8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported):      March 22, 2007

SCHNITZER STEEL INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

OREGON (State or other jurisdiction of incorporation) 0-22496 (Commission File Number) 93-0341923 (I.R.S. Employer Identification No.)

3200 N.W. Yeon Ave. P.O. Box 10047 Portland, OR (Address of principal executive offices)     97296-0047 (Zip Code)

Registrant’s telephone number, including area code: (503) 224-9900

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

q Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)  

q Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)  

q Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))  

q Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))  

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

On March 22, 2007, Schnitzer Steel Industries, Inc. (the “Company”) announced that Richard D. Peach was appointed as Deputy Chief Financial Officer of the Company, starting on March 30, 2007. In this position, Mr. Peach will serve as the Company’s principal accounting officer. On March 2, 2007, the Company executed a letter agreement with Mr. Peach regarding his position as Deputy Chief Financial Officer (the “Letter Agreement”). Under the Letter Agreement Mr. Peach will receive compensation of $300,000 per annum and will be eligible to participate in the Company’s bonus program. The bonus target for Mr. Peach is 40% of his annual salaryand, for the first year of Mr. Peach’s employment with the Company, Mr. Peach is guaranteed a minimum bonus of $120,000. Mr. Peach will be recommended for participation in the Company’s Long-Term Incentive Program. Beginning in June 2007, Mr. Peach will be eligible for consideration in the Company’s annual salary review program pursuant to which his salary may increase. Mr. Peach will also be granted an auto allowance of $700 per month, a Company gas card and will be eligible for certain other benefits. Mr. Peach is an “at-will” employee of the Company and his employment and compensation can be terminated, with or without cause and with or without notice, at any time, at the option of the Company or Mr. Peach. A copy of the Letter Agreement is attached hereto as Exhibit 10.1 and incorporated by reference herein.

Mr. Peach, 43, was the Chief Financial Officer of and a Senior Vice President with a multi-state energy utility, PacifiCorp, from 2003 to 2006. He served as the Group Controller of Scottish Power plc, an international energy company headquartered in Glasgow, Scotland, from 2000 through 2002. Prior to that, Mr. Peach was with Scottish Power plc as the Head of United Kingdom Customer Services from 1999 to 2000 and Head of Energy Supply Finance from 1997 to 1999. Mr. Peach is a Chartered Accountant of Scotland. A copy of the press release announcing this appointment is attached hereto as exhibit 99.1 and incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits.

10.1 Letter Agreement, dated March 2, 2007, between Schnitzer Steel Industries, Inc. and Richard D. Peach, regarding Mr. Peach’s position as Deputy Chief Financial Officer

99.1 Press Release of Schnitzer Steel Industries, Inc. issued on March 22, 2007

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SCHNITZER STEEL INDUSTRIES, INC.
	(Registrant)
Dated:               March 22, 2007	By:	/s/ RICHARD C. JOSEPHSON
		Name:  Richard C. Josephson
		Title:    Vice President, General Counsel and Secretary

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Exhibit Index

Exhibit No. Description

10.1 Letter Agreement, dated March 2, 2007, between Schnitzer Steel Industries, Inc. and Richard D. Peach, regarding Mr. Peach’s position as Deputy Chief Financial Officer

99.1 Press Release of Schnitzer Steel Industries, Inc. issued on March 22, 2007

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EX-10.1

EXHIBIT 10.1

SCHNITZER STEEL INDUSTRIES, INC. 3200 NW Yeon Avenue P.O. Box 10047 Portland, Oregon 97296-0047 Phone (503) 224-9900 Fax (503) 321-2649 

March 2, 2007 

Richard Peach

2066 Glenmorrie Drive,

Lake Oswego, OR 97034

Dear Richard:

This will confirm our offer of employment along with your acceptance. Here are the particulars:

Position:	Deputy Chief Financial Officer for Schnitzer Steel Industries, Inc: This position is exempt under the Fair Labor Standards Act.
Company and Work Location:	Schnitzer Steel Industries, Inc. (“Company”) Portland, Oregon
Reporting To:	Greg Witherspoon, Chief Financial Officer Schnitzer Steel Industries, Inc.
Original Date of Hire:	March 30, 2007 (“Hire Date”)
Report Date:	April 2, 2007
Compensation:	$ 300,000.00 per annum
Auto Allowance:	You will be granted Auto Allowance, Level C, Oregon, which is currently at $700 per month. You will also receive a Company gas card. The auto allowance and gas card are pursuant to the Company’s Human Resources Policy #640, and are considered taxable income to employees.
Bonus Eligibility:	You are eligible for participation in the Company’s bonus program beginning on your Hire Date. Your bonus target is 40%. You will be guaranteed a minimum first year bonus of $120,000.00. Should individual and Company performance exceed the minimum amount, then the amount will be adjusted to reflect the higher amount. Bonus amounts, as formulated, are payable following the Company’s fiscal year-end on August 31st, and are based on Company and individual performance and are not guaranteed. Further details on the program will be presented to you at a later date.
Long-Term Incentive Program:	You will be recommended for participation in the Schnitzer Steel Industries, Inc. Long-Term Incentive Program (“LTIP”) at a level commensurate with your position as a member of the senior management team; the anticipated award level will be assigned at the next review cycle. Actual award levels under the LTIP are subject to approval by the Compensation Committee of the Board of Directors, and are not automatic in nature or guaranteed until approved.

Benefits Effective:	The effective date of your benefits will be determined by the waiting periods, if any, contained in each of the plans for which you are eligible. Other benefits are effective per plans and coverages as currently exist or as modified in the future for the salary group of which you are a part. The Company reserves the right to amend, alter or eliminate coverages.
Paid Time Off:	PTO will accrue as per the timeframes described in the Company Human Resource Policy Manual (Policy #525). Initially, from the first day of employment to your fourth anniversary, you will accrue a total of 160 hours (20 days) at a rate of 6.16 hours every pay period.
Performance and Salary Review:	Normally, performance appraisals are conducted during the second calendar quarter of each year (usually in April or May). Salary reviews are normally conducted in June of each year. Increases, if any, depend upon individual performance and Company financial considerations and are not automatic in nature.

The foregoing does not constitute a contract since the Company is an “at-will” employer. “At-will” means that employment and compensation can be terminated, with or without cause and with or without notice, at any time, at the option of the Company or yourself. This offer is made contingent on your successfully passing a drug screen provided by the Company, as well as the Company finalizing a background check to verify references and credentials.

Richard, welcome to Schnitzer Steel Industries, Inc.

Sincerely,     /s/ Greg Witherspoon Greg Witherspoon Chief Financial Officer  Accepted,       /s/ Richard Peach Richard Peach    

cc: Employee File

EX-99.1

EXHIBIT 99.1

SCHNITZER STEEL ANNOUNCES EXECUTIVE APPOINTMENTS

PORTLAND, Ore. - (BUSINESS WIRE) -March 22, 2007—Schnitzer Steel Industries, Inc. (Nasdaq-SCHN) today announced the appointment of Richard D. Peach as Deputy Chief Financial Officer of the Company, effective March 30, 2007. In this position, Mr. Peach will serve as the Company’s principal accounting officer and will be responsible for the Company’s accounting functions. He will report to Gregory J. Witherspoon, the Company’s Chief Financial Officer.

Mr. Peach, 43, was the Chief Financial Officer of and a Senior Vice President with the multi-state energy utility, PacifiCorp, from 2003 to 2006. Previously, he served in a variety of executive positions with Scottish Power, the international energy company headquartered in Glasgow, Scotland, including Group Controller from 2000 through 2002, Head of United Kingdom Customer Services from 1999 to 2000 and Head of Energy Supply Finance from 1997 to 1999. Mr. Peach is a Chartered Accountant of Scotland.

In the role as principal accounting officer, Mr. Peach replaces Vicki A. Piersall, who was recently appointed to the position of Vice President of Strategic Planning and Chief Administrative Officer for the Company’s Metals Recycling Business. Ms. Piersall had served as Vice President and Corporate Controller since September 2005. Mr. Witherspoon had been acting as the Company’s principal accounting officer since Ms. Piersall’s appointment.

Jeff P. Poeschl was recently appointed to the position of Vice President and Corporate Controller. Mr. Poeschl was previously Vice President, Finance with Mesa Air Group in Phoenix, Arizona from 2000 until his appointment. He is a graduate of the University of Wisconsin and a Certified Public Accountant.

Schnitzer Steel Industries, Inc. is one of the largest manufacturers and exporters of recycled ferrous metal products in the United States with 32 operating facilities located in 11 states throughout the country, including six export facilities located on both the East and West Coasts and in Hawaii. The Company’s vertically integrated operating platform also includes its auto parts and steel manufacturing businesses. The Company’s auto parts business sells used auto parts through its 35 self service facilities and 17 full service facilities located in 14 states and in western Canada. With an annual production capacity of over 750,000 tons, the Company’s steel manufacturing business produces finished steel products, including rebar, wire rod and other specialty products. The Company commenced its 101st year of operations in 2007.