Document:

Exhibit

Exhibit 10.1

SCHNITZER STEEL INDUSTRIES, INC.
LONG-TERM INCENTIVE AWARD AGREEMENT
(2nd Half FY2017-FY2019 Performance Period)
On April 27, 2017, the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Schnitzer Steel Industries, Inc. (the “Company”) authorized and granted a performance-based award to _______________ (“Recipient”) pursuant to Section 10 of the Company’s 1993 Stock Incentive Plan (the “Plan”).  Compensation paid pursuant to the award is intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986 (the “Code”).  By accepting this award, Recipient agrees to all of the terms and conditions of this Agreement.
1.    Award.  Subject to the terms and conditions of this Agreement, the Company shall issue to the Recipient the number of shares of Class A Common Stock of the Company (“Performance Shares”) determined under this Agreement based on (a) the performance of the Company during the 21⁄2-year period from March 1, 2017 to August 31, 2019 (the “Performance Period”) as described in Section 2, (b) Recipient’s continued employment during the Performance Period as described in Section 3, and (c) Recipient’s not engaging in actions prohibited by Section 4.  Recipient’s “TSR Target Share Amount” for purposes of this Agreement is ___________ shares and Recipient’s “CFROI Target Share Amount” for purposes of this Agreement is _________ shares.  This award does not include a dividend equivalent cash payment.
2.    Performance Conditions.
2.1    Payout Formula.  Subject to adjustment under Sections 3, 4, 5, 6, 7 and 8, the number of Performance Shares to be issued to Recipient shall be equal to the sum of (a) the TSR Payout Shares (as defined below), plus (b) the CFROI Payout Factor as determined under Section 2.3 below multiplied by the CFROI Target Share Amount.  The “TSR Payout Shares” shall be equal to the TSR Payout Factor as determined under Section 2.2 below multiplied by the TSR Target Share Amount; provided, however, that the number of TSR Payout Shares shall be reduced as necessary to ensure that the total value of the TSR Payout Shares at the time of payout (calculated by multiplying the Value (as defined in Section 7 below) by the number of TSR Payout Shares) shall not be more than 400% of the value of the TSR Target Share Amount on the date of this Agreement (calculated by multiplying the closing market price for Class A Common Stock on the date of this Agreement by the TSR Target Share Amount).
2.2    TSR Payout Factor.
2.2.1    The “TSR Payout Factor” shall be determined under the table below based on the Average TSR Percentile Rank of the Company; provided, however, that if the Three-Year TSR as determined under Section 2.2.5 below is less than 0%, the TSR Payout Factor shall not be greater than 100%.
	
				
	 
	Average
TSR Percentile Rank
	TSR Payout Factor
	 

	 
	 
	 
	 

	 
	less than 25%
	0%
	 

	 
	25%
	50%
	 

	 
	50%
	100%
	 

	 
	90% or more
	200%
	 

If the Company’s Average TSR Percentile Rank is between any two data points set forth in the first column of the above table, the TSR Payout Factor shall be determined by interpolation between the corresponding data points in the second column of the table as follows:  the difference between the Company’s Average TSR Percentile Rank and the lower data point shall be divided by the difference between the higher data point and the lower data point, the resulting fraction shall be multiplied by the difference between the two corresponding data points in the second column of the table, and the resulting product shall be added to the lower corresponding data point in the second column of the table, with the resulting sum being the TSR Payout Factor.
2.2.2    The Company’s “Average TSR Percentile Rank” for the Performance Period shall be equal to the sum of (a) 20% of the TSR Percentile Rank for the first partial fiscal year of the Performance Period, plus (b) 40% of the TSR Percentile Rank for the second fiscal year of the Performance Period, plus (c) 40% of the TSR Percentile Rank for the third fiscal year of the Performance Period.  To determine the Company’s “TSR Percentile Rank” for any fiscal year the TSR of the 

Company and each of the Peer Group Companies for that fiscal year shall be calculated, and the Peer Group Companies shall be ranked based on their respective TSR’s from lowest to highest.  If the Company’s TSR is equal to the TSR of any other Peer Group Company, the Company’s TSR Percentile Rank shall be equal to the number of Peer Group Companies with a lower TSR divided by the number that is one less than the total number of Peer Group Companies, with the resulting amount expressed as a percentage and rounded to the nearest tenth of a percentage point.  If the Company’s TSR is between the TSRs of any two Peer Group Companies, the TSR Percentile Ranks of those two Peer Group Companies shall be determined as set forth in the preceding sentence, and the Company’s TSR Percentile Rank shall be interpolated as follows.  The excess of the Company’s TSR over the TSR of the lower Peer Group Company shall be divided by the excess of the TSR of the higher Peer Group Company over the TSR of the lower Peer Group Company.  The resulting fraction shall be multiplied by the difference between the TSR Percentile Ranks of the two Peer Group Companies.  The product of that calculation shall be added to the TSR Percentile Rank of the lower Peer Group Company, and the resulting sum (rounded to the nearest tenth of a percentage point) shall be the Company’s TSR Percentile Rank.  The intent of this definition of TSR Percentile Rank is to produce the same result as calculated using the PERCENTRANK.INC function in Microsoft Excel to determine the rank of the Company’s TSR within the array consisting of the TSRs of the Peer Group Companies.
2.2.3    The “Peer Group Companies” are AK Steel Holding Corporation, Allegheny Technologies Incorporated, Century Aluminum Company, Cliffs Natural Resources Inc., Coeur Mining, Inc., Commercial Metals Company, Gerdau S.A., Ferroglobe PLC, Harsco Corporation, Hecla Mining Company, Minerals Technologies Inc., Nucor Corporation, Sims Metal Management Limited, Steel Dynamics, Inc., Suncoke Energy, Inc. and United States Steel Corporation.  If prior to the end of any fiscal year in the Performance Period, the common stock of any Peer Group Company ceases to be publicly traded for any reason, then such company shall no longer be considered a Peer Group Company for that fiscal year.
2.2.4    Except as provided below for the first partial fiscal year of the Performance Period, the “TSR” for the Company and each Peer Group Company for any fiscal year shall be calculated by (1) assuming that $100 is invested in the common stock of the company at a price equal to the average of the closing market prices of the stock for the twenty trading day period ending on the last trading day of the prior fiscal year, (2) assuming that for each dividend paid on the stock during the fiscal year, the amount equal to the dividend paid on the assumed number of shares held is reinvested in additional shares at a price equal to the closing market price of the stock on the ex-dividend date for the dividend, and (3) determining the final dollar value of the total assumed number of shares based on the average of the closing market prices of the stock for the twenty trading day period ending on the last trading day of the fiscal year.  The “TSR” shall then equal the amount determined by subtracting $100 from the foregoing final dollar value, dividing the result by 100 and expressing the resulting fraction as a percentage.  For the first partial fiscal year of the Performance Period, the fiscal year shall be deemed to be the period from the date of this Agreement to August 31, 2017, and the TSR calculation for each company shall be further modified by assuming that $100 is invested in the common stock of the company at a price equal to the closing market price of the stock on the date of this Agreement.  For Sims Metal Management Limited, all calculations shall be in Australian dollars.  For Gerdau S.A., all calculations shall be in Brazilian reals.
2.2.5    The “Three-Year TSR” for the Company shall be calculated by (1) assuming that $100 is invested in the common stock of the Company at a price equal to the closing market price of the stock on the date of this Agreement, (2) assuming that for each dividend paid on the stock during the period from the date of this Agreement to the end of the Performance Period, the amount equal to the dividend paid on the assumed number of shares held is reinvested in additional shares at a price equal to the closing market price of the stock on the ex-dividend date for the dividend, and (3) determining the final dollar value of the total assumed number of shares based on the average of the closing market prices of the stock for the twenty trading day period ending on the last trading day of the Performance Period.  The “Three-Year TSR” shall then equal the amount determined by subtracting $100 from the foregoing final dollar value, dividing the result by 100 and expressing the resulting fraction as a percentage.
2.3    CFROI Payout Factor.
2.3.1    The “CFROI Payout Factor” shall be determined under the table below based on the Average CFROI of the Company for the Performance Period.

	
					
	 
	CFROI Payout
	 
	 

	 
	Average CFROI
	Factor
	

	 

	 
	 
	 
	 

	 
	Less than ___%
	0%
	

	 

	 
	___%
	50
	%
	 

	 
	___%
	100
	%
	 

	 
	___% or more
	200
	%
	 

If the Average CFROI is between any two data points set forth in the first column of the above table, the CFROI Payout Factor shall be determined by interpolation between the corresponding data points in the second column of the table as follows:  the difference between the Average CFROI and the lower data point shall be divided by the difference between the higher data point and the lower data point, the resulting fraction shall be multiplied by the difference between the two corresponding data points in the second column of the table, and the resulting product shall be added to the lower corresponding data point in the second column of the table, with the resulting sum being the CFROI Payout Factor.
2.3.2    The Company’s “Average CFROI” for the Performance Period shall be equal to the sum of (a) 20% of the CFROI for the first six months of the Performance Period, plus (b) 40% of the CFROI for the first full fiscal year of the Performance Period, plus (c) 40% of the CFROI for the second full fiscal year of the Performance Period.  The “CFROI” for any six-month period shall be equal to two times the Adjusted Cash Flow for that period divided by the Average Adjusted Capital for that period, expressed as a percentage and rounded to the nearest hundredth of a percentage point.  The “CFROI” for any full fiscal year shall be equal to Adjusted Cash Flow for that fiscal year divided by Average Adjusted Capital for that fiscal year, expressed as a percentage and rounded to the nearest hundredth of a percentage point.  “Adjusted Cash Flow” for any fiscal period shall mean the net cash provided by operating activities for that fiscal period reduced by capital expenditures for that fiscal period and increased by proceeds from the sale of assets for that fiscal period, in each case as set forth in the consolidated statement of cash flows of the Company and its subsidiaries for the fiscal period, and as adjusted in accordance with Section 2.4 below.  “Average Adjusted Capital” for any six-month period shall mean the average of three (3) numbers consisting of the Adjusted Capital as of the last day of the period and as of the last day of the two preceding fiscal quarters.  “Average Adjusted Capital” for any fiscal year shall mean the average of five (5) numbers consisting of the Adjusted Capital as of the last day of the fiscal year and as of the last day of the four preceding fiscal quarters.  “Adjusted Capital” as of any date shall mean (i) the Company’s total assets, as adjusted in accordance with Section 2.4 below, minus (ii) the Company’s total liabilities other than debt for borrowed money and capital lease obligations, in each case as set forth in the consolidated balance sheet of the Company and its subsidiaries as of the applicable date or otherwise determined from the Company’s accounting records on a consistent basis.
2.4    Adjustments.
2.4.1    Change in Accounting Principle.  If the Company implements a change in accounting principle during the Performance Period either as a result of issuance of new accounting standards or otherwise, and the effect of the accounting change was not reflected in the Company’s business plan at the time of approval of this award, then the Adjusted Cash Flow and Adjusted Capital for each affected period shall be adjusted to eliminate the impact of the change in accounting principle.
2.4.2    Restructuring Charges.  Adjusted Cash Flow for the last fiscal year of the Performance Period shall be adjusted to eliminate the impact of any restructuring charges and exit-related activities announced by the Company during the last six months of the Performance Period.
2.4.3    Impairments.  Adjusted Capital as of each quarter end during the Performance Period shall be adjusted to eliminate the impact of any charges taken by the Company during the Performance Period for impairment of goodwill or other assets as well as to add back the amount of goodwill allocated to any business sold by the Company during the Performance Period.
2.4.4    Acquisition Impacts.  Adjusted Cash Flow for the last fiscal year of the Performance Period shall be adjusted to eliminate any impact of business acquisitions or business combinations completed or reviewed (including incremental costs incurred solely as a result of the transaction, whether or not consummated) during that fiscal year.

2.4.5    Certain Environmental Expenses.  Adjusted Cash Flow for each fiscal period during the Performance Period shall be adjusted to eliminate any fines, penalties, fees, costs and other cash expenses incurred in connection with the Portland Harbor Superfund Site and the other environmental matters listed as adjustments in the Company’s Fiscal 2017 Operating Targets Environmental Adjustments document dated November 1, 2016 (net of any insurance or other reimbursements thereof).
2.4.6    Tax Impacts.  All adjustments to Adjusted Cash Flow for the items listed in Sections 2.4.1 to 2.4.5 in any fiscal period shall be net of the discrete cash income tax impacts of the adjustments as certified by the Audit Committee based on the recommendation of the Chief Financial Officer.
3.    Employment Condition.
3.1    Full Payout.  In order to receive the full number of Performance Shares determined under Section 2, Recipient must be employed by the Company on the October 31 immediately following the end of the Performance Period (the “Vesting Date”).  For purposes of Sections 3 and 4, all references to the “Company” shall include the Company and its subsidiaries.
3.2    Retirement; Termination Without Cause After 12 Months.  If Recipient’s employment with the Company is terminated at any time prior to the Vesting Date because of retirement (as defined in paragraph 6(a)(iv)(D) of the Plan), or if Recipient’s employment is terminated by the Company without Cause (as defined below) after the end of the 12th month of the Performance Period and prior to the Vesting Date, Recipient shall, subject to Section 4.1, be entitled to receive a pro-rated award to be paid following completion of the Performance Period.  The number of Performance Shares to be issued as a pro-rated award under this Section 3.2 shall be determined by multiplying the number of Performance Shares determined under Section 2 by a fraction, the numerator of which is the number of days Recipient was employed by the Company since the beginning of the Performance Period and the denominator of which is the number of days in the period from the beginning of the Performance Period to the Vesting Date.  Any obligation of the Company to issue a pro-rated award under this Section 3.2 shall be subject to and conditioned upon the execution and delivery by Recipient no later than the Vesting Date of a Release of Claims in such form as may be requested by the Company.  For purposes of this Section 3.2, “Cause” shall mean (a) the conviction (including a plea of guilty or nolo contendere) of Recipient of a felony involving theft or moral turpitude or relating to the business of the Company, other than a felony predicated on Recipient's vicarious liability, (b) Recipient’s continued failure or refusal to perform with reasonable competence and in good faith any of the lawful duties assigned by (or any lawful directions of) the Company that are commensurate with Recipient’s position with the Company (not resulting from any illness, sickness or physical or mental incapacity), which continues after the Company has given notice thereof (and a reasonable opportunity to cure) to Recipient, (c) deception, fraud, misrepresentation or dishonesty by Recipient in connection with Recipient’s employment with the Company, (d) any incident materially compromising Recipient’s reputation or ability to represent the Company with the public, (e) any willful misconduct by Recipient that substantially impairs the Company’s business or reputation, or (f) any other willful misconduct by Recipient that is clearly inconsistent with Recipient’s position or responsibilities.
3.3    Death or Disability.  If Recipient’s employment with the Company is terminated at any time prior to the Vesting Date because of death or disability, Recipient shall be entitled to receive a pro-rated award to be paid as soon as reasonably practicable following such event.  The term “disability” means a medically determinable physical or mental condition of Recipient resulting from bodily injury, disease, or mental disorder which is likely to continue for the remainder of Recipient’s life and which renders Recipient incapable of performing the job assigned to Recipient by the Company or any substantially equivalent replacement job.  For purposes of calculating the pro-rated award under this Section 3.3, the TSR Payout Factor and the CFROI Payout Factor shall both be calculated as if the Performance Period ended on the last day of the Company’s most recently completed fiscal quarter prior to the date of death or disability.  For this purpose, the TSR for the Company and each Peer Group Company for any partial fiscal year shall be determined based on the closing market prices of its stock for the twenty trading day period ending on the last day of the most recently completed fiscal quarter prior to the date of death or disability, before determining the Company’s TSR Percentile Rank for that partial fiscal year, and the Average TSR Percentile Rank shall be determined by averaging however many full and partial fiscal years for which a TSR Percentile Rank shall have been determined using the relative weightings of the three fiscal years set forth in Section 2.2.2.  For this purpose, the Adjusted Cash Flow for any partial six-month period shall be doubled, the Adjusted Cash Flow for any partial fiscal year shall be annualized (e.g., multiplied by 4/3 if the partial period is three quarters) and the Average Adjusted Capital for any period shall be determined based on the average of Adjusted Capital as of the last day of only those quarters that have been completed, before determining the CFROI for that partial fiscal period, and the Average CFROI shall be determined by averaging however many full and partial fiscal years for which a CFROI shall have been determined using the relative weightings of the three fiscal years set forth in Section 2.3.2.  The number of Performance Shares to be issued as a pro-rated award under this Section 3.3 shall be determined by multiplying the number of Performance Shares determined after applying the modifications described in the preceding sentences by a fraction, the numerator of which is the number of days Recipient was employed by the Company since the beginning of the Performance 

Period and the denominator of which is the number of days in the period from the beginning of the Performance Period to the Vesting Date.

3.4    Other Terminations.  If Recipient’s employment by the Company is terminated at any time prior to the Vesting Date and neither Section 3.2 nor Section 3.3 applies to such termination, Recipient shall not be entitled to receive any Performance Shares.
4.    Non-Competition.
4.1    Consequences of Violation.  If the Company determines that Recipient has engaged in an action prohibited by Section 4.2 below, then:
4.1.1    Recipient shall immediately forfeit all rights under this Agreement to receive any unissued Performance Shares; and
4.1.2    If Performance Shares were issued to Recipient following completion of the Performance Period, and the Company’s determination of a violation occurs on or before the first anniversary of the Vesting Date, Recipient shall repay to the Company (a) the number of shares of Common Stock issued to Recipient under this Agreement (the “Forfeited Shares”), plus (b) the amount of cash equal to the withholding taxes paid by withholding shares of Common Stock from Recipient as provided in Section 7.  If any Forfeited Shares are sold by Recipient prior to the Company’s demand for repayment, Recipient shall repay to the Company 100% of the proceeds of such sale or sales.  The Company may, in its sole discretion, reduce the amount to be repaid by Recipient to take into account the tax consequences of such repayment for Recipient.
4.2    Prohibited Actions.  The consequences described in Section 4.1 shall apply if during Recipient’s employment with the Company, or at any time during the period of one year following termination of such employment, Recipient, directly or indirectly, owns, manages, controls, or participates in the ownership, management or control of, or is employed by, consults for, or is connected in any manner with:
4.2.1    if Recipient is, or was at the time of termination of employment, employed by the Company’s Steel Manufacturing Business (“SMB”), any business that (a) is engaged in the steel manufacturing business, (b) produces any of the same steel products as SMB, and (c) competes with SMB for sales to customers in California, Oregon, Washington, Nevada, British Columbia or Alberta;
4.2.2    if Recipient is, or was at the time of termination of employment, employed by the Company’s Auto and Metals Recycling Business (“AMR”), any business that (a) is engaged in the metals recycling business or the self-service used auto parts business, and (b) operates a metal recycling collection or processing facility or a self-service used auto parts store within 250 miles of any of AMR’s facilities or stores;
4.2.3    if Recipient is, or was at the time of termination of employment, employed in the Company’s Corporate Shared Services Division, any business that is described in Section 4.2.1 or Section 4.2.2.
5.    Company Sale.
5.1    If a Company Sale (as defined below) occurs before the Vesting Date, Recipient shall be entitled to receive an award payout no later than the earlier of fifteen (15) days following such event or the last day on which the Performance Shares could be issued so that Recipient may participate as a shareholder in receiving proceeds from the Company Sale.  The amount of the award payout under this Section 5.1 shall be the greater of (a) the sum of the TSR Target Share Amount and the CFROI Target Share Amount, or (b) the amount determined using a TSR Payout Factor and a CFROI Payout Factor each calculated as if the Performance Period ended on the last day of the Company’s most recently completed fiscal quarter prior to the date of the Company Sale.  For this purpose, the TSR for the Company and each Peer Group Company for any partial fiscal year shall be determined based on the closing market prices of its stock for the twenty trading day period ending on the last day of the most recently completed fiscal quarter prior to the date of the Company Sale, before determining the Company’s TSR Percentile Rank for that partial fiscal year, and the Average TSR Percentile Rank shall be determined by averaging however many full and partial fiscal years for which a TSR Percentile Rank shall have been determined using the relative weightings of the three fiscal years set forth in Section 2.2.2.  For this purpose, the Adjusted Cash Flow for any partial six-month period shall be doubled, the Adjusted Cash Flow for any partial fiscal year shall be annualized (e.g., multiplied by 4/3 if the partial period is three quarters) and the Average Adjusted Capital for any period shall be determined based on the average of Adjusted Capital as of the last day of only those quarters that have been completed, before determining the CFROI for that partial fiscal period, and the Average CFROI shall 

be determined by averaging however many full and partial fiscal years for which a CFROI shall have been determined using the relative weightings of the three fiscal years set forth in Section 2.3.2.
5.2    For purposes of this Agreement, a “Company Sale” shall mean the occurrence of any of the following events:
5.2.1    any consolidation, merger or plan of share exchange involving the Company (a “Merger”) in which the Company is not the continuing or surviving corporation or pursuant to which outstanding shares of Class A Common Stock would be converted into cash, other securities or other property; or
5.2.2    any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, the assets of the Company.
6.    Certification and Payment.  As soon as practicable following the completion of the audit of the Company’s consolidated financial statements for the final fiscal year of the Performance Period, the Company shall calculate the TSR Payout Factor, the CFROI Payout Factor and the corresponding numbers of Performance Shares issuable to Recipient.  This calculation shall be submitted to the Committee.  No later than the Vesting Date the Committee shall certify in writing (which may consist of approved minutes of a Committee meeting) the levels of TSR and TSR Percentile Rank attained by the Company for each fiscal period of the Performance Period, the levels of CFROI attained by the Company for each fiscal period of the Performance Period, the Tax Impacts applied in calculating CFROI in each fiscal period and the number of Performance Shares issuable to Recipient based on the Company’s performance.  Subject to applicable tax withholding, the number of Performance Shares so certified shall be issued to Recipient as soon as practicable following the Vesting Date, but no Performance Shares shall be issued prior to certification.  No fractional shares shall be issued and the number of Performance Shares deliverable shall be rounded to the nearest whole share.  In the event of the death or disability of Recipient as described in Section 3.3 or a Company Sale as described in Section 5, each of which requires an award payout earlier than the Vesting Date, a similar calculation and certification process shall be followed within the time frames required by those sections.
7.    Tax Withholding.  Recipient acknowledges that, on the date the Performance Shares are issued to Recipient (the “Payment Date”), the Value (as defined below) on that date of the Performance Shares will be treated as ordinary compensation income for federal and state income and FICA tax purposes, and that the Company will be required to withhold taxes on these income amounts.  To satisfy the required minimum withholding amount, the Company shall withhold the number of Performance Shares having a Value equal to the minimum withholding amount.  For purposes of this Section 7, the “Value” of a Performance Share shall be equal to the closing market price for Class A Common Stock on the last trading day preceding the Payment Date.
8.    Changes in Capital Structure.  If the outstanding Class A Common Stock of the Company is hereafter increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of any stock split, combination of shares or dividend payable in shares, recapitalization or reclassification, appropriate adjustment shall be made by the Committee in the number and kind of shares subject to this Agreement so that the Recipient’s proportionate interest before and after the occurrence of the event is maintained.
9.    Approvals. The obligations of the Company under this Agreement are subject to the approval of state, federal or foreign authorities or agencies with jurisdiction in the matter.  The Company will use its reasonable best efforts to take steps required by state, federal or foreign law or applicable regulations, including rules and regulations of the Securities and Exchange Commission and any stock exchange on which the Company’s shares may then be listed, in connection with the award evidenced by this Agreement.  The foregoing notwithstanding, the Company shall not be obligated to deliver Class A Common Stock under this Agreement if such delivery would violate or result in a violation of applicable state or federal securities laws.
10.    No Right to Employment.  Nothing contained in this Agreement shall confer upon Recipient any right to be employed by the Company or to continue to provide services to the Company or to interfere in any way with the right of the Company to terminate Recipient’s services at any time for any reason, with or without cause.
11.    Miscellaneous.
11.1    Entire Agreement.  This Agreement constitutes the entire agreement of the parties with regard to the subjects hereof.
11.2    Notices.  Any notice required or permitted under this Agreement shall be in writing and shall be deemed sufficient when delivered personally to the party to whom it is addressed or when deposited into the United States Mail as registered or certified mail, return receipt requested, postage prepaid, addressed to the Company, Attention: Corporate Secretary, at its principal 

executive offices or to Recipient at the address of Recipient in the Company’s records, or at such other address as such party may designate by ten (10) days’ advance written notice to the other party.
11.3    Assignment; Rights and Benefits.  Recipient shall not assign this Agreement or any rights hereunder to any other party or parties without the prior written consent of the Company.  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 foregoing restriction on assignment, be binding upon Recipient’s heirs, executors, administrators, successors and assigns.
11.4    Further Action.  The parties agree to execute such instruments and to take such action as may reasonably be necessary to carry out the intent of this Agreement.
11.5    Applicable Law; Attorneys’ Fees.  The terms and conditions of this Agreement shall be governed by the laws of the State of Oregon.  In the event either party institutes litigation hereunder, the prevailing party shall be entitled to reasonable attorneys’ fees to be set by the trial court and, upon any appeal, the appellate court.
11.6    Severability.  Each provision of this Agreement will be treated as a separate and independent clause and unenforceability of any one clause will in no way impact the enforceability of any other clause.  Should any of the provisions of this Agreement be found to be unreasonable or invalid by a court of competent jurisdiction, such provision will be enforceable to the maximum extent enforceable by the law of that jurisdiction.
	
				
	 
	SCHNITZER STEEL INDUSTRIES, INC.

	 
	 
	 
	 

	 
	By:
	 
	 

	 
	 
	Authorized OfficerExhibit

Exhibit 4.1

CERTIFICATE OF DETERMINATION OF PREFERENCES OF THE
SERIES L PREFERENCE STOCK

SOUTHERN CALIFORNIA EDISON COMPANY

We, the undersigned, being the Vice President and the Assistant Treasurer, respectively, of Southern California Edison Company (the “Corporation”), a corporation organized and existing under and by virtue of the provisions of the laws of the State of California, DO HEREBY CERTIFY: 

FIRST:  The Restated Articles of Incorporation, as amended (the “Articles”), authorize the issuance of 50,000,000 shares of Preference Stock which may be issued from time to time in one or more series, and authorize the Board of Directors of the Corporation to (i) fix the number of shares of any series of Preference Stock and to determine the designation of any such series, (ii) to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preference Stock, including but not limited to rights, preferences, privileges and restrictions regarding dividends (including provisions specifying dividends at a floating or variable rate or dividends to be determined by reference to an index, formula, auction, bid or other objectively ascertainable criterion), liquidation, conversion, redemption and voting (including provisions specifying no general voting rights or voting rights of more than one vote per share), and, (iii) within the limits and restrictions stated in any resolution or resolutions of the Board of Directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any such series subsequent to the issue of shares of that series.

SECOND:  Acting pursuant to the authority delegated by the Board of Directors of the Corporation, the Pricing Committee of the Board of Directors did duly adopt on June 19, 2017, the following resolutions authorizing and providing for the creation of a series of said shares of Preference Stock to be known as Series L Preference Stock, consisting of 190,004 shares, none of the shares of such series having been issued:

“NOW, THEREFORE, BE IT RESOLVED, that 190,004 shares of the presently authorized but unissued Preference Stock, no par value, be and hereby determined to be and shall be of a series of said Preference Stock hereby designated as the “Series L Preference Stock” (the “Series L Shares”); and 

BE IT FURTHER RESOLVED, that the rights, preferences, privileges and restrictions of Series L Shares of such series be and the same are hereby fixed, respectively, as follows:

		
	1.
	Dividends

(a)    The holders of record of the Series L Shares (each individually a “Holder,” or collectively the “Holders”) will be entitled to receive, when, as and if declared by the Board of Directors of the Corporation or duly authorized committee thereof (the “Board”), in its sole discretion out of funds legally available therefor, cumulative quarterly cash dividends at an annual rate equal to 5.00% of the Liquidation Preference from, and including, the issue date of the Series L Shares through, but excluding, the redemption date of the Series L Shares, if any.  When, as and if declared by the Board, we will pay dividends on the Series L Shares quarterly, in arrears, on March 15, June 15, September 15 and December 15 of each year (each, a “Dividend Payment Date”), commencing September 15, 2017.  Such dividends shall be cumulative from the date of issue whether or not declared, and no interest, dividends or sum in lieu thereof shall be payable in respect of the amount of any dividend on the Series L Shares not paid on a Dividend Payment Date and accrued.  If a Dividend Payment Date is not a Business Day (as defined below), the related dividend (if declared) will be paid on the next succeeding Business Day with the same force and effect as though paid on the Dividend Payment Date, without any increase to account for the period from such Dividend Payment Date through the date of actual payment.  Dividends payable on the Series L Shares for any period from but including a Dividend Payment Date to but excluding the next succeeding Dividend Payment Date (a “Dividend Period”) will be computed on the basis of a 360-day year consisting of twelve 30-day months; provided however that dividends payable on the Series L Shares for the initial Dividend Period and any period shorter than a full Dividend Period will be computed on the basis of a 360-day year consisting of twelve 30-day months and the actual number of days elapsed in the period using 30-day months.  “Liquidation Preference” means $2,500.00 per share of the Series L Shares.  “Business Day” means any weekday that is not a legal holiday in New York, New York and is not a day on which banking institutions in New York, New York or Los Angeles, California are closed. 
(b)    Dividends will be payable to Holders as of the applicable record date, which record date shall be fixed by the Board and shall be a date not exceeding 60 days before the applicable payment date.  Dividends not declared with respect to a specific Dividend Payment Date shall be payable to the Holders as of the record date fixed with respect to such dividends when so declared.

(c)    So long as any Series L Shares shall be outstanding, no dividend (other than dividends or distributions paid in shares of, or options, warrants or rights to subscribe for or purchase shares of, the common stock of the Corporation (the “Common Stock”) or any other stock of the Corporation ranking, as to the payment of dividends and the distribution of assets upon dissolution, liquidation or winding up of the Corporation, junior to the Series L Shares), whether in cash or property, may be paid or declared or set apart, nor may any distribution be made on the Common Stock or such other stock, nor may any shares of Common Stock or such other stock be purchased, redeemed or 

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otherwise acquired for value by the Corporation, unless all dividends on the Series L Shares for the then-current quarterly Dividend Period and all past quarterly Dividend Periods shall have been declared and paid or set apart.

(d)    The Board may, in its discretion, choose to pay dividends on the Series L Shares without the payment of any dividends on the Common Stock (or any other stock of the Corporation ranking, as to the payment of dividends, junior to the Series L Shares).

(e)    No full dividends shall be declared or paid or set apart for payment on any stock of the Corporation ranking, as to the payment of dividends, equally with the Series L Shares for any period unless full dividends have been declared and paid or set apart for payment on the Series L Shares for the then-current quarterly Dividend Period and all past quarterly Dividend Periods.  When dividends are not paid in full upon the Series L Shares and all other classes or series of stock of the Corporation, if any, ranking, as to the payment of dividends, equally with the Series L Shares, all dividends declared upon the Series L Shares and all such other stock of the Corporation will be declared pro rata so that the amount of dividends declared for the Series L Shares and all such other stock will in all cases bear to each other the same ratio that accrued dividends for the Series L Shares and for all such other stock bear to each other (but without, in the case of non-cumulative shares of such other stock, accumulation of unpaid dividends for prior Dividend Periods).

(f)    No dividends may be declared or paid or set apart for payment on any Series L Shares if at the same time any arrears exist or default exists in the payment of dividends on any outstanding class or series of stock of the Corporation ranking, as to the payment of dividends, senior to the Series L Shares.

(g)    The Holders will not be entitled to any dividends, whether payable in cash or property, other than as herein provided and will not be entitled to interest or dividends, or any sum in lieu thereof, on or in respect of any dividend payment or other payment on the Series L Shares which may be in arrears.

		
	2.
	Liquidation Rights

(a)    Upon any voluntary or involuntary dissolution, liquidation or winding up of the Corporation, after payment or provision for the liabilities of the Corporation and the expenses of such dissolution, liquidation or winding up, the Holders of outstanding Series L Shares will be entitled to receive out of the assets of the Corporation or proceeds thereof available for distribution to shareholders, before any payment or distribution of assets is made to holders of the Common Stock (or any other stock of the Corporation ranking, as to the distribution of assets upon dissolution, liquidation or winding up of the Corporation, junior to the Series L Shares), the Liquidation Preference per Share plus an amount equal to the accrued and unpaid dividend (whether or not declared) for the then-current quarterly Dividend Period accrued 

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to but excluding the date of such liquidation payment, plus unpaid dividends on the Series L Shares for all past quarterly Dividend Periods, if any.

(b)    If the assets of the Corporation available for distribution in such event are insufficient to pay in full the aggregate amount payable to Holders of Series L Shares and holders of all other classes or series of stock of the Corporation, if any, ranking, as to the distribution of assets upon dissolution, liquidation or winding up of the Corporation, equally with the Series L Shares, the assets will be distributed to the Holders of Series L Shares and holders of all such other stock pro rata, based on the full respective preferential amounts to which they are entitled (but without, in the case of any non-cumulative shares, accumulation of unpaid dividends for prior dividend periods).

(c)    Notwithstanding the foregoing, Holders of Series L Shares will not be entitled to be paid any amount in respect of a dissolution, liquidation or winding up of the Corporation until holders of any classes or series of stock of the Corporation ranking, as to the distribution of assets upon dissolution, liquidation or winding up of the Corporation, senior to the Series L Shares have been paid all amounts to which such classes or series are entitled.

(d)    Neither the sale, lease nor exchange (for cash, shares of stock, securities or other consideration) of all or substantially all of the property and assets of the Corporation, nor the merger, consolidation or combination of the Corporation into or with any other corporation or the merger, consolidation or combination of any other corporation or entity into or with the Corporation, shall be deemed to be a dissolution, liquidation or winding up, voluntary or involuntary, for the purposes of this Section 2.

(e)    After payment to the Holders of Series L Shares of the full amount of the distribution of assets upon dissolution, liquidation or winding up of the Corporation to which they are entitled pursuant to this Section 2, such Holders will not be entitled to any further participation in any distribution of assets by the Corporation.

		
	3.
	Voting Rights

The Series L Shares shall have no voting rights except as set forth in this Section 3 or as otherwise provided by California law:

(a)    So long as any Series L Shares are outstanding, the consent of the Holders of at least a majority of the Series L Shares at the time outstanding, voting as a single class, or voting as a single class together with the holders of any other series of Preference Stock (i) upon which like voting or consent rights have been conferred and (ii) which are similarly affected by the matter to be voted upon, given in person or by proxy, either in writing or by vote at any meeting called for the purpose, shall be necessary for effecting or validating any one or more of the following:

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(i)    any amendment of the Corporation’s Restated Articles of Incorporation which would adversely affect the rights, preferences, privileges or restrictions of the Series L Shares; or

(ii)    the authorization or creation, or the increase in the authorized amount, of any stock of any class or any security convertible into stock of any class, ranking senior to the Series L Shares with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation.

provided, however, that no such consent of the Holders of Series L Shares shall be required if, at or prior to the time when such amendment is to take effect or when the authorization, creation or increase in the authorized amount of any such senior stock or convertible security is to be made, as the case may be, provision is to be made for the redemption of all Series L Shares at the time outstanding.

(b)On matters requiring their consent, the Holders will be entitled to one vote per Share.

		
	4.
	Redemption

(a)    Subject to the notice provisions set forth in Section 4(c) below and subject to any further limitations which may be imposed by law, the Series L Shares shall be redeemable out of funds legally available therefor (i) at the option of the Corporation at any time or from time to time, in whole or in part, on or after June 26, 2022 (an “Optional Redemption”), (ii) at the option of the Corporation exercisable prior to June 26, 2022, if the Holder of all the Series L Shares is SCE Trust VI or another Delaware statutory trust in which the Corporation owns all of the securities thereof designated as common securities, at any time, in whole but not in part, within 90 days after an Investment Company Event or a Tax Event (each, a “Special Event Redemption”), and (iii) at the option of the Corporation exercisable prior to June 26, 2022 at any time, in whole but not in part, after a Rating Agency Event (a “Rating Agency Redemption”).  

(b)     The redemption price for the Series L Shares being redeemed shall be, (i) in the event of an Optional Redemption, the Liquidation Preference per Series L Share being redeemed, (ii) in the event of a Special Event Redemption, 101% of the Liquidation Preference per Series L Share being redeemed; and (iii) in the event of a Rating Agency Redemption, 102% of the Liquidation Preference per Series L Share being redeemed, plus in each case an amount equal to the amount of the accrued and unpaid dividend (whether or not declared) for the then-current quarterly Dividend Period to but excluding the redemption date, plus unpaid dividends on the Series L Shares being redeemed for all past quarterly Dividend Periods, if any.  If less than all of the outstanding Series L Shares are to be redeemed in an Optional Redemption, the Corporation will select the Series L Shares to be redeemed from the outstanding Series L Shares not previously called for redemption by lot or pro rata.

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(c)    In the event the Corporation shall redeem any or all of the Series L Shares as aforesaid, the Corporation will give notice of any such redemption to Holders neither more than 60 nor less than 30 days prior to the date fixed by the Board for such redemption.  Failure to give notice to any Holder shall not affect the validity of the proceedings for the redemption of Series L Shares of any other Holder being redeemed.

(d)    Notice having been given as herein provided, from and after the redemption date, dividends on the Series L Shares called for redemption shall cease to accrue and such Series L Shares called for redemption will no longer be deemed outstanding, and all rights of the Holders thereof will cease.

(e)    The Series L Shares will not be subject to any mandatory redemption, sinking fund or other similar provisions.  In addition, Holders will have no right to require redemption of any Series L Shares.

(f)    Any Series L Shares which are converted, redeemed or retired shall thereafter have the status of authorized but unissued shares of Preference Stock of the Corporation undesignated as to series, and may thereafter be reissued by the Board in the same manner as any other authorized and unissued shares of Preference Stock.

(g)    If the Corporation shall deposit on or prior to any date fixed for redemption of the Series L Shares, with any bank or trust company having a capital, surplus and undivided profits aggregating at least five million dollars ($5,000,000), as a trust fund, funds sufficient to redeem the Series L Shares called for redemption, with irrevocable instructions and authority to such bank or trust company to pay on and after the date fixed for redemption or such earlier date as the Board may determine, to the respective Holders of such Series L Shares, the redemption price thereof, then from and after the date of such deposit (although prior to the date fixed for redemption) such Series L Shares so called shall be deemed to be redeemed and dividends thereon shall cease to accrue from and after said date fixed for redemption and such deposit shall be deemed to constitute full payment of said Series L Shares to the Holders thereof and thereafter said Series L Shares shall no longer be deemed to be outstanding, and the Holders thereof shall cease to be shareholders with respect to such Series L Shares, and shall have no rights with respect thereto except only the right to receive from said bank or trust company payment of the redemption price of such Series L Shares without interest.

(h)     Any moneys deposited by the Corporation pursuant to Section 4(g) which shall not be required for the redemption because of the exercise of any such right of conversion or exchange subsequent to the date of the deposit shall be repaid to the Corporation forthwith.

(i)    For purposes of this Certificate of Determination of Preferences, “Investment Company Event,” “Tax Event” and “Rating Agency Event” shall have the meanings ascribed to such terms in the Amended and Restated Declaration of Trust of 

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SCE Trust VI, a Delaware statutory trust (the “Trust”), to be dated as of June 26, 2017, by and among Southern California Edison Company, as Sponsor, the Trustees identified therein and the holders, from time to time, of undivided beneficial interests in the assets of the Trust, as may be amended from time to time, a copy of which is available without charge upon request by writing or calling the Corporate Governance Department at the Corporation’s principal place of business. 

		
	5.
	Rank

The Series L Shares shall rank, with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation:

(a)    junior to the Cumulative Preferred Stock and the $100 Cumulative Preferred Stock, and any other equity securities that the Corporation may later authorize or issue, the terms of which provide that such securities will rank senior to the Series L Shares with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation;

(b)    equally with any other shares of Preference Stock and any other equity securities that the Corporation may later authorize or issue, the terms of which provide that such shares or other securities will rank equally with the Series L Shares with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation; and

(c)    senior to the Common Stock, and any other equity securities that the Corporation may later authorize or issue, the terms of which provide that such securities will rank junior to the Series L Shares with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation.

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IN WITNESS WHEREOF, the undersigned have executed this Certificate in Rosemead, California on June 20, 2017.

/s/ Daniel S. Wood
Daniel S. Wood
Vice President

/s/ George T. Tabata
George T. Tabata
Assistant Treasurer

Each of the undersigned declares under penalty of perjury that the matters contained in the foregoing certificate are true of their own knowledge.  Executed in Rosemead, California on June 20, 2017.

/s/ Daniel S. Wood
Daniel S. Wood
Vice President

/s/ George T. Tabata
George T. Tabata
Assistant Treasurer

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