Document:

exh10-2_17392.htm

EXHIBIT 10.2

 

 

 

STOCK OPTION AGREEMENT

NON-STATUTORY STOCK OPTION AGREEMENT

1993 STOCK INCENTIVE PLAN, AS AMENDED

Pursuant to the 1993 Stock Incentive Plan, as amended of SCHNITZER STEEL INDUSTRIES, INC., an Oregon corporation (the “Company”), the Company grants to ______________ (the “Optionee”), the right and option (the “Option”) to purchase all or any part of _______ shares of the Company's Class A Common Stock at a purchase price of $34.75 per share, subject to the terms and conditions of this agreement between the Company and the Optionee (this “Agreement”).  By accepting this Option grant, the Optionee agrees to all of the terms and conditions of the Option grant.  The terms and conditions of the Option grant set forth in attached Exhibit A are
incorporated into and made a part of this Agreement.

1.           The Option is not intended to be an Incentive Stock Option, as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), and therefore is a Non-Statutory Stock Option.

2.           The Vesting Reference Date for the Option is August 28, 2012.  See paragraph 1 of Exhibit A.

3.           The Grant Date for the Option is August 28, 2012.  The Option shall continue in effect until the date five years after the Grant Date unless earlier terminated as provided in paragraphs 2, 5 and 6 of Exhibit A.

SCHNITZER STEEL INDUSTRIES, INC.

By: _____________________________

 

Title: ____________________________

 

 

 

 

 

  

  

  

1.           Time of Exercise of Option.  Until it expires or is terminated as provided in paragraphs 2, 5 or 6, this Option may be exercised from time to time to purchase shares up to the following limits:

 

	

Years After Vesting

    Reference Date   

	Percentage Exercisable
	Less than 2	0%
	

2 or more 

	100%

2.           Termination of Employment.

2.1           If the Optionee’s employment by the Company or any parent or subsidiary of the Company terminates for any reason other than death, disability, retirement or termination by the Company for cause, the Option may be exercised at any time prior to the Expiration Date or the expiration of 90 days after the date of the termination, whichever is the shorter period, but only if and to the extent the Optionee was entitled under paragraph 1 to exercise the Option on the date of termination.

2.2           If the Optionee’s employment by the Company or any parent or subsidiary of the Company is terminated by the Company for cause, the Option may be exercised at any time prior to the Expiration Date or the expiration of 30 days after the date of the termination, whichever is the shorter period, but only if and to the extent the Optionee was entitled under paragraph 1 to exercise the Option on the date of termination.  The term “cause” means (A) the conviction (including a plea of guilty or nolo contendere) of the Optionee of a felony involving theft or moral turpitude or relating to the business of the Company, other
than a felony predicated on the Optionee's vicarious liability, (B) the Optionee’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 the Optionee’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 the Optionee, (C) deception, fraud, misrepresentation or dishonesty by Optionee in connection with the Optionee’s employment with the Company, (D) any incident materially compromising the Optionee’s reputation or ability to represent the Company with the public, (E) any willful misconduct by the Optionee that substantially impairs the Company’s business or reputation, or
(F) any other willful misconduct by the Optionee that is clearly inconsistent with the Optionee’s position or responsibilities.

2.3           If the Optionee’s employment by the Company or any parent or subsidiary of the Company is terminated because of death or disability, the Option shall become fully exercisable and may be exercised at any time prior to the Expiration Date or the expiration of 12 months after the date of termination, whichever is the shorter period.  The term “disability” means a medically determinable physical or mental condition of the Optionee resulting from bodily injury, disease, or mental disorder which is likely to continue for the remainder of the Optionee’s life and which renders the Optionee incapable of performing the
job assigned to the Optionee by the Company or any substantially equivalent replacement job.  If the Optionee’s employment is terminated by death, the Option shall be exercisable only by the person or persons to whom the Optionee’s rights under the Option pass by the Optionee’s will or by the laws of descent and distribution of the state or country of the Optionee’s domicile at the time of death.

  

  

  

2.4           If the Optionee’s employment by the Company or any parent or subsidiary of the Company is terminated because of retirement, the Option may be exercised at any time prior to the Expiration Date or the expiration of 12 months after the date of the termination, whichever is the shorter period, but only if and to the extent the Optionee was entitled under paragraph 1 to exercise the Option on the date of termination.  The term “retirement” means (A) normal retirement after reaching age 65, (B) early retirement after reaching age 55 and completing 10 years of service, or (C) early retirement after completing 30 years of
service without regard to age.

3.           Method of Exercise of Option.

3.1           The Option may be exercised only by notice in writing from the Optionee to the Company of the Optionee’s intention to exercise, specifying the number of shares the Optionee desires to purchase and the date on which the Optionee desires to complete the transaction, which may not be more than 30 days after receipt of the notice, and, unless in the opinion of counsel for the Company such a representation is not required to comply with the Securities Act of 1933, as amended, containing a representation that it is the Optionee’s intention to acquire the shares for investment and not with a view to distribution.  On or before the
date specified for completion of the purchase, the Optionee must have paid the Company the full purchase price in cash or in shares of Class A Common Stock previously acquired by the Optionee, valued at fair market value.  No shares shall be issued until full payment therefor has been made.

3.2           Upon notification of the amount due, if any, and prior to or concurrently with delivery of the certificates representing the shares for which the option was exercised, the Optionee shall pay to the Company amounts necessary to satisfy any applicable federal, state, and local withholding tax requirements.  If additional withholding becomes required beyond any amount deposited before delivery of the certificates, the Optionee shall pay such amount to the Company on demand.  If the Optionee fails to pay the amount demanded, the Company shall have the right to withhold that amount from other amounts payable by the Company to the
Optionee, including salary, subject to applicable law.

4.           Nontransferability of Option.  The Option may not be assigned or transferred by the Optionee except by will, by the laws of descent and distribution of the state or country of his or her domicile at the time of death or pursuant to a qualified domestic relations order as defined under the Code or Title I of the Employee Retirement Income Security Act, and during the Optionee’s lifetime the Option may be exercised only by the Optionee.

  

  

  

5.           Changes in Capital Structure.

5.1           If during the term of the Option the outstanding shares of Class A Common Stock are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company or of another corporation, by reason of any reorganization, merger, consolidation, plan of exchange, recapitalization, reclassification, stock split-up, combination of shares, or dividend payable in shares, appropriate adjustment shall be made by the Committee (as defined in the Plan) in the number and kind of shares subject to the Option, or the unexercised portion thereof.  Such adjustments shall be made without change in the
total price applicable to the unexercised portion of the Option and with a corresponding adjustment in the option price per share.  Any such adjustment made by the Committee shall be conclusive.

5.2           In the event of dissolution of the Company or a merger, consolidation, or plan of exchange affecting the Company, in lieu of making any adjustments that may be provided for above in this paragraph 5 or in lieu of having the Option continue unchanged, the Committee may, in its sole discretion, by written notice provide a 30-day period prior to such event during which the Option will be exercisable for 100 percent of the shares subject to the Option and after which the Option will terminate.

6.           Special Acceleration in Certain Events. Notwithstanding any other provision in this Agreement, the Option shall, upon a change in control of the Company, immediately become exercisable in full during the remainder of the term of the Option; provided, however, that the Committee may, in its sole discretion, by written notice provide a 30-day period prior to the change in control of the Company during which the Optionee shall have the right to exercise the Option, in whole or in part, without any limitation on exercisability, and upon the expiration of such period, the Option
shall immediately terminate.  The term “change in control of the Company” means the occurrence of any of the following events:

(A)           The consummation of:

(1)           any consolidation, merger or plan of share exchange involving the Company (a “Merger”) as a result of which the holders of outstanding securities of the Company ordinarily having the right to vote for the election of directors (“Voting Securities”) immediately prior to the Merger do not continue to hold at least 50% of the combined voting power of the outstanding Voting Securities of the surviving corporation or a parent corporation of the surviving corporation immediately after the Merger, disregarding any Voting Securities issued to or retained by such holders in respect of securities of any other party to the Merger;
or

(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;

(B)           At any time during a period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company (“Incumbent Directors”) shall cease for any reason to constitute at least a majority thereof; provided, however, that the term “Incumbent Director” shall also include each new director elected during such two-year period whose nomination or election was approved by two-thirds of the Incumbent Directors then in office; or

  

  

  

(C)           Any person shall, as a result of a tender or exchange offer, open market purchases or privately negotiated purchases from anyone other than the Company, have become the beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of Voting Securities representing 20% or more of the combined voting power of the then outstanding Voting Securities.  For purposes of this paragraph 6, the term “person” means and includes any individual, corporation, partnership, group, association or other “person,” as such term is used in Section 14(d) of the Securities
Exchange Act of 1934, other than the Company or any employee benefit plan sponsored by the Company.

Notwithstanding anything in this paragraph 6 to the contrary, unless otherwise determined by the Board of Directors of the Company, no change in control of the Company shall be deemed to have occurred for purposes of this Agreement if (1) the Optionee acquires (other than on the same basis as all other holders of shares of Class A Common Stock of the Company) an equity interest in an entity that acquires the Company in a change in control of the Company otherwise described under subparagraph (A) of this paragraph 6, or (2) the Optionee is part of a group that constitutes a person which becomes a beneficial owner of Voting Securities in a transaction that otherwise would have resulted in a change in control of the
Company under subparagraph (C) of this paragraph 6.

7.           Conditions on Obligations.  The Company shall not be obligated to issue shares upon exercise of the Option if the Company is advised by its legal counsel that such issuance would violate applicable state or federal laws, including securities laws.  The Company will use its best efforts to take any steps required by state or federal law or applicable regulations in connection with issuance of shares upon exercise of the Option.

8.           No Right to Employment.  Nothing in the Plan or this Agreement shall confer upon the Optionee any right to be continued in the employment of the Company or any parent or subsidiary of the Company, or to interfere in any way with the right of the Company or any parent or subsidiary by whom the Optionee is employed to terminate the Optionee’s employment at any time, for any reason, with or without cause, or to decrease the Optionee’s compensation or benefits.

9.           Successors of Company.  This Agreement shall be binding upon and shall inure to the benefit of any successor or successors of the Company but except as provided herein the Option may not be assigned or otherwise disposed of by the Optionee.

10.         Notices.  Any notices under this Agreement must be in writing and will be effective when actually delivered, except that any notice pursuant to paragraphs 5.2 or 6 given by mail shall be effective when mailed.  Mail shall be directed to the Company at its headquarters office (attention:  HR department) or to such address as the Company may certify by notice to the other party.  Mail shall be directed to the Optionee at the most recent address provided by the Optionee to the Company.Unassociated Document

EXHIBIT 10.3

 

RESTRICTED STOCK UNIT

AWARD AGREEMENT

Pursuant to Section 8 of the 1993 Stock Incentive Plan (the “Plan”) of Schnitzer Steel Industries, Inc., an Oregon corporation (the “Company”), on August 30, 2012 the Compensation Committee of the Board of Directors of the Company authorized and granted to Tamara L. Lundgren (the “Recipient”) an award of restricted stock units with respect to the Company’s Class A Common Stock (“Common Stock”), subject to the terms and conditions of this agreement between the Company and the Recipient (this “Agreement”).  By accepting
this award, the Recipient  agrees to all of the terms and conditions of this Agreement.

1.           Award and Terms of Restricted Stock Units.  The Company awards to the Recipient under the Plan 2,763 restricted stock units (the “Award”), subject to the restrictions, terms and conditions set forth in this Agreement.

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

(b)           Vesting Date.  The RSUs awarded under this Agreement shall initially be 100% unvested and subject to forfeiture.  The Vesting Reference Date of this Award is August 28, 2012.  Subject to Sections 1(c), (d), (e) and (f), the RSUs shall vest in full on the fifth anniversary of the Vesting Reference Date.

(c)           Acceleration on Death or Disability.  If the Recipient ceases to be an employee of the Company or a parent or subsidiary of the Company by reason of the Recipient’s death or disability, all outstanding but unvested RSUs shall become immediately vested.  The term “disability” means a medically determinable physical or mental condition of the Recipient resulting from bodily injury, disease, or mental disorder which is likely to continue for the remainder of the Recipient’s life and which renders the Recipient incapable of performing the job assigned
to the Recipient by the Company or any substantially equivalent replacement job.

(d)           Certain Transactions.  Notwithstanding any provision in this Agreement (but subject to the last sentence of this Section 1(d)), in the event of dissolution of the Company or a merger, consolidation or plan of exchange affecting the Company, the Compensation Committee of the Board of Directors (the “Compensation Committee”) may, in its sole discretion and to the extent possible under the structure of the applicable transaction, select one or a combination of the following alternatives for treating this Award of RSUs:

 

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

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

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

  

  

  

Notwithstanding the foregoing provisions of this Section 1(d) to the contrary, no such alternative shall occur with respect to the RSUs to the extent that, if it did, a 20% tax would be imposed under Section 409A of the Internal Revenue Code on the Recipient.

(e)           Special Acceleration in Certain Events.  Notwithstanding any other provision in this Agreement, upon a change in control of the Company, all outstanding but unvested RSUs shall become immediately vested.  The term “change in control of the Company” means the occurrence of any of the following events:

(i)           The consummation of:

(A)           any consolidation, merger or plan of share exchange involving the Company (a “Merger”) as a result of which the holders of outstanding securities of the Company ordinarily having the right to vote for the election of directors (“Voting Securities”) immediately prior to the Merger do not continue to hold at least 50% of the combined voting power of the outstanding Voting Securities of the surviving corporation or a parent corporation of the surviving corporation immediately after the Merger, disregarding any Voting Securities issued to or retained by such holders in respect of securities of any other party to the Merger;
or

(B)           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;

(ii)           At any time during a period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company (“Incumbent Directors”) shall cease for any reason to constitute at least a majority thereof; provided, however, that the term “Incumbent Director” shall also include each new director elected during such two-year period whose nomination or election was approved by two-thirds of the Incumbent Directors then in office; or

(iii)           Any person shall, as a result of a tender or exchange offer, open market purchases or privately negotiated purchases from anyone other than the Company, have become the beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of Voting Securities representing 20% or more of the combined voting power of the then outstanding Voting Securities.  For purposes of this Section 1(e), the term “person” means and includes any individual, corporation, partnership, group, association or other “person,” as such term is used in Section 14(d) of the Securities
Exchange Act of 1934, other than the Company or any employee benefit plan sponsored by the Company.

Notwithstanding anything in this Section 1(e) to the contrary, unless otherwise determined by the Board of Directors of the Company, no change in control of the Company shall be deemed to have occurred for purposes of this Agreement if (1) the Recipient acquires (other than on the same basis as all other holders of shares of Common Stock of the Company) an equity interest in an entity that acquires the Company in a change in control of the Company otherwise described under subparagraph (i) of this Section 1(e), or (2) the Recipient is part of a group that constitutes a person which becomes a beneficial owner of Voting Securities in a transaction that otherwise would have resulted in a change in control of the Company
under subparagraph (iii) of this Section 1(e).

  

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(f)           Forfeiture of RSUs on Termination of Service.  If the Recipient ceases to be an employee of the Company or a parent or subsidiary of the Company under circumstances where the RSUs have not previously vested and do not become vested pursuant to Section 1(c) or 1(d), the Recipient shall immediately forfeit all outstanding but unvested RSUs awarded pursuant to this Agreement and the Recipient shall have no right to receive the related Common Stock.

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

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

(i)           Delivery Date for the Shares Underlying the RSUs.  As soon as practicable, but in no event later than thirty days, following a date on which any RSUs vest, the Company will issue the Recipient the Common Stock underlying the then vested RSUs in the form of uncertificated shares in book entry form; provided, however, that if accelerated vesting of the RSU occurs pursuant to Section 1(c) by reason of the Recipient’s disability, the date of issuance of the shares underlying the RSUs shall be delayed until the date that is six months after the date of the Recipient’s
separation from service (within the meaning of Section 409A of the Internal Revenue Code); provided further, however, that if accelerated vesting of the RSUs occurs pursuant to Section 1(d) or 1(e), the date of issuance of the shares underlying the RSUs shall occur as soon as practicable, but in no event later than thirty days, following the earliest to occur of (1) the Recipient’s separation from service (within the meaning of Section 409A of the Internal Revenue Code (but subject to the immediately preceding proviso)), (2) the Recipient’s death or (3) a change in ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, within the meaning of Section 409A(a)(2)(A)(v) of the Internal Revenue Code.  The shares of Common Stock will be issued in the Recipient’s name or, in the event of the
Recipient’s death, in the name of either (i) the beneficiary designated by the Recipient on a form supplied by the Company or (ii) if the Recipient has not designated a beneficiary, the person or persons establishing rights of ownership by will or under the laws of descent and distribution.

(j)           Taxes and Tax Withholding.  The Recipient acknowledges and agrees that no election under Section 83(b) of the Internal Revenue Code can or will be made with respect to the RSUs.  The Recipient acknowledges that on each date that shares underlying the RSUs are issued to the Recipient (the “Payment Date”), the Value (as defined below) on that date of the shares so issued 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 from the shares otherwise issuable the number of shares having a Value equal to the minimum withholding amount.  For purposes of this Section 6, the “Value” of a share shall be equal to the closing market price for the Common Stock on the last trading day preceding the Payment Date.  Alternatively, the Company may, at its option, permit the Recipient to pay such withholding amount in cash under procedures established by the Company.

 

  

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

2.           Miscellaneous.

 

(a)           Entire Agreement; Amendment.  This Agreement and the Plan constitute the entire agreement of the parties with regard to the subjects hereof.

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

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

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

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

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

	  	
SCHNITZER STEEL INDUSTRIES, INC.

	  	  
	  	  
	  	
By:

	  	  
	  	  	
Authorized Officer

 

 

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