www.EXFILE.com   888.775-4789    SCHNITZER STEEL INDUSTRIES, INC.  EXHIBIT 10.1 TO FORM 8K


    EXHIBIT
      10.1

     

    FORM
      OF RESTRICTED
      STOCK UNIT
      AWARD AGREEMENT

     

    RESTRICTED
      STOCK UNIT

    AWARD
      AGREEMENT

     
      

    This
      Award Agreement (the “Agreement”) is entered into as of ___________, 2006 (the
“Award Date”) by and between Schnitzer Steel Industries, Inc., an Oregon
      corporation (the “Company”), and ____________ , an employee of the Company or a
      parent or subsidiary of the Company (the “Recipient”), for the award of
      restricted stock units with respect to the Company’s Class A Common Stock
      (“Common Stock”). 

     
      

    The
      award
      of restricted stock units to the Recipient is made pursuant to Section 8 of
      the
      Company’s 1993 Stock Incentive Plan (the “Plan”) and the Recipient desires to
      accept the award subject to the terms and conditions of this Agreement.


     
      

    IN
      CONSIDERATION of the mutual covenants and agreements set forth in this
      Agreement, the parties agree to the following. 

     
      

    1.            
      Award
      and Terms of Restricted Stock Units.
      The
      Company awards to the Recipient under the Plan _________ restricted stock units
      (the “Award”), subject to the restrictions, terms and conditions set forth in
      this Agreement. 

     
      

    (a)  Rights
      under Restricted Stock Units.
      A
      restricted stock unit (a “RSU”) obligates the Company, upon vesting in
      accordance with this Agreement, to issue to the Recipient one share of Common
      Stock for each RSU.  The number of shares of Common Stock issuable with
      respect to each RSU is subject to adjustment as determined by the Board of
      Directors of the Company as to the number and kind of shares of stock
      deliverable upon any merger, reorganization, consolidation, recapitalization,
      stock dividend, spin-off or other change in the corporate structure affecting
      the Common Stock generally. 

     
      

    (b) Vesting
      Date.
      The
      RSUs awarded under this Agreement shall initially be 100% unvested and subject
      to forfeiture.  Subject to Sections 1(c), (d) and (e), the RSUs shall
      vest in equal annual installments over five years commencing on June 1, 2006
      (the “Vesting Reference Date”) as follows:

     

    
      
        	 	
                %
                  of RSUs Vested

              
	
                First
                  anniversary of the Vesting Reference Date

              	
                20%

              
	
                Second
                  anniversary of the Vesting Reference Date

              	
                40%

              
	
                Third
                  anniversary of the Vesting Reference Date

              	
                60%

              
	
                Fourth
                  anniversary of the Vesting Reference Date

              	
                80%

              
	
                Fifth
                  anniversary of the Vesting Reference Date

              	
                100%

              


      

    

     
      

    (c) Acceleration
      on Death, Total Disability or Retirement.
      If the
      Recipient ceases to be an employee of the Company or a parent or subsidiary
      of
      the Company by reason of the Recipient’s death, total disability or retirement,
      all outstanding but unvested RSUs shall become immediately vested. The term
      “total disability” means a mental or physical impairment which is expected to
      result in death or which has lasted or is expected to last for a continuous
      period of 12 months or more and which causes Recipient to be unable, in the
      opinion of the Company and two independent physicians, to perform his or her
      duties as an employee, officer or consultant of the Company and to be engaged
      in
      any substantial gainful activity. Total disability shall be deemed to have
      occurred on the first day after the Company and the two

     

    
      
         

      

      
         

        
          

        

      

      
         


    

    independent
      physicians have furnished their opinion of total disability to the Company.
      The
      term “retirement” shall mean (i) normal retirement after reaching age 65, (ii)
      early retirement after reaching age 55 and completing 10 years of service,
      or
      (iii) early retirement after completing 30 years of service without regard
      to
      age.

    


    (d) Certain
      Transactions.
      Notwithstanding any provision in this Agreement,
      in the
      event of dissolution of the Company or a merger, consolidation or plan of
      exchange affecting the Company, the Compensation Committee of the Board of
      Directors (the “Compensation Committee”) may, in its sole discretion and to the
      extent possible under the structure of the applicable transaction, select one
      or
      a combination of the following alternatives for treating this Award of
      RSUs:

     

    (i) The
      Award
      shall remain in effect in accordance with its terms; 

    


    (ii) All
      or a
      portion of the RSUs shall, to the extent then still subject to the vesting
      restrictions, be released from the vesting restrictions in connection with
      the
      closing of the applicable transaction; or

    


    (iii) The
      RSUs
      shall be converted into restricted stock units or restricted stock of one or
      more of the corporations that are the surviving or acquiring corporations in
      the
      applicable transaction. The amount and type of converted restricted stock units
      or restricted stock shall be determined by the Company, taking into account
      the
      relative values of the companies involved in the applicable transaction and
      the
      exchange rate, if any, used in determining shares of the surviving
      corporation(s) to be held by holders of shares of the Company following the
      applicable transaction. Unless otherwise determined by the Company, by action
      of
      the Compensation
      Committee,
      the
      converted restricted stock units or restricted stock shall continue to be
      subject to the forfeiture provisions applicable to the RSUs at the time of
      the
      applicable transaction.

    


    (e) Forfeiture
      of RSUs on Termination of Service.
      If the
      Recipient ceases to be an employee of the Company or a parent or subsidiary
      of
      the Company for any reason that does not result in acceleration of vesting
      pursuant to Section 1(c) or 1(d), the Recipient shall immediately forfeit all
      outstanding but unvested RSUs awarded pursuant to this Agreement and the
      Recipient shall have no right to receive the related Common Stock. 

     
      

    (f) Restrictions
      on Transfer.
      The
      Recipient may not sell, transfer, assign, pledge or otherwise encumber or
      dispose of the RSUs subject to this Agreement. The Recipient may designate
      beneficiaries to receive the shares of Common Stock underlying the RSUs subject
      to this Agreement if the Recipient dies before delivery of the shares of Common
      Stock by so indicating on a form supplied by the Company. If the Recipient
      fails
      to designate a beneficiary, such Common Stock will be delivered to the
      person or persons establishing rights of ownership by will or under the laws
      of
      descent and distribution.

     
      

    (g) No
      Voting Rights; Dividends.
      The
      Recipient shall have no rights as a shareholder with respect to the RSUs or
      the
      Common Stock underlying the RSUs until the underlying Common Stock is issued
      to
      the Recipient. The Recipient will be entitled to receive any cash dividends
      declared on the Common Stock underlying the RSUs after the RSUs have vested
      and
      the Common Stock has been issued. The Company shall accrue and pay to the
      Recipient on the vesting of the RSUs an amount in cash equal to dividends that
      would have been paid on the Common Stock

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    underlying
      the RSUs after the date of the issuance of the RSUs. No interest shall be paid
      by the Company on accrued amounts.

    


    (h) Delivery
      Date for the Shares Underlying the RSU. As
      soon
      as practicable following a date on which any RSUs vest, the Company will issue
      the Recipient the Common Stock underlying the then vested RSUs in the form
      of
      uncertificated shares in book entry form. The shares of Common Stock will be
      issued in the Recipient’s name or, in the event of the Recipient’s death, in the
      name of either (i) the beneficiary designated by the Recipient on a form
      supplied by the Company or (ii) if the Recipient has not designated a
      beneficiary, the person or persons establishing rights of ownership by will
      or
      under the laws of descent and distribution.

    


    (i) Taxes
      and Tax Withholding.
      The
      Recipient acknowledges and agrees that no election under Section 83(b) of the
      Internal Revenue Code can or will be made with respect to the RSUs. The Company
      shall be entitled to withhold from any delivery of Common Stock hereunder any
      income or other tax withholding obligations arising as a result of this Award,
      in amounts determined by the Company. To satisfy the required withholding
      amount, the Company shall withhold the number of shares of Common Stock having
      a
      Value equal to the required withholding amount, unless the Company, by written
      notice to the Recipient, gives the Recipient the option of paying, and the
      Recipient has paid, such amount in cash. For purposes of this Agreement, the
      “Value” of a share of Common Stock on any date shall be equal to the closing
      market price for the Common Stock on that date. 

    


    (j) Not
      a
      Contract of Employment.
      Nothing
      in the Plan or this Agreement shall confer upon Recipient
      any
      right to be continued in the employment of the Company or any parent or
      subsidiary of the Company, or to interfere in any way with the right of the
      Company or any parent or subsidiary by whom Recipient
      is
      employed to terminate Recipient’s
      employment at any time or for any reason, with or without cause, or to
      decrease
      Recipient’s
      compensation or benefits.

    


    2.           
      Miscellaneous.
      

     
      

    (a) Entire
      Agreement; Amendment.
      This
      Agreement and the Plan constitute the entire agreement of the parties with
      regard to the subjects hereof and this Agreement may be amended only by written
      agreement between the Company and the Recipient.

    


    (b) Interpretation
      of the Plan and the Agreement.
      The
      Compensation Committee shall have the sole authority to interpret the provisions
      of this Agreement and the Plan and all determinations by it shall be final
      and
      conclusive.

    


    (c) Electronic
      Delivery.
      The
      Recipient consents to the electronic delivery of notices and any prospectus
      and
      any other documents relating to this Award in lieu of mailing or other form
      of
      delivery. 

     
      

    (d) Rights
      and Benefits.
      The
      rights and benefits of this Agreement shall inure to the benefit of and be
      enforceable by the Company’s successors and assigns and, subject to the
      restrictions on transfer of this Agreement, be binding upon the Recipient’s
      heirs, executors, administrators, successors and assigns. 

     
      

    (e) Further
      Action.
      The
      parties agree to execute such further instruments and to take such further
      action as may reasonably be necessary to carry out the intent of this Agreement.
      

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (f) Governing
      Law.
      This
      Agreement and the Plan will be interpreted under the laws of the state of
      Oregon, exclusive of choice of law rules. 

    


    (g) Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original. 

     
      

     
      

     

     

     

     

     

     

     

     

     

    
      	 	 	 
	 	
              SCHNITZER
                STEEL INDUSTRIES, INC.

            
	 
 	 
 	 
 
	 	By:  	
            
	 	
              
Authorized
              Officer
	 	 
	 	 
	 	
            
	 	
              
                

              

              Recipient