Document:

EXHIBIT 10.1

 

 

QUANEX CORPORATION

 

EMPLOYEE STOCK OPTION
AGREEMENT

 

<<Full
Name>>

Grantee

 

	
  Date of Grant:

  	
   

  	
  <<                   >>

  
	
   

  	
   

  	
   

  
	
  Total Number of Shares Relating to the Options Granted:

  	
   

  	
  <<                   >>

  
	
   

  	
   

  	
   

  
	
  Exercise
  Price per Share

  (the Exercise 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:

  	
   

  	
  [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                    .]

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

  

 

GRANT OF OPTION

 

1.                                      GRANT OF OPTION. 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 nonqualified stock option to purchase the total number
of shares set forth above of the Company’s common stock, $0.50 par value per
share, at the exercise price set forth above for each share subject to this
option, subject to adjustment as provided in the Plan. The option is
exercisable in installments in accordance with the Vesting Schedule set forth
above with the exercise price payable at the time of exercise. To the extent
not exercised, installments shall be cumulative and may be exercised in whole
or in part until the option terminates. The option may not be exercised after
the Expiration Date, or the applicable date following your termination of
employment specified in this Stock Option Agreement (this “Agreement”).

 

Employee

[Cliff
Vesting]

[Graded Vesting]

 

 

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

 

2.1           Termination
Generally. If your employment with the Company Group terminates before the
Expiration Date for any reason other than one of the reasons described in Section 2.2
or Section 2.3 below, all of your rights in the option 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
Section 2.2 or Section 2.3 below, in the event your employment with the Company
Group terminates, the option 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 option shall continue to vest after
such termination of employment until 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 2.2, 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
option shall continue to vest after such termination of employment until the
earlier of the Expiration Date or three years after the date of your death. After
your death, your executors, administrators or any person or persons to whom
your option 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
option, to exercise the option.

 

3.                                      CASHLESS EXERCISE. Cashless exercise, in accordance with the
terms of the Plan, shall be available to you for the shares subject to the
option.

 

4.                                      TAX WITHHOLDING. To the extent that the receipt of the
option or the Agreement, the vesting of the option or the exercise of the
option results in income to you for federal, state or local income, employment
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 subject to the option 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
option 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 option 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 option granted under this Agreement may
exercise the option during your lifetime. None of the Company, its 

 

2

 

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 option granted under this Agreement or
the transferee’s exercise of the option. 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 option shall not affect in any way the right or power of the
Company or any company the stock of which is issued 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.                                      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.

 

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 covered
by the option until the date of the issuance of the shares following exercise
of the option pursuant to this Agreement and payment for the shares.

 

9.                                      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 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 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.

 

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.                               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.

 

13.                               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.

 

3

 

14.                               MISCELLANEOUS. The Agreement and the option 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.
In the event of a conflict between this Agreement and the Plan provisions, the
Plan provisions will control. Capitalized terms that are not defined herein or
in the Agreement shall have the meanings ascribed to such terms in the Plan.

 

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

 

	
   

  	
  QUANEX CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Raymond
  Jean – Chief Executive Officer

  

 

4EXHIBIT 10.2

 

 

QUANEX CORPORATION

 

EXECUTIVE STOCK OPTION
AGREEMENT

 

<<Full
Name>>

Grantee

 

	
  Date of Grant:

  	
   

  	
  <<                     >>

  
	
   

  	
   

  	
   

  
	
  Total Number of Shares Relating to the Options Granted:

  	
   

  	
  <<                     >>

  
	
   

  	
   

  	
   

  
	
  Exercise
  Price per Share

  (the Exercise 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:

  	
   

  	
  [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                      .]

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

  

 

GRANT OF OPTION

 

1.                                      GRANT
OF OPTION. 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 nonqualified stock option to purchase the total number
of shares set forth above of the Company’s common stock, $0.50 par value per
share, at the exercise price set forth above for each share subject to this
option, subject to adjustment as provided in the Plan. The option is
exercisable in installments in accordance with the Vesting Schedule set forth
above with the exercise price payable at the time of exercise. To the extent
not exercised, installments shall be cumulative and may be exercised in whole
or in part until the option terminates. The option may not be exercised after
the Expiration Date, or the applicable date following your termination of
employment specified in this Stock Option Agreement (this “Agreement”).

 

Executive

[Cliff Vesting]

[Graded Vesting]

 

 

2.                                      TERMINATION OF EMPLOYMENT/CHANGE IN CONTROL. The following provisions will apply in the event
your employment with the Company and all Affiliates of the Company
(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 before the Expiration Date set
forth in the Agreement:

 

2.1           Termination 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 through 2.4 below, all of your rights in
the option 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 through 2.4 below, in the
event your employment with the Company Group terminates for any reason, the
option shall not continue to vest after such termination of employment.

 

2.2           Potential or Actual Change in Control.

 

(i)            Termination Without Cause or for Good Reason in
Connection With a Potential Change in Control Before the Expiration Date. If
(a) the Company Group terminates your employment without Cause (as defined
in the Change in Control Agreement between you and the Company) on or before
the third anniversary of the date of Grant (“Third
Anniversary Date”) prior to a Change in Control (whether or not a
Change in Control ever occurs) and such termination is at the request or
direction of a person who has entered into an agreement with the Company the
consummation of which would constitute a Change in Control or is otherwise in
connection with or in anticipation of a Change in Control (whether or not a
Change in Control ever occurs) or (b) you terminate your employment with
the Company Group for Good Reason (as defined in the Change in Control
Agreement between you and the Company) on or before the Third Anniversary Date
prior to a Change in Control (whether or not a Change in Control ever occurs),
and such termination or the circumstance or event which constitutes Good Reason
occurs at the request or direction of a person who has entered into an
agreement with the Company the consummation of which would constitute a Change
in Control or is otherwise in connection with or in anticipation of a Change in
Control (whether or not a Change in Control ever occurs), then the option shall
become fully exercisable on the date of the termination of your employment
relationship.

 

(ii)           Employment Not Terminated Before a Change in Control on
or Before the Expiration Date. If a Change in Control occurs on or before
the Third Anniversary Date and your employment with the Company Group does not
terminate before the date the Change in Control occurs, then the option shall
become fully exercisable on the date the Change in Control occurs.

 

2.3           Retirement or Disability. If your employment with the Company Group
terminates due to your Retirement or Disability, then your option shall
continue to vest after such termination of employment until 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 2.3, 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

 

2.4           Death. If your employment with the Company Group terminates due to your
death, then your option shall continue to vest after such termination of
employment until the earlier of the Expiration Date or three years after the
date of your death. After your death, your executors, administrators or any
person or persons to whom your option 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 option to exercise the option.

 

3.                                      CASHLESS EXERCISE. Cashless exercise, in
accordance with the terms of the Plan, shall be available to you for the shares
subject to the option.

 

4.                                      TAX WITHHOLDING. To the extent that the receipt of the
option or the Agreement, the vesting of the option or the exercise of the
option results in income to you for federal, state or local income, employment
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 subject to the option 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 option 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 option 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 option granted under this Agreement may
exercise the option 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 option granted under this Agreement or the transferee’s
exercise of the option. 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 option shall not affect in any
way the right or power of the Company or any company the stock of which is
issued 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.                                      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.

 

3

 

8.                                      NO RIGHTS AS A STOCKHOLDER. You shall not have any
rights as a stockholder of the Company with respect to any shares covered by
the option until the date of the issuance of such shares following exercise of
the option pursuant to the Agreement and payment for the shares.

 

9.                                      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 Grantee 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 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.

 

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.                               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.

 

13.                               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.

 

14.                               MISCELLANEOUS. The Agreement and the option are awarded
pursuant to and is subject to all of the provisions of the Plan, which are
incorporated by reference herein, including all amendments to the Plan, if any.
In the event of a conflict between this Agreement and the Plan provisions, the
Plan provisions will control. Capitalized terms that are not defined herein or
in the Agreement shall have the meanings ascribed to such terms in the Plan.

 

By
your acceptance of the option, you agree that the option 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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