NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Quanex Building Products Corporation, a Delaware corporation (the "Company" or "Quanex"), will be held at the principal executive offices of the Company, 1800 West Loop South, Suite 1500, Houston, Texas, 77027, on Thursday,Friday, March 1, 2018,22, 2019, at 8:00 a.m., C.S.T.C.D.T., for the following purposes:

(1)

To elect foursix directors to serve until the Annual Meeting of Stockholders in 2019;2020;



(2)

To approve an advisory resolution approving the compensation of the Company's named executive officers;



(3)

To approve a resolution ratifying the appointment of the Company's independent auditor for fiscal 2018;2019; and



(4)

To transact such other business as may properly come before the meeting or any adjournment or adjournments thereof.

        Information with respect to the above matters is set forth in the Proxy Statement that accompanies this Notice.

        The Board of Directors of the Company (the "Board of Directors" or "Board") has fixed the close of business on January 10, 2018,30, 2019, as the record date for determining stockholders entitled to notice of and to vote at the meeting. A complete list of the stockholders entitled to vote at the meeting will be maintained at the Company's principal executive offices, will be open to the examination of any stockholder for any purpose germane to the meeting during ordinary business hours for a period of ten days prior to the meeting, and will be made available at the time and place of the meeting during the whole time thereof.

        Please execute your vote promptly. Your designation of a proxy is revocable and will not affect your right to vote in person if you find it convenient to attend the meeting and wish to vote in person.

        The Company's Annual Report to Stockholders for the fiscal year ended October 31, 2017,2018, accompanies this Notice.

		By order of the Board of Directors,
		Kevin P. Delaney Senior Vice President—General Counsel and Secretary

Houston, Texas
January 26, 2018February 27, 2019

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PROXY STATEMENT

Annual Meeting of Stockholders
To Be Held March 1, 201822, 2019

        This Proxy Statement and the accompanying form of proxy are to be first mailed on or about January 26, 2018,February 27, 2019, to all holders of record on January 10, 201830, 2019 (the "Record Date"), of the common stock, $.01 par value (the "Common Stock"), of Quanex Building Products Corporation, a Delaware corporation (the "Company"). These materials are furnished in connection with the solicitation of proxies by the Board of Directors of the Company to be used at the Annual Meeting of Stockholders to be held at the Company's principal executive offices, 1800 West Loop South, Suite 1500, Houston, Texas, 77027, at 8:00 a.m., C.S.T.C.D.T., on Thursday,Friday, March 1, 2018,22, 2019, and at any adjournment or adjournments thereof. Shares of Common Stock represented by any un-revoked proxy in the enclosed form, if such proxy is properly executed and is received prior to the meeting, will be voted in accordance with the specifications made on such proxy. Proxies on which no specifications have been made will be voted FOR the election as director of theall nominees listed herein, FOR ratification of the appointment of the Company's independent auditor for fiscal 2018,2019, and FOR each other proposal included herein. Proxies are revocable by written notice to the Secretary of the Company at the address of the Company set forth below, or by delivery to the Company of a later dated proxy, at any time prior to their exercise. Proxies may also be revoked by a stockholder attending and voting in person at the meeting.

        The Common Stock is the only class of securities of the Company that is entitled to vote at the meeting. As of the close of business on the Record Date, the date for determining stockholders who are entitled to receive notice of and to vote at the meeting, there were 35,070,48233,299,617 shares of Common Stock outstanding. Each share is entitled to one vote. The presence at the meeting, in person or by proxy, of the holders of a majority of shares of Common Stock is necessary to constitute a quorum. Abstentions and broker non-votes are counted as present in determining whether the quorum requirement is satisfied.

        The cost of soliciting proxies will be borne by the Company. Solicitation may be made personally or by mail, telephone or electronic data transfer by officers, directors and regular employees of the Company (who will not receive any additional compensation for any solicitation of proxies), or by the firm of Morrow Sodali, LLC, which has been retained by the Company to assist in the solicitation for a fee of approximately $7,500 plus expenses. The Company will also reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable expenses for sending proxy materials to the beneficial owners of Common Stock. The mailing address of the Company's principal executive office is 1800 West Loop South, Suite 1500, Houston, Texas, 77027.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING TO BE HELD ON MARCH 1, 2018:22, 2019:

        Our Proxy Statement and 20172018 Annual Report are available online at the following web address:

http://www.quanex.com/2017AR2018AR

        In accordance with Securities and Exchange Commission rules, this website provides complete anonymity with respect to any stockholder accessing it.

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MATTERS TO COME BEFORE THE MEETING

PROPOSAL NO. 1
ELECTION OF DIRECTORS

        FourSix directors are to be elected at the meeting. Prior to March 2016, the Company's Certificate of Incorporation and Amended and Restated Bylaws provided that the Board of Directors would bewas divided into three classes, as nearly equal in number as possible, with the terms of office of the classes expiring at different times. Class III directors will standtimes for election ateach class. In March 2016, however, the Company's annual stockholder meetingCompany amended its Certificate of Incorporation and Bylaws to declassify the Board of Directors by providing that each director would be held in 2019, andelected for a term of only one year. Class I and Class II directors are standing for election at the annual meetingwere elected to which this proxy relates. However, in accordance with amendments approvedone year terms at the Company's 2016 Annual Meeting in 2018, and the final three year term of Stockholders,the Class III directors will expire at the Company's Annual Meeting in 2019. As such, the declassification process is now complete, and all of the Company's current directors are up for election for one-year terms.

        Because the Quanex Corporate Governance Guidelines mandate that no person may be nominated to serve on the Board of Directorsafter his or her 72^nd birthday, Mr. Nosbaum is not standing for re-election as a director. Instead, the Board has nominated Mr. Donald R. Maier to stand for election as a director. Mr. Maier is currently the President and Chief Executive Officer of Armstrong Flooring, located in Lancaster, Pennsylvania. In selecting Mr. Maier to stand for election, the Board engaged in a thorough and diligent search process that involved consideration of declassifying,a number of highly qualified candidates. The Board strongly believes that Mr. Maier's executive, industry, and each directoroperational experience, along with his strong understanding of corporate governance issues, will nowprove to be elected to a termhuge asset for the Company's Board. More information about Mr. Maier's background and qualifications may be found on page 5 of only one year.this Proxy Statement.

        Current directors Robert R. Buck, Susan F. Davis, William C. Griffiths, Joseph D. Rupp and Curtis M. Stevens are the directors currently standing for election. Ms. Davis and Mr. Stevens were eachGriffiths was elected by the stockholders in 20172016 to a term ending in 2018, while Messrs. Buck2019, and Ruppall other directors were each elected by the stockholders in 20152018 to a one-year term endingthat ends in 2018.2019. Each of these directors aredirector nominee is standing for re-election for a term expiring at the 2019 Annual Meeting. Messrs. Griffiths and Nosbaum were elected to a term ending in 2019 at the 20162020 Annual Meeting.

        In reviewing the information contained in this Proxy Statement that relates to our directors and officers, it is important to note that Quanex Building Products Corporation was initially created on December 12, 2007, in connection with the April 2008 spin-off of the building products business of Quanex Corporation, and the related merger of Quanex Corporation with Gerdau S.A. In connection with these transactions, the directors and officers of Quanex Corporation became the directors and officers of Quanex Building Products Corporation. As such, we have listed these "carryover" directors and officers as beginning with the Company in 2007 despite the fact that they may have served in similar positions with Quanex Corporation prior to that time. For information related to the transaction, the origins of Quanex Building Products Corporation, and any pre-transaction service as a director or officer of Quanex Corporation, please see (a) the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2008, (b) the Information Statement attached as Exhibit 99.1 to the Company's Registration Statement on Form 10, filed April 4, 2008 and effective April 9, 2008, and (c) Quanex Corporation's Annual Report on Form 10-K, as amended by Form 10-K/A, for the fiscal year ended October 31, 2007.

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Director and Director Nominee Biographies, Key Attributes, and Skills

ROBERT BUCK, age 7071

        Biography:    Mr. Buck is the Chairman of the Board of Beacon Roofing Supply, Inc., a $6.4 billion NASDAQ-traded roofing materials distributor with approximately $7 billion in revenue.distributor. Prior to becoming Chairman in early 2011, Mr. Buck served as Chairman and CEO of Beacon from 2007 to 2011; as Chairman, President, and CEO in 2007; and as President and CEO from 2003 to 2007. Prior to joining Beacon in 2003, Mr. Buck spent 21 years with Cintas Corporation in various executive positions. Mr. Buck holds a B.S. in Finance from the University of Cincinnati.

        Key Attributes, Experience, and Skills:    During his time at Beacon Roofing and Cintas Corporation, Mr. Buck developed extensive executive leadership, finance and accounting expertise. Mr. Buck also participated in numerous mergers and acquisitions and has strong corporate governance experience. In addition, Mr. Buck's tenure at Beacon Roofing has provided him substantial experience in the building products industry. Mr. Buck has also amassed a good deal ofextensive public company board experience through his service on the boards of Beacon Roofing Supply, Multi-Color Corporation, and Kendle International.

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        Other Directorships Since 2012:2013:    Mr. Buck currently serves on the boards of Beacon Roofing Supply, Inc., and Multi-Color Corporation. Mr. Buck also serves on the board of privately held Elkay Manufacturing Co.Co..

SUSAN DAVIS, age 6465

        Biography:    Ms. Davis retired in 2016 from Johnson Controls, Inc., a global leader in automotive systems, building efficiency and power solutions. Prior to her retirement, Ms. Davis served as the Executive Vice President—Asia Pacific for Johnson Controls, beginning in 2015. Prior to her appointment to that position, Ms. Davis served as the chief human resources officer of Johnson Controls from 1994 to 2015, holding the positions of Executive Vice President and Chief Human Resources Officer from 2014 to 2015, Executive Vice President of Human Resources from 2006 to 2014, and Vice President of Human Resources from 1994 to 2006. Prior to that time, she served in various other positions with Johnson Controls, which she originally joined in 1983. Ms. Davis received an MBA degree from the University of Michigan, and received both Master's and Bachelor's degrees from Beloit College.

        Key Attributes, Experience, and Skills:    As the executive leader of Human Resources forat Johnson Controls from 1994 to 2015, and through her role as Executive Vice President—Asia Pacific from 2015 to 2016,for over twenty years, Ms. Davis acquired extensive management, corporate governance, public company, and international business expertise. She has also worked extensively with executive compensation and management development issues. Further, Ms. Davis' time as a director for Butler Manufacturing, and Cooper Tire & Rubber Company, and Johnson Controls' status as a global leader in building efficiency

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products and controls, has provided Ms. Davis with the opportunity to accumulate extensive experience in the building products industry and with manufacturing processes, both of which are very valuable in her service as a director of the Company. Ms. Davis also gained public company board experience as a result of her prior service as a director for Butler Manufacturing and Quanex Corporation.Corporation, and in her current service as a board member of Cooper Tire & Rubber Company.

        Other Directorships Since 2012:2013.    Ms. Davis currently serveshas served since 2016 on the board of Cooper Tire & Rubber Company, which she joined in 2016.an NYSE-traded manufacturer of car, motorcycle, truck, and racing tires.

WILLIAM GRIFFITHS, age 6667

        Biography:    Mr. Griffiths was named Chairman, President, and Chief Executive Officer of the Company in July 2013, after serving as an independent director of the Company beginning in 2009.2013. Prior to joining the Company as President and CEO, Mr. Griffiths served as the Managing Director and a member of the board of directors of Sealine (International) Ltd., a privately held manufacturer of yachts and other marine vessels based in the United Kingdom. Prior to joining Sealine in January 2012, Mr. Griffiths served as Chairman of the Board, President and CEO of Champion Enterprises, Inc., a NYSE-traded producer of modular and manufactured housing until 2010. He joined Champion as a Director, and as President and Chief Executive Officer, in August 2004, and was named Chairman of the Board in 2006. Champion filed for Chapter 11 bankruptcy on November 15, 2009. From 2001 to 2004, Mr. Griffiths was President—Fluid Systems Division at SPX Corporation, a global multi-industry company located in Charlotte, North Carolina. Mr. Griffiths graduated from the University of London with a BS with Honors in Mining Engineering. In addition, Mr. Griffiths is a graduate of the Harvard Business School's PMD executive education program.

        Key Attributes, Experience, and Skills:    During his tenure as CEO of Champion Enterprises, Mr. Griffiths gained extensive experience with manufacturing processes, corporate governance, and public company issues. Champion also provided Mr. Griffiths with valuable expertise and insight into the building products industry, which he has continued to build during his tenure at Quanex Building Products Corporation.Products. In addition, Mr. Griffiths' time as a senior leader at SPX Corporation provided him with extensive and wide-reaching expertise in international operations management and international

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business in general. It also allowed him to build a great deal of experience in mergers and acquisitions, both international and domestic.

DONALD MAIER, age 54

        Biography:    Mr. Maier has served since 2016 as the President and Chief Executive Officer of Armstrong Flooring, Inc., an NYSE-traded global producer of flooring products for use primarily in the construction and renovation of commercial, residential and institutional buildings. Prior to assuming that role, Mr. Maier served as Executive Vice President and CEO of the Flooring Products division of Armstrong World Industries, Inc. from 2014 to 2016, and as Senior Vice President, Global Operations Excellence of Armstrong World Industries, Inc. from 2010 to 2014. Mr. Maier also served as Senior Advisor of TPG Capital Advisors from 2007 to 2010, and in various senior leadership, strategic, marketing, business development, and engineering roles at Hillenbrand Industries and its subsidiaries Hill-Rom and Batesville Casket Company from 1987 to 2007.

        Key Attributes, Experience, and Skills:    Mr. Maier has extensive manufacturing, engineering, marketing and operational experience that will make him a valuable member of the Board. In addition, Mr. Maier's experience as a director and chief executive officer of a global and publicly-traded company has provided him with extensive corporate governance, international business, and public company expertise.

        Other Directorships Since 2013.    Mr. Maier has served on Armstrong Flooring's board of directors since 2016.

LEROY NOSBAUM, age 7172

        Biography:    Mr. Nosbaum is the retired Chairman, President and Chief Executive Officer of Itron, Inc., a NASDAQ-traded leading technology provider to the global energy and water industries and a leading provider of intelligent metering, data collection and utility software solutions. Mr. Nosbaum joined Itron in 1996, was promoted to the role of President and CEO in 2000, and was elected as Chairman in 2002. He retired from Itron in 2009, but returned as President and Chief Executive Officer in 2011, before retiring again in December 2012. Prior to his employment with Itron, Mr. Nosbaum served in various positions at Metricom, Inc. from 1989 to 1996, and at Schlumberger Limited from 1977 to 1989. Mr. Nosbaum holds a B.S. in Electrical Engineering from Valparaiso University.

        Key Attributes, Experience, and Skills:    Mr. Nosbaum brings to the board strong sales, marketing and technology expertise, which he gained during his service as the Executive VP of Marketing and Sales for Metricom, Inc. In his various roles at Itron, Mr. Nosbaum also built extensive public company, finance, strategic development, acquisition, technology and manufacturing process expertise. Further, Mr. Nosbaum gained extensive finance and acquisition experience while serving as CEO of Itron. Mr. Nosbaum also gained international experience at Itron, which conducts operations throughout Europe, South America, and Asia. In addition, he has built corporate governance expertise both through his role as CEO of Itron, and through his service on the Nominating and Corporate Governance Committees of Esterline Technologies and Quanex Building Products Corporation.

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        Other Directorships Since 2012:    Mr. Nosbaum served as director of Itron from 2000 to 2002 and as Chairman from 2002 to 2009. After a brief interval, Mr. Nosbaum again served as a director of Itron from 2011 until his retirement in December 2012.Products.

JOSEPH RUPP, age 6768

        Biography:    Mr. Rupp is the retired Chairman of the Board of Olin Corporation, an NYSE traded basic materials company concentrated in chemicals and ammunition. Mr. Rupp served as the Chairman of the Board of Olin Corporation from May 2016 to April 2017. Prior to May 2016, Mr. Rupp served as Chairman, President and Chief Executive Officer of Olin since 2005. Prior to his election as Chairman, Mr. Rupp was President and Chief Executive Officer of Olin from 2002 to 2005. Prior to

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2002, Mr. Rupp served in various positions with Olin, which he originally joined in 1972. Mr. Rupp holds a bachelor's degree in metallurgical engineering from the University of Missouri, Rolla.

        Key Attributes, Experience, and Skills:    As the CEO of Olin, Mr. Rupp amassed strong corporate governance expertise, public company management experience, and solid financial acumen. He also brings a wealth of experience in operations management, lean manufacturing processes, and mergers and acquisitions. In addition, he has gained extensive public board experience as a director of Olin fromsince 2002 to 2017 and as a director of Quanex Building Products since 2008.

        Other Directorships Since 2012:2013:    Mr. Rupp served as a director of Olin Corporation from 2002 to 2005, and as Chairman of Olin's board from 2005 until his retirement in April 2017. Mr. Rupp also currently serveshas served since 2018 on the Boardsboard of Owens-Illinois, an NYSE-traded manufacturer of container glass products and since 2016 as a director of Cass Information Systems, and Owens-Illinois, Inc.a NASDAQ traded company.

CURTIS STEVENS, age 6566

        Biography:    Mr. Stevens retired in June 2017 from Louisiana-Pacific Corporation, an NYSE traded building materials manufacturer. Prior to his retirement, Mr. Stevens served as the Chief Executive Officer and a director of Louisiana-Pacific from 2012 to June 2017. Prior to becoming CEO in May 2012, Mr. Stevens served as Louisiana-Pacific's Chief Operating Officer and Executive Vice President beginning in December 2011. Prior to assuming the role of Chief Operating Officer, Mr. Stevens served as Chief Financial Officer of Louisiana-Pacific since 1997, and as Executive Vice President, Administration, since 2002. Before joining Louisiana-Pacific, Mr. Stevens served for 14 years in various financial and operational positions at Planar Systems, a flat-panel display products manufacturer. Mr. Stevens holds a B.A. in Economics and an M.B.A with a concentration in Finance from the University of California at Los Angeles.

        Key Attributes, Experience, and Skills:    Through his various roles at Louisiana-Pacific,Louisiana Pacific, Mr. Stevens acquired broad experience in the building products industry. He also possesses a strong background in accounting and finance, as well as extensive expertise in information technology and supply chain management, strategy development, and public company issues. Further, Louisiana-Pacific'sLouisiana Pacific's international operations have provided Mr. Stevens with strong international business experience.

        Other Directorships Since 2012:2013:    Mr. Stevens served on the board of Louisiana-Pacific from 2012 until his retirement in 2017.2017, and has served since 2018 on the board of Interfor Corporation, a lumber producer whose stock is listed on the Toronto Stock Exchange.

        The Board of Directors has affirmatively determined that Ms. Davis and each of Messrs. Buck, Maier, Nosbaum, Rupp, and Stevens have no material relationship with the Company and have satisfied the independence requirements of the New York Stock Exchange. In assessing director and director nominee independence, the Board of Directors considered the relationships (as a customer or supplier or otherwise) of the Company with various companies with which such directors or director nominees may be affiliated and has determined that there are no such relationships that, in the opinion of the Board, might impact any director's independence. In making this assessment, the Board took into account the level of transactions with such companies in relationship to the Company's and the other parties' aggregate sales, the level of

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director or director nominee involvement in such transactions and the ability of such directors or director nominees to influence such transactions. Based on its review, the Board determined that no transactions occurred during the year that might affect any non-employee director'sdirector or director nominee's independence. During the fiscal year, the Nominating & Corporate Governance Committee determined that there were no "related person" transactions, as defined by the Securities and Exchange Commission. In addition, each of such directorsdirector and director nominee has met the definitions of "non-employee director" under Rule 16b-3 of the Securities Exchange Act of 1934 and "outside director" under Section 162(m) of the Internal Revenue Code of 1986.

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        There are no arrangements or understandings between any person and any of the directorsdirector nominees pursuant to which such director nominee was selected as a nominee for election at the Meeting, and there are no family relationships among any of the directorsdirector nominees or executive officers of the Company. Ms. Davis and Messrs. Buck, Griffiths, Maier, Rupp and Stevens have each indicated a willingness to serve if elected. If a nominee should be unable to serve or will not serve for any reason, and if any other person is nominated, the persons designated on the accompanying form of proxy will have discretionary authority to vote or refrain from voting in accordance with their judgment on such other nominee unless authority to vote on such matter is withheld.

Vote Required

        To be elected as a director, a director nominee must receive a majority of votes cast at the meeting with respect to such nominee (the number of shares voted "FOR" a director nominee must exceed the number of votes cast "AGAINST" that nominee). Cumulative voting is not permitted in the election of directors. Abstentions and broker non-votes will not be treated as a vote for or against any particular director nominee and will not affect the outcome of the election of directors.

        Pursuant to the Company's Corporate Governance Guidelines, any current director that is nominated for election must tender his or her resignation as a director in the event that he or she receives more "AGAINST" votes than "FOR" votes. In such an event, the Governance Committee and subsequently the full Board would then review and determine whether to accept or reject the tendered resignation. The Board is required to publicly disclose its decision and the rationale behind it within ninety days from the date of the certification of the election results.

Recommendation

        The Board of Directors recommends that you vote "FOR" the elections of Ms. Davis and Messrs. Buck, Griffiths, Maier, Rupp and Stevens. Unless you give contrary instructions in your proxy, your proxy will be voted "FOR" the elections of Ms. Davis and Messrs. Buck, Griffiths, Maier, Rupp and Stevens. If any nominee should become unable or unwilling to accept nomination or election, the person acting under the proxy will vote for the election of such other person as the Board of Directors may recommend. The Board has no reason, however, to believe that any nominee will be unable or unwilling to serve if elected.

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PROPOSAL NO. 2
ADVISORY VOTE APPROVING NAMED EXECUTIVE OFFICER COMPENSATION

        At the meeting, the stockholders will vote on an advisory resolution approving the compensation of the Company's named executive officers, as required pursuant to Sectionsection 14A of the Securities Exchange Act.

        We believe that our compensation practices and procedures are competitive, focused on pay-for-performance and strongly aligned with the long-term interests of our stockholders. This advisory stockholder vote, commonly known as "Say-on-Pay," gives you as a stockholder the opportunity to express approval or withhold approval of the compensation we pay our named executive officers through voting for or against the following resolution:

        "Resolved, that the stockholders approve the compensation of the Company's named executive officers as disclosed pursuant to Item 402 of Regulation S-K in the Company's 20182019 Proxy Statement, which disclosure includes the Compensation Discussion and Analysis, the Summary Compensation Table and the other executive compensation tables and related discussion."

        The Company and the Compensation & Management Development Committee (the "Compensation Committee") remain committed to the compensation philosophy, practices, and objectives outlined under the heading "Compensation Discussion and Analysis" located on page 1415 of this Proxy Statement. As always, the Compensation Committee will continue to review all elements of the executive compensation program and take any steps it deems necessary to continue to fulfill the objectives of the program.

        Stockholders are encouraged to carefully review the "Compensation Discussion and Analysis" section of this Proxy Statement for a detailed discussion of the Company's executive compensation program.

        Because your vote is advisory, it will not be binding upon the Company or the Board of Directors. However, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements.

        Unless the Board modifies its policy on the frequency on holding Say-on-Pay"Say-on-Pay" advisory votes, Say-on-Pay votes by our stockholders take place at each Annual Meeting, and the next such vote will occur at the annual meeting to which this Proxy Statement relates.

Vote Required

        The affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on this proposal is necessary to approve the Say-on-Pay"Say-on-Pay" proposal. Abstentions will have the same effect as a vote "AGAINST" the Say-on-Pay proposal. Broker non-votes will have no effect on the Say-on-Pay proposal.

Board Recommendation

        The Board recommends that you vote "FOR" the ratification of the advisory resolution approving the compensation of the Company's named executive officers.

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PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDIT FIRM

        The Audit Committee has selected Grant Thornton LLP, an independent registered public accounting firm, to audit the Company's consolidated financial statements for fiscal year 2018.2019. Grant Thornton LLP has been the Company's independent registered public accounting firm since April 2014, when it was retained by the Audit Committee after the completion of a competitive process to select an auditor for the Company's fiscal 2014 financial statements. We are asking the stockholders to ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending October 31, 2018.2019. Grant Thornton LLP was appointed by the Audit Committee in accordance with its charter.

        In the event stockholders fail to ratify the appointment of Grant Thornton LLP, the Audit Committee may reconsider this appointment. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent accounting firm at any time during the year if the Audit Committee determines that such a change would be in the Company's and its stockholders' best interests.

        The Audit Committee has approved all services provided by Grant Thornton LLP. A representative of Grant Thornton LLP will be present at the Annual Meeting, will have the opportunity to make a statement, and will be available to respond to appropriate questions you may ask.

Vote Required

        This vote requires approval by the affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on this proposal. Abstentions with respect to the approval of this proposal will have the effect of a vote "AGAINST" this proposal. Broker non-votes will not be counted for the purpose of determining the number of votes necessary for approval of this proposal.

Board Recommendation

        The Board recommends that you vote "FOR" the ratification of appointment of Grant Thornton LLP as the Company's independent registered public accounting firm for the fiscal year ending October 31, 2018.2019.

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EXECUTIVE OFFICERS

        Set forth below is certain information concerning the executive officers of the Company, each of whom serves at the pleasure of the Board of Directors. There is no family relationship between any of these individuals or between these individuals and any of the Company's directors. There are no arrangements or understandings between any person and any of the executive officers pursuant to which such executive officer was selected as an executive officer, except for arrangements or understandings with such executive officer acting solely in such executive officer's capacity as such.

        Mr. Griffiths was elected Chairman, President and Chief Executive Officer of the Company effective July 9, 2013. Prior to joining the Company, Mr. Griffiths served as the Managing Director and a member of the board of directors of Sealine (International) Ltd., a privately held manufacturer of yachts and other marine vessels based in the United Kingdom, from 2012 until it was sold in June 2013. Prior to joining Sealine in 2012, Mr. Griffiths served as Chairman of the Board, President and CEO of Champion Enterprises, Inc., a NYSE-traded producer of modular and manufactured housing until 2010. He joined Champion as a Director, and as President and Chief Executive Officer, in August 2004, and was named Chairman of the Board in 2006. Champion filed for Chapter 11 bankruptcy on November 15, 2009. From 2001 to 2004, Mr. Griffiths was President—Fluid Systems Division at SPX Corporation, a global multi-industry company located in Charlotte, North Carolina. Mr. Griffiths graduated from the University of London with a B.S. with Honors in Mining Engineering. In addition, Mr. Griffiths is a graduate of the Harvard Business School's PMD executive education program.

        Mr. Korb was named Senior Vice President—Finance and Chief Financial Officer of the Company on August 1, 2008. Mr. Korb was named Vice President—Controller of Quanex Corporation in 2005, and was elected to the same position with the Company upon its creation on December 12, 2007. Prior to his election as Vice President—Controller of Quanex Corporation, Mr. Korb served as Assistant Controller of Quanex Corporation from 2003 to 2005. Prior to that time, Mr. Korb was Controller & Director of Business Analysis since 2003, and Manager of Business Analysis since 2001, of Resolution Performance Products, a manufacturer of specialty chemicals. From 1996 to 2001, Mr. Korb held various positions at Service Corporation International, a provider of funeral, cremation and cemetery services, including Director International Finance & Accounting, Manager International Finance & Accounting, Manager Corporate Development, Manager Strategic Planning, and Financial Analyst.

        Mr. Delaney was named Senior Vice President—General Counsel and Secretary of Quanex Corporation on February 24, 2005, and was elected to the same position with the Company upon its creation on December 12, 2007. Prior to that, he was Vice President—General Counsel of Quanex Corporation since 2003, and Secretary since 2004. Prior to that he was Chief Counsel for Trane Residential Systems, a business of American Standard Companies, a global manufacturer with market leading positions in automotive, bath and kitchen, and air conditioning systems, since 2002; Assistant General Counsel for American Standard Companies since 2001; and Group Counsel for The Trane Company's North American Unitary Products Group since 1997. Prior to that time, Mr. Delaney was Vice President—General Counsel with GS Roofing Products Company, Inc. from 1995 to 1997 and Senior Attorney with GTE Directories Corporation from 1991 to 1995.

        Mr. Wilson was named Vice President—Chief Operating Officer of the Company effective August 1, 2017. Prior to his appointment to that role, Mr. Wilson served as President and General

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Manager of the Company's Insulating Glass Systems Division since 2011, and as General Manager of Edgetech I.G., Inc. beginning with its purchase by Quanex in March 2011 until it was consolidated with existing Quanex operations to create the Insulating Glass Systems Division. Prior to joining Quanex, Mr. Wilson served as the Vice President of Operations for Lauren Manufacturing from 2008 to 2010, and as the Vice President of Human Resources for its parent company Lauren International, a diversified manufacturer of polymers, rubbers and plastics, from 2010 to 2011. Prior to that time and beginning in 1993, Mr. Wilson served in various capacities of increasing responsibility for Federal Mogul, a Tier 1 manufacturer of various automobile components.

        Mr. WilliamsZuehlke was named Vice President—ControllerInvestor Relations and Treasurer of the Company effective July 1, 2013.January 25, 2016. Prior to joining the Company, Mr. WilliamsZuehlke served as Vice President, Investor Relations for Halcón Resources from 2011 to 2016, and as Director, Investor Relations for Geokinetics from 2010 to 2011. In those roles, Mr. Zuehlke was responsible for leading and managing the Vice President—Accounting, Corporate Controller, Chief Accounting Officerinvestor relations function and Assistant Treasureracting as the primary contact to the investment community. Halcón is an independent energy company focused on the acquisition, production, exploration and development of Complete Production Services, Inc., a publicly held oilfieldonshore liquids-rich assets in the United States, while Geokinetics is an international land and shallow water geophysical service provider,company focusing on the petroleum and mining industries. Prior to joining Geokinetics, Mr. Zuehlke served as Manager, Finance and Investor Relations for Hercules Offshore from 2009 until itto 2010. Mr. Zuehlke began his career at Invesco, where he was acquired by Superior Energy Services in 2012. In this role, Mr. Williams servedemployed as principal accounting officeran Equity Analyst and also provided cash management services, various treasury functions, and purchase accounting/transaction support. PriorMarket Data Associate from 1998 to that, he served as Assistant Controller for Complete Production Services from 2005 to 2009. During the time from his 2012 departure from Complete Production Services until he joined the Company in 2013, Mr. Williams engaged in consulting work primarily related to purchase transaction accounting for several oilfield service companies.

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DIRECTOR AND OFFICER COMPENSATION

Director Compensation

        Directors who are also employees of the Company do not receive any additional compensation for serving on the Board. In fiscal 2017,2018, Mr. Griffiths was the only director who also served as an employee of the Company. As such, he did not receive any additional compensation for Board service, and has not since the date on which he became an employee.

        For the fiscal year ended October 31, 2017,2018, the Company's non-employee directors received the following compensation:

•

Annual Cash Retainer⁽¹⁾—$55,000/year paid quarterly



•

Committee Member Retainer⁽¹⁾—



•

Member of Audit Committee: $9,000/year paid quarterly



•

Member of Compensation & Management Development Committee: $7,500/year paid quarterly



•

Member of Nominating & Corporate Governance Committee: $7,500/year paid quarterly



•

Committee Chairman Fees (paid in lieu of Committee Member Retainer listed above)⁽¹⁾—



•

Chairman of Audit Committee: $15,000/year paid quarterly



•

Chairman of Compensation & Management Development Committee: $10,000/year paid quarterly



•

Chairman of Nominating & Corporate Governance Committee: $10,000/year paid quarterly⁽²⁾



•

Lead Director Fee⁽¹⁾—$20,000/year paid quarterly



•

Annual Restricted Stock Unit Retainer⁽³⁾—On the first business day of each fiscal year, non-employee directors receive an annual restricted stock unit award of $80,000 in equivalent value. The restricted stock unit award vests immediately upon issuance. If the non-employee director meets the Company's director stock ownership guidelines (in shares and share equivalents), payment of the award will be deferred automatically to the director's separation from service (or, if earlier, a change in control of the Company), unless an election is made by the director to settle and pay the award on an earlier permitted specified date, and such election is made prior to the last day of the deferral election period applicable to the award under Section 409A of the Internal Revenue Code. If the non-employee director has not met the Company's applicable stock ownership guidelines, then payment of the award will automatically be deferred until the director's separation from service, and no election for an earlier payment date will be allowed. For purposes of this paragraph, the determination of whether a director meets the stock ownership guidelines will be made as of December 31^st of the calendar year immediately preceding the calendar year in which the applicable restricted stock unit award is granted. With respect to the restricted stock unit awards that were granted on November 1, 2016, no director2018, Mr. Stevens elected for early payment to be made on the second anniversary of the date of grant. No other directors elected for an earlierearly payment date.to be made.



•

Initial Restricted Stock Unit GrantGrant——On the date on which a non-employee director is first elected or appointed as a director, such director will be granted an annual restricted stock unit award that is pro-rated for the time served during the current fiscal year, from the director's date of election or appointment. These grants will immediately vest and will be settled and paid upon the earlier of the director's separation from service or a change in control of the

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Company. The pro-rated restricted stock unit award, as well as the first full restricted stock unit




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award granted to a newly appointed or elected director, is not eligible for any form of deferral or other payment timing election.

•

Expense Reimbursement—Directors are reimbursed by the Company for their expenses relating to attendance at meetings.

   

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⁽¹⁾

Non-employee directors are permitted to defer all or any part of their cash retainers and fees under the Quanex Building Products Corporation Deferred Compensation Plan (the "DC Plan"). These deferrals are placed into notional accounts maintained under the DC Plan and are deemed invested in cash, units denominated in Common Stock, or any of the accounts available under the Company's qualified 401(k) plan, as the director elects. The number of units that are deemed invested in Company common stock units and credited to a director's notional account is equal to the number of shares of Common Stock that could have been purchased with the dollar amount deferred based on the closing price of the Common Stock on the New York Stock Exchange on the date the amount would have been paid for such share purchase. If a dividend or other distribution is declared and paid on Common Stock, for each notional common stock unit credited to a director's account a corresponding credit will be accrued in the director's notional matching account. All director deferrals are 100% vested. No payments may be made under the DC Plan until a distribution is permitted in accordance with the terms of the DC Plan. In the event of a "change in control" of the Company, any amount credited to a director's account is fully vested and is payable in cash within five days after the change in control occurs. A "change in control" is defined generally as (i) an acquisition of securities resulting in an individual or entity or group thereof becoming, directly or indirectly, the beneficial owner of 20% or more of either (a) the Company's then-outstanding Common Stock or (b) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors, (ii) a change in a majority of the persons who were members of the Board of Directors as of December 12, 2007 (the "Incumbent Board"), (iii) generally, a reorganization, merger, consolidation or sale of the Company or disposition of all or substantially all of the assets of the Company, or (iv) the approval by the stockholders of the Company of a complete liquidation or dissolution of the Company. For this purpose, an individual will be treated as a member of the Incumbent Board if he becomes a director subsequent to December 12, 2007, and his election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board; unless his initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of an individual, entity or group other than the Board. All distributions under the DC Plan will be made in cash. Any deferral or payment permitted under the DC Plan is administered in a manner that is intended to comply with Section 409A of the Internal Revenue Code of 1986.



⁽²⁾

Mr. Rupp serves as Chairman of the Nominating & Corporate Governance Committee, but has chosen to decline the Committee Chairman Fee related to that position.



⁽³⁾

Restricted stock unit grants are issued from the Quanex Building Products Corporation 2008 Omnibus Incentive Plan, as amended.




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        The table below shows the total compensation of our non-employee directors for the fiscal year ended October 31, 2017.2018:

Name		Fees Earned or Paid in Cash(1) ($)			Stock Unit Awards(2) ($)			Option Awards(2) ($)			Change in Pension Value & Nonqualified Deferred Compensation Earnings(3) ($)			All Other Compensation(4) ($)			Total ($)				Fees Earned or Paid in Cash(1) ($)			Restricted Stock Unit Awards(2) ($)			Option Awards(2) ($)			Change in Pension Value & Nonqualified Deferred Compensation Earnings(3) ($)			All Other Compensation(4) ($)			Total ($)
Robert R. Buck			69,500			76,873			—			—			5,035			151,408				71,500			78,879			—			—			7,741			158,120
Susan F. Davis			71,250			76,873			—			—			6,584			154,707				72,500			78,879			—			—			8,987			160,366
LeRoy D. Nosbaum			75,750			76,873			—			—			2,567			155,190				79,000			78,879			—			—			3,931			161,810
Joseph D. Rupp			87,500			76,873			—			—			3,255			167,628				90,000			78,879			—			—			4,791			173,760
Curtis M. Stevens			76,250			76,873			—			—			4,674			157,797				77,500			78,879			—			—			6,824			163,203

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(1)

Amounts shown reflect fees earned by the directors from Quanex Building Products Corporationthe Company during fiscal year 2017.2018. During fiscal 2017,2018, Messrs. Buck and Stevens and Ms. Davis elected to defer cash compensation of $69,500, $38,125$71,500 and $17,500,$9,688, respectively, under the Quanex Building Products Corporation Deferred Compensation Plan in the form of notional units.



(2)

These columns show respectively, the aggregate grant date fair value for restricted stock units and stock options awarded in fiscal 20172018 computed in accordance with FASB ASC Topic 718. There were no grants of stock options to non-employee directors during fiscal 2017.2018. Director grants vest immediately and as such are expensed on the date of grant. A discussion of the assumptions used in computing the grant date fair values may be found in Note 15, "Stock-Based Compensation," included in the Company's audited financial statements including in the Company's Annual Report on Form 10-K for the year ended October 31, 2017.2018. These values reflect the Company's assumptions used to determine the accounting expense associated with these awards and do not necessarily correspond to the actual value that may be recognized by the directors.



The following table shows the grant date fair value of restricted stock units and option grants made during fiscal year 20172018 as well as the aggregate number of restricted stock units and stock option awards outstanding for each non-employee director as of October 31, 2017:2018:

		Restricted Stock Units									Stock Options									Restricted Stock Units									Stock Options
		2017 Grants									2017 Grants									2018 Grants									2018 Grants
								Total Units Outstanding as of October 31, 2017 (#)								Total Stock Options Outstanding as of October 31, 2017 (#)										Total Units Outstanding as of October 31, 2018 (#)								Total Stock Options Outstanding as of October 31, 2018 (#)
Name		Grant Date			Grant Date Fair Value ($)						Grant Date		Grant Date Fair Value ($)							Grant Date			Grant Date Fair Value ($)						Grant Date		Grant Date Fair Value ($)
Buck			11/1/16			76,873			12,935		n/a			—			20,876				11/1/17			78,879			16,545		n/a			—			20,876
Davis			11/1/16			76,873			20,346		n/a			—			56,308				11/1/17			78,879			23,956		n/a			—			35,887
Nosbaum			11/1/16			76,873			16,046		n/a			—			35,398				11/1/17			78,879			19,656		n/a			—			35,398
Rupp			11/1/16			76,873			20,346		n/a			—			56,308				11/1/17			78,879			23,956		n/a			—			35,887
Stevens			11/1/16			76,873			16,046		n/a			—			35,398				11/1/17			78,879			19,656		n/a			—			35,398

(3)

The Company does not provide a pension plan for non-employee directors. None of the directors received preferential or above-market earnings on deferred compensation.



(4)

Amounts shown represent (a) dividends paid during fiscal 20172018 on outstanding restricted stock units, and (b) equivalent dividends paid on phantom stock in the Deferred Compensation Plan for Ms. Davis and Messrs. Buck and Stevens of $3,329; $2,965;$4,196; $4,432; and $2,106,$2,893, respectively.




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Compensation Discussion and Analysis


Introduction


        This section of the proxy describes the compensation paid to the executive officers listed in the "Summary Compensation TableTable" on page 3739 of this Proxy Statement:

•

William C. Griffiths—Chairman, President and Chief Executive Officer ("CEO")



•

George L. Wilson—Vice President and Chief Operating Officer ("COO")



•

Brent L. Korb—Senior Vice President—Finance and Chief Financial Officer ("CFO")



•

Kevin P. Delaney—Senior Vice President—General Counsel and Secretary



•

Scott M. Dewayne Williams—Zuehlke—Vice President—ControllerInvestor Relations and Treasurer

        The compensation programs described, however, apply more broadly to other officers and management personnel at the Company, with changes as appropriate to reflect different levels and types of responsibility. The Company believes that this approach helps to align Quanex employees into a unified team committed to the Company's corporate objectives.

Business and Compensation Context


Execution on Strategic Repositioning and Fiscal 2017 PerformanceImperatives

        Beginning early in 2013,fiscal 2018, we undertook a thorough assessment of the Company embarked onbusiness and our position within the current economic cycle. As a transformative strategy that began with the hiring of William Griffiths as CEO. Under Mr. Griffith's leadership, and with ongoing oversight fromresult, we made a conscious decision to accelerate our Board of Directors, the Company's executive team began implementing a strategic transformation plande-leveraging plans, by focusing even greater attention to improve profitability, increase free cash flow generation. The Compensation Committee worked closely with management to develop a comprehensive and adjusteffective executive compensation program aligned with the Company's portfoliostrategy. For fiscal 2018, the Compensation Committee set modified free cash flow as the metric in the annual incentive plan, which is consistent with the 2018 strategic imperatives.

        Through continuous improvement, tighter control over working capital, and a reduction in capital expenditures, our management team generated record free cash flow in fiscal 2018 of businesses$78 million. The successful execution of our strategy resulted in returning cash to our shareholders and products to drive long-term shareholder value. These strategic actions included:strengthening our balance sheet, which translated into the following significant accomplishments:

•

Divested Nichols Aluminum, a rolled aluminum sheet business;Doubled the quarterly cash dividend from 4 cents to 8 cents per share;



•

Acquired HL Plastics, a vinyl window and door frame business;Repurchased $32 million of Quanex stock in the fourth fiscal quarter;



•

Acquired Woodcraft, a supplierRepaid $28 million of hardwood and manufactured cabinet doors and components;debt; and



•

Closed four plants and redeployed or retired related assets which were no longer in line with long-term financial goals.

        These strategic initiatives, including the decision to become a "pure play" building products company, further added to our EBITDA, EBITDA Margin, and free cash flow and reinforced our strategy of value driven business units.

        In fiscal 2017, we consciously exited over $80 million in revenue. These reduced volumes, in combination with operational inefficiencies, dampened profitability and resulted in underperformance on key financial goals. Despite this initial decline, cash flow continued to be strong and allowed us to reduce debt (net of capital leases) by over $45 million for the second consecutive year. Additionally, Total Shareholder Return forExited the year was 36%. Managing cost structure, maintainingat a strong balance sheet, and providing meaningful returnstwo-times net debt to our shareholders are important elements of our strategy. The actions taken in 2017 are intended to position Quanex to further improve its profitability and cash flow in 2018.

        The following graphs illustrate critical scope and financial metrics over the prior four-year period. They are presented on a pro forma basis to include the results of Nichols Aluminum (excluding a one-time gain on the sale of Nichols) to provide an understanding of the Company's execution on its strategic goals.

Adjusted EBITDA ratio.

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        The following graph illustrates critical financial metrics over the prior five-year period. Achievements during fiscal 2018 reflect our focus on free cash flow generation and our commitment to reducing our leverage while returning capital to our

Despite Falling Short on TargetsExecution of our Strategy Yielded Record Free Cash Flow Generation in Fiscal 2017, the Strategic Actions taken Reflect2018, Resulting in Cash to our Focus on Investment for the Long Term.Shareholders and a Stronger Balance Sheet

Pro Forma Revenue and Pro Forma EBITDA Margin Performance		Pro Forma EBITDA, Free Cash Flow, and Pro Forma EBITDA Margin Performance
While revenue in fiscal 2017 ended below desired levels, EBITDA margin performance remained strong.		In combination with the decision to retire or redeploy assets in fiscal 2017, improvements in EBITDA and free cash flow fell short of Management's goals.

        Despite underperformance on key financial metrics in 2017, since 2014, EBITDA has more than doubled (from $47 million to $96 million), and Free Cash Flow has grown significantly (from $(13) million to $44 million).

Realized PayCompensation and Shareholder Alignment

        The effect of the strategic repositioning has meaningfully reduced realized pay for our executives during this time frame. The following chart illustrates the relationship between the CEO's target and realized pay to the Company's total shareholder return between fiscal 2014 and fiscal 2017.aggregate

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target and realized compensation from fiscal 2014 through fiscal 2018 and the Company's total shareholder return between fiscal 2015 and fiscal 2018.

        Note: Target pay includes base salary; target bonus; and the grant date value of options, restricted stock, cash-based performance units, and performance shares for the applicable period. Realized paycompensation includes base salary, bonus payout, in-the-money value of stock options based on the October 31, 20172018 stock price, the value of restricted stock and performance restricted stock units granted during the period based on the October 31, 20172018 stock price, and the value of cash-based performance units and performance shares paid out during the period. Revenue reflects the Company's fiscal year end revenue for each applicable year. Fiscal 2014 Revenue includes $137 million attributable to Nichols Aluminum.

        The following table shows the payouts (as a percentage of target) for the Company's annual incentive award program ("AIA") and performance awards under the Company's Long-Term Incentive Plan. Over the past five years, incentive plan payouts have been responsive to Company performance—on average, payouts under the AIA and long-term performance award have been approximately 51%85% of target and 42% of target, respectively.

        In fiscal 2017,2018, we did not earnearned a payout of 170.7% of target under the AIA and earned below0% of target on the long-term performance award, consistent with our performance on goals during the year. Mr. Wilson earned a pro rata payout related to his prior service as a division president.

Responding to Shareholders: Changes for 20182019

        In line with our commitment to align pay and performance, we undertook careful analysis of the value drivers of our business in relation to our compensation arrangements. As a result, decisions were madethe Compensation Committee decided to change our compensation programs for fiscal 2018.2019. The Compensation Committee believes that the decisions

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made to our program going forward demonstrate our ongoing commitment to align executive compensation with stockholder interests and encourage value

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creation at Quanex. Although these changes are discussed here, the full impact of these decisions will be reflected in 20182019 pay and in next year's proxy statement. These recent changes include the following:

•

Held target compensation levels flat for executives, with the exception of a 3% market10% adjustment for the VP-Controller;COO.



•

Replaced EBITDA with Modified Free Cash Flow under theChanged AIA to reflect our commitment to stronger cash flow generation;be based on 50% EBITDA growth and 50% revenue growth, with a modifier based on working capital as a percentage of sales;



•

Replaced stock options with Performance Restricted Stock Units ("PRSU"), resulting in anChanged LTI mix that is 75% performance-based;to be 30% restricted stock, 30% performance restricted stock units, and 40% performance share awards;



•

Changed executive LTI target values toPerformance share awards will be expressed as dollar amounts rather than a percentage of salary.based 100% on corporate Return on Net Assets (RONA).

Compensation Best Practices

        We use traditional compensation elements of base salary, annual incentives, long-term incentives, and employee benefits to deliver attractive and competitive compensation. We benchmark both compensation and Company performance in evaluating the appropriateness of pay. All of our executive pay programs are administered by an independent compensation committee, with assistance from an independent consultant. Some highlights to our executive compensation program include the following actions:

Compensation Objectives

        We design our executive compensation program to further our corporate goal of paying for performance. Our compensation plan and pay strategy focus on and are intended to influence the

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profit margins of our businesses, cash flow generation, returns to stockholders and efficient management of our operations.

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        Our specific objectives and related plan features include:

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Competitive Positioning

Fiscal 20172018

        The Compensation Committee annually examines the level of competitiveness and continued appropriateness of our executive compensation program. For fiscal 2017, the Company examined the previous comparator group for benchmarking compensation and determined to transition from a reference group approach to a peer group approach comprised of the Company's direct industry peers. For fiscal 2017,2018, Quanex used comparative compensation data from a group of sixteenseventeen direct industry companies, referred to in this CD&A as the "Peer Group," as a point of reference in designing and setting its compensation levels. The Peer Group consists of companies selected on criteria including size, complexity, revenue, market capitalization, risk profile, asset intensity, margins, and industrial application of the primary business. The Compensation Committee reviewed and approved the following companies to be included in the Company's fiscal 20172018 peer group:

The following 18        All the companies above, except for Insteel Industries, were included in the fiscal 2016 Reference Group but removed from the fiscal 2017 Peer Group: A.M. Castle & Co., Actuant Corp., Albany International Corp., Astec Industries Inc., Builders FirstSource Inc., CLARCOR Inc., Compass Minerals International Inc., Eagle Materials Inc., Encore Wire Corp., EnPro Industries Inc., Graco Inc., H&E Equipment Services Inc., Headwaters Inc., Nordson Corp., Nortek Inc., Olympic Steel Inc., Superior Industries International, and Watts Water Technologies Inc.peer group.

        Frederic W. Cook & Co., Inc. ("FW Cook"), an independent compensation consultant to the Compensation Committee, used the Peer Group pay information, along with manufacturing and general industry survey data, to develop the appropriate range of compensation for each executive position. FW Cook also prepared an independent analysis of our key performance indicators such as profitability, growth, capital efficiency, balance sheet strength, and total return to stockholders compared to our sixteen industry peers. These results were then reported to the Compensation Committee in order to provide a thorough picture of the competitiveness of pay in the context of our performance as compared with that of our peers. While the Compensation Committee uses this analysis to help frame its decisions on compensation, it uses its collective judgment in determining executive pay. The Compensation Committee exercises discretion in making compensation decisions based on the following inputs: its understanding of market conditions, its understanding of competitive pay analysis, recommendations from the CEO regarding his direct reports, the Committee's overall evaluation of the executive's performance, and our overall compensation strategy.

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Changes for Fiscal 20182019

        For fiscal 2018,2019, the Company added one company, Insteel Industries,made the following changes to the peer group.group: added two companies (Armstrong Flooring and CSW Industrials) and removed four companies (LCI Industries, Louisiana-Pacific Corp., Ply Gem Holdings Inc., and Universal Forest Products Inc.). The following seventeenfifteen companies below comprise the fiscal 20182019 peer group:

Program Description

        Our executive compensation program is a traditional design structure that has been customized to suit the business and organizational objectives of the Company. It includes base salary, annual cash incentive compensation, long-term incentives and executive benefits. Our fiscal 20172018 long-term incentive program consisted of stock option grants, restricted stock grants, performance restricted stock units, and performance share awards. The amount of pay that is performance-based for an executive is directly related to the level of responsibility held by the position; accordingly, our highest ranked executive has the most performance-based pay as a percentage of total compensation. We attempt to set realistic but challenging goals in our annual incentive and long-term performance share plans. In both cases,each case, if we fail to meet the pre-determined standards, no plan-based compensation is earned by executives.

        We evaluate the various components of compensation annually relative to the competitive market for prevalence and value. By setting each of the elements against the competitive market within the parameters of our compensation strategy, the relative weighting of each element of our total pay mix varies by individual. We do not set fixed percentages for each element of compensation. The mix may also change over time as the competitive market moves or other market conditions which affect us change. We do not have and do not anticipate establishing any policies for allocating between long-term and currently paid compensation, or between cash and non-cash compensation. We have a process of assessing the appropriate allocation between these elements of compensation on a periodic basis and adjusting our position based on market conditions and our business strategy.

Base Salary

        Purpose:    This pay element is intended to compensate executives for their qualifications and the value of their job in the competitive market.

        Competitive Positioning:    The Company's goal is to target the market median as our strategic target for base salary. We review each executive's salary and performance every year to determine whether base salary should be adjusted. Along with individual performance, we also consider movement of salary in the market, as well as our financial results from the prior year to determine appropriate salary adjustments.

        While the Compensation Committee applies general compensation concepts when determining the competitiveness of our executives' salaries, the Compensation Committee generally considers base salaries as being competitive when they are within approximately 10%a reasonable range of the stated market target (in this case, the market 50^th percentile). In the most recent analysis using both our comparator group and general industry data, the salaries for our named executive officers ranged from 82% to 107%were within 10% of the market 50^th percentile.

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        Fiscal 20172018 Review:    In December 2016,2017, the Compensation Committee decided to maintain current base salaries for the executives based on the Company's relative position to the market and overall stockholder return.

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Mr. Wilson's base salary was determined in connection with his promotion to COO in August 2017. The table below provides base salaries for fiscals 20162017 and 2017:2018:

        Changes for Fiscal 2018:2019:    In October 2017,2018, the Compensation Committee decided to maintain current base salaries as set forth above, based onfor the Company's relative positionexecutives, except for Mr. Wilson. Mr. Wilson will receive a 10% increase, from $450,000 to market.$495,000,

Annual Incentive Awards (AIA)

        Purpose:    This element of compensation is intended to reward executives for the achievement of annual goals related to key business drivers. It is also intended to emphasize to executives the key business goals of the Company from year to year.

        Competitive Positioning:    The Company's strategy is to target the market median for annual incentives for performance that meets expected levels. We have established the range of possible payouts under the plan so that our competitive position could be above or below our stated strategy based on performance outcomes. Our most recent analysis showed our named executive officers to be in a range of 81%104% to 108%115% of the market median on target total cash compensation.

        Plan Mechanics:    The Company's 2008 Omnibus Incentive Plan, as amended in 2011 and 2014 (the "Omnibus Plan") serves as the governing plan document for our AIA. The AIA is a goal attainment incentive plan design that pays target award levels for expected performance results.

        Fiscal 2017:2018:    The AIA emphasizes earnings and informed decision making with regard to the Company's operational and strategic goals. To integrate the goals of the AIA throughout the Company, the annual incentive program participation includes the top leaders of all of our domestic business divisions. We believe this is necessary in order to align managers throughout the organization with this incentive structure. The plan design requires the Company (excluding any amounts attributable to corporate) to have positive operating income in order for any Annual Incentive Awards to be paid out. If the performance hurdle is met, then the bonus pool for all Annual Incentive Awards is funded at the maximum bonus opportunity level.

        Rigorous Goals:    If funded, the Compensation Committee will assess performance against the fiscal 20172018 corporate scorecard weighted 100% on EBITDA.Modified Free Cash Flow. Modified Free Cash Flow is defined as Adjusted EBITDA minus changes in accounts receivable, inventory, and accounts payable,

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minus capital expenditures. The Company set rigorous performance expectations based on the forecasted results of the operating divisions and the projected markets for

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building products. The Committee established performance goals for fiscal 20172018 that require the Company to at least perform at last year's levels to earn a payout.

        Target Award Levels:    Based on competitive market practices for annual incentives, and our compensation strategy, we set a target award opportunity for each of our executives. This is the amount of incentive compensation the executive can earn when performance meets expected results, or "target." The table below reflects the payout percentage of a named executive's base salary at the threshold, target and maximum levels of performance for fiscal 2017.2018.

Potential AIA Payout
Expressed as a % of Salary

        Fiscal 20172018 Results:    For fiscal 2017,2018, the performance hurdle of positive operating income (excluding corporate) was met, with the Company having earned operating income of $34.4$47 million. Once the hurdle was met and the plan was funded, the Compensation Committee determined the incentive payouts. The primary metric for the AIA scorecard considered by the Compensation Committee was the Adjusted EBITDAModified Free Cash Flow target of $111.8$69.9 million. TheIn calculating Modified Free Cash Flow, the Committee adjusted the EBITDA resultscomponent by factoring in the effect of foreign exchange rates, LIFO, stock basedstock-based compensation, restructuring related costs, loss on sale, and transaction related costs. The Company achieved adjusted EBITDAModified Free Cash Flow of $98.5$76.6 million, which resulted in an AIA achievement of 0%171% of target payment for the officers. Mr. Wilson earned a payout equal to 81% of target, based on his role as Division President of IG Systems for the first nine months of the fiscal year, and a 0% of target payout based on his role as COO for the last three months of the fiscal year. The AIA achievement resulted in payments to participants as follows:

        Fiscal 20182019 Changes:    For fiscal 2018,2019, the Compensation Committee replacedtook careful consideration of the Company's performance throughout the year. Despite our record performance on free cash flow generation, the Company fell short on our EBITDA metric ingrowth targets for the AIA with Modified Free Cash Flow. Modified Free Cash Flow is defined as EBITDA minus change in accounts receivable, inventory, and accounts payable minus capital expenditures.

        Theyear. In line the Company's commitment to be responsive to our shareholders, for fiscal 2018 scorecard2019, modified free cash flow will be weighted 100%replaced with a scorecard based on Modified Free Cash Flow. We believe that50% EBITDA growth and 50% revenue growth, with a modifier based on working capital as a percentage of sales. The Compensation Committee believes the usecombination of EBITDA and revenue growth metrics with a single financial measure helps focusmodifier based on working capital % of sales will balance the management team on operational excellenceteam's focus and profitability.position the Company strategically for healthy growth and profitability for fiscal 2019. The plan will continue tono longer use positive operating income (excluding any amounts attributable to corporate) as the initial performance hurdle.

        AIA participant target payout percentages will remain the same for fiscal 2018.2019.

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Long-Term Incentive Compensation

        Purpose:    We have a long-term incentive program designed to help align the interests of executive management with shareholders and reward executives for the achievement of long-term goals. Long-term incentives are also critical to the retention of key employees and provide executives an opportunity for personal capital accumulation. For these reasons we have placed more value on the long-term incentive element of compensation than on other elements. The result is that this element of compensation represents at least half of the named executive officers' total direct compensation.

        Competitive Positioning:    In 2016, we evaluated theOur long-term incentive philosophy and made modifications in order to targettargets the 50th percentile of the market. In our most recent analysis versus the market, we found that the named executive officers' competitive positioning is within approximately 10%15% of the market 50^th percentile. The individual performance of each named executive officer is not considered in the value of the long-term incentive awards granted. Since the goals are set prospectively, the Company's financial performance determines the ultimate value of the award.

        Participation:    Participation in the program includes the named executive officers and certain key contributors to the business and is determined based on competitive practices as well as our assessment of which positions contribute to long-term value creation.

        Target Award Levels:    In order to align with our market strategy of targeting the 50^th percentile, we have maintained the dollar value of target awards for our executives. This has been the practice for the CEO, CFO, and GC. Target awardsGC since fiscal 2016 and is new for ourthe VPs are determined based on a percent of salary.in fiscal 2018. The following LTI targets were established for the executives for fiscal 2017:2018:

Fiscal Year 20172018 Long Term Incentive Program Design

Vehicles and Goals

        TheAt the Compensation Committee's December 2017 meeting, the Compensation Committee elected to change the Company's fiscal 2017 program consistedlong-term incentive plan design to consist of a combination of restricted stock, performance restricted stock units (PRSUs), and performance shares. Beginning in fiscal 2018, the PRSUs replaced stock options, performance shares and restricted stock.resulting in a long-term incentive mix that is 75% performance-based. The allocation between the long-term incentive vehicles is determined by the Compensation Committee based on market information provided by its compensation consultant, as well as input from senior management regarding the key business drivers that allow for the continuation of a results-oriented culture. The Omnibus Plan does not provide for any specific subjective individual performance component in determining the ultimate value of the award. The following chart illustrates the fiscal 20172018 allocation of long-term incentives by vehicle type.

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Fiscal 2018 LTI Mix

Stock Options

        Options to purchase company stock comprised 25% of our long-term incentive target value for fiscal 2017 and provide executives the opportunity to share in the increase in stock value over time. They provide an element of compensation that varies along with changes in stock price over time. These awards also offer our executives the opportunity to accumulate value (if the Company's stock appreciates) since the growth in value occurs over a long period of time (up to 10 years), and gains from that growth are not taxed until such time as the options are exercised. Since we generally use ratable vesting over three years for each award, stock options also serve a meaningful role in the retention of our key employees.

        Our stock options are granted at the fair market value closing price on the date of grant, have a term of ten years, and generally vest ratably over a three-year period.

Restricted Stock

        Restricted stock represents 25% of the participant's long-term incentive value. We chose 25% of the total value because it provides meaningful retentive value to our key executives, helps smooth out market volatility, and is cost efficient. The restricted stock awards vest three years after the award is granted, so long as the participant remains employed by us. We believe restricted stock awards are an effective long-term compensation vehicle through which key employees can be retained, especially through volatile periods in the market.

Performance Restricted Stock Units

        Performance restricted stock units represent 25% of the participant's long-term incentive value. The PRSUs can be earned based on absolute total shareholder return over the three-year performance period. In order for executives to receive a target payout, the Company must have absolute TSR improvement of 20%. The table below illustrates the number of shares that will vest based on the

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Company's absolute TSR under the PRSU awards. Performance will be interpolated for any results in between threshold and target or target and maximum.

Performance Shares

        Performance shares represent 50% of each participant's long-term incentive value. Performance shares are payable 50% in cash and 50% in stock and are intended to motivate executives to achieve preset goals that are in line with critical business drivers. These awards also provide an incentive for executives to outperform peer companies as measured by relative total shareholder return.

        We set target award values for each year. These target award values are used to calculate the number of performance shares granted to each executive. The final number of shares to vest is not determined until the end of a three-year performance cycle and is based on Earnings Per Share Growth (or "EPS Growth") and Relative Total Shareholder Return (or "Relative TSR"). Each goal is weighted 50% of the total performance share award. As part of our emphasis on performance-based long-term

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incentives new for 2017, the payouts under these metrics are subject to a modifier based on Return on Invested Capital ("ROIC") improvement.

        EPS Growth is measured as the cumulative value of EPS over the three-year performance period, Relative TSR is expressed as the stock price appreciation plus dividends reinvested relative to appreciation of our peer group, and ROIC performance is measured as the Company's absolute improvement over the three-year performance period. ROIC is defined as net operating profit after taxes divided by average invested capital. Net operating profit after taxes is defined as earnings from continuing operations plus after-tax interest and amortization expense. Average invested capital is defined as the sum of the average debt and shareholders' equity for the year. ROIC excludes other comprehensive loss, goodwill impairments and non-economic accounting changes, as they are not reflective of our operating performance. Modifier payouts can range from 0% to 50% of target, but no modifier will be applied if the Company does not reach at least threshold performance on the EPS Growth and Relative TSR metrics. Performance shares will continue to be capped at 200% of target. The goals for EPS Growth and Relative TSR are listed below:

        To measure performance for the fiscal 20172018 grant, the three-year cumulative compounded EPS growth will be applied to the starting value of $0.80$0.79 per share, which was derived from historical EPS, adjusted for the pro forma results of businesses acquired, restructuring and goodwill impairment charges, less certain transaction costs.

Fiscal 20172018 Long-Term Incentive Grants

        The number of long-term incentive awards granted during fiscal 20172018 was determined by: (1) taking 25% of the participant's target award value and dividing it by the calculated Black-Scholes value10-day average closing

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stock optionprice between October 18, 2017 and October 31, 2017 to determine the number of options,restricted stock awards, (2) taking 25% of the participant's target award value and dividing it by the calculated Monte Carlo value of the PRSUs based on the 10-day average closing stock price between October 18, 20162017 and October 31, 20162017 to determine the number of performance restricted stock awardsunits, and (3) taking 50% of the participant's target award value and dividing it by the 10-day average closing stock price between October 18, 20162017 and October 31, 20162017 to determine the number of performance shares. The equity grant calculations apply an average stock price based on the last 10 trading days in October 2016.2017. For more information related to long-term incentive awards granted during fiscal 2017, please see the table entitled "Grants"Grants of Plan Based Awards"Awards" located on page 4041 of this Proxy Statement.

Previously Awarded Performance Shares

Fiscal 20152016 Performance Shares

        The performance shares awarded to our executives in December 20142015 (the "Fiscal 20152016 Performance Shares") became payable to executives in December 2017,2018, with a final value determined by the Company's performance period for fiscal 20152016 through fiscal 2017.2018. Performance measures and goals for the Fiscal 20152016 Performance Shares included EPS Growth and Relative TSR, each weighted 50% of the total performance share award. EPS Growth is measured as the cumulative value of EPS over the three-year performance period, and Relative TSR is expressed as the stock price appreciation plus dividends reinvested relative to appreciation of our peer group. Relative TSR is determined by calculating the change in the value of our stock plus the value of dividends and comparing that value

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with that of our peer group. Our performance against these pre-established goals determined the payout to executives within a range from threshold to maximum. The pre-established goals and the actual performance to these goals are set forth below.

        For the Fiscal 20152016 Performance Shares, the total actual payout was equal to 41%0% of target as a result of earning 82%0% of target associated with EPS Growth and 0% of target associated with relative TSR. Actual payout amounts for each named executive officer were as follows:

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Fiscal 20182019 Long-Term Incentive Grants

        At the Compensation Committee's December 20172018 meeting, the Compensation Committee elected to change the Company's LTI plan design from an LTI mix of 25% stock options, 25% restricted stock, 25% performance restricted stock units, and 50% performance shares to 25%30% restricted stock, 30% performance restricted stock units, 25% restricted stock and 50%40% performance shares. The new LTI design will be 75%70% performance-based. Other than the replacement of stock options with performance restricted stock units, the design of the LTI plan is the same as in fiscal 2017. The following charts illustrate the change inchart illustrates the allocation of long-term incentives by vehicle type for fiscal 2018.2019.

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Fiscal 2019 LTI Mix

Fiscal 20182019 Performance Restricted Stock Units

        The design of the PRSUs will be unchanged for fiscal 2018 performance restricted stock units (PRSU) can2019. The PRSUs will be earned based on absolute total shareholder return over the three-year performance period. The PRSUs will beperiod and settled 100% in equity. In order for executives to receive a target payout, the Company must have absolute TSR improvement of 20%. The table below illustrates the number of shares that will vest based on the Company's absolute TSR under the PRSU awards. Performance will be interpolated for any results in between threshold and target or target and maximum.

Fiscal 20182019 Performance Shares

        The fiscalIn December 2018, the Compensation Committee determined to change the design of the performance shares will continue to include EPS Growth and Relative TSR, each weighted 50%, with a modifierbe based on absolute ROIC improvement. Modifier payouts can range from 0% 100% return on net assets (RONA). RONA is defined as operating income over total assets minus cash minus current liabilities plus current long-term debt. This decision

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to 50% of target, but no modifier will be applied ifmove to one performance metric was made to help focus the Company does not reach at least thresholdexecutives on exceptional performance on the EPS Growth and Relative TSR metrics. Performancereturns. The performance shares will continue to be capped at 200% of target.

        For fiscal 2018, the three-year cumulative compounded EPS growth will be applied to the starting value of $0.58 per share, which is the pro forma EPS for fiscal 2017, excluding transaction costs.

        The foregoing goals are not intended to and do not reflect guidance by or expectations of the Company as to actual results. These goals are part of an overall compensation program designed,

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among other things, to align executive compensation with the market's reasonable expectations of performance and shareholder returns.

LTI Targets

        For fiscal 2018,2019, we will continue to target the market median for long-term incentives. Our review of market conditions for fiscal 20182019 indicated no change to target LTI values as compared to last year withfor all the exception of the VP Controller. The Committee chose to raise the LTI value for the VP Controller to $175,000. In addition to holding target LTI values flat, we have maintained the dollar value of target awards for the VPs. This practice has been used for the CEO, CFO, and GC since fiscal 2016.executives. The following table shows the LTI targets for the executives.

Processes and Procedures for Determining Executive Compensation

        Guided by the principal objectives described above, the Compensation Committee approves the structure of the executive compensation program and administers the programs for our executive officers, including matters where approval by our independent Compensation Committee members is appropriate for tax or regulatory reasons. The following describes the roles of key participants in the process.

The Role of Executives

        Our Chief Executive Officer is the only executive who works with the Compensation Committee and compensation consultant in establishing compensation levels and performance targets. Our Chief Executive Officer is responsible for reviewing the compensation and performance of the other executive officers and, as such, makes recommendations to the Compensation Committee regarding adjustments in compensation to such executive officers. The Compensation Committee considers the Chief Executive Officer's recommendations along with the Compensation Committee's own evaluation of individual and business performance and the market data provided by its compensation consultant. In making recommendations, the Chief Executive Officer relies upon his evaluation of his direct reports' performance and competitive compensation information. The Chief Executive Officer does not recommend his own compensation. The Chief Executive Officer recommends AIA performance goals to the Compensation Committee. The Chief Executive Officer, with input from the compensation consultant, recommends performance goals for long-term incentive awards that are properly aligned with the business goals and compensation strategy.

        Our Senior Vice President—General Counsel and Secretary serves as the liaison between the compensation consultant, the Compensation Committee, and the Governance Committee. In this role,

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he interfaces with the compensation consultant to carry out the duties of the Compensation Committee and Governance Committee.

The Role of Independent External Advisors

        To facilitate the formulation and administration of our compensation program, the Compensation Committee has retained Frederic W. Cook & Co., Inc. ("FW Cook") since July 2012 as its independent consultant on executive compensation matters. FW Cook helps the Compensation Committee assess the

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competitiveness and appropriateness of compensation programs throughout the market, including our peers, and develop a compensation program that is consistent with our objectives and market conditions. FW Cook meets with our Compensation Committee in executive sessions and advises the Compensation Committee with respect to a wide range of issues related to executive compensation. The Compensation Committee authorizes the scope of services that it desires FW Cook to provide for the Company, including reviewing and analyzing market data, evaluating our comparator group composition, making recommendations for incentive system designs, providing market and regulatory updates, assisting with deliberations related to CEO compensation, reviewing any relevant information and reporting to the Compensation Committee on all aspects of our compensation programs. FW Cook reports directly to, and takes its charge from, the Compensation Committee. However, the Compensation Committee does not specifically direct the manner in which FW Cook performs the scope of services it provides to the Company. Additionally, the Compensation Committee makes all final decisions regarding compensation.

Independence of Advisors

        The Compensation Committee reviewed the independence of FW Cook based on the NYSE rules for independence which include the following factors: (i) the provision of other services to the Company by FW Cook; (ii) the amount of fees from the Company paid to FW Cook as a percentage of FW Cook's total revenue; (iii) the policies and procedures of FW Cook that are designed to prevent conflicts of interest; (iv) any business or personal relationship of the individual compensation advisors who serve the Committee with any member of the Committee; (v) any stock of the Company owned by such individual compensation advisors, and (vi) any business or personal relationship of FW Cook or the individual compensation advisors who serve the Committee with an executive officer of the Company. The Compensation Committee also reviewed FW Cook's policies for avoiding conflicts of interest. The Compensation Committee has determined, based on its analysis of the factors listed above, that the work of FW Cook and the individual compensation consultants employed by FW Cook does not create any conflicts of interest and that FW Cook meets the NYSE standards for independence.

The Role of the Compensation & Management Development Committee

        The Compensation Committee currently comprises three non-employee independent directors. The Compensation Committee's duties in administering executive compensation programs include the following:

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Review and approve the Company's overall total compensation policy.



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Review and evaluate Company performance against pre-established performance metrics.



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Establish the annual total compensation paid to officers and key executives, including base salary, annual incentive, and long-term incentives.



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Regularly review and approve all employment agreements and severance arrangements for the executive officers.



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Review the Company's Compensation Discussion and Analysis disclosure.

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        The Compensation Committee determines the Chief Executive Officer's salary and incentive awards based upon an assessment of individual and Company performance, as well as market data provided by the compensation consultant. The Compensation Committee may form and delegate duties to subcommittees when appropriate. A more expansive list of the Compensation Committee's responsibilities can be found in its charter, which can be viewed on our website atwww.quanex.com.

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Post-Employment Compensation

        Severance and change in control benefits are provided under the employment agreements of our executives, as well as under our incentive plans. These benefits are discussed at greater length in the section entitled "Employment Agreements and Potential Payments upon Termination or Change in Control" on page 3134 of this Proxy Statement.

        Since 2013, the Company has maintained a policy to no longer provide excise tax gross up benefits to any new executives in the event of a change in control termination.

Deferred Compensation Plan

        The Company has a nonqualified deferred compensation program that gives executives the opportunity to defer income. As with our various other plans and programs, this deferral opportunity is designed to attract and retain key executives.

        The deferred compensation program is administered by the Compensation Committee. Before eligible employees can participate, they must first receive a recommendation from our senior managers and then final approval by the Compensation Committee. Participants in the program may choose to defer up to 100% of their annual and long-term incentive bonuses. Participants may choose from a variety of investment choices in which the Company will invest their deferrals over the defined deferral period.

Executive Benefits

        Purpose:    The role of executive benefits is to provide financial security, enhanced employee welfare, and competitive packages that are meaningful in the markets for which we compete for executive talent. These programs provide post retirement income, and in some cases, additional benefits in place of those that would otherwise be lost due to plan limits imposed by the Internal Revenue Code.

        Competitive Positioning:    Our executive benefits strategy is to provide meaningful yet cost-efficient benefits to executives at a level that aligns with our desired competitive positioning of the market median. We provide executives with health and welfare benefits that are consistent with our program for exempt personnel generally. Supplemental retirement and supplemental life benefits are also provided to our officers.

Program Elements:

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Retirement and other benefits.  Our executives participate in the Company's defined benefit pension plan, 401(k) defined contribution retirement plan, and supplemental executive retirement plans. Executives also receive company contributions under our 401(k) plan, a 15% match under our employee stock purchase program (ESPP) and dividends on unvested restricted stock. The Company previously provided a 20% match under the deferred compensation plan, but that benefit was suspended on April 1, 2009.



•

Life insurance benefits.  Our executives participate in Company provided life insurance, the amount of which takes into consideration age and/or income. Our executives also have the opportunity to purchase supplemental life insurance.

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•

Perquisites.  We provide our executives with certain perquisites which help us compete for executive talent, and in some cases, allow our executives to devote more attention to the business of the Company. Certain perquisites have been grandfathered and not all executives are provided the same. The various perquisites include executive life insurance, financial and tax

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planning, automobile allowances, and club memberships. The Compensation Committee eliminated tax gross-up payments on perquisites, effective December 31, 2009.

Other Compensation Items

Clawback Provision (Recovery of Incentive Payments)

        We have a policy to enable the Board, in its judgment and to the extent permitted by governing law, to require reimbursement of any cash bonus or performance shares paid to an executive where (a) the value of the award was predicated upon the achievement of certain financial results that were subsequently the subject of a material restatement, and (b) a lower payment would have been made to the executive based on the restated financial results. In each instance, the Company may seek to recover that portion of the affected executive's annual and/or long-term incentive payments that is higher than the payment that would have originally been paid. No reimbursement will be required if such material restatement was caused by or resulted from any change in accounting policy or rules. In addition, we have amended our performance based award agreements to facilitate a transition to new SEC and stock exchange requirements when they are finalized.

Risk Assessment

        In fiscal 2017,2018, the Compensation Committee discussed and analyzed risks associated with the Company's compensation policies and practices for executive officers and all employees generally. This discussion included, but was not limited to, topics such as eligibility, affordability, retention impact, corporate objectives, alignment with shareholder interests, governance, and possible unintended consequences. The Compensation Committee did not identify any risks arising from the Company's compensation programs or practices that are reasonably likely to have a material adverse effect on the Company.

Executive Stock Ownership Guidelines

        We encourage our executives to own our Common Stock because we believe such ownership provides strong alignment of interests between executives and shareholders. Our executive stock ownership guidelines provide that different levels of executives are expected to own a specific value of our Common Stock, expressed as a percentage of salary. The stock ownership requirement for the current CEO is effective five years after assuming his role. For other executives, the stock ownership requirement is effective three years after assuming their respective roles. The chart below shows the guidelines by executive level.

        All of our named executives currently are in compliance with the executive stock ownership guidelines.

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Prohibition on Certain Transactions Involving Company Stock

        The Company's Corporate Governance Guidelines specifically prohibit the Company's directors, officers and employees from hedging or pledging Company stock; maintaining margin accounts holding Company Stock, and buying or selling any puts, calls or other derivatives of Company stock. Please see page 63 of this Proxy Statement for the Company's policy with regard to these activities.

Timing of Certain Committee Actions

        The Compensation Committee schedules actions related to executive pay to coincide with its regularly scheduled Board meetings in October and December:

        Compensation decisions related to promotions or new hire awards are addressed on an individual basis, at the time the executive is promoted or first joins the Company.

Accounting Considerations and Tax Deductibility of Executive Compensation

        In designing compensation programs, we consider the effects that accounting and taxation may have on us, the named executive officers or other employees as a group. We account for compensation arrangements in accordance with FASB ASC Topic 718. All share based payments to employees are measured at fair value on the date of grant and recognized in the statement of operations as compensation expense over their requisite service periods.

        Historically, Section 162(m) of the Internal Revenue Code providesprovided that we may not deduct for federal income tax purposes compensation of more than $1,000,000 paid in any year to the Chief Executive Officer or any of the three other most highly compensated executive officers, excluding the Chief Financial Officer, unless the compensation is paid solely on the attainment of one or more pre-established objective performance goals and certain other considerations are met. Under

        The exemption from Section 162(m)'s deduction limit for performance-based compensation has been repealed, effective for taxable years beginning after December 31, 2017, such that compensation paid to any "covered employee" in excess of $1,000,000 will not be deductible, unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017. A "covered employee" under Section162(m) is any employee who has served as our CEO, CFO or other named executive officers for tax years after December 31, 2016. The rules and regulations promulgated under Section 162(m) are complicated, and may change from time to time, and the termsscope of our annual cash bonus program and performance unit and performance share programs, the Compensation Committee may, in its discretion, adjust payouts to executives downward. Becausetransition relief under the plans arelegislation repealing Section 162(m)'s performance-based exemption from the

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deduction limit is uncertain. As such, there can be no guarantee that compensation intended to comply with Internal Revenue Code Section 162(m), no upward discretionsatisfy the requirements for tax deductibility in determining payouts is permitted.

        Tax reform legislation that was enacted in December 2017 will be considered as the Committee administers compensation arrangements in the future.fact will.

Influence of Say on Pay Results on Executive Compensation Decisions

        Management and the Compensation Committee are attentive to the outcome of the shareholder "Say on Pay" vote. At the Company's 20172018 annual shareholder meeting, the Company received significant support for its executive compensation program, with 98.8%98.9% of the votes in favor of the "Say on Pay" resolution. The Compensation Committee remains responsive to shareholder feedback and believes that the strong support from shareholders indicates satisfaction with the executive compensation program.

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Employment Agreements and Potential Payments upon Termination or Change in Control

        The Company has entered into change in control agreements with its named executive officers. We believe that the change in control agreements help us attract and retain our named executive officers by reducing the personal uncertainty and anxiety that arises from the possibility of a future business combination. During a potential change in control, we do not want executives leaving to pursue other employment out of concern for the security of their jobs or being unable to concentrate on their work. To enable executives to focus on the best interest of our stockholders, we offer change in control agreements that generally provide benefits to executives whose employment terminates in connection with a change in control.

        In addition, to attract certain of our named executive officers to accept employment with us, we agreed to provide those officers who previously were employed by Quanex Corporation with severance agreements that will provide them certain of the protections they would have been entitled to if they had remained with Quanex Corporation following the spin-off of Quanex Building Products Corporation from Quanex Corporation in April 2008. The Company also entered into a letter agreement with its President and CEO, effective July 9, 2013, which contains certain executive severance provisions. The Company entered into these arrangements because executives at this level generally require a longer timeframe to find comparable jobs as fewer jobs at this level exist in the market. In addition, executives often have a large percentage of their personal wealth dependent on the status of their employer, given the requirement to hold a multiple of their salary in stock and the fact that a large part of their compensation is stock-based. The amount and type of benefits were based on competitive market practices for executives at this level.

        Provisions of the severance agreements and severance letter arrangement require a termination of employment before any benefits are paid. The change in control agreements require both a change in control and a termination of employment before any benefits are paid (a "double trigger"). If an executive officer who is covered by both a change in control agreement and a severance agreement or letter arrangement experiences both a change in control of the Company and a termination of employment, benefits are payable under only the change in control agreement; in no event will the executive be able to receive payment under both the severance agreement or letter arrangement and the change in control agreement.

Severance Agreements of Certain Executives

        This section describes the severance agreements entered into by Quanex with the SVP—Finance and CFO and the SVP—General Counsel and Secretary. As described above, benefits are payable under the severance agreements following a termination of employment that meets certain requirements. A termination of employment that triggers benefits under the severance agreements includes involuntary termination by the Company without Cause. "Cause" exists if the executive commits gross negligence or willful misconduct in connection with his employment; an act of fraud,

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embezzlement or theft in connection with his employment; intentional wrongful damage to Company property; intentional wrongful disclosure of our secret processes or confidential information; or an act leading to a conviction of a felony or a misdemeanor involving moral turpitude.

        If the executive is entitled to benefits under the severance agreement, the executive will receive the following:

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Annual base salary and compensation for earned but unused vacation time accrued through the date of termination of employment;



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Pro-rated amount equal to the greater of the executive's (i) target performance bonus for the year of termination of employment, or (ii) performance bonus for the year immediately preceding the year of termination of employment;

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Lump sum severance equal to 18 months of the executive's base salary for the fiscal year in which the termination occurs;



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Continued participation in health and welfare plans and payment of benefit premiums for 18 months; and



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All other perquisites to which the executive is entitled pursuant to the terms of the agreements providing for such perquisites.

President and CEO Severance Letter Agreement

        This section describes the severance provisions contained in the letter agreement entered into by the Company and Mr. Griffiths upon his assumption of duties as the Company's Chairman, President and CEO. In the event that Mr. Griffiths' employment is terminated by the Board of Directors for any reason other than "Cause," as defined in the change in control agreement, or a material violation of the Company's Code of Business Conduct and Ethics, the following benefits would be payable:

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Base salary continuation for two years (at the rate in effect immediately preceding the date of termination), paid semi-monthly for 24 months;



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Pro-rated AIA bonus for the year of termination, as determined by the Board of Directors; and



•

Continued participation in health and welfare plans and payment of benefit premiums (i.e., medical, dental, vision, life, disability and any other welfare plans he currently participates in) for 18 months.

The letter agreement requires Mr. Griffiths to execute a mutually satisfactory release of all claims before the expiration of the 90^th day following his termination, or he shall forfeit any and all payment, reimbursements, and benefits due under the letter agreement.

Change in Control Agreements

        As described above, benefits are payable under the change in control agreements following the occurrence of both (i) a change in control of the Company and (ii) termination of the named executive officer's employment with the Company. Each of the following events generally constitutes a change in control of the Company for purposes of the change in control agreements:

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Any person or entity acquiring or becoming beneficial owner as defined in SEC regulations of 20% or more of (i) the then outstanding shares of our Common Stock or (ii) the combined voting power of the then outstanding voting securities of the Company;



•

Generally, our current directors ceasing to constitute a majority of our directors;