1997 LONG-TERM INCENTIVE PLAN
SECTION 1. PURPOSE. The purposes of the Worthington Industries, Inc. 1997
Long-Term Incentive Plan (the "Plan") are to encourage selected key employees of
Worthington Industries, Inc. and its subsidiaries (collectively the "Company")
to acquire a proprietary and vested interest in the growth and performance of
the Company, to generate an increased incentive to contribute to the Company's
future success and prosperity, thus enhancing the value of the Company for the
benefit of share owners, and to enhance the ability of the Company to attract
and retain individuals of exceptional talent upon whom, in large measure, the
sustained progress, growth and profitability of the Company depends.
SECTION 2. ADMINISTRATION. The Plan shall be administered by the
Committee. The Committee shall have full power and authority, subject to such
orders or resolutions not inconsistent with the provisions of the Plan as may
from time to time be adopted by the Board, to: (i) select the Employees of the
Company to whom Awards may from time to time be granted hereunder; (ii)
determine the type or types of Award to be granted to each Participant
hereunder; (iii) determine the number of Shares to be covered by each Award
granted hereunder; (iv) determine the terms and conditions, not inconsistent
with the provision of the Plan, of any Award granted hereunder; (v) determine
whether, to what extent and under what circumstances Awards may be settled in
cash, Shares or other property or canceled or suspended; (vi) determine whether,
to what extent and under what circumstances cash, Shares, and other property and
other amounts payable with respect to an Award under the Plan shall be deferred
either automatically or at the election of the Participant; (vii) interpret and
administer the Plan and any instrument or agreement entered into under the Plan;
(viii) establish such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan; and (ix) make any
other determination and take any other action that the Committee deems necessary
or desirable for administration of the Plan. Decisions of the Committee shall be
final, conclusive and binding upon all persons, including the Company, any
Participant, any shareholder, and any employee of the Company. A majority of the
members of the Committee may determine its actions and fix the time and place of
SECTION 3. DURATION OF, AND SHARES SUBJECT TO PLAN.
(a) Term. The Plan shall remain in effect until terminated by the Board,
provided, however, that no Incentive Stock Option may be granted more than ten
(10) years after the Effective Date of the Plan.
(b) Shares Subject to the Plan. The maximum number of Shares in respect of
which Awards may be granted under the Plan, subject to adjustment as provided in
Section 3(c) of the Plan, is 4,500,000 Shares. Notwithstanding the foregoing, in
no event shall more than 1,000,000 Shares be cumulatively available for Awards
of Incentive Stock Options under the Plan and provided further that no
Participant may be granted Awards in any one calendar year with respect to more
than two hundred thousand (200,000) Shares.
For the purpose of computing the total number of Shares available for
Awards under the Plan, there shall be counted against the foregoing limitations
the number of Shares subject to issuance upon exercise or settlement of Award as
of the dates on which such Awards are granted. Shares which were previously
subject to Awards shall again be available for Awards under the Plan if any such
Awards are forfeited, terminated, expire unexercised, settled in cash or
property other than Shares or exchanged for other Awards (to the extent of such
forfeiture, termination or expiration of such Awards), or if the Shares subject
thereto can otherwise no longer be issued. Further, any Shares which are used as
full or partial payment to the Company by a Participant of the purchase price of
Shares upon exercise of a Stock Option shall again be available for Awards under
Shares which may be issued under the Plan may be either authorized and
unissued shares or issued shares which have been reacquired by the Company. No
fractional shares shall be issued under the Plan.
(c) Changes in Shares. In the event of any merger, reorganization,
consolidation, recapitalization, stock dividend, stock split, reverse stock
split, spin off, exchange of shares or similar transaction or other change in
corporate structure or capitalization affecting the Shares or the price thereof,
such adjustments and other substitutions shall be made to the Plan and to Awards
as the Committee in its sole discretion deems equitable or appropriate,
including without limitation such adjustments in the aggregate number, class and
kind of Shares which may be delivered under the Plan, in the aggregate or to any
one Participant, in the number, class, kind and option or exercise price of
Shares subject to outstanding Options, Stock Appreciation Rights or other Awards
granted under the Plan, and in the number, class and kind of Shares subject to,
Awards granted under the Plan (including, if the Committee deems appropriate,
the substitution of similar options to purchase the shares of, or other awards
denominated in the shares of, another company) as the Committee may determine to
be appropriate in its sole discretion, provided that the number of Shares or
other securities subject to any Award shall always be a whole number.
SECTION 4. ELIGIBILITY. Any Employee (excluding any member of the
Committee) shall be eligible to be selected as a Participant.
SECTION 5. STOCK OPTIONS. Options may be granted hereunder to
Participants either alone or in addition to other Awards granted under the Plan.
Any Option granted under the Plan shall be evidenced by an Award Agreement in
such form as the Committee may from time to time approve. Any such Option shall
be subject to the following terms and conditions and to such additional terms
and conditions, not inconsistent with the provisions of the Plan, as the
Committee shall deem desirable. The provisions of Options need not be the same
with respect to each recipient.
(a) Option Price. The purchase price per Share purchasable under an Option
shall be determined by the Committee in its sole discretion; provided that such
purchase price shall not be less than the Fair Market Value of the Share on the
date of the grant of the Option.
(b) Option Period. The term of each Option shall be fixed by the Committee
in its sole discretion; provided that no Incentive Stock Option shall be
exercisable after the expiration of ten years from the date the Option is
(c) Exercisability. Options shall be exercisable at such time or times as
determined by the Committee at or subsequent to grant. Unless other determined
by the Committee at or subsequent to grant, no Incentive Stock Option shall be
exercisable during the year ending on the day before the first anniversary date
of the granting of the Incentive Stock Option.
(d) Method of Exercise. Subject to the other provisions of the Plan and
any applicable Award Agreement, any Option may be exercised by the Participant
in whole or in part at such time or times, and the Participant may make payment
of the option price in such form or forms, including, without limitation,
payment by delivery of cash, Shares or other consideration (including, where
permitted by law and the Committee, Awards) having a Fair Market Value on the
exercise date equal to the total option price, or by any combination of cash,
Shares and other consideration as the Committee may specify in the applicable
(e) Incentive Stock Options. In accordance with rules and procedures
established by the Committee, the aggregate Fair Market Value (determined as of
the time of grant) of the Shares with respect to which Incentive Stock Options
held by any Participant which are exercisable for the first time by such
Participant during any calendar year under the Plan (and under any other benefit
plans of the Company or of any parent or subsidiary corporation of the Company)
shall not exceed $100,000 or, if different, the maximum limitation in effect at
the time of grant under
Section 422 of the Code, or any successor provision, and any regulations
promulgated thereunder. The terms of any Incentive Stock Option granted
hereunder shall comply in all respects with the provisions of Section 422 of the
Code, or any successor provision, and any regulations promulgated thereunder.
SECTION 6. STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may be
granted hereunder to Participants either alone or in addition to other Awards
granted under the Plan and may, but need not, relate to a specific Option
granted under Section 5. The provisions of Stock Appreciation Rights need not be
the same with respect to each recipient. Any Stock Appreciation Right related to
a Nonstatutory Stock Option may be granted at any time thereafter before
exercise or expiration of such Option. Any Stock Appreciation Right related to
an Incentive Stock Option must be granted at the same time such Option is
granted. In the case of any Stock Appreciation Right related to any Option, the
Stock Appreciation Right or applicable portion thereof shall terminate and no
longer be exercisable upon the termination or exercise of the related Option,
except that a Stock Appreciation Right granted with respect to less than the
full number of Shares covered by a related Option shall not be reduced until the
exercise or termination of the related Option exceeds the number of shares not
covered by the Stock Appreciation Right. Any Option related to any Stock
Appreciation Right shall no longer be exercisable to the extent the related
Stock Appreciation Right has been exercised. The Committee may impose such
conditions or restrictions on the exercise of any Stock Appreciation Right as it
shall deem appropriate.
SECTION 7. RESTRICTED STOCK.
(a) Issuance. Restricted Stock Awards may be issued hereunder to
Participants either alone or in addition to other Awards granted under the Plan,
for such consideration as determined by the Committee in its sole discretion and
the Committee may issue such Awards for no consideration or for such minimum
consideration as may be required by applicable law. Restricted Stock Awards
shall contain such limitations, terms and conditions and other provisions as
determined by the Committee in its sole discretion. The provisions of Restricted
Stock Awards need not be the same with respect to each recipient.
(b) Registration. Any Restricted Stock issued hereunder may be evidenced
in such manner as the Committee in its sole discretion shall deem appropriate,
including, without limitation, book-entry registration or issuance of a stock
certificate or certificates. In the event any stock certificate is issued in
respect of shares of Restricted Stock awarded under the Plan, such certificate
shall be registered in the name of the Participant, and shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such Award.
(c) Forfeiture. Except as otherwise determined by the Committee at the
time of grant, upon termination of employment for any reason during the
restriction period, all shares of Restricted Stock still subject to restriction
shall be forfeited by the Participant and reacquired by the Company, for the
purchase price paid by the Participant or such other consideration (or no
consideration) as set by the Committee as part of the terms and conditions of
the Award, provided that except as provided in Section 11, in the event of a
Participant's retirement, permanent disability, other termination of employment
or death, or in cases of special circumstances, the Committee may, in its sole
discretion, waive in whole or in part any or all remaining restrictions with
respect to such Participant's shares of Restricted Stock. Unrestricted Shares,
evidenced in such manner as the Committee shall deem appropriate, shall be
issued to the grantee after the period of forfeiture, as determined or modified
by the Committee, shall expire.
SECTION 8. PERFORMANCE AWARDS. Performance Awards may be issued hereunder
to Participants, either alone or in addition to other Awards granted under the
Plan, for such consideration as determined by the Committee, in its sole
discretion, and the Committee may issue such Awards for no consideration or for
such minimum consideration as may be required by applicable law. The performance
criteria to be achieved during any Performance Period, the length of the
Performance Period and the other terms and conditions and provisions with
respect to the Award shall be determined by the Committee upon the grant of each
Performance Award. Except as provided in Section 10, Performance Awards will be
distributed only after the end of the relevant Performance Period. Performance
Awards may be paid in cash, Shares, other property or any combination thereof,
in the sole discretion of the Committee at the time of payment. The performance
levels to be achieved for each Performance Period and the amount of the Award to
be distributed shall be conclusively determined by the Committee. Performance
Awards may be paid in a lump sum or in installments following the close of the
Performance Period. The maximum value of the property, including cash, that may
be paid or distributed to any Participant pursuant to a grant of Performance
Units made in any one calendar year shall be $2,500,000. The provisions of
Performance Awards need not be the same with respect to each recipient.
SECTION 9. OTHER STOCK UNIT AWARDS.
(a) Stock and Administration. Other Awards of Shares and other Awards that
are valued in whole or in part by reference to, or are otherwise based on,
Shares or other property ("Other Stock Unit Awards") may be granted hereunder to
Participants, either alone or in addition to other Awards granted under the
Plan. Other Stock Unit Awards may be paid in Shares, cash or any other form of
property as the Committee shall determine.
(b) Terms and Conditions. Other Stock Unit Awards granted under this
Section 9 may be issued for such consideration as determined by the Committee in
its sole discretion, and the Committee may issue such Awards for no
consideration or for such minimum consideration as may be required by applicable
law. Shares (including securities convertible into Shares) purchased pursuant to
a purchase right awarded under this Section 9 shall be purchased for such
consideration as the Committee shall in its sole discretion determine, which
shall not be less than the Fair Market Value of such Shares or other securities
as of the date such purchase right is awarded. The terms and conditions and
other provisions with respect to Other Stock Unit Awards shall be determined by
the Committee. The provisions of Other Stock Unit Awards need not be the same
with respect to each recipient.
SECTION 10. CHANGE IN CONTROL PROVISIONS.
(a) Impact of Event. Notwithstanding any other provision of the Plan to
the contrary, but subject to the provisions of Section 10(d), in the event of a
Change in Control:
(i) Any Options and Stock Appreciation Rights outstanding as of the
date such Change in Control is determined to have occurred, and which are
not then exercisable and vested, shall become fully exercisable and vested
to the full extent of the original grant; provided, that in the case of a
Participant holding a Stock Appreciation Right who is actually subject to
Section 16(b) of the Exchange Act, such Stock Appreciation Right shall not
become fully vested and exercisable unless it shall have been outstanding
for at least six months at the date such Change in Control is determined to
(ii) The restrictions and deferral limitations applicable to any
Restricted Stock shall lapse, and such Restricted Stock shall become free
of all restrictions and limitations and become fully vested and
transferable to the full extent of the original grant.
(iii) All Performance Awards shall be considered to be earned and
payable in full, and any deferral or other restriction shall lapse and such
Performance Awards shall be immediately settled or distributed.
(iv) The restrictions and deferral limitations and other conditions
applicable to any Other Stock Unit Awards or any other Awards shall lapse,
and such Other Stock Unit Awards or such other Awards shall become free of
all restrictions, limitations or conditions and become fully vested and
transferable to the full extent of the original grant.
(b) Change in Control Cash-Out. Notwithstanding any other provision of the
Plan, during the 60-day period from and after a Change in Control (the "Exercise
Period"), if the Committee shall determine at, or at any time after the time of
grant, a Participant holding an Option shall have the right, whether or not the
Option is fully exercisable and in lieu of the payment of the Purchase Price for
the Shares being purchased under the Option and by giving notice to the Company,
to elect (within the Exercise Period) to surrender all or part of the Option to
the Company and to receive cash, within 30 days of such notice, in an amount
equal to the amount by which the Change in Control Price per Share on the date
of such election shall exceed the purchase price per Share under the Option (the
"Spread") multiplied by the number of Shares granted under the Option as to
which the right granted under this Section 10(b) shall have been exercised;
provided, that if the Change in Control is within six months of the date of
grant of a particular Option held by a Participant who is an officer or director
of the Company and is subject to Section 16(b) of the Exchange Act, no such
election shall be made by such Participant with respect to such Option prior to
six months from the date of grant. However, if the end of such 60-day period
from and after a Change-in-Control is within six months of the date of grant of
an Option held by a Participant who is an officer or director of the Company and
is subject to Section 16(b) of the Exchange Act, such Option (unless theretofore
exercised) shall be canceled in exchange for a cash payment to the Participant,
effected on the day which is six months and one day after the date of grant of
such Option, equal to the Spread multiplied by the number of Shares granted
under the Option.
(c) Pooling Transaction. Notwithstanding any other provision of this Plan,
if any right granted pursuant to this Plan would make a Change in Control
transaction ineligible for pooling-of-interests accounting under APB No. 16 that
(after giving effect to any other actions taken to cause such transaction to be
eligible for such pooling-of-interests accounting treatment) but for the nature
of such grant would otherwise be eligible for such accounting treatment, the
Committee shall have the ability to substitute for the cash payable pursuant to
such right Shares with a Fair Market Value equal to the cash that would
otherwise be payable pursuant thereto.
(d) Provisions not Applicable. The provisions of this Section 10 shall not
apply (i) if the Committee determines at the time of grant that such Section
shall not apply or (ii) to any Change in Control when expressly provided
otherwise by a three-fourths vote of the Whole Board, but only if a majority of
the members of the Board then in office and acting upon such matters shall be
SECTION 11. CODE SECTION 162(M) PROVISIONS.
(a) Applicability. Notwithstanding any other provision of this Plan, if
the Committee determines at the time Restricted Stock, a Performance Award or an
Other Stock Unit Award is granted to a Participant that such Participant is, or
is likely to be at the time he or she recognizes income for federal income tax
purposes in connection with such Award a Covered Employee then the Committee may
provide that this Section 11 is applicable to such Award.
(b) Performance Goals. If an Award is subject to this Section 11, then the
lapsing of restrictions thereon and the distribution of cash, Shares or other
property pursuant thereto, as applicable, shall be subject to the achievement of
one or more objective performance goals established by the Committee, which
shall be based on the attainment of one or any combination of the following:
specified levels of earnings per share from continuing operations, operating
income, revenues, gross margin, return on operating assets, return on equity,
economic value added, stock price appreciation, total stockholder return
(measured in terms of stock price appreciation and dividend growth), or cost
control, of the Company or an Affiliate or division of the Company for or within
which the Participant is primarily employed, or such other measures as the
Committee may determine to comply with the requirements of Section 162(m) of the
Code and the regulations thereunder. Such Performance Goals also may be based
upon the attaining specified levels of performance under one or more of the
measures described above relative to the
performance of other corporations. Such performance goals shall be set by the
Committee within the time period prescribed by, and shall otherwise comply with
the requirements of, Section 162(m) of the Code and the regulations thereunder.
(c) Limitations on Adjustments. Notwithstanding any provision of this Plan
other than Section 10, with respect to any Award that is subject to this Section
11, the Committee may not adjust upwards the amount payable pursuant to such
Award, nor may it waive the achievement of the applicable performance goals
except in the case of the death or disability of the Participant.
(d) Other Restrictions. The Committee shall have the power to impose such
other restrictions on Awards subject to this Section 11 as it may deem necessary
or appropriate to ensure that such Awards satisfy all requirements for
"performance-based compensation" within the meaning of Section 162 (m)(4)(B) of
the Code or any successor thereto.
SECTION 12. AMENDMENTS AND TERMINATIONS. The Board may amend, alter or
discontinue the Plan, but no amendment, alteration, or discontinuation shall be
made that would impair the rights of an Optionee or Participant under an Award
theretofore granted, without the optionee's or Participant's consent, or that
without the approval of the Stockholders would:
(a) except as is provided in Section 3(c) of the Plan, increase the total
number of shares reserved for the purpose of the Plan; or
(b) change the employees or class of employees eligible to participate in
The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any Participant without his consent.
SECTION 13. GENERAL PROVISIONS.
(a) No Assignment. Unless the Committee determines otherwise at the time
the Award is granted, no Award, and no Shares subject to Awards described in
Section 9 which have not been issued or as to which any applicable restriction,
performance or deferral period has not lapsed, may be sold, assigned,
transferred, pledged or otherwise encumbered, except by will or by the laws of
descent and distribution; provided that, if so determined by the Committee, a
Participant may, in the manner established by the Committee, designate a
beneficiary to exercise the rights of the Participant with respect to any Award
upon the death of the Participant. Each Award shall be exercisable, during the
Participant's lifetime, only by the Participant or, if permissible under
applicable law, by the Participant's guardian or legal representative.
(b) Term of Awards. The term of each Award shall be for such period of
months or years from the date of its grant as may be determined by the
Committee; provided that in no event shall the term of any Incentive Stock
Option or any Stock Appreciation Right related to any Incentive Stock Option
exceed a period of ten (10) years from the date of its grant.
(c) No Right to Award. No Employee or Participant shall have any claim to
be granted any Award under the Plan and there is no obligation for uniformity of
treatment of Employees or Participants under the Plan.
(d) Written Agreement Required. The prospective recipient of any Award
under the Plan shall not, with respect to such Award, be deemed to have become a
Participant, or to have any rights with respect to such Award, until and unless
such recipient shall have executed an agreement or other instrument evidencing
the Award and delivered a fully executed copy thereof to the Company, and
otherwise complied with the then applicable terms and conditions.
(e) Adjustments. Except as provided in Section 11, the Committee shall be
authorized to make adjustments in Performance Award criteria or in the terms and
conditions of other Awards in recognition of unusual or nonrecurring events
affecting the Company or its financial statements or changes in applicable laws,
regulations or accounting principles. The Committee may correct
any defect, supply any omission or reconcile any inconsistency in the Plan or
any Award in the manner and to the extent it shall deem desirable to carry it
into effect. In the event the Company shall assume outstanding employee benefit
awards or the right or obligation to make future awards in connection with the
acquisition of another corporation or business entity, the Committee may, in its
discretion, make such adjustments in the terms of Awards under the Plan as it
shall deem appropriate.
(f) Cancellations and Forfeitures. The Committee shall have full power and
authority to determine whether, to what extent, and under what circumstances,
any Award shall be canceled or suspended. In particular, but without limitation,
all outstanding Awards to any Participant shall be canceled if the Participant,
without the consent of the Committee, while employed by the Company or after
termination of such employment becomes associated with, employed by, renders
services to, or owns any interest in (other than any nonsubstantial interest, as
determined by the Committee), any business that is in competition with the
Company or with any business in which the Company has a substantial interest as
determined by the Committee.
In the event a Participant terminates his or her employment with the
Company for any reason whatsoever, and within eighteen (18) months after the
date thereof becomes associated with, employed by, renders services to, or owns
any interest in (other than any nonsubstantial interest, as determined by the
Committee), any business that is in competition with the Company or with any
business in which the Company has a substantial interest as determined by the
Committee, the Committee, in its sole discretion, may require such Participant
to return to the Company the economic value of any Award which is realized or
obtained (measured at the date of exercise) by such Participant at any time
during the period beginning on that date which is six months prior to the date
of such Participant's termination of employment with the Company.
(g) Securities Laws Restrictions. No Shares shall be issued under the Plan
unless counsel for the Company shall be satisfied that such issuance will be in
compliance with applicable Federal and state securities laws. All certificates
for Shares delivered under the Plan pursuant to any Award shall be subject to
such stock-transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations, and other requirements of the Securities
and Exchange Commission, any stock exchange upon which the Shares are then
listed, and any applicable Federal or state securities law, and the Committee
may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(h) Deferrals. The Committee shall be authorized to establish procedures
pursuant to which the payment of any Award may be deferred. Subject to the
provisions of this Plan and any Award Agreement, the recipient of an Award
(including, without limitation, any deferred Award) may, if so determined by the
Committee, be entitled to receive, currently or on a deferred basis, interest or
dividends, or interest or dividend equivalents, with respect to the number of
shares covered by the Award, as determined by the Committee, in its sole
discretion, and the Committee may provide that such amounts (if any) shall be
deemed to have been reinvested in additional Shares or otherwise reinvested.
(i) Payment Requirements. Except as otherwise required in any applicable
Award Agreement or by the terms of the Plan, recipients of Awards under the Plan
shall not be required to make any payment or provide consideration other than
the rendering of services.
(j) Withholding. The Company shall be authorized to withhold from any
Award granted or payment due under the Plan the amount of withholding taxes due
in respect of an Award or payment hereunder and to take such other action as may
be necessary in the opinion of the Company to satisfy all obligations for the
payment of such taxes. The Committee shall be authorized to establish procedures
for election by Participants to satisfy such withholding taxes by delivery of,
or directing the Company to retain Shares.
(k) Other Arrangements. Nothing contained in this Plan shall prevent the
Board from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is otherwise required, and such
arrangements may be either generally applicable or applicable only in specific
(l) Applicable Law. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Delaware and applicable Federal law.
(m) Invalid Provisions. If any provision of this Plan is or becomes or is
deemed invalid, illegal or unenforceable in any jurisdiction, or would
disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan, it
shall be stricken and the remainder of the Plan shall remain in full force and
(n) Foreign Nationals. Awards may be granted to Employees who are foreign
nationals or employed outside the United States, or both, on such terms and
conditions different from those specified in the Plan as may, in the judgment of
the Committee, be necessary or desirable in order to recognize differences in
local law or tax policy. The Committee also may impose conditions on the
exercise or vesting of Awards in order to minimize the Company's obligation with
respect to tax equalization for Employees on assignments outside their home
(o) No Right to Employment. Neither the adoption of the Plan nor the
granting of any Award shall confer upon any employee of the Company any right to
continued employment with the Company, nor shall it interfere in any way with
the right of the Company to terminate the employment of any of its employees at
any time, with or without cause.
(p) Treatment as Compensation for Other Purposes. Payments and other
benefits received by a Participant under an Award made pursuant to the Plan
shall not be deemed a part of a Participant's regular, recurring compensation
for purposes of the termination indemnity or severance pay law of any country
and shall not be included in, nor have any effect on, the determination of
benefits under any other employee benefit plan or similar arrangement provided
by the Company unless expressly so provided by such other plan or arrangements,
or except where the Committee expressly determines that an Award or portion of
an Award should be included to accurately reflect competitive compensation
practices or to recognize that an Award has been made in lieu of a portion of
competitive annual cash compensation. Awards under the Plan may be made in
combination with or in tandem with, or as alternatives to, grants, awards or
payments under any other Company plans. The Plan notwithstanding, the Company
may adopt such other compensation programs and additional compensation
arrangements as it deems necessary to attract, retain and reward employees for
their service with the Company.
Section 14. EFFECTIVE DATE OF THE PLAN. The Plan shall be effective on
the Effective Date.
Section 15. DEFINITIONS. As used in the Plan, the following terms shall
have the meanings set forth below:
(a) "Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock Award, Performance Share, Performance Unit, Dividend
Equivalent, Other Stock Unit Award, or any other right, interest, or option
relating to Shares granted pursuant to the provisions of the Plan.
(b) "Award Agreement" shall mean any written agreement, contract, or
other instrument or document evidencing any Award granted by the Committee
(c) "Board" shall mean the Board of Directors of Worthington
(d) "Change in Control" shall mean the following:
(i) A Change in Control shall have occurred when any Acquiring
Person (other than (i) Worthington or any Worthington Subsidiary, (ii)
any employee benefit plan of the Company or any trustee of or fiduciary
with respect to any such plan when acting in such capacity, or (iii) any
person who, on the Effective Date of the Plan, is an Affiliate of this
Company and owning in excess of ten percent (10%) of the outstanding
shares of the Company and the respective successors, executors, legal
representatives, heirs and legal assigns of such person), alone or
together with its Affiliates and Associates, has acquired or obtained
the right to acquire the beneficial ownership of twenty-five percent
(25%) or more of the Shares then outstanding.
(ii) "Acquiring Person" means any person (any individual, firm,
corporation or other entity) who or which, together with all Affiliates
and Associates, has acquired or obtained the right to acquire the
beneficial ownership of twenty-five percent (25%) or more of the Shares
(iii) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(iv) "Continuing Director" means any person who was a member of the
Board on the Effective Date of the Plan or thereafter elected by the
shareholders or appointed by the Board prior to the date as of which the
acquiring Person became a Substantial Shareholder (as such term is
defined in Article Six of the Company's Certificate of Incorporation)
or, a person designated (before his initial election or employment as a
director) as a Continuing Director by three-fourths of the Whole Board,
but only if a majority of the Whole Board shall then consist of
(v) "Whole Board" means the total number of directors which the
Company would have if there were no vacancies.
(e) "Change in Control Price Per Share" shall mean the highest price
per Share (i) paid by the Acquiring Person in connection with the
transactions that results in the Change in Control; or (ii) paid or offered
by the Acquiring Person, to acquire other Shares in excess of 1% of the
outstanding shares, at any time after the change in control and before the
Participant exercises his election under Section 10(b).
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
(g) "Committee" shall mean the Compensation and Stock Option Committee
of the Board, composed of no fewer than three directors, each of whom is a
Disinterested Person and an "outside director" within the meaning of
Section 162(m) of the Code.
(h) "Company" shall mean Worthington Industries, Inc., a Delaware
corporation, and its subsidiaries, direct or indirect. Subsidiaries of the
Company shall include any entity of which the Company owns 50% or more.
(i) "Covered Employee" shall mean a "covered employee" within the
meaning of Section 162(m)(3) of the Code.
(j) "Disinterested Person" shall have the meaning set forth in Rule
16b-3(d)(3) promulgated by the Securities and Exchange Commission under the
Exchange Act or any successor definition adopted by the Securities and
(k) "Dividend Equivalent" shall mean any right granted pursuant to
Section 14(h) hereof.
(l) "Effective Date" shall mean September 18, 1997.
(m) "Employee" shall mean any salaried employee of the Company. Unless
otherwise determined by the Committee in its sole discretion, for purposes
of the Plan, an Employee shall be considered to have terminated employment
and to have ceased to be an Employee if his or her employer ceases to be a
subsidiary of Worthington, even if he or she continues to be employed by
(n) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.
(o) "Fair Market Value" shall mean, with respect to any property, the
fair market value of such property determined pursuant to the regulations
issued under Section 422 of the Code or by such other methods or procedures
as shall be established from time to time by the Committee.
(p) "Incentive Stock Option" shall mean an Option granted under
Section 5 hereof that is intended to meet the requirements of Section 422
of the Code or any successor provision thereto.
(q) "Nonstatutory Stock Option" shall mean an Option granted under
Section 5 hereof that is not intended to be an Incentive Stock Option.
(r) "Option" shall mean any right granted to a Participant under the
Plan allowing such Participant to purchase Shares at such price or prices
and during such period or periods as the Committee shall determine.
(s) "Other Stock Unit Award" shall mean any right granted to a
Participant by the Committee pursuant to Section 9 hereof.
(t) "Participant" shall mean an Employee who is selected by the
Committee to receive an Award under the Plan.
(u) "Performance Award" shall mean any Award of Performance Shares or
Performance Units pursuant to Section 8 hereof.
(v) "Performance Period" shall mean that period established by the
Committee at the time any Performance Award is granted or at any time
thereafter during which any performance goal specified by the Committee
with respect to such Award are to be measured.
(w) "Performance Share" shall mean any grant pursuant to Section 8
hereof of a unit valued by reference to a designated number of Shares,
which value may be paid to the Participant by delivery of such property as
the Committee shall determine, including, without limitation, cash, Shares,
or any combination thereof, upon achievement of such performance goals
during the Performance Period as the Committee shall establish at the time
of such grant or thereafter.
(x) "Performance Unit" shall mean any grant pursuant to Section 8
hereof of a unit valued by reference to a designated amount of property
other than Shares, which value may be paid to the Participant by delivery
of such property as the Committee shall determine, including, without
limitation, cash, Shares, or any combination thereof, upon achievement of
such performance goals during the Performance Period as the Committee shall
establish at the time of such grant or thereafter.
(y) "Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization,
limited liability company, other entity or government or political
(z) "Restricted Stock" shall mean any Share issued with the
restriction that the holder may not sell, transfer, pledge, or assign such
Share and with such other restrictions as the Committee, in its sole
discretion, may impose (including, without limitation, any restriction
on the right to vote such Share, and the right to receive any cash
dividends), which restrictions may lapse separately or in combination at
such time or times, in installments or otherwise, as the Committee may deem
(aa) "Restricted Stock Award" shall mean an award of Restricted Stock
under Section 7 hereof.
(bb) "Shares" shall mean the shares of common stock, $.01 par value,
of the Company and such other securities of the Company as the Committee
may from time to time determine.
(cc) "Stock Appreciation Right" shall mean any right granted to a
Participant pursuant to Section 6 hereof to receive, upon exercise by the
Participant, the excess of (i) the Fair Market Value of one Share on the
date of exercise or, if the Committee shall so determine in the case of any
such right other than one related to any Incentive Stock Option, at any
time during a specified period before the date of exercise over (ii) the
grant price of the right on the date of grant, or if granted in connection
with an outstanding Option on the date of grant of the related Option, as
specified by the Committee in its sole discretion, which, other than in the
case of substitute awards, shall not be less than the Fair Market Value of
one Share on such date of grant of the right or the related Option, as the
case may be. Any payment by the Company in respect of such right may be
made in cash, Shares, other property, or any combination thereof, as the
Committee, in its sole discretion, shall determine.
(dd) "Worthington" shall mean Worthington Industries, Inc., a Delaware