Document:

EXHIBIT 10.11

 

 

QUANEX CORPORATION

 

EXECUTIVE PERFORMANCE STOCK AWARD AGREEMENT

 

<<Name>>

Grantee

 

	
  Date of Award:

  	
   

  	
  <<                >>

  
	
  Target Number of Shares of Common Stock:

  	
   

  	
  <<                >>

  

 

AWARD GRANT

 

1.                                      GRANT
OF PERFORMANCE STOCK AWARD. 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, an opportunity to receive shares of the Company’s Common
Stock, $0.50 par value per share (the “Common
Stock”), based upon attainment of the Performance Goals during the
Performance Period on the terms and conditions set forth in this Performance
Stock Award Agreement (this “Agreement”).

 

For purposes of
this Agreement, the term “Performance Period”
means the           -year
period beginning                              ,
20    , and ending                           ,
20     . For purposes of this Agreement, the term “Performance Goals” means
               .

 

2.                                      FINAL
PERFORMANCE FACTOR. The aggregate number of shares of the Common Stock
to be issued to you under this Agreement (the “Shares”)
is equal to the Target Number of Shares of Common Stock set forth above
multiplied by the Final Performance Factor (which is determined as provided
below):

 

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 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 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.

 

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 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
                             .

 

Executive

 

 

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 Shares 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 Shares) x $100 (Performance Share 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 Shares) 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 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.
Unless otherwise provided in this Agreement, the Company, on behalf of
the Employer, shall cause the Shares to be issued to you on                              ,
20      (the “Payment
Date”).

 

Upon the
issuance of Shares pursuant to this Agreement the 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.                                      TERMINATION OF EMPLOYMENT/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 change in control of the Company as defined in the Change in
Control Agreement between you and the Company (“Change in Control”) occurs,
on or before the last day of the Performance Period.

 

4.1           Termination Generally. If your
employment with the Company Group terminates on or before the last day of the
Performance Period for any reason other than one of the reasons described in
Sections 4.2 through 4.5 below, all of your rights in the Agreement 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 issue to you that number of shares of the Common Stock equal to
the product of (A) the Target Number of Shares of Common Stock set forth in this
Agreement and (B) a fraction, the numerator of which is the number of years
from the beginning of the Performance Period (rounded up to the nearest
full

 

2

 

year) through the date of the Change in Control and the denominator of
which is the number of years in the Performance Period.

 

(ii)           Delayed Payment In Certain
Circumstances. Notwithstanding any other provision of this
Section 4.2, no shares will be issued to you pursuant to this
Section 4.2 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 or these Terms and Conditions to the
contrary, if your employment with the Company Group terminates because you
incur a Permanent Disability before the last day of the Performance Period then
the Company will issue to you shares of Common Stock in an amount equal to the
product of (1) and (2) where (1) is the number of shares you would have
received under the Agreement if your employment with the Company Group had not
been terminated 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 employment with the Company Group
terminates and the denominator of which is the number of days in the
Performance Period. Any amount payable pursuant to this Section will be paid to
you on the Payment Date. After such Shares are issued to you, you will have no
further rights with respect to the Agreement and the Company Group will have no
further obligations to you pursuant to the Agreement. For purposes of this
Section, 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 or these Terms and Conditions 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
will issue to your estate shares of Common Stock in an amount equal to the
product of (1) and (2) where (1) is the number of shares you would have
received under the Agreement if your employment with the Company Group had not
been terminated 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 employment with the Company Group terminates
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. After such Shares are issued, the Company Group will have no
further obligations to you pursuant to the Agreement.

 

4.4           Retirement. Notwithstanding
any other provision of the Agreement or these Terms and Conditions to the
contrary, if your employment with the Company Group terminates due to your
Retirement before the last day of the Performance Period then the Company will
issue to you shares of Common Stock in an amount equal to the product of (1)
and (2) where (1) is the number of shares you would have received under the
Agreement if your employment with the Company Group had not been terminated
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 employment with the Company Group terminates 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 to you on the
Payment Date. After such Shares are issued to you, you will have no further
rights with respect to the Agreement and the Company Group will have no further
obligations to you pursuant to the Agreement. For purposes of this Section 4.5 “Retirement” means the voluntary
termination of your employment relationship with the

 

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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
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”)
has a withholding obligation, you shall deliver to the Company at the time of
such receipt or issuance, 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 is authorized to
withhold from the 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 Agreement is not
transferable by you otherwise than by will or by the laws of descent and
distribution. Your rights under this Agreement may not be sold, assigned, pledged,
exchanged, hypothecated or otherwise transferred, encumbered or disposed of
(other than by will or the applicable laws of descent and distribution). 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 award
granted under the Agreement 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.                                      AWARD UNDER THE AGREEMENT DOES 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 Common Stock with respect to the award granted to you under the
Agreement. Only after the Shares are issued in exchange for your rights under
this Agreement will you have all of the rights of a shareholder with respect to
such Shares issued in exchange for your rights under this Agreement.

 

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 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

 

4

 

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 these Terms and Conditions 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 granted in this Agreement you accept and agree to be bound
by all the terms and conditions of the Plan, this Agreement and the Terms and
Conditions.

 

	
   

  	
  QUANEX CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Raymond Jean – Chief
  Executive Officer

  

 

5EXHIBIT 10.12

 

 

QUANEX CORPORATION

 

DIRECTOR PERFORMANCE STOCK AWARD AGREEMENT

 

<<Name>>

Grantee

 

	
  Date of Award:

  	
   

  	
  <<                 >>

  
	
  Target Number of Shares of Common Stock:

  	
   

  	
  <<                 >>

  

 

AWARD GRANT

 

1.                                      GRANT
OF PERFORMANCE STOCK AWARD. 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, an
opportunity to receive shares of the Company’s Common Stock, $0.50 par value
per share (the “Common Stock”),
based upon attainment of the Performance Goals during the Performance Period on
the terms and conditions set forth in this Performance Stock Award Agreement
(this “Agreement”).

 

For purposes of
this Agreement, the term “Performance Period”
means the        -year period beginning                          ,
20    , and ending                     ,
20     . For purposes of this Agreement, the term “Performance Goals” means
                 .

 

2.                                      FINAL
PERFORMANCE FACTOR. The aggregate number of shares of the Common Stock
to be issued to you under this Agreement (the “Shares”)
is equal to the Target Number of Shares of Common Stock set forth above
multiplied by the Final Performance Factor (which is determined as provided
below):

 

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 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 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 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 through the last
day of the Performance Period. For purposes of this Agreement, the “Threshold Milestone” means
                        .

 

Director

 

 

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 Shares
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 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 Shares) x $100 (Performance Share 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 Shares) 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 shall cause the Shares to be issued to you on                          ,
20        (the “Payment Date”), unless otherwise provided under this
Agreement.

 

4.                                      TERMINATION OF MEMBERSHIP/CHANGE IN CONTROL. The following
provisions will apply in the event you cease to be a member of the Board of
Directors of the Company (the “Board”),
or “a change in the ownership or effective control of the corporation” or Section
409A Change in Control occurs,
on or before the last day of the Performance Period.

 

4.1           Termination Generally. If you cease
to be a member of the Board on or before the last day of the Performance Period
for any reason other than one of the reasons described in Sections 4.2 through
4.5 below, all of your rights in this Agreement will lapse and be completely
forfeited on the date you cease to be a member of the Board.

 

4.2           Permanent Disability. Notwithstanding
any other provision of this Agreement to the contrary, if you cease to be a
member of the Board because you incur a Permanent Disability before the last
day of the Performance Period then the Company will issue to you shares of
Common Stock in an amount equal to the product of (1) and (2) where (1) is the
number of Shares you would have received under this 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 4.2 will be paid to you on the
Payment Date. After such Shares are issued to you, you will have no further
rights with respect to this Agreement and the Company will have no further
obligations to you pursuant to this 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

 

2

 

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 this 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 to your estate shares of Common Stock in an amount
equal to the product of (1) and (2) where (1) is the number of Shares you would
have received 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 4.3 will be paid to your estate on the Payment
Date. After such Shares are issued, the Company will have no further
obligations to you pursuant to this Agreement.

 

4.4           Retirement. Notwithstanding
any other provision of this Agreement to the contrary, if you cease to be a
member of the Board due to your Retirement before the last day of the
Performance Period then the Company will issue to you shares of Common Stock in
an amount equal to the product of (1) and (2) where (1) is the number of shares
you would have received under this Agreement if your service with the Company
had not ceased 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 service with the Company ceased 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 you on the
Payment Date. After such Shares are issued to you, you will have no further
rights with respect to this Agreement and the Company will have no further
obligations to you pursuant to this Agreement. For purposes of this
Section 4.4, 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.”

 

4.5           Section 409A Change in
Control. Notwithstanding any other provision of this Agreement to the
contrary, if a Section 409A Change in Control occurs before the last day of the
Performance Period then the Company will issue to you shares of Common Stock in
an amount equal to the product of (1) and (2) where (1) is the number of shares
you would have received under this Agreement if the Section 409A Change in
Control had not occurred before the end of the Performance Period and (2) is 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. Any amount payable pursuant to this
Section 4.5 will be paid to you on the Date of the Section 409A Change in
Control. After such Shares are issued to you, you will have no further rights
with respect to this Agreement and the Company will have no further obligations
to you pursuant to this Agreement.

 

5.                                      NONTRANSFERABILITY. This Agreement is not
transferable by you otherwise than by will or by the laws of descent and
distribution. Your rights under this Agreement may not be sold, assigned,
pledged, exchanged, hypothecated or otherwise transferred, encumbered or
disposed of (other than by will or the applicable laws of descent and
distribution). 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 award
granted under this Agreement shall not affect in any way the right or power of
the Company or any company the stock of which is awarded pursuant to this
Agreement to make or authorize any adjustment,

 

3

 

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.                                      AWARD UNDER THIS AGREEMENT DOES 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 Common Stock with respect to the award granted to you under this
Agreement. Only after the Shares are issued in exchange for your rights under
this Agreement will you have all of the rights of a shareholder with respect to
such Shares issued in exchange for your rights under this Agreement.

 

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.

 

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.                               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.

 

11.                               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.

 

12.                               MISCELLANEOUS. This 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 this Agreement. Capitalized terms that are not
defined herein or in this Agreement shall have the meanings ascribed to such
terms in the Plan.

 

In
accepting the award granted 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

  

 

4

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