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Exhibit 10.6

CHANGE IN CONTROL AGREEMENT

BETWEEN QUANEX BUILDING PRODUCTS CORPORATION

AND                     

     This Agreement between Quanex Building Products Corporation, a Delaware corporation
(the “Company”), and                      (the “Executive”) is effective as of the Effective Date (as
defined herein), and is subject to and contingent upon the closing of the Contemplated Transactions
(as defined in that certain Waiver and Release Agreement by and between the Company and Executive
dated November 19, 2007). Certain capitalized terms used herein are defined in Section 21.

W I T N E S S E T H:

     Whereas, the Company considers it to be in the best interests of its stockholders to
encourage the continued employment of certain key employees of the Company notwithstanding the
possibility, threat or occurrence of a Change in Control of the Company (as that phrase is defined
in Section 2); and

     Whereas, the Executive is a key employee of the Company; and

     Whereas, the Company believes that the possibility of the occurrence of a Change in
Control of the Company may result in the termination by the Executive of the Executive’s employment
by the Company or in the distraction of the Executive from the performance of his duties to the
Company, in either case to the detriment of the Company and its stockholders; and

     Whereas, the Company previously recognized that the Executive could suffer adverse
financial and professional consequences if a Change in Control of the Company were to occur and
entered into this Agreement to protect the Executive if a Change in Control of the Company occurs;
and

     Whereas, under current Internal Revenue Service guidance, the Agreement is subject to
Section 409A of the Internal Revenue Code of 1986, as amended by the American Jobs Creation Act of
2004 (“Section 409A”);

     Now, Therefore, the parties agree, effective as stated above, as follows:

     Section 1. Other Employment Arrangements.

     (a) Except as specified below in this paragraph, this Agreement does not affect the
Executive’s existing or future employment arrangements with the Company unless a Change in Control
of the Company shall have occurred before the expiration of the term of this Agreement. The
Executive’s employment with the Company shall continue to be governed by the Executive’s existing
or future employment agreements with the Company, if any, or, in the absence of any employment
agreement, shall continue to be at the will of the Board of Directors or, if the Executive is not
an officer of the Company at the time of the termination of the Executive’s employment with the
Company, the will of the Chief Executive Officer of the Company, except that if (i) a Change in
Control of the Company shall have occurred before the expiration of the term of this Agreement, and
(ii) the Executive’s employment with the Company is terminated (whether by the Executive or the
Company or automatically as provided in Section 3) after the occurrence of that Change in Control
of the Company, then the Executive shall be entitled to receive certain benefits as provided in
this Agreement.

     (b) Notwithstanding anything contained in this Agreement to the contrary, if following the
commencement of any discussion with a third person that ultimately results in a Change in Control
of the Company, (i) the Executive’s employment with the Company is terminated, (ii) the Executive
is removed

 

 

from any material duties or position with the Company, (iii) the Executive’s Base Salary
is reduced, or (iv) the Executive’s annual bonus is reduced to an amount less than the Benchmark
Bonus, then for all purposes of this Agreement, such Change in Control of the Company shall be
deemed to have occurred on the date immediately prior to the date of such termination, removal, or
reduction.

     (c) Nothing in this Agreement shall prevent or limit the Executive’s continuing or future
participation in any plan, program, policy or practice of or provided by the Company or any of its
Affiliates and for which the Executive may qualify, nor shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or agreement with the Company or
any of its Affiliates. Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any plan, program, policy or practice of or provided by, or any contract
or agreement with, the Company or any of its Affiliates at or subsequent to the date of termination
of the Executive’s employment with the Company shall be payable or otherwise provided in accordance
with such plan, program, policy or practice or contract or agreement except as explicitly modified
by this Agreement.

     Section 2. Change in Control of the Company. For purposes of this Agreement, a “Change in Control
of the Company” shall mean the occurrence of any of the following after the Effective Date:

     (a) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Exchange Act) (a “ Covered Person”) of beneficial ownership (within the meaning
of rule 13d-3 promulgated under the Exchange Act) of 20 percent or more of either (i) the then
outstanding shares of the common stock of the Company (the “Outstanding Company Common Stock”), or
(ii) the combined voting power of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that for purposes of this subsection (a) of this Section 2, the
following acquisitions shall not constitute a Change in Control of the Company: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company or any entity
controlled by the Company, or (iv) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or

     (b) individuals who, as of the Effective Date, constitute the Board of Directors (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the Board of
Directors; provided, however, that any individual becoming a director subsequent to
the Effective Date whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a Covered Person other
than the Board; or

     (c) the consummation of (xx) a reorganization, merger or consolidation or sale of the Company,
or (yy) a disposition of all or substantially all of the assets of the Company (a “Business
Combination”), in each case, unless, following such Business Combination, (i) all or substantially
all of the individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, direct or indirectly, more than 80 percent of,
respectively, the then outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including, without limitation, a corporation
which as a result of such transaction owns the Company or all or substantially all of the Company’s
assets either directly or

 

 

through one or more subsidiaries) in substantially the same proportions
as their ownership immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Covered Person
(excluding any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or indirectly, 20 percent or
more of, respectively, the then outstanding shares of common stock of the corporation resulting
from such Business Combination or the combined voting power of the then outstanding voting
securities of such corporation, except to the extent that such ownership existed prior to the
Business Combination, and (iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination, were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of the Board of Directors,
providing for such Business Combination; or

     (d) the approval by the stockholders of the Company of a complete liquidation or dissolution
of the Company.

     Section 3. Term of This Agreement. The term of this Agreement shall begin on the Effective Date
and, unless automatically extended pursuant to the second sentence of this Section 3, shall expire
on the first to occur of:

     (i) the Executive’s death or the Executive’s Disability, which events shall
also be deemed automatically to terminate Executive’s employment by the Company;

     (ii) the termination by the Executive or the Company of the Executive’s
employment by the Company; or

     (iii) the end of the last day (the “Expiration Date”) of:

     (1) the three-year period beginning on the Effective Date (or
any period for which the term of this Agreement shall have been
automatically extended pursuant to the second sentence of this
Section 3) if no Change in Control of the Company shall have
occurred during that three-year period (or any period for which the
term of this Agreement shall have been automatically extended
pursuant to the second sentence of this Section 3); or

     (2) if one or more Changes in Control of the Company shall have
occurred during the three-year period beginning on the Effective
Date (or any period for which the term of this Agreement shall have
been automatically extended pursuant to the second sentence of this
Section 3), the three-year period beginning on the date on which the
last Change in Control of the Company occurred.

If (i) the term of this Agreement shall not have expired as a result of the occurrence of one of
the events described in clause (i) or (ii) of the immediately preceding sentence, and (ii) the
Company shall not have given notice to the Executive at least ninety (90) days before the
Expiration Date that the term of this Agreement will expire on the Expiration Date, then the term
of this Agreement shall be automatically extended for successive one-year periods (the first such
period to begin on the day immediately following the Expiration Date) unless the Company shall have given notice to the Executive at least ninety
(90) days before the end of any one-year period for which the term of this Agreement shall have
been automatically extended that such term will expire at the end of that one-year period. The
expiration of the term of this

 

 

 Agreement shall not terminate this Agreement itself or affect the
right of the Executive or the Executive’s legal representatives to enforce the payment of any
amount or other benefit to which the Executive was entitled before the expiration of the term of
this Agreement or to which the Executive became entitled as a result of the event (including the
termination, whether by the Executive or the Company or automatically as provided in this
Section 3, of the Executive’s employment by the Company) that caused the term of this Agreement to
expire.

     Section 4. Event of Termination for Cause. An “Event of Termination for Cause“shall have occurred
if, after a Change in Control of the Company, the Executive shall have committed:

     (i) gross negligence or willful misconduct in connection with his duties or in
the course of his employment with the Company;

     (ii) an act of fraud, embezzlement or theft in connection with his duties or in
the course of his employment with the Company;

     (iii) intentional wrongful damage to property of the Company;

     (iv) intentional wrongful disclosure of secret processes or confidential
information of the Company; or

     (v) an act leading to a conviction of a felony or a misdemeanor involving moral
turpitude.

For purposes of this Agreement, no act, or failure to act, on the part of the Executive shall be
deemed “intentional“if it was due primarily to an error in judgment or negligence, but shall be
deemed “intentional” only if done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that his action or omission was in the best interest of the Company.
Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated as a
result of an “Event of Termination for Cause” hereunder unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less
than three-quarters of the Board of Directors then in office at a meeting of the Board of Directors
called and held for such purpose (after reasonable notice to the Executive and an opportunity for
the Executive, together with his counsel, to be heard before the Board of Directors), finding that,
in the good faith opinion of the Board of Directors, the Executive had committed an act set forth
above in this Section 4 and specifying the particulars thereof in detail. Nothing herein shall
limit the right of the Executive or his legal representatives to contest the validity or propriety
of any such determination.

     Section 5. An Event of Termination for Good Reason. An “Event of Termination for Good Reason”
shall mean the occurrence of any of the following on or after a Change in Control of the Company:

     (i) the Company or the Successor assigns to the Executive any duties
inconsistent with the Executive’s position (including offices, titles and reporting
requirements), authority, duties or responsibilities with the Company in effect
immediately before the occurrence of the first Change in Control of the Company or
otherwise make any change in any such position, authority, duties or
responsibilities;

     (ii) the Company or the Successor removes the Executive from, or fails to
re-elect or appoint the Executive to, any duties or position with the Company that
were assigned or held by the Executive immediately before the occurrence of the
first Change

 

 

in Control of the Company, except that a nominal change in the
Executive’s title that is merely descriptive and does not affect rank or status
shall not constitute such an event;

     (iii) the Company or the Successor takes any other action that results in a
material diminution in such position, authority, duties or responsibilities or
otherwise take any action that materially interferes therewith;

     (iv) the Company or the Successor reduces the Executive’s annual base salary as
in effect immediately before the occurrence of the first Change in Control of the
Company or as the Executive’s annual base salary may be increased from time to time
after that occurrence (the “Base Salary”);

     (v) the Company or the Successor reduces the Executive’s annual bonus (x) to an
amount less than                      ($                    ) [target bonus on effective date] at
any time on or prior to the third anniversary of the Effective Date, or (y) to an
amount less than the average of the two annual bonuses earned by such Executive with
respect to the two preceding years at any time after the third anniversary of the
Effective Date (the amount determined pursuant to clause (x) or (y), as applicable,
is referred to herein as the “Benchmark Bonus”);

     (vi) the Company or the Successor relocates the Executive’s principal office
outside of the portion of the metropolitan area of the City of Houston, Texas that
is located within the highway known as “Beltway 8”;

     (vii) the Company or the Successor fails to (x) continue in effect any bonus,
incentive, profit sharing, performance, savings, retirement or pension policy, plan,
program or arrangement (such policies, plans, programs and arrangements collectively
being referred to herein as “Basic Benefit Plans”), including, but not limited to,
any deferred compensation, supplemental executive retirement or other retirement
income, stock option, stock purchase, stock appreciation, or similar policy, plan,
program or arrangement of the Company, in which the Executive was a participant
immediately before the occurrence of the first Change in Control of the Company, or
any substitute plan adopted by the Board of Directors and in which the Executive was
a participant immediately before the occurrence of the last Change in Control of the
Company, unless an equitable and reasonably comparable arrangement (embodied in a
substitute or alternative benefit or plan) shall have been made with respect to such
Basic Benefit Plan promptly following the occurrence of the last Change in Control
of the Company, or (y) continue the Executive’s participation in any Basic Benefit
Plan (or any substitute or alternative plan) on substantially the same basis, both
in terms of the amount of benefits provided to the Executive (which are in any event
always subject to the terms of any applicable Basic Benefit Plan) and the level of
the Executive’s participation relative to other participants, as existed immediately
before the occurrence of the first Change in Control of the Company;

     (viii) the Company or the Successor fails to continue to provide the Executive
with benefits substantially similar to those enjoyed by the Executive under any of
the Company’s other Executive benefit plans, policies, programs and arrangements,
including, but not limited to, life insurance, medical, dental, health, hospital,
accident or disability plans, in which the Executive was a participant immediately before
the occurrence of the first Change in Control of the Company;

 

 

     (ix) the Company or the Successor takes any action that would directly or
indirectly materially reduce any other non-contractual benefits that were provided
to the Executive by the Company immediately before the occurrence of the first
Change in Control of the Company or deprive the Executive of any material fringe
benefit enjoyed by the Executive immediately before the occurrence of the first
Change in Control of the Company;

     (x) the Company or the Successor fails to provide the Executive with the number
of paid vacation days to which the Executive was entitled in accordance with the
Company’s vacation policy in effect immediately before the occurrence of the first
Change in Control of the Company;

     (xi) the Company or the Successor fails to continue to provide the Executive
with office space, related facilities and support personnel (including, but not
limited to, administrative and secretarial assistance) (y) that are both
commensurate with Executive’s responsibilities to and position with the Company
immediately before the occurrence of the first Change in Control of the Company and
not materially dissimilar to the office space, related facilities and support
personnel provided to other Executives of the Company having comparable
responsibility to the Executive, or (z) that are physically located at the Company’s
principal executive offices;

     (xii) the Company or the Successor requires the Executive to perform a majority
of his duties outside the Company’s principal executive offices for a period of more
than 21 consecutive days or for more than 90 days in any calendar year;

     (xiii) the Company or the Successor fails to honor any provision of any
employment agreement Executive has or may in the future have with the Company or
fail to honor any provision of this Agreement;

     (xiv) the Company or the Successor gives effective notice of an election to
terminate at the end of the term or extended the term of any employment agreement
Executive has or may in the future have with the Company or the Successor in
accordance with the terms of any such agreement; or

     (xv) the Company or the Successor purports to terminate the Executive’s
employment by the Company unless notice of that termination shall have been given to
the Executive pursuant to, and that notice shall meet the requirements of,
Section 6.

     Section 6. Notice of Termination If a Change in Control of the Company shall have occurred before
the expiration of the term of this Agreement, any subsequent termination by the Executive or the
Company of the Executive’s employment by the Company, or any determination of the Executive’s
Disability, shall be communicated by notice to the other party that shall indicate the specific
paragraph of Section 7 pursuant to which the Executive is to receive benefits as a result of the
termination. If the notice states that the Executive’s employment by the Company has been
automatically terminated as a result of the Executive’s Disability, the notice shall (i)
specifically describe the basis for the determination of the Executive’s Disability, and (ii) state
the date of the determination of the Executive’s Disability, which date shall be not more than ten
(10) days before the date such notice is given. If the notice is from the Company and states that
the Executive’s employment by the Company is terminated by the Company as a result of the occurrence of an Event of Termination for Cause, the
notice shall specifically describe the action or inaction of the Executive that the Company
believes constitutes an Event of Termination for Cause and shall be accompanied by a copy of the
resolution satisfying

 

 

Section 4. If the notice is from the Executive and states that the
Executive’s employment by the Company is terminated by the Executive as a result of the occurrence
of an Event of Termination for Good Reason, the notice shall specifically describe the action or
inaction of the Company that the Executive believes constitutes an Event of Termination for Good
Reason. Each notice given pursuant to this Section 6 (other than a notice stating that the
Executive’s employment by the Company has been automatically terminated as a result of the
Executive’s Disability) shall state a date, which shall be not fewer than thirty (30) days nor more
than sixty (60) days after the date such notice is given, on which the termination of the
Executive’s employment by the Company is effective. The date so stated in accordance with this
Section 6 shall be the “Termination Date”. If a Change in Control of the Company shall have
occurred before the expiration of the term of this Agreement, any subsequent purported termination
by the Company of the Executive’s employment by the Company, or any subsequent purported
determination by the Company of the Executive’s Disability, shall be ineffective unless that
termination or determination shall have been communicated by the Company to the Executive by notice
that meets the requirements of the foregoing provisions of this Section 6 and the provisions of
Section 9.

     Section 7. Benefits Payable on Change in Control and Termination. (a) If (x) a Change in Control
of the Company shall have occurred before the expiration of the term of this Agreement, and (y) the
Executive’s employment by the Company is terminated (whether by the Executive or the Company or
automatically as provided in Section 3) after the occurrence of that Change in Control of the
Company, the Executive shall be entitled to the following benefits:

     (i) If the Executive’s employment by the Company is terminated (x) by the
Company as a result of the occurrence of an Event of Termination for Cause, or (y)
by the Executive before the occurrence of an Event of Termination for Good Reason,
then the Company shall pay to the Executive the Base Salary accrued through the
Termination Date but not previously paid to the Executive, and the Executive shall
be entitled to any other amounts or benefits provided under any plan, policy,
practice, program, contract or arrangement of or with the Company, including, but
not limited to, the Basic Benefit Plans and the Other Benefit Plans, which shall be
governed by the terms thereof (except as explicitly modified by this Agreement).

     (ii) If the Executive’s employment by the Company is automatically terminated
as a result of the Executive’s death or the Executive’s Disability, then (x) the
Company shall pay to the Executive the Base Salary accrued through the date of the
occurrence of that event but not previously paid to the Executive, and (y) the
Executive shall be entitled to any other amounts or benefits provided under any
plan, policy, practice, program, contract or arrangement of or with the Company,
including, but not limited to, the Basic Benefit Plans and the Other Benefit Plans,
which shall be governed by the terms thereof (except as explicitly modified by this
Agreement).

     (iii) If the Executive’s employment by the Company is terminated (x) by the
Company otherwise than as a result of the occurrence of an Event of Termination for
Cause, or (y) by the Executive after the occurrence of an Event of Termination for
Good Reason, then the Executive shall be entitled to the following:

     (1) the Company shall pay to the Executive the Base Salary and
compensation for earned but unused vacation time accrued through the
Termination Date but not previously paid to the Executive;

     (2) the Company shall pay to the Executive an amount equal to
the product of (A) the greater of (I) the Executive’s target
performance

 

 

bonus for the Fiscal Year in which the Termination Date
occurs and (II) the Executive’s performance bonus for the Fiscal
Year preceding the Fiscal Year in which the Termination Date occurs
(including any deferred portion thereof) (the greater of the amounts
described in clauses (I) and (II) of this Section 7(a)(iii)(2)(A)
being referred to herein as the “Highest Bonus”), and (B) a
fraction, the numerator of which is the number of days in the
current Fiscal Year through the Termination Date and the denominator
of which is 365;

     (3) the Company shall pay to the Executive, as a lump sum, an
amount (the “Severance Payment”) equal to [three (3) [CEO/SVPs]][two
(2) [VPs]] times the sum of:

     (A) the amount (including any deferred portion
thereof) of the Base Salary that would have been
paid to the Executive during the Fiscal Year in
which the Termination Date occurs based on the
assumption that the Executive’s employment by the
Company had continued throughout that Fiscal Year at
the Base Salary rate in effect in the Fiscal Year in
which the Termination Date occurs, or in the
immediately preceding Fiscal Year, whichever is
higher;

     (B) the amount of the Highest Bonus;

     (4) the Company (at its sole expense) shall take the following
actions:

     (A) throughout the Relevant Period, the Company
shall maintain in effect, and not materially reduce
the benefits provided by, each of the Other Benefit
Plans in which the Executive was a participant
immediately before the Termination Date; and

     (B) the Company shall arrange for the
Executive’s uninterrupted participation throughout
the Relevant Period in each of such Other Benefit
Plans,

provided that if the Executive’s
participation after the Termination Date in any such
Other Benefit Plan is not permitted by the terms of
that Other Benefit Plan, then throughout the
Relevant Period, the Company (at its sole expense)
shall provide the Executive with substantially the
same benefits that were provided to the Executive by
that Other Benefit Plan immediately before the
Termination Date; and

     (5) the Executive shall be entitled to any other amounts or
benefits provided under any plan, policy, practice, program,
contract or arrangement of or with the Company, including, but not
limited to, the Basic Benefit Plans and the Other Benefit Plans, which shall be
governed by the terms thereof (except as explicitly modified by this
Agreement).

 

 

     (b) Each payment required to be made to the Executive pursuant to the foregoing provisions of
this Section 7(a) above (i) shall be made by check drawn on an account of the Company at a bank
located in the United States of America, and (ii) shall be paid (x) if the Executive’s employment
by the Company was terminated as a result of the Executive’s death or the Executive’s Disability,
not more than thirty (30) days immediately following the date of the occurrence of that event, and
(y) if the Executive’s employment by the Company was terminated for any other reason, on the
Termination Payment Date.

     (c) The following shall occur immediately upon the occurrence of a Change in Control of the
Company:

     (i) all options to acquire Voting Stock and all stock appreciation rights
pertaining to Voting Stock held by the Executive immediately prior to a Change in
Control of the Company shall become fully exercisable, regardless of whether or not
the vesting conditions set forth in the relevant stock option agreements have been
satisfied in full; and

     (ii) all restrictions on any restricted Voting Stock granted to the Executive
prior to a Change in Control of the Company shall be removed and the stock shall be
freely transferable, regardless of whether the conditions set forth in the relevant
restricted stock agreements have been satisfied in full.

     Section 8. Successors. If a Change in Control of the Company shall have occurred before the
expiration of the term of this Agreement,

     (i) the Company shall not, directly or indirectly, consolidate with, merge into
or sell or otherwise transfer its assets as an entirety or substantially as an
entirety to, any person, or permit any person to consolidate with or merge into the
Company, unless immediately after such consolidation, merger, sale or transfer, the
Successor shall have assumed in writing the Company’s obligations under this
Agreement; and

     (ii) not fewer than ten (10) days before the consummation of any consolidation
of the Company with, merger by the Company into, or sale or other transfer by the
Company of its assets as an entirety or substantially as an entirety to, any person,
the Company shall give the Executive notice of that proposed transaction.

     Section 9. Notice. Notices required or permitted to be given by either party pursuant to this
Agreement shall be in writing and shall be deemed to have been given when delivered personally to
the other party or when deposited with the United States Postal Service as certified or registered
mail with postage prepaid and addressed:

     (i) if to the Executive, at the Executive’s address last shown on the Company’s
records, and

     (ii) if to the Company, at 1900 West Loop West, Suite 1500, Houston, Texas
77027, directed to the attention of the Chair of the Compensation & Management
Development Committee of the Board of Directors.

or, in either case, to such other address as the party to whom or which such notice is to be given
shall have specified by notice given to the other party.

 

 

     Section 10. Withholding Taxes. The Company may withhold from all payments to be paid to the
Executive pursuant to this Agreement all taxes that, by applicable federal or state law, the
Company is required to so withhold.

     Section 11. Certain Additional Payments by the Company.

     (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by, or benefit from, the Company or any of its
Affiliates to or for the benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (any such payments,
distributions or benefits being individually referred to herein as a “Payment,” and any two or more
of such payments, distributions or benefits being referred to herein as “Payments”), would be
subject to the excise tax imposed by Section 4999 of the Code (such excise tax, together with any
interest thereon, any penalties, additions to tax, or additional amounts with respect to such
excise tax, and any interest in respect of such penalties, additions to tax or additional amounts,
being collectively referred herein to as the “Excise Tax”), then the Executive shall be entitled to
receive an additional payment or payments (individually referred to herein as a “Gross-Up Payment”
and any two or more of such additional payments being referred to herein as “Gross-Up Payments”) in
an amount such that after payment by the Executive of all taxes (as defined in Section 11(k))
imposed upon the Gross-Up Payment, the Executive retains an amount of such Gross-Up Payment equal
to the Excise Tax imposed upon the Payments. The purpose of this Section 11 and the intent of the
parties to this Agreement is to place the Executive in the same economic position the Executive
would have been in had no Excise Tax been imposed with respect to the Payments.

     (b) Subject to the provisions of Section 11(c) through (i), any determination (individually, a
“Determination”) required to be made under this Section 11(b), including whether a Gross-Up Payment
is required and the amount of such Gross-Up Payment, shall initially be made, at the Company’s
expense, by nationally recognized tax counsel mutually acceptable to the Company and the Executive
(“Tax Counsel”). Tax Counsel shall provide detailed supporting legal authorities, calculations, and
documentation both to the Company and the Executive within 15 business days of the termination of
the Executive’s employment, if applicable, or such other time or times as is reasonably requested
by the Company or the Executive. If Tax Counsel makes the initial Determination that no Excise Tax
is payable by the Executive with respect to a Payment or Payments, it shall furnish the Executive
with an opinion reasonably acceptable to the Executive that no Excise Tax will be imposed with
respect to any such Payment or Payments. The Executive shall have the right to dispute any
Determination (a “Dispute”) within 15 business days after delivery of Tax Counsel’s opinion with
respect to such Determination. The Gross-Up Payment, if any, as determined pursuant to such
Determination shall, at the Company’s expense, be paid by the Company to the Executive within five
business days of the Executive’s receipt of such Determination. The existence of a Dispute shall
not in any way affect the Executive’s right to receive the Gross-Up Payment in accordance with such
Determination. If there is no Dispute, such Determination shall be binding, final and conclusive
upon the Company and the Executive, subject in all respects, however, to the provisions of
Section 11(c) through (i) below. As a result of the uncertainty in the application of Sections 4999
and 280G of the Code, it is possible that Gross-Up Payments (or portions thereof) which will not
have been made by the Company should have been made (“Underpayment”), and if upon any reasonable
written request from the Executive or the Company to Tax Counsel, or upon Tax Counsel’s own
initiative, Tax Counsel, at the Company’s expense, thereafter determines that the Executive is
required to make a payment of any Excise Tax or any additional Excise Tax, as the case may be, Tax
Counsel shall, at the Company’s expense, determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company to the Executive.

     (c) The Company shall defend, hold harmless, and indemnify the Executive on a fully grossed-up
after tax basis from and against any and all claims, losses, liabilities, obligations, damages,

 

 

impositions, assessments, demands, judgements, settlements, costs and expenses (including
reasonable attorneys’, accountants’, and experts’ fees and expenses) with respect to any tax
liability of the Executive resulting from any Final Determination (as defined in Section 11(j))
that any Payment is subject to the Excise Tax.

     (d) If a party hereto receives any written or oral communication with respect to any question,
adjustment, assessment or pending or threatened audit, examination, investigation or
administrative, court or other proceeding which, if pursued successfully, could result in or give
rise to a claim by the Executive against the Company under this Section 11 (“Claim”), including,
but not limited to, a claim for indemnification of the Executive by the Company under
Section 11(c), then such party shall promptly notify the other party hereto in writing of such
Claim (“Tax Claim Notice”).

     (e) If a Claim is asserted against the Executive (“Executive Claim”), the Executive shall take
or cause to be taken such action in connection with contesting such Executive Claim as the Company
shall reasonably request in writing from time to time, including the retention of counsel and
experts as are reasonably designated by the Company (it being understood and agreed by the parties
hereto that the terms of any such retention shall expressly provide that the Company shall be
solely responsible for the payment of any and all fees and disbursements of such counsel and any
experts) and the execution of powers of attorney, provided that:

     (i) within 30 calendar days after the Company receives or delivers, as the case
may be, the Tax Claim Notice relating to such Executive Claim (or such earlier date
that any payment of the taxes claimed is due from the Executive, but in no event
sooner than five calendar days after the Company receives or delivers such Tax Claim
Notice), the Company shall have notified the Executive in writing (“Election
Notice”) that the Company does not dispute its obligations (including, but not
limited to, its indemnity obligations) under this Agreement and that the Company
elects to contest, and to control the defense or prosecution of, such Executive
Claim at the Company’s sole risk and sole cost and expense; and

     (ii) the Company shall have advanced to the Executive on an interest-free
basis, the total amount of the tax claimed in order for the Executive, at the
Company’s request, to pay or cause to be paid the tax claimed, file a claim for
refund of such tax and, subject to the provisions of the last sentence of
Section 11(g), sue for a refund of such tax if such claim for refund is disallowed
by the appropriate taxing authority (it being understood and agreed by the parties
hereto that the Company shall only be entitled to sue for a refund and the Company
shall not be entitled to initiate any proceeding in, for example, United States Tax
Court) and shall indemnify and hold the Executive harmless, on a fully grossed-up
after tax basis, from any tax imposed with respect to such advance or with respect
to any imputed income with respect to such advance; and

     (iii) the Company shall reimburse the Executive for any and all costs and
expenses resulting from any such request by the Company and shall indemnify and hold
the Executive harmless, on fully grossed-up after-tax basis, from any tax imposed as
a result of such reimbursement.

     (f) Subject to the provisions of Section 11(e) hereof, the Company shall have the right to
defend or prosecute, at the sole cost, expense and risk of the Company, such Executive Claim by all
appropriate proceedings, which proceedings shall be defended or prosecuted diligently by the
Company to a Final Determination; provided, however, that (i) the Company shall
not, without the Executive’s prior

 

 

written consent, enter into any compromise or settlement of such
Executive Claim that would adversely affect the Executive, (ii) any request from the Company to the
Executive regarding any extension of the statute of limitations relating to assessment, payment, or
collection of taxes for the taxable year of the Executive with respect to which the contested
issues involved in, and amount of, the Executive Claim relate is limited solely to such contested
issues and amount, and (iii) the Company’s control of any contest or proceeding shall be limited to
issues with respect to the Executive Claim and the Executive shall be entitled to settle or
contest, in his sole and absolute discretion, any other issue raised by the Internal Revenue
Service or any other taxing authority. So long as the Company is diligently defending or
prosecuting such Executive Claim, the Executive shall provide or cause to be provided to the
Company any information reasonably requested by the Company that relates to such Executive Claim,
and shall otherwise cooperate with the Company and its representatives in good faith in order to
contest effectively such Executive Claim. The Company shall keep the Executive informed of all
developments and events relating to any such Executive Claim (including, without limitation,
providing to the Executive copies of all written materials pertaining to any such Executive Claim),
and the Executive or his authorized representatives shall be entitled, at the Executive’s expense,
to participate in all conferences, meetings and proceedings relating to any such Executive Claim.

     (g) If, after actual receipt by the Executive of an amount of a tax claimed (pursuant to an
Executive Claim) that has been advanced by the Company pursuant to Section 11(e)(ii) hereof, the
extent of the liability of the Company hereunder with respect to such tax claimed has been
established by a Final Determination, the Executive shall promptly pay or cause to be paid to the
Company any refund actually received by, or actually credited to, the Executive with respect to
such tax (together with any interest paid or credited thereon by the taxing authority and any
recovery of legal fees from such taxing authority related thereto), except to the extent that any
amounts are then due and payable by the Company to the Executive, whether under the provisions of
this Agreement or otherwise. If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 11(e)(ii), a determination is made by the Internal Revenue Service or
other appropriate taxing authority that the Executive shall not be entitled to any refund with
respect to such tax claimed and the Company does not notify the Executive in writing of its intent
to contest such denial of refund prior to the expiration of 30 days after such determination, then
such advance shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of any Gross-Up Payments and other payments
required to be paid hereunder.

     (h) With respect to any Executive Claim, if the Company fails to deliver an Election Notice to
the Executive within the period provided in Section 11(e)(i) hereof or, after delivery of such
Election Notice, the Company fails to comply with the provisions of Section 11(e)(ii) and (iii) and
(f) hereof, then the Executive shall at any time thereafter have the right (but not the
obligation), at his election and in his sole and absolute discretion, to defend or prosecute, at
the sole cost, expense and risk of the Company, such Executive Claim. The Executive shall have full
control of such defense or prosecution and such proceedings, including any settlement or compromise
thereof. If requested by the Executive, the Company shall cooperate, and shall cause its Affiliates
to cooperate, in good faith with the Executive and his authorized representatives in order to
contest effectively such Executive Claim. The Company may attend, but not participate in or
control, any defense, prosecution, settlement or compromise of any Executive Claim controlled by
the Executive pursuant to this Section 11(h) and shall bear its own costs and expenses with respect
thereto. In the case of any Executive Claim that is defended or prosecuted by the Executive, the
Executive shall, from time to time, be entitled to current payment, on a fully grossed-up after tax
basis, from the Company with respect to costs and expenses incurred by the Executive in connection
with such defense or prosecution.

     (i) In the case of any Executive Claim that is defended or prosecuted to a Final Determination
pursuant to the terms of this Section 11(i), the Company shall pay, on a fully grossed-up

 

 

after tax basis, to the Executive in immediately available funds the full amount of any taxes arising or
resulting from or incurred in connection with such Executive Claim that have not theretofore been
paid by the Company to the Executive, together with the costs and expenses, on a fully grossed-up
after tax basis, incurred in connection therewith that have not theretofore been paid by the
Company to the Executive, within ten calendar days after such Final Determination. In the case of
any Executive Claim not covered by the preceding sentence, the Company shall pay, on a fully
grossed-up after tax basis, to the Executive in immediately available funds the full amount of any
taxes arising or resulting from or incurred in connection with such Executive Claim at least ten
calendar days before the date payment of such taxes is due from the Executive, except where payment
of such taxes is sooner required under the provisions of this Section 11(i), in which case payment
of such taxes (and payment, on a fully grossed-up after tax basis, of any costs and expenses
required to be paid under this Section 11(i) shall be made within the time and in the manner
otherwise provided in this Section 11(i).

     (j) For purposes of this Agreement, the term “Final Determination” shall mean (A) a decision,
judgment, decree or other order by a court or other tribunal with appropriate jurisdiction, which
has become final and non-appealable; (B) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not limited to, a closing
agreement under Section 7121 of the Code; (C) any disallowance of a claim for refund or credit in
respect to an overpayment of tax unless a suit is filed on a timely basis; or (D) any final
disposition by reason of the expiration of all applicable statutes of limitations.

     (k) For purposes of this Agreement, the terms “tax” and “taxes” mean any and all taxes of any
kind whatsoever (including, but not limited to, any and all Excise Taxes, income taxes, and
employment taxes), together with any interest thereon, any penalties, additions to tax, or
additional amounts with respect to such taxes and any interest in respect of such penalties,
additions to tax, or additional amounts.

     (l) Nothwithstanding anything in this Agreement to the contrary, if any additional payment
required pursuant to this Section 11 is determined by the Board (or its delegate) to be subject to
Section 409A, such payment shall be made no later than the end of the Executive’s taxable year
following the year in which the related Excise Taxes are remitted to the relevant taxing authority.

     Section 12. Expenses of Enforcement. If a Change in Control of the Company shall have occurred
before the expiration of the term of this Agreement, then, upon demand by the Executive made to the
Company, the Company shall reimburse the Executive for the reasonable expenses (including
attorneys’ fees and expenses) incurred by the Executive in enforcing or seeking to enforce the
payment of any amount or other benefit to which the Executive shall have become entitled pursuant
to this Agreement, including those incurred in connection with any arbitration initiated pursuant
to Section 20. To the extent that any such reimbursement would be subject to the Excise Tax, then
the Executive shall be entitled to receive Gross-Up Payments in an amount such that after payment
by the Executive of all taxes imposed on such Gross-Up Payments, the Executive retains an amount
equal to the Excise Tax imposed upon the reimbursement, and the other provisions of Section 11
hereof shall also apply to such circumstance unless the context thereof otherwise indicates.

     Section 13. Employment by Wholly Owned Entities. If, at or after the Effective Date, the Executive
is or becomes an Executive of one or more corporations, partnerships, limited liability companies
or other entities that are, directly or indirectly, wholly owned by the Company (“Wholly Owned
Entities”), references in this Agreement to the Executive’s employment by the Company shall include
the Executive’s employment by any such Wholly Owned Entity.

 

 

     Section 14. No Obligation to Mitigate; No Rights of Offset.

     (a) The Executive shall not be required to mitigate the amount of any payment or other benefit
required to be paid to the Executive pursuant to this Agreement, whether by seeking other
employment or otherwise, nor shall the amount of any such payment or other benefit be reduced on
account of any compensation earned by the Executive as a result of employment by another person.

     (b) The Company’s obligation to make the payments provided for in this Agreement and otherwise
to perform its obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have against the
Executive or others.

     Section 15. Amendment and Waiver. No provision of this Agreement may be amended or waived (whether
by act or course of conduct or omission or otherwise) unless that amendment or waiver is by written
instrument signed by the parties hereto. No waiver by either party of any breach of this Agreement
shall be deemed a waiver of any other or subsequent breach.

     Section 16. Governing Law. The validity, interpretation, construction and enforceability of this
Agreement shall be governed by the laws of the State of Texas.

     Section 17. Validity. The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this Agreement, which shall
remain in full force and effect.

     Section 18. Counterparts. This Agreement may be executed in counterparts, each of which shall be
deemed an original but all of which together will constitute the same instrument.

     Section 19. Assignment; Binding Effect. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s legal representative. This Agreement shall be binding upon any
Successor. The Company may not assign any of its obligations under this Agreement unless (i) such
assignment is to a Successor and (ii) the requirements of Section 8 are fulfilled.

     Section 20. Arbitration. Except as otherwise explicitly provided in Section 11, any dispute
between the parties arising out of this Agreement, whether as to this Agreement’s construction,
interpretation or enforceability or as to any party’s breach or alleged breach of any provision of
this Agreement, shall be submitted to arbitration in accordance with the following procedures:

     (i) Either party may demand such arbitration by giving notice of that demand to
the other party. The notice shall state (x) the matter in controversy, and (y) the
name of the arbitrator selected by the party giving the notice.

     (ii) Not more than 15 days after such notice is given, the other party shall
give notice to the party who demanded arbitration of the name of the arbitrator
selected by the other party. If the other party shall fail to timely give such
notice, the arbitrator that the other party was entitled to select shall be named by
the Arbitration Committee of the American Arbitration Association. Not more than 15
days after the second arbitrator is so named, the two arbitrators shall select a
third arbitrator. If the two arbitrators shall fail to timely select a third
arbitrator, the third arbitrator shall be named by the Arbitration Committee of the
American Arbitration Association.

 

 

     (iii) The dispute shall be arbitrated at a hearing that shall be concluded
within ten days immediately following the date the dispute is submitted to
arbitration unless a majority of the arbitrators shall elect to extend the period of
arbitration. Any award made by a majority of the arbitrators (x) shall be made
within ten days following the conclusion of the arbitration hearing, (y) shall be
conclusive and binding on the parties, and (z) may be made the subject of a judgment
of any court having jurisdiction.

     (iv) All expenses of the arbitration shall be borne by the Company.

The agreement of the parties contained in the foregoing provisions of this Section 20 shall be a
complete defense to any action, suit or other proceeding instituted in any court or before any
administrative tribunal with respect to any dispute between the parties arising out of this
Agreement.

     Section 21.
Interpretation.

     (a) As used in this Agreement, the following terms and phrases have the indicated meanings:

     (i) “Affiliate” and “Affiliates” mean, when used with respect to any entity,
individual, or other person, any other entity, individual, or other person which,
directly or indirectly, through one or more intermediaries controls, or is
controlled by, or is under common control with such entity, individual or person.

     (ii) “Base Salary” has the meaning assigned to that term in Section 5.

     (iii) “Basic Benefit Plans” has the meaning assigned to that term in Section 5.

     (iv) “Benchmark Bonus” has the meaning assigned to that term in Section 5.

     (v) “Board of Directors” means the Board of Directors of the Company.

     (vi) “Business Combination” has the meaning assigned to that term in Section 2.

     (vii) “Change in Control of the Company” has the meaning assigned to that
phrase in Section 2.

     (viii) “Claim” has the meaning assigned to such term in Section 11.

     (ix) “Code” means the Internal Revenue Code of 1986, as amended from time to
time.

     (x) “Commission” means the United States Securities and Exchange Commission or
any successor agency.

     (xi) “Company” has the meaning assigned to that term in the preamble to this
Agreement. The term “Company” shall also include any Successor, whether the
liability of such Successor under this Agreement is established by contract or
occurs by operation of law.

 

 

     (xii) “ Covered Person” has the meaning assigned to that term in Section 2.

     (xiii) “Determination” has the meaning assigned to that term in Section 11.

     (xiv) “Dispute” has the meaning assigned to that term in Section 11.

     (xv) “Effective Date” means the closing of the transactions contemplated by the
Distribution Agreement dated as of December 19, 2007 among Quanex Corporation,
Quanex Building Products Corporation and Quanex Building Products Corporation Sub.

     (xvi) “Election Notice” has the meaning assigned to such term in Section 11.

     (xvii) “Executive” has the meaning assigned to such term in the preamble to
this Agreement.

     (xviii) “Executive Claim” has the meaning assigned to such term in Section 11.

     (xix) “Executive’s Disability” means:

     (1) if no Change in Control of the Company shall have occurred
before the date of determination, the physical or mental disability
of the Executive determined in accordance with the disability policy
of the Company at the time in effect and generally applicable to its
salaried Executives; and

     (2) if a Change in Control of the Company shall have occurred
at that date, the physical or mental disability of the Executive
determined in accordance with the disability policy of the Company
in effect immediately before the occurrence of the first Change in
Control of the Company and generally applicable to its salaried
Executives.

The Executive’s Disability, and the automatic termination of the
Executive’s employment by the Company by reason of the Executive’s
Disability, shall be deemed to have occurred on the date of
determination, provided that if (1) a Change in Control of
the Company shall have occurred before the expiration of the term of
this Agreement, (2) the Company shall have subsequently given notice
pursuant to Section 6 of the Company’s determination of the
Executive’s Disability, and (3) the Executive shall have given
notice to the Company that the Executive disagrees with that
determination, then (A) whether the Executive’s Disability shall
have occurred shall be submitted to arbitration pursuant to
Section 20, and (B) if a majority of the arbitrators decide that the
Executive’s Disability had not occurred, at the date of
determination by the Company, then (I) the Executive’s Disability,
and the automatic termination of the Executive’s employment by the
Company by reason of the Executive’s Disability, shall be deemed not
to

 

 

have occurred, and (II) on demand by the Executive made to the
Company, the Company shall reimburse the Executive for the
reasonable expenses (including attorneys’ fees and expenses)
incurred by the Executive in obtaining that decision.

     (xx) “Event of Termination for Good Reason” has the meaning assigned to that
phrase in Section 5.

     (xxi) “Event of Termination for Cause” has the meaning assigned to that phrase
in Section 4.

     (xxii) “Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time.

     (xxiii) “Excise Tax” has the meaning assigned to that term in Section 11.

     (xxiv) “Expiration Date” has the meaning assigned to that term in Section 3.

     (xxv) “Final Determination” has the meaning assigned to such term in
Section 11.

     (xxvi) “Fiscal Year” means the fiscal year of the Company.

     (xxvii) “Gross-Up Payment” has the meaning assigned to that term in Section 11.

     (xxviii) “Other Benefit Plan” means any employee welfare benefit plan (within
the meaning of section 3(1) of the Employee Retirement Income Security Act of 1974,
as amended) maintained by the Company.

     (xxix) “Outstanding Company Common Stock” has the meaning assigned to that term
in Section 2.

     (xxx) “Outstanding Company Voting Securities” has the meaning assigned to that
term in Section 2.

     (xxxi) “Payment” has the meaning assigned to that term in Section 11.

     (xxxii) “Person” means any individual, corporation, partnership, joint venture,
association, joint-stock company, limited partnership, limited liability company,
trust, unincorporated organization, government, or agency or political subdivision
of any government.

     (xxxiii) “Relevant Period” means a period beginning on the Termination Date and
ending on the first to occur of (x) the third anniversary of the Termination Date,
or (y) the date on which the Executive becomes employed on a full-time basis by
another person.

     (xxxiv) “Severance Payment” has the meaning assigned to that term in Section 7.

 

 

     (xxxv) “Successor” means a person with or into which the Company shall have
been merged or consolidated or to which the Company shall have transferred its
assets as an entirety or substantially as an entirety.

     (xxxvi) “Tax” has the meaning assigned to that term in Section 11.

     (xxxvii) “Tax Claim Notice” has the meaning assigned to that term in
Section 11.

     (xxxviii) “Tax Counsel” has the meaning assigned to that term in Section 11.

     (xxxix) “Termination Date” has the meaning assigned to that term in Section 6.

     (xl) “Termination Payment Date” means

     (1) if the Board (or its delegate) determines in its sole
discretion that as of the Termination Date, other than a termination
due to death or Disability, the Executive is a specified employee
(as defined in Section 409A(a)(2)(B)(i), and Department of Treasury
regulations and other interpretive guidance issued thereunder) as of
such date (a “Specified Employee”) and that Section 409A applies
with respect to a portion of the payments hereunder, then with
respect to such portion, the first business day following the
six-month anniversary of the Termination Date (the “Six-Month Delay
Period”)or

     (2) if the Board (or its delegate) determines in its sole
discretion that as of the Termination Date, other than a termination
due to death or Disability, the Executive is not a Specified
Employee as of such date or that Section 409A does not apply with
respect to a portion of the payments hereunder, then with respect to
such portion, not more than ten (10) days immediately following the
Termination Date and

     (3) with respect to any amount payable to or on behalf of the
Executive under a welfare or benefit plan program of the Company,
including but not limited to a Basic Benefit Plan or Other Benefit
Plan, then, to the extent such benefits are provided after the
period of time during which the Executive would be entitled to (or
would, but for this Agreement, be entitled to) COBRA continuation
coverage under a group health plan of the Company, the Company shall
make any payments due for such coverage during the Relevant Period
on the last business day of the calendar month following the month
in which such payments become due.

If the Board (or its delegate) determines in its sole discretion
that as of the Termination Date, other than a termination due to
death or Disability, the Executive is a Specified Employee as of
such date and that Section 409A applies with respect to a portion of
the payments hereunder, then any such portion payable during the
Six-Month Delay Period, including but not limited to any payments
under Section 11 or any other reimbursements, shall be transferred
to a rabbi trust (which

 

 

shall be a rabbi trust previously created by the Company that contains other
amounts of deferred compensation payable by the Company to the
Executive or a rabbi trust created by the Company or its successor,
on terms reasonably acceptable to the Executive) as soon as
administratively feasible following the occurrence of the event
giving rise to the Executive’s right to such payment, except to the
extent such transfer would subject the Executive to penalties under
the funding restriction provisions of Section 409A, as amended by
the Pension Protection Act of 2006, and such amounts (together with
earnings thereon determined in accordance with the terms of the
trust agreement) shall be transferred from the trust to the
Executive upon the earlier of (i) the expiration of the Six-Month
Delay Period, or (ii) any other earlier date permitted under Section
409A.

     (xli) “This Agreement” means this Change in Control Agreement as it may be
amended from time to time in accordance with Section 15.

     (xlii) “Underpayment” has the meaning assigned to that term in Section 11.

     (xliii) “Wholly Owned Entities” has the meaning assigned to that term in
Section 13.

     (b) In the event of the enactment of any successor provision to any statute or rule cited in
this Agreement, references in this Agreement to such statute or rule shall be to such successor
provision.

     (c) The headings of Sections of this Agreement shall not control the meaning or interpretation
of this Agreement.

     (d) References in this Agreement to any Section are to the corresponding Section of this
Agreement unless the context otherwise indicates.

     (e) This Agreement is intended to meet the requirements of Section 409A and shall be
administered, construed and interpreted in a manner that is intended to meet those requirements. To
the extent that the provision of a benefit or payment under the Agreement is subject to Section
409A, except as the Company and Executive otherwise determine in writing, the provision or payment
shall be provided or paid in a manner that will meet the requirements of Section 409A, including
regulations or other guidance issued with respect thereto, such that the provisions or payment
shall not be subject to the additional tax or interest applicable under Section 409A. Any provision
of this Agreement that would cause the provision or payment to fail to satisfy Section 409A shall
be amended to comply with Section 409A on a timely basis, which may be made on a retroactive basis,
in accordance with regulations and other guidance issued under Section 409A. In the event
additional regulations or other guidance is issued under Section 409A or a court of competent
jurisdiction provides additional authority concerning the application of Section 409A with respect
to the distributions under the Agreement, then the provisions of the Agreement 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 Agreement prior to its amendment to comply with Section
409A.

 

 

     In Witness Whereof, the Company and the Executive have executed this Agreement this
                     day of                                         , 2008, to be effective as set forth herein.

	 	 	 	 	 	 	 
	 	 	QUANEX BUILDING PRODUCTS CORPORATION	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	EXECUTIVEexv10w1

 

Exhibit 10.1

RETIREMENT AGREEMENT

     THIS RETIREMENT AGREEMENT (this “Agreement”) is entered into as of February 11, 2008 (the
“Effective Date”) between Arthur M. Coffey (“Executive”) and Red Lion Hotels Corporation (the
“Company”).

RECITALS

     A. Pursuant to that certain Executive Employment Agreement dated April 12, 2007 (said
agreement, as the same is amended pursuant to Section 2 of this Agreement, will be referred to as
the “Employment Agreement”), Executive serves as the President and Chief Executive Officer of the
Company.

     B. Executive has notified the Company that he wishes to retire from the Company effective as
of the Effective Date.

     C. The Company and Executive wish to settle and resolve all issues arising out of Executive’s
employment with and retirement from the Company.

     D. The Board of Directors of the Company, at a meeting held on the Effective Date (notice of
which has been waived by Executive), has authorized the Company to enter into this Agreement.

     NOW, THEREFORE, for and in consideration of the mutual promises and other good and valuable
consideration described below, the receipt and adequacy of which are acknowledged by the Company
and Executive, both of them agree to the following:

     1. Retirement. The Company and Executive agree that Executive’s last date of
employment by the Company is the Effective Date. Upon execution of this Agreement, Executive hereby
resigns all positions as an officer and director of the Company, and of all other corporations,
limited liability companies and other entities in which the Company holds a direct or indirect
equity interest (such other entities will be referred to in this Agreement as “Subsidiaries”), and
the Company accepts such resignations.

     2. Amendments to Employment Agreement.

          (a) Section 6 of the Employment Agreement is hereby amended to designate subparagraph (j)
thereof as a new subparagraph (k) and to add the following thereto as subparagraph (j):

 

 

          (j) The amounts required to be paid to the Executive under this Section 6,
together with any Gross-Up Payment required to be paid to the Executive under
Section 10(b), shall be paid to the Executive as soon as practicable following the
occurrence of the event that entitles the Executive to such payments; provided,
however, if the Executive at the time of his separation from service with the
Company is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of
the Internal Revenue Code of 1986, as amended (the “Code”), such amounts shall
instead be paid six months after his separation from service to the extent necessary
so that none of such amounts will be subject to the additional income tax provided
for in Section 409A(a)(1)(B)(i) of the Code.

          (b) Section 8(a) of the Employment Agreement is hereby amended to add the following at the end
thereof:

Notwithstanding the foregoing, the term “Competing Business” shall not include
Executive’s involvement in any venture that directly or indirectly owns or manages
no more than two hotels, so long as each hotel has fewer than 300 rooms.

          (c) The first sentence of Section 5 of Appendix A to each of the Restricted Stock Unit
Agreements between the Company and Executive is hereby amended to read as follows:

Any Restricted Stock Units that vest while you remain employed by Red Lion or one of
its Affiliates in accordance with paragraph 3 will, subject to paragraph 8, be paid
to you (or in the event of your death, to your estate) in shares of Common Stock as
soon as administratively practicable following the date of vesting, but in no event
later than March 15 of the year following the year in which the vesting occurs.

     3. Payments; Reimbursement of Expenses. The Company agrees to make the following
payments to Executive in lieu of any amounts to which Executive may be entitled under the
Employment Agreement or otherwise:

          (a) The Company will pay Executive the sum of $311,311 in a single lump-sum payment on
February 14, 2008. The parties acknowledge and agree that this payment will be on account of
Executive’s accrued but unpaid salary and vacation and his accrued but unpaid bonus for 2007 under
the Company’s Executive Officers Variable Pay Plan. This payment shall be subject to such
withholding as may be required or permitted under applicable law with respect to any taxable income
realized by Executive as a result of any of the provisions of this Agreement, including but not
limited to the lapse of restrictions on his restricted stock units of the Company as provided in
Section 5(a) below.

          (b) The Company will pay Executive the sum of $2,124,153, subject to applicable withholding,
in a single lump-sum payment on August 12, 2008.

          (c) The Company will reimburse Executive for any reasonable business expenses that Executive
has incurred prior to the Effective Date for which Executive submits
appropriate documentation pursuant to the Company’s reimbursement policies within 30 days
after the Effective Date.

          (d) The Company will reimburse Executive for up to $3,000 of accounting and legal expenses
incurred by Executive in connection with this Agreement.

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          (e) Executive agrees that, except as otherwise expressly provided in this Agreement, the
Company does not owe Executive any other payments, compensation or benefits under the Employment
Agreement or otherwise, other than Executive’s accrued and vested benefits under any pension or
welfare benefit plan in which he participated while employed by the Company.

          (f) If any payments under this Agreement are deemed to be made pursuant to one or more
“nonqualified deferred compensation plans” within the meaning of Section 409A(d)(1) of the Internal
Revenue Code of 1986, as amended (the “Code”), the Company and Executive intend that each such plan
comply in all respects with the requirements of Section 409A of the Code. However, except as
provided in Section 4(c), the Company does not warrant or represent or otherwise undertake that any
such plan so complies, and Executive hereby agrees that he shall be solely responsible for any
failure of any such plan to so comply.

     4. Medical and Other Benefits.

          (a) Executive’s group health coverage with the Company will continue until the last day of the
month in which the Effective Date falls or as otherwise provided under the Company’s group health
plans. Pursuant to federal COBRA law, Executive and Executive’s qualified beneficiaries may elect
continuation coverage in accordance with election materials and other COBRA notices to be provided
to Executive by the plans’ designated administrators.

          (b) The Company will pay the monthly premium for continuation (COBRA) coverage under the
Company’s group health plans for Executive and Executive’s qualified beneficiaries through August
2009 if Executive properly and timely elects such coverage as provided for in the Company’s COBRA
notice materials. However, such payments shall end earlier if Executive becomes eligible to
participate in the group health plan of a subsequent employer; provided, that if Executive is
required to pay any amounts for coverage for himself and his qualified beneficiaries under such
other group health plan, the Company will promptly reimburse Executive upon request for all amounts
paid for such coverage through August 2009.

          (c) During any portion of the period from September 1, 2009 through February 10, 2010 that
Executive is not participating in the group health plan of a subsequent employer, the Company will
provide medical and dental coverage to Executive and his qualified beneficiaries, by means of self
insurance or otherwise, comparable to the coverage that Executive and his qualified beneficiaries
would have had if they had remained covered by the Company’s group health plans. If the Company
elects to provide such coverage through self insurance, the Company agrees in providing such
coverage to use commercially reasonable efforts to comply with Treasury Regulation
1.409A-3(i)(1)(iv) if such compliance can be achieved without significantly increasing the cost of
providing such coverage. During any portion of the period from September 1, 2009 through February
10, 2010 that Executive is participating in the group health plan of a subsequent employer, if
Executive is required to pay
any amounts for coverage for himself and his qualified beneficiaries under such other group
health plan, the Company will promptly reimburse Executive upon request for all reasonable amounts
paid for such coverage during that period.

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     5. Stock Awards.

          (a) All options held by Executive to acquire stock of the Company, other than options under
the Company’s 2008 Employee Stock Purchase Plan and any options the exercise price of which is
greater than $12.00, will immediately vest and become exercisable as of the Effective Date. All
restrictions on any restricted stock units of the Company held by Executive shall lapse as of the
Effective Date, and the Company shall issue to Executive the stock subject to those restricted
stock units on August 12, 2008.

          (b) As of the Effective Date, the period during which options held by Executive to acquire
stock of the Company, other than options under the Company’s 2008 Employee Stock Purchase Plan and
any options the exercise price of which is greater than $12.00, may be exercised, whether by
Executive or his estate, shall be extended until the earlier of (i) the respective latest dates
upon which the respective options could expire by their existing terms under any circumstances,
notwithstanding anything to the contrary in the agreements evidencing such options, or (ii)
February 10, 2011.

     6. No Authority. Executive understands and agrees that effective as of the Effective
Date, Executive is no longer authorized to incur any expenses, obligations or liabilities on behalf
of the Company or to act on behalf of or represent himself as an officer or director of the
Company.

     7. Return of Property. Executive warrants and represents that as of the Effective
Date, Executive will return to the Company all Company-owned property in Executive’s possession or
control, including, but not limited to, credit cards, access cards, keys to the Company’s buildings
or property, and all Company-owned equipment, computers and other electronic equipment; provided,
however, that Executive shall be entitled to retain the notebook computer and cell phone that he
has used while employed by the Company.

     8. Confidential Information; Restrictive Covenants. Section 7, Section 8 and Section
9 of the Employment Agreement shall remain in effect and not be affected by this Agreement (other
than Section 2(b) hereof), and they are hereby incorporated by reference into this Agreement.

     9. Characterization of Termination. The Company and Executive agree that for all
future purposes they will characterize Executive’s termination of employment as a voluntary
retirement.

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     10. Waiver and Release of Claims by Executive. With the exception of the obligations
of the Company arising under this Agreement and Executive’s rights to indemnification under the
existing governing documents of the Company and its Subsidiaries, Executive knowingly and
voluntarily, unconditionally and forever, waives and releases any and all claims, damages, causes
of action and rights that he may have against the Company or any of its Subsidiaries or any of
their respective directors, officers, agents, representatives or
employees, past or present (“Releasees”), arising out of or related to Executive’s service
with the Company and its Subsidiaries as an employee, officer or director, whether known or
unknown, contingent or noncontingent, contractual or otherwise; provided, however, that such waiver
and release shall not apply to any claims that Executive has or may have with respect to his
accrued and vested benefits under any pension or welfare benefits plans maintained by the Company.
Executive makes this commitment even though Executive understands that Executive may not, as of the
Effective Date, know all of the claims Executive may lawfully have against the Releasees and that
Executive is relinquishing the right to pursue any claims which Executive could have pursued before
courts without having the opportunity to pursue those claims to a trial and have the damages, if
any, set by a judge and/or jury. This release is intended to be as broad as the law allows and
includes, without limitation, any claims pursuant to statute or otherwise for attorneys’ fees and
costs.

     11. Review/Revocation of Claims. In accordance with the Older Workers’ Benefit
Protection Act, the parties agree that:

          (a) Executive specifically intends to knowingly and voluntarily waive any rights Executive may
have under the Age Discrimination in Employment Act (ADEA), and he intends to release Releasees
from any and all claims for damages or other remedies he may have under the ADEA. This release is
not to be construed as a waiver of ADEA claims that may arise after the execution of this
Agreement.

          (b) By this Agreement, the Company hereby advises Executive that Executive should consult with
and obtain the advice of an attorney of Executive’s choice before signing this Agreement.

          (c) Executive has been offered a period of twenty-one (21) days to consider whether to accept
the terms of this Agreement, and by executing this Agreement on the Effective Date, has waived the
balance of that period, if any.

          (d) Executive may revoke this Agreement within seven (7) calendar days of execution of this
Agreement. If Executive does so, the entire Agreement becomes void and unenforceable and no
benefits hereunder will be provided to Executive.

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     12. Market Stand-off. From the Effective Date until the date that is six (6) months
after all options held by Executive to acquire stock of the Company either have been exercised or
have expired, if the Company desires to conduct an underwritten public offering of its common stock
or other securities pursuant to the Securities Act of 1933, as amended (the “Act”), Executive
agrees that (a) he will not, to the extent requested by the Company and an underwriter of such
common stock or other securities, sell or otherwise transfer or dispose of (other than to donees
who agree to be similarly bound and other than those securities being registered in the offering)
any common stock or other securities of the Company convertible, exercisable or exchangeable for
shares of its common stock for a period of 180 days following the effective date of a registration
statement filed under the Act, and (b) he will enter into a customary form of market stand-off
agreement reflecting such restrictions upon the reasonable request of the Company and such
underwriter; provided, however, that all officers, directors and five percent (5%) or greater
beneficial owners of the Company’s common stock enter into similar agreements.

     13. Litigation Assistance. If any charge, complaint or lawsuit is filed against the
Company or any of its affiliates, Executive agrees to provide reasonable cooperation to the Company
in the defense of the same. Such cooperation shall include, without limitation, meeting with and
providing information to the Company’s agents and attorneys upon reasonable notice and at mutually
agreed upon times and places. In the event Executive is named in a lawsuit arising out of actions
Executive took in good faith in the course and within the scope of Executive’s service with the
Company or any of its Subsidiaries, the Company will defend, indemnify and hold harmless Executive
and advance expenses to Executive to the fullest extent permitted under the laws of the State of
Washington.

     14. Free and Voluntary Act of Executive. Executive acknowledges that Executive is
entering into this Agreement freely and voluntarily, that Executive has been given adequate time to
review and decide whether to sign this Agreement, and that Executive has signed this Agreement only
after full reflection and analysis. Executive further acknowledges that Executive has been advised
to obtain the advice of an attorney of Executive’s choice before signing this Agreement, that
Executive has read this Agreement carefully and fully understands all of its provisions, and that
neither the Company nor any of its agents or representatives has made any representations to
Executive concerning the terms or effects of this Agreement other than those contained herein.

     15. No Admission of Liability. This Agreement shall not be construed as an admission
by the Company or Executive of any wrongdoing, improper conduct, liability, breach of any agreement
between the Company or Executive, or violation by the Company or Executive of any statute, law or
regulation. Both parties agree that neither this Agreement nor any of its terms or conditions will
be offered or received in evidence in any proceeding or used in any manner as an admission of
wrongdoing or liability on either party’s part except in connection with an action to enforce the
terms of this Agreement.

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     16. Governing Law; Arbitration. Interpretation and enforcement of this Agreement
shall be governed by the substantive laws which exist in the State of Washington on the date of
execution of this Agreement; however, any controversy regarding this Agreement or the breach
thereof shall be resolved exclusively by arbitration in Spokane County, Washington. Arbitration
shall be conducted in accordance with the then-prevailing commercial arbitration rules of the
American Arbitration Association (the “AAA”), with one arbitrator appointed by the mutual consent
of the parties or, in the absence of such consent, by application of any party to the AAA. The
parties agree to abide by all decisions and awards rendered in such proceedings. Such decisions and
awards rendered by the arbitrator shall be final and conclusive and may be entered in any court
having jurisdiction thereof as a basis of judgment and of the issuance of execution for its
collection. All such controversies, claims or disputes shall be settled in this manner in lieu of
any action at law or equity; provided, however, that nothing in this Section 16 shall be construed
as precluding the Company from bringing an action for injunctive relief or other equitable relief.
In any such dispute, the prevailing party shall be entitled to its or his attorneys’ fees and
costs, in addition to any other relief that may be awarded.

     17. Changes to Agreement. This Agreement may not be changed orally, but only in
writing signed by both parties.

     18. Severability. If any of the provisions of this Agreement shall prove to be
invalid, void or illegal, it shall in no way affect, impair or invalidate any of the other
provisions hereof.

     19. Binding Effect. This Agreement shall be binding on and inure to the benefit of
the parties hereto and their respective heirs, personal representatives, successors and assigns.

     20. Entire Agreement. This Agreement constitutes the entire agreement between the
parties and, except to the extent that the provisions of the Employment Agreement continue to apply
in accordance with the terms hereof, it fully replaces and supersedes all prior arrangements,
discussions and negotiations between the parties except with respect to Executive’s accrued and
vested benefits under any pension or welfare benefit plan in which he participated while employed
by the Company.

     21. Enforcement. In any action to enforce any of the provisions of this Agreement,
the prevailing party shall be entitled to recover its reasonable attorney’s fees and costs, in
addition to any other damages and remedies available at law or in equity.

[Signature Page Follows]

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     IN WITNESS WHEREOF, the parties have entered into this Agreement as of the Effective Date
first set forth above.

	 	 	 	 	 	 	 	 	 
	EXECUTIVE:	 	 	 	COMPANY:
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	RED LION HOTELS CORPORATION
	 
	 	 	 	 	 	 	 	 
	/s/ Arthur M. Coffey

	 	 	 	By
	 	/s/ Jon Eliassen	 	 
	Arthur M. Coffey

	 	 	 	 	 	Jon Eliassen, Lead Independent Director, by
authority of resolution by the Board of
Directors	 	 

8

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