Document:

exhibit10-15_033108.htm

     

    

      Exhibit
10.15

      

      CFS
Bancorp, Inc. 2008 Cash Incentive Compensation Program

      

      On April
29, 2008, the Compensation Committee of the Board of Directors approved a Cash
Incentive Compensation Program (Cash Incentive Program) for
officers and key employees.  The Cash Incentive Program provides for
an opportunity of a cash bonus based on the actual performance of the Company or
the individual relative to established performance objectives.  These
objectives are position specific and include a mix of corporate, individual and,
where relevant, business unit measures.

      

      Bonuses under the Cash Incentive
Program are expected to be paid in February 2009.  If the performance
targets are achieved, a person will be entitled to receive a bonus only if he or
she is employed by the Company or one of its affiliates on the bonus payment
date.WWW.EXFILE.COM, INC. -- 888-775-4789 -- SCHNITZER STEEL INDUSTRIES, INC. -- EXHIBIT 10.1 TO FORM 8K

    EXHIBIT
10.1

     

    CHANGE
OF CONTROL SEVERANCE AGREEMENT

     

    AGREEMENT, dated as
of the [___] day of
[___], [___] (this “Agreement”), by
and between Schnitzer Steel Industries, Inc., an Oregon corporation (the
“Company”), and [___]
(the “Executive”).

     

    WHEREAS,
the Compensation Committee (the “Committee”) of the Board of Directors of the
Company (the “Board”), has determined that it is in the best interests of the
Company and its stockholders to assure that the
Company will have the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined
herein).  The Committee believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal uncertainties
and risks created by a pending or threatened Change of Control and to encourage
the Executive’s full attention and dedication to the Company in the event of any
threatened or pending Change of Control, and to provide the Executive with
compensation and benefits arrangements upon a Change of Control that ensure that
the compensation and benefits expectations of the Executive will be satisfied
and that provide the Executive with compensation and benefits arrangements that
are competitive with those of other corporations.  Therefore, in order
to accomplish these objectives, the Committee has caused the Company to enter
into this Agreement.

     

    NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     

    Section
1. Certain
Definitions.

     

    (a)    “Affiliated
Company” means any company controlled by, controlling or under common control
with the Company.

     

    (b)    “Change
of Control” means:

     

    (1)    Any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a
“Person”) becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent (20%) or more of either
(A) the then-outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (B) the combined voting power of the then-outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that, for purposes
of this Section 1(b), the following acquisitions shall not constitute a Change
of Control:  (i) any acquisition directly from the Company, (ii) any
acquisition by the Company, (iii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any Affiliated
Company or (iv) any acquisition by any corporation pursuant to a transaction
that complies with Sections 1(b)(3)(A), 1(b)(3)(B) and 1(b)(3)(C);

     

    (2)    Any time
at which individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual
becoming a director subsequent to the date 

     

    
      
        
        

      

      
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    hereof
whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;

     

    (3)    Consummation
of a reorganization, merger, statutory share exchange or consolidation or
similar transaction involving the Company or any of its subsidiaries, a sale or
other disposition of all or substantially all of the assets of the Company, or
the acquisition of assets or stock of another entity by the Company or any of
its subsidiaries (each, a “Business Combination”), in each case unless,
following such Business Combination, (A) all or substantially all of the
individuals and entities that were the beneficial owners of the Outstanding
Company Common Stock and the Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than fifty percent (50%) of the then-outstanding shares of common stock
(or, for a non-corporate entity, equivalent securities) and the combined voting
power of the then-outstanding voting securities entitled to vote generally in
the election of directors (or, for a non-corporate entity, equivalent governing
body), as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity that, as a result of such
transaction, owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership immediately prior to such Business
Combination of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities, as the case may be, (B) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, twenty percent (20%) or
more of, respectively, the then-outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then-outstanding voting securities of such corporation, except to
the extent that such ownership existed prior to the Business Combination, and
(C) at least a majority of the members of the board of directors (or, for a
non-corporate entity, equivalent governing body) of the entity resulting from
such Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement or of the action of the Board providing for
such Business Combination; or

     

    (4)    Approval
by the stockholders of the Company of a complete liquidation or dissolution of
the Company other than in connection with the Company’s bankruptcy or
insolvency.

     

    Notwithstanding
anything in the foregoing to the contrary, unless otherwise determined by the
Board, no Change of Control shall be deemed to have occurred for purposes of
this Agreement if (a) the Executive is a 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 of Control under subparagraph (1)
above, or (b) the Executive acquires (other than on the same basis as all

     

    
      
        
        

      

      
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    other
holders of shares of Common Stock of the Company) an equity interest in an
entity that acquires the Company in a Change of Control otherwise described
under subparagraph (3) above.

     

    (c)    “Change
of Control Period” means the period commencing on the Effective Date and ending
on the date that is eighteen (18) months following the Effective
Date.

     

    (d)    “COBRA” means the
Consolidated Omnibus Budget Reconciliation Act of 1985.

     

    (e)    “Code”
means the Internal Revenue Code of 1986, as amended, and the regulations and
other guidance promulgated thereunder.

     

    (f)    “Effective
Date” means the first date on which a Change of Control
occurs.  Notwithstanding anything in this Agreement to the contrary,
if a Change of Control occurs and if the Executive’s employment with the Company
is terminated prior to the date on which the Change of Control occurs, and if it
is reasonably demonstrated by the Executive that such termination of employment
(1) was at the request of a third party that has taken steps reasonably
calculated to effect a Change of Control or (2) otherwise arose in connection
with or anticipation of a Change of Control, then “Effective Date” means the
date immediately prior to the date of such termination of
employment.

     

    Section
2.    Termination of Employment
during the Change of Control Period.

     

    (a)    Death or
Disability.  The Executive’s
employment shall terminate automatically if the Executive dies during the Change
of Control Period.  If the Company determines in good faith that the
Disability (as defined herein) of the Executive has occurred during the Change
of Control Period (pursuant to the definition of “Disability”), it may give to
the Executive written notice in accordance with Section 9(b) of its intention to
terminate the Executive’s employment.  In such event, the Executive’s
employment with the Company shall terminate effective on the thirtieth (30th)
day after receipt of such notice by the Executive (the “Disability Effective
Date”), provided that,
within the thirty (30) days after such receipt, the Executive shall not have
returned to full-time performance of the Executive’s
duties.  “Disability” means the absence of the Executive from the
Executive’s duties with the Company on a full-time basis for one hundred eighty
(180) consecutive business days as a result of incapacity due to mental or
physical illness that is determined to be total and permanent by a physician
selected by the Company or its insurers and reasonably acceptable to the
Executive or the Executive’s legal representative.

     

    (b)    Cause.  The Company may
terminate the Executive’s employment during the Change of Control Period with or
without Cause.  “Cause” means:

     

    (1)    the
willful and continued failure substantially to perform the Executive’s duties
with the Company or any Affiliated Company (other than as a result of the
Executive’s incapacity due to physical or mental illness or injury or following
the Executive’s delivery of a Notice of Termination for Good Reason), after a
written demand for substantial performance is delivered to the Executive by the
Board, the Chief Executive Officer of the Company or a 

     

    
      
        
        

      

      
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    senior
officer of the Company to whom the Executive reports that specifically
identifies the manner in which the Board or the Chief Executive Officer of the
Company believes that the Executive has not substantially performed the
Executive’s duties;

     

    (2)    the
willful engaging by the Executive in illegal conduct which results in material
and demonstrable damage to the business or reputation of the Company;
or

     

    (3)    conviction
of, or plea of guilty or nolo contendere to, a charge of commission of a
felony.

     

    For
purposes of this Section 2(b), no act, or failure to act, on the part of the
Executive shall be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the
Company.  Any act, or failure to act, based upon authority (A) given
pursuant to a resolution duly adopted by the Board, or if the Company is not the
ultimate parent corporation of the Affiliated Companies and is not
publicly-traded, the board of directors of the ultimate parent of the Company
(the “Applicable Board”), (B) [given pursuant to written
instructions of the Chief Executive Officer of the Company or a senior officer
of the Company to whom the Executive reports]1 or (C) in accordance with the advice of
counsel for the Company shall be conclusively presumed to be done, or omitted to
be done, by the Executive in good faith and in the best interests of the
Company.  The cessation of employment of the Executive shall not be
deemed to be for Cause unless and until (I) the Executive has been
given notice in reasonable detail by the Company of the existence of the
circumstances claimed to constitute Cause within ninety (90) days following the
initial existence of such circumstances, and given an opportunity of thirty (30)
days to cure, and such circumstances remain uncured at the end of such thirty
(30)-day period, and (II) there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not less than
two-thirds of the entire membership of the Applicable Board (excluding the
Executive, if the Executive is a member of the Applicable Board) at a meeting of
the Applicable Board called and held for such purpose (after reasonable notice
is provided to the Executive and the Executive is given an opportunity, together
with counsel for the Executive, to be heard before the Applicable Board),
finding that, in the good faith opinion of the board, the Executive is guilty of
the conduct described in Section 2(b), and specifying the particulars thereof in
detail.

     

    (c)    Good
Reason.  During the Change
of Control Period, the Executive’s employment may be terminated by the Executive
for Good Reason or by the Executive voluntarily without Good
Reason.  “Good Reason” means:

     

    (1)    any
material diminution in the Executive’s position;

     

    (2)    any
material reduction by the Company in the Executive’s base salary as in effect
immediately prior to the Effective Date;

     

     

      
        

      

    

    1           Depending
on the Executive’s level.

    
      
        
        

      

      
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    (3)    the
Company requiring the Executive to be based at a location more than seventy five
(75) miles from where the Executive’s office is located immediately preceding
the Effective Date;

     

    (4)    the
failure by the Company to continue in effect any Material Plan (as hereinafter
defined) in which the Executive is participating immediately prior to the
Effective Date (or Material Plans providing the Executive with at least
substantially similar benefits) other than as a result of the normal expiration
of any such Material Plan in accordance with its terms as in effect immediately
prior to the Effective Date, or the taking of any action, or the failure to act,
by the Company which would materially adversely affect the Executive’s continued
participation in any of such Material Plans on at least as favorable a basis to
the Executive as is the case immediately prior to the Effective Date or which
would materially reduce the Executive’s benefits in the future under any of such
Material Plans or deprive the Executive of any material benefit enjoyed by the
Executive immediately prior to the Effective Date;

     

    (5)    the
failure by the Company to pay the Executive any material portion of the
Executive’s current or deferred compensation within seven (7) days of the date
such compensation is due; or

     

    (6)    any
failure by the Company to comply with and satisfy Section 8(c).

     

    For
purposes of this Agreement, “Plan” shall mean any compensation plan, such as an
incentive compensation, stock option, restricted stock or performance share
plan, or any employee benefit plan such as a thrift, pension, profit sharing,
deferred compensation, medical, disability, accident, life insurance, or
relocation plan or policy, or any other plan, program or policy of the Company
intended to benefit employees, and a “Material Plan” shall mean any Plan
providing (A) an annual incentive cash opportunity target, expressed as a
percentage of the Executive’s base salary; (B) a long-term incentive opportunity
(payable in cash or Company stock); (C) a savings and/or retirement benefit
(including, without limitation, Plans qualified under Section 401(a) of the Code
and Plans not so qualified); and (D) health care insurance
coverage.

     

    The
Executive’s employment shall not be deemed to have been terminated by the
Executive for Good Reason unless he has provided the Company with written notice
of the existence of the circumstances claimed to constitute Good Reason within
ninety (90) days following the initial existence of such circumstances, and the
Company has not remedied such circumstances within thirty (30) days of its
receipt of such notice from the Executive.  The Executive’s mental or
physical incapacity following the occurrence of an event described above in
clauses (1) through (6) shall not affect the Executive’s ability to terminate
employment for Good Reason.

     

    (d)    Notice of
Termination.  
Any termination by the Company for Cause,  or by the Executive for
Good Reason, shall be communicated by Notice of Termination to the other party
hereto given in accordance with Section  9(b).   “Notice of
Termination” means a written notice that (1) indicates the specific termination
provision in this Agreement relied upon, (2) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive’s employment under the provision so

     

    
      
        
        

      

      
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    indicated,
and (3) if the Date of Termination (as defined herein) is other than the date of
receipt of such notice, specifies the Date of Termination (which Date of
Termination shall be not more than thirty (30) days after the giving of such
notice).  The failure by the Executive or the Company to set forth in
the Notice of Termination any fact or circumstance that contributes to a showing
of Good Reason or Cause shall not waive any right of the Executive or the
Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the
Executive’s or the Company’s respective rights hereunder.

     

    (e)    Date of
Termination.
“Date of Termination” means (1) if the Executive’s employment is
terminated by the Company for Cause, or by the Executive for Good Reason, the
date of receipt of the Notice of Termination or any later date specified in the
Notice of Termination (which date shall not be more than thirty (30) days after
the giving of such notice), as the case may be, (2) if the Executive’s
employment is terminated by the Company other than for Cause or Disability, the
date on which the Company notifies the Executive of such termination, (3) if the
Executive resigns without Good Reason, the date on which the Executive notifies
the Company of such termination, and (4) if the Executive’s employment is
terminated by reason of death or Disability, the date of death of the Executive
or the Disability Effective Date, as the case may be.

     

    (f)    Compensation
During Dispute.  With respect to any termination of the
Executive's employment during the Change of Control Period, if within fifteen
(15) days after any Notice of Termination is given, or, if later, prior to the
Date of Termination, the party receiving such Notice of Termination notifies the
other party that a dispute exists concerning the termination (a “Notice of
Dispute”), the Company shall continue to pay the Executive the full compensation
in effect when the Notice of Termination was given (including, but not limited
to, his then current annual base salary) and continue the Executive as a
participant in all Plans in which the Executive was participating when the
Notice of Termination was given until the earliest of (i) the date on which the
Change of Control Period ends, (ii) the date on which the dispute is finally
resolved, either by mutual written agreement of the parties or by a final
judgment, order or decree of an arbitrator or a court of competent jurisdiction
(which is not appealable or with respect to which the time for appeal therefrom
has expired and no appeal has been perfected), or (iii) six (6) months after the
later of (x) the Date of Termination or (y) the date the Notice of Dispute was
given; provided, however, that this Section 2(f) shall be applicable in the
event of a Notice of Dispute given by the Executive only if such notice is given
in good faith and the Executive pursues the resolution of such dispute with
reasonable diligence.  

     

    (g)    No Offset
or Reduction.  Amounts paid under Section 2(f) are in addition
to other amounts due under this Agreement and shall not, for
example,  be offset against or reduce any amounts otherwise due under
Section 3(a) hereof.

     

    (h)    Separation
from Service. The
Executive shall not be obligated to perform any services after the Date of
Termination that would prevent the termination of his employment on

     

    
      
        
        

      

      
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    such Date
of Termination from qualifying as a “separation from service” as defined in
Treasury Regulations §1.409A-1(h).

     

    Section
3.    Obligations of the Company
upon Termination during the Change of Control
Period.  

     

    (a)    Good
Reason; Other Than for Cause, Death or Disability.  If, during the
Change of Control Period, the Company terminates the Executive’s employment
other than for Cause, death or Disability or the Executive terminates employment
for Good Reason:

     

    (1)    the
Company shall pay to the Executive, within thirty (30) days after the Date of
Termination, the aggregate of the following amounts:

     

    (A)    the sum
of (i) the Executive’s full base salary through to the Date of Termination at
the rate in effect just prior to the time a Notice of Termination is given, plus
any benefits or awards which pursuant to the terms of any Plans have been earned
or become payable, but which have not yet been paid to the Executive, provided, however, that with
respect to a termination of the Executive’s employment for Good Reason based on
a reduction by the Company in the Executive’s base salary as in effect
immediately prior to the Effective Date, the Company shall pay the Executive’s
full base salary through the Date of Termination at the rate in effect just
prior to such reduction plus any benefits or awards which pursuant to the terms
of any Plans have been earned or become payable prior to the Date of
Termination, but which have not yet been paid to the Executive, (ii) any accrued
vacation pay through the Date of Termination, and (iii) the Executive’s business
expenses that have not been reimbursed by the Company as of the Date of
Termination that were incurred by the Executive prior to the Date of Termination
in accordance with the applicable Company policy (the sum of the amounts
described in subclauses (i) through (iii), the “Accrued
Obligations”);

     

    (B)    notwithstanding
any provision of any annual cash incentive plan to the contrary, the Company
shall pay to the Executive a lump sum amount, in cash, equal to the sum of (1)
any unpaid incentive compensation which has been determined by the Committee to
be payable to the Executive under any such plan for a completed fiscal year
preceding the Date of Termination and which, as of the Date of Termination, is
contingent only upon the Executive’s continued employment to a subsequent date,
and (2) with respect to any completed or uncompleted fiscal year for which the
annual incentive compensation amount pursuant to an outstanding award under any
such plan has not been determined as of the Date of Termination, the greater of
(i) one hundred percent (100%) of the Executive’s target award for such fiscal
year assuming (if necessary) that the Executive had continued to receive through
the end of such fiscal year his annual rate of base salary in effect immediately
prior to the Effective Date, or (ii) the amount determined by applying to such
target award the payout multiple calculated by annualizing the Company’s results
for the portion of the fiscal year ended as of the last day of the most recent
fiscal quarter ended prior to the Date of Termination and determining the
financial performance portions of the annual incentive based on such annualized
results (assuming that the Committee would not exercise discretion to pay above
the stretch level but would exercise discretion to make financial performance
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    consistent
with those approved for the most recent fiscal year), and by assuming that the
Executive’s individual goals for such fiscal year were all met and that the
Committee exercised discretion to pay the individual goals portion of the annual
incentive using the same payout multiple as determined for the financial
performance portion;

     

    (C)    in lieu
of any further salary for periods subsequent to the Date of Termination, the
Company shall pay to the Executive in a single payment an amount in cash equal
to [one (1)]2 [one and one-half (11⁄2)]3 times the sum of (1) the greater of (i) the
Executive’s annual rate of base salary in effect on the Date of Termination or
(ii) the Executive’s annual rate of base salary in effect immediately prior to
the Effective Date and (2) the greater of (i) the average of the last three
annual bonuses (annualized in the case of any bonus paid with respect to a
partial year) paid to, or earned by, the Executive preceding the Date of
Termination (taking into account the Executive’s full economic value added (EVA)
bonuses at the time such bonuses were declared with respect to a fiscal year,
even though payment of a portion of such bonuses was deferred) or (ii) the
Executive’s target bonus as most recently established by the
Committee;

     

    (D)    any
unpaid balance in the Executive’s bonus bank under any of the Company’s Economic
Value Added Bonus Plans, if applicable, shall be vested and paid to the
Executive;

     

    (E)    for an
[eighteen (18)]4[twelve (12)]5 month period after the Date of Termination,
the Company shall arrange to provide the Executive, his spouse and his
dependents with life, accident and health insurance benefits substantially
similar to those which the Executive was receiving immediately prior to the
Effective Date, at no greater cost to the Executive than the after tax cost (as
determined by the Committee using the highest individual marginal Federal and
applicable state and local income tax rates) to the Executive immediately prior
to the date of such Effective Date, as applicable; provided, however, that, in
the case of health insurance benefits, such coverage shall, to the maximum
extent available, be considered to be provided pursuant to COBRA, and the
Executive shall be required to make the necessary election of such
coverage.  Notwithstanding the foregoing, (i) the Company shall not
provide any benefit otherwise receivable by the Executive pursuant to this
subparagraph (E) to the extent that a similar benefit is actually received by
the Executive from a subsequent employer during such [eighteen (18)]6 [twelve (12)]7 month period, and any such benefit actually
received by the Executive shall be reported to the Company, and (ii) to the
extent required in order to comply with Section 409A of the Code, in no event
shall any such benefits be provided beyond the end of the second calendar year
that begins after the Executive’s “separation from service” within the meaning
of Section 409A of the Code;

     

     

      
        

      

    

    
      2           For
Tier 3 executives. 

      
        3           For
Tier 2 executives. 

      

      
        4           For
Tier 2 executives. 

      

      
        5           For
Tier 3 executives. 

      

      
        6           For
Tier 2 executives. 

      

      
        7           For
Tier 3 executives.

      

    

    
      
        
        

      

      
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    (F)    if any
amounts previously contributed by the Company to the Executive’s account under
the Schnitzer Steel Industries, Inc. Retirement Plan (the “401(k) Plan”) are
unvested and therefore forfeited under the terms of the 401(k) Plan as a result
of the Executive’s termination of employment, the Company shall pay to the
Executive an amount equal to the forfeited balance, and if any accrued benefit
for the Executive under the Pension Retirement Plan for Employees of Schnitzer
Steel Industries, Inc. and Affiliated Employers (the “Pension Retirement Plan”)
is unvested and therefore forfeited under the terms of the Pension Retirement
Plan as a result of the Executive’s termination of employment, the Company shall
pay to the Executive an amount equal to the actuarial lump sum value of such
forfeited benefit, plus, in each such case, an additional cash payment to fully
gross up any taxes imposed on such amounts and additional cash payment (as
determined by the Company using the highest individual marginal Federal and
applicable state and local income tax rates);

     

    (G)    all
options to purchase Company common stock then held by the Executive shall become
immediately vested and exercisable in full, and remain exercisable as if the
Executive continued to be employed by the Company for the entire term of such
options, and any restricted stock or restricted stock units then held by the
Executive under which vesting is based solely on continued employment with the
Company shall become immediately vested; and

     

    (H)    with
respect to any outstanding performance share award held by the Executive under a
Long-Term Incentive Award Agreement with the Company, if a Company Sale (as
defined in the Long-Term Incentive Award Agreement) triggering an award payout
thereunder has not occurred as of the later of the Date of Termination or the
Effective Date, the Company shall issue to the Executive the number of shares
that would have been issued under the award if a Company Sale had occurred on
the later of the Date of Termination or the Effective Date.

     

    (2)    to the
extent not theretofore paid or provided, the Company shall timely pay or provide
to the Executive any Other Benefits (as defined in Section 4).

     

    Notwithstanding
the foregoing provisions of this Section 3(a), to the extent required in order
to comply with Section 409A of the Code, cash amounts that would otherwise be
payable under this Section 3(a) during the six-month period immediately
following the Date of Termination shall instead be paid, with interest on any
delayed payment at the applicable federal rate provided for in Section
7872(f)(2)(A) of the Code (“Interest”), on the first business day after the date
that is six months following the Executive’s “separation from service” within
the meaning of Section 409A of the Code.

     

    Notwithstanding
the foregoing, the Company's obligations to pay or provide any amounts or
benefits required by Section 3(a)(1) shall (1) cease as of the date the
Executive is determined by a court of competent jurisdiction to have breached
any of the provisions of Section 7 and (2) be conditioned on the Executive
signing a general release of claims in favor of the Company and its affiliates,
in the form attached hereto as Exhibit
A, or which is otherwise satisfactory to the Company, and the expiration
of any revocation period provided for in such release, all within sixty (60)
days following the Date of Termination.

     

    
      
        
        

      

      
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    (b)    Death.  If the
Executive’s employment is terminated by reason of the Executive’s death during
the Change of Control Period, the Company shall provide the Executive’s estate
or beneficiaries with the Accrued Obligations and the timely payment or delivery
of the Other Benefits, and shall have no other severance obligations under this
Agreement.  The Accrued Obligations shall be paid to the Executive’s
estate or beneficiary, as applicable, in a lump sum in cash within thirty (30)
days of the Date of Termination.  With respect to the provision of the
Other Benefits, the term “Other Benefits” as utilized in this Section 3(b) shall
include, without limitation, and the Executive’s estate and/or beneficiaries
shall be entitled to receive, benefits provided by the Company and the
Affiliated Companies under such plans, programs, practices and policies relating
to death benefits as in effect with respect to the Executive and his
beneficiaries at any time during the one hundred twenty (120)-day period
immediately preceding the Effective Date or, if more favorable to the
Executive’s estate and/or the Executive’s beneficiaries, as in effect on the
date of the Executive’s death.

     

    (c)    Disability.  If the
Executive’s employment is terminated by reason of the Executive’s Disability
during the Change of Control Period, the Company shall provide the Executive
with the Accrued Obligations and the timely payment or delivery of the Other
Benefits, and the Company shall have no other severance obligations under this
Agreement.  The Accrued Obligations shall be paid to the Executive in
a lump sum in cash within thirty (30) days of the Date of Termination, provided,
that to the extent required in order to comply with Section 409A of the Code,
amounts and benefits to be paid or provided under this Section 3(c) shall be
paid or provided, with Interest, to the Executive on the first business day
after the date that is six months following the Executive’s “separation from
service” within the meaning of Section 409A of the Code.  With respect
to the provision of the Other Benefits, the term “Other Benefits” as utilized in
this Section 3(c) shall include, and the Executive shall be entitled after the
Disability Effective Date to receive, disability and other benefits provided by
the Company and the Affiliated Companies with respect to the Executive and his
family in the event of disability in accordance with such plans, programs,
practices and policies relating to disability, if any, as in effect with respect
to the Executive and his family at any time during the one hundred twenty
(120)-day period immediately preceding the Effective Date or, if more favorable
to the Executive and/or the Executive’s family, as in effect at any time
thereafter with respect to the Executive and his family.

     

    (d)    Cause;
Other Than for Good Reason.  If the
Executive’s employment is terminated for Cause during the Change of Control
Period, the Company shall provide the Executive with the Executive’s base salary
through the Date of Termination and the timely payment or delivery of the Other
Benefits, and the Company shall have no other severance obligations under this
Agreement.  If the Executive voluntarily terminates employment during
the Change of Control Period, excluding a termination for Good Reason, the
Company shall provide to the Executive the Accrued Obligations and the timely
payment or delivery of the Other Benefits, and the Company shall have no other
severance obligations under this Agreement.  In such case, all the
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
thirty (30) days of the Date of Termination, provided, that to the extent
required in order to comply with Section 409A of the Code, amounts and benefits
to be paid or provided under this sentence of Section 3(d) shall be paid or
provided, with Interest, to the 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    Executive
on the first business day after the date that is six months following the
Executive’s “separation from service” within the meaning of Section 409A of the
Code.

     

    Section
4.    Non-exclusivity
of Rights.  Nothing in this
Agreement shall prevent or limit the Executive’s continuing or future
participation in any Plan, program, policy or practice provided by the Company
or the Affiliated Companies and for which the Executive may qualify, nor,
subject to Section 9(f), shall anything herein limit or otherwise affect such
rights as the Executive may have under any other contract or agreement with the
Company or the Affiliated Companies.  Amounts that are vested benefits
or that the Executive is otherwise entitled to receive under any Plan, policy,
practice or program of or any other contract or agreement with the Company or
the Affiliated Companies at or subsequent to the Date of Termination (“Other
Benefits”) shall be payable in accordance with such Plan, policy, practice or
program or contract or agreement, except as explicitly modified by this
Agreement.  Without limiting the generality of the foregoing, the
Executive’s resignation under this Agreement with or without Good Reason, shall
in no way affect the Executive’s ability to terminate employment by reason of
the Executive’s “retirement” under any compensation and benefits plans, programs
or arrangements of the Affiliated Companies, including without limitation any
retirement or pension plans or arrangements or to be eligible to receive
benefits under any compensation or benefit plans, programs or arrangements of
the Affiliated Companies, including without limitation any retirement or pension
plan or arrangement of the Affiliated Companies or substitute plans adopted by
the Company or its successors, and any termination which otherwise qualifies as
Good Reason shall be treated as such even if it is also a “retirement” for
purposes of any such plan.  Notwithstanding the foregoing, if the
Executive receives payments and benefits pursuant to Section 3(a) of this
Agreement, the Executive shall not be entitled to any severance pay or benefits
under any severance plan, program or policy of the Company and the Affiliated
Companies, unless otherwise specifically provided therein in a specific
reference to this Agreement.  

     

    Section
5.    Full
Settlement.  The Company’s
obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense, or other claim, right or action that the
Company may have against the Executive or others.  In no event shall
the Executive be obligated to seek other employment or take any other action by
way of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement, and such amounts shall not be reduced whether or
not the Executive obtains other employment.  The Company agrees to pay
as incurred (within 10 days following the Company’s receipt of an invoice from
the Executive; provided,
however, that in no event shall any such payments be made later than the
last day of the Executive’s taxable year following the taxable year in which the
fee or expense was incurred), to the full extent permitted by law, all legal
fees and expenses that the Executive may reasonably incur as a result of any
contest (regardless of the outcome thereof) by the Company, the Executive or
others (a) concerning the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance thereof (including
as a result of any contest by the Executive concerning the amount of any payment
pursuant to this Agreement), (b) in connection with any tax audit or proceeding
to the extent attributable to the application of Section 4999 or 409A of the
Code to 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    any
payment or benefit provided hereunder or otherwise by the Company or any
Affiliated Company or (c) otherwise relating to the Executive’s employment, or
termination of employment, with the Company or any Affiliated Company; provided, however, that the
Executive shall be obligated to reimburse the Company for all such payments if
the action of the Executive is determined by a court of competent jurisdiction
or by an arbitrator to have been frivolous.

     

    Section
6.    Treatment of Parachute
Payments.

     

    (a)    Anything
in this Agreement to the contrary notwithstanding and except as set forth below,
in the event it shall be determined that any Payment would be subject to the
Excise Tax, then the Executive shall be entitled to receive an additional
payment (the “Gross-Up Payment”) in an amount such that, after payment by the
Executive of all taxes (and any interest or penalties imposed with respect to
such taxes), including, without limitation, any income taxes (and any interest
and penalties imposed with respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, but excluding any income taxes and penalties imposed pursuant
to Section 409A of the Code, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the
Payments.  Notwithstanding the foregoing provisions of this Section
6(a), if it shall be determined that the Executive is entitled to the Gross-Up
Payment, but that the Parachute Value of all Payments is less than one hundred
ten percent (110%) of the Safe Harbor Amount, then no Gross-Up Payment shall be
made to the Executive and the amounts payable under this Agreement shall be
reduced so that the Parachute Value of all Payments, in the aggregate, equals
the Safe Harbor Amount (the “Capped Benefit”).  The reduction of the
amounts payable hereunder, if applicable, shall be made by first reducing the
payments under Section 3(a)(1), unless an alternative method of reduction is
elected by the Executive (provided, however, that such
election shall be subject to approval by the Company if made on or after the
date on which the event that triggers the relevant Payment occurs), and in any
event shall be made in such a manner as to maximize the Value of all Payments
actually made to the Executive.  For purposes of reducing the Payments
to the Safe Harbor Amount, only amounts payable under this Agreement (and no
other Payments) shall be reduced.  If the reduction of the amount
payable under this Agreement would not result in a reduction of the Parachute
Value of all Payments to the Safe Harbor Amount, no amounts payable under the
Agreement shall be reduced pursuant to this Section 6(a).  The
Company’s obligation to make Gross-Up Payments under this Section 6 shall not be
conditioned on the Executive’s termination of employment.

     

    (b)    Subject
to the provisions of Section 6(c), all determinations required to be made under
this Section 6, including whether and when a Gross-Up Payment is required, the
amount of such Gross-Up Payment and the assumptions to be utilized in arriving
at such determination shall be made by a nationally recognized certified public
accounting firm (other than one that is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control) designated by the
Company and reasonably acceptable to the Executive (the “Accounting
Firm”).  The Accounting Firm shall provide detailed supporting
calculations both to the Company and the Executive within fifteen (15) business
days of the receipt of notice from the Executive that there has been a Payment
or such earlier time as is requested by the 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    Company.  All
fees and expenses of the Accounting Firm shall be borne solely by the
Company.  Any Gross-Up Payment, as determined pursuant to this Section
6, shall be paid by the Company to the Executive within five (5) days of the
receipt of the Accounting Firm’s determination.  Any determination by
the Accounting Firm shall be final and binding upon the Company and the
Executive.  As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments that will not
have been made by the Company should have been made (the “Underpayment”),
consistent with the calculations required to be made hereunder.  In
the event the Company exhausts its remedies pursuant to Section 6(c) and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
(including, if such redetermination causes the Capped Benefit to no longer
apply, the full amount of the Excise Tax) and any such Underpayment (plus any
interest, penalties or additions payable by the Executive with respect to such
Underpayment) shall be promptly paid by the Company to or for the benefit of the
Executive.

     

    (c)    The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of
the Gross-Up Payment.  Such notification shall be given as soon as
practicable, but no later than ten (10) business days after the Executive is
informed in writing of such claim.  The Executive shall apprise the
Company of the nature of such claim and the date on which such claim is
requested to be paid.  The Executive shall not pay such claim prior to
the expiration of the thirty (30)-day period following the date on which the
Executive gives such notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due).  If
the Company notifies the Executive in writing prior to the expiration of such
period that the Company desires to contest such claim, the Executive
shall:

     

    (1)    give the
Company any information reasonably requested by the Company relating to such
claim,

     

    (2)    take such
action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably
selected by the Company,

     

    (3)    cooperate
with the Company in good faith in order effectively to contest such claim,
and

     

    (4)    permit
the Company to participate in any proceedings relating to such
claim;

     

    provided, however, that the Company
shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest, and shall
indemnify and hold the Executive harmless, on an after-tax basis, for any Excise
Tax or income tax (including interest and penalties) imposed as a result of such
representation and payment of costs and expenses.  Without limitation
on the foregoing provisions of this Section 6(d), the 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    Company
shall control all proceedings taken in connection with such contest, and, at its
sole discretion, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the applicable taxing authority in
respect of such claim and may, at its sole discretion, either pay the tax
claimed to the appropriate taxing authority on behalf of the Executive and
direct the Executive to sue for a refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall determine; provided, however, that, if the Company
pays such claim and directs the Executive to sue for a refund, the Company shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties) imposed with respect
to such payment or with respect to any imputed income in connection with such
payment; and provided,
further, that any
extension of the statute of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested
amount.  Furthermore, the Company’s control of the contest shall be
limited to issues with respect to which the Gross-Up Payment would be payable
hereunder, and the Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.

     

    (d)    If, after
the receipt by the Executive of a Gross-Up Payment or payment by the Company of
an amount on the Executive’s behalf pursuant to Section 6(c), the Executive
receives any refund with respect to the Excise Tax to which such Gross-Up
Payment relates or with respect to such claim, the Executive shall (subject to
the Company’s complying with the requirements of Section 6(c), if applicable)
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable
thereto).  If, after payment by the Company of an amount on the
Executive’s behalf pursuant to Section 6(c), a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and the
Company does not notify the Executive in writing of its intent to contest such
denial of refund prior to the expiration of thirty (30) days after such
determination, then the amount of such payment shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.

     

    (e)    Notwithstanding
any other provision of this Section 6, the Company may, in its sole discretion,
withhold and pay over to the Internal Revenue Service or any other applicable
taxing authority, for the benefit of the Executive, all or any portion of any
Gross-Up Payment, and the Executive hereby consents to such
withholding.

     

    (f)    Definitions.  The
following terms shall have the following meanings for purposes of this Section
6:

     

    (1)    “Excise
Tax” shall mean the excise tax imposed by Section 4999 of the Code, together
with any interest or penalties imposed with respect to such excise
tax.

     

    (2)    “Parachute
Value” of a Payment shall mean the present value as of the date of the change of
control for purposes of Section 280G of the Code of the portion of such Payment
that constitutes a “parachute payment” under Section 280G(b)(2), as determined
by 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    the
Accounting Firm for purposes of determining whether and to what extent the
Excise Tax will apply to such Payment.

     

    (3)    A
“Payment” shall mean any payment or distribution in the nature of compensation
(within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of
the Executive, whether paid or payable pursuant to this Agreement or
otherwise.

     

    (4)    The “Safe Harbor Amount”
means two and ninety-nine one hundredths (2.99) times the Executive’s
“base amount,” within the meaning of Section 280G(b)(3) of the
Code.

     

    (5)    “Value”
of a Payment shall mean the economic present value of a Payment as of the date
of the change of control for purposes of Section 280G of the Code, as determined
by the Accounting Firm using the discount rate required by Section 280G(d)(4) of
the Code.

     

    Section
7.    Restrictive
Covenants.  The Executive
agrees that the compensation and benefits payable to the Executive under this
Agreement are conditioned on the Executive’s agreement to and compliance with
the following restrictive covenants.  If the Executive breaches any of
the following restrictive covenants, then, in addition to any other remedies
available to the Company at law or in equity, the Executive will be obligated to
repay to the Company all amounts paid to the Executive under this Agreement to
which the Executive was not otherwise entitled.  The Executive further
acknowledges and agrees that the Executive is entering into this Agreement in
the Executive’s additional capacity as a shareholder of the Company, and
understand that the restraints contained in this Agreement are likely to be
desired by any party effecting the Change of Control, and that the Executive
will benefit financially by providing such a covenant in advance of such an
event.

     

    (a)    Confidential
Information.  The Executive reaffirms that he or she holds and
shall continue to hold in a fiduciary capacity for the benefit of the Company
all secret or confidential information, knowledge or data relating to the
Company or the Affiliated Companies, and their respective businesses, which
information, knowledge or data shall have been obtained by the Executive during
the Executive’s employment by the Company or the Affiliated Companies and which
information, knowledge or data shall not be or become public knowledge or known
within the relevant trade or industry (other than by acts by the Executive or
representatives of the Executive in violation of this
Agreement).  After termination of the Executive’s employment with the
Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process or by any
administrative or legislative body (including any committee thereof) with actual
or apparent jurisdiction to order such information, knowledge or data to be
disclosed, and then only to the extent required, after prompt notice, if
permitted by law, to the Company of any such order, or in connection with any
litigation involving this Agreement, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
persons designated by the Company.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (b)    Non-Competition.  If
the Executive becomes entitled to receive benefits under Section 3(a) of this
Agreement, then from the Executive’s Date of Termination and continuing until
the [date which is
eighteen (18) months following]8 [first anniversary of]9 the later of the Date of Termination or the
Effective Date (the “Restricted Period”),
the Executive shall not, without the prior written consent of the Company,
directly or indirectly, render services of a business, professional or
commercial nature (whether for compensation or otherwise) to any person or
entity competitive with the business engaged in by the Company or any of its
subsidiaries within twelve (12) months prior to such Date of Termination, or
serve as an officer, director, employee, partner, member, owner, consultant or
independent contractor in any entity which is competitive with the business
engaged in by the Company or any of its subsidiaries within twelve (12) months
prior to such Date of Termination.  Notwithstanding the foregoing,
nothing shall prevent the Executive from owning publicly traded securities
issued by any such competitive entity, provided that the ownership
thereof by the Executive does not constitute more than five percent (5%) of all
of such entity’s publicly traded outstanding securities.

     

    (c)    Non-Solicitation.  If the Executive
becomes entitled to receive benefits under Section 3(a) of this Agreement, then
during the Restricted Period, the Executive shall not, directly or indirectly,
for himself or on behalf of any other person or entity, solicit for employment
any person who at any time during the then immediately preceding twelve (12)
month period shall have been an employee of the Company or any of its
subsidiaries (other than any such person whose employment was terminated by the
Company prior to such employment, engagement or retention), or contact any
supplier, customer or employee of the Company or any of its subsidiaries for the
purpose of soliciting or diverting any such supplier, customer or employee from
its business relationship with the Company or any of its subsidiaries or
otherwise intentionally interfering with the business relationship of the
Company or any of its subsidiaries with any of the foregoing.

     

    (d)    No
Withholding of Amounts.  In no event shall
an asserted violation of the provisions of this Section 7 constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under
this Agreement.

     

    (e)    Savings
Clause.  The Executive
agrees that if (i) any portion of the Executive’s covenants in this Section 7 is
held to be invalid or unenforceable, the covenant should be modified or severed
by the court, and otherwise enforced to the maximum extent permissible, or (ii)
a court determines that any portion of the Executive’s covenants in this Section
7 is unenforceable as written, the maximum reasonable restrictions of time,
scope of activities, and geographic area should be substituted for any such
restrictions found unenforceable as written.

     

    Section
8.    Successors. 

     

    (a)    This
Agreement is personal to the Executive, and, without the prior written consent
of the Company, shall not be assignable by the Executive other than by will or
the 

     

    
      
        
          

        

        8           For
Tier 2 executives. 

      

      
        9           For
Tier 3 executives.

      

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

      laws of descent and distribution.  This Agreement shall inure to
the benefit of and be enforceable by the Executive’s legal
representatives.

       

    

    (b)    This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.  Except as provided in Section 8(c), without
the prior written consent of the Executive this Agreement shall not be
assignable by the Company.

     

    (c)    The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken
place.  “Company” means the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid that assumes and agrees to
perform this Agreement by operation of law or otherwise.

     

    Section
9.    Miscellaneous. 

     

    (a)    This
Agreement shall be governed by and construed in accordance with the laws of the
State of Oregon, without reference to principles of conflict of
laws.  The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.  This Agreement may not be
amended or modified other than by a written agreement executed by the parties
hereto or their respective successors and legal representatives.

     

    (b)    All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:

     

    
      	
               
      

            	
              If
      to the Executive:

            

    

     

    At the
most recent address on file at the Company.

     

    
      	
               
      

            	
              If
      to the Company:

            

    

     

    Schnitzer
Steel Industries, Inc.

    Attention:  General
Counsel10

    3200 NW
Yeon Avenue

    Portland,
Oregon 97210

     

    or to
such other address as either party shall have furnished to the other in writing
in accordance herewith.  Notice and communications shall be effective
when actually received by the addressee.

     

    (c)    The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.

     

    
      
        

      

    

    10           CEO
for General Counsel.

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (d)    The
Company may withhold from any amounts payable under this Agreement such United
States federal, state or local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

     

    (e)    The
Executive’s or the Company’s failure to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right the Executive or
the Company may have hereunder (including, without limitation, the right of the
Executive to terminate employment for Good Reason pursuant to Sections 2(c)(1)
through 2(c)(7)) shall not be deemed to be a waiver of such provision or right
or any other provision or right of this Agreement, except as specifically
provided in this Agreement (including, without limitation, the provision of
Section 2(c) for written notice by the Executive).

     

    (f)    The
Executive and the Company acknowledge that, except as may otherwise be provided
under any other written agreement between the Executive and the Company, the
employment of the Executive by the Company is “at will” and, subject to Section
1(f), prior to the Effective Date, the Executive’s employment may be terminated
by either the Executive or the Company at any time prior to the Effective Date,
in which case the Executive shall have no further rights under this
Agreement.  From and after the Effective Date, except as specifically
provided herein, this Agreement shall supersede any other agreement between the
parties with respect to the subject matter hereof.

     

    (g)    Compensation
or benefits provided by this Agreement are intended to comply with, or be exempt
from, Section 409A of the Code, and this Agreement shall be interpreted and
administered in a manner that is consistent with such intention.  If
any compensation or benefits provided by this Agreement may result in the
application of Section 409A of the Code, the Company shall, in consultation with
the Executive, modify the Agreement in the least restrictive manner necessary in
order to exclude such compensation from the definition of “deferred
compensation” within the meaning of such Section 409A of the Code or in order to
comply with the provisions of Section 409A of the Code, other applicable
provision(s) of the Code and/or any rules, regulations or other regulatory
guidance issued under such statutory provisions and without any diminution in
the value of the payments to the Executive.

     

    (h)    The
respective rights and obligations of the parties to this Agreement hereunder
shall survive any termination of this Agreement or the Executive’s employment
with the Company or any Affiliated Company.

     

    (i)    This
Agreement may be executed in several counterparts, each of which shall be deemed
to be an original but all of which together will constitute one and the same
instrument.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    IN
WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization from the Board, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first above written.

     

    

     

    

    
    

     

    
      	 	
               

              
                
      

              [Executive]

               

              Schnitzer
      Steel Industries, Inc.

               

              

               

              By:

              
                
      

              Name:    John
      D. Carter

              Title:      President
      and CEO 

            

    

     

     

    
 

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    
      Exhibit A

    

    

     

    ___________________,
200_

     

    [Name]

    [Address]

    [Address]

     

    Re:           Separation Agreement and
General Release

     

    Dear
_________:

     

    This
letter confirms the termination of your employment with Schnitzer Steel
Industries, Inc. (the “Company”) as of ______________, 20__.

     

    In
connection with the termination of your employment, the Company is prepared to
provide you with the following severance payments and benefits (which are
described in Section 3(a) of the Change of Control Severance Agreement, dated
_______________, 20__, by and between the Company and you (“Severance
Agreement”) (in each case, less applicable deductions and
withholdings):  ______________________________________________________________________.

     

    In order
to be eligible to receive the severance payments and benefits described above to
which you are not otherwise entitled, you are required to agree to the terms
contained in this Separation Agreement and General Release, indicate your
agreement by signing and returning this Separation Agreement and General Release
and not revoke your agreement as provided below.

     

    In
consideration for the Company’s payment of the severance payments and other
benefits described above to which you are not otherwise entitled, you hereby
release the Company and any and all of the Company’s predecessors, successors,
assigns, parents, subsidiaries, affiliates and related entities (collectively,
“Company Entities”) and the present and former officers, directors, employees,
owners, members and agents of the Company and any and all Company Entities
(collectively, “Company Officials”), individually and in their official
capacities, of and from all claims, demands, damages, causes of action or suit,
judgments, costs and agreements of any kind whatsoever, including, but not
limited to, all matters arising out of or relating to your employment with the
Company and/or any and all Company Entities and the termination of your
employment with the Company and/or any and all Company Entities.  This
release includes, but is not limited to, any and all alleged claims based on the
following, in each case as amended from time to time (and any successor
statutes):  the Age Discrimination in Employment Act (including the
Older Workers Benefit Protection Act), the Americans with Disabilities Act,
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, the
Employee Retirement Income Security Act of 1974 (except any valid claim to
recover vested benefits, if applicable), the Oregon Fair Employment Practices
Act, the Oregon Tort Claims Act, the Oregon Family Leave Act, the Oregon Equal
Pay Act, the Oregon Safe Employment Act, and any common law, public policy,
contract (whether oral or written, express or implied) or tort 

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    law, and
any other local, state or federal law, regulation, ordinance or rule having any
bearing whatsoever on the terms and conditions of your employment and/or the
cessation thereof.  By signing this Separation Agreement and General
Release you are providing a complete waiver of all claims that may have arisen,
whether known or unknown, up until the time that this Agreement and General
Release is executed.

     

    In
addition, you will keep in confidence and will not, except as specifically
authorized in writing by the Company or as otherwise required by law, disclose
to or use for the benefit of any third party any confidential or proprietary
information of or about the Company, any Company Entities or any Company
Officials which you acquired, developed or created by reason of your employment,
except for information that is or becomes public other than through your breach
of this paragraph.

     

    You will
also promptly return to the Company all documents, materials and property in
your possession, custody or control that are the property of the Company, any
Company Entities or any Company Officials.

     

    You agree
that you will cooperate with the Company and any Company Entities and Company
Officials and their legal counsel in connection with any current or future
investigation or litigation relating to any matter with which you were involved
or of which you have knowledge or which occurred during your employment at the
Company.  Such assistance will include, but not be limited to,
depositions and testimony and shall continue until such matters are
resolved.

     

    You agree
that the provisions of the Company’s Code of Conduct and any Company employee
handbook and/or any other applicable documents (including, but not limited to,
any provisions relating to confidential and proprietary information and
intellectual property) which contain your obligations that extend beyond your
employment with the Company will continue to remain in full force and
effect.  In addition, you acknowledge and agree that you continue to
be bound by the terms of the restrictive covenants set forth in Section 7 of the
Severance Agreement.

     

    If you
breach this Separation Agreement and General Release, in addition to any other
available remedy, the Company will seek restitution and/or offset of any
payments or benefits provided to the extent permitted by law.  In
addition, as provided in the Severance Agreement, any payments or benefits
provided hereunder will cease as of the date that you are determined by a court
of competent jurisdiction to have breached any of the provisions of Section 7 of
the Severance Agreement.

     

    This
Separation Agreement and General Release does not affect your entitlement to
previously accrued or vested benefits to which you may be entitled, which are
summarized as follows:

     

    
      	
              ·  

            	
              You
      will be paid for any accrued but unused vacation days on a pro-rated
      basis.

            

    

     

    
      	
              ·  

            	
              Your
      group health insurance benefits will remain in effect until
      __________, 20__.  Upon the termination of your group
      health insurance benefits,

            

    

    
       

      
        
          
          

        

        
          A-2

          
            

          

        

        
          
          

        

      

      
        	
                 

              	
                you
      will be provided separate information regarding your right thereafter to
      continue group coverage as required by the Consolidated Omnibus Budget
      Reconciliation Act of 1985.

              

      

       

    

    
      	
              ·  

            	
              Your
      group life insurance will remain in effect until ___________,
      20__.  Upon the termination of your group life insurance, you
      will be provided separate information regarding any right to convert your
      group life insurance to an individual
policy.

            

    

     

    
      	
              ·  

            	
              You
      will be provided a separate statement of your benefits, if any, under any
      Company savings and/or pension plan.  Your rights to benefits
      under any Company savings and/or pension plan will be determined by law
      and in accordance with the terms of the specific
  plan.

            

    

     

    Since
your execution of this Separation Agreement and General Release releases the
Company, any Company Entities and any Company Officials from all claims you may
have, you should review this carefully before signing it.  You can
take at least forty-five (45) days from your receipt of this Separation
Agreement and General Release to consider its meaning and effect and to
determine whether you wish to enter into it.  You are advised to
consult with anyone of your choosing, including an attorney, prior to executing
this Separation Agreement and General Release.

     

    Once you
have signed this Separation Agreement and General Release, you may choose to
revoke your execution within seven (7) days.  Any revocation of this
Separation Agreement and General Release must be in writing and personally
delivered to ________________, Schnitzer Steel Industries, Inc.,
____________________, ________, ________ __________, or, if mailed, postmarked
within seven (7) days of the date upon which it was signed by you.

     

    TO
RECEIVE THE SEVERANCE PAYMENT AND OTHER BENEFITS DESCRIBED ABOVE, YOU MUST SIGN
AND RETURN THIS SEPARATION AGREEMENT AND GENERAL RELEASE NO LATER THAN
________________, 20__, AND DELIVER THE ATTACHED LETTER INDICATING THAT YOU DO
NOT WISH TO REVOKE YOUR AGREEMENT NO EARLIER THAN SEVEN (7) DAYS AFTER THE DATE
YOU SIGN THIS SEPARATION AGREEMENT AND GENERAL RELEASE.  This
Separation Agreement and General Release should be returned to ________________,
Schnitzer Steel Industries, Inc., ____________________, ________, ________
__________.  The Company will not make any payments or provide any
benefits pursuant to this Separation Agreement and General Release until after
the seven (7) day period expires and the Company receives the attached letter
indicating that you have not revoked your agreement.

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

    If any portion of this Separation
Agreement and General Release is found to be unenforceable but such portion
would be enforceable if some part thereof were deleted or modified, then such
portion will apply with such deletion or modification as is necessary to make it
enforceable to the fullest extent permitted by law.  If any such
portion cannot be modified to be enforceable, such portion will be deemed
severed from this Separation Agreement and General Release and will not affect
the validity or enforceability of the remainder of this Separation Agreement and
General Release.

     

    This
Separation Agreement and General Release (and the provisions of sections 3(a), 7
and 9 of the Severance Agreement attached hereto) contains the entire
understanding of the parties relating to the subject matter
hereof.  You acknowledge that no representations, oral or written,
have been made other than those expressly set forth herein, and that you have
not relied on any other representations in executing this Separation Agreement
and General Release.  This Separation Agreement and General Release
may be modified only in a document signed by the parties and referring
specifically hereto.

     

    Sincerely
yours,

     

    Schnitzer
Steel Industries, Inc.

     

    [Name]

    [Title]

     

     

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

    ACKNOWLEDGMENT

     

    I AGREE
TO THE TERMS AND CONDITIONS SPECIFIED IN THIS SEPARATION AGREEMENT AND GENERAL
RELEASE, AND I INTEND TO RELEASE ALL CLAIMS THAT I MAY HAVE AGAINST THE COMPANY,
ANY COMPANY ENTITIES AND ANY COMPANY OFFICIALS.  I UNDERSTAND THAT
THIS SEPARATION AGREEMENT AND GENERAL RELEASE CREATES A TOTAL AND UNLIMITED
RELEASE OF ALL CLAIMS, WHETHER KNOWN OR UNKNOWN, EXISTING AS OF THIS DATE THAT I
MAY HAVE AGAINST THE COMPANY, ANY COMPANY ENTITIES AND ANY COMPANY
OFFICIALS.

     

    I HAVE
HAD AMPLE TIME TO REVIEW THIS SEPARATION AGREEMENT AND GENERAL RELEASE AND TO
CONSIDER MY RELEASE OF ALL CLAIMS AS SET FORTH HEREIN.  I AM SIGNING
THIS SEPARATION AGREEMENT AND GENERAL RELEASE KNOWINGLY, VOLUNTARILY AND WITH
FULL UNDERSTANDING OF ITS TERMS AND EFFECTS.  I UNDERSTAND THAT I CAN
TAKE AT LEAST FORTY-FIVE (45) DAYS FROM RECEIPT OF THIS SEPARATION AGREEMENT AND
GENERAL RELEASE TO DETERMINE WHETHER I WISH TO SIGN IT, THAT I HAVE BEEN ADVISED
TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING IT, AND THAT I HAVE SEVEN (7) DAYS
FROM THE DATE I SIGN THIS SEPARATION AGREEMENT AND GENERAL RELEASE TO REVOKE
IT.

     

    I
ACKNOWLEDGE THAT I HAVE NOT RELIED ON ANY REPRESENTATIONS OR STATEMENTS NOT SET
FORTH HEREIN.  I WILL NOT DISCLOSE THIS SEPARATION AGREEMENT AND
GENERAL RELEASE TO ANYONE EXCEPT TO MY IMMEDIATE FAMILY AND ANY TAX, LEGAL OR
OTHER COUNSEL THAT I HAVE CONSULTED REGARDING THE MEANING OR EFFECT OF THIS
SEPARATION AGREEMENT AND GENERAL RELEASE, EXCEPT AS OTHERWISE REQUIRED BY
LAW.

     

    In
witness hereof, I have executed this Separation Agreement and General Release
this ___ day of _________, 20__.

     

    

     

    _________________________

    [Name]

     

    

     

    YOU
MUST RETURN THE ENTIRE SEPARATION AGREEMENT AND GENERAL RELEASE (INCLUDING THE
ACKNOWLEDGMENT PAGES).

     

    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

     

     

    ____________________,
20__

     

    

    

    

    

    

    

    [Name]

    [Title]

    Schnitzer
Steel Industries, Inc.

    [Address]

    [Address]

     

    Re:           Separation Agreement and
General Release

     

    Dear
_____________:

     

    On
_______________, 20__, I executed a Separation Agreement and General Release
between Schnitzer Steel Industries, Inc. and me.  I was advised in
writing to consult with an attorney or other advisor of my choosing prior to
signing the Separation Agreement and General Release.

     

    At least
seven (7) days have elapsed since I executed the above-mentioned Separation
Agreement and General Release, and I have not revoked my acceptance or execution
thereof.  I hereby request that Schnitzer Steel Industries, Inc.
provide me with the payments and/or benefits described in that Separation
Agreement and General Release.

     

    
    

     

    
      	 	
              Very
      truly yours,

               

              

               

              ______________________

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