EXHIBIT 10.1 SCHNITZER STEEL INDUSTRIES, INC. EXECUTIVE ANNUAL BONUS PLAN

                                                                    EXHIBIT 10.1

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                        SCHNITZER STEEL INDUSTRIES, INC.

                           EXECUTIVE ANNUAL BONUS PLAN

            1. Purpose. Schnitzer Steel Industries, Inc. (the "Company") hereby

establishes the Schnitzer Steel Industries, Inc. Executive Annual Bonus Plan

(the "Plan") with the intent of qualifying compensation paid under the Plan as

"performance-based compensation" within the meaning of Section 162(m) of the

Internal Revenue Code of 1986 ("Section 162(m)") and the regulations promulgated

thereunder. The Plan shall be interpreted in a manner consistent with the

foregoing intent.

            2. Administration. The Plan shall be administered by the

Compensation Committee (the "Committee") of the Board of Directors of the

Company, which shall be comprised solely of two or more "outside directors" as

defined in regulations promulgated under Section 162(m). The Committee may adopt

guidelines to implement and administer the Plan.

            3. Plan Participants. The participants