EXHIBIT 10.4

 

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QUANEX CORPORATION

 

EMPLOYEE RESTRICTED STOCK AWARD AGREEMENT

 

<<Full Name>>
Grantee

 

Date of Award:

 

<<                         >>

 

 

 

Number of Shares:

 

<<                         >>

 

 

 

General Vesting Schedule/Restriction Period:

 

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

 

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

 

AWARD OF RESTRICTED STOCK

 

1.                                      GRANT OF RESTRICTED STOCK AWARD. THE
COMPENSATION COMMITTEE (THE “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 SHARES (THE “SHARES”) OF THE COMPANY’S COMMON
STOCK, $0.50 PAR VALUE PER SHARE (THE “COMMON STOCK”), SET FORTH ABOVE AS
RESTRICTED STOCK ON THE FOLLOWING TERMS AND CONDITIONS:

 

During the Restricted Period, the Shares of Restricted Stock will be evidenced
by entries in the stock register of the Company reflecting that such Shares of
Restricted Stock have been issued in your name. For purposes of this Agreement,
the term “Restricted Period” means the period designated by the Committee during
which the Shares may not be sold, assigned, transferred, pledged, or otherwise
encumbered.

 

The Shares that are awarded hereby to you as Restricted Stock shall be subject
to the prohibitions and restrictions set forth herein with respect to the sale
or other disposition of such Shares and the obligation to forfeit and surrender
such Shares to the Company (the “Forfeiture Restrictions”). The Restricted
Period and all Forfeiture Restrictions on the Restricted Stock covered hereby
shall lapse as to those shares when the shares become vested and you meet all
other terms and conditions of this Agreement.

 

2.                                      TERMINATION OF EMPLOYMENT. THE FOLLOWING
PROVISIONS WILL APPLY IN THE EVENT YOUR EMPLOYMENT WITH THE COMPANY AND ALL
AFFILIATES (COLLECTIVELY, THE “COMPANY GROUP”) TERMINATES BEFORE THE THIRD
ANNIVERSARY OF THE DATE OF AWARD (THE “THIRD ANNIVERSARY DATE”) UNDER THE
AGREEMENT:

 

2.1           TERMINATION GENERALLY. EXCEPT AS SPECIFIED IN SECTIONS 2.2 OR 2.3
BELOW, IF YOUR EMPLOYMENT WITH THE COMPANY GROUP TERMINATES ON OR BEFORE THE
THIRD ANNIVERSARY DATE, THE FORFEITURE RESTRICTIONS THEN APPLICABLE TO THE
SHARES OF RESTRICTED STOCK SHALL NOT LAPSE AND THE NUMBER OF SHARES OF
RESTRICTED STOCK THEN SUBJECT TO THE FORFEITURE RESTRICTIONS SHALL BE FORFEITED
TO THE COMPANY ON THE DATE YOUR EMPLOYMENT TERMINATES.

 

Employee

[Cliff Vesting]—[Graded Vesting]

 

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2.2           DISABILITY. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT
TO THE CONTRARY, IF YOU INCUR A DISABILITY BEFORE THE THIRD ANNIVERSARY DATE AND
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][DATE OF GRANT] AND ENDING ON THE DATE OF YOUR
DISABILITY BY 1095.

 

2.3           DEATH. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO
THE CONTRARY, IF YOU DIE BEFORE THE THIRD ANNIVERSARY DATE AND 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][DATE OF GRANT] AND ENDING ON THE DATE OF YOUR DEATH BY 1095.

 

3.                                      TAX WITHHOLDING. TO THE EXTENT THAT THE
RECEIPT OF THE SHARES OF RESTRICTED STOCK OR THE LAPSE OF ANY FORFEITURE
RESTRICTIONS RESULTS IN INCOME, WAGES OR OTHER COMPENSATION TO YOU FOR ANY
INCOME, EMPLOYMENT OR OTHER TAX PURPOSES WITH RESPECT TO WHICH THE COMPANY HAS A
WITHHOLDING OBLIGATION, YOU SHALL DELIVER TO THE COMPANY AT THE TIME OF SUCH
RECEIPT OR LAPSE, AS THE CASE MAY BE, SUCH AMOUNT OF MONEY AS THE COMPANY MAY
REQUIRE TO MEET ITS OBLIGATION UNDER APPLICABLE TAX LAWS OR REGULATIONS, AND, IF
YOU FAIL TO DO SO, THE COMPANY IS AUTHORIZED TO WITHHOLD FROM THE SHARES AWARDED
HEREBY OR FROM ANY CASH OR STOCK REMUNERATION OR OTHER PAYMENT THEN OR
THEREAFTER PAYABLE TO YOU ANY TAX REQUIRED TO BE WITHHELD BY REASON OF SUCH
TAXABLE INCOME, WAGES OR COMPENSATION SUFFICIENT TO SATISFY THE WITHHOLDING
OBLIGATION BASED ON THE LAST PER SHARE SALES PRICE OF THE COMMON STOCK FOR THE
TRADING DAY IMMEDIATELY PRECEDING THE DATE THAT THE WITHHOLDING OBLIGATION
ARISES, AS REPORTED IN THE NEW YORK STOCK EXCHANGE COMPOSITE TRANSACTIONS.

 

4.                                      NONTRANSFERABILITY. THIS AGREEMENT IS
NOT TRANSFERABLE BY YOU OTHERWISE THAN BY WILL OR BY THE LAWS OF DESCENT AND
DISTRIBUTION. THE SHARES OF RESTRICTED STOCK AWARDED HEREBY 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) TO THE EXTENT THEN SUBJECT TO THE FORFEITURE RESTRICTIONS. ANY
SUCH ATTEMPTED SALE, ASSIGNMENT, PLEDGE, EXCHANGE, HYPOTHECATION, TRANSFER,
ENCUMBRANCE OR DISPOSITION IN VIOLATION OF THIS AGREEMENT SHALL BE VOID AND THE
COMPANY GROUP SHALL NOT BE BOUND THEREBY.

 

Further, the Shares awarded hereby that are no longer subject to Forfeiture
Restrictions 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. Upon the lapse of the Forfeiture
Restrictions with respect to Shares awarded hereby such Shares 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).

 

5.                                      CAPITAL ADJUSTMENTS AND REORGANIZATIONS.
THE EXISTENCE OF THE SHARES OF RESTRICTED STOCK SHALL NOT AFFECT IN ANY WAY THE
RIGHT OR POWER OF THE COMPANY OR ANY COMPANY THE STOCK OF WHICH IS AWARDED
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.

 

6.                                      RIGHTS REGARDING DISTRIBUTIONS MADE BY
THE COMPANY DURING THE RESTRICTED PERIOD. DURING THE RESTRICTED PERIOD, (A) ANY
SECURITIES OF THE COMPANY DISTRIBUTED BY THE COMPANY IN RESPECT OF THE SHARES OF
RESTRICTED STOCK WILL BE EVIDENCED BY ENTRIES IN THE APPROPRIATE SECURITIES
REGISTER OF THE COMPANY REFLECTING THAT SUCH SECURITIES OF THE COMPANY, IF ANY,
HAVE BEEN ISSUED IN YOUR NAME (THE “RETAINED COMPANY SECURITIES”) AND (B) ANY
SECURITIES OF ANY COMPANY OTHER THAN THE COMPANY OR ANY OTHER PROPERTY (OTHER
THAN REGULAR CASH DIVIDENDS) DISTRIBUTED BY THE COMPANY IN RESPECT OF THE SHARES
OF RESTRICTED STOCK WILL BE EVIDENCED

 

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IN YOUR NAME BY SUCH CERTIFICATES OR IN SUCH OTHER MANNER AS THE COMPANY
DETERMINES (THE “RETAINED OTHER SECURITIES AND PROPERTY”) AND MAY BEAR A
RESTRICTIVE LEGEND TO THE EFFECT THAT OWNERSHIP OF SUCH RETAINED OTHER
SECURITIES AND PROPERTY AND THE ENJOYMENT OF ALL RIGHTS APPURTENANT THERETO, ARE
SUBJECT TO THE RESTRICTIONS, TERMS, AND CONDITIONS PROVIDED IN THE PLAN AND THIS
AGREEMENT. THE RETAINED COMPANY SECURITIES AND THE RETAINED OTHER SECURITIES AND
PROPERTY (COLLECTIVELY, THE “RETAINED DISTRIBUTIONS”) SHALL BE SUBJECT TO THE
SAME RESTRICTIONS, TERMS AND CONDITIONS AS ARE APPLICABLE TO THE SHARES OF
RESTRICTED STOCK.

 

7.                                      RIGHTS WITH RESPECT TO SHARES OF
RESTRICTED STOCK AND RETAINED DISTRIBUTIONS DURING RESTRICTED PERIOD. YOU SHALL
HAVE THE RIGHT TO VOTE THE SHARES OF RESTRICTED STOCK AWARDED TO YOU AND TO
RECEIVE AND RETAIN ALL REGULAR CASH DIVIDENDS (WHICH WILL BE PAID 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), AND TO EXERCISE ALL OTHER RIGHTS, POWERS AND PRIVILEGES OF A HOLDER OF
THE COMMON STOCK, WITH RESPECT TO SUCH SHARES OF RESTRICTED STOCK, WITH THE
EXCEPTION THAT (A) YOU SHALL NOT BE ENTITLED TO HAVE CUSTODY OF SUCH SHARES OF
RESTRICTED STOCK UNTIL THE FORFEITURE RESTRICTIONS APPLICABLE THERETO SHALL HAVE
LAPSED, (B) THE COMPANY SHALL RETAIN CUSTODY OF ALL RETAINED DISTRIBUTIONS MADE
OR DECLARED WITH RESPECT TO THE SHARES OF RESTRICTED STOCK UNTIL SUCH TIME, IF
EVER, AS THE FORFEITURE RESTRICTIONS APPLICABLE TO THE SHARES OF RESTRICTED
STOCK WITH RESPECT TO WHICH SUCH RETAINED DISTRIBUTIONS SHALL HAVE BEEN MADE,
PAID, OR DECLARED SHALL HAVE LAPSED, AND SUCH RETAINED DISTRIBUTIONS SHALL NOT
BEAR INTEREST OR BE SEGREGATED IN SEPARATE ACCOUNTS AND (C) YOU MAY NOT SELL,
ASSIGN, TRANSFER, PLEDGE, EXCHANGE, ENCUMBER, OR DISPOSE OF THE SHARES OF
RESTRICTED STOCK OR ANY RETAINED DISTRIBUTIONS DURING THE RESTRICTED PERIOD.
DURING THE RESTRICTED PERIOD, THE COMPANY MAY, IN ITS SOLE DISCRETION, ISSUE
CERTIFICATES FOR SOME OR ALL OF THE SHARES OF RESTRICTED STOCK, IN WHICH CASE
ALL SUCH CERTIFICATES SHALL BE DELIVERED TO THE CORPORATE SECRETARY OF THE
COMPANY OR TO SUCH OTHER DEPOSITORY AS MAY BE DESIGNATED BY THE COMMITTEE AS A
DEPOSITORY FOR SAFEKEEPING UNTIL THE FORFEITURE OF SUCH SHARES OF RESTRICTED
STOCK OCCURS OR THE FORFEITURE RESTRICTIONS LAPSE. WHEN REQUESTED BY THE
COMPANY, YOU SHALL EXECUTE SUCH STOCK POWERS OR OTHER INSTRUMENTS OF ASSIGNMENT
AS THE COMPANY REQUESTS RELATING TO TRANSFER TO THE COMPANY OF ALL OR ANY
PORTION OF SUCH SHARES OF RESTRICTED STOCK AND ANY RETAINED DISTRIBUTIONS THAT
ARE FORFEITED IN ACCORDANCE WITH THE PLAN AND THIS AGREEMENT.

 

8.                                      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.

 

9.                                      SECTION 83(B) ELECTION. YOU SHALL NOT
EXERCISE THE ELECTION PERMITTED UNDER SECTION 83(B) OF THE CODE WITH RESPECT TO
THE SHARES OF RESTRICTED STOCK WITHOUT THE WRITTEN APPROVAL OF THE CHIEF
FINANCIAL OFFICER OR GENERAL COUNSEL OF THE COMPANY.

 

10.                               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 YOU AND
THE COMPANY OR ANY AFFILIATE OR GUARANTEE THE RIGHT TO REMAIN EMPLOYED BY THE
COMPANY OR ANY AFFILIATE FOR ANY SPECIFIED TERM.

 

11.                               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.

 

12.                               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.

 

13.                               LIMIT OF LIABILITY. UNDER NO CIRCUMSTANCES
WILL THE COMPANY OR ANY AFFILIATE 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.

 

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14.                               MISCELLANEOUS. THIS AGREEMENT IS AWARDED
PURSUANT TO AND IS SUBJECT TO ALL OF THE PROVISIONS OF THE PLAN, INCLUDING
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 THE AGREEMENT. CAPITALIZED TERMS
THAT ARE NOT DEFINED HEREIN SHALL HAVE THE MEANINGS ASCRIBED TO SUCH TERMS IN
THE PLAN OR THIS AGREEMENT.

 

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

 

 

QUANEX CORPORATION

 

 

 

 

 

 

 

 

Raymond Jean – Chief Executive Officer

 

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