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EXHIBIT 10.1
 
 
Memorandum
 [worthingtonlogo.jpg] To:
From:
Date:

 
Re:   Long-Term Incentive Awards:  Performance Share and Performance Cash Awards
 

 
It’s an exciting time to be a part of Worthington Industries.  The successes of
our Transformation are becoming apparent in our results and goals have been
established that will continue to push us to drive performance, growth and
excellence in all of our businesses.  Our three-year strategy has been defined,
and with your help, we will grow earnings to $400 million and all businesses
will hit or exceed EVA targets.  Because of your role in achieving these goals,
you been selected to participate in the Long-Term Incentive Awards Plan.

At its June meeting, the Board’s Compensation Committee approved the grant of
Performance Cash and Performance Share Awards for the three-year period ending
May 31, xxxx, under the Company’s Long-Term Incentive Plan (LTIP)  These awards
become payable if the Company achieves specified levels (threshold, target,
maximum) of the selected financial measures.

In an effort to focus on both the quantity of earnings and the amount of capital
employed to generate those earnings, the Performance Cash Awards and Performance
Share Awards incorporate both an EPS and EVA component.  For Corporate officers,
half of the possible award is allocated to EPS targets and half to EVA targets.

For Business Unit officers, half of the possible award is allocated to Business
Unit EOI targets, and the other half is divided equally between Corporate EPS
and EVA targets.

Your target Performance Awards for the three-year performance period ending May
31, xxxx are: (a) a Cash Award of $xxx,xxx and (b) a Performance Share Award of
xxxx common shares of Worthington Industries, Inc. (“Company Stock”).  The
specific performance targets, and the related Performance Cash and Performance
Share Awards for 20xx are listed in the table below.

Three Year Period Ending May 31, 2015

         EPS Targets 20xx Corporate EPS Cash Award
Share Award
 Threshold $x.xx $xxx,xxx xxx shares  Target $x.xx $xxx,xxx xxx shares  Maximum
$x.xx $xxx,xxx xxx shares          EVA Targets
Cumulative 3-Year Corporate
EVA Ending 20xx
Cash Award Share Award  Threshold $xx million $xxx,xxx xxx shares  Target $xx
million $xxx,xxx xxx shares  Maximum $xx million $xxx,xxx xxx shares

    
For the three-year performance period ending May 31, 20xx, the FIFO impact,
positive or negative, restructuring items and unusual or non-recurring items,
will be excluded for the purposes of measuring Corporate EPS and Business Unit
EOI as determined by the Compensation Committee.  No FIFO adjustment will be
made to the EVA calculation.

 
 
 

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Performance falling between threshold and maximum will be prorated on a linear
basis.  No payments will be made if performance falls below threshold.  Each of
the performance measures is freestanding 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 as adjusted for FIFO impact, restructuring
items and unusual or non-recurring items.  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 audit of 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 and 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.

If you are transferred out of your current position of employment into another
LTIP-eligible position, your award will generally be amended at the discretion
of the Compensation Committee to reflect your new position.  In such case, a new
award will be given to reflect the remaining time in the Performance Period with
new award amounts and new performance targets set in accordance with those
established at the beginning of the performance period (similar amounts for
those given for comparable positions at the beginning of the performance
period).  Your awards for the performance period will then be prorated based on
the two awards (the previous award for your previous position and the new award
for your new position).  The proration will be made based on the number of
months in each position, prorated over the 36 month period.  The Compensation
Committee can choose the effective time of the change from your previous
performance award to your new performance award when it amends the performance
award.  If the Compensation Committee elects not to amend the performance award,
this award shall remain in place with no proration.

If you are demoted from or otherwise transferred out of your current position to
a position that is not LTIP eligible, but remain employed by the Company, at a
time that there are more than 12 months remaining in the performance period,
your award will be reduced on a prorata basis to reflect the number of months
during the performance period in which you are no longer in an LTIP-eligible
position.  For example, if you are transferred to a non LTIP-eligible position
after 20 months of the performance period, your performance award would be
prorated on the basis of 20/36.
 
 
 
 

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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.

If there is a Change in Control and within two years thereafter your employment
is terminated by the Company without “cause” or by your “due to an adverse
change of the Participant’s employment” (as those terms are defined in rules
adopted by the Compensation Committee) your reward will be considered earned and
payable in full at the maximum amount and will be immediately settled or
distributed.  The provisions of this paragraph will apply in lieu of the
provisions of Section 10 of the Plan.

If the Company determines that any payment or benefit related to these awards in
connection with a Change in Control, when combined with any other payment or
benefit due to you form the Company or any other entity in connection with such
Change in Control, would be considered a “parachute payment” within the meaning
of Section 280G of the Code, the payments and benefits due to you under this
Agreement may be reduced by the Company to $1.00 less than the amount that would
otherwise be considered a “parachute payment” within the meaning of Section 280G
of the Code, in accordance with rules and procedures which may be established by
the Compensation Committee.

The provisions of the Plan are incorporated herein by reference and a copy is
enclosed in this packet.

Your continuing efforts on behalf of the Company are greatly appreciated.  If
you have any questions after reviewing the enclosed information, please feel
free to call me at 614-438-7506.

 
 
 
 
 
 

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