Chaparral Steel CO
FORM OF NONQUALIFIED STOCK OPTION AGREEMENT
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<DESCRIPTION>FORM OF NONQUALIFIED STOCK OPTION AGREEMENT
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Exhibit 10.12 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>Form of Nonqualified Stock Option Agreement </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2">AMENDMENT </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">(Change of Control) </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2">TO </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">STOCK OPTION AGREEMENT </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%" ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">This amendment (the &#147;<B><I>Amendment</I></B>&#148;) is entered into effective as of January&nbsp;13,
2006, by and between Chaparral Steel Company, a Delaware corporation (the &#147;<B><I>Company</I></B>&#148;), and the other signatory to this Amendment (the &#147;<B><I>Grantee</I></B>&#148;), and evidences, </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%" ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, the Company and the Grantee have previously entered
into the Stock Option Agreement identified in <B><U>Exhibit A</U></B> attached hereto (the &#147;<B><I>Stock Option Agreement</I></B>&#148;) granting the Grantee the right to purchase shares (the &#147;<B><I>Shares</I></B>&#148;) of the $0.01 par
value per share common stock of the Company (the &#147;<B><I>Common Stock</I></B>&#148;); </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"
ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, the Company and the Grantee desire to amend, as hereinafter set forth, certain provisions of the Stock Option Agreement; </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%" ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">NOW THEREFORE, in consideration of the premises, the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%" ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">1. Capitalized terms used but not defined herein are used as defined in the Stock Option Agreement. In the event of any conflict between
the terms and conditions of this Amendment and the terms and conditions of the Stock Option Agreement, the terms and conditions of this Amendment will govern and control. Except to the extent set forth in this Amendment, the terms and conditions of
the Stock Option Agreement will continue in full force and effect. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%" ALIGN="justify"><FONT
FACE="Times New Roman" SIZE="2">2. Article VI of the Stock Option Agreement is amended to read in its entirety as follows: </FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(a)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">In the event the Company or the stockholders of the Company enter into an agreement not approved by a vote of eighty percent (80%)&nbsp;of the Board in
accordance with Article FIFTEENTH of the Company&#146;s Certificate of Incorporation to dispose of all or substantially all of the assets or stock of the Company by means of a sale, merger, reorganization, liquidation or otherwise, this Option shall
become immediately exercisable with respect to the full number of Shares subject to this Option, notwithstanding the specific terms of this Option, during the period commencing as of the date of such agreement and ending when the disposition of
assets or stock contemplated by the agreement is consummated or the agreement is terminated. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(b)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">In the event of a Change of Control (as defined below) and the termination of Grantee&#146;s status as a director of the Company within a period of twenty-four
(24)&nbsp;months after the Change of Control for any reason other than death or removal of Grantee from the Board for fraud, dishonesty or other acts detrimental to the Company or a Subsidiary, this Option shall become immediately exercisable with
respect to the full number of Shares subject to this Option, notwithstanding the specific terms of this Option, for the period provided in Section IV(a) of this Agreement. </FONT></P></TD></TR></TABLE> <P
STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(c)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">&#147;Change of Control&#148; means that, after the Effective Date, </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT
SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">any Person becomes the Beneficial Owner of securities of the Company representing more than 50% of the combined voting power of the Company&#146;s then
outstanding securities that have the right to vote for the election of directors generally; or </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">Continuing Directors (as defined below) cease for any reason to constitute a majority of the directors of the Company then serving; or
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<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">there is consummated (i)&nbsp;a merger, consolidation or other business combination (including an exchange of securities with the security holder&#146;s of a
company that is a constituent in such business combination) of the Company or any direct or indirect subsidiary of the Company with any other company or (ii)&nbsp;a single transaction or series of related transactions pursuant to which a majority of
the voting securities of the Company are issued in exchange for consideration other than cash, provided, however, a &#147;Change of Control&#148; will not be deemed to mean a merger, consolidation or business combination which would result in the
voting securities of the Company outstanding immediately prior to such merger, consolidation or business combination continuing to represent at least a majority of the combined voting power of the securities having the right to vote for the election
of directors generally of the Company or the surviving entity or any parent thereof outstanding immediately after such merger, consolidation or business combination (either by remaining outstanding or by being converted into or exchanged for voting
securities of the surviving entity or parent thereof); or </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(iv)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">there is consummated a sale, lease or other disposition by the Company of all or substantially all of the Company&#146;s assets, other than a sale, lease or
other disposition by the Company of all or substantially all of the Company&#146;s assets to an entity, at least a majority of the combined voting power of the outstanding securities of which are owned by stockholders of the Company; or
</FONT></P></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(v)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">any other transaction that is determined by the Committee to be a Change of Control. </FONT></P></TD></TR></TABLE> <P
STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%" ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">Notwithstanding the foregoing, a &#147;Change of
Control&#148; shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the holders of the Common Stock (or securities convertible into or exchangeable for
Common Stock) immediately prior to such transaction or series of transactions continue to have a majority of ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of
transactions. For purposes of this definition, &#147;Person&#148; shall mean any Person other than (1)&nbsp;any employee plan established by the Company, (2)&nbsp;the Company or any of its Affiliates, (3)&nbsp;an underwriter temporarily holding
securities pursuant to an offering of such securities, or (4)&nbsp;an entity owned, directly or indirectly, by securityholders (including, without limitation, warrant or option holders) of the Company in substantially the same proportions as their
ownership of the Company. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(d)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">&#147;Continuing Directors&#148; means directors of the Company who were: </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT
SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">directors on the effective date of the Plan, or </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">elected or nominated for election with the approval of a majority of the directors who, at the time of such election or nomination, were Continuing Directors.
</FONT></P></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(e)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">Upon the occurrence of a Change of Control, the provisions of Section IV(c) are superseded and shall no longer have any effect. </FONT></P></TD></TR></TABLE>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%" ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">IN WITNESS WHEREOF, the undersigned have executed this Amendment. </FONT></P> <P
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<TD VALIGN="top" COLSPAN="3"> <P ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">CHAPARRAL STEEL COMPANY</FONT></P></TD></TR>
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<TD VALIGN="top"> <P ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">By:&nbsp;</FONT></P></TD>
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<TD VALIGN="top"> <P ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">Name:&nbsp;</FONT></P></TD>
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<TD VALIGN="top"> <P ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">Title:&nbsp;</FONT></P></TD>
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<TD VALIGN="top" COLSPAN="3"> <P ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">GRANTEE</FONT></P></TD></TR>
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<TD VALIGN="top"> <P ALIGN="justify"><FONT FACE="Times New Roman" SIZE="2">Printed&nbsp;Name:&nbsp;</FONT></P></TD>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B><U>EXHIBIT A </U></B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">Description of Stock Option Agreement </FONT></P>
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