Exhibit 10.10

 

MEMORANDUM      

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To:          From:          Personal & Confidential       Date:    Re:   

Long-Term Incentive Awards: Performance Share and Performance Cash

 

 

 

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, 20xx. These awards become payable if the company achieves specified
levels (threshold, target, maximum) of selected financial measures. You have
been selected as a recipient of these awards.

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.

Your target Performance Awards for the three-year performance period ending
May 31, 20xx are: (a) a Cash Award of $xxx,xxx and (b) a Performance Share Award
of x,xxx 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, 20xx

 

EPS Targets

  20xx Corporate EPS   Cash Award   Share Award

Threshold

  $xxx   $xxx   xxx shares

Target

  $xxx   $xxx   xxx shares

Maximum

  $xxx   $xxx   xxx shares

Cumulative 3-Year Corporate

 

EVA Targets

  EVA Ending 20xx   Cash Award   Share Award

Threshold

  $xxx million   $xxx   xxx shares

Target

  $xxx million   $xxx   xxx shares

Maximum

  $xxx million   $xxx   xxx shares

For the three-year performance period ending May 31, 20xx, all FIFO impact,
positive or negative, will be excluded for the purposes of measuring Corporate
EPS. No FIFO adjustment will be made to the EVA calculation.

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.

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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 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.

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.

The potential dollar value of these grants is considerable and should be viewed
as significant additional incentive and reward for performance. Let’s be focused
in our efforts to ensure the achievement of these performance levels.

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-xxx-xxxx.