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EXHIBIT 10.3
AMENDMENT TO
THE QUANEX CORPORATION
1988 STOCK OPTION PLAN
THIS AGREEMENT by Quanex Corporation (the "Company"),
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company previously adopted the
plan agreement known as the "Quanex Corporation 1988 Stock Option Plan" (the
"Plan"); and
WHEREAS, the Board of Directors of the Company retained the right in
Paragraph 18 of the Plan to amend the Plan from time to time; and
WHEREAS, the Board of Directors of the Company has approved the
following amendment to the Plan;
NOW, THEREFORE, effective January 1, 2000, the Board of Directors of
the Company agrees that Paragraph 12 of the Plan is hereby amended, effective
with respect to all Options issued in the future under this Plan, as follows:
12. TERMINATION OF EMPLOYMENT OR DEATH OF OPTIONEE. Except as
may be otherwise expressly provided herein with respect to an Option
that is a Non-statutory Stock Option, all Options shall terminate on
the earlier of the date of the expiration of the Option or one day less
than three months after the date of severance, upon severance of the
employment relationship between the Company and the optionee, whether
with or without cause, for any reason other than the death, disability
or, in the case of Non-statutory Stock Options only, Retirement of the
optionee, during which period the optionee shall be entitled to
exercise the Option in respect of the number of shares that the
optionee would have been entitled to purchase had the optionee
exercised the Option on the date of such severance of employment.
Whether authorized leave of absence, or absence on military or
government service, shall constitute severance of the employment
relationship between the Company and the optionee shall be determined
by the Committee at the time thereof. In the event of severance because
of the disability of the holder of any Incentive Stock Option while in
the employ of the Company and before the date of expiration of such
Incentive Stock Option, such Incentive Stock Option shall terminate on
the earlier of such date of expiration or one year following the date
of such severance because of disability, during which period the
optionee shall be
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entitled to exercise the Incentive Stock Option in respect to the
number of shares that the optionee would have been entitled to purchase
had the optionee exercised the Incentive Stock Option on the date of
such severance because of disability. In the event of the death of the
holder of any Incentive Stock Option while in the employ of the Company
and before the date of expiration of such Incentive Stock Option, such
Incentive Stock Option shall terminate on the earlier of such date of
expiration or one year following the date of death. After the death of
the optionee, his executors, administrators or any person or person to
whom his Incentive Stock 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 an Incentive Stock Option to exercise the
Incentive Stock Option, in respect to the number of shares that the
optionee would have been entitled to exercise if he had exercised the
Incentive Stock Option on the date of his death while in employment.
For purposes of Incentive Stock Options issued under this Plan, an
employment relationship between the Company and the optionee shall be
deemed to exist during any period in which the optionee is employed by
the Company, a corporation issuing or assuming an option in a
transaction to which Section 424(a) of the Code applies, or a parent or
subsidiary corporation of such corporation issuing or assuming an
option. For this purpose, the phrase "corporation issuing or assuming
an option" shall be substituted for the word "Company" in the
definitions of parent and subsidiary corporations in Section 4 and the
parent-subsidiary relationship shall be determined at the time of the
corporate action described in Section 424(a) of the Code.
In the event of the death, disability, or Retirement of a
holder of a Non-statutory Stock Option, before the date of expiration
of such Non-statutory Stock Option, such Non-statutory Stock Option
shall continue fully in effect, including provisions providing for
subsequent vesting of such Option, for a period of not less than three
years commencing on the date of his death, disability or Retirement,
and shall terminate on the earlier of the date of the expiration of
such three-year period or the date of expiration of the Non-statutory
Stock Option notwithstanding any provision to the contrary in the
optionee's Option Agreement. After the death of the optionee, his
executors, administrators or any person or person to whom his
Non-statutory Stock 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 Non-statutory Stock Option to exercise the
Non-statutory Stock Option, in respect to the number of shares that the
optionee would have been entitled to exercise if he were still alive.
Notwithstanding the foregoing provisions of this Section, in the case
of a Non-statutory Stock Option granted on or after December 8, 1994,
the Committee may provide for a different option termination date in
the Option Agreement with respect to such Option.
Dated: December 9, 1999
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