Exhibit 10.5
QUANEX CORPORATION
SUPPLEMENTAL SALARIED EMPLOYEES’ PENSION PLAN
Amended and Restated
Effective as of January 1, 2005

 

 

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TABLE OF CONTENTS

                                  Page
 
                ARTICLE I   DEFINITIONS AND DESIGNATIONS   I-1
 
               
 
    1.01     “Actuarial Equivalent”   I-1
 
    1.02     “Affiliate”   I-1
 
    1.03     “Applicable Covered Employee”   I-1
 
    1.04     “Beneficiary”   I-1
 
    1.05     “Board of Directors”   I-1
 
    1.06     “Cash Balance Participant”   I-1
 
    1.07     “Code”   I-1
 
    1.08     “Committee”   I-1
 
    1.09     “Company”   I-1
 
    1.10     “Covered Employee”   I-1
 
    1.11     “Deferred Compensation Ledger”   I-1
 
    1.12     “Deferred Retirement Date”   I-2
 
    1.13     “Early Retirement Date”   I-2
 
    1.14     “Employee”   I-2
 
    1.15     “Normal Retirement Date”   I-2
 
    1.16     “Participant”   I-2
 
    1.17     “Plan”   I-2
 
    1.18     “Plan Year”   I-2
 
    1.19     “Qualified Plan”   I-2
 
    1.20     “Qualified Plan Benefit”   I-2
 
    1.21     “Restricted Period”   I-2
 
    1.22     “Retirement Date”   I-2
 
    1.23     “Separates From Service”   I-2
 
    1.24     “Separation From Service”   I-2
 
    1.25     “Service”   I-2
 
                ARTICLE II   ELIGIBILITY   II-4
 
                ARTICLE III   RETIREMENT BENEFITS   III-1
 
               
 
    3.01     Normal Retirement Benefit   III-1
 
    3.02     Deferred Retirement Benefit   III-1
 
    3.03     Early Retirement Benefit   III-1
 
    3.04     Deferred Vested Benefit   III-1
 
    3.05     Cash Balance Participant Benefit   III-1
 
    3.06     Time of Payment of Benefit   III-1
 
                ARTICLE IV   DEATH BENEFITS   IV-1
 
               
 
    4.01     Death Prior to Payment of Plan Benefit   IV-1
 
    4.02     Designation of Beneficiary   IV-1
 
                ARTICLE V   FORFEITURE FOR CAUSE   V-1
 
               

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TABLE OF CONTENTS
(continued)

                                  Page
 
                ARTICLE VI   PLAN COMMITTEE   VI-1
 
    6.01     Committee   VI-1
 
    6.02     General Rights, Powers and Duties of Plan Committee   VI-1
 
    6.03     Rules and Decisions   VI-1
 
    6.04     Committee Organization and Voting   VI-2
 
    6.05     Committee Discretion   VI-2
 
    6.06     Authorization of Benefit Payments   VI-2
 
    6.07     Application and Forms of Benefits   VI-2
 
    6.08     Facility of Payment   VI-2
 
    6.09     Claims Procedure   VI-2
 
                ARTICLE VII   AMENDMENT AND TERMINATION   VII-1
 
               
 
    7.01     Amendment   VII-1
 
    7.02     Right to Terminate Plan   VII-1
 
                ARTICLE VIII   FUNDING   VIII-1
 
               
 
    8.01     Unfunded Arrangement   VIII-1
 
    8.02     Participants Must Rely Only on General Credit of the Company  
VIII-1
 
                ARTICLE IX   MISCELLANEOUS   IX-1
 
               
 
    9.01     Limitation of Rights   IX-1
 
    9.02     Distributions to Incompetents or Minors   IX-1
 
    9.03     Nonalienation of Benefits   IX-1
 
    9.04     Reliance Upon Information   IX-1
 
    9.05     Severability   IX-2
 
    9.06     Notice   IX-2
 
    9.07     Gender and Number   IX-2
 
    9.08     Governing Law   IX-2
 
    9.09     Effect of Amendment and Restatement Effective As of January 1, 2005
  IX-2
 
    9.10     Section 409A   IX-2

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QUANEX CORPORATION
SUPPLEMENTAL SALARIED EMPLOYEES’ PENSION PLAN
WHEREAS, Quanex Corporation established the Quanex Corporation Supplemental
Salaried Employees’ Pension Plan (the “Plan”) to provide a retirement pay
supplement for a select group of management or highly compensated employees so
as to retain their loyalty and to offer a further incentive to them to maintain
and increase their standard of performance;
WHEREAS, the Plan is required to be amended to comply with the requirements of
new section 409A of the Internal Revenue Code of 1986, as amended by the
American Jobs Creation Act of 2004;
WHEREAS, it has been determined that the Plan should now be completely amended,
restated and continued without a gap or lapse in coverage, time or effect which
would cause any Participant to be entitled to a distribution in order to
fundamentally change the purpose and provisions of the Plan;
WHEREAS, it has been determined that the amendment and restatement of the Plan
shall apply only to amounts earned and vested on or after January 1, 2005, and
that the provisions of the Plan prior to this amendment and restatement shall
apply to any amounts that were earned and vested under the Plan on or before
December 31, 2004;
WHEREAS, Quanex Corporation desires to amend and restate the Plan effective as
of January 1, 2005.
NOW, THEREFORE, Quanex Corporation amends and restates the Plan as follows:

 

 

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ARTICLE I
DEFINITIONS AND DESIGNATIONS
1.01 “Actuarial Equivalent” shall mean a benefit of equivalent value computed on
the basis of the mortality assumptions and interest rate assumptions in effect
under the Qualified Plan immediately prior to the Participant’s Separation From
Service with the Company.
1.02 “Affiliate” means all business organizations which are members of a
controlled group of corporations (within the meaning of section 414(b) of the
Code), or which are trades or businesses (whether or not incorporated) which is
under common control (within the meaning of section 414(c) of the Code), or
which are members of an affiliated service group of employers (within the
meaning of section 414(m) of the Code), which related group of corporations,
businesses or employers includes Quanex.
1.03 “Applicable Covered Employee” means any of the following:
(a) a Covered Employee of Quanex;
(b) a Covered Employee of an Affiliate; and
(c) a former employee who was a Covered Employee at the time of termination of
employment with Quanex or an Affiliate.
1.04 “Beneficiary” shall mean a person or entity designated by the Participant
under the terms of this Plan to receive any amounts distributed under the Plan
upon the death of the Participant.
1.05 “Board of Directors” shall mean the Board of Directors of the Company.
1.06 “Cash Balance Participant” shall mean a Participant who is a Cash Balance
Member in the Qualified Plan.
1.07 “Code” shall mean the Internal Revenue Code of 1986, as amended from time
to time.
1.08 “Committee” shall mean the Committee established under Article VI to
administer the Plan.
1.09 “Company” shall mean Quanex Corporation, a Delaware corporation.
1.10 “Covered Employee” means an individual (i) described in section 162(m)(3)
of the Code or (ii) subject to the requirements of Section 16(a) of the
Securities Act.
1.11 “Deferred Compensation Ledger” shall mean the ledger maintained by the
Committee for each Participant which reflects the amounts credited by the
Company under this Plan to the account of each Participant.

 

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1.12 “Deferred Retirement Date” shall mean the first day of the month following
the month in which a Participant retires pursuant to the provisions of
Section 3.02.
1.13 “Early Retirement Date” shall mean the first day of any month after a
Participant’s attainment of age 55 and the completion of five years of Service.
1.14 “Employee” shall mean a person who is in a select group of management or a
highly compensated employee of the Company.
1.15 “Normal Retirement Date” shall mean the first day of the month coincident
or next following a Participant’s 65th birthday.
1.16 “Participant” shall mean an Employee of the Company designated by the Board
of Directors as eligible for participation in the Plan, and who meets the
requirements of Article II.
1.17 “Plan” shall mean the Quanex Corporation Supplemental Salaried Employees’
Pension Plan.
1.18 “Plan Year” shall mean the 12-month period commencing on November 1 and
ending on the following October 31.
1.19 “Qualified Plan” shall mean the Quanex Corporation Salaried Employees
Pension Plan maintained by the Company which is intended to qualify under
section 401 of the Code.
1.20 “Qualified Plan Benefit” shall mean the actuarial equivalent of the
Participant’s benefit under the Qualified Plan assuming that the Participant’s
entire benefit under the Qualified Plan will be paid in a lump sum cash payment.
The amount of a Participant’s Qualified Plan Benefit shall be determined based
on the provisions of the Qualified Plan (including provisions relating to
interest and mortality assumptions) as in effect on the date his benefits under
this Plan are determined.
1.21 “Restricted Period” means, for any qualified defined benefit plan sponsored
by Quanex or an Affiliate, any period during which the plan is in at-risk status
as described in section 409A of the Code.
1.22 “Retirement Date” shall mean a Participant’s Normal Retirement Date, Early
Retirement Date, or Deferred Retirement Date, as the case may be.
1.23 “Separates From Service” shall mean a Participant incurs a Separation From
Service.
1.24 “Separation From Service” shall mean a Participant’s complete separation
from service with the Company and all of its Affiliates. The determination of
whether an Participant Separates From Service will be determined in accordance
with section 409A of the Code.
1.25 “Service” shall have the same meaning as given that term under the
Qualified Plan. All Service taken into account under the Qualified Plan will be
taken into account under this Plan.

 

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ARTICLE II
ELIGIBILITY
The Employees who shall be eligible to participate in the Plan shall be those
Employees as the Committee shall determine from time to time. An Employee will
become a Participant effective as of the date specified in writing by the
Committee.

 

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ARTICLE III
RETIREMENT BENEFITS
3.01 Normal Retirement Benefit. If a Participant other than a Cash Balance
Participant Separates From Service on or after his Normal Retirement Date, he
will be entitled to the lump sum Actuarial Equivalent of a monthly benefit
payable to the Participant for life only in an amount equal to:
(a) the amount of the Participant’s Qualified Plan Benefit that would be payable
if the applicable limitation under section 401(a)(17) of the Code for each
fiscal year of the Qualified Plan commencing on or after November 1, 1994, was
$235,840 (not indexed for increases in the cost of living), less
(b) the Participant’s Qualified Plan Benefit.
3.02 Deferred Retirement Benefit. If a Participant other than a Cash Balance
Participant Separates From Service after his Normal Retirement Date, he will be
entitled to the lump sum Actuarial Equivalent of a monthly benefit payable to
the Participant for life only determined in accordance with the provisions of
Section 3.01. The benefit will not be actuarially increased to reflect the later
benefit payment date or his shorter life expectancy.
3.03 Early Retirement Benefit. If a Participant other than a Cash Balance
Participant Separates From Service on or after his Early Retirement Date but
before age 65, he shall be entitled to the lump sum Actuarial Equivalent of a
monthly benefit payable to the Participant for life only determined in
accordance with the provisions of Section 3.01 as of his Early Retirement Date.
3.04 Deferred Vested Benefit. If a Participant other than a Cash Balance
Participant Separates From Service prior to his Early Retirement Date but has
five or more years of Service, he will upon attaining age 55 be entitled to the
lump sum Actuarial Equivalent of a monthly benefit payable to the Participant
for life, commencing on his Normal Retirement Date, determined in accordance
with the provisions of Section 3.01.
3.05 Cash Balance Participant Benefit. If a Cash Balance Participant Separates
From Service, he will be entitled to:
(a) the amount of the Participant’s Qualified Plan Benefit that would be payable
if the applicable limitation under section 401(a)(17) of the Code for each
fiscal year of the Qualified Plan commencing on or after November 1, 1994, was
$235,840 (not indexed for increases in the cost of living), less
(b) the Participant’s Qualified Plan Benefit.
3.06 Time of Payment of Benefit. Upon a Participant’s Normal Retirement,
Deferred Retirement, Early Retirement or other Separation From Service, the
Participant shall be paid a lump sum cash payment of his Plan benefit as
determined under Section 3.01, 3.02, 3.03 or 3.05 on the first business which is
at least six (6) months after the date of such Employee’s Separation From
Service, or as soon as is administratively practicable thereafter. A terminated
Participant’s deferred vested benefit as determined under Section 3.04 shall be
paid on the 90th day after his attainment of age 55 or as soon as
administratively practicable thereafter in a lump sum cash payment but not
earlier than the first business which is at least six (6) months after the date
of such Employee’s Separation From Service.

 

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ARTICLE IV
DEATH BENEFITS
4.01 Death Prior to Payment of Plan Benefit. If a Participant’s death occurs
before his Plan benefit has begun to be paid to him, the following rules shall
apply:
(a) Participants Other Than Cash Balance Participants. The Beneficiary of a
Participant other than a Cash Balance Participant shall be entitled to receive a
lump sum benefit Actuarially Equivalent to the Plan benefit payable at the time
of death, determined in accordance with the provisions of Section 3.01. In
calculating the lump sum death benefit under this Section, the benefit shall be
reduced in the same manner it is reduced in Section 3.03 or 3.04, whichever is
applicable, for payment earlier than Normal Retirement Date. Such lump sum
payment shall be made on the 90th day after the death of the Participant or as
soon as administratively practicable thereafter.
(b) Cash Balance Participants. The Beneficiary of a Cash Balance Participant
shall be entitled to receive a lump sum benefit of such Participant’s benefit
payable at the time of death, determined in accordance with the provisions of
Section 3.05. Such lump sum payment shall be made on the 90th day after the
death of the Participant or as soon as administratively practicable thereafter.
4.02 Designation of Beneficiary. Each Participant, upon becoming eligible to
participate in the Plan, shall file with the Committee a designation of one or
more Beneficiaries to whom the distribution otherwise due the Participant shall
be made in the event of his death prior to the distribution of the amount
credited on his behalf in the Deferred Compensation Ledger. The designation will
be effective upon receipt by the Committee of a properly executed form which the
Committee has approved for that purpose. The Participant may from time to time
revoke or change any designation of Beneficiary by filing another approved
Beneficiary designation form with the Committee. If there is no valid
designation of Beneficiary on file with the Committee at the time of the
Participant’s death, or if all of the Beneficiaries designated in the last
Beneficiary designation have predeceased the Participant or otherwise ceased to
exist, the Beneficiary shall be the Participant’s spouse, if the spouse survives
the Participant, or otherwise the Participant’s estate. If any Beneficiary
survives the Participant but dies or otherwise ceases to exist before receiving
all amounts due the Beneficiary under the Plan, the balance of the amount which
would have been paid to that Beneficiary shall, unless the Participant’s
designation provides otherwise, be distributed to the individual deceased
Beneficiary’s estate or to the Participant’s estate in the case of a Beneficiary
which is not an individual. Any Beneficiary designation which designates any
person or entity other than the Participant’s spouse must be consented to in
writing by the spouse in a form acceptable to the Committee to be effective.

 

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ARTICLE V
FORFEITURE FOR CAUSE
If the Committee finds, after full consideration of the facts presented on
behalf of both the Company and a former Participant, that the Participant was
discharged by the Company for fraud, embezzlement, theft, commission of a
felony, proven dishonesty in the course of his employment by the Company which
damaged the Company, or for disclosing trade secrets of the Company, the entire
amount credited on his behalf in the Deferred Compensation Ledger shall be
forfeited. The decision of the Committee as to the cause of a former
Participant’s discharge and the damage done to the Company will be final. No
decision of the Committee will affect the finality of the discharge of the
Participant by the Company in any manner.

 

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ARTICLE VI
PLAN COMMITTEE
6.01 Committee. The Plan shall be administered by a Committee which shall have
at least three members appointed by the Board of Directors. Any person may
resign from the Committee upon 30 days’ prior notice to the Board of Directors.
The Board of Directors may remove any member of the Committee at any time.
6.02 General Rights, Powers and Duties of Plan Committee. The Committee shall be
responsible for the management, operation and administration of the Plan. In
addition to any powers, rights and duties set forth elsewhere in the Plan, it
shall have the following powers and duties:
(a) to adopt such rules and regulations consistent with the provisions of the
Plan as it deems necessary for the proper and efficient administration of the
Plan;
(b) to enforce the Plan in accordance with its terms and any rules and
regulations it establishes;
(c) to maintain records concerning the Plan sufficient to prepare reports,
returns and other information required by the Plan or by law;
(d) to construe and interpret the Plan and to resolve all questions arising
under the Plan;
(e) to direct the Company to pay benefits under the Plan, and to give such other
directions and instructions as may be necessary for the proper administration of
the Plan;
(f) to employ or retain agents, attorneys, actuaries, accounts or other persons,
who may also be employed by or represent the Company, and
(g) to be responsible for the preparation, filing and disclosure on behalf of
the Plan of such documents and reports as are required by any applicable Federal
or State law.
The Committee shall have no power to add to, subtract from or modify any of the
terms of the Plan, or to change or add to any benefits provided by the Plan, or
to waive or fail to apply any requirements of eligibility for benefits under the
Plan.
6.03 Rules and Decisions. The Committee may adopt such rules and actuarial
tables as it deems necessary, desirable or appropriate. All rules and decisions
of the Committee shall be uniformly and consistently applied to all Participants
in similar circumstances. When making a determination or calculation, the
Committee shall be entitled to rely upon information furnished to it by a
Participant or beneficiary, the Company, and the legal counsel, actuary and
accountant for the Company.

 

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6.04 Committee Organization and Voting. The Committee shall select from among
its members a chairman who shall preside at all of its meetings and shall elect
a secretary without regard to whether that person is a member of the Committee.
The secretary shall keep all records, documents and data pertaining to the
Committee’s supervision and administration of the Plan. A majority of the
members of the Committee shall constitute a quorum for the transaction of
business and the vote of a majority of the members present at any meeting shall
decide any question brought before the meeting. In addition, the Committee may
decide any question by vote, taken without a meeting, of a majority of its
members. A member of the Committee who is also a Participant shall not vote or
act on any matter relating solely to himself.
6.05 Committee Discretion. The Committee in exercising any power or authority
granted under this Plan or in making any determination under this Plan shall
perform or refrain from performing those acts using its sole discretion and
judgment. Any decision made by the Committee or any refraining to act or any act
taken by the Committee in good faith shall be final and binding on all parties.
The Committee’s decision shall never be subject to de novo review.
6.06 Authorization of Benefit Payments. The Committee shall issue directions to
the Company concerning all benefits which are to be paid pursuant to the
provisions of the Plan. The Company shall furnish the Committee such data and
information as it may require. The records of the Company shall be determinative
of each Participant’s period of employment, Separation From Service and the
reason therefor, leave of absence, reemployment, years of Service, Earnings, and
Final Average Earnings. Participants and their beneficiaries shall furnish to
the Committee such evidence, data, or information, and execute such documents,
as the Committee requests.
6.07 Application and Forms of Benefits. The Committee may require a Participant
to complete and file with the Committee an application for retirement benefits
and all other forms approved by the Committee, and to furnish all pertinent
information requested by the Committee. The Committee may rely upon all such
information so furnished it, including the Participant’s current mailing
address.
6.08 Facility of Payment. Whenever, in the Committee’s opinion, a person
entitled to receive any payment of a benefit or installment thereof hereunder is
under a legal disability or is incapacitated in any way so as to be unable to
manage his financial affairs, the Committee may direct the Company to make
payments to such person or to his legal representative or to a relative or
friend of such person for his benefit, or the Committee may direct the Company
to apply the payment for the benefit of such person in such manner as the
Committee considers advisable. Any payment of a benefit or installment thereof
in accordance with the provisions of this Section shall be a complete discharge
of any liabilities for the making of such payment under the provisions of the
Plan.
6.09 Claims Procedure. The Committee shall make all determinations as to the
right of any person to receive benefits under the Plan. Any denial by the
Committee of a claim for benefits under the Plan by a Participant, spouse or
retired Participant (collectively referred to herein as “Claimant”) shall be
stated in writing by the Committee and delivered or mailed to the Claimant on
the 90th day after receipt of the claim, unless special circumstances require an
extension of time for processing the claim. If such an extension of time is
required, written notice of the extension shall be furnished to the Claimant on
the 90th day after receipt of the claim and the claim shall thereafter be paid
on the 180th day after the date of receipt of the initial claim. Such notice
shall set forth the specific reasons for the denial, specific reference to
pertinent provisions of the Plan upon which the denial is based, a description
of any additional material or information necessary for the Claimant to perfect
his claim with an explanation of why such material or information is necessary,
and an explanation of claim review procedures under the Plan written to the best
of the Committee’s ability in a manner that may be understood without legal or
actuarial counsel. A Claimant whose claim for benefits has been wholly or
partially denied by the Committee may, within 90 days following the date of such
denial, request a review of such denial in a writing addressed to the Committee.
The Claimant shall be entitled to submit such issues or comments, in writing or
otherwise, as he shall consider relevant to a determination of his claim, and
may include in his request a request for a hearing in person before the
Committee. Prior to submitting his request, the Claimant shall be entitled to
review such documents as the Committee shall agree are pertinent to his claim.
The Claimant may, at all stages of review, be represented by counsel, legal or
otherwise, of his choice, provided that the fees and expenses of such counsel
shall be borne by the Claimant. All requests for review shall be promptly
resolved. The Committee’s decisions with respect to any such review shall be set
forth in writing and shall be mailed to the Claimant on the 60th day following
receipt by the Committee of the Claimant’s request unless special circumstances,
such as the need to hold a hearing, require an extension of time for processing,
in which case the Committee’s decision shall be so mailed on the 120th day after
receipt of such request.

 

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ARTICLE VII
AMENDMENT AND TERMINATION
7.01 Amendment. The Plan may be amended in whole or in part by the Company at
any time. Notice of any such amendment shall be given in writing to the
Committee and to each Participant and each beneficiary of a deceased
Participant. No such amendment however shall have the effect of reducing that
portion of the benefit the Participant ultimately becomes entitled to below that
amount he would have received to the date of the amendment under the formula set
out in the Plan prior to the amendment . In addition, no such amendment shall
apply to amounts accrued and vested on or before December 31, 2004, unless the
amendment instrument explicitly states that the amendment shall apply to such
amounts.. An amendment to the Plan shall be made by a written instrument
executed by an officer of the Company. The Board of Directors of the Company
must authorize the amendment in order for the amendment to be effective.
7.02 Right to Terminate Plan. The Company intends to maintain the Plan for an
indefinite period of time, but necessarily must, and hereby does, reserve the
right to terminate the Plan at any time. The Company shall not have any further
financial obligations under the Plan from and after such termination of the Plan
except those that have accrued up to the date of termination and have not been
satisfied. Upon termination of the Plan, any benefits vested under the Plan
shall be payable at the time and in the manner provided hereunder; provided,
however, that the Board may terminate the Plan within the 30 days preceding or
12 months following a change in control, as defined by section 409A of the Code,
or as otherwise permitted under section 409A of the Code, and distribute the
Participants’ accrued vested benefits to Participants in the manner and the time
as determined by the Committee, in its sole discretion, as permitted by section
409A of the Code. The termination of the Plan shall be accomplished by a
resolution of the Board of Directors of the Company and shall be evidenced by a
written instrument executed by an officer of the Company.

 

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ARTICLE VIII
FUNDING
8.01 Unfunded Arrangement. It is intended that this Plan shall be unfunded for
tax purposes and for purposes of Title 1 of the Employee Retirement Income
Security Act of 1974, as amended. The Committee will establish a bookkeeping
account for each Participant in a special Deferred Compensation Ledger which
shall be maintained by the Company.
8.02 Participants Must Rely Only on General Credit of the Company. It is
specifically recognized by both the Company and the Participants that this Plan
is only a general corporate commitment and that each Participant must rely upon
the general credit of the Company for the fulfillment of its obligations
hereunder. Under all circumstances the rights of Participants to any asset held
by the Company will be no greater than the rights expressed in this agreement.
Nothing contained in this agreement shall constitute a guarantee by the Company
that the assets of the Company will be sufficient to pay any benefits under this
Plan or would place the Participant in a secured position ahead of general
creditors of the Company; the Participants are only unsecured creditors of the
Company with respect to their Plan benefits and the Plan constitutes a mere
promise by the Company to make benefit payments in the future. No specific
assets of the Company have been or shall be set aside, or shall in any way be
transferred to the trust or shall be pledged in any way for the performance of
the Company’s obligations under this Plan which would remove such assets from
being subject to the general creditors of the Company.
In addition, no assets shall be set aside or reserved (directly or indirectly)
in a trust (or other arrangement as determined by the Internal Revenue Service),
or transferred to a trust or other arrangement established to fund the Company’s
obligations under the Plan during any Restricted Period for purposes of paying
benefits to an Applicable Covered Employee. The rule contained in the preceding
sentence does not apply to assets set aside, reserved or transferred before or
after a Restricted Period.

 

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ARTICLE IX
MISCELLANEOUS
9.01 Limitation of Rights. Nothing in this Plan shall be construed:
(a) to give any employee of the Company any right to be designated a Participant
in the Plan;
(b) to give a Participant any right with respect to the amounts and interest
credited in the Deferred Compensation Ledger on behalf of the Participant,
except in accordance with the terms of this Plan;
(c) to limit in any way the right of the Company to terminate a Participant’s
employment with the Company at any time;
(d) to evidence any agreement or understanding, expressed or implied, that the
Company will employ a Participant in any particular position or for any
particular remuneration; or
(e) to give a Participant or any other person claiming through him any interest
or right under this Plan other than that of an unsecured general creditor of the
Company.
9.02 Distributions to Incompetents or Minors. Should a Participant become
incompetent or should a Participant designate a Beneficiary who is a minor or
incompetent, the Committee is authorized to pay the funds due to the parent of
the minor or to the guardian of the minor or incompetent or directly to the
minor or to apply those funds for the benefit of the minor or incompetent in any
manner the Committee determines in its sole discretion.
9.03 Nonalienation of Benefits. No right or benefit provided in this Plan shall
be transferable by the Participant except, upon his death, to a named
Beneficiary as provided in this Plan. No right or benefit under this Plan shall
be subject to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by creditors of the Participant or the
Participant’s Beneficiary. Any attempt to anticipate, alienate, sell, assign,
pledge, encumber, or charge the same shall be void. No right or benefit under
this Plan shall in any manner be liable for or subject to any debts, contracts,
liabilities or torts of the person entitled to such benefits. If any Participant
or any Beneficiary becomes bankrupt or attempts to anticipate, alienate, sell,
assign, pledge, encumber or charge any right or benefit under this Plan, that
right or benefit shall, in the discretion of the Committee, cease. In that
event, the Committee may have the Company hold or apply the right or benefit or
any part of it to the benefit of the Participant or Beneficiary, his or her
spouse, children or other dependents or any of them in any manner and in any
proportion the Committee believes to be proper in its sole and absolute
discretion, but is not required to do so.
9.04 Reliance Upon Information. The Committee shall not be liable for any
decision or action taken in good faith in connection with the administration of
this Plan. Without limiting the generality of the foregoing, any decision or
action taken by the Committee when it relies upon information supplied it by any
officer of the Company, the Company’s legal counsel, the Company’s independent
accountants or other advisors in connection with the administration of this Plan
shall be deemed to have been taken in good faith.

 

IX-1

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9.05 Severability. If any term, provision, covenant or condition of the Plan is
held to be invalid, void or otherwise unenforceable, the rest of the Plan shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated.
9.06 Notice. Any notice or filing required or permitted to be given to the
Committee or a Participant shall be sufficient if in writing and hand delivered
or sent by U.S. mail to the principal office of the Company or to the
residential mailing address of the Participant. Notice will be deemed to be
given as of the date of hand delivery or if delivery is by mail, as of the date
shown on the postmark.
9.07 Gender and Number. If the context requires it, words of one gender when
used in this Plan will include the other genders, and words used in the singular
or plural will include the other.
9.08 Governing Law. The Plan will be construed, administered and governed in all
respects by the laws of the State of Texas.
9.09 Effect of Amendment and Restatement Effective As of January 1, 2005. Unless
otherwise explicitly provided herein, the amendment and restatement of the Plan
effective as of January 1, 2005 shall apply only to amounts earned and vested on
or after January 1, 2005. The provisions of the Plan prior to this amendment and
restatement shall apply to any amounts that were earned and vested under the
Plan on or before December 31, 2004. The amendment and restatement of the Plan
is not intended to be a material modification of the Plan with respect to
amounts accrued and vested on or before December 31, 2004, and any provision of
the Plan that is considered to be a material modification of the Plan shall be
retroactively amended to the extent required to prevent such provision from
being considered a material modification of the Plan with respect to such
amounts.
9.10 Section 409A. The Plan is intended to be a nonqualified deferred
compensation arrangement and is not intended to meet the requirements of section
401(a) of the Code. The Plan is intended to meet the requirements of section
409A of the Code and may be administered in a manner that is intended to meet
those requirements and shall be construed and interpreted in accordance with
such intent. To the extent that a deferral, accrual, vesting or payment of an
amount under the Plan is subject to section 409A of the Code, except as the
Committee otherwise determines in writing, the amount will be deferred, accrued,
vested or paid in a manner that will meet the requirements of section 409A of
the Code, including regulations or other guidance issued with respect thereto,
such that the deferral, accrual, vesting or payment shall not be subject to the
excise tax applicable under section 409A of the Code. Any provision of the Plan
that would cause the deferral, accrual, vesting or payment of an amount under
the Plan to fail to satisfy section 409A of the Code shall be amended (in a
manner that as closely as practicable achieves the original intent of the Plan)
to comply with section 409A of the Code on a timely basis, which may be made on
a retroactive basis, in accordance with regulations and other guidance issued
under section 409A of the Code. In the event additional regulations or other
guidance is issued under section 409A of the Code or a court of competent
jurisdiction provides additional authority concerning the application of section
409A of the Code with respect to the distributions under the Plan, then the
provisions of the Plan regarding distributions shall be automatically amended to
permit such distributions to be made at the earliest time permitted under such
additional regulations, guidance or authority that is practicable and achieves
the intent of the Plan prior to its amendment to comply with section 409A of the
Code.

 

IX-2

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IN WITNESS WHEREOF, the Company has amended and restated this Plan on the 21st
day of November 2006.

              QUANEX CORPORATION
 
       
 
  By:                       /s/ Kevin P. Delaney
 
       
 
  Title:   Senior Vice President — General Counsel and Secretary