SCHN 2017 Proxy Statement

Proxy Summary Executive Compensation Program Highlights Our executive compensation program is aligned with our business strategy and with creating long-term shareholder value. We design our program to pay for performance and to align management’s interests with our shareholders’ interests. Highlights include: ✓ Emphasis on performance-based compensation: 83% of the CEO’s target compensation and 69% of other named executive officers (“NEOs”) target compensation are “at-risk” ✓ Caps on incentive compensation ✓ The use of a variety of distinct performance metrics (earnings per share, operating cash flow, cost savings, safety performance and strategic objectives) in the annual incentive compensation plans for the CEO and other NEOs which are intended to drive long-term shareholder value ✓ Performance share awards, which represent 50% of the Company’s long-term incentive grant, focused on total shareholder return (“TSR”) relative to peers and cash flow return on investment (“CFROI”) ✓ Restricted Stock Units (“RSUs”), which represent 50% of the Company’s long-term incentive grant, generally vest ratably over five years ✓ Minimum stock ownership requirements for the CEO and other NEOs, which reinforce our focus on shareholder alignment ✓ Double-trigger for cash severance payments and benefits in change-in-control agreements ✓ No excise tax gross-up provisions in any new or modified change-in-control agreements since 2008 ✓ No reloading, re-pricing, or backdating of stock options ✓ Annual review of executive compensation design, market competitiveness, and best practices ✓ Retention of an independent compensation consultant to provide guidance and support to the Compensation Committee The following flowchart provides an overview of the Compensation Committee’s process in setting performance goals. Develop Plan Design & Metrics Develop Targets Apply Rigor Align Metrics with Company Goals • Tie to strategic plan and to creation of long- term shareholder value • Select short-term metrics that are key to achievement of longer- term goals • Link long-term metrics to increased shareholder value over performance period • Avoid duplication Link Pay and Performance • Provide appropriate incentives and stretch goals without excessive risk-taking • Review operating plans and forecasts • Compare prior year metrics and results • Consider peer, market and other external data Test and Review • Stress test targets • Assess appropriate degree of difficulty • Consider competitive landscape, market conditions, and realistic scenarios • Review and iterate Setting Performance Goals 6 | Notice of Annual Meeting of Shareholders and 2017 Proxy Statement