EXHIBIT 10.10

 

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QUANEX CORPORATION

 

EMPLOYEE PERFORMANCE STOCK AWARD AGREEMENT

 

<<Name>>
Grantee

 

Date of Award:

 

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Target Number of Shares of Common Stock:

 

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AWARD GRANT

 

1.                                      GRANT OF PERFORMANCE 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, AN
OPPORTUNITY TO RECEIVE SHARES OF THE COMPANY’S COMMON STOCK, $0.50 PAR VALUE PER
SHARE (THE “COMMON STOCK”), BASED UPON ATTAINMENT OF THE PERFORMANCE GOALS
DURING THE PERFORMANCE PERIOD ON THE TERMS AND CONDITIONS SET FORTH IN THIS
PERFORMANCE STOCK AWARD AGREEMENT (THIS “AGREEMENT”).

 

For purposes of this Agreement, the term “Performance Period” means the
         -year period beginning                      , 20    , and ending
                           , 20    . For purposes of this Agreement, the term
“Performance Goals” means                      .

 

2.                                      FINAL PERFORMANCE FACTOR. THE AGGREGATE
NUMBER OF SHARES OF THE COMMON STOCK TO BE ISSUED TO YOU UNDER THIS AGREEMENT
(THE “SHARES”) IS EQUAL TO THE TARGET NUMBER OF SHARES OF COMMON STOCK SET FORTH
ABOVE MULTIPLIED BY THE FINAL PERFORMANCE FACTOR (WHICH IS DETERMINED AS
PROVIDED BELOW):

 

2.1           THE FINAL PERFORMANCE FACTOR SHALL BE EQUAL TO ONE (1) IF (A) THE
COMPANY ACHIEVES THE TARGET MILESTONE DURING THE PERFORMANCE PERIOD AND DOES NOT
ACHIEVE THE MAXIMUM MILESTONE DURING THE PERFORMANCE PERIOD AND (B) YOU REMAIN
IN THE ACTIVE EMPLOY OF ONE OR MORE MEMBERS OF THE COMPANY GROUP THROUGH THE
LAST DAY OF THE PERFORMANCE PERIOD. FOR PURPOSES OF THIS AGREEMENT, THE “TARGET
MILESTONE” MEANS                       AND THE “MAXIMUM MILESTONE” MEANS
                     .

 

2.2           THE FINAL PERFORMANCE FACTOR SHALL BE EQUAL TO TWO (2) IF (A) THE
COMPANY ACHIEVES THE MAXIMUM MILESTONE DURING THE PERFORMANCE PERIOD AND (B) YOU
REMAIN IN THE ACTIVE EMPLOY OF ONE OR MORE MEMBERS OF THE COMPANY GROUP THROUGH
THE LAST DAY OF THE PERFORMANCE PERIOD.

 

2.3           THE FINAL PERFORMANCE FACTOR SHALL BE EQUAL TO THREE-FOURTHS (¾)
IF (A) THE COMPANY ACHIEVES THE THRESHOLD MILESTONE DURING THE PERFORMANCE
PERIOD AND DOES NOT ACHIEVE THE TARGET MILESTONE DURING THE PERFORMANCE PERIOD
AND (B) YOU REMAIN IN THE ACTIVE EMPLOY OF ONE OR MORE MEMBERS OF THE COMPANY
GROUP THROUGH THE LAST DAY OF THE PERFORMANCE PERIOD. FOR PURPOSES OF THIS
AGREEMENT, THE “THRESHOLD MILESTONE” MEANS                      .

 

2.4           IF THE PERFORMANCE STANDARD ACHIEVED WITH RESPECT TO A PARTICULAR
PERFORMANCE GOAL IS BETWEEN THE THRESHOLD MILESTONE AND THE TARGET MILESTONE OR
BETWEEN THE TARGET MILESTONE AND THE MAXIMUM MILESTONE, THE APPLICABLE FINAL
PERFORMANCE FACTOR SHALL BE DETERMINED BY INTERPOLATION.

 

For example, assume that the Committee grants an employee a performance based
compensation award under the Plan that is contingent upon achieving Performance
Goal A and Performance Goal B,

 

Employee without Change in Control Agreement

 

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weighting the importance of the goals as 50% and 50%, respectively. The
Committee establishes Threshold, Target and Maximum Milestones for each Goal.
The Final Performance Factor assigned for achieving the threshold, target and
maximum performance standards are ¾, 1 and 2, respectively. Finally, assume that
the employee is awarded 2,000 Performance Shares with a Target Value of $100, is
continuously employed by the Company throughout the Performance Period and
achieves the Maximum Milestone for Performance Goal A, and precisely halfway
between the Target and Maximum Milestones for Performance Goal B. The total
amount payable to the employee under the award is $250,000, which is determined
as follows:  The amount payable to the employee with respect to Performance
Goal A is $100,000 (50% (Performance Goal Percentage) x 2,000 (Performance
Shares) x $100 (Performance Share Value) x 1 (Final Performance Factor) =
$100,000), and the amount payable to the employee with respect to Performance
Goal B is $150,000 (50% (Performance Goal Percentage) x 2000 (Performance
Shares) x $100 (Target Value) x 1.5 (Final Performance Factor)= $150,000).

 

2.5           IF THE THRESHOLD MILESTONE IS NOT ACHIEVED DURING THE PERFORMANCE
PERIOD, THEN THE AWARD PURSUANT TO THIS AGREEMENT SHALL LAPSE AND BE FORFEITED
AS OF THE LAST DAY OF THE PERFORMANCE PERIOD.

 

2.6           THE COMMITTEE’S DETERMINATIONS WITH RESPECT TO THE PERFORMANCE
PERIOD FOR PURPOSES OF THIS AGREEMENT SHALL BE BINDING UPON ALL PERSONS. THE
COMMITTEE MAY NOT INCREASE THE AMOUNT PAYABLE UNDER THIS AGREEMENT.

 

3.                                      PAYMENT. THE COMPANY, ON BEHALF OF THE
EMPLOYER, SHALL CAUSE THE SHARES TO BE ISSUED TO YOU ON
                           , 20     (THE “PAYMENT DATE”), UNLESS OTHERWISE
PROVIDED UNDER THIS AGREEMENT.

 

4.                                      TERMINATION OF EMPLOYMENT. THE FOLLOWING
PROVISIONS WILL APPLY IN THE EVENT YOUR EMPLOYMENT WITH THE COMPANY AND ALL
AFFILIATES (COLLECTIVELY, THE “COMPANY GROUP”) TERMINATES ON OR BEFORE THE LAST
DAY OF THE PERFORMANCE PERIOD.

 

4.1           TERMINATION GENERALLY. IF YOUR EMPLOYMENT WITH THE COMPANY GROUP
TERMINATES ON OR BEFORE THE LAST DAY OF THE PERFORMANCE PERIOD FOR ANY REASON
OTHER THAN ONE OF THE REASONS DESCRIBED IN SECTIONS 4.2 THROUGH 4.4 BELOW, ALL
OF YOUR RIGHTS IN THIS AGREEMENT WILL LAPSE AND BE COMPLETELY FORFEITED ON THE
DATE YOUR EMPLOYMENT TERMINATES.

 

4.2           PERMANENT DISABILITY. NOTWITHSTANDING ANY OTHER PROVISION OF THIS
AGREEMENT TO THE CONTRARY, IF YOUR EMPLOYMENT WITH THE COMPANY GROUP TERMINATES
BECAUSE YOU INCUR A PERMANENT DISABILITY BEFORE THE LAST DAY OF THE PERFORMANCE
PERIOD THEN THE COMPANY WILL ISSUE TO YOU SHARES OF COMMON STOCK IN AN AMOUNT
EQUAL TO THE PRODUCT OF (1) AND (2) WHERE (1) IS THE NUMBER OF SHARES YOU WOULD
HAVE RECEIVED UNDER THIS AGREEMENT IF YOUR EMPLOYMENT WITH THE COMPANY GROUP HAD
NOT BEEN TERMINATED BEFORE THE END OF THE PERFORMANCE PERIOD AND (2) IS A
FRACTION, THE NUMERATOR OF WHICH IS THE NUMBER OF DAYS FROM THE BEGINNING OF THE
PERFORMANCE PERIOD THROUGH THE DATE YOUR EMPLOYMENT WITH THE COMPANY GROUP
TERMINATES AND THE DENOMINATOR OF WHICH IS THE NUMBER OF DAYS IN THE PERFORMANCE
PERIOD. ANY AMOUNT PAYABLE PURSUANT TO THIS SECTION 4.2 WILL BE PAID TO YOU ON
THE PAYMENT DATE. AFTER SUCH SHARES ARE ISSUED TO YOU, YOU WILL HAVE NO FURTHER
RIGHTS WITH RESPECT TO THIS AGREEMENT AND THE COMPANY GROUP WILL HAVE NO FURTHER
OBLIGATIONS TO YOU PURSUANT TO THIS AGREEMENT. FOR PURPOSES OF THIS SECTION 4.2,
YOU WILL HAVE A “PERMANENT DISABILITY” IF YOU ARE UNABLE TO ENGAGE IN ANY
SUBSTANTIAL GAINFUL ACTIVITY BY REASON OF ANY MEDICALLY DETERMINABLE PHYSICAL OR
MENTAL IMPAIRMENT WHICH CAN BE EXPECTED TO RESULT IN DEATH OR CAN BE EXPECTED TO
LAST FOR A CONTINUOUS PERIOD OF NOT LESS THAN 12 MONTHS.

 

4.3           DEATH. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO
THE CONTRARY, IF YOU DIE BEFORE THE LAST DAY OF THE PERFORMANCE PERIOD AND WHILE
IN THE ACTIVE EMPLOY OF ONE OR MORE MEMBERS OF THE COMPANY GROUP, THEN THE
COMPANY WILL ISSUE TO YOUR ESTATE SHARES OF COMMON STOCK IN AN AMOUNT EQUAL TO
THE PRODUCT OF (1) AND (2) WHERE (1) IS THE NUMBER OF SHARES YOU WOULD HAVE
RECEIVED UNDER THIS AGREEMENT IF YOUR EMPLOYMENT WITH THE COMPANY GROUP HAD NOT
BEEN TERMINATED BEFORE

 

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THE END OF THE PERFORMANCE PERIOD AND (2) IS A FRACTION, THE NUMERATOR OF WHICH
IS THE NUMBER OF DAYS FROM THE BEGINNING OF THE PERFORMANCE PERIOD THROUGH THE
DATE YOUR EMPLOYMENT WITH THE COMPANY GROUP TERMINATES AND THE DENOMINATOR OF
WHICH IS THE NUMBER OF DAYS IN THE PERFORMANCE PERIOD. ANY AMOUNT PAYABLE
PURSUANT TO THIS SECTION 4.3 WILL BE PAID TO YOUR ESTATE ON THE PAYMENT DATE.
AFTER SUCH SHARES ARE ISSUED, THE COMPANY GROUP WILL HAVE NO FURTHER OBLIGATIONS
TO YOU PURSUANT TO THIS AGREEMENT.

 

4.4           RETIREMENT. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT
TO THE CONTRARY, IF YOUR EMPLOYMENT WITH THE COMPANY GROUP TERMINATES DUE TO
YOUR RETIREMENT BEFORE THE LAST DAY OF THE PERFORMANCE PERIOD THEN THE COMPANY
WILL ISSUE TO YOU SHARES OF COMMON STOCK IN AN AMOUNT EQUAL TO THE PRODUCT OF
(1) AND (2) WHERE (1) IS THE NUMBER OF SHARES YOU WOULD HAVE RECEIVED UNDER THIS
AGREEMENT IF YOUR EMPLOYMENT WITH THE COMPANY GROUP HAD NOT BEEN TERMINATED
BEFORE THE END OF THE PERFORMANCE PERIOD AND (2) IS A FRACTION, THE NUMERATOR OF
WHICH IS THE NUMBER OF DAYS FROM THE BEGINNING OF THE PERFORMANCE PERIOD THROUGH
THE DATE YOUR EMPLOYMENT WITH THE COMPANY GROUP TERMINATES AND THE DENOMINATOR
OF WHICH IS THE NUMBER OF DAYS IN THE PERFORMANCE PERIOD. ANY AMOUNT PAYABLE
PURSUANT TO THIS SECTION 4.4 WILL BE PAID TO YOU ON THE PAYMENT DATE. AFTER SUCH
SHARES ARE ISSUED TO YOU, YOU WILL HAVE NO FURTHER RIGHTS WITH RESPECT TO THIS
AGREEMENT AND THE COMPANY GROUP WILL HAVE NO FURTHER OBLIGATIONS TO YOU PURSUANT
TO THIS AGREEMENT. FOR PURPOSES OF THIS SECTION 4.4 “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.

 

5.                                      TAX WITHHOLDING. TO THE EXTENT THAT THE
ISSUANCE OF SHARES PURSUANT TO THIS AGREEMENT RESULTS IN INCOME, WAGES OR OTHER
COMPENSATION TO YOU FOR ANY INCOME, EMPLOYMENT OR OTHER TAX PURPOSES WITH
RESPECT TO WHICH THE COMPANY OR THE LEGAL ENTITY THAT IS A MEMBER OF THE COMPANY
GROUP AND THAT IS CLASSIFIED AS YOUR EMPLOYER (THE “EMPLOYER”) HAS A WITHHOLDING
OBLIGATION, YOU SHALL DELIVER TO THE COMPANY AT THE TIME OF SUCH RECEIPT OR
ISSUANCE, AS THE CASE MAY BE, SUCH AMOUNT OF MONEY AS THE COMPANY OR THE
EMPLOYER 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 OR FROM ANY CASH OR STOCK REMUNERATION OR OTHER PAYMENT THEN OR
THEREAFTER PAYABLE TO YOU BY THE COMPANY OR THE EMPLOYER ANY TAX REQUIRED TO BE
WITHHELD BY REASON OF SUCH TAXABLE INCOME, WAGES OR COMPENSATION INCLUDING
(WITHOUT LIMITATION) SHARES OF COMMON STOCK 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.

 

6.                                      NONTRANSFERABILITY. THIS AGREEMENT IS
NOT TRANSFERABLE BY YOU OTHERWISE THAN BY WILL OR BY THE LAWS OF DESCENT AND
DISTRIBUTION. YOUR RIGHTS UNDER THIS AGREEMENT 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, 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.

 

7.                                      CAPITAL ADJUSTMENTS AND REORGANIZATIONS.
THE EXISTENCE OF THE AWARD GRANTED UNDER THIS AGREEMENT 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.

 

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8.                                      AWARD UNDER THIS AGREEMENT DOES NOT
AWARD ANY RIGHTS OF A SHAREHOLDER. YOU SHALL NOT HAVE THE VOTING RIGHTS OR ANY
OF THE OTHER RIGHTS, POWERS OR PRIVILEGES OF A HOLDER OF THE COMMON STOCK WITH
RESPECT TO THE AWARD GRANTED TO YOU UNDER THIS AGREEMENT. ONLY AFTER THE SHARES
ARE ISSUED IN EXCHANGE FOR YOUR RIGHTS UNDER THIS AGREEMENT WILL YOU HAVE ALL OF
THE RIGHTS OF A SHAREHOLDER WITH RESPECT TO SUCH SHARES ISSUED IN EXCHANGE FOR
YOUR RIGHTS UNDER THIS AGREEMENT.

 

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.                               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.                               LIMIT OF LIABILITY. UNDER NO CIRCUMSTANCES
WILL THE COMPANY OR AN 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.

 

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.                               EMPLOYER LIABLE FOR PAYMENT. THE EMPLOYER IS
LIABLE FOR THE PAYMENT OF ANY AMOUNTS THAT BECOME DUE UNDER THIS AGREEMENT.

 

16.                               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 THIS AGREEMENT. CAPITALIZED TERMS
THAT ARE NOT DEFINED HEREIN SHALL HAVE THE MEANINGS ASCRIBED TO SUCH TERMS IN
THE PLAN.

 

In accepting the award granted in this Agreement you accept and agree to be
bound by all the terms and conditions of the Plan, this Agreement and the Terms
and Conditions.

 

 

QUANEX CORPORATION

 

 

 

 

 

 

 

 

Raymond Jean – Chief Executive Officer

 

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