Document:

EXHIBIT
10.13

 

 

QUANEX CORPORATION

 

EMPLOYEE [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. The
Compensation Committee (the “Committee”)
of the Board of Directors of Quanex Corporation, a Delaware corporation (the “Company”), pursuant to the Quanex
Corporation 2006 Omnibus Incentive Plan (the “Plan”),
hereby awards to you, the above-named Grantee, effective as of the Date of
Award set forth above, 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 and (b) you remain in the active employ of one or
more members of the Company Group through the last day of the Performance
Period. For purposes of this Agreement, the “Target
Milestone” means                        
and the “Maximum Milestone” means
                         .

 

2.2           The Final Performance Factor
shall be equal to two (2) if (a) the Company achieves the Maximum
Milestone during the Performance Period, and (b) you remain in the active
employ of one or more members of the Company Group through the last day of the
Performance Period.

 

2.3           The Final Performance Factor
shall be equal to three-fourths (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 and (b) you remain in the
active employ of one or more members of the Company Group through the last day
of the Performance Period. For purposes of this Agreement, the “Threshold Milestone” means
                          .

 

Employee

[Stock Settled]
— [Cash Settled]

 

 

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

 

For example, assume that
the Committee grants an employee a performance based compensation award under
the Plan that is contingent upon achieving Performance Goal A and
Performance Goal B, weighting the importance of the goals equally 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 employee is awarded 2,000 Performance
Units with a Target Value of $100, is continuously employed by the Company
throughout the Performance Period and achieves the Maximum Milestone for
Performance Goal A, and precisely halfway between the Target and Maximum
Milestones for Performance Goal B. The total amount payable to the
employee under the award is $250,000, which is determined as follows:  .The amount payable to the employee with respect
to Performance Goal A is $100,000 (50% (Performance Goal Percentage) x
2,000 (Performance Units) x $100 (Performance Unit Value) x 1 (Final
Performance Factor) = $160,000), and the amount payable to the employee with
respect to Performance Goal B is $180,000 (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, then the award pursuant to this
Agreement shall lapse and be forfeited as of the last day of the Performance
Period.

 

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

 

3.             PAYMENT. [The Company,
on behalf of the Employer, shall cause the shares to be issued] [Any amount payable to you pursuant to this Agreement will be paid] to you [by the Employer] on                      ,
20     [(the “Payment Date”)] unless
otherwise provided under this Agreement. [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. The following provisions will apply in the event you
separate from service  with the Company and
all Affiliates (collectively, the “Company Group”),
before the last day of the Performance Period.

 

4.1           Separation from Service
Generally. Except as specified in Sections 4.2 through 4.4
below, if you separate from service with the Company Group on or before the
last day of the Performance Period, 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           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][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 [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 separate from service with the Company Group and
the denominator of which is the number of days in

 

2

 

the Performance Period. Any amount payable pursuant to this
Section 4.2 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 4.2, you will have a “Permanent Disability” if you are unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months.

 

4.3           Death. Notwithstanding
any other provision of the Agreement to the contrary, if you die before the
last day of the Performance Period and while in the active employ of one or
more members of the Company Group, then the [Company][Employer] 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 under the Agreement if you had not died 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 death 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 [by the Employer] 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 Group will have no further obligations pursuant to the Performance
Units or the Agreement.

 

4.4           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 4.4 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 4.4 “Retirement”
means the voluntary termination of your employment relationship with the
Company Group on or after the date on which (a) you are age 65 or
(b) you are age 55 and have five years of service with the Company Group.

 

5.             TAX
WITHHOLDING. To the extent that [the issuance of Shares][any payment] pursuant to the Agreement results in income,
wages or other compensation to you for any income, employment or other tax
purposes with respect to which the Company or the [legal entity that is a
member of the Company Group and that is classified as your employer (the “Employer”)][Employer] has a withholding obligation, you shall deliver
to the Company [or the Employer] at the time of
such receipt or [issuance][payment], as
the case may be, such amount of money as the Company or the Employer may
require to meet its obligation under applicable tax laws or regulations, and,
if you fail to do so, the Company [or the Employer]
is authorized to withhold from [any payment under]
the [Shares][Agreement] or
from any cash or stock remuneration or other payment then or thereafter payable
to you [by the Company or the Employer] any
tax required to be withheld by reason of such taxable income, wages or
compensation [including (without limitation) shares of Common Stock
sufficient to satisfy the withholding obligation based on the last per share
sales price of the Common Stock for the trading day immediately preceding the
date that the withholding obligation arises, as reported in the New York Stock
Exchange Composite Transactions.]

 

3

 

6.             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 Group shall not be bound thereby.

 

7.             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.

 

8.             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.

 

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

 

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

 

11.          [SECURITIES ACT
LEGEND. If you are 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.]

 

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

 

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

 

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

 

15.          EMPLOYER LIABLE FOR PAYMENT.
Except as specified in Section 4.2, the Employer is liable for the
payment of any amounts that become due under the Agreement.

 

4

 

16.          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 or
the Agreement.

 

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 10.14

 

 

QUANEX CORPORATION

 

EXECUTIVE [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. The Compensation Committee
(the “Committee”) of the Board of
Directors of Quanex Corporation, a Delaware corporation (the “Company”), pursuant to the Quanex
Corporation 2006 Omnibus Incentive Plan (the “Plan”),
hereby awards to you, the above-named Grantee, effective as of the Date of
Award set forth above, 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 in the active employ of one or more members of the Company
Group through the last day of the Performance Period. For purposes of this
Agreement, the “Target Milestone”
means                           
and the “Maximum Milestone” means
                        .

 

2.2           The Final Performance Factor
shall be equal to two (2) if (a) the Company achieves the Maximum
Milestone during the Performance Period, (b) a Section 409A Change in
Control has not occurred on or before the last day of the Performance Period,
and (c) you remain in the active employ of one or more members of the
Company Group through the last day of the Performance Period.

 

Executive

[Stock Settled]
— [Cash Settled]

 

 

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 Section 409A Change
in Control has not occurred on or before the last day of the Performance
Period, and (c) you remain in the active employ of one or more members of
the Company Group through the last day of the Performance Period. For purposes
of this Agreement, the “Threshold Milestone”
means                           .

 

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

 

For example, assume that
the Committee grants an executive 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 executive is awarded 2,000 Performance
Units with a Target Value of $100, is continuously employed by the Company
throughout the Performance Period and achieves the Maximum Milestone for
Performance Goal A, and precisely halfway between the Target and Maximum
Milestones for Performance Goal B. The total amount payable to the
executive under the award is $250,000, which is determined as follows:  .The amount payable to the executive 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 executive
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 Committee’s
determinations with respect to the Performance Period for purposes of this
Agreement shall be binding upon all persons. The Committee may not increase the
amount payable under this Agreement.

 

3.                                      PAYMENT. [The Company,
on behalf of the Employer, shall cause the Shares to be issued][Any
amount payable to you pursuant to this Agreement will be paid] to you [by the Employer] on                       ,
20      [the “Payment Date”],
unless otherwise provided under this Agreement. [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 your employment with the Company and all
Affiliates (collectively, the “Company Group”)
terminates, or a Section 409A Change in Control occurs, before the last day of
the Performance Period.

 

4.1           Separation from Service
Generally. Except as specified in Sections 4.2 through 4.5
below, if you separate from service with the Company Group on or before the
last day of the Performance Period,

 

2

 

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 your employment terminates.

 

(i)            Change in Control. If the
Company Group terminates your employment without Cause or you terminate your
employment with Good Reason (all as defined in the Change in Control Agreement
between you and the Company) on or before the last day of the Performance
Period prior to a Change in Control, then ten (10) business days after the
date your employment relationship with the Company Group terminates, the
Company will pay to you [that number of shares of the Common Stock][an amount in cash] 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 for the year in which the termination
occurs (the “Award Target Value”) and (b) a
fraction, the numerator of which is the number of years through you date of
termination in the current Performance Period (rounded up to the nearest full
year) and the denominator of which is the number of years in the current
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 Employer to you t][T]en (10) business days
after the date your employment relationship with the Company Group terminates[,the
Company will issue to you the shares payable pursuant to this Section 4.2(i). 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 Group will have no further obligations to you
pursuant to the Performance Units or the Agreement.

 

(ii)           Delayed Payment In Certain
Circumstances. Notwithstanding any other provision of this
Section 4.2, no [shares will be issued to you][payment]
pursuant to this Section 4.2 [will be made to you] before
the earlier of (1) the Payment Date specified in the Agreement (the “Payment Date”), or (2) the date on
which you incur a separation from service (or, if you are a specified employee
the date that is six months after the date on which you incur a separation from
service). For this purpose, the terms “separation from service” and “specified
employee” shall have the meanings specified in section 409A of the Internal
Revenue Code of 1986, as amended and the rules and regulations issued
thereunder.

 

4.2           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][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 [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 [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 4.3, 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.

 

4.3           Death. Notwithstanding
any other provision of the Agreement to the contrary, if you die before the
last day of the Performance Period and while in the active employ of one or
more members of the Company Group, then the [Company][Employer] will [issue][pay]
to your estate [shares of Common

 

3

 

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 died 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 of your death 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 [by the Employer] 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 Group
will have no further obligations pursuant to the Performance Units or the
Agreement.

 

4.4           Retirement. Notwithstanding
any other provision of the Agreement to the contrary, if you separated 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 “Retirement”
means the voluntary termination of your employment relationship with the
Company Group on or after the date on which (a) you are age 65 or
(b) you are age 55 and have five years of service with the Company Group.

 

5.                                      TAX WITHHOLDING. To the extent that [the issuance of
Shares][any payment] pursuant to the
Agreement results in income, wages or other compensation to you for any income,
employment or other tax purposes with respect to which the Company or the [legal
entity that is a member of the Company Group and that is classified as your
employer (the “Employer”)][Employer] has a withholding obligation, you shall deliver
to the Company [or the Employer] at the time of
such receipt or [issuance][payment], as
the case may be, such amount of money as the Company or the Employer may
require to meet its obligation under applicable tax laws or regulations, and,
if you fail to do so, the Company [or the Employer] is
authorized to withhold from [any payment under] the
[Agreement]  [Shares] or from any
cash or stock remuneration or other payment then or thereafter payable to you [by
the Company or the Employer] any tax required to be withheld by reason of
such taxable income, wages or compensation [including (without limitation)
shares of Common Stock sufficient to satisfy the withholding obligation based
on the last per share sales price of the Common Stock for the trading day
immediately preceding the date that the withholding obligation arises, as
reported in the New York Stock Exchange Composite Transactions].

 

6.                                      NONTRANSFERABILITY. 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 Group shall not be bound thereby.

 

7.                                      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

 

4

 

otherwise dispose of all or any part of its assets or business, or
engage in any other corporate act or proceeding.

 

8.                                      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.

 

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

 

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

 

11.                               [SECURITIES ACT LEGEND. If you are 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.]

 

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

 

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

 

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

 

15.                               EMPLOYER LIABLE FOR PAYMENT. Except as specified in
Section 4.2, the Employer is liable for the payment of any amounts that become
due under the Agreement.

 

16.                               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.

 

5

 

	
   

  	
  QUANEX CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Raymond Jean – Chief Executive Officer

  

 

6

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