Document:

EX-10.(c)

 Exhibit 10(c) 

EXECUTION VERSION 
 LEASED
EMPLOYEE AGREEMENT 
 AMONG GLIDEPATH HOLDINGS INC. 

GREAT AMERICAN LIFE INSURANCE COMPANY, 

ANNUITY INVESTORS LIFE INSURANCE COMPANY AND 

MANHATTAN NATIONAL LIFE INSURANCE COMPANY 

THIS LEASED EMPLOYEE AGREEMENT (“Agreement”) is entered into as of the 28th day of May, 2021, by and among Glidepath Holdings Inc.
(“Glidepath”), a Delaware corporation, having a principal place of business at 1295 State Street, Springfield, Massachusetts, and Great American Life Insurance Company (“GALIC”), an Ohio domiciled life insurance company, having a
principal place of business at 301 East Fourth Street, Cincinnati, Ohio, Annuity Investors Life Insurance Company, an Ohio domiciled life insurance company, having a principal place of business at 301 East Fourth Street, Cincinnati, Ohio
(“AILIC”) and Manhattan National Life Insurance Company, an Ohio domiciled life insurance company, having a principal place of business at 301 East Fourth Street, Cincinnati, Ohio (“MNLIC”). GALIC, AILIC and MNLIC are
individually referred to herein as a “Company” and collectively as the “Companies”. 
 WHEREAS, the Companies are
a wholly-owned subsidiaries of Glidepath; 
 WHEREAS, the Companies desire to lease employees from Glidepath; 

WHEREAS, Glidepath desires to lease employees to the Companies; 

NOW, THEREFORE, to effectuate the above purposes and in consideration of the mutual covenants, agreements and compensation provided in
this Agreement, Glidepath, GALIC, AILIC and MNLIC hereby agree as follows: 
 1. Services. In consideration of the Fee to be
paid pursuant to Section 3 of this Agreement, Glidepath will provide the Companies with certain services (the “Services”) during the term of this Agreement. The Services may include, but are not limited to, the services described in
Appendix A attached hereto and incorporated herein by reference, as such may be amended from time to time in accordance with Section 10 herein. 

In connection with its performance of the Services, Glidepath will furnish staff and personnel needed to support the Companies’ business.
The Companies will timely notify Glidepath of any changes in their business practices, systems or employment of their workforce, if any. The Companies will, to the best of their ability, provide Glidepath with accurate, timely, and complete
information with respect to all business activities such that Glidepath can satisfactorily perform the Services described in this Agreement. 

The parties expressly understand and acknowledge that each of the Companies 

 
shall at all times retain ultimate authority, absolute control of, and responsibility for the business and operations of such Company and shall at all times be subject to the direction and
control of the board of directors and officers of such Company. The performance of the Services shall be subject to the criteria, standards, and guidelines furnished by each of the Companies to Glidepath and shall be discharged in a manner
consistent with such Company’s best interests. Each Company shall maintain oversight for the functions provided by Glidepath for such Company and each Company shall monitor the services performed by Glidepath annually for quality assurance.
Books and records of each of the Companies shall include all books and records developed or maintained under or related to the Agreement and all such books and records are and shall remain the property of such Company and are subject to the control
of such Company. Each party to this Agreement shall retain the right of continuing access to the books and records of the other party sufficient to permit the parties to fulfill all of their obligations under this Agreement, subject to the
provisions of Section 8 of this Agreement. The parties agree that any appropriate regulatory authority shall have access to books and records associated with this Agreement during normal business hours and upon reasonable advance notice. The
books, accounts, and records of each Company and Glidepath shall be so maintained as to clearly and accurately disclose the nature and details of the transactions contemplated in this Agreement. 

2. Duty of Care. 

(a) All services under this Agreement will be performed with the same standards of care, prudence and diligence which the parties hereto
exercise in the performance of their own management, administrative and general corporate responsibilities. 
 (b) At all times during the
providing of Services and thereafter, Glidepath and the Companies will treat all proprietary, confidential or secret information and materials of the other party as if such all proprietary, confidential, and secret information was its own. In
addition to protecting confidential information and materials of the other party in accordance with the terms of this Agreement, Glidepath and the Companies agree to implement reasonable measures to establish a written information security program
with respect to nonpublic personally identifiable information (“Personal Information”), to the extent such information is shared, which (i) ensures the security and confidentiality of such information, (ii) protects against any
anticipated threats or hazards to the confidentiality, security or integrity of Personal Information, and (iii) protects against any unauthorized access to or use of Personal information, including but not limited to, any access or use that
could result in substantial harm or inconvenience to the parties or the parties’ customers, employees, or agents. Glidepath and the Companies will restrict access to Personal Information to those individuals that have a legitimate need to
access such information. 
 (c) Glidepath and the Companies will immediately notify the other in the event of any circumstances involving a
Breach of Security (defined below) of Personal Information and reasonably cooperate in the investigation of any such incident. Breach of 

  
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Security is defined herein to mean any actual or suspected unauthorized access to or use of Personal Information. In addition, Glidepath and the Companies agree to provide each other with any
additional information, reasonably required by the other party, in sufficient detail to enable the other party to comply with any and all legal and regulatory requirements resulting from such Breach of Security. 

3. Fee. 

(a) In consideration of the Services provided by Glidepath as described in Section 1 of this Agreement and Appendix A, GALIC, AILIC and
MNLIC will collectively pay to Glidepath an amount that reflects the actual costs and expenses which are directly or indirectly related to the Services and may include allocable salaries and benefits and other similar expenses, which will be
prorated for any period less than a full year during which this Agreement is in effect (“Fee”). An estimate of the current Fee is attached hereto as Appendix B. The parties will agree upon and determine the Fee on an annual basis. 

(b) The parties further agree that: (i) the Fee for the Services will be fair and reasonable; (ii) expenses incurred and payment
received will be allocated on an equitable basis in conformity with customary insurance accounting practices consistently applied; and (iii) the books, accounts and records of the parties will be so maintained as to clearly and accurately
disclose the nature and details of the Services and the Fee, including such accounting information as is necessary to support the reasonableness of the Fee. 

(c) Upon request by GALIC, AILIC or MNLIC, Glidepath will, within thirty (30) days after the expiration of each calendar year during which this
Agreement is in effect, furnish the management of GALIC, AILIC or MNLIC with a written statement of amounts received and expended pursuant to this Agreement, in such detail and with such supporting documentation as the management of GALIC, AILIC or
MNLIC may reasonably require. 
 (d) Unless otherwise agreed to by the parties, the Fee will be paid at least on a biweekly basis. The Fee
will be paid in United States dollars and may be made by electronic transfer or such other means, as agreed upon by the parties. The Fee will be due and payable no later than thirty days after receipt of the bill. Any undisputed portion of the Fee
payments made after the thirtieth (30th) day following the receipt of the bill will accrue interest on a daily basis at the then Applicable Long Term Federal Rate as regularly published in the
Internal Revenue Code of the United States Treasury. 
 (e) None of the Companies shall advance funds to Glidepath except to pay for the
Services provided under this Agreement. All funds and invested assets of each of the Companies are the exclusive property of such Company, held for the benefit of such Company and are subject to the control of such Company. 

(e) Unless otherwise agreed between the parties, any indebtedness between Glidepath and the Companies which is not evidenced by a written
instrument requiring 

  
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payment of interest will bear interest at the minimum rate of interest specified in Section 1.482-2(a)(2) of the United States Treasury Regulations,
with such interest to accrue six (6) months after the date the debt arises. 
 4. Expenses To Be Borne By the
Companies. GALIC, AILIC and MNLIC will each be solely responsible for their own expenses (i.e. expenses incurred by GALIC, AILIC and MNLIC not related to goods and services associated with the Services provided by Glidepath). 

5. Services Not Exclusive. The Companies agree that Glidepath’s Services to the Companies under this Agreement are
not to be exclusive and that Glidepath will be free to render similar services to others. Glidepath agrees that the Companies will be free to cancel any specific Services provided by Glidepath under this Agreement upon ninety (90) days written
notice and that the Companies will be free to obtain such services thereafter from other vendors. The Companies agree that Glidepath will be free to cancel any Services provided pursuant to this Agreement upon ninety (90) days written notice.

 6. No Partnership or Joint Venture. Each Company and Glidepath are not partners or joint venturers with each other,
and nothing herein will be construed so as to make them such partners or joint venturers or impose any liability as such on either of them. 

7. Directors, Officers and Employees. Glidepath’s directors, officers and employees may serve as directors,
officers, agents, nominees or signatories for any or all of the Companies. When executing documents or otherwise acting in such capacity for any or all of the Companies, such persons will use their respective titles in the applicable Company and
will be acting within the scope of his or her stated capacity solely for the applicable Company and not within the scope of their stated capacity for Glidepath. Such persons will receive no compensation from the applicable Company for their services
to such Company in such capacities. Any person employed or formerly employed by Glidepath who may be or become an employee of, and paid by, any or all of the Companies will be deemed, when acting within the scope of his or her employment by such
Company, to be acting in such employment solely for such Company and not as a Glidepath employee or agent, except when separate consulting agreements are entered into between Glidepath and employees of any or all of the Companies. 

8. Limitation of Liability and Indemnification. 

(a) In the absence of misfeasance, violation of applicable law, bad faith or negligence in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement, neither Glidepath nor the Companies will be liable to the other for any act or failure to act in connection with the performance of its duties hereunder. 

(b) Glidepath hereby agrees to indemnify and hold each Company harmless from any loss occasioned by the misfeasance, violation of applicable
law, bad faith, 

  
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reckless disregard or negligent acts or omissions of Glidepath and its employees, other than its leased employees. 

(c) Each Company hereby agrees to indemnify and hold Glidepath harmless from any loss occasioned by the misfeasance, violation of applicable
law, bad faith, reckless disregard or negligent acts or omissions of such Company. 
 9. Duration and Termination of this
Agreement. This Agreement will remain in force until superseded by an agreement in writing between the parties and/or terminated in accordance with the terms of this Section 9. This Agreement may be terminated with or without
cause at any time by the Companies or by Glidepath on ninety (90) days’ written notice to the other party hereto. This Agreement will automatically terminate in the event of its assignment, unless such assignment has been consented to by
the parties in advance. In the event of the termination of this Agreement: (a) all records in Glidepath’s possession pertaining to the operation of the Companies, together with any other Company property in its possession, will promptly be
delivered to the applicable Company or its representative authorized to receive the same, it being understood by the Companies that Glidepath may retain copies of any documents or information necessary for Glidepath to fulfill its own legal
obligations with respect to the Companies, including those which arise by virtue of any ownership interest which Glidepath may have in the Companies; and (b) Glidepath’s right to compensation will immediately cease, except for (i) any
payments, or pro rata portions thereof, which are due on the date of termination; and (ii) Services which must be provided in order to wind up any ongoing matters, including but not limited to matters relating to pending litigation, tax
accounting and filing services, Internal Revenue Service audits, and employee benefit administration matters. Glidepath shall have no automatic right to terminate this Agreement with respect to any of the Companies if any action is taken against
such Company pursuant to applicable supervision, rehabilitation, and liquidation laws. Glidepath shall continue to maintain systems, programs, or other infrastructure notwithstanding action being taken against any of the Companies pursuant to
applicable insurers supervision, rehabilitation, and liquidation laws, and will make them available for so long as Glidepath continues to receive timely payment for services rendered. 

10. Entire Agreement; Amendments; No Assignment. This Agreement and the appendices referred to herein will constitute the
entire agreement between the parties hereto for leased employees and related services, and no provision of this Agreement may be changed, waived, discharged or terminated orally but only by an amendment in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought; provided, however, each party may provide direction to the other regarding the extent and manner of Services to be provided. Neither this Agreement nor any rights or obligations
hereunder may be assigned or otherwise transferred, in whole or in part, by any party, and any attempted assignment in contravention of this Agreement is null and void. 

11. Receivership. In the event any action is taken against any of the Companies under applicable supervision,
rehabilitation or liquidation laws, the 

  
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Superintendent of the Ohio Department of Insurance, as Rehabilitator or Liquidator, shall be vested with all rights of such Company hereunder and all books and records of such Company shall
immediately be made available to the Superintendent or rehabilitator upon request. 
 12. Miscellaneous; Governing Law.
The captions in this Agreement are included for convenience of reference only, and in no way define or limit any of the provisions hereof or otherwise change their construction or effect. This Agreement is hereby deemed to have been made under and
governed by the laws of the State of Ohio, without regard to any conflict of law principles. Should litigation be filed relative to a dispute related to or arising from this Agreement, the parties agree that the forum for any such litigation shall
be the state or federal courts located in Franklin County, Ohio as the court of proper jurisdiction and venue for any actions or proceedings relating to this Agreement, hereby irrevocably consent to such designation, jurisdiction or venue with
respect to any action or proceeding initiated in such court and hereby waive all defenses and objections to jurisdiction and venue. This Agreement may be executed simultaneously in two or more counterparts, each of which will be deemed an original,
but all of which together will constitute one and the same instrument. 
 [The remainder of this page left blank intentionally. Signature page to
follow.] 

  
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 Agreed to as of the date first written above. 

 

	
	GLIDEPATH HOLDINGS INC.
	
	 /s/ Michael Fanning

	Name: Michael Fanning
	Title:   President and Chief Executive Officer

 GREAT AMERICAN LIFE INSURANCE COMPANY 
  

	
	 /s/ Mark F. Muething

	Name: Mark F. Muething
	Title:   President

 ANNUITY INVESTORS LIFE INSURANCE COMPANY 
  

	
	 /s/ Mark F. Muething

	Name: Mark F. Muething
	Title:   President

 MANHATTAN NATIONAL LIFE INSURANCE COMPANY 
  

	
	 /s/ Mark F. Muething

	Name: Mark F. Muething
	Title:   President

  
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 APPENDIX A 

Glidepath will assign or lease designated employee(s) of Glidepath to GALIC, AILIC and MNLIC, at GALIC’s, AILIC’s or MNLIC’s request. Each
leased employee will remain an employee of Glidepath and receive compensation and benefits as an employee of Glidepath, but will provide services to GALIC, AILIC and MNLIC, under GALIC’s, AILIC’s or MNLIC’s direction and control with
respect to day-to-day assignments. Upon consultation with Glidepath, GALIC, AILIC or MNLIC may directly hire any Glidepath leased employee. At GALIC’s, AILIC’s
or MNLIC request, Glidepath will remove any leased employee from assignment to GALIC, AILIC or MNLIC and GALIC, AILIC or MNLIC will have no further obligation toward that leased employee. 

  
 8schn-ex101_6.htm

Exhibit 10.1

 

SCHNITZER STEEL INDUSTRIES, INC.

LONG-TERM INCENTIVE AWARD AGREEMENT

(FY2022-FY2024 Performance Period)

On November 5, 2021, 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”).  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 3-year period from September 1, 2021 to August 31, 2024 (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 “Volume Growth Target Share Amount” for purposes of this Agreement is _______ shares and Recipient’s “ROCE Target Share Amount” for purposes of this Agreement is _______ shares.  This award does not include a dividend equivalent cash payment.

2.Performance Conditions.

2.1Payout 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 Volume Growth Payout Shares, plus (b) the ROCE Payout Shares. The “Volume Growth Payout Shares” shall be equal to the Volume Growth Payout Factor as determined under Section 2.2 below and as modified by the TSR Modifier under Section 2.4 below, multiplied by the Volume Growth Target Share Amount. The “ROCE Payout Shares” shall be equal to the ROCE Payout Factor as determined under Section 2.3 below and as modified by the TSR Modifier under Section 2.4 below, multiplied by the ROCE Target Share Amount.  

2.2Volume Growth Payout Factor.

2.2.1The “Volume Growth Payout Factor” for each fiscal year shall be determined under the table below based on Average Volume Growth of the Company for the Performance Period.  

		
	
 

Average

Volume Growth
	
 

Volume Growth Payout Factor

	
 
	
 

	
less than ___%
	
0%

	
___%
	
50%

	
___%
	
100%

	
___% or more
	
200%

 

 

 

 

If the Average Volume Growth is between any two data points set forth in the first column of the above table, the Volume Growth 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 Volume Growth 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 Volume Growth Payout Factor.

2.2.2 The Company’s “Average Volume Growth” for the Performance Period shall be equal to the average of the Volume Growth determined for each of the three fiscal years of the Performance Period.  The “Volume Growth” for any fiscal year shall be equal to the number of thousands of long tons of ferrous and nonferrous metal sales, inclusive of ferrous tons transferred to the Company’s steel mill, by the Company for the fiscal year expressed as a percentage change from the prior fiscal year baseline amount. Volume Growth for a fiscal year can be negative.

2.3ROCE Payout Factor.

2.3.1The “ROCE Payout Factor” shall be determined under the table below based on the Average ROCE of the Company for the Performance Period.

		
	
Average

ROCE
	
ROCE Payout

Factor

	
 
	
 

	
Less than ___%
	
0%

	
___%
	
50%

	
___%
	
100%

	
___% or more
	
200%

If the Average ROCE is between any two data points set forth in the first column of the above table, the ROCE 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 ROCE 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 ROCE Payout Factor.

2.3.2The Company’s “Average ROCE” for the Performance Period shall be equal to the average of the ROCEs determined for each of the three fiscal years of the Performance Period.  The “ROCE” for any fiscal year shall be equal to Adjusted Net Income 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 Net Income” for any fiscal year shall mean the net income attributable to SSI for that fiscal year as set forth in the audited consolidated statement of operations of the Company and its subsidiaries for the fiscal year, and as adjusted in accordance with Section 2.5 below, increased by interest expense for that fiscal year, 

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as set forth in the audited consolidated statement of operations of the Company and its subsidiaries for the fiscal year, adjusted to exclude the impact of the associated income tax determined in accordance with Section 2.5.11.  “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 2.5 below, minus (ii) the Company’s total liabilities other than debt for borrowed money and finance lease liabilities, 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.

2.4TSR Modifier

2.4.1In order to determine the final number of Performance Shares to be issued to the Recipient, each of (a) the Volume Growth Payout Factor as determined in Section 2.2 above, and (b) the ROCE Payout Factor as determined in Section 2.3 above shall be modified by the TSR Modifier.  The “TSR Modifier” is an adjustment to the number of Performance Shares based on the Average TSR Percentile Rank of the Company for the Performance Period as follows:

		
	
Average TSR Percentile Rank
	
TSR Modifier Adjustment

	
 
	
 

	
75% or more
	
+20%

	
50%
	
0%

	
25% or less
	
+20%

 

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 Modifier 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 Modifier.

2.4.2The Company’s “Average TSR Percentile Rank” for the Performance Period shall be equal to the average of the TSR Percentile Ranks determined for each of the three fiscal years 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 

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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.

2.4.3The “Peer Group Companies” are Allegheny Technologies Incorporated, Century Aluminum Company, Cleveland-Cliffs Inc., Coeur Mining, Inc., Commercial Metals Company, Gerdau S.A., 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.

2.4.4Except as provided below for the first 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 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, 2022, 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.

2.5Adjustments.

2.5.1Change 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 Net Income and Adjusted Capital for each affected period shall be adjusted to eliminate the impact of the change in accounting principle.

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2.5.2Restructuring Charges.  Adjusted Net Income for each fiscal year of the Performance Period and Adjusted Capital as of each quarter end used in calculating Average Adjusted Capital for any fiscal year of the Performance Period shall be adjusted to eliminate the impact of any restructuring charges and exit-related activities as set forth in the audited consolidated statement of operations of the Company and its subsidiaries for the applicable period.

2.5.3Impairments.  Adjusted Net Income for each fiscal year of the Performance Period and Adjusted Capital as of each quarter end used in calculating Average Adjusted Capital for any fiscal year of the Performance Period shall be adjusted to eliminate the impact of any charges, and reversal of charges, taken by the Company during the applicable period for impairment of goodwill or other assets as set forth in the audited consolidated statement of operations of the Company and its subsidiaries for the applicable period, as well as to add back to Adjusted Capital the amount of goodwill allocated to any business sold by the Company during the applicable period.

2.5.4Acquisition Impacts.  Adjusted Net Income and Volume Growth for the last fiscal year of the Performance Period and Adjusted Capital as of each quarter end in 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.

2.5.5Certain Environmental Accruals and Expenses.  Adjusted Capital as of each quarter end used in calculating Average Adjusted Capital for any fiscal year of the Performance Period and Adjusted Net Income for each fiscal year during the Performance Period shall be adjusted to eliminate the impact of any changes in environmental liabilities recorded for investigation and remediation costs and natural resource or other damage claims and any fines, penalties, indemnities, fees, costs and other expenses incurred in connection with or resulting from the Portland Harbor Superfund Site and the other environmental matters listed as adjustments in the Company’s Fiscal 2022 Operating Targets Environmental Adjustments document dated November 5, 2021, which document is available for review from the Company’s Legal Division (net of any insurance or other reimbursements thereof).

2.5.6Net Realizable Value Charges.  Adjusted Net Income for each fiscal year during the Performance Period shall be adjusted to eliminate any charges to reduce the recorded value of any inventory to net realizable value in connection with significant macroeconomic events.

2.5.7Accelerated Depreciation.  Adjusted Net Income for each fiscal year of the Performance Period and Adjusted Capital as of each quarter end used in calculating Average Adjusted Capital for any fiscal year of the Performance Period shall be adjusted to eliminate the impact of any incremental accelerated depreciation related to joint product equipment assets existing on September 1, 2021 which are made obsolete due to the Three Dimensional Separator (3DS) ASR Processing System technology investment during the Performance Period. 

2.5.8Utility Charges.  Adjusted Net Income for each fiscal year during the Performance Period shall be adjusted to eliminate any charges related to the settlement of any 

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third-party claims in connection with a purported error on the part of a utility provider in the calculation and reporting of electricity consumption at one of the Company’s facilities.

2.5.9Tax Reform.  Adjusted Net Income for each fiscal year during the Performance Period and Adjusted Capital as of each quarter end used in calculating Average Adjusted Capital for any fiscal year of the Performance Period shall be adjusted to eliminate the impact resulting from major changes in federal or state tax laws.

2.5.10Environmental Laws.  Adjusted Net Income for each fiscal year during the Performance Period and Adjusted Capital as of each quarter end used in calculating Average Adjusted Capital for any fiscal year of the Performance Period shall be adjusted to eliminate the impact of new or amendments to, or changes in interpretations of existing, environmental laws, regulations or standards, on capital expenditures (including the non-capitalizable portion thereof), implementation costs thereof and any related fines and penalties.

2.5.11Tax Impacts.  All adjustments to Adjusted Net Income for the items listed in Sections 2.5.1 to 2.5.10 in any fiscal year shall be net of the discrete income tax impacts associated with each of the adjustments as certified by the Audit Committee based on the recommendation of the Chief Financial Officer.

3.Employment Condition.

3.1Full 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.

3.2Retirement; 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 

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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.

3.3Death 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 Volume Growth Payout Factor, the ROCE Payout Factor and the TSR Modifier 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.  For this purpose, the Adjusted Net Income 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 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 ROCE for that partial fiscal year, and the Average ROCE shall be determined by averaging however many full and partial fiscal years for which a ROCE shall have been determined.  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.

 

3.4Other 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.

4.1Consequences of Violation.  If the Company determines that Recipient has engaged in an action prohibited by Section 4.2 below, then:

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4.1.1Recipient shall immediately forfeit all rights under this Agreement to receive any unissued Performance Shares; and

4.1.2If 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.

4.2Prohibited 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:

4.2.1any business that (a) is engaged in the steel manufacturing business, (b) produces any of the same steel products as Cascade Steel Rolling Mills, Inc. (“Cascade Steel”), and (c) competes with Cascade Steel for sales to customers in California, Oregon, Washington, Nevada, British Columbia or Alberta;

4.2.2any 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 the Company’s facilities or stores;

5.Company Sale.

5.1If 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 Volume Growth Target Share Amount and the ROCE Target Share Amount, or (b) the amount determined using a Volume Growth Payout Factor and a ROCE Payout Factor, each as modified by the TSR Modifier and 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.  For this purpose, the Adjusted Net 

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Income 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 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 ROCE for that partial fiscal year, and the Average ROCE shall be determined by averaging however many full and partial fiscal years for which a ROCE shall have been determined.  For this purpose, the number of thousands of long tons of ferrous and nonferrous metal sales, inclusive of ferrous tons transferred to the Company’s steel mill, used to calculate Volume Growth for any partial fiscal year shall be annualized (e.g., multiplied by 4/3 if the partial period is three quarters) before determining the Volume Growth for that partial fiscal year, and the Average Volume Growth shall be determined by averaging however many full and partial fiscal years for which a Volume Growth shall have been determined.

 

5.2For purposes of this Agreement, a “Company Sale” shall mean the occurrence of any of the following events:

5.2.1any 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

5.2.2any 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 Volume Growth Payout Factor, the ROCE Payout Factor, the TSR Modifier 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 Volume Growth attained by the Company for each fiscal year of the Performance Period, the levels of ROCE attained by the Company for each fiscal year of the Performance Period, the levels of TSR and TSR Percentile Rank attained by the Company for each fiscal year of the Performance Period, the Tax Impacts applied in calculating ROCE in each fiscal year 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 

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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. Recoupment Policy.  The Recipient acknowledges and agrees that the Performance Shares shall be subject to the Company’s Executive Officer Incentive Compensation Recovery Policy, as the same may be amended from time to time or any replacement policy thereto, or as may be required by any applicable law (including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder).

12.Miscellaneous.

12.1Entire Agreement.  This Agreement constitutes the entire agreement of the parties with regard to the subjects hereof.

12.2Notices.  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.

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12.3Assignment; 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.

12.4Further 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.

12.5Applicable 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.

12.6Severability.  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

Title

 

 

 

 

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