction of the current market value of one Series
      A
      Share. For purposes of this Section 14(b), the current market value of a Series
      A Share shall be the closing price of a Series A Share (as determined pursuant
      to Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date
      of such exercise.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)  Following
      the occurrence of a Triggering Event, the Company shall not be required to
      issue
      fractions of Common Shares upon exercise of the Rights or to distribute
      certificates that evidence fractional Common Shares. In lieu of fractional
      Common Shares, the Company may pay to the registered holders of Right
      Certificates at the time such Rights are exercised as herein provided an amount
      in cash equal to the same fraction of the current market value of one Common
      Share. For purposes of this Section 14(c), the current market value of one
      Common Share shall be the closing price of one Common Share (as determined
      pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior
      to
      the date of such exercise.

     

    (d)  The
      holder of a Right, by the acceptance of the Rights, expressly waives his right
      to receive any fractional Rights or any fractional shares upon exercise of
      a
      Right, except as otherwise set forth herein.

     

    Section
      15.   Rights
      of Action.
      All
      rights of action in respect of this Agreement, except the rights of action
      given
      to the Rights Agent under Section 18 hereof, are vested in the respective
      registered holders of the Right Certificates (and, prior to the Distribution
      Date, the registered holders of the Common Shares); and any registered holder
      of
      any Right Certificate (or, prior to the Distribution Date, of the Common
      Shares), without the consent of the Rights Agent or of the holder of any other
      Right Certificate (or, prior to the Distribution Date, of the Common Shares),
      may, in his own behalf and for his own benefit, enforce, and may institute
      and
      maintain any suit, action, or proceeding against the Company to enforce, or
      otherwise act in respect of, his right to exercise the Rights evidenced by
      such
      Right Certificate in the manner provided in such Right Certificate and in this
      Agreement. Without limiting the foregoing or any remedies available to the
      holders of Rights, it is specifically acknowledged that the holders of Rights
      would not have an adequate remedy at law for any breach of this Agreement and
      will be entitled to specific performance of the obligations under, and
      injunctive relief against actual or threatened violations of the obligations
      of
      any Person subject to, this Agreement.

     

    Section
      16.   Agreement
      of Right Holders.
      Every
      holder of a Right, by accepting the same, consents and agrees with the Company
      and the Rights Agent and with every other holder of a Right that:

     

    (a)  before
      the Distribution Date, the Rights will be transferable only in connection with
      the transfer of the Common Shares;

     

    (b)  after
      the
      Distribution Date, the Right Certificates are transferable only on the registry
      books of the Rights Agent if surrendered at the principal office of the Rights
      Agent designated for such purpose, duly endorsed or accompanied by a proper
      instrument of transfer and with appropriate forms and certificates fully
      executed;

     

    (c)  subject
      to Sections 6(a) and 7(f) hereof, the Company and the Rights Agent may deem
      and
      treat the person in whose name the Class A Right Certificate or
      Class B Right Certificate (or, prior to the Distribution Date, the
      associated Class A Common Share certificate or Class B Common Share
      certificate, as the case may be) is registered as the absolute owner thereof
      and
      of the Rights evidenced thereby (notwithstanding any notations of ownership
      or
      writing on the Class A Right Certificate (or the 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    associated
      Class A Common Share certificate) or Class B Right Certificate (or the
      associated Class B Common Share certificate), as the case may be, made by
      anyone other than the Company or the Rights Agent) for all purposes whatsoever,
      and neither the Company nor the Rights Agent shall be affected by any notice
      to
      the contrary; and

     

    (d)  notwithstanding
      anything in this Agreement to the contrary, neither the Company nor the Rights
      Agent shall have any liability to any holder of a Right or other Person as
      a
      result of its inability to perform any of its obligations under this Agreement
      by reason of any preliminary or permanent injunction or other order, decree
      or
      ruling issued by a court having jurisdiction or by a governmental, regulatory,
      or administrative agency or commission, or any statute, rule, regulation or
      executive order promulgated or enacted by any governmental authority prohibiting
      or otherwise restraining performance of such obligation; provided,
      however,
      the
      Company must use its best efforts to have any such order, decree or ruling
      lifted or otherwise overturned as soon as possible.

     

    Section
      17.   Right
      Certificate Holder Not Deemed a Shareholder.
      No
      holder, as such, of any Right Certificate shall be entitled to vote, receive
      dividends, or be deemed for any purpose the holder of the Series A Shares or
      any
      other securities of the Company that may at any time be issuable on the exercise
      of the Rights represented thereby, nor shall anything contained herein or in
      any
      Right Certificate be construed to confer upon the holder of any Right
      Certificate, as such, any of the rights of a shareholder of the Company or
      any
      right to vote for the election of directors or upon any matter submitted to
      shareholders at any meeting thereof, or to give or withhold consent to any
      corporate action, or to receive notice of meetings or other actions affecting
      shareholders (except as provided in Section 25 hereof), or to receive dividends
      or subscription rights, or otherwise, until the Right or Rights evidenced by
      such Right Certificate shall have been exercised in accordance with the
      provisions hereof.

     

    Section
      18.   Concerning
      the Rights of Agent.
      (a)
      The
      Company agrees to pay to the Rights Agent reasonable compensation for all
      services rendered by it hereunder and, from time to time, on demand of the
      Rights Agent, its reasonable expenses and counsel fees and other disbursements
      incurred in the administration and execution of this Agreement and the exercise
      and performance of its duties hereunder. The Company also agrees to indemnify
      the Rights Agent for, and to hold it harmless against, any loss, liability,
      or
      expense, incurred without negligence, bad faith, or willful misconduct on the
      part of the Rights Agent, for anything done or omitted by the Rights Agent
      in
      connection with the acceptance and administration of this Agreement, including
      the costs and expenses of defending against any claim of liability in the
      premises. The costs and expenses of enforcing this right of indemnification
      shall also be paid by the Company. The indemnification provided for hereunder
      shall survive the expiration of the Rights and termination of this
      Agreement.

     

    (b)  The
      Rights Agent shall be fully indemnified against, shall be protected from, and
      shall incur no liability or expense (including without limitation, attorneys’
fees and expenses) for, or in respect of any action taken, suffered or omitted
      by it in connection with, its administration of this Agreement in reliance
      upon
      any Right Certificate or certificate for the Series A Shares or Common Shares
      or
      for other securities of the Company, instrument of assignment or transfer,
      power
      of attorney, endorsement, affidavit, letter, notice, direction, consent,
      certificate, statement, or other paper or document believed by it to be genuine
      and to be 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    signed,
      executed and, where necessary, verified or acknowledged, by the proper person
      or
      persons, or otherwise upon the advice of its counsel as set forth in Section
      20
      hereof. 

     

    (c)  Notwithstanding
      anything in this Agreement to the contrary, in no event shall the Rights Agent
      be liable for special, indirect or consequential loss or damage of any kind
      whatsoever (including but not limited to lost profits). 

     

    Section
      19.   Merger
      or Consolidation or Change of Name of Rights Agent.
      (a)
      Any
      corporation into which the Rights Agent or any successor Rights Agent may be
      merged or with which it may be consolidated, or any corporation resulting from
      any merger or consolidation to which the Rights Agent or any successor Rights
      Agent shall be a party, or any corporation succeeding to the corporate trust
      business of the Rights Agent or any successor Rights Agent, shall be the
      successor to the Rights Agent under this Agreement without the execution or
      filing of any paper of any further act on the part of any of the parties hereto,
      provided,
      however,
      that
      such corporation would be eligible for appointment as a successor Rights Agent
      under the provisions of Section 21 hereof. In case at the time such successor
      Rights Agent shall succeed to the agency created by this Agreement, any of
      the
      Right Certificates shall have been countersigned but not delivered, any such
      successor Rights Agent may adopt the countersignature of the predecessor Rights
      Agent and deliver such Right Certificates so countersigned; and in case at
      that
      time any of the Right Certificates shall not have been countersigned, any
      successor Rights Agent may countersign such Right Certificates either in the
      name of the predecessor Rights Agent or in the name of the successor Rights
      Agent; and in all such cases such Right Certificates shall have the full force
      provided in the Right Certificates and in this Agreement.

     

    (b)  In
      case
      at any time the name of the Rights Agent shall be changed and at such time
      any
      of the Right Certificates shall have been countersigned but not delivered,
      the
      Rights Agent may adopt the countersignature under its prior name and deliver
      Right Certificates so countersigned; and in case at that time any of the Right
      Certificates shall not have been countersigned, the Rights Agent may countersign
      such Right Certificates either in its prior name or in its changed name; and
      in
      all such cases such Right Certificates shall have the full force provided in
      the
      Right Certificates and in this Agreement.

     

    Section
      20.   Duties
      of Rights Agent.
      The
      Rights Agent undertakes the duties and obligations imposed by this Agreement
      upon the following terms and conditions, by all of which the Company and the
      holders of Right Certificates, by their acceptance thereof, shall be
      bound:

     

    (a)  The
      Rights Agent may consult with legal counsel (who may be legal counsel for the
      Company), and the opinion of such counsel shall be full and complete
      authorization and protection to the Rights Agent as to any action taken or
      omitted by it in good faith and in accordance with such opinion.

     

    (b)  Whenever
      in the performance of its duties under this Agreement the Rights Agent shall
      deem it necessary or desirable that any fact or matter (including, without
      limitation, the identity of any Acquiring Person and the determination of
“current per share market price”) be proved or established by the Company before
      taking or suffering any action hereunder, such fact or matter (unless other
      evidence in respect

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     thereof
      be herein specifically prescribed) may be deemed to be conclusively proved
      and
      established by a certificate signed by the President or a Vice President and
      by
      the Secretary or an Assistant Secretary or the Treasurer or an Assistant
      Treasurer of the Company and delivered to the Rights Agent; and such certificate
      shall be full authorization to the Rights Agent for any action taken or suffered
      in good faith by it under the provisions of this Agreement in reliance upon
      such
      certificate.

     

    (c)  The
      Rights Agent shall be liable hereunder to the Company and any other Person
      only
      for its own negligence, bad faith, or willful misconduct.

     

    (d)  The
      Rights Agent shall not be liable for or by reason of any of the statements
      of
      fact or recitals contained in this Agreement or in the Right Certificates
      (except its countersignature thereof) or be required to verify the same, but
      all
      such statements and recitals are and shall be deemed to have been made by the
      Company only.

     

    (e)  The
      Rights Agent shall not be under any responsibility in respect of the validity
      of
      this Agreement or the execution and delivery hereof (except the due execution
      hereof by the Rights Agent) or in respect of the validity or execution of any
      Right Certificate (except its countersignature thereof); nor shall it be
      responsible for any breach by the Company of any covenant or condition contained
      in this Agreement or in any Right Certificate; nor shall it be responsible
      for
      any adjustment required under the provisions of Sections 11, 13 or 24 hereof
      or
      responsible for the manner, method, or amount of any such adjustment or the
      ascertainment of the existence of facts that would require any such adjustment
      (except with respect to the exercise of Rights evidenced by Right Certificates
      after actual notice of any such adjustment); nor shall it by any act hereunder
      be deemed to make any representation or warranty as to the authorization or
      reservation of any Series A Shares to be issued pursuant to this Agreement
      or
      any Right Certificate or as to whether any Series A Shares will, when issued,
      be
      validly authorized and issued, fully paid, and nonassessable.

     

    (f)  The
      Company agrees that it will perform, execute, acknowledge, and deliver or cause
      to be performed, executed, acknowledged, and delivered all such further and
      other acts, instruments, and assurances as may reasonably be required by the
      Rights Agent for the carrying out or performing by the Rights Agent of the
      provisions of this Agreement.

     

    (g)  The
      Rights Agent is hereby authorized and directed to accept instructions with
      respect to the performance of its duties hereunder from any one of the Chairman
      of the Board, the President, the Executive Vice President, any Vice President,
      the Secretary, or the Treasurer of the Company, and to apply to such officers
      for advice or instructions in connection with its duties, and it shall not
      be
      liable for any action taken or suffered to be taken by it in good faith in
      accordance with instructions of any such officer or for any delay in acting
      while waiting for those instructions. Any application by the Rights Agent for
      written instructions from the Company may, at the option of the Rights Agent,
      set forth in writing any action proposed to be taken or omitted by the Rights
      Agent under this Agreement and the date on or after which such action shall
      be
      taken or such omission shall be effective. The Rights Agent shall not be liable
      for any action taken by, or 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    omission
      of, the Rights Agent in accordance with a proposal included in any such
      application on or after the date specified in such application (which date
      shall
      not be less than ten Business Days after the date any officer of the Company
      actually receives such application, unless, any such officer shall have
      consented in writing to an earlier date) unless, prior to taking any such action
      (or the effective date in the case of an omission), the Rights Agent shall
      have
      received written instructions in response to such application subject to the
      proposed action or omission and/or specifying the action to be taken or
      omitted.

     

    (h)  The
      Rights Agent and any shareholder, director, officer, or employee of the Rights
      Agent may buy,
      sell,
      or
      deal in any of the Rights or other securities of the Company or become
      interested in any transaction in which the Company may be interested, or
      contract with or lend money to the Company or otherwise act as fully and freely
      as though it were not Rights Agent under this Agreement. Nothing herein shall
      preclude the Rights Agent from acting in any other capacity for the Company
      or
      for any other legal entity.

     

    (i)  The
      Rights Agent may execute and exercise any of the rights or powers hereby vested
      in it or perform any duty hereunder either itself or by or
      through its attorneys or agents, and the Rights Agent shall not be answerable
      or
      accountable for any act, default, neglect, or misconduct of any such attorneys
      or agents or for any loss to the Company resulting from any such act, default,
      neglect, or misconduct, provided
      that
      reasonable care was exercised in the selection and continued employment
      thereof.

     

    (j)  No
      provision of this Agreement shall require the Rights Agent to expend or risk
      its
      own funds or otherwise incur any financial liability in the performance of
      any
      of its duties hereunder or in the exercise of its rights if there shall be
      reasonable grounds for believing that repayment of such funds or adequate
      indemnification against such risk or liability is not reasonably assured to
      it.

     

    (k)  If,
      with
      respect to any Right Certificate surrendered to the Rights Agent for exercise
      or
      transfer, the certificate attached to the form of assignment or form of election
      to purchase, as the case may be, has either not been completed or indicates
      an
      affirmative response to clause 1 and/or 2 on such certificate attached to the
      form of assignment or form of election to purchase, the Rights Agent shall
      not
      take any further action with respect to such requested exercise or transfer
      without first consulting with the Company.

     

    (l)  The
      Rights Agent shall not be required to take notice or be deemed to have any
      notice of any fact, event or determination (including, without limitation,
      any
      dates or events defined in this Agreement or the designation of any Person
      as an
      Acquiring Person, Affiliate or Associate) under this Agreement unless and until
      the Rights Agent shall be specifically notified in writing by the Company of
      such fact, event or determination. 

     

    Section
      21.   Change
      of Rights Agent.
      The
      Rights Agent or any successor Rights Agent may resign and be discharged from
      its
      duties under this Agreement upon 30 days’ notice 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    in
      writing mailed to the Company and to each transfer agent of the Common Shares
      and Series A Shares by registered or certified mail, and to the holders of
      the
      Right Certificates by first-class mail. The Company may remove the Rights Agent
      or any successor Rights Agent upon 30 days’ notice in writing, mailed to the
      Rights Agent or successor Rights Agent, as the case may be, and to each transfer
      agent of the Common Shares and Series A Shares by registered or certified mail,
      and to the holders of the Right Certificates by first-class mail. If the Rights
      Agent shall resign or be removed or shall otherwise become incapable of acting,
      the Company shall appoint a successor to the Rights Agent. If the Company shall
      fail to make such appointment within a period of 30 days after giving notice
      of
      such removal or after it has been notified in writing of such resignation or
      incapacity by the resigning or incapacitated Rights Agent or by the holder
      of a
      Right Certificate (who shall, with such notice, submit his Right Certificate
      for
      inspection by the Company), then the registered holder of any Right Certificate
      may apply to any court of competent jurisdiction for the appointment of a new
      Rights Agent. Any successor Rights Agent, whether appointed by the Company
      or by
      such a court, shall be a corporation organized and doing business under the
      laws
      of the United States or any state of the United States, in good standing, which
      is authorized under such laws to exercise corporate trust powers and is subject
      to supervision or examination by federal or state authority and which has at
      the
      time of its appointment as Rights Agent a combined capital and surplus of at
      least $100,000,000. After appointment, the successor Rights Agent shall be
      vested with the same powers, rights, duties, and responsibilities as if it
      had
      been originally named as Rights Agent without further act or deed; but the
      predecessor Rights Agent shall deliver and transfer to the successor Rights
      Agent any property at the time held by it hereunder, and execute and deliver
      any
      further assurance, conveyance, act, or deed necessary for the purpose. Not
      later
      than the effective date of any such appointment the Company shall file notice
      thereof in writing with the predecessor Rights Agent and each transfer agent
      of
      the Common Shares and Series A Shares and mail a notice thereof in writing
      to
      the registered holders of the Right Certificates. Failure to give any notice
      provided for in this Section 21, however, or any defect therein, shall not
      affect the legality or validity of the resignation or removal of the Rights
      Agent or the appointment of the successor Rights Agent, as the case may
      be.

     

    Section
      22.   Issuance
      of New Rights Certificates.
      Notwithstanding any of the provisions of this Agreement or of the Rights to
      the
      contrary, the Company may,
      at
      its
      option, issue new Right Certificates evidencing Rights in such form as may
      be
      approved by the Board to reflect any adjustment or change in the Purchase Price
      per share and the number or kind or class of shares or other securities or
      property purchasable under the Right Certificates made in accordance with the
      provisions of this Agreement. In addition, in connection with the issuance,
      sale, or delivery of Common Shares following the Distribution Date and prior
      to
      the redemption or expiration of the Rights, the Company (a) shall, with respect
      to Common Shares so issued, sold, or delivered pursuant to the exercise of
      stock
      options or under any employee plan or arrangement outstanding, granted or
      awarded as of the Distribution Date, or upon the exercise, conversion or
      exchange of securities hereinafter issued by the Company, and (b) may, in any
      other case, if deemed necessary or appropriate by the Board, issue Right
      Certificates representing the appropriate number of Rights in connection with
      such issuance or sale; provided,
      however,
      that
      (i) no such Rights Certificate shall be issued if, and to the extent that,
      the
      Company shall be advised by counsel that such issuance would create a
      significant risk of material adverse tax consequences to the Company or the
      Person to whom such Rights Certificate would be issued, 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    and
      (ii)
      no such Rights Certificate shall be issued if, and to the extent that,
      appropriate adjustment shall otherwise have been made in lieu of the issuance
      thereof.

     

    Section
      23.   Redemption
      and Termination.
      (a)
      The
      Board may, at its option, at any time prior to the earlier of (A) the time
      at
      which an Acquiring Person becomes such, or (B) the Final Expiration Date, redeem
      all but not less than all the then outstanding Rights at a redemption price
      of
      $.001 per Right, appropriately adjusted to reflect any stock split, stock
      dividend, or similar transaction occurring after the date hereof (such
      redemption price being hereinafter referred to as the “Redemption
      Price”).
      The
      redemption of the Rights by the Board may be made effective at such time, on
      such basis and with such conditions as the Board, in its sole discretion, may
      establish.

     

    (b)  In
      the
      case of a redemption permitted under Section 23 hereof, immediately upon the
      action of the Board ordering the redemption of the Rights, evidence of which
      shall have been filed promptly with the Rights Agent, and without any further
      action and without any notice, the right to exercise the Rights will terminate
      and the only right thereafter of the holders of Rights shall be to receive
      the
      Redemption Price. Within ten days after the action of the Board ordering the
      redemption of the Rights under Section 23(a) hereof, the Company shall give
      notice of such redemption to the holders of the then outstanding Rights by
      mailing such notice to all such holders at their last addresses as they appear
      upon the registry books of the Rights Agent or, prior to the Distribution Date,
      on the registry books of the Transfer Agent for the Common Shares. Any notice
      which is mailed in the manner herein provided shall be deemed given, whether
      or
      not the holder receives the notice. Each such notice of redemption shall state
      the Redemption Date and the method by which the payment of the Redemption Price
      will be made. The Company may, at its option, discharge all of its obligations
      with respect to providing such notice to Rights holders by (i) issuing a press
      release announcing the manner of redemption of the Rights, (ii) depositing
      with
      a bank or trust company in New York, New York or Portland, Oregon, having a
      capital and surplus of at least $100,000,000, funds necessary for such
      redemption, in trust, to be applied to the redemption of the Rights so called
      for redemption and (iii) arranging for the mailing of the Redemption Price
      to
      the registered holders of the Rights.

     

    Section
      24.   Exchange.
      (a)
      The
      Board may, at its option, at any time after any Person becomes an Acquiring
      Person, exchange all or part of the then outstanding and exercisable Rights
      (which shall not include Rights that have become void pursuant to the provisions
      of Section 7(e) hereof) for Common Shares at an exchange ratio of one
      Class A Common Share per Class A Right and one Class B Common
      Share per Class B Right, respectively, in each case, appropriately adjusted
      to reflect any stock split, stock dividend, or similar transaction occurring
      after the date hereof (such exchange ratio being hereinafter referred to as
      the
“Exchange
      Ratio”).
      Notwithstanding the foregoing, the Board shall not be empowered to effect such
      exchange at any time after any Person (other than the Company, any Subsidiary
      of
      the Company, any employee benefit plan of the Company or any such Subsidiary,
      or
      any Person or entity organized, appointed or established by the Company for
      or
      pursuant to any such plan), together with all Affiliates and Associates of
      such
      Person, becomes the Beneficial Owner of Common Shares representing a majority
      of
      the Voting Power then outstanding.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)  Immediately
      upon the action of the Board ordering the exchange of any Rights pursuant to
      Section 24(a) hereof and without any further action and without any notice,
      the
      right to exercise such Rights shall terminate and (i) the only right thereafter
      of a holder of such Rights shall be to receive that number of Class A
      Common Shares or Class B Common Shares equal to the number of Class A
      Rights or Class B Rights, as the case may be, held by such holder
      multiplied by the Exchange Ratio. The Company shall promptly give public notice
      of any such exchange; provided,
      however,
      that
      the failure to give, or any defect in, such notice shall not affect the validity
      of such exchange. The Company promptly shall mail a notice of any such exchange
      to all of the holders of such Rights at their last addresses as they appear
      upon
      the registry books of the Rights Agent. Any notice which is mailed in the manner
      herein provided shall be deemed given, whether or not the holder received the
      notice. Each such notice of exchange will state the method by which the exchange
      of the Class A Common Shares or Class B Common Shares for Class A
      Rights or Class B Rights, as the case may be, will be effected. Any partial
      exchange shall be effected pro rata based on the number of Rights (other than
      Rights which have become void pursuant to the provisions of Section 7(d)) held
      by each holder of Rights.

     

    (c)  In
      any
      exchange pursuant to this Section 24, the Company, at its option, may substitute
      Series A Shares (or equivalent preferred shares) for Common Shares exchangeable
      for Rights, at the initial rate of one one-thousandth of a Series A Share (or
      equivalent preferred share) for each Common Share, as appropriately adjusted
      to
      reflect stock splits, stock dividends and other similar transactions after
      the
      date hereof.

     

    (d)  The
      Company shall not be required to issue fractions of Common Shares or to
      distribute certificates which evidence fractional Series A Shares (except as
      hereinafter provided) or fractional Common Shares, but if the exchange is for
      Series A Shares, the Company shall be obligated to issue fractional shares
      so
      long as any fraction of a Series A Share so to be issued is at least equal
      to
      one one-thousandth of a Series A Share. In lieu of such fractional shares,
      the
      Company shall pay to the registered holders of the Right Certificates with
      regard to which such fractional shares would otherwise be issuable, an amount
      in
      cash equal to the same fraction of the current market value of a whole share.
      For the purposes of this Section 24(d), (i) the current market value of a whole
      Common Share shall be the closing price of a Common Share (as determined
      pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading
      Day
      immediately following the day of the public announcement by the Company that
      an
      exchange is to be effected pursuant to this Section 24, and (ii) the current
      market value of a Series A Share or fraction of a Series A Share shall be the
      current market value on such day of a Series A Share (or fraction of a Series
      A
      Share) as determined in accordance with Section 11(d).

     

    Section
      25.   Notice
      of Certain Events.
      (a)
      In case
      the Company shall propose, at any time after the Distribution Date, (i) to
      pay
      any dividend payable in stock of any class to the holders of its Series A Shares
      or to make any other distribution to the holders of its Series A Shares (other
      than a regular quarterly cash dividend), or (ii) to offer to the holders of
      its
      Series A Shares rights or warrants to subscribe for or to purchase any
      additional Series A Shares or shares of stock of any class or any other
      securities, rights, or options, or (iii) to effect any reclassification of
      its
      Series A Shares (other than a reclassification involving only the subdivision
      of
      outstanding Series A Shares), or (iv) to effect any consolidation or merger
      into
      or with any other Person (other than a Subsidiary of the Company in a
      transaction which complies with 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      11(o) hereof), or to effect any sale or other transfer (or to permit one or
      more
      of its Subsidiaries to effect any sale or other transfer), in one or more
      transactions, of more than 50% of the assets or earning power of the Company
      and
      its Subsidiaries (taken as a whole) to any other Person or related Person,
      or
      (v) to effect the liquidation, dissolution or winding up of the Company, then,
      in each such case, the Company shall give to each holder of a Right Certificate,
      to the extent feasible and in accordance with Section 26 hereof, a notice of
      such proposed action, which shall specify the record date for the purposes
      of
      such stock dividend, or distribution of rights or warrants, or the date on
      which
      such reclassification, consolidation, merger, sale, transfer, liquidation,
      dissolution, or winding up is to take place and, if applicable, the date of
      participation therein by the holders of the Common Shares and/or Series A
      Shares, if any such date is to be fixed, and such notice shall be so given
      in
      the case of any such action covered by clause (i) or (ii) above at least 20
      days
      before the record date for determining holders of the Series A Shares for
      purposes of such action, and in the case of any such other action, at least
      20
      days before the date of participation therein by the holders of the Common
      Shares and/or Series A Shares, whichever shall be the earlier.

     

    (b)  In
      case
      of the occurrence of a Section 11(a)(ii) Event, then, in any such case, (i)
      the
      Company shall as soon as practicable thereafter give to each holder of a Right
      Certificate, to the extent feasible and in accordance with Section 26 hereof,
      a
      notice of the occurrence of such event, which shall specify the event and the
      consequences of the event to holders of Rights under Section 11(a)(ii), and
      (ii)
      all references in the preceding paragraph to Series A Shares shall be deemed
      thereafter to refer to Class A Common Shares with respect to holders of
      Class A Rights, Class B Common Shares with respect to holders of
      Class B Rights and/or, if appropriate, other securities.

     

    Section
      26.   Notices.
      Notices
      or demands authorized by this Agreement to be given or made by the Rights Agent
      or by the holder of any Right Certificate to or on the Company shall be
      sufficiently given or made if sent by first-class mail, postage prepaid,
      addressed (until another address is filed in writing with the Rights Agent)
      as
      follows:

     

    Schnitzer
      Steel Industries, Inc.

    3200
      NW
      Yeon Avenue

    Portland,
      Oregon 97210

    Attention: General
      Counsel

     

    with
      a
      copy to (which copy shall not constitute notice):

     

    White
      & Case LLP

    1155
      Avenue of the Americas

    New
      York,
      New York 10036

    


    Attention: William
      F. Wynne, Jr.

    Gregory
      Pryor

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Subject
      to the provisions of Section 21 hereof, any notice or demand authorized by
      this
      Agreement to be given or made by the Company or by the holder of any Right
      Certificate to or on the Rights Agent shall be sufficiently given or made if
      sent by first-class mail, postage prepaid, addressed (until another address
      is
      filed in writing with the Company) as follows:

     

    
      
        	 	
                To:

              	
                Wells
                  Fargo Bank, N.A.

                Shareowner
                  Services

                161
                  North Concord Exchange

                South
                  St. Paul, Minnesota
                  55075−1139

              


      

      
        	 	 	 


      

      
        	 	Attention: 	Manager of Account
                Management 


      

    

     

    Notices
      or demands authorized by this Agreement to be given or made by the Company
      or
      the Rights Agent to the holder of any Right Certificate shall be sufficiently
      given or made if sent by first-class mail, postage prepaid, addressed to such
      holder at the address of such holder as shown on the registry books of the
      Rights Agent.

     

    Section
      27.   Supplements
      and Amendments.
      For so
      long as the Rights are redeemable, the Company may, in its sole and absolute
      discretion, and the Rights Agent shall, if the Company so directs, supplement
      or
      amend any provision of this Agreement without the approval of any holders of
      certificates representing Common Shares. From and after the time the Rights
      are
      no longer redeemable, the Company may, in its sole and absolute discretion,
      and
      the Rights Agent shall, if the Company shall so direct, supplement or amend
      this
      Agreement without approval of any holders of Right Certificates in order (i)
      to
      cure any ambiguity, (ii) to correct or supplement any provision contained herein
      which may be defective or inconsistent with any other provision herein, or
      (iii)
      to change or supplement the provisions hereunder in any manner which the Company
      may deem necessary or desirable and which shall not adversely affect the
      interests of the holders of Right Certificates (other than an Acquiring Person
      or an Affiliate or Associate of an Acquiring Person); provided
      that no
      such supplement or amendment may cause this Agreement to again become amendable
      other than in accordance with this sentence or cause the Rights to again become
      redeemable. Upon the delivery of a certificate from an appropriate officer
      of
      the Company which states that the proposed supplement or amendment is in
      compliance with the terms of this Section 27, the Rights Agent shall execute
      such supplement or amendment. Prior to the Distribution Date, the interests
      of
      the holders of Rights shall be deemed coincident with the interests of the
      holders of Common Shares. Notwithstanding anything in this Agreement to the
      contrary, no supplement or amendment that changes the rights and duties of
      the
      Rights Agent under this Agreement will be effective against the Rights Agent
      without the execution of such supplement or amendment by the Rights Agent.
      

     

    Section
      28.   Successors.
      All the
      covenants and provisions of this Agreement by or for the benefit of the Company
      or the Rights Agent shall bind and inure to the benefit of their respective
      successors and assigns hereunder.

     

    Section
      29.   Determination
      and Actions by the Board.
      For all
      purposes of this Agreement, any calculation of the number of Common Shares
      outstanding at any particular time and any determination of the particular
      percentage of such outstanding Common Shares of which any Person is the
      Beneficial Owner shall be made in accordance with the provisions of Rule
      13d-

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3(d)(1)(i)
      of the General Rules and Regulations under the Exchange Act as in effect as
      of
      the date hereof. The Board shall have the exclusive power and authority to
      administer this Agreement and to exercise all rights and powers specifically
      granted to the Board or the Company, or as may be necessary or advisable in
      the
      administration of this Agreement, including, without limitation, the right
      and
      power to (i) interpret the provisions of this Agreement and (ii) make all
      determinations deemed necessary or advisable for the administration of this
      Agreement (including a determination to redeem or not redeem the Rights or
      to
      amend the Agreement). All such actions, calculations, interpretations, and
      determinations (including, for purposes of clause (ii) below, all omissions
      with
      respect to the foregoing) which are done or made by the Board, in good faith,
      shall (i) be final, conclusive and binding on the Company, the Rights Agent,
      the
      holders of the Right Certificates and all other parties, and (iii) not subject
      the Board to any liability to the holders of the Right
      Certificates.

     

    Section
      30.   Benefits
      of this Agreement.
      Nothing
      in this Agreement shall be construed to give to any person or corporation other
      than the Company, the Rights Agent and the registered holders of the Right
      Certificates (and, prior to the Distribution Date, the Common Shares) any legal
      or equitable right, remedy or claim under this Agreement; but this Agreement
      shall be for the sole and exclusive benefit of the Company, the Rights Agent
      and
      the registered holders of the Right Certificates (and, prior to the Distribution
      Date, the Common Shares).

     

    Section
      31.   Severability.
      If any
      term, provision, covenant, or restriction of this Agreement is held
      by a
      court
      of competent jurisdiction or other authority to be invalid, void or
      unenforceable, the remainder of the terms, provisions, covenants, and
      restrictions of this Agreement shall remain in full force and effect and shall
      in no way be affected, impaired or invalidated; provided,
      however,
      notwithstanding anything in this Agreement to the contrary, if any such term,
      provision, covenant, or restriction is held by such court or authority to be
      invalid, void, or unenforceable and the Board determines in its good faith
      judgment that severing the invalid language from this Agreement would adversely
      affect the purpose or effect of this Agreement, the right of redemption set
      forth in Section 23 hereof shall be reinstated and shall not expire until the
      close of business on the tenth day following the date of such determination
      by
      the Board. 

     

    Section
      32.   Governing
      Law.
      This
      Agreement and each Right Certificate issued hereunder shall be deemed to be
      a
      contract made under the laws of the State of Oregon, and for all purposes shall
      be governed by and construed in accordance with the laws of such State
      applicable to contracts made and to be performed entirely within such State;
      provided,
      however,
      that
      all provisions regarding the rights, duties and obligations of the Rights Agent
      shall be governed by and construed in accordance with the laws of the State
      of
      New York applicable to contracts made and to be performed entirely within such
      State.

     

    Section
      33.   Counterparts.
      This
      Agreement may be executed in any number of counterparts and each of such
      counterparts shall for all purposes be deemed to be an original, and all such
      counterparts shall together constitute but one and the same
      instrument.

     

    Section
      34.   Descriptive
      Headings.
      Descriptive headings of the several Sections of this Agreement are inserted
      for
      convenience of reference only and shall not control or affect the meaning or
      construction of any of the provisions hereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed and their respective corporate seals to be hereunto affixed and
      attested, all as of the day and year first above written.

     

    
      	
               

              Attest:

               

              By  
                /s/  Richard C. Josephson

              
                

              

              Name:  
                Richard C. Josephson 

              Title:    
                Secretary

               

            	
               

              SCHNITZER
                STEEL INDUSTRIES, INC.

               

              By  
                /s/  John D. Carter

              
                

              

              Name:  
                John D. Carter  

              Title:    
                President 

            
	
              [SEAL]

            	 
	
               

              Attest:

               

              By  
                /s/  John D. Baker

              
                

              

              Name:  
                John D. Baker 

              Title:     Vice
                President 

               

            	
               

              WELLS
                FARGO BANK, N.A.

               

               

              By  
                /s/  Darren Larson 

              
                

              

              Name: Darren
                Larson 

              Title: Vice
                President

               

            
	 	 


    

    


     

    


     


    
      
        
          


        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          


          


        

      

    

    
 

    EXHIBIT
      A


    FORM
      OF


     

    ARTICLES
      OF AMENDMENT 

     

    TO
      THE


     

    RESTATED
      ARTICLES OF INCORPORATION

     

    OF

     

    SCHNITZER
      STEEL INDUSTRIES, INC.

     

    Pursuant
      to Section 60.134 of the Oregon Revised Statutes

     

    Pursuant
      to Section 60.134 of the Oregon Revised Statutes, Schnitzer Steel Industries,
      Inc., a corporation organized and existing under the laws of the State of Oregon
      (the “Corporation”),
      adopts the following Articles of Amendment to its Restated Articles of
      Incorporation (this “Amendment”)
      for the
      purpose of creating a series of 100,000 shares of Preferred Stock designated
      as
      Series A Participating Preferred Stock:

     

    1.    The
      name
      of the Corporation is Schnitzer Steel Industries, Inc.

     

    2.    The
      text
      of the amendment determining the terms of the Series A Participating Preferred
      Stock is attached hereto as Appendix
      I.

     

    3.    This
      Amendment was duly adopted by the Board of Directors of the Corporation on
      March
      21, 2006 without shareholder approval. No shareholder action was
      required.

     

    


    
      	 	 	 
	 	SCHNITZER
              STEEL
              INDUSTRIES, INC.
	 
 	 
 	 
 
	Dated:
              March __, 2006 	By:  	/s/ 
	 	
              
Name:
	 	Title:


    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    APPENDIX
      I

     

    DESIGNATION
      OF TERMS

    OF

    SERIES
      A PARTICIPATING PREFERRED STOCK

    OF

    SCHNITZER
      STEEL INDUSTRIES, INC.

    


    RESOLVED,
      that pursuant to the authority vested in the Board of Directors of the
      Corporation by the Corporation’s Restated Articles of Incorporation, a series of
      Preferred Stock of the Corporation be and it hereby is created, no shares of
      which have been heretofore issued, and that the designation and amount thereof
      and the voting powers, preferences and relative, participating, optional and
      other special rights of the shares of such series, and the qualifications,
      limitations or restrictions thereof are as follows:

     

    Section
      1.    Designation
      and Amount.
      The
      shares of such series shall be designated as “Series A Participating Preferred
      Stock”, par value $1.00 per share (the “Series
      A Preferred Stock”),
      and
      the number of shares constituting such series shall be 100,000.

     

    Section
      2.    Dividends
      and Distributions.

     

    (A)    Subject
      to the prior and superior rights of the holders of any shares of any series
      of
      stock ranking prior and superior to the shares of Series A Preferred Stock
      with
      respect to dividends, the holders of shares of Series A Preferred Stock, in
      preference to the holders of Class A Common Stock, par value $1.00 per
      share, of the Company (the “Class A
      Common Stock”)
      and
      Class B Common Stock, par value $1.00 per share, of the Company (the
“Class B
      Common Stock”)
      and of
      any other junior stock, shall be entitled to receive, when, as and if declared
      by the Board of Directors out of funds legally available for the purpose,
      quarterly dividends payable in cash on the first day of January, April,
      July,
      and
      October in each year (each such date being referred to herein as a “Quarterly
      Dividend Payment Date”),
      commencing on the first Quarterly Dividend Payment Date after the first issuance
      of a share or fraction of a share of Series A Preferred Stock, in an amount
      per
      share (rounded to the nearest cent) equal to the greater of (a) $1.00 or (b)
      subject to the provision for adjustment hereinafter set forth, one thousand
      (1000) times the aggregate per share amount of all cash dividends, and one
      thousand (1000) times the aggregate per share amount (payable in kind) of all
      non-cash dividends or other distributions, other than a dividend or distribution
      payable in shares of Class A Common Stock or Class B Common Stock or a
      subdivision of the outstanding shares of Class A Common Stock or
      Class B Common Stock (by reclassification or otherwise), declared on the
      Class A Common Stock or Class B Common Stock since the immediately
      preceding Quarterly Dividend Payment Date or, with respect to the first
      Quarterly Dividend Payment Date, since the first issuance of any share or
      fraction of a share of Series A Preferred Stock. Dividends on the Series A
      Preferred Stock shall be paid out of funds legally available for such purpose.
      In the event the Company shall at any time after March 21, 2006 (the
“Rights
      Declaration Date”),
      (i)
      declare any dividend on Class A Common Stock or Class B Common Stock
      payable in shares of Class A Common Stock or Class B Common Stock,
      (ii) subdivide the outstanding Class A Common Stock or Class B Common
      Stock, or (iii) combine the outstanding Class A Common Stock or
      Class B Common Stock into a smaller number of shares, then in each such
      case the amounts to which 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    holders
      of shares of Series A Preferred Stock were entitled immediately prior to such
      event under clause (b) of the preceding sentence shall be adjusted by
      multiplying each such amount by a fraction the numerator of which is the number
      of shares of Class A Common Stock and Class B Common Stock outstanding
      immediately after such event and the denominator of which is the number of
      shares of Class A Common Stock and Class B Common Stock that were
      outstanding immediately prior to such event.

     

    (B)    The
      Company shall declare a dividend or distribution on the Series A Preferred
      Stock
      as provided in paragraph (A) of this Section immediately after it declares
      a
      dividend or distribution on the Class A Common Stock or Class B Common
      Stock (other than a dividend or distribution payable in shares of Class A
      Common Stock or Class B Common Stock); provided
      that, in
      the event no dividend or distribution shall have been declared on the
      Class A Common Stock or Class B Common Stock during the period between
      any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
      Payment Date, a dividend of $1.00 per share on the Series A Preferred Stock
      shall nevertheless be payable on such subsequent Quarterly Dividend Payment
      Date; and provided
      further,
      that
      nothing contained in this paragraph (B) shall be construed so as to conflict
      with any provision relating to the declaration of dividends contained in the
      Certificate.

     

    (C)    Dividends
      shall begin to accrue and be cumulative on outstanding shares of Series A
      Preferred Stock from the Quarterly Dividend Payment Date next preceding the
      date
      of issue of such shares of Series A Preferred Stock, unless the date of issue
      of
      such shares is prior to the record date for the first Quarterly Dividend Payment
      Date, in which case dividends on such shares shall begin to accrue from the
      date
      of issue of such shares, or unless the date of issue is a Quarterly Dividend
      Payment Date or is a date after the record date for the determination of holders
      of shares of Series A Preferred Stock entitled to receive a quarterly dividend
      and before such Quarterly Dividend Payment Date, in either of which events
      such
      dividends shall begin to accrue and be cumulative from such Quarterly Dividend
      Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
      paid on the shares of Series A Preferred Stock in an amount less than the total
      amount of such dividends at the time accrued and payable on such shares shall
      be
      allocated pro rata on a share-by-share basis among all such shares at the time
      outstanding. The Board of Directors may fix a record date for the determination
      of holders of shares of Series A Preferred Stock entitled to receive payment
      of
      dividend or distribution declared thereon, which record date shall be no more
      than 30 days before the date fixed for the payment thereof.

     

    Section
      3.    Voting
      Rights.
      The
      holders of shares of Series A Preferred Stock shall have the following voting
      rights:

     

    (A)    Subject
      to the provision for adjustment hereinafter set forth, each share of Series
      A
      Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters
      submitted to a vote of the shareholders of the Company. In the event the Company
      shall at any time following the Rights Declaration Date (i) declare any dividend
      on Class A Common Stock or Class B Common Stock payable in shares of
      Class A Common Stock or Class B Common Stock, (ii) subdivide the
      outstanding shares of Class A Common Stock or Class B Common Stock or
      (iii) combine the outstanding Class A Common Stock or Class B Common
      Stock into 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    a
      smaller
      number of shares, then in each such case the number of votes per share to which
      holders of shares of Series A Preferred Stock were entitled immediately prior
      to
      such event shall be adjusted by multiplying such number by a fraction the
      numerator of which is the number of votes entitled to be cast by the holders
      of
      shares of Class A Common Stock and Class B Common Stock outstanding
      immediately after such event and the denominator of which is the number of
      votes
      entitled to be cast by the holders of shares of Class A Common Stock and
      Class B Common Stock that were outstanding immediately prior to such
      event.

     

    (B)    Except
      as
      otherwise provided herein or by law, the holders of shares of Series A Preferred
      Stock and the holders of shares of Class A Common Stock and Class B
      Common Stock shall vote together as one class on all matters submitted to a
      vote
      of shareholders of the Company.

     

    (C)    (i)
      If at
      any time dividends on any Series A Preferred Stock shall be in arrears in an
      amount equal to six (6) quarterly dividends thereon, the occurrence of such
      contingency shall mark the beginning of a period (herein called a “default
      period”)
      which
      shall extend until such time when all accrued and unpaid dividends for all
      previous quarterly dividend periods and for the current quarterly dividend
      period on all shares of Series A Preferred Stock then outstanding shall have
      been declared and paid or set apart for payment. During each default period,
      all
      holders of Preferred Stock (including holders of the Series A Preferred Stock)
      with dividends in arrears in an amount equal to six (6) quarterly dividends
      thereon, voting as a class, irrespective of series, shall have the right to
      elect two (2) directors.

     

    (ii)    During
      any default period, such voting right of the holders of Series A Preferred
      Stock
      may be exercised initially at a special meeting called pursuant to subparagraph
      (iii) of this Section 3(C) or at any annual meeting of shareholders, and
      thereafter at annual meetings of shareholders, provided
      that
      neither such voting right nor the right of the holders of any other series
      of
      Series A Preferred Stock, if any, to increase, in certain cases, the authorized
      number of directors shall be exercised unless the holders of ten percent (10%)
      in number of shares of Series A Preferred Stock outstanding shall be present
      in
      person or by proxy. The absence of a quorum of the holders of Class A
      Common Stock and Class B Common Stock shall not affect the exercise by the
      holders of Series A Preferred Stock of such voting right. At any meeting at
      which the holders of Series A Preferred Stock shall exercise such voting right
      initially during an existing default period, they shall have the right, voting
      as a class, to elect directors to fill such vacancies, if any, in the Board
      of
      Directors as may then exist up to two (2) directors or, if such right is
      exercised at an annual meeting, to elect two (2) directors. If the number which
      may be so elected at any special meeting does not amount to the required number,
      the holders of the Series A Preferred Stock shall have the right to make such
      increase in the number of directors as shall be necessary to permit the election
      by them of the required number. After the holders of the Series A Preferred
      Stock shall have exercised their right to elect directors in any default period
      and during the continuance of such period, the 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    number
      of
      directors shall not be increased or decreased except by vote of the holders
      of
      Series A Preferred Stock as herein provided or pursuant to the rights of any
      equity securities ranking senior to or pari passu with the Series A Preferred
      Stock.

     

    (iii)    Unless
      the holders of Series A Preferred Stock shall, during an existing default
      period, have previously exercised their right to elect directors, the Board
      of
      Directors may order, or any shareholder or shareholders owning in the aggregate
      not less than ten percent (10%) of the total number of shares of Series A
      Preferred Stock outstanding, irrespective of series, may request, the calling
      of
      a special meeting of the holders of Series A Preferred Stock, which meeting
      shall thereupon be called by the President, a Vice President or the Secretary
      of
      the Corporation. Notice of such meeting and of any annual meeting at which
      holders of Series A Preferred Stock are entitled to vote pursuant to this
      Paragraph (C)(iii) shall be given to each holder of record of Series A Preferred
      Stock by mailing a copy of such notice to him at his last address as the same
      appears on the books of the Corporation. Such meeting shall be called for a
      time
      not earlier than 20 days and not later than 60 days after such order or request
      or, in default of the calling of such meeting within 60 days after such order
      or
      request, such meeting may be called on similar notice by any shareholder or
      shareholders owning in the aggregate not less than ten percent (10%) of the
      total number of shares of Series A Preferred Stock outstanding. Notwithstanding
      the provisions of this Paragraph (C)(iii), no such special meeting shall be
      called during the period within 60 days immediately preceding the date fixed
      for
      the next annual meeting of the shareholders.

     

    (iv)    In
      any
      default period, the holders of Class A Common Stock, Class B Common
      Stock and other classes of stock of the Corporation if applicable, shall
      continue to be entitled to elect the whole number of directors until the holders
      of Series A Preferred Stock shall have exercised their right to elect two (2)
      directors voting as a class, after the exercise of which right (x) the directors
      so elected by the holders of Series A Preferred Stock shall continue in office
      until their successors shall have been elected by such holders or until the
      expiration of the default period, and (y) any vacancy in the Board of Directors
      may (except as provided in Paragraph (C)(ii) of this Section 3) be filled by
      vote of a majority of the remaining directors theretofore elected by the holders
      of the class of stock which elected the director whose office shall have become
      vacant. References in this Paragraph (C) to directors elected by the holders
      of
      a particular class of stock shall include directors elected by such directors
      to
      fill vacancies as provided in clause (y) of the foregoing sentence.

     

    (v)    Immediately
      upon the expiration of a default period, (x) the right of the holders of Series
      A Preferred Stock as a class to elect directors shall cease, (y) the term of
      any
      directors elected by the holders of Series A Preferred Stock as a class shall
      terminate, and (z) the number of directors shall be such number as may be
      provided for in the certificate of incorporation or by-laws irrespective of
      any
      increase made pursuant to the provisions of Paragraph (C)(ii) of this Section
      3


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (such
      number being subject, however, to change thereafter in any manner provided
      by
      law or in the certificate of incorporation or by-laws). Any vacancies in the
      Board of Directors effected by the provisions of clauses (y) and (z) in the
      preceding sentence may be filled by a majority of the remaining
      directors.

     

    (D)    Except
      as
      set forth herein, holders of Series A Preferred Stock shall have no special
      voting rights and their consent shall not be required (except to the extent
      they
      are entitled to vote with holders of Class A Common Stock and Class B
      Common Stock as set forth herein) for taking any corporate action.

     

    Section
      4.    Certain
      Restrictions.

     

    (A)    Whenever
      quarterly dividends or other dividends or distributions payable on the Series
      A
      Preferred Stock as provided in Section 2 are in arrears, thereafter and until
      all accrued and unpaid dividends and distributions, whether or not declared,
      on
      shares of Series A Preferred Stock outstanding shall have been paid in full,
      the
      Company shall not:

     

    (i)    declare
      or pay dividends on, make any other distributions on, or redeem or purchase
      or
      otherwise acquire for consideration any shares of stock ranking junior (either
      as to dividends or upon liquidation, dissolution, or winding up) to the Series
      A
      Preferred Stock;

     

    (ii)    declare
      or pay dividends on or make any other distributions on any shares of stock
      ranking on a parity (either as to dividends or upon liquidation, dissolution,
      or
      winding up) with the Series A Preferred Stock, except dividends paid ratably
      on
      the Series A Preferred Stock and all such parity stock on which dividends are
      payable or in arrears in proportion to the total amounts to which the holders
      of
      all such shares are then entitled;

     

    (iii)    redeem
      or
      purchase or otherwise acquire for consideration shares of any stock ranking
      on a
      parity (either as to dividends or upon liquidation, dissolution, or winding
      up)
      with the Series A Preferred Stock, provided
      that the
      Company may at any time redeem, purchase or otherwise acquire shares of any
      such
      parity stock in exchange for shares of any stock of the Company ranking junior
      (either as to dividends or upon dissolution, liquidation or winding up) to
      the
      Series A Preferred Stock; or

     

    (iv)    purchase
      or otherwise acquire for consideration any shares of Series A Preferred Stock,
      or any shares of stock ranking on a parity (either as to dividends or upon
      liquidation, dissolution, or winding up) with the Series A Preferred Stock,
      except in accordance with a purchase offer made in writing or by publication
      (as
      determined by the Board of Directors) to all holders of such shares upon such
      terms as the Board of Directors, after consideration of the respective annual
      dividend rates and other relative rights and preferences of the respective
      series and classes, shall determine in good faith will result in fair and
      equitable treatment among the respective series or classes.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (B)    The
      Company shall not permit any subsidiary of the Company to purchase or otherwise
      acquire for consideration any shares of stock of the Company unless the Company
      could, under paragraph (A) of this Section 4, purchase or otherwise acquire
      such
      shares at such time and in such manner.

     

    Section
      5.    Redemption.
      The
      Series A Preferred Stock shall not be redeemable.

     

    Section
      6.    Reacquired
      Shares.
      Any
      shares of Series A Preferred Stock purchased or otherwise acquired by the
      Company in any manner whatsoever shall be retired and canceled promptly after
      the acquisition thereof. All such shares shall upon their cancellation become
      authorized but unissued shares of Preferred Stock and may be reissued as part
      of
      a new series of Preferred Stock to be created by resolution or resolutions
      of
      the Board of Directors, subject to the conditions and restrictions on issuance
      set forth herein.

     

    Section
      7.    Liquidation,
      Dissolution, or Winding Up.

     

    (A)    Upon
      any
      voluntary or involuntary liquidation, dissolution, or winding up of the Company,
      no distribution shall be made to the holders of shares of stock ranking junior
      (either as to dividends or upon liquidation, dissolution, or winding up) to
      the
      Series A Preferred Stock unless, prior thereto, the holders of shares of Series
      A Preferred Stock shall have received $1,000 per share, plus an amount equal
      to
      accrued and unpaid dividends and distributions thereon, whether or not declared,
      to the date of such payment (the “Series
      A Liquidation Preference”).
      Following the payment of the full amount of the Series A Liquidation Preference,
      no additional distributions shall be made to the holders of shares of Series
      A
      Preferred Stock unless, prior thereto, the holders of shares of Class A
      Common Stock and Class B Common Stock shall have received an amount per
      share (the “Common
      Adjustment”)
      equal
      to the quotient obtained by dividing (i) the Series A Liquidation Preference
      by
      (ii) 1,000 (as appropriately adjusted as set forth in subparagraph C below
      to
      reflect such events as stock splits, stock dividends and recapitalizations
      with
      respect to the Class A Common Stock and Class B Common Stock) (such
      number in clause (ii) being the “Adjustment
      Number”).
      Following the payment of the full amount of the Series A Liquidation Preference
      and the Common Adjustment in respect of all outstanding shares of Series A
      Preferred Stock, Class A Common Stock and Class B Common Stock,
      respectively, holders of Series A Preferred Stock, holders of shares of
      Class A Common Stock and holders of shares of Class B Common Stock
      shall receive their ratable and proportionate share of the remaining assets
      to
      be distributed in the ratio of the Adjustment Number to one with respect to
      such
      Preferred Stock, Class A Common Stock and Class B Common Stock, on a
      per share basis, respectively.

     

    (B)    In
      the
      event, however, that there are not sufficient assets available to permit payment
      in full of the Series A Liquidation Preference and the liquidation preferences
      of all other series of preference stock, if any, which rank on a parity with
      the
      Series A Preferred Stock, then all such available assets shall be distributed
      ratably to the holders of the Series A Preferred Stock and the holders of such
      parity stock in proportion to their respective liquidation preferences. In
      the
      event that, after payment in full of the Series A Liquidation Preference, there
      are not sufficient assets available to permit payment in full of the Common
      Adjustment, then any such remaining assets shall be distributed ratably to
      the
      holders of Class A Common Stock and Class B Common Stock.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (C)    In
      the
      event the Company shall at any time after the Rights Declaration Date, (i)
      declare any dividend on Class A Common Stock or Class B Common Stock
      payable in shares of Class A Common Stock or Class B Common Stock,
      (ii) subdivide the outstanding Class A Common Stock or Class B Common
      Stock, or (iii) combine the outstanding Class A Common Stock or
      Class B Common Stock into a smaller number of shares, then in each such
      case the Adjustment Number in effect immediately prior to such event shall
      be
      adjusted by multiplying such Adjustment Number by a fraction, the numerator
      of
      which is the number of shares of Class A Common Stock and Class B
      Common Stock outstanding immediately after such event, and the denominator
      of
      which is the number of shares of Class A Common Stock and Class B
      Common Stock that were outstanding immediately prior to such event.

     

    Section
      8.    Consolidation,
      Merger, etc.
      In case
      the Company shall enter into any consolidation, merger, combination, or other
      transaction in which the shares of Class A Common Stock or Class B
      Common Stock are exchanged for or changed into other stock or securities, cash,
      and/or any other property, then in any such case the shares of Series A
      Preferred Stock shall at the same time be similarly exchanged or changed in
      an
      amount per share (subject to the provision for adjustment hereinafter set forth)
      equal to 1,000 times the aggregate amount of stock, securities, cash, and/or
      any
      other property (payable in kind), as the case may be, into which or for which
      each share of Class A Common Stock and Class B Common Stock is changed
      or exchanged. In the event the Company shall at any time after the Rights
      Declaration Date: (i) declare or pay any dividend on Class A Common Stock
      or Class B Common Stock payable in shares of Class A Common Stock or
      Class B Common Stock, (ii) subdivide the outstanding shares of Class A
      Common Stock or Class B Common Stock, or (iii) combine the outstanding
      shares of Class A Common Stock or Class B Common Stock into a smaller
      number of shares, then in each such case the amount set forth in the preceding
      sentence with respect to the exchange or change of shares of Series A Preferred
      Stock shall be adjusted by multiplying such amount by a fraction, the numerator
      of which is the number of shares of Class A Common Stock and Class B
      Common Stock outstanding immediately after such event, and the denominator
      of
      which is the number of shares of Class A Common Stock and Class B
      Common Stock that were outstanding immediately prior to such event.

     

    Section
      9.    Ranking.
      The
      Series A Preferred Stock shall rank junior to all other series of the Company’s
      Preferred Stock as to the payment of dividends and distribution of assets,
      unless the term of any such series shall provide otherwise.

     

    Section
      10.    Fractional
      Shares.
      The
      Company may issue fractions and certificates representing fractions of a share
      of Series A Preferred Stock in integral multiples of 1/1000th of a share of
      Series A Preferred Stock (or in lieu thereof, at the election of the Board
      of
      Directors of the Company at the time of the first issue of any shares of Series
      A Preferred Stock, and evidence such fractions by depositary receipts, pursuant
      to an appropriate agreement between the Company and a depositary selected by
      it,
provided
      that
      such agreement shall provide that the holders of such depositary receipts shall
      have all rights, privileges and preferences to which they would be entitled
      as
      beneficial owners of shares of Series A Preferred Stock in the event that
      fractional shares of Series A Preferred Stock are issued) which shall entitle
      the holders thereof, in the proportion which such fraction bears to a full
      share, to all the rights provided herein for holders of full shares of Series
      A
      Preferred Stock.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      11.    Amendment.
      At any
      time when any shares of Series A Preferred Stock are outstanding, the
      designation of terms of Series A Preferred Stock set forth in these Articles
      of
      Amendment shall not be amended in any manner that would materially alter or
      change the powers, preferences, or special rights of the Series A Preferred
      Stock so as to affect them adversely, without the affirmative vote of the
      holders of a majority or more of the outstanding shares of Series A Preferred
      Stock, voting together as a single class.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

     

    [FORM
      OF
      CLASS A RIGHT CERTIFICATE]

     

    
      	Certificate No. R- 	___________________
              Rights 


    

     

    NOT
      EXERCISABLE AFTER MARCH 21, 2016, UNLESS EXTENDED PRIOR THERETO BY THE BOARD
      OF
      DIRECTORS OR EARLIER IF EXCHANGED OR REDEEMED BY THE COMPANY. THE RIGHTS ARE
      SUBJECT TO REDEMPTION AT $.001 PER RIGHT AND UNDER CERTAIN CIRCUMSTANCES TO
      EXCHANGE, IN EACH CASE AT THE OPTION OF THE COMPANY AND ON THE TERMS SET FORTH
      IN THE RIGHTS AGREEMENT.

     

    UNDER
      CERTAIN CIRCUMSTANCES, CLASS A RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
      (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER
      OF
      SUCH CLASS A RIGHTS MAY BECOME NULL AND VOID. [THE CLASS A RIGHTS REPRESENTED
      BY
      THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME
      AN
      ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
      TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS CLASS A RIGHT
      CERTIFICATE AND THE CLASS A RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE
      CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*  

     

    Class A
      Right Certificate

     

    SCHNITZER
      STEEL INDUSTRIES, INC.

     

    This
      certifies that __________________________, or registered assigns, is the
      registered owner of the number of Class A Rights set forth above, each of
      which entitles the owner thereof, subject to the terms, provisions and
      conditions of the Rights Agreement, dated as of March 21, 2006 (the
“Rights
      Agreement”),
      between Schnitzer Steel Industries, Inc., an Oregon corporation (the
“Company”),
      and
      Wells Fargo Bank, N.A. (the “Rights
      Agent”),
      to
      purchase from the Company at any time prior to 5:00 PM (New York City time)
      on
      March 21, 2016 (unless such date is extended prior thereto by the Board of
      Directors) (the “Final
      Expiration Date”),
      at
      the office or offices of the Rights Agent designated for such purpose, or its
      successors as Rights Agent, one one-thousandth of a fully paid, non-assessable
      share of Series A Participating Preferred Stock, par value $1.00 per share
      (“Series
      A Preferred Stock”),
      of
      the Company, at a purchase price of One Hundred Ten Dollars ($110.00) per one
      one-thousandth of a share (the “Purchase
      Price”),
      upon
      presentation and surrender of this Class A Right Certificate with the Form
      of Election to Purchase and related Certificate duly executed. Except as
      otherwise provided in the Rights Agreement, the Purchase Price shall be paid
      in
      cash. The number of Class A Rights evidenced by this Class A Right
      Certificate (and the number of fractional shares of Series A Preferred Stock
      that may be purchased upon exercise thereof) set forth above, and 

    
       

      
        

      

    

    
      
        
          	
                  *

                	
                  The
                    bracketed portion of the legend should be inserted only if
                    applicable.

                


        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

     

    the
      Purchase Price per fractional share of Series A Preferred Stock set forth above,
      are the number and Purchase Price as of April 4, 2006, based on the Series
      A
      Preferred Stock as constituted at such date. The Company reserves the right
      to
      require before the occurrence of a Triggering Event (as such term is defined
      in
      the Rights Agreement) that a number of Class A Rights be exercised so that
      only whole shares of Preferred Stock will be issued.

     

    Upon
      the
      occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights
      Agreement), if the Class A Rights evidenced by this Class A Right
      Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate
      or
      Associate of any such Acquiring Person (as such terms are defined in the Rights
      Agreement), (ii) a transferee of any such Acquiring Person, Associate, or
      Affiliate, or (iii) under certain circumstances specified in the Rights
      Agreement, a transferee of a person who, after such transfer, became an
      Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
      Class A Rights shall become null and void and no holder hereof shall have
      any right with respect to such Class A Rights from and after the occurrence
      of any such Section 11(a)(ii) Event.

     

    As
      provided in the Rights Agreement, the Purchase Price, and the number and kind
      of
      shares of Series A Preferred Stock or other securities that may be purchased
      upon the exercise of the Class A Rights evidenced by this Class A
      Right Certificate are subject to modification and adjustment upon the happening
      of certain events, including Triggering Events (as such term is defined in
      the
      Rights Agreement).

     

    This
      Class A Right Certificate is subject to all of the terms, provisions, and
      conditions of the Rights Agreement, which terms, provisions, and conditions
      are
      hereby incorporated herein by reference and made a part hereof and to which
      Rights Agreement reference is hereby made for a full description of the rights,
      limitations of rights, obligations, duties, and immunities hereunder of the
      Rights Agent, the Company, and the holders of the Class A Right
      Certificates, which limitations of rights include the temporary suspension
      of
      the exercisability of such Class A Rights under the specific circumstances
      specified in the Rights Agreement. Copies of the Rights Agreement are on file
      at
      the above-mentioned office of the Rights Agent and are also available upon
      written request to the Company.

     

    This
      Class A Right Certificate, with or without other Class A Right
      Certificates, upon surrender at the principal office or offices of the Rights
      Agent designated for such purpose, may be exchanged for another Class A
      Right Certificate or Class A Right Certificates of like tenor and date
      evidencing Class A Rights entitling the holder to purchase a like aggregate
      number of shares of Series A Preferred Stock as the Class A Rights
      evidenced by the Class A Right Certificate or Class A Right
      Certificates surrendered shall have entitled such holder to purchase. If the
      Class A Rights evidenced by this Class A Right Certificate shall be
      exercised in part, the holder shall be entitled to receive upon surrender hereof
      another Class A Right Certificate or Class A Right Certificates for
      the number of whole Class A Rights not exercised.

     

    Subject
      to the provisions of the Rights Agreement, the Class A Rights evidenced by
      this Class A Right Certificate may be redeemed by the Company at its option
      at a redemption price of $.001 per Class A Right at any time prior to the
      earlier of (i) the time at which an Acquiring Person becomes such, or (ii)
      the
      Final Expiration Date. In addition, under certain circumstances following the
      time any Acquiring Person becomes such, the Class A Rights may


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    be
      exchanged, in whole or in part, for Class A Common Shares (as defined in
      the Rights Agreement) or shares of Series A Preferred Stock (or equivalent
      preferred shares). Immediately upon the action of the Board of Directors of
      the
      Company authorizing exchange or redemption of the Class A Rights, the
      Class A Rights will no longer be exercisable, and thereafter the only right
      of the holders of the Class A Rights evidenced hereby will be to receive
      the securities issuable on exchange or the redemption price.

     

    The
      Rights Agreement may be supplemented or amended without the approval of any
      holder of the Class A Rights (or the Class A Common Shares) as set
      forth in the Rights Agreement.

     

    No
      fractional shares of Series A Preferred Stock will be issued upon the exercise
      of any Class A Right or Class A Rights evidenced hereby (other than
      fractions that are integral multiples of one one-thousandth of a share of Series
      A Preferred Stock, which may, at the election of the Company, be evidenced
      by
      depositary receipts), but in lieu thereof a cash payment will be made as
      provided in the Rights Agreement. The Company, at its election, may require
      that
      a number of Class A Rights be exercised so that only whole shares of
      Preferred Stock would be issued.

     

    No
      holder
      of this Class A Right Certificate, as such, shall be entitled to vote or
      receive dividends or be deemed for any purpose the holder of Series A Preferred
      Stock or of any other securities of the Company (including Class A Common
      Shares) that may at any time be issuable on the exercise hereof, nor shall
      anything contained in the Rights Agreement or herein be construed to confer
      upon
      the holder hereof, as such, any of the rights of a shareholder of the Company
      or
      any right to vote for the election of directors or upon any matter submitted
      to
      shareholders at any meeting thereof, or to give or withhold consent to any
      corporate action, or to receive notice of meetings or other actions affecting
      shareholders (except as provided in the Rights Agreement), or to receive
      dividends or subscription rights, or otherwise, until the Class A Rights
      evidenced by this Class A Right Certificate shall have been exercised as
      provided in the Rights Agreement and its corporate seal.

     

    This
      Class A Right Certificate shall not be valid or obligatory for any purpose
      until it shall have been countersigned by the Rights Agent.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      WITNESS
        the facsimile signature of the proper officers of the Company and its corporate
        seal.

    

     

    Dated
      as
      of _______________, 200__.

     

    
      	
              Countersigned

               

            	 
	
              WELLS
                FARGO BANK, N.A.

               

              By

              
                

              

              Authorized
                Signature

               

            	
              SCHNITZER
                STEEL INDUSTRIES, INC.

               

              By

              
                

              

              Title:

               

            
	
               

               

               

               

              [SEAL]

               

            	
              Attest:

               

              By

              
                

              

              Title:

               

              [SEAL]

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [FORM
      OF
      REVERSE SIDE OF CLASS A RIGHT CERTIFICATE]

     

    FORM
      OF ASSIGNMENT

     

    (To
      be
      executed by the registered holder if such

    holder
      desires to transfer the Class A Right Certificate.)

     

    FOR
      VALUE
      RECEIVED ______________________________________ hereby sells, assigns,
or
      transfers unto

     

      
        

      

    

    (Please
      print name and address of transferee)

    this
      Class A Right Certificate, together with all right, title, and interest
      therein, and does hereby irrevocably constitute and appoint _________________
      Attorney, to transfer the within Class A Right Certificate on the books of
      the within-named Company, with full power of substitution.

     

    Dated:
      _________________, 200_

     

     

      
        

      

    

    Signature

     

    Signature
      Medallion Guaranteed:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Certificate

     

    The
      undersigned hereby certifies by checking the appropriate boxes
      that:

     

    (1)
      this
      Class A Rights Certificate [     ] is
      [     ] is not being sold, assigned or transferred by
      or on behalf of a Person who is or was an Acquiring Person or an Affiliate
      or
      Associate of any such Acquiring Person (as such terms are defined pursuant
      to the Rights Agreement);

     

    (2)
      after
      due inquiry and to the best knowledge of the undersigned, it
      [     ] did [     ] did not
      acquire the Class A Rights evidenced by this Class A Right Certificate
      from any Person who is, was or subsequently became an Acquiring Person or an
      Affiliate or Associate of an Acquiring Person.

     

     

    
      	Dated: _____________,
              200_  	_______________________________
              Signature 

            


    

     

     

    Signature
      Medallion Guaranteed:

     

    NOTICE

     

    The
      signature(s) to the foregoing Assignment and Certificate must correspond to
      the
      name(s) as written upon the face of this Class A Right Certificate in every
      particular, without alteration or enlargement or any change
      whatsoever.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    [FORM
      OF
      ELECTION TO PURCHASE]

     

    (To
      be
      executed if holder desires to exercise

     

    Class A
      Rights represented by the Class A Right Certificate.)

     

    To:
      Schnitzer Steel Industries, Inc.

     

    The
      undersigned hereby irrevocably elects to exercise ____________ Class A
      Rights represented by this Class A Right Certificate to purchase the shares
      of Series A Shares issuable upon the exercise of the Class A Rights (Common
      Shares or such other securities of the Company or of any other person which
      may
      be issuable upon the exercise of the Class A Rights) and requests that
      certificates for such shares be issued in the name of:
      _______________________

     

    Please
      insert social security

    or
      other
      identifying number: ________________

     

      
        

      

    

    (Please
      print name and address)

     

      
        

      

    

     

      
        

      

    

     

    If
      such
      number of Class A Rights shall not be all the Class A Rights evidenced
      by this Class A Right Certificate, a new Class A Right Certificate for
      the balance of such Class A Rights shall be registered in the name of and
      delivered to: _______________________

     

    Please
      insert social security

    or
      other
      identifying number: ________________

     

    
      
        

      

      (Please
        print name and address)

       

        
          

        

      

       

        
          

        

      

    

     

    
       

      
        	Dated: _____________,
                200_  	_______________________________
                Signature 

              


      

       

    

    Signature
      Medallion Guaranteed:

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    CERTIFICATE

     

    The
      undersigned hereby certifies by checking the appropriate boxes
      that:

     

    (1) the
      Class A Rights evidenced by this Class A Right Certificate
      [     ] are [     ] are not
      being exercised by or on behalf of a Person who is or was an Acquiring Person
      or
      an Affiliate or Associate of any such Acquiring Person (as such terms are
      defined pursuant to the Rights Agreement);

     

    (2) after
      due
      inquiry and to the best knowledge of the undersigned, it
      [     ] did [     ] did not
      acquire the Class A Rights evidenced by this Class A Right Certificate
      from any Person who is, was or became an Acquiring Person or an Affiliate or
      Associate of an Acquiring Person.

     

    
       

      
        	Dated: _____________,
                200_  	_______________________________
                Signature 

              


      

    

     

    Signature
      Medallion Guaranteed:

     

    NOTICE

     

    The
      signature(s) to the foregoing Election to Purchase and Certificate must
      correspond to the name(s) as written upon the face of this Class A Right
      Certificate in every particular, without alteration or enlargement or any change
      whatsoever.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C



    [FORM
      OF
      CLASS B RIGHT CERTIFICATE]

    
       

      
        	Certificate No. R- 	___________________
                Rights 


      

       

    

    NOT
      EXERCISABLE AFTER MARCH 21, 2016, UNLESS EXTENDED PRIOR THERETO BY THE BOARD
      OF
      DIRECTORS OR EARLIER IF EXCHANGED OR REDEEMED BY THE COMPANY. THE RIGHTS ARE
      SUBJECT TO REDEMPTION AT $.001 PER RIGHT AND UNDER CERTAIN CIRCUMSTANCES TO
      EXCHANGE, IN EACH CASE AT THE OPTION OF THE COMPANY AND ON THE TERMS SET FORTH
      IN THE RIGHTS AGREEMENT.

     

    UNDER
      CERTAIN CIRCUMSTANCES, CLASS B RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
      (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER
      OF
      SUCH CLASS B RIGHTS MAY BECOME NULL AND VOID. [THE CLASS B RIGHTS REPRESENTED
      BY
      THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME
      AN
      ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
      TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS CLASS B RIGHT
      CERTIFICATE AND THE CLASS B RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE
      CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*  

     

    Class B
      Right Certificate

     

    SCHNITZER
      STEEL INDUSTRIES, INC.

     

    This
      certifies that __________________________, or registered assigns, is the
      registered owner of the number of Class B Rights set forth above, each of
      which entitles the owner thereof, subject to the terms, provisions and
      conditions of the Rights Agreement, dated as of March 21, 2006 (the
“Rights
      Agreement”),
      between Schnitzer Steel Industries, Inc., an Oregon corporation (the
“Company”),
      and
      Wells Fargo Bank, N.A. (the “Rights
      Agent”),
      to
      purchase from the Company at any time prior to 5:00 PM (New York City time)
      on
      March 21, 2016 (unless such date is extended prior thereto by the Board of
      Directors) (the “Final
      Expiration Date”),
      at
      the office or offices of the Rights Agent designated for such purpose, or its
      successors as Rights Agent, one one-thousandth of a fully paid, non-assessable
      share of Series A Participating Preferred Stock, par value $1.00 per share
      (“Series
      A Preferred Stock”),
      of
      the Company, at a purchase price of One Hundred Ten Dollars ($110.00) per one
      one-thousandth of a share (the “Purchase
      Price”),
      upon
      presentation and surrender of this Class B Right Certificate with the Form
      of Election to Purchase and related Certificate duly executed. Except as
      otherwise provided in the Rights Agreement, the Purchase Price shall be paid
      in
      cash. The number of Class B Rights evidenced by this Class B Right
      Certificate (and the number of fractional shares of Series A Preferred Stock
      that may be purchased upon exercise thereof) set forth above, and 

     

    
      
        

      

      
        
          
            	
                    *

                  	
                    The
                      bracketed portion of the legend should be inserted only if
                      applicable.

                  


          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

    

     

    the
      Purchase Price per fractional share of Series A
      Preferred Stock set forth above, are the number and Purchase Price as of April
      4, 2006, based on the Series A Preferred Stock as constituted at such date.
      The
      Company reserves the right to require before the occurrence of a Triggering
      Event (as such term is defined in the Rights Agreement) that a number of
      Class B Rights be exercised so that only whole shares of Preferred Stock
      will be issued.

     

    Upon
      the
      occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights
      Agreement), if the Class B Rights evidenced by this Class B Right
      Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate
      or
      Associate of any such Acquiring Person (as such terms are defined in the Rights
      Agreement), (ii) a transferee of any such Acquiring Person, Associate, or
      Affiliate, or (iii) under certain circumstances specified in the Rights
      Agreement, a transferee of a person who, after such transfer, became an
      Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
      Class B Rights shall become null and void and no holder hereof shall have
      any right with respect to such Class B Rights from and after the occurrence
      of any such Section 11(a)(ii) Event.

     

    As
      provided in the Rights Agreement, the Purchase Price, and the number and kind
      of
      shares of Series A Preferred Stock or other securities that may be purchased
      upon the exercise of the Class B Rights evidenced by this Class B
      Right Certificate are subject to modification and adjustment upon the happening
      of certain events, including Triggering Events (as such term is defined in
      the
      Rights Agreement).

     

    This
      Class B Right Certificate is subject to all of the terms, provisions, and
      conditions of the Rights Agreement, which terms, provisions, and conditions
      are
      hereby incorporated herein by reference and made a part hereof and to which
      Rights Agreement reference is hereby made for a full description of the rights,
      limitations of rights, obligations, duties, and immunities hereunder of the
      Rights Agent, the Company, and the holders of the Class B Right
      Certificates, which limitations of rights include the temporary suspension
      of
      the exercisability of such Class B Rights under the specific circumstances
      specified in the Rights Agreement. Copies of the Rights Agreement are on file
      at
      the above-mentioned office of the Rights Agent and are also available upon
      written request to the Company.

     

    This
      Class B Right Certificate, with or without other Class B Right
      Certificates, upon surrender at the principal office or offices of the Rights
      Agent designated for such purpose, may be exchanged for another Class B
      Right Certificate or Class B Right Certificates of like tenor and date
      evidencing Class B Rights entitling the holder to purchase a like aggregate
      number of shares of Series A Preferred Stock as the Class B Rights
      evidenced by the Class B Right Certificate or Class B Right
      Certificates surrendered shall have entitled such holder to purchase. If the
      Class B Rights evidenced by this Class B Right Certificate shall be
      exercised in part, the holder shall be entitled to receive upon surrender hereof
      another Class B Right Certificate or Class B Right Certificates for
      the number of whole Class B Rights not exercised.

     

    Subject
      to the provisions of the Rights Agreement, the Class B Rights evidenced by
      this Class B Right Certificate may be redeemed by the Company at its option
      at a redemption price of $.001 per Class B Right at any time prior to the
      earlier of (i) the time at which an Acquiring Person becomes such, or (ii)
      the
      Final Expiration Date. In addition, under certain circumstances following the
      time any Acquiring Person becomes such, the Class B Rights may


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    be
      exchanged, in whole or in part, for Class B Common Shares (as defined in
      the Rights Agreement) or shares of Series A Preferred Stock (or equivalent
      preferred shares). Immediately upon the action of the Board of Directors of
      the
      Company authorizing exchange or redemption of the Class B Rights, the
      Class B Rights will no longer be exercisable, and thereafter the only right
      of the holders of the Class B Rights evidenced hereby will be to receive
      the securities issuable on exchange or the redemption price.

     

    The
      Rights Agreement may be supplemented or amended without the approval of any
      holder of the Class B Rights (or the Class B Common Shares) as set
      forth in the Rights Agreement.

     

    No
      fractional shares of Series A Preferred Stock will be issued upon the exercise
      of any Class B Right or Class B Rights evidenced hereby (other than
      fractions that are integral multiples of one one-thousandth of a share of Series
      A Preferred Stock, which may, at the election of the Company, be evidenced
      by
      depositary receipts), but in lieu thereof a cash payment will be made as
      provided in the Rights Agreement. The Company, at its election, may require
      that
      a number of Class B Rights be exercised so that only whole shares of
      Preferred Stock would be issued.

     

    No
      holder
      of this Class B Right Certificate, as such, shall be entitled to vote or
      receive dividends or be deemed for any purpose the holder of Series A Preferred
      Stock or of any other securities of the Company (including Class B Common
      Shares) that may at any time be issuable on the exercise hereof, nor shall
      anything contained in the Rights Agreement or herein be construed to confer
      upon
      the holder hereof, as such, any of the rights of a shareholder of the Company
      or
      any right to vote for the election of directors or upon any matter submitted
      to
      shareholders at any meeting thereof, or to give or withhold consent to any
      corporate action, or to receive notice of meetings or other actions affecting
      shareholders (except as provided in the Rights Agreement), or to receive
      dividends or subscription rights, or otherwise, until the Class B Rights
      evidenced by this Class B Right Certificate shall have been exercised as
      provided in the Rights Agreement and its corporate seal.

     

    This
      Class B Right Certificate shall not be valid or obligatory for any purpose
      until it shall have been countersigned by the Rights Agent.


     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    WITNESS
      the facsimile signature of the proper officers of the Company and its corporate
      seal.

     

    Dated
      as
      of _______________, 200__.

     

    
       

      
        	
                Countersigned

                 

              	 
	
                WELLS
                  FARGO BANK, N.A.

                 

                By

                
                  

                

                Authorized
                  Signature

                 

              	
                SCHNITZER
                  STEEL INDUSTRIES, INC.

                 

                By

                
                  

                

                Title:

                 

              
	
                 

                 

                 

                 

                [SEAL]

                 

              	
                Attest:

                 

                By

                
                  

                

                Title:

                 

                [SEAL]

              


      

      


    

     

    


     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    [FORM
      OF
      REVERSE SIDE OF CLASS B RIGHT CERTIFICATE]

     

    FORM
      OF ASSIGNMENT

     

    (To
      be
      executed by the registered holder if such

    holder
      desires to transfer the Class B Right Certificate.)

     

    FOR
      VALUE
      RECEIVED ______________________________________ hereby sells, assigns, or
      transfers unto

     

    
      
        

      

    

    (Please
      print name and address of transferee)

    this
      Class B Right Certificate, together with all right, title, and interest
      therein, and does hereby irrevocably constitute and appoint _________________
      Attorney, to transfer the within Class B Right Certificate on the books of
      the within-named Company, with full power of substitution.

     

    
      
         

        
          	Dated: _____________,
                  200_  	_______________________________
                  Signature 

                


        

         

      

    

    Signature
      Medallion Guaranteed:

     

    


     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Certificate

     

    The
      undersigned hereby certifies by checking the appropriate boxes
      that:

     

    (1)
      this
      Class B Rights Certificate [     ] is
      [     ] is not being sold, assigned or transferred by
      or on behalf of a Person who is or was an Acquiring Person or an Affiliate
      or
      Associate of any such Acquiring Person (as such terms are defined pursuant
      to the Rights Agreement);

     

    (2)
      after
      due inquiry and to the best knowledge of the undersigned, it
      [     ] did [     ] did not
      acquire the Class B Rights evidenced by this Class B Right Certificate
      from any Person who is, was or subsequently became an Acquiring Person or an
      Affiliate or Associate of an Acquiring Person.

     

    
      
         

        
          	Dated: _____________,
                  200_  	_______________________________
                  Signature 

                


        

         

      

    

    Signature
      Medallion Guaranteed:

     

    NOTICE

     

    The
      signature(s) to the foregoing Assignment and Certificate must correspond to
      the
      name(s) as written upon the face of this Class B Right Certificate in every
      particular, without alteration or enlargement or any change
      whatsoever.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    [FORM
      OF
      ELECTION TO PURCHASE]

     

    (To
      be
      executed if holder desires to exercise

    Class B
      Rights represented by the Class B Right Certificate.)

     

    To:
      Schnitzer Steel Industries, Inc.

     

    The
      undersigned hereby irrevocably elects to exercise ____________ Class B
      Rights represented by this Class B Right Certificate to purchase the shares
      of Series A Shares issuable upon the exercise of the Class B Rights (Common
      Shares or such other securities of the Company or of any other person which
      may
      be issuable upon the exercise of the Class B Rights) and requests that
      certificates for such shares be issued in the name of:
      _______________________

     

    Please
      insert social security

    or
      other
      identifying number: ________________

     

     

      
        

      

    

    (Please
      print name and address)

     

      
        

      

    

     

      
        

      

    

     

    If
      such
      number of Class B Rights shall not be all the Class B Rights evidenced
      by this Class B Right Certificate, a new Class B Right Certificate for
      the balance of such Class B Rights shall be registered in the name of and
      delivered to: _______________________

     

    Please
      insert social security

    or
      other
      identifying number: ________________

     

    
      
        

      

    

    (Please
      print name and address)

     

      
        

      

    

     

      
        

      

    

     

     

    
      
        
          	Dated: _____________,
                  200_  	_______________________________
                  Signature 

                


        

         

      

    

    Signature
      Medallion Guaranteed:

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    CERTIFICATE

     

    The
      undersigned hereby certifies by checking the appropriate boxes
      that:

     

    (1) the
      Class B Rights evidenced by this Class B Right Certificate
      [     ] are [     ] are not
      being exercised by or on behalf of a Person who is or was an Acquiring Person
      or
      an Affiliate or Associate of any such Acquiring Person (as such terms are
      defined pursuant to the Rights Agreement);

     

    (2) after
      due
      inquiry and to the best knowledge of the undersigned, it
      [     ] did [     ] did not
      acquire the Class B Rights evidenced by this Class B Right Certificate
      from any Person who is, was or became an Acquiring Person or an Affiliate or
      Associate of an Acquiring Person.

     

    
      
         

        
          	Dated: _____________,
                  200_  	_______________________________
                  Signature 

                


        

         

      

    

    Signature
      Medallion Guaranteed:

     

    NOTICE

     

    The
      signature(s) to the foregoing Election to Purchase and Certificate must
      correspond to the name(s) as written upon the face of this Class B Right
      Certificate in every particular, without alteration or enlargement or any change
      whatsoever.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      D


    SUMMARY
      OF RIGHTS TO PURCHASE

    SERIES
      A
      SHARES

     

    On
      March
      21, 2006, the Board of Directors of Schnitzer Steel Industries, Inc. (the
“Company”)
      declared a dividend distribution of one preferred share purchase right (a
“Class A
      Right”)
      for
      each share of Class A Common Stock, par value $1.00 per share, of the
      Company (a “Class A
      Common Share”)
      outstanding at the close of business on April 4, 2006 (the “Record
      Date”)
      and
      one preferred share purchase right (a “Class B
      Right”)
      for
      each share of Class B Common Stock, par value $1.00 per share, of the
      Company (a “Class B
      Common Share” and
      together with the Class A Common Shares, the “Common
      Shares”)
      outstanding at the Record Date (the Class A Rights and Class B Rights
      together the “Rights”).
      Except
      as set forth below, each Right entitles the registered holder to purchase from
      the Company one one-thousandth of a share (a “Unit”)
      of
      Series A Participating Preferred Stock, par value $1.00 per share, of the
      Company (“Series
      A Preferred Shares”),
      at a
      price of $110.00 (the “Purchase
      Price”),
      subject to adjustment. The Purchase Price shall be paid in cash, or by certified
      check or cashier’s check payable to the order of the Company. The description
      and terms of the Rights are set forth in a Rights Agreement (the “Rights
      Agreement”)
      between the Company and Wells Fargo Bank, N.A., as Rights Agent.

     

    Initially,
      no separate Right Certificates will be distributed. Until the earlier to occur
      of (i) 10 days following (A) a public announcement that, or (B) such earlier
      date as a majority of the Company’s Board of Directors has become aware that, a
      person or group of affiliated or associated persons (an “Acquiring
      Person”)
      has
      acquired, or obtained the right to acquire, beneficial ownership of Common
      Shares representing either (x) 15% or more of the total number of votes entitled
      to be cast by the holders of the Common Shares of the Company then outstanding
      or (y) 15% or more of the total number of outstanding Common Shares of the
      Company (the earlier of the dates referred to in (A) and (B) being referred
      to
      as the “Shares
      Acquisition Date”)
      or
      (ii) 10 Business Days (or such later date as the Board of Directors may
      determine) following the commencement of a tender offer or exchange offer if,
      upon consummation thereof, such person or group would become an Acquiring Person
      (the earlier of such dates being called the “Distribution
      Date”),
      the
      Rights will be evidenced, with respect to any Common Shares outstanding on
      and
      after the Record Date, by the certificates representing such Common Shares.
      Under the Rights Agreement, the Schnitzer Steel Industries, Inc. Voting Trust
      (the “Voting
      Trust”)
      governed by the Schnitzer Steel Industries, Inc. 2001 Restated Voting Trust
      and
      Buy-Sell Agreement, dated as of March 26, 2001 (the “Voting
      Trust Agreement”)
      and any
      trustees thereof in their capacity as such (each, a “Trustee”)
      are
      excluded from the definition of Acquiring Person. No person, other than the
      Voting Trust and the Trustees in their capacity as Trustees, shall be deemed
      to
      beneficially own any Common Shares as a result of being a party to or bound
      by
      the Voting Trust Agreement. The Rights Agreement provides that, until the
      Distribution Date, the Rights will be transferred with and only with Common
      Share certificates. As soon as practicable following the Distribution Date,
      separate certificates evidencing the rights (“Right
      Certificates”)
      will
      be mailed to holders of record of the Common Shares as of the close of business
      on the Distribution Date and, thereafter, such separate Right Certificates
      alone
      will evidence the Rights.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The
      Rights are not exercisable until the Distribution Date and will expire on March
      21, 2016, unless such date is extended or the Rights are earlier redeemed or
      exchanged by the Company as described below.

     

    If
      a
      person (other than the Company and certain other entities) becomes an Acquiring
      Person, each holder of a Class A Right will thereafter have the right to
      receive, upon the exercise thereof at the Purchase Price, Class A Common
      Shares of the Company and each holder of a Class B Right will thereafter
      have the right to receive, upon the exercise thereof at the Purchase Price,
      Class B Common Shares of the Company, or, in certain circumstances, cash,
      property or other securities of the Company, in each case, having a value equal
      to two times the Purchase Price. Notwithstanding any of the foregoing, following
      the occurrence of the event set forth above, all Rights that are, or (under
      certain circumstances specified in the Rights Agreement) were, beneficially
      owned by any Acquiring Person will be null and void.

     

    If,
      at
      any time following the Shares Acquisition Date, (i) the Company engages in
      a
      merger or other business combination transaction in which the Company is not
      the
      surviving corporation, or in which the Company is the surviving corporation
      but
      in which its Common Shares are changed or exchanged, or (ii) more than 50%
      of
      the Company’s assets or earning power is sold or transferred, the Rights
      Agreement provides that proper provision shall be made so that each holder
      of a
      Right (other than Rights that previously have been voided as set forth above)
      shall thereafter have the right to receive, upon the exercise thereof at the
      Purchase Price, common shares of the acquiring company having a value equal
      to
      two times the Purchase Price.

     

    The
      Purchase Price payable, and the number of Units of Series A Preferred Shares
      or
      other securities or property issuable, upon exercise of the Rights are subject
      to adjustment from time to time to prevent dilution (i) in the event of a
      dividend of Series A Preferred Shares on, or a subdivision, combination or
      reclassification of, the Series A Preferred Shares, (ii) upon the grant to
      holders of the Series A Preferred Shares of certain rights or warrants to
      subscribe for Series A Preferred Shares or securities convertible into Series
      A
      Preferred Shares, or (iii) upon the distribution to holders of the Series A
      Preferred Shares of debt securities or assets (excluding regular quarterly
      cash
      dividends and dividends payable in Series A Preferred Shares) or of subscription
      rights or warrants (other than those referred to above).

     

    With
      certain exceptions, no adjustment in the Purchase Price will be required until
      cumulative adjustments require an adjustment of at least 1% in such Purchase
      Price. No fractional shares that are not integral multiples of one
      one-thousandth of a Series A Share will be issued and, in lieu thereof, an
      adjustment in cash will be made based on the market price of the Series A
      Preferred Shares on the last trading date prior to the date of
      exercise.

     

    At
      any
      time after the date of the Rights Agreement until the date on which an Acquiring
      Person becomes such, the Board of Directors may redeem the Rights in whole,
      but
      not in part, at a price of $.001 per Right, subject to adjustments (the
“Redemption
      Price”).

     

    At
      any
      time after a person becomes an Acquiring Person, provided
      that the
      Acquiring Person beneficially owns not more than 50% of the outstanding Common
      Shares, the Board of Directors may, at its option, exchange all or part of
      the
      then outstanding and exercisable 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Rights
      for Common Shares at an exchange ratio of one Class A Common Share per
      Class A Right and one Class B Common Share per Class B Right,
      respectively.

     

    Until
      a
      Right is exercised, the holder thereof, as such, will have no rights as a
      shareholder of the Company. While the distribution of the Rights will not be
      taxable to shareholders or to the Company, shareholders may, depending on the
      circumstances, recognize taxable income in the event that the Rights become
      exercisable for Class A Common Shares, Class B Common Shares (or other
      consideration) of the Company or for common stock of the acquiring company
      or in
      the event of the redemption of the Rights.

     

    Any
      of
      the provisions of the Rights Agreement may be amended by the Board of Directors
      at any time the Rights are redeemable. Thereafter, the Rights Agreement may
      be
      amended to cure any ambiguity, to correct defects and inconsistencies or to
      make
      changes that do not adversely affect the interests of holders of the Rights
      (other than an Acquiring Person); provided
      that no
      supplement or amendment may cause the Rights Agreement to again become amendable
      other than in accordance with this sentence or to cause the Rights to again
      become redeemable.

     

    A
      copy of
      the Rights Agreement has been filed with the Securities and Exchange Commission
      as an Exhibit to a Registration Statement on Form 8-A. A copy of the Rights
      Agreement is available free of charge from the Company or the Rights Agent.
      This
      summary description of the Rights does not purport to be complete and is
      qualified in its entirety by reference to the Rights Agreement, which is
      incorporated herein by reference.