EXHIBIT 10.3

QUANEX BUILDING PRODUCTS CORPORATION

KEY LEADER

STOCK OPTION AGREEMENT

[GRANTEE NAME]

Grantee

 

Date of Grant:      <<                    >> Total Number of Shares:     
<<                    >> Exercise Price per Share:     
<<$                    >> Expiration Date:      <<                    >>
General Vesting Schedule:      [100% exercisable on Date of Grant.]     
[                    % exercisable on         . 0% exercisable prior to
                    .]      [                     years, with vesting in
installments of                     % on the anniversary date of the Date of
Grant in each of the years.]

GRANT OF OPTION

 

1. GRANT OF OPTION. The Compensation Committee (the “Committee”) of the Board of
Directors of Quanex Building Products Corporation, a Delaware corporation (the
“Company”), subject to the terms and provisions of the Quanex Building Products
Corporation 2008 Omnibus Incentive Plan, as amended (the “Plan”), hereby grants
to you, the above-named Grantee, effective as of the Date of Grant set forth
above, a nonqualified stock option (the “Option”) to purchase the total number
of shares (“Shares”) set forth above of the Company’s common stock, $0.01 par
value per Share, at the exercise price set forth above for each Share subject to
the Option, subject to adjustment as provided in the Plan. Subject to Section 2
below, the Option is exercisable in accordance with the General Vesting Schedule
set forth above with the exercise price payable at the time of exercise. To the
extent not exercised, any installments shall be cumulative and may be exercised
in whole or in part until the Option terminates. Notwithstanding anything to the
contrary herein, the Option may not be exercised after the earlier of the
Expiration Date set forth above or as extended pursuant to Section 3 hereof (the
“Expiration Date”) or the applicable date following your termination of
employment specified in Section 2 of this Stock Option Agreement (this
“Agreement”).

 

2. TERMINATION OF EMPLOYMENT/CHANGE IN CONTROL. The following provisions will
apply in the event your employment with the Company and all Affiliates of the
Company (collectively, the “Company Group”) terminates or a Change in Control of
the Company occurs before the Expiration Date:

2.1 Termination Generally. Except as otherwise expressly provided to the
contrary in this Section 2, if your employment with the Company Group terminates
for any reason, (a) all of your rights in the Option shall terminate and become
null and void on the earlier of the Expiration Date or 90 days after the date
your employment with the Company Group terminates and (b) the Option shall not
continue to vest after such termination of employment.

 

Key Leader

 

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2.2 Change in Control of the Company. If a Change in Control (as such term is
defined in the Plan) of the Company occurs, you are employed by the Company
Group as of that date, and the successor company in the Change in Control does
not otherwise assume or substitute for the award granted hereby, then any
unvested portion of the Option shall immediately vest and become fully
exercisable immediately prior to the occurrence of the Change in Control.
Notwithstanding anything to the contrary contained in this Agreement or the
Plan, if following the commencement of any discussion with a third person that
ultimately results in a Change in Control of the Company, (i) your employment
with the Company is terminated, (ii) you are removed from any material duties or
position with the Company, (iii) your base salary is reduced, or (iv) your
target annual bonus is reduced to an amount less than the target bonus paid to
you during the previous fiscal year, then for all purposes of this Agreement,
such Change in Control of the Company shall be deemed to have occurred on the
date immediately prior to the date of such termination, removal, or reduction.

2.3 Retirement or Disability. If your employment with the Company Group
terminates due to your Retirement or Disability, then the Option shall continue
to vest after such termination of employment until the earlier of the Expiration
Date or three years after the date your employment with the Company Group
terminates as a result of Retirement or Disability. For purposes of this
Section 2.3, the term “Retirement” means the voluntary termination of your
employment relationship with the Company Group on or after the date on which
(a) you are age 65 or (b) you are age 55 and have five years of service with the
Company Group.

2.4 Death. If your employment with the Company Group terminates due to your
death, then the Option shall continue to vest after such termination of
employment until the earlier of the Expiration Date or three years after the
date of your death. After your death, your executors, administrators or any
person or persons to whom the Option may be transferred by will or by the laws
of descent and distribution, shall have the right, at any time prior to the
termination of the Option to exercise the Option.

 

3. EXTENSION OF EXPIRATION DATE IN CERTAIN CIRCUMSTANCES. If on the last
business day prior to the Expiration Date (a) the exercise of the Option is
prohibited by applicable law or (b) you are prohibited from trading any Shares
as the result of a Company policy or a “lock-up” agreement between you and the
Company, the Expiration Date shall be extended until the date that is thirty
(30) days following the end of the prohibition instituted by such law, Company
policy, or lock-up agreement. In such event, the term “Expiration Date” as used
in this Agreement shall refer to such extended date.

 

4. AUTOMATIC EXERCISE IN CERTAIN CIRCUMSTANCES. If on the Expiration Date (as
may be extended pursuant to Section 3), (a) the fair market value of one share
of Stock exceeds the Exercise Price, and (b) you have not exercised the Option,
and (c) the Option has not otherwise expired or terminated; then you shall be
deemed to have exercised the Option as of the Expiration Date, with payment made
by withholding Shares otherwise issuable in connection with the exercise of the
Option. In such event, the Company will deliver to you the number of shares for
which the Option was deemed exercised, less the number of shares required to be
withheld for the payment of the total purchase price and required withholding
taxes; provided, however, that any fractional shares shall be settled in cash.

 

5. CASHLESS EXERCISE. Cashless exercise, in accordance with the terms of the
Plan, shall be available to you for the Shares subject to the Option.

 

Key Leader

 

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6. TAX WITHHOLDING. To the extent that the receipt of the Option or this
Agreement, the vesting of the Option or the exercise of the Option results in
income to you for federal, state or local income, employment or other tax
purposes with respect to which the Company Group has a withholding obligation,
you shall deliver to the Company at the time of such receipt, vesting or
exercise, as the case may be, such amount of money as the Company Group may
require to meet its obligation under applicable tax laws or regulations, and, if
you fail to do so, the Company Group is authorized to withhold from the Shares
subject to the Option or from any cash or stock remuneration then or thereafter
payable to you any tax required to be withheld by reason of such taxable income,
sufficient to satisfy the withholding obligation based on the last per share
sales price of the common stock of the Company for the trading day immediately
preceding the date that the withholding obligation arises, as reported in the
New York Stock Exchange Composite Transactions.

 

7. NONTRANSFERABILITY. Except as specified in this Agreement, the Option and
this Agreement are not transferable or assignable by you other than by will or
the laws of descent and distribution, and shall be exercisable during your
lifetime only by you. You may transfer the Option to (a) a member or members of
your immediate family, (b) to a revocable living trust established exclusively
for you or you and your spouse, (c) a trust under which your immediate family
members are the only beneficiaries or (d) a partnership of which your immediate
family members are the only partners. For this purpose, “immediate family” means
your spouse, children, stepchildren, grandchildren, parents, grandparents,
siblings (including half brothers and sisters), and individuals who are family
members by adoption.

The terms applicable to the assigned option(s) shall be the same as those in
effect for the Option immediately prior to such assignment and shall be set
forth in such documents to be executed by the assignee as the Committee may deem
appropriate. You may also designate one or more persons as the beneficiary or
beneficiaries of the Option under the Plan, and the Option shall, in accordance
with such designation, automatically be transferred to such beneficiary or
beneficiaries upon your death while holding the Option. Such beneficiary or
beneficiaries shall take the transferred option(s) subject to all the terms and
conditions of this Agreement. Except for the limited transferability provided by
the foregoing, outstanding options under the Plan shall not be assignable or
transferable.

None of the Company, its employees or directors makes any representations or
guarantees concerning the tax consequences associated with the inclusion of this
provision in this Agreement or your transfer of the Option. It is your sole
responsibility to seek advice from your own tax advisors concerning those tax
consequences. You are entitled to rely upon only the tax advice of your own tax
advisors.

 

8. CAPITAL ADJUSTMENTS AND REORGANIZATIONS. The existence of the Option shall
not affect in any way the right or power of the Company or any company the stock
of which is issued pursuant to this Agreement to make or authorize any
adjustment, recapitalization, reorganization or other change in its capital
structure or its business, engage in any merger or consolidation, issue any debt
or equity securities, dissolve or liquidate, or sell, lease, exchange or
otherwise dispose of all or any part of its assets or business, or engage in any
other corporate act or proceeding.

 

9. EMPLOYMENT RELATIONSHIP. For purposes of this Agreement, you shall be
considered to be in the employment of the Company Group as long as you have an
employment relationship with the Company Group. The Committee shall determine
any questions as to whether and when there has been a termination of such
employment relationship, and the cause of such termination, under the Plan and
the Committee’s determination shall be final and binding on all persons.

 

10. NO RIGHTS AS A STOCKHOLDER. You shall not have any rights as a stockholder
of the Company with respect to any Shares covered by the Option until the date
of the issuance of such Shares following exercise of the Option pursuant to this
Agreement and payment for the Shares.

 

Key Leader

 

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11. NOT AN EMPLOYMENT AGREEMENT. This Agreement is not an employment agreement,
and no provision of this Agreement shall be construed or interpreted to create
an employment relationship between the Grantee and the Company or any of its
Affiliates or guarantee the right to remain employed by the Company or any of
its Affiliates for any specified term.

 

12. SECURITIES ACT LEGEND. If you are an officer or affiliate of the Company
under the Securities Act of 1933, you consent to the placing on any certificate
for the Shares of an appropriate legend restricting resale or other transfer of
the Shares except in accordance with such Act and all applicable rules
thereunder.

 

13. REGISTRATION. The Shares that may be issued under the Plan are registered
with the Securities and Exchange Commission under a Registration Statement on
Form S-8.

 

14. SALE OF SECURITIES. The Shares that may be issued under this Agreement may
not be sold or otherwise disposed of in any manner that would constitute a
violation of any applicable federal or state securities laws. You also agree
that (a) the Company may refuse to cause the transfer of the Shares to be
registered on the stock register of the Company if such proposed transfer would
in the opinion of counsel satisfactory to the Company constitute a violation of
any applicable federal or state securities law and (b) the Company may give
related instructions to the transfer agent, if any, to stop registration of the
transfer of the Shares.

 

15. LIMIT OF LIABILITY. Under no circumstances will the Company Group be liable
for any indirect, incidental, consequential or special damages (including lost
profits) of any form incurred by any person, whether or not foreseeable and
regardless of the form of the act in which such a claim may be brought, with
respect to the Plan.

 

16. MISCELLANEOUS. This Agreement and the Option are awarded pursuant to and are
subject to all of the provisions of the Plan, which are incorporated by
reference herein, including all amendments to the Plan, if any. In the event of
a conflict between this Agreement and the Plan provisions, the Plan provisions
will control. The term “you” and “your” refer to the Grantee named in this
Agreement. Capitalized terms that are not defined herein shall have the meanings
ascribed to such terms in the Plan. This Agreement shall be binding on the
Company’s successors and assigns.

By your acceptance of the Option, you agree that the Option is granted under,
governed by and subject to the terms of the Plan and this Agreement.

 

QUANEX BUILDING PRODUCTS CORPORATION

 

[Name and Title of Executing Officer]

 

Key Leader

 

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