EXHIBIT 10.7

 

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QUANEX CORPORATION

 

[STOCK-][CASH-]SETTLED
RESTRICTED STOCK UNIT AWARD AGREEMENT

 

<< Full Name>>
Grantee

 

Date of Award:

 

<<                           >>

 

 

 

Number of Restricted Stock Units:

 

<<                           >>

 

 

 

Expiration Date:

 

<<                           >>

 

 

 

General Vesting Schedule/Restricted Period:

 

[3 years, with vesting in installments of 33 1/3% on the anniversary date of the
Date of Grant in each of the years                 ,                  and
                .]

 

[100% exercisable on [first][second][third] anniversary of the Date of Grant. 0%
exercisable prior to the [first][second][third] anniversary of the Date of
Grant.]

 

AWARD OF RESTRICTED STOCK UNITS

 

The Compensation Committee of the Board of Directors of Quanex Corporation, a
Delaware corporation (the “Company”), pursuant to the Quanex Corporation 2006
Omnibus Incentive Plan (the “Plan”), hereby awards to you, the above-named
Grantee, effective as of the Date of Award set forth above (the “Date of
Award”), that number of restricted stock units set forth above (the “RSUs”), on
the following terms and conditions:

 

During the Restricted Period, the RSUs will be evidenced by entries in a
bookkeeping ledger account which reflect the number of RSUs credited under the
Plan for your benefit. For purposes of this Agreement, the term “Restricted
Period” means the period designated by the Committee during which the RSUs are
subject to forfeiture and restrictions on transfer (the “Forfeiture
Restrictions”). The Restricted Period and all Forfeiture Restrictions on the
RSUs covered hereby shall lapse as to those RSUs when the RSUs become vested and
you meet all other terms and conditions of this Agreement.

 

Upon the earlier of (1) the date the RSUs granted under this Award become vested
under the General Vesting Schedule (without regard to any acceleration
provisions contained herein) or (2) the date on which you separate from service
(within the meaning of section 409A of the Internal Revenue Code of 1986, as
amended (“Section 409A”)) for any reason, the Company shall issue to you [cash
in an amount equal to the fair market value of] one share of the Company’s
common stock, $0.50 par value per share (the “Common Stock”), less applicable
withholding, in exchange for each RSU that is awarded to you hereby and
thereafter you shall have no further rights with respect to such RSU. [The
Company shall cause to be delivered to you (or your legal representative or
heir) a stock certificate representing those shares of the Common Stock issued
in exchange for RSUs awarded hereby, and such shares of the Common Stock shall
be transferable by you (except to the extent that any proposed transfer would,
in the opinion of counsel satisfactory to the Company, constitute a violation of
applicable federal or state securities law).]

 

Employee
Cliff Vested—Graded Vesting
Stock Settled—Cash Settled

 

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If you separate from service with the Company and all Affiliates (collectively,
the “Company Group”) terminates before the third anniversary of the Date of
Award (the “Third Anniversary Date”), the Forfeiture Restrictions then
applicable to the RSUs shall not lapse and the number of RSUs then subject to
the Forfeiture Restrictions shall be forfeited to the Company on the date of
your separation from service. Notwithstanding the preceding sentence, if you
die, incur a Disability or Retire before the Third Anniversary Date, each while
in the active employ of one or more members of the Company Group, all remaining
Forfeiture Restrictions shall lapse on a prorated basis determined by dividing
the number of days during the period commencing on the last anniversary vesting
date or Date of Grant, as applicable, and ending on the date of your death,
Disability or Retirement by 1095. For purposes of this Section, the term
“Retire” 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.

 

DELAYED PAYMENT IN CERTAIN CIRCUMSTANCES. NOTWITHSTANDING ANY OTHER PROVISION OF
THIS AGREEMENT, IF YOU ARE A SPECIFIED EMPLOYEE (WITHIN THE MEANING OF SECTION
409A), NO PAYMENTS SHALL BE MADE TO YOU PURSUANT TO THIS AWARD DUE TO A
SEPARATION FROM SERVICE FOR ANY REASON BEFORE THE DATE THAT IS SIX MONTHS AFTER
THE DATE ON WHICH YOU INCUR SUCH SEPARATION FROM SERVICE.

 

If during the Restricted Period you hold any RSUs awarded hereby the Company
pays a dividend in cash with respect to the outstanding shares of the Common
Stock (a “Cash Dividend”), then the Company will pay to you in cash, an amount
equal to the product of (a) the RSUs awarded hereby that have not been exchanged
by the Company for cash and (b) the amount of the Cash Dividend paid per share
of the Common Stock (the “Dividend Equivalent”). The Company shall pay to you
currently (and in no case later than the end of the calendar year in which the
dividends are paid to the holders of the Common Stock, or if later, the 15th day
of the third month following the date the dividends are paid to the holders of
the Common Stock) an amount equal to such Dividend Equivalents.

 

If during the Restricted Period you hold any RSUs awarded hereby the Company
pays a dividend in shares of the Common Stock with respect to the outstanding
shares of the Common Stock, then the Company will increase the RSUs awarded
hereby that have not then been exchanged by the Company for shares of the Common
Stock by an amount equal to the product of (a) the RSUs awarded hereby that have
not been exchanged by the Company for cash and (b) the number of shares of the
Common Stock paid by the Company per share of the Common Stock (collectively,
the “Stock Dividend RSUs”). Each Stock Dividend RSU will be subject to the same
restrictions, limitations and conditions applicable to the RSU for which such
Stock Dividend RSU was awarded and will be [paid in cash][exchanged for shares
of the Common Stock] at the same time and on the same basis as such RSU.

 

To the extent that the receipt of the RSUs or the Agreement, the vesting of the
RSUs or a distribution under the Agreement 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 any payment due under the Agreement 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.

 

The RSUs may not be sold, assigned, pledged, exchanged, hypothecated or
otherwise transferred, encumbered or disposed of (other than by will or the
applicable laws of descent and distribution). Any such attempted sale,

 

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assignment, pledge, exchange, hypothecation, transfer, encumbrance or
disposition in violation of this Agreement shall be void and the Company shall
not be bound thereby. [Further, any shares of Common Stock awarded hereunder 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 agree that
(a) the Company may refuse to cause the transfer of such 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 such shares.]

 

Capitalized terms that are not defined herein shall have the meaning ascribed to
such terms in the Plan.

 

In accepting the award of RSUs set forth in this Agreement you accept and agree
to be bound by all the terms and conditions of the Plan.

 

 

QUANEX CORPORATION

 

 

 

 

 

 

 

 

Raymond Jean – Chief Executive Officer

 

 

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