<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
WORTHINGTON INDUSTRIES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WORTHINGTON INDUSTRIES, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Not Applicable
(2) Aggregate number of securities to which transaction applies:
Not Applicable
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:
Not Applicable
(4) Proposed maximum aggregate value of transaction:
Not Applicable
(5) Total fee paid:
Not Applicable
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
Not Applicable
(2) Form, Schedule or Registration Statement No.:
Not Applicable
(3) Filing Party:
Not Applicable
(4) Date Filed:
Not Applicable
<PAGE> 2
WORTHINGTON INDUSTRIES, INC.
1205 DEARBORN DRIVE
COLUMBUS, OHIO 43085
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of
WORTHINGTON INDUSTRIES, INC.:
Notice is hereby given that the 1996 Annual Meeting of Shareholders of
Worthington Industries, Inc. (the "Company") will be held at the Worthington
Industries Training Center, 905 Dearborn Drive, Columbus, Ohio on September 19,
1996 at 2:30 P.M., local time. The meeting is being held for the following
purposes:
1. To elect four directors, each for a term of three years.
2. To ratify the selection of the firm of Ernst & Young LLP as
independent auditors of the Company for the fiscal year ending May 31,
1997.
3. To transact such other business as may properly come before the
meeting or any adjournment(s) thereof.
PLEASE COMPLETE, SIGN AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED
ENVELOPE. THIS WILL NOT PREVENT YOU FROM VOTING IN PERSON AT THE MEETING. IT
WILL, HOWEVER, HELP ASSURE A QUORUM AND AVOID ADDED PROXY SOLICITATION COSTS.
Very truly yours,
CHARLES D. MINOR, Secretary
August 16, 1996
<PAGE> 3
WORTHINGTON INDUSTRIES, INC.
1205 DEARBORN DRIVE
COLUMBUS, OHIO 43085
(614) 438-3210
------------------------------
PROXY STATEMENT
------------------------------
The enclosed Proxy is being solicited by the Board of Directors of
Worthington Industries, Inc. for use at the Annual Meeting of Shareholders (the
"Annual Meeting") to be held on September 19, 1996, or any adjournment(s)
thereof, and is being mailed to shareholders on or about August 16, 1996.
Without affecting any vote previously taken, the Proxy may be revoked by a
shareholder at any time before it is voted by delivering to the Company a
later-dated Proxy or by giving notice of revocation to the Company in writing or
in open meeting. All Proxies received prior to the Annual Meeting and not
revoked will be voted as specified thereon or, in the absence of specific
instructions to the contrary, will be voted (1) FOR the election as directors of
the nominees listed below under "ELECTION OF DIRECTORS"; and (2) FOR the
ratification of the selection of independent auditors.
Solicitation of Proxies may be made by mail, personal interview, telephone
or telegraph by the directors or regularly engaged officers and employees of the
Company. All expenses in connection therewith will be paid by the Company.
As used herein, the term "Company" means Worthington Industries, Inc. or,
where appropriate, Worthington Industries, Inc. and its subsidiaries. The term
"Common Shares" means shares of the Company's Common Stock, $.01 par value.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
VOTING RIGHTS
The total number of outstanding Common Shares entitled to vote at the
Annual Meeting is 90,826,161 Common Shares. Only shareholders of record at the
close of business on August 8, 1996 are entitled to notice of and to vote at the
Annual Meeting or any adjournment(s) thereof. Each shareholder is entitled to
one vote for each Common Share held. A quorum for the Annual Meeting is
one-third of the outstanding Common Shares. There are no cumulative voting
rights in the election of directors.
Common Shares represented by signed Proxies that are returned to the
Company will be counted toward the quorum in all matters even though they are
marked as "Abstain," "Against" or "Withhold Authority" on one or more or all
matters or they are not marked at all. Broker/ dealers, who hold their
customers' shares in street name, may, under the applicable rules of the
exchange and other self-regulatory organizations of which the broker/dealers are
members, sign
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<PAGE> 4
and submit Proxies for such Common Shares and may vote such Common Shares on
routine matters, which, under such rules, typically include the election of
directors and the ratification of the selection of independent auditors, but
broker/dealers may not vote such Common Shares on other matters, which typically
include amendments to the certificate of incorporation of a corporation, mergers
and the approval of stock compensation plans, without specific instructions from
the customer who owns such Common Shares. Proxies signed and submitted by
broker/ dealers which have not been voted on certain matters as described in the
previous sentence are referred to as broker nonvotes. Such Proxies count toward
the establishment of a quorum. The effect of an abstention or broker nonvote on
the proposal to ratify the selection of independent auditors is the same as a
"No" vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the only person known by the Company to be
the beneficial owner of more than five percent of the outstanding Common Shares
on August 8, 1996:
<TABLE>
<CAPTION>
NAME AND ADDRESS COMMON SHARES % OF COMMON
OF BENEFICIAL OWNER BENEFICIALLY OWNED SHARES OUTSTANDING
- -------------------------------------------------------- ------------------ ------------------
<S> <C> <C>
John H. McConnell....................................... 11,011,770(1) 12.1%
1205 Dearborn Drive
Columbus, Ohio 43085
</TABLE>
- ---------------
(1) Includes 8,437,495 Common Shares which are held of record by JDEL, Inc.
("JDEL"), a Delaware corporation, which is a wholly-owned subsidiary of
JMAC, Inc. ("JMAC"), a private holding company. Mr. McConnell is the
President of JDEL and controlling shareholder of JMAC, and the directors of
JDEL have given Mr. McConnell sole voting and investment power with respect
to the Common Shares held by JDEL. Also included are 86,487 Common Shares
subject to currently-exercisable options and 506,250 Common Shares held by
Mr. McConnell's wife, as to which Common Shares beneficial ownership is
disclaimed. The table does not include 2,428,312 Common Shares (2.7% of the
Common Shares outstanding) held by an independent trustee, in trust for the
benefit of Mr. McConnell's wife and two adult children, over which Common
Shares the Trustee has investment and voting power, subject to the approval
of Mrs. McConnell. Beneficial ownership of these 2,428,312 Common Shares is
disclaimed.
ELECTION OF DIRECTORS
The Board of Directors has designated the nominees listed in the following
table for election as directors of the Company for terms expiring in 1999. The
enclosed Proxy will be voted as specified thereon, or if no instructions are
given, FOR the following nominees; however, the persons designated as proxies
reserve full discretion to cast votes for other persons in the event the nominee
who would otherwise receive the votes is unable to serve. The Board of Directors
has no reason to believe that any of the nominees will be unable to serve.
Under Delaware law and the Company's By-Laws, the four nominees receiving
the greatest number of votes will be elected as directors. Common Shares as to
which the authority to vote is withheld will be counted for quorum purposes but
will not be counted toward the election of directors, or toward the election of
the individual nominees specified on the form of Proxy.
2
<PAGE> 5
The following table sets forth the nominees for election to the Board of
Directors, the directors of the Company whose terms in office will continue, and
certain information, as of August 8, 1996, with respect to each nominee,
continuing director, executive officer named in the Summary Compensation Table
who is not a nominee or continuing director and all directors and executive
officers as a group.
<TABLE>
<CAPTION>
DIRECTOR
CONTINUOUSLY PRINCIPAL COMMON SHARES
NAME AND AGE SINCE OCCUPATION BENEFICIALLY OWNED (1)
- ---------------------- ------------ ----------------------------------- ------------------------
<S> <C> <C> <C>
NOMINEES FOR TERMS EXPIRING IN 1999
Pete A. Klisares, 60 1991 Executive Vice President 13,250
Donal H. Malenick, 57 1972 President and Chief Operating Officer 877,960
John H. McConnell, 73 1955 Chairman of the Board 11,011,770(2)
James Petropoulos, 67 1976 Owner, James Petropoulos & Company, a
commercial real estate firm 256,143
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 1997
Charles R. Carson, 67 1986 Retired Senior Vice President, General
Electric Company 3,375
William S. Dietrich, 58 1996 President, Dietrich Industries, Inc., a
subsidiary of the Company 10,000
John E. Fisher, 66 1993 Retired General Chairman, Nationwide
Insurance Companies 3,000
John F. Havens, 69 1988 Private Investor, Retired Chairman of
Banc One Corporation 2,250
Charles D. Minor, 69 1962 Counsel, Vorys, Sater, Seymour and Pease,
Attorneys at Law (3) 156,130(4)
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 1998
Katherine S. LeVeque, 69 1992 Chief Executive Officer, LeVeque
Enterprises, a commercial real estate
firm 1,750
John P. McConnell, 42 1990 Vice Chairman and Chief Executive Officer 897,318(5)
Robert B. McCurry, 73 1972 Senior Advisor to President, Toyota Motor
Sales, USA, Inc. 50,455(6)
Gerald B. Mitchell, 68 1986 Retired Chairman and Chief Executive
Officer, Dana Corporation 2,584
........................ ..... ........................................ .............
Edward A. Ferkany, 59 N/A Group Vice President -- Processed Steel 71,352
All directors and executive officers as a group (18 people).......................... 13,488,173(7)
</TABLE>
- ---------------
(1) All amounts are as of August 8, 1996. Unless otherwise indicated, each named
person has sole voting and investment power over the listed Common Shares,
or shares such power with his spouse. Common Shares subject to
currently-exercisable options are included in the shareholdings of the
executive officers. See "EXECUTIVE COMPENSATION -- Option Exercises and
Holdings." John H. McConnell (12.1%) and John P. McConnell (1.0%) are the
only directors, nominees or executive officers with beneficial ownership of
more than 1% of the outstanding Common Shares.
3
<PAGE> 6
(2) See "VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF -- Security Ownership
of Certain Beneficial Owners."
(3) Vorys, Sater, Seymour and Pease rendered legal services to the Company
during its last fiscal year and is rendering legal services to the Company
in the current fiscal year.
(4) Includes 50,000 Common Shares held by Mr. Minor's wife. Beneficial ownership
of these Common Shares is disclaimed.
(5) Included are 29,879 Common Shares held by John P. McConnell as custodian for
his minor children. Also included are 77,200 Common Shares held in an
educational trust, for the benefit of third parties, of which John P.
McConnell is a co-trustee and thus shares voting and investment power.
Beneficial ownership of the latter Common Shares is disclaimed.
(6) These 50,455 Common Shares are held by Mr. McCurry and his wife as trustees
of a family trust.
(7) See Notes (2) and (4)-(6) above. These 13,488,173 Common Shares represent
14.9% of the outstanding Common Shares.
The principal occupation of each of the nominees and directors during the
past five years has been as indicated in the table above under "Principal
Occupation," except as follows:
John H. McConnell was also Chief Executive Officer of the Company from its
founding in 1955 until May 31, 1993 at which time he retired as Chief Executive
Officer and remained Chairman of the Board.
John P. McConnell's principal occupation for more than five years prior to
July 1990 had been in various capacities with the Company. In July 1990, he
resigned his employment with the Company to become President of JMAC (see Note
(1) under "Security Ownership of Certain Beneficial Owners"). John P. McConnell
was elected Vice Chairman of the Company in June 1992 and became Chief Executive
Officer on June 1, 1993. John P. McConnell is John H. McConnell's son.
Mr. Klisares was Manufacturing Vice President and General Manager for AT&T
for more than five years prior to May 1991 and Executive Director of JMAC from
May 1991 through December 1991. He became Assistant to the Chairman of the
Company in December 1991 and was named Executive Vice President in August 1993.
Mr. Carson had been Senior Vice President of General Electric Company for
more than five years prior to his retirement in 1987. Mr. Fisher had been
General Chairman of Nationwide Insurance Companies for more than five years
prior to his retirement in 1994. Mr. Havens had been Chairman of Banc One
Corporation for more than five years prior to his retirement in 1986. Mr.
Mitchell had been Chairman and Chief Executive Officer of Dana Corporation for
more than five years prior to his retirement in 1990.
4
<PAGE> 7
The following directors and nominees are also directors of the corporations
listed opposite their names:
<TABLE>
<S> <C>
Mr. Carson.................... United Meridian Corporation
Mr. Dietrich.................. Carpenter Technologies Corporation
Mr. Klisares.................. Borror Corporation and Huntington National Bank
Mr. Havens.................... Banc One Corporation, Cardinal Distribution, Inc. and
The W. W. Williams Company
Mr. J. P. McConnell........... ALLTEL Corporation
Mr. Mitchell.................. George Weston, Ltd. (Canada), West Point Stevens, Inc.
and Eastman Chemical Co.
</TABLE>
Five meetings of the directors of the Company were held during the
fiscal year ended May 31, 1996. Each director attended at least 75% of the
aggregate of (i) the total number of meetings of the directors and (ii) the
total number of meetings held by all committees of the directors on which he or
she served.
COMPENSATION OF DIRECTORS
Non-management directors are paid $6,000 per quarter plus $1,500 for each
attendance at board meetings and $1,000 ($1,500 for committee chairmen) for each
attendance at meetings of committees of the directors.
The Company has adopted Deferred Compensation Plans pursuant to which
certain executive officers and directors have elected to defer a portion of
their bonuses or directors' fees. Under the Plans, participants may generally
elect to defer payment of these amounts until a specified date or until they are
no longer associated with the Company. Amounts deferred under these Plans accrue
interest at a rate equal to the percentage increase in the Company's book value
per share.
COMMITTEES OF DIRECTORS
The directors of the Company have an Audit Committee, the members of which
are Mr. Carson, Mr. Havens, Ms. LeVeque, Mr. Minor and Mr. Petropoulos. The
Audit Committee met two times during fiscal 1996. Its functions are to review
the adequacy of the Company's system of internal controls, to investigate the
scope and adequacy of the work of the Company's auditors and to recommend to the
directors a firm of accountants to serve as the Company's independent auditors.
The directors of the Company have a Compensation and Stock Option
Committee, the members of which are Mr. Fisher, Mr. Havens, Mr. McCurry and Mr.
Mitchell. The Compensation and Stock Option Committee met three times during
fiscal 1996. Its functions are to set and review all base and bonus compensation
for officers of the Company and to administer the Company's stock option plans.
The directors of the Company have a Nominating Committee, the members of
which are Mr. John H. McConnell, Mr. John P. McConnell and Mr. Malenick. The
Nominating Committee met one time during fiscal 1996. Its function is to
recommend to the directors persons to be
5
<PAGE> 8
nominated for election as directors. The Committee will consider nominees
recommended by shareholders, provided that such nominations are submitted in
writing not later than May 31 preceding the meeting to John H. McConnell, 1205
Dearborn Drive, Columbus, Ohio 43085. Each such nomination must include a
statement of the qualifications of the nominee, a consent signed by the nominee
evidencing a willingness to serve as a director if elected, and a commitment by
the nominee to meet personally with the Nominating Committee.
In accordance with the Company's By-Laws, any shareholder wishing to make a
nomination of a director otherwise than through the Nominating Committee must
give notice to the Secretary of the Company not less than 14 nor more than 50
days prior to the meeting at which directors will be elected, unless
shareholders are given less than 21 days notice of the meeting, in which case
shareholder nominations would be permissible up to 7 days after the notice of
the meeting has been mailed. The notice of nomination must include the nominee's
name, address and principal occupation, the number of shares held beneficially
by such nominee and the nominating shareholder, a written consent of the
proposed nominee to serve if elected, and any other information concerning the
nominee required to be disclosed under the laws and regulations governing proxy
solicitations.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the Company's knowledge, during the fiscal year ended May 31, 1996, all
filing requirements applicable to officers, directors and beneficial owners of
more than 10% of the outstanding Common Shares under Section 16(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), were complied
with; except that Donald G. Barger, Jr., an executive officer of the Company,
filed three weeks late a Form 5 reporting acquisitions under the Company's
Dividend Reinvestment Plan.
6
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth information for the fiscal years ended May
31, 1996, 1995 and 1994 as to cash compensation paid by the Company, as well as
certain other compensation paid or accrued for those years, to the Company's
Chief Executive Officer ("CEO") and its four other most highly compensated
executive officers (collectively, the "Named Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
---------------------
AWARDS
ANNUAL COMPENSATION ---------------------
NAME AND PRINCIPAL YEAR ENDED ---------------------- SECURITIES UNDERLYING ALL OTHER
POSITION LAST FISCAL YEAR MAY 31 SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)(1)
- ------------------------- ---------- --------- -------- --------------------- ------------------
<S> <C> <C> <C> <C> <C>
John P. McConnell, 1996 300,000 402,100 -- 6,384
Vice Chairman and CEO 1995 240,000 435,250 50,000 11,038
1994 240,000 397,442 -- 10,794
John H. McConnell, 1996 240,000 353,750 -- 19,395
Chairman of the Board 1995 240,000 414,250 50,000 24,071
1994 240,000 426,562 -- 24,612
Donal H. Malenick, 1996 260,000 332,275 -- 445,532
President and COO 1995 235,000 388,950 40,000 346,645
1994 235,000 317,600 -- 245,752
Pete A. Klisares, 1996 215,000 278,475 -- 56,795
Executive Vice President 1995 200,000 325,300 30,000 37,367
1994 125,000 258,800 -- 24,655
Edward A. Ferkany, 1996 175,000 239,200 -- 73,020
Group Vice President -- 1995 150,000 268,725 30,000 59,194
Processed Steel 1994 150,000 219,600 -- 43,254
</TABLE>
- ---------------
(1) Any amounts deferred under the Deferred Compensation Plan (see "Compensation
of Directors") for the Named Executives are included in the "Bonus" column.
For fiscal 1996, Messrs. Malenick, Klisares and Ferkany had $436,992,
$47,392 and $64,534, respectively, in interest accrued on amounts in their
Deferred Compensation Plan accounts which amounts are included in "All Other
Compensation."
The Named Executives participate in the Company's Deferred Profit Sharing
Plan (the "Deferred Plan"), together with substantially all of the other
regular full-time employees of the Company except those represented by labor
unions. Contributions are based on profits and are allocated quarterly to
employee accounts based upon total compensation and length of service.
Payments under the Deferred Plan are generally deferred until retirement,
death or total and permanent disability. Allocations under the Deferred Plan
for the benefit of Messrs. J. P. McConnell ($5,772), J. H. McConnell
($5,859), Malenick ($5,840), Klisares ($5,718) and Ferkany ($5,786) are
included in "All Other Compensation."
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<PAGE> 10
Also included in "All Other Compensation" are the following costs of
providing term life insurance for the benefit of the Named Executives: J. P.
McConnell ($612), J. H. McConnell ($13,536), Malenick ($2,700), Klisares
($3,686) and Ferkany ($2,700).
OPTION GRANTS
No stock options were granted to the Named Executives during the fiscal
year ended May 31, 1996.
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the exercise of
stock options during the fiscal year ended May 31, 1996 and unexercised stock
options held as of May 31, 1996 by the Named Executives.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT 5/31/96 AT 5/31/96($)(1)
ON VALUE --------------------------- ---------------------------
EXERCISE REALIZED NOT NOT
NAME (#) ($)(1) EXERCISABLE EXERCISABLE EXERCISABLE EXERCISABLE
- ------------------------ -------- -------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
John P. McConnell -0- -0- 30,000 20,000 26,250 17,500
John H. McConnell -0- -0- 30,000 86,487 26,250 742,393
Donal H. Malenick -0- -0- 24,000 16,000 21,000 14,000
Pete A. Klisares -0- -0- 18,000 12,000 15,750 10,500
Edward A. Ferkany -0- -0- 12,000 48,500 10,500 448,563
</TABLE>
- ---------------
(1) Pretax value based on the May 31, 1996 closing price of $20.125 per share.
EXECUTIVE COMPENSATION REPORT AND PERFORMANCE GRAPH
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Exchange
Act that might incorporate future filings, including this Proxy Statement, in
whole or in part, the following Committee Report and the information under
"COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN" shall not be incorporated by
reference into any such filings.
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<PAGE> 11
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
ON EXECUTIVE COMPENSATION
General Compensation Philosophy
A basic philosophy of Worthington Industries, Inc. is that all regular
full-time, nonunion employees of the Company have a meaningful portion of their
total compensation tied to the profitability of the Company. In furtherance of
this philosophy, all such employees in general participate in either the
Company's cash profit sharing plan or the executive cash bonus plan (the "Bonus
Plan") which has been in place since the 1960's. Cash profit sharing, which
covers the majority of the Company's employees, is computed as a fixed
percentage of profits, and is paid quarterly.
The Company's CEO, its other executive officers and certain other key
employees participate in the Bonus Plan. Under the Bonus Plan, bonuses paid to
participants are computed as a percentage of the Company's income before taxes,
but after adjustment for contributions to the Deferred Plan. The total amount of
bonuses paid to all participants in the Bonus Plan may not exceed 15% of the
Company's pretax income. Bonuses are paid quarterly based upon the quarterly
financial results and generally account for in excess of 50% of a participant's
total compensation.
Compensation for Executives
Since bonus payments account for such a large percentage of total
compensation and since bonuses are tied to the Company's profitability, the
largest variable in determining total compensation of the CEO, the executive
officers and other participants in the Bonus Plan is the profitability of the
Company. However, bonuses can be adjusted, up or down, based on the individual's
performance, subjectively determined by his or her supervisor, the CEO or the
Compensation and Stock Option Committee (the "Compensation Committee"), as
appropriate.
In setting base salaries for the CEO and the executive officers, the
Compensation Committee has reviewed information regarding compensation paid by
other manufacturing companies of similar size to officers with similar
responsibilities. It is the Committee's intent to set base salaries at levels so
that when the Company performs well, the bonus payments (which are tied to
Company income) would put Company officers in the upper range of total
compensation being paid to officers of comparable companies. Conversely, should
the Company's performance be below that of comparable companies, total executive
compensation would fall below the average compensation range.
Performance of the CEO
Consistent with the philosophy behind the Bonus Plan, profitability of the
Company has been the primary variable in the compensation paid to John P.
McConnell, the Company's CEO. The Compensation Committee believes that the
Company has performed well (fiscal 1996 was the second best earnings year in the
Company's history, following an outstanding record year in 1995) and that the
Company's performance has exceeded that of comparable companies. Based upon the
criteria discussed above, the Committee believes that Mr. McConnell's total
compensation should exceed that of CEO's of comparable companies. The wage
comparison data provided
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<PAGE> 12
to the Committee indicates that Mr. McConnell's total cash compensation (salary
and bonus) is more than 20% below the median pay of comparable company CEO's and
that his total direct compensation, including long-term incentives, is more than
40% below the median of other CEO's. Based upon the Company's and Mr.
McConnell's performance and the comparison to other CEO's, the Committee
believes and recommended that Mr. McConnell's compensation should be
substantially increased. Mr. McConnell, however, asked that the executive
compensation increases be delayed until wage and salary comparisons company wide
were completed and appropriate action taken.
Long-Term Incentives
Although the quarterly Bonus Plan is tied to current profitability, the
Company has found it to provide a good balance between incentives for current
and long-term profitability. Since the payment is based on current year income,
the incentive toward current profitability is obvious. However, since future
compensation for the officers will continue to be based in large part on the
Bonus Plan, the Plan also provides incentives to assure the long-term
profitability of the Company.
Long-term incentives are also provided under the Company's stock option
plans. The Company views stock options as particularly appropriate long-term
incentives because stock options align the interests of the
employee/optionholder with those of the shareholder by providing value to the
employee tied directly to stock price increases. Although the terms of the
Company's 1990 Stock Option Plan are flexible, all options granted in the past
ten years have been granted at 100% of the market value on the date of grant.
The Company will continue to grant stock options to the CEO and other Named
Executives as appropriate and based upon position held, individual performance
and the timing and amounts of previous grants.
The Committee believes that the implementation of additional long-term
incentive compensation for the Company's top executive officers, tied to
sustained financial achievement, would be in the best interest of the
shareholders. As CEO compensation increases to a more appropriate range, the
Committee intends to seek a balance between short-term and long-term
compensation by developing a long-term incentive program tied to sustained
financial performance of the Company and the individual performance of the CEO
and the executive team. As currently envisioned, such a program would include
measurable criteria of performance for current year and multiple year
achievements; annual cash, stock or stock awards for achievement of the
established goals; selective participation; and administration by the
Compensation Committee composed of outside directors.
Tax Deductibility
Section 162(m) of the Internal Revenue Code limits deductions for
compensation paid to a publicly-held corporation's five most highly compensated
executive officers to $1,000,000 per year per executive officer, excluding
"performance based compensation" meeting certain requirements. Final regulations
under Section 162(m) were issued by the Internal Revenue Service in December
1995 for the purpose of giving guidance regarding provisions which compensatory
plans must contain to qualify for the "performance based" exemption under
Section 162(m). The
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<PAGE> 13
Committee intends for any compensation which may be paid under the Company's
1990 Stock Option Plan to qualify for the exemption as "performance based
compensation." Since no officer's annual salary plus bonus has approached
$1,000,000, the Commitee has not attempted to revise the Bonus Plan to satisfy
the conditions for the exemption, but it may re-examine the matter in the event
it becomes relevant.
COMPENSATION AND STOCK OPTION COMMITTEE
John F. Havens, Chairman
John E. Fisher
Robert B. McCurry
Gerald B. Mitchell
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
The following graph compares the five year cumulative return from investing
$100 at May 31, 1991 in Common Shares, the S&P 500 index of companies and the
S&P Industrials index of companies, with dividends assumed to be reinvested when
received. The S&P Industrials index includes a broad range of manufacturers.
Because of the diversity of the Company's business, it is felt that comparison
with this broader index is appropriate.
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) WTHG S&P 500 S&P INDUST.
<S> <C> <C> <C>
1991 100.00 100.00 100.00
1992 145.27 109.86 108.74
1993 189.09 122.61 117.94
1994 193.12 127.83 123.42
1995 208.14 153.60 150.25
1996 205.15 197.28 193.28
</TABLE>
11
<PAGE> 14
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Management will present at the Annual Meeting a resolution calling for the
ratification of the appointment of the firm of Ernst & Young LLP as independent
auditors of the Company for the fiscal year ending May 31, 1997. It is expected
that a representative of Ernst & Young LLP will be present at the Annual Meeting
and will be given the opportunity to make a statement and to respond to
appropriate questions. That firm has audited the accounts of the Company since
1964.
SHAREHOLDER PROPOSALS
Any shareholder of the Company who intends to submit a proposal to the
Company at the next Annual Meeting of Shareholders must submit such proposal to
the Company at its corporate offices not later than April 18, 1997 for inclusion
in the Company's Proxy Statement and form of Proxy relating to that meeting.
10-K REPORT
The 1996 Annual Report to Shareholders, which includes financial statements
and information concerning the Company's operations during the 1996 fiscal year,
accompanies this Proxy Statement. ANY SHAREHOLDER OF THE COMPANY MAY RECEIVE,
WITHOUT CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE
FISCAL YEAR ENDED MAY 31, 1996 AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. PLEASE WRITE TO THE COMPANY'S SHAREHOLDER RELATIONS DEPARTMENT FOR A
COPY AT 1205 DEARBORN DRIVE, COLUMBUS, OH 43085.
OTHER MATTERS
Management knows of no other business which may be brought before the
Annual Meeting. However, if any other matter shall properly come before the
Annual Meeting, it is the intention of the persons named in the enclosed form of
Proxy to vote such Proxy in accordance with their best judgment on such matters.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, SHAREHOLDERS
WHO DO NOT EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON ARE URGED TO FILL IN,
SIGN AND RETURN THE PROXY IN THE ENCLOSED, SELF-ADDRESSED STAMPED ENVELOPE.
By order of the Board of Directors,
Charles D. Minor,
Secretary
Dated: August 16, 1996
12
<PAGE> 15
DETACH HERE WOR F
WORTHINGTON INDUSTRIES, INC.
P PROXY
R
The undersigned hereby constitutes and appoints John H.
O McConnell, Donal H. Malenick and Charles D. Minor, or any of them, the
proxy or proxies of the undersigned to vote at the Annual Meeting of
X Shareholders of Worthington Industries, Inc. (the "Company") to be
held at the Worthington Industries Training Center, 905 Dearborn Drive,
Y Columbus, Ohio on September 19, 1996 at 2:30 P.M. and at any
adjournments thereof, all of the shares of Common Stock of the Company
which the undersigned is entitled to vote at such meeting or any
adjournments thereof.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
----------------
SEE REVERSE SIDE
----------------
<PAGE> 16
[LOGO]
The Officers and Directors of Worthington Industries, Inc.
invite you to attend
the Annual Meeting of Shareholders
Thursday, September 19, 1996 at 2:30 p.m.
Worthington Industries Training Center
905 Dearborn Drive, Columbus, Ohio
John H. McConnell
Founder & Chairman of the Board
John P. McConnell
Vice Chairman & Chief Executive Officer
DETACH HERE
PLEASE MARK WOR F
/ X / VOTES AS IN
THIS EXAMPLE.
ALL PROXIES PREVIOUSLY GIVEN BY THE UNDERSIGNED ARE HEREBY REVOKED. THIS PROXY
WILL BE VOTED AS SPECIFIED. UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE
VOTED FOR PROPOSALS NOS. 1 AND 2.
1. The election of four directors for a term expiring in 1999. NOMINEES: Pete
A. Klisares, Donal H. Malenick, John H. McConnell and James Petropoulos.
FOR WITHHELD
ALL / / / / FROM ALL
NOMINEES NOMINEES
/ / _________________________________________________________________
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. Ratification of the selection of the / / / / / /
firm of Ernst & Young LLP as auditors for
the current fiscal year.
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting and any adjournments
thereof.
MARK HERE MARK HERE
FOR ADDRESS / / IF YOU PLAN / /
CHANGE AND TO ATTEND
NOTE AT LEFT THE MEETING
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
PLEASE SIGN IT AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
Please sign exactly as your name appears on this proxy. Executors,
administrators, trustees, guardians, attorneys and agents should give their
full titles. If shareholder is a corporation, sign in full corporate name by
authorized officer.
If any changes are required to your address, please cross through the current
information and print the new information. The new address will be used by the
Transfer Agent for all future communications, including proxies and dividend
checks.
Signature: _________________________________________ Date: _______________
Signature: _________________________________________ Date: _______________
