EXHIBIT 10.4

QUANEX BUILDING PRODUCTS CORPORATION

DIRECTOR

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 Board of Directors (the “Board”) 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 earliest of (a) the Expiration Date
set forth above or as extended pursuant to Section 3 hereof (the “Expiration
Date”) or (b) the applicable date following (x) the date on which you cease to
be a member of the Board or (y) a Change in Control of the Company, in each case
as specified in Section 2 of this Stock Option Agreement (this “Agreement”).

Director

--------------------------------------------------------------------------------

2. TERMINATION OF MEMBERSHIP/CHANGE IN CONTROL. The following provisions will
apply in the event you cease to be a member of the Board, 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 you cease to be a member of the Board for any
reason, then your rights under the Option (to the extent unvested) shall
[                    ]1.

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 on or before the Expiration Date and
on or before the date you cease to be a member of the Board, then your rights
under the Option that have not then vested shall vest immediately prior to the
occurrence of the Change in Control. All rights in the Option shall terminate
and become null and void on the earliest of the Expiration Date or three years
after the date of the Change in Control of the Company.

2.3 Retirement or Disability. If you cease to be a member of the Board due to
your Retirement or Disability, then the Option shall continue to vest after such
termination of service until the earlier of the Expiration Date or three years
after the date you cease to be a member of the Board as a result of Retirement
or Disability. For purposes of this Section 2.3, the term “Retirement” means
your voluntary cessation of your membership as a director with the Board on or
after the date you serve six years or two consecutive terms as a director.

2.4 Death. If you cease to be a member of the Board due to your death, then the
Option shall continue to vest after such termination of service 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.

 

 

1  Treatment of unvested Options in connection with a director’s cessation of
service for reasons other than death, disability, or retirement, will be
determined by the Board in its discretion on an award-by-award basis. In such an
event, unvested Options will be either forfeited in their entirety, vested in
their entirety, or vested on a pro rata basis according to the number of days
served by the director during the vesting period.

 

Director

 

2

--------------------------------------------------------------------------------

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.

 

6. 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.

 

7. 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.

 

8. 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.

 

9. NOT A SERVICE OR EMPLOYMENT AGREEMENT. This Agreement is not a service or
employment agreement, and no provision of this Agreement shall be construed or
interpreted to create a service or employment relationship between the Grantee
and the Company or any of its Affiliates or guarantee the right to remain as a
director of or employed by the Company or any of its Affiliates for any
specified term.

 

10. 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.

 

11. LIMIT OF LIABILITY. Under no circumstances will the Company 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.

 

Director

 

3

--------------------------------------------------------------------------------

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. 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.

 

14. 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]

 

Director

 

4