<PAGE>   1
                                                                   EXHIBIT 10.28

                                    AMENDMENT
                            TO THE QUANEX CORPORATION
              1996 EMPLOYEE STOCK OPTION AND RESTRICTED STOCK PLAN


         THIS AGREEMENT by Quanex Corporation (the "Company"),

                                  WITNESSETH:

         WHEREAS, the Company maintains the Plan known as the "Quanex
Corporation 1996 Employee Stock Option and Restricted Stock Plan" (the "Plan");

         WHEREAS, the Company retained the right in Section 12 of the Plan to
amend the Plan from time to time; and

         WHEREAS, the Board of Directors of the Company has approved the
following amendment to the Plan;

        NOW, THEREFORE, effective July 1, 2000, the Plan is hereby amended,
effective with respect to both awards of restricted stock outstanding on the
date of the adoption of this amendment and all restricted stock granted under
the Plan in the future, as follows:

         (1)      Section 8.D is hereby amended and restated in its entirety as
                  follows:

                  D. CONSEQUENCE OF VESTING. Subject to Section 9, when shares
         of Restricted Stock become vested, the Restricted Period shall be
         terminated as to those shares, and, upon satisfaction of the Company's
         required tax withholding obligation in the manner specified in Section
         8.E, the Company shall deliver to the Restricted Stock Award recipient
         (or his estate, if applicable) a Common Stock certificate representing
         those shares and all Retained Distributions made or declared with
         respect to those shares.

         (2)      Section 8.E is hereby amended and restated in its entirety as
                  follows:

                  E. WITHHOLDING OF TAXES. When shares of Restricted Stock
         become vested, the Restricted Stock Award recipient shall (i) pay the
         Company an amount of money necessary to satisfy the Company's tax
         withholding obligations under the Code and applicable state or local
         law arising from the vesting of such Restricted Stock or, (ii) elect to
         receive a reduced number of shares of Common Stock to satisfy the
         Company's tax withholding obligations.

                  At the time a Restricted Stock Award recipient's shares of
         Restricted Stock become vested, the Company shall calculate the amount
         of the Company's tax

<PAGE>   2

         withholding obligations on the assumption that all such vested shares
         of Restricted Stock are made available for delivery. The Restricted
         Stock Award recipient may pay the Company the amount of the Company's
         tax withholding obligations by cashier's check drawn on a national
         banking association and payable to the order of the Company in United
         States dollars. Such payment, if any, shall be delivered to the Company
         within three days after the date of the lapse of restrictions. If the
         Restricted Stock Award recipient does not timely pay the Company an
         amount necessary to satisfy the Company's withholding obligation, he
         shall be deemed to have elected to have the Company withhold shares of
         the Restricted stock to satisfy the Company's withholding obligation.
         In the event that a Restricted Stock Recipient is deemed to have made
         such an election, the Company shall (i) reduce the number of vested
         shares of Restricted Stock made available for delivery so that the Fair
         Market Value of the shares withheld on the vesting date approximates
         the amount of tax the Company is obliged to withhold and (ii) in lieu
         of the withheld shares, remit cash to the United States Treasury and
         other applicable governmental authorities, on behalf of the Restricted
         Stock Award recipient, in the amount of the withholding tax due.

                  If the Restricted Stock Award recipient is deemed to have
         elected to receive a reduced number of shares of Common Stock to
         satisfy the Company's tax withholding obligations, the Company shall
         withhold only the number of whole shares of Common Stock necessary to
         satisfy its minimum statutory withholding obligation, which shall be
         based on minimum statutory withholding rates for federal and state tax
         purposes, including payroll taxes, that are applicable to the
         Restricted Stock Award recipient's taxable income arising from the
         vesting of his Restricted Stock. If the Fair Market Value of the
         withheld shares does not equal Company's minimum statutory withholding
         amount due, the Company shall withhold whole shares with a Fair Market
         Value slightly less than the minimum statutory withholding amount due.
         The Restricted Stock Award recipient shall pay to the Company the
         remaining balance of the minimum statutory withholding amount due by
         cashier's check drawn on a national banking association and payable to
         the order of the Company in United States dollars.

                  The withheld shares of Restricted Stock not made available for
         delivery by the Company shall be retained as treasury stock or will be
         canceled and, in either case, the recipient's right, title and interest
         in such Restricted Stock shall terminate.

                  All references to the Restricted Stock recipient in this
         Section 8.E shall be deemed to be references to the estate of the
         Restricted Stock recipient, if applicable.