Document:

EXHIBIT 10.15

 

 

QUANEX CORPORATION

 

DIRECTOR [STOCK-][CASH]SETTLED 

PERFORMANCE UNIT AWARD AGREEMENT

 

<<Name>>

Grantee

 

	
  Date of Award:

  	
   

  	
  <<                      >>

  
	
  Number of Performance Units Awarded:

  	
   

  	
  <<                      >>

  
	
  [Target Value of Each Performance Unit:]

  	
   

  	
  <<                      >>

  

 

AWARD OF PERFORMANCE
UNITS

 

1.             GRANT OF PERFORMANCE UNITS. Quanex
Corporation, a Delaware corporation (the “Company”),
pursuant to the Quanex Corporation 2006 Omnibus Incentive Plan (the “Plan”), hereby awards to you, the
above-named Grantee, effective as of the Date of Award set forth above, that
number of Performance Units set forth above (each, a “Performance Unit”, and collectively, the “Performance Units”), on the terms and
conditions set forth in this Performance Unit Award Agreement (this “Agreement”).

 

[The][Each]
Performance [Units provide][Unit provides]
you an opportunity to [receive shares of the Company’s common stock, $0.50
par value per share (the “Common Stock”),][earn a cash payment] based upon attainment of the
Performance Goals during the Performance Period. For purposes of this
Agreement, the term “Performance Period”
means the       -year period beginning
                    ,
20    , and ending
                  ,
20     , and the term “Performance Goals” means              .

 

2.             FINAL PERFORMANCE FACTOR. The aggregate
[number of shares of the Common Stock to be issued to you][amount payable] under this Agreement [(the “Shares”)] is equal to the number of
Performance Units multiplied by the Target Value of each Performance Unit
multiplied by the Final Performance Factor (which is determined as provided
below)[divided by the Fair Market Value of a Share of Common Stock on the
first business day immediately preceding the Payment Date]:

 

2.1           The Final Performance Factor
shall be equal to one (1) if (a) the Company achieves the Target Milestone
during the Performance Period and does not achieve the Maximum Milestone during
the Performance Period, (b) ”a change in the ownership or effective
control of the corporation” or a “change in the ownership of a substantial
portion of the assets of the corporation” (within the meaning of section 409A
of the Internal Revenue Code of 1986, as amended) (“Section 409A
Change in Control”)
has not occurred on or before the last day of the Performance Period, and
(c) you remain an active member of the Board of Directors of the Company
(the “Board”) through the last day of the
Performance Period. For purposes of this Agreement, the “Target Milestone” means                            
and the “Maximum Milestone” means
                   .

 

2.2           The Final Performance Factor
shall be equal to two (2) if (a) the Company achieves the Maximum
Milestone during the Performance Period, (b) a Change in Control has not
occurred on 

 

Director

[Stock Settled]—[Cash Settled]

 

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or before the last day of the Performance Period, and
(c) you remain an active member of the Board through the last day of the
Performance Period.

 

2.3           The Final Performance Factor
shall be equal to three-fourths (3⁄4) if (a) the Company achieves the
Threshold Milestone during the Performance Period and does not achieve the
Target Milestone during the Performance Period, (b) a Change in Control
has not occurred on or before the last day of the Performance Period, and
(c) you remain an active member of the Board through the last day of the
Performance Period. For purposes of this Agreement, the “Threshold Milestone” means
                       .

 

2.4           If the performance standard
achieved with respect to a particular Performance Goal is between the Threshold
Milestone and the Target Milestone or between the Target Milestone and the
Maximum Milestone, the applicable Final Performance Factor shall be determined
by interpolation.

 

For example, assume that the Committee grants a
director a performance based compensation award under the Plan that is
contingent upon achieving Performance Goal A and Performance Goal B,
weighting the importance of the goals as 50% and 50%, respectively. The
Committee establishes Threshold, Target and Maximum Milestones for each Goal. The
Final Performance Factor assigned for achieving the threshold, target and
maximum performance standards are 3⁄4, 1 and 2, respectively. Finally, assume
that the director is awarded 2,000 Performance Units with a Target Value of $100,
is continuously on the Board throughout the Performance Period and achieves the
Maximum Milestone for Performance Goal A, and precisely halfway between
the Target and Maximum Milestones for Performance Goal B. The total amount
payable to the director under the award is $250,000, which is determined as
follows:  The amount payable to the
director with respect to Performance Goal A is $100,000 (50% (Performance
Goal Percentage) x 2,000 (Performance Units) x $100 (Performance Unit Value) x
1 (Final Performance Factor) = $100,000), and the amount payable to the
director with respect to Performance Goal B is $150,000 (50% (Performance
Goal Percentage) x 2000 (Performance Units) x $100 (Target Value) x 1.5 (Final
Performance Factor)= $150,000).

 

2.5           If the Threshold Milestone
is not achieved during the Performance Period and a Section 409A Change in
Control has not occurred on or before the last day of the Performance Period,
then the award pursuant to this Agreement shall lapse and be forfeited as of
the last day of the Performance Period.

 

2.6           The Company’s determinations
with respect to the Performance Period for purposes of this Agreement shall be
binding upon all persons. The Company may not increase the amount payable under
this Agreement.

 

3.             PAYMENT. [The Company shall
cause the Shares to be issued][Any amount payable to you
pursuant to this Agreement will be paid] to you on                         ,
20       [the “Payment Date”],
unless otherwise provided in this Agreement as of the date of grant. [The
Shares that may be issued to you under this Agreement][Such
payment] will be [issued][made] to you
in exchange for the Performance Units and thereafter you shall have no further
rights with respect to such Performance Units or the Agreement.

 

[Upon the issuance of Shares pursuant to this Agreement,
such Shares shall be transferable by you (except to the extent that any
proposed transfer would, in the opinion of counsel satisfactory to the Company,
constitute a violation of applicable federal or state securities law).]

 

4.             SEPARATION
FROM SERVICE/SECTION 409A CHANGE IN CONTROL. The following provisions
will apply in the event you separate from service with the Company and its

 

2

 

Affiliates (the “Company Group”)
or “a change in the ownership or effective control of the corporation” or a “change
in the ownership of a substantial portion of the assets of the corporation”
(all within the meaning of section 409A of the Internal Revenue Code of 1986,
as amended) with respect to the Company (“Section 409A Change in Control”) occurs,
before the last day of the Performance Period.

 

4.1           Separation from Service
Generally. If you separate from service with the Company
Group on or before the last day of the Performance Period, then, except as
provided in Sections 4.2 through 4.5 below, all of your rights in the
Agreement, including all rights to the Performance Units granted to you, will
lapse and be completely forfeited on the date of your separation from service.

 

4.2           Section 409A Change in
Control. If a Section 409A Change in Control occurs while you are a director
and on or before the last day of the Performance Period, then the Company will [issue][pay] to you [shares of Common Stock][cash] in an amount
equal to the product of the Target Value of each Performance Unit multiplied by
the number of Performance Units that were awarded to you under this Agreement and
a fraction, the numerator of which is the number of years from the
beginning of the Performance Period (rounded up to the nearest full year)
through the date of the Section 409A Change in Control and the denominator of
which is the number of years in the Performance Period[divided by the
Fair Market Value of a Share of Common Stock on the first business day
immediately preceding the Payment Date]. [Any amount
payable to you pursuant to this Section 4.2(i) will be paid by the Company to
you t][T]en (10) business days after the date of the
Section 409A Change in Control [, the Company will issue to you one share of
the Common Stock for each Performance Unit granted to you under this Agreement.
Such shares will be issued][. Such payment will be
made] to you in exchange for the Performance Units and thereafter
you shall have no further rights with respect to such Performance Units or the
Agreement and the Company will have no further obligations to you pursuant to
the Performance Units or the Agreement.

 

4.3           Permanent Disability. Notwithstanding
any other provision of the Agreement to the contrary, if you separate from
service with the Company Group because you incur a Permanent Disability before
the last day of the Performance Period then the Company will [issue][pay] to you [shares of Common Stock] in [cash] an amount equal to the product of (1) and (2) where
(1) is the [number of shares][amount] you
would have received under the Agreement if you had not separated from service
with the Company Group before the end of the Performance Period and (2) is a
fraction, the numerator of which is the number of days from the beginning of
the Performance Period through the date you separated from service with the
Company Group and the denominator of which is the number of days in the
Performance Period. Any amount payable pursuant to this Section 4.3 will
be paid to you on the Payment Date. Such payment will be made to you in
exchange for the Performance Units and thereafter you shall have no further
rights with respect to such Performance Units or the Agreement and the Company
will have no further obligations to you pursuant to the Performance Units or
the Agreement. For purposes of this Section 4.3, you will have a “Permanent Disability” if you are unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months.

 

4.4           Death. Notwithstanding
any other provision of the Agreement to the contrary, if you die before the
last day of the Performance Period and while an active member of the Board,
then the Company will [issue][pay] to your
estate [shares of Common Stock] in [cash] an
amount equal to the product of (1) and (2) where (1) is the [number of shares][amount] you would have received

 

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under the Agreement if your membership on the Board had not ended
before the end of the Performance Period and (2) is a fraction, the numerator
of which is the number of days from the beginning of the Performance Period
through the date your membership on the Board ended and the denominator of
which is the number of days in the Performance Period. Any amount payable
pursuant to this Section 4.4 will be paid to your estate on the Payment
Date. Such payment will be made in exchange for the Performance Units and
thereafter your estate and heirs, executors, and administrators shall have no
further rights with respect to such Performance Units or the Agreement and the
Company will have no further obligations pursuant to the Performance Units or
the Agreement.

 

4.5           Retirement. Notwithstanding any other
provision of the Agreement to the contrary, if you separate from service with
the Company Group due to your Retirement before the last day of the Performance
Period then the [Company][Employer] will
[issue][pay] to you [shares of Common
Stock] in [cash] an amount equal to the
product of (1) and (2) where (1) is the amount you would have received under
the Agreement if you had not separated from service with the Company Group
before the end of the Performance Period and (2) is a fraction, the numerator
of which is the number of days from the beginning of the Performance Period
through the date you separated from service with the Company Group and the
denominator of which is the number of days in the Performance Period. Any
amount payable pursuant to this Section 4.5 will be paid [by the Employer] to you on the Payment Date. Such payment
will be made to you in exchange for the Performance Units and thereafter you
shall have no further rights with respect to such Performance Units or the
Agreement and the Company Group will have no further obligations to you
pursuant to the Performance Units or the Agreement. For purposes of this Section 4.5, the term “Retirement” means your voluntary cessation
of your membership as a director with the Company on or after the later of (a)
the date on which you attain age 70 or (b) the date your term as a director
expires if you attain age 70 during such term; provided, that that with respect
to any person who was a director on November 1, 1996, the reference to “70
years” shall be changed to “72 years.”

 

5.             NONTRANSFERABILITY. The
Performance Units and your rights under this Agreement may not be sold, assigned,
pledged, exchanged, hypothecated or otherwise transferred, encumbered or
disposed of. Any such attempted sale, assignment, pledge, exchange,
hypothecation, transfer, encumbrance or disposition in violation of this
Agreement shall be void and the Company shall not be bound thereby.

 

6.             CAPITAL
ADJUSTMENTS AND REORGANIZATIONS. The existence of the
Performance Units shall not affect in any way the right or power of the Company
[or any company the stock of which is awarded pursuant to the Agreement]
to make or authorize any adjustment, recapitalization, reorganization or other
change in its capital structure or its business, engage in any merger or
consolidation, issue any debt or equity securities, dissolve or liquidate, or
sell, lease, exchange or otherwise dispose of all or any part of its assets or
business, or engage in any other corporate act or proceeding.

 

7.             PERFORMANCE
UNITS DO NOT AWARD ANY RIGHTS OF A SHAREHOLDER. You shall not have the
voting rights or any of the other rights, powers or privileges of a holder of
the stock of the Company with respect to the Performance Units that are awarded
hereby.

 

8.             [SECURITIES
ACT LEGEND. If you are or become an officer or affiliate of the
Company under the Securities Act of 1933, you consent to the placing on any
certificate for the Shares of an appropriate legend restricting resale or other
transfer of the Shares except in accordance with such Act and all applicable
rules thereunder.]

 

4

 

9.             LIMIT OF
LIABILITY. Under no circumstances will the Company or an
Affiliate be liable for any indirect, incidental, consequential or special
damages (including lost profits) of any form incurred by any person, whether or
not foreseeable and regardless of the form of the act in which such a claim may
be brought, with respect to the Plan.

 

10.          REGISTRATION. The Shares that
may be issued under the Plan are registered with the Securities and Exchange
Commission under a Registration Statement on Form S-8.

 

11.          SALE OF SECURITIES. The Shares that
may be issued under this Agreement may not be sold or otherwise disposed of in
any manner that would constitute a violation of any applicable federal or state
securities laws. You also agree that (a) the Company may refuse to cause
the transfer of the Shares to be registered on the stock register of the
Company if such proposed transfer would in the opinion of counsel satisfactory
to the Company constitute a violation of any applicable federal or state
securities law and (b) the Company may give related instructions to the
transfer agent, if any, to stop registration of the transfer of the Shares.]

 

12.          MISCELLANEOUS. The Agreement
is awarded pursuant to and is subject to all of the provisions of the Plan,
including amendments to the Plan, if any. In the event of a conflict between this
Agreement and the Plan provisions, the Plan provisions will control. The term “you” and “your”
refer to the Grantee named in the Agreement. Capitalized terms that are not
defined herein shall have the meanings ascribed to such terms in the Plan.

 

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

 

	
   

  	
  QUANEX CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Raymond Jean – Chief Executive Officer

  

 

5EXHIBIT 10.16

 

 

QUANEX CORPORATION

 

[STOCK-][CASH-]SETTLED

STOCK APPRECIATION RIGHT AGREEMENT

 

<<Full
Name>>

Grantee

 

	
  Date of Grant:

  	
   

  	
  <<                        >>

  
	
   

  	
   

  	
   

  
	
  Total Number of Shares Relating to the SARs Granted:

  	
   

  	
  <<                        >>

  
	
   

  	
   

  	
   

  
	
  Grant
  Price per Share           

  (the Grant Price
  per Share is equal to the last per share sales price of the common stock of
  Quanex Corporation for the Date of Grant and, if the stock was not traded on
  the Date of Grant, the first trading day immediately preceding the Date of
  Grant, as reported in the New York Stock Exchange Composite Transactions)

  	
   

  	
  <<$                      >>

  
	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
  <<                       >>

  
	
   

  	
   

  	
   

  
	
  General Vesting Schedule:

  	
   

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

  

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

  

 

The following terms and
conditions are applicable to a stock appreciation right (a “SAR”) granted pursuant to the Quanex Corporation 2006
Omnibus Incentive Plan (the “Plan”)
and are incorporated as part of the Stock Appreciation Right Agreement setting
forth the terms of such SAR (the “Agreement”).

 

1.                                      GRANT OF STOCK APPRECIATION RIGHT  The
Compensation Committee of the Board of Directors of Quanex Corporation, a
Delaware corporation (the “Company”),
pursuant to the Quanex Corporation 2006 Omnibus Incentive Plan (the “Plan”), hereby grants to you, the
above-named Grantee, effective as of the Date of Grant set forth above, a stock
appreciation right (“SAR”) that
entitles you to receive, upon exercise hereof, [the number of shares of the
Company’s common stock][cash payment(s) from the
Company in an amount] determined by multiplying the excess of the
Fair Market Value of a share of the Company’s common stock on the date of
exercise over the Grant Price per share set forth above by the number of shares
of the Company’s common stock with respect to which the SAR is exercised[
and dividing the resulting product by the Fair Market Value of a share of 

 

Employee

[Cliff Vesting]—[Graded
Vesting]

[Stock Settled]—[Cash Settled]

 

 

the Company’s common stock on the date of exercise]. The SAR is exercisable in installments in
accordance with the Vesting Schedule set forth above by giving written notice
to the Company as specified in this Agreement. To the extent not exercised,
installments shall be cumulative and may be exercised in whole or in part until
the SAR terminates. The SAR may not be exercised after the Expiration Date, or
the applicable date following your termination of employment specified in this
Agreement.

 

2.                                      TERMINATION OF EMPLOYMENT. The following provisions will apply if your
employment with the Company and all Affiliates of the Company (collectively,
the “Company Group”) terminates
before the Expiration Date set forth in this Agreement:

 

2.1           Generally. If your employment with the Company Group terminates before the
Expiration Date for any reason other than one of the reasons described in
Sections 2.2 or 2.3 below, all of your rights in the SAR shall terminate
and become null and void on the earlier of the Expiration Date or 90 days after
the date your employment with the Company Group terminates. Except as specified
in Sections 2.2 or 2.3 below, if your employment with the Company Group
terminates for any reason, the SAR shall not continue to vest after such
termination of employment.

 

2.2           Retirement or Disability. If your employment with the Company Group
terminates due to your Retirement or Disability, then your rights under the SAR
that have not then vested shall vest on the effective date of your Retirement
or termination of employment due to Disability. All of your rights in the SAR
shall terminate and become null and void on the earlier of the Expiration Date
or three (3) years after the date your employment with the Company Group
terminates as a result of Retirement or a Disability  For purposes of this Section, the term “Retirement” means the voluntary
termination of your employment relationship with the Company Group on or after
the date on which (a) you are age 65 or (b) you are age 55 and have
five years of service with the Company Group.

 

2.3           Death. If your employment with the Company Group terminates due to your
death, then your rights under the SAR that have not then vested shall vest on
the date of your death. All rights in the SAR shall terminate and become null
and void on the earlier of the Expiration Date or three (3) years after the
date of your death. After your death, your executors, administrators or any
person or persons to whom your SAR may be transferred by will or by the laws of
descent and distribution, shall have the right, at any time prior to the
termination of the SAR to exercise the SAR.

 

3.                                      EXERCISE. Subject to the terms and provisions of the
Plan and this Agreement, the SAR may be exercised in whole or in part from time
to time by the delivery of timely written notice personally delivered or sent
by first class mail or facsimile transmission to the attention of the General
Counsel or Chief Financial Officer of the Company stating (1) the date you
wish to exercise such SAR, (2) the number of shares of Stock with respect
to which the SAR is to be exercised and (3) the [address or account][address] to which [the shares of the Company’s common
stock][any payment], less any applicable
withholding, should be mailed[ or transmitted]. Notice under this paragraph
shall be addressed as follows:  ATTN:
General Counsel and/or Chief Financial Officer, Quanex Corporation, 1900 West
Loop South, Suite 1500, Houston, Texas 77027 or 713.439.1016 (if via facsimile
transmission). The Company may provide a delegate to receive such notice or
alternate procedures for complying with the exercise and notice requirements of
this section. The exercise date shall be the later of the date specified in
such notice or the date such notice is actually received by the Company or its
delegate.

 

4.                                      TAX WITHHOLDING. To the extent that the receipt of the SAR
or this Agreement, the vesting of the SAR or the exercise of the SAR results in
income to you for federal, state or local income, employment

 

2

 

or other tax purposes with respect to which the Company Group has a
withholding obligation, you shall deliver to the Company at the time of such
receipt, vesting or exercise, as the case may be, such amount of money as the
Company Group may require to meet its obligation under applicable tax laws or
regulations, and, if you fail to do so, the Company Group is authorized to
withhold from the [shares][payment]
subject to the SAR or from any cash or stock remuneration then or thereafter
payable to you any tax required to be withheld by reason of such taxable
income, sufficient to satisfy the withholding obligation based on the last per
share sales price of the common stock of the Company for the trading day
immediately preceding the date that the withholding obligation arises, as
reported in the New York Stock Exchange Composite Transactions.

 

5.                                      NONTRANSFERABILITY. Except as specified in this Agreement, the
SAR and the Agreement are not transferable or assignable by you other than by
will or the laws of descent and distribution, and shall be exercisable during
your lifetime only by you. You may transfer this SAR to a member or members of
your immediate family, a trust under which your immediate family members are
the only beneficiaries and a partnership of which your immediate family members
are the only partners. For this purpose, “immediate family” means your spouse,
children, stepchildren, grandchildren, parents, grandparents, siblings
(including half brothers and sisters), and individuals who are family members
by adoption. Notwithstanding any other provision of this Agreement, such a
transferee of the SAR granted under this Agreement may exercise the SAR during
your lifetime. None of the Company, its employees or directors makes any
representations or guarantees concerning the tax consequences associated with
the inclusion of this provision in this Agreement, your transfer of the SAR
granted under this Agreement or the transferee’s exercise of the SAR. It is
your sole responsibility to seek advice from your own tax advisors concerning
those tax consequences. You are entitled to rely upon only the tax advice of
his own tax advisors.

 

6.                                      CAPITAL ADJUSTMENTS AND
REORGANIZATIONS. The
existence of the SAR shall not affect in any way the right or power of the
Company or any company the stock of which is issued pursuant to this Agreement
to make or authorize any adjustment, recapitalization, reorganization or other
change in its capital structure or its business, engage in any merger or
consolidation, issue any debt or equity securities, dissolve or liquidate, or
sell, lease, exchange or otherwise dispose of all or any part of its assets or
business, or engage in any other corporate act or proceeding.

 

7.                                      EMPLOYMENT RELATIONSHIP. For purposes of this Agreement, you shall be
considered to be in the employment of the Company Group as long as you have an
employment relationship with the Company Group. The Committee shall determine
any questions as to whether and when there has been a termination of such employment
relationship, and the cause of such termination, under the Plan and the
Committee’s determination shall be final and binding on all persons.

 

8.                                      NO RIGHTS AS A STOCKHOLDER. You shall not have any rights as a
stockholder of the Company with respect to any shares of common stock relating
to the SAR[ until the date of the issuance of the shares following exercise
of the SAR pursuant to this Agreement and the payment of any required
withholding].

 

9.                                      NOT AN EMPLOYMENT AGREEMENT. This Agreement is not an employment
agreement, and no provision of this Agreement shall be construed or interpreted
to create an employment relationship between you and the Company or any of its
Affiliates or guarantee the right to remain employed by the Company or any of
its Affiliates for any specified term.

 

10.                               [SECURITIES ACT LEGEND. If you are or become an officer or affiliate
of the Company under the Securities Act of 1933, you consent to the placing on
any certificate for the Shares of an appropriate

 

3

 

legend restricting resale or other transfer of the Shares except in
accordance with such Act and all applicable rules thereunder.]

 

11.                               LIMIT OF LIABILITY. Under no circumstances will the Company
Group be liable for any indirect, incidental, consequential or special damages
(including lost profits) of any form incurred by any person, whether or not
foreseeable and regardless of the form of the act in which such a claim may be
brought, with respect to the Plan.

 

12.                               MISCELLANEOUS. This Agreement and the SAR are awarded
pursuant to and are subject to all of the provisions of the Plan, which are
incorporated by reference herein, including all amendments to the Plan, if any.
If there is a conflict between this Agreement and the Plan provisions, the Plan
provisions will control. Capitalized terms that are not defined herein shall
have the meanings ascribed to such terms in the Plan.

 

By
your acceptance of the SAR, you agree that the SAR is granted under, governed
by and subject to the terms of the Plan and this Agreement.

 

	
   

  	
  QUANEX CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Raymond
  Jean – Chief Executive Officer

  

 

4

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