EXHIBIT 10.1
[date]
[Participant Name]
[Address]
[City, State Zip]
Re: 1997 Long-Term Incentive Plan Performance Award -
Targets for 3-Year Period Ending May 2010
Dear Participant:
The Compensation Committee of the Board of Directors of Worthington Industries,
Inc. (the "Company") has granted to you a Performance Award under the Company's
1997 Long-Term Incentive Plan (the "Plan") on the terms described below. The
Performance Award is designed to provide incentive payouts to certain senior
managers based on the attainment of stated financial performance targets over a
three-year period.
In an effort to focus on both the quantity and quality of earnings, the
Performance Award incorporates both an earnings per share ("EPS") and economic
value added ("EVA") component. EPS targets are for corporate EPS for the fiscal
year ending 2010. EVA targets are for cumulative corporate EVA over the
three-year period ending May 31, 2010. For corporate officers, half of the
possible Performance Award is allocated to the EPS target and half to the EVA
target. For business unit executives, the Performance Award is structured a
little differently; half of the possible Performance Award is allocated to the
same corporate EPS and EVA targets as the corporate officers and half is
allocated to business unit operating income targets.
Your target Performance Awards for the three-year performance period ending May
31, 2010 are: (a) a Cash Award of $______ and (b) a Performance Share Award of
__________ common shares of Worthington Industries, Inc. ("Company Stock"). The
specific performance targets, and the related Cash Award and Performance Share
Award, are set forth below:
Performance
EPS Targets 2010 Corporate EPS Cash Award Share Award
- ----------- ------------------ ---------- -----------
Threshold $________ $________ _____ shares
Target $________ $________ _____ shares
Maximum $________ $________ _____ shares
Cum 3 Year Corporate
EVA Targets EVA Ending 2010
- ----------- --------------------
Threshold $____ million $________ _____ shares
Target $____ million $________ _____ shares
Maximum $____ million $________ _____ shares
Performance falling between threshold and maximum will be pro rated on a linear
basis.
No payments will be made if performance falls below threshold. Each of the
performance measures is free standing so that you will be able to earn a pay-out
based upon the achievement of one measure, even if the threshold performance
level is not achieved in the other measure.
Calculation of the Company results and attainment of performance measures will
be made solely by the Compensation Committee based upon the Company's audited
consolidated financial statements. The Compensation Committee has the right to
make changes and adjustments in calculating the performance measures to take
into account unusual or non-recurring events, including, without limitation,
changes in tax and accounting rules and regulations; extraordinary gains and
losses; mergers and acquisitions and purchases or sales of substantial assets;
provided that, if Section 162(m) of the Internal Revenue Code would be
applicable to the pay-out of the Performance Awards hereunder, any such change
or adjustment must be permissible under Section 162(m).
The determination of the attainment of performance objectives and the amount of
the Performance Awards payable will generally be finalized within a reasonable
time after the applicable consolidated financial statements of the Company has
been completed. Payments will then be made within a reasonable time after
finalization by the Committee, unless there is a need for a delay.
Unless the Committee elects a different form of pay-out, payments of the Cash
Award will be made in cash. Payment of the Performance Share Award will be made
in Company Stock. The Committee may adopt provisions permitting the deferral of
a portion or all of the pay-out into a Deferred Compensation Plan, provided that
a timely deferral election is made. The Company may require payment of, or may
withhold from payments, amounts necessary to meet any federal, state or local
tax withholding requirements.
In general, termination of employment terminates Performance Awards. Termination
of employment for reasons of death, disability or retirement will result in a
pro rata pay-out for performance periods ending within 24 months after
termination based on the number of months of employment completed by you during
the performance period before the effective date of termination. No pay-out will
be made for performance periods ending more than 24 months after termination.
Termination of employment for any other reason, voluntary or involuntary, prior
to the Committee's determination of the attainment of performance objectives and
finalization of the Performance Award amount will result in the forfeiture of
all Performance Awards from the Plan.
The provisions of the Plan are incorporated herein by reference and a copy is
available at your request.
If you have any questions about your Performance Awards, please direct them to
me.
Very truly yours,