EXHIBIT 10(iii)(e)
RETIREMENT BENEFIT EQUITY PLAN
OF
ARMSTRONG WORLD INDUSTRIES, INC.
This Retirement Benefit Equity Plan was originally established, pursuant to
the authority of the Board of Directors of Armstrong World Industries, Inc.,
effective January 1, 1976 to pay supplemental retirement benefits to certain
employees of the Company who have qualified or may qualify for benefits under
the Retirement Income Plan for Employees of Armstrong World Industries, Inc.
The Retirement Benefit Equity Plan is hereby amended and restated as of January
1, 2000.
All benefits payable under this Plan shall be paid out of the general
assets of the Company, or from a trust, if any, established by the Company for
the purpose of paying benefits under the Plan, the assets of which shall remain
subject to the claims of judgment creditors of the Company in accordance with
the provisions of any such trust.
Article 1. Definitions
1.01 "Actuarial Equivalent Present Value" shall refer to the present
value of a Member's supplemental benefits. With respect to any
Member who is eligible to retire or has retired under the Retirement
Income Plan, such present value shall be determined using the
immediate Present Value Factors applied to a single life annuity
payable immediately. With respect to any Member who is not eligible
to retire or has not retired under the Retirement Income Plan, such
present value shall be determined using the deferred Present Value
Factors applied to an age 65 single life annuity. The determination
of Actuarial Equivalent Present Value shall reflect future assumed
increases in the limitations under Section 415 of the Internal
Revenue Code, with such future assumed increases being based on the
interest rate that is used by the Committee to determine the amount
of any employment taxes that may be owed under Section 3121(v) of
the Internal Revenue Code.
1.02 "Board of Directors" shall mean the Board of Directors of the
Company.
1.03 "Committee" shall mean the Retirement Committee as provided for in
Article 4.
1.04 "Company" shall mean Armstrong World Industries, Inc. or any
successor by merger, purchase or otherwise, with respect to its
employees. The term Company shall also mean any other company
participating in the Retirement Income Plan with respect to its
employees if such Company adopts this Plan.
1.05 "Compensation" shall mean a Member's "compensation" as determined
under the Retirement Income Plan without regard to limitations under
Section 401(a)(17) of the Internal Revenue Code, plus amounts
deferred by the Member under the Armstrong Deferred Compensation
Plan, if any, and amounts contributed by the Company to the Bonus
Replacement Retirement Plan of Armstrong World Industries, Inc. (the
"Bonus Replacement Retirement Plan") on behalf of the Member in the
year in which such contribution is made.
1.06 "Effective Date" shall mean January 1, 1976.
1.07 "Member" shall mean any person included in the membership of the
Plan as provided in Article 2.
1.08 "Plan" shall mean the Retirement Benefit Equity Plan of Armstrong
World Industries, Inc. as described herein or as hereafter amended.
1.09 "Present Value Factors" shall refer to the discount rate utilized in
the Company's annual published financial statements in determining
the Company's net credit for its U.S. defined benefit plans for the
calendar year preceding the year in which the supplemental benefits
are determined and the 1983 Group Annuity Mortality Table, based
upon a fixed blend of 50% of the male rates and 50% of the female
rates.
1.10 "Retirement Income Plan" shall mean the Retirement Income Plan for
Employees of Armstrong World Industries, Inc.
Article 2. Membership
2.01 Every person who was a member of the Plan as in effect on December
31, 1999 shall remain a Member of the Plan on or after January 1,
2000.
2.02 Every other employee of the Company shall become a Member of the
Plan on the first day of the calendar year in which the Committee
determines that:
(a) the employee's benefit calculated under the Retirement Income
Plan exceeds the allowed benefit under Section 415 of the
Internal Revenue Code,
(b) the employee's compensation exceeds the maximum allowed under
Section 401(a)(17) of the Internal Revenue Code,
(c) the employee has compensation deferred under the terms of the
Armstrong Deferred Compensation Plan,
(d) the employee is a key executive designated by the Board of
Directors, or its delegate, to receive credit for employment
prior to his Company employment for purposes of calculating his
Retirement Income Plan benefit, as provided under Section
3.01(a)(iii) of this Plan, or
(e) the employee has a contribution made on his behalf to the Bonus
Replacement Retirement Plan.
2.03 Membership under the Plan shall terminate if a Member's employment
with the Company terminates unless at that time the Member is
entitled to retirement income payments pursuant to the Retirement
Income Plan or benefits described in Section 3.04.
Article 3. Amount and Payment of Supplemental Benefits
3.01 The supplemental benefits under this Plan shall be payable by the
Company only with respect to a Member who has retired, died or
otherwise terminated his employment with the Company after becoming
vested under the Retirement Income Plan. Any such supplemental
benefits shall be payable from the general assets of the Company or
from a trust, if any, established by the Company for the purpose of
paying benefits under the Plan, the assets of which shall remain
subject to the claims of judgment creditors of the Company in
accordance with the provisions of any such trust.
2
The amount of any supplemental benefits payable to or on account of
a Member pursuant to this Plan, expressed as a single life annuity
payable as of the Member's "normal retirement date" (as that term is
defined in the Retirement Income Plan) or in the event the Member
defers his retirement beyond his normal retirement date, his
"deferred retirement date" (as that term is defined in the
Retirement Income Plan), shall be equal to (a) minus (b) minus (c)
minus (d), where:
(a) is the benefit calculated under the provisions of the
Retirement Income Plan, but:
(i) disregarding any reduction in the amount of benefits
under the Retirement Income Plan attributable to any
provision therein incorporating limitations imposed by
Section 415 of the Internal Revenue Code or Section
401(a)(17) of the Internal Revenue Code;
(ii) disregarding any reduction due to compensation deferred
under the Armstrong Deferred Compensation Plan;
(iii) including, for purposes of calculating Total Service
under the Retirement Income Plan, years of employment
for a Member described in Section 2.02(d) which precede
his Company employment to the extent so designated by
the Board of Directors, or its delegate, at the time
such individual is designated as eligible for membership
in the Plan; and
(iv) including, for purposes of determining compensation, any
amounts contributed on the Member's behalf to the Bonus
Replacement Retirement Plan;
(b) is the actual amount of benefits payable to or on account of
the Member as calculated under the Retirement Income Plan;
(c) is the value of the benefit (excluding the portion of such
benefit attributable to employee contributions) which is
payable, which has been paid or which will become payable to a
Member described in Section 2.02(d) from a qualified defined
benefit plan to the extent such plan takes into account the
period of employment described in Section 3.01(a)(iii). In the
event the Member has received, is receiving, or is scheduled to
receive benefits from another such plan in any form other than
a single life annuity or at a time other than when benefits
commence under this Plan, the benefit to be taken into account
under this subsection (c) shall be determined by the Company
based on actuarial assumptions and factors reasonably utilized
under the Retirement Income Plan as of the date of
determination, or to the extent such factors or assumptions do
not contemplate a particular situation which arises under this
Plan, based upon the Present Value Factors; and
(d) is the actuarial equivalent value of any supplemental benefits
previously paid to the Member under this Plan, provided that
the actuarial equivalent value of any supplemental benefits
paid as a single sum shall be determined using the Present
Value Factors.
3
Notwithstanding the preceding provisions of this Section 3.01, in
the event a retired or terminated Member's benefit calculated under
the Retirement Income Plan is increased for any reason after the
Member's supplemental benefit payments have commenced in an annuity
form, the amount of any supplemental benefits payable to or on
account of such Member under this Plan shall be reduced
correspondingly on a prospective basis, and in the event such
increase is made retroactively resulting in the overpayments of any
or all of the Member's supplemental benefits, future benefit
payments under this Plan shall be reduced to reflect such prior
overpayments in any manner determined by the Committee, in its
discretion, and applied on a consistent basis to all similarly
situated Members, until an amount equal to the total overpayments in
the Member's supplemental benefit payments are recovered.
3.02 Subject to the following rules, an employee of the Company who
becomes a Member under this Plan in accordance with Section 2.02
shall elect in writing the form and timing of payment of the
supplemental benefits payable on behalf of such Member under this
Plan within the thirty (30) day period following the Committee's
determination that such employee has become a Member. Further,
subject to the following rules, each employee of the Company who is
a Member of the Plan on December 31, 1999 shall elect in writing no
later than June 30, 2000 the form and timing of payment of the
supplemental benefits payable on behalf of such Member.
(a) The Member may elect to have his supplemental benefits paid in
the form of any annuity that is offered under the Retirement
Income Plan or in a single sum.
(b) In no event shall the Member elect to have his supplemental
benefits commence or be paid earlier than the later of: (i) the
Member's attainment of age 55, or (ii) the date the Member
first becomes eligible to receive his benefits under the
Retirement Income Plan and in no event shall the Member elect
to have his supplemental benefits commence or be paid later
than the Member's attainment of age 65 or, if later, his actual
retirement from the Company. Notwithstanding the preceding
sentence, if the Member elects a single sum payment, he may
elect to receive such single sum payment at any time following
his termination of employment.
(c) In the event the Member fails to affirmatively elect the form
and timing of payment of his supplemental benefits hereunder,
the Member shall be deemed to have elected to have his
supplemental benefits paid in the form of a single life
annuity, commencing as of the first day of the month next
following his attainment of age 65 or if later, his actual
retirement from the Company.
(d) If the Member elects to have his supplemental benefits paid in
a single sum, the Member shall receive 100% of the Actuarial
Equivalent Present Value of his supplemental benefits
determined under Section 3.01. Notwithstanding the preceding
sentence, if the Member elects a single sum payment date that
is within twelve (12) months of the date of his distribution
election, he shall receive 94% of the Actuarial Equivalent
Present Value of his supplemental benefits determined under
Section 3.01, and the
4
remaining six percent (6%) of the Actuarial Equivalent Present
Value shall be permanently forfeited.
(e) Notwithstanding any other provision of the Plan to the
contrary, in the event the Member elects to receive a period
certain annuity or joint and survivor annuity and either the
beneficiary designated by the Member dies prior to the date the
Member commences receiving his supplemental benefits or the
Member designates his spouse as his beneficiary and the Member
is not legally married to such spouse immediately preceding the
date the Member commences receiving his supplemental benefits,
the Member's election to receive such period certain annuity or
joint and survivor annuity shall automatically be converted to
an election to receive a single life annuity.
3.03 Notwithstanding the provisions of Section 3.02, a Member who has not
commenced receiving payment of his supplemental benefits may request
in writing to the Committee to amend the commencement date (in the
case of an annuity) or payment date (in the case of a single sum)
and/or the form of payment of his supplemental benefits elected by
the Member under Section 3.02, in accordance with the following
rules:
(a) A Member who has not commenced receiving payment of his
supplemental benefits may request to amend the timing and/or
form of payment of the supplemental benefits provided: (i) the
commencement date or the payment date in the absence of such
distribution election amendment is not within twelve (12)
months of the date of the amendment; (ii) his amended
commencement date or payment date (if applicable) is at least
twelve (12) months after the date of the distribution election
amendment; and (iii) his amended commencement date or payment
date (if applicable) is otherwise in conformance with the
provisions of Section 3.02(b).
(b) Notwithstanding subsection (a) above and any other provision of
the Plan to the contrary, a Member who has not commenced
receiving payment of his supplemental benefits may request at
any time to change (i) his annuity form of payment to a single
sum payment or (ii) the payment date of the single sum, with
the single sum payment in either case being made within the
twelve (12) month period beginning on the date of the
distribution election amendment and being equal to 94% of the
Actuarial Equivalent Present Value of the Member's supplemental
benefits, and with the remaining six percent (6%) of the
Actuarial Equivalent Present Value being permanently forfeited.
(c) Notwithstanding any other provision of the Plan to the
contrary, a Member who is receiving annuity payments of his
supplemental benefits may request to receive a single sum
payment of the Actuarial Equivalent Present Value of the
remaining supplemental benefits payable to such Member (and if
applicable, to such Member's beneficiary in the case of a
period certain annuity or a joint and survivor annuity) only
under the following circumstances:
(i) Each Member who is receiving payments of his supplemental
benefits immediately prior to March 1, 2000 shall be
given a three (3) month period, beginning with the date
the Committee notifies the Member, during which the
5
Member may elect to receive such single sum payment.
(ii) In the event of a change in control (as defined in
Section 5.05(c)), each Member who is receiving payments
of his supplemental benefits immediately prior to the
change in control shall be given a three (3) month
period, beginning with the date of the change in control,
during which the Member may elect to receive such single
sum payment.
The Member's election under (i) or (ii) must be in writing and
must specify the payment date of the single sum; provided,
however, if the Member elects a payment date that is within
twelve (12) months of the date of his single sum election, he
shall receive 94% of the Actuarial Equivalent Present Value of
the remaining supplemental benefits payable to such Member (and
if applicable, to such Member's beneficiary), and the remaining
six percent (6%) of the Actuarial Equivalent Present Value
shall be permanently forfeited.
3.04 Notwithstanding the provisions of Section 3.01 and Section 3.02,
supplemental benefits shall be payable under this Plan to or on
account of a Member described in Section 2.02(d) who: (i) is
involuntarily terminated after completing one year of service but
prior to becoming vested in the Retirement Income Plan, and (ii)
receives severance pay benefits under the Severance Pay Plan for
Salaried Employees of Armstrong World Industries, Inc. or any
individual severance agreement, or who is eligible for severance pay
benefits under the Employment Protection Plan for Salaried Employees
of Armstrong World Industries, Inc. The Member's supplemental
benefits will be calculated using the guaranteed pension schedule
for Salaried Employees of Armstrong World Industries, Inc. under the
Retirement Income Plan multiplied by the total years of service
credited for employment prior to his Company employment, as
determined in Section 2.02(d) and his years of Company employment
and shall be payable in the form of a single life annuity commencing
as of the later of the Member's attainment of age 62 or the Member's
termination date.
3.05 If a Member is restored to employment with the Company after having
retired, any monthly payments under the Plan shall be discontinued
and, upon subsequent retirement or termination of employment with
the Company, the Member's benefits under the Plan shall be
recomputed in accordance with Section 3.01 and shall again become
payable to such Member in accordance with the provisions of the
Plan, including his election under Section 3.02.
3.06 In the event the dollar amount of the maximum benefit under the
Retirement Income Plan pursuant to Section 415 of the Internal
Revenue Code increases because of adjustments in the cost of living,
the supplemental benefits of any Member payable under the Plan,
whether or not in pay status, shall be recalculated to take into
account the higher maximum benefit payable from the Retirement
Income Plan. If payments have already commenced under the Retirement
Income Plan and this Plan, benefit amounts under both plans shall be
adjusted to reflect the higher maximum benefit, by increasing the
amount paid under the Retirement Income Plan and decreasing the
amount paid under this Plan, as soon as administratively possible
after such a change.
6
Notwithstanding the above, if the Retirement Income Plan is
terminated, no adjustments shall be made to benefits payable under
this Plan with respect to changes in the maximum benefit after the
date of such termination.
Article 4. Administration
4.01 The administration of the Plan and the responsibility for carrying
out its provisions are vested in a Retirement Committee which shall
be composed of the members of the Retirement Committee provided for
under Article X of the Retirement Income Plan. The provisions of
Article X of the Retirement Income Plan concerning powers of the
Committee shall apply under this Plan. The Retirement Committee
shall have the full and exclusive discretion and authority to
interpret the Plan and to determine all benefits and to resolve all
questions arising from the administration, interpretation, and
application of Plan provisions, either by general rules or by
particular decisions, including determinations as to whether a
claimant is eligible for benefits, the amount, form and timing of
benefits, and any other matter (including any question of fact)
raised by a claimant or identified by the Retirement Committee. All
decisions of the Committee shall be conclusive and binding upon all
affected persons. The expenses of the Committee shall be paid
directly by the Company.
Article 5. General Provisions
5.01 The establishment of the Plan shall not be construed as conferring
any legal rights upon any person for a continuation of employment,
nor shall it interfere with the rights of the Company to discharge
any employee and to treat him without regard to the effect which
such treatment might have upon him as a Member of the Plan. No legal
or beneficial interest in any of the Company's assets is intended to
be conferred by the terms of the Plan.
5.02 In the event that the Committee shall find that a Member or other
person entitled to benefits hereunder is unable to care for his
affairs because of illness or accident, the Committee may direct
that any benefit payment due him, unless claim shall have been made
therefor by a duly appointed legal representative, be paid to his
spouse, a child, a parent or other blood relative, or to a person
with whom he resides, and any such payment so made shall be a
complete discharge of the liabilities of the Company and the Plan
therefor.
5.03 The Company shall have the right to deduct from each payment to be
made under the Plan any required withholding taxes.
5.04 Subject to any applicable law, no benefit under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, any attempt so to do
shall be void, nor shall any such benefit be in any manner liable
for or subject to garnishment, attachment, execution or levy, or
liable for or subject to the debts, contracts, liabilities,
engagements or torts of the Member. In the event that the Committee
shall find that any Member or other person entitled to benefits
hereunder has become bankrupt or has made any such attempt with
respect to any such benefit, such benefit shall cease and terminate,
and in that event the Board shall hold or apply the same to or for
the benefit of such Member or other person entitled to benefits.
7
5.05 (a) In the event that a Member (i) is discharged for willful,
deliberate, or gross misconduct as determined by the Board of
Directors or a duly constituted committee thereof; or (ii) if
following the Member's termination of employment with the
Company and, within a period of three years thereafter, the
Member engages in any business or enters into any employment
which the Board of Directors or a duly constituted committee
thereof determines to be either directly or indirectly
competitive with the business of the Company or substantially
injurious to the Company's financial interest (the occurrence
of an event described in (i) or (ii) shall be referred to as
"Injurious Conduct"), all benefits which would otherwise be
payable to him under the Plan shall be forfeited. Further, the
Board of Directors or a duly constituted committee thereof, in
its discretion, may require the Member who has engaged in
Injurious Conduct to return any amounts previously received by
the Member, provided the right to require repayment under this
subsection (a) must be exercised within ninety (90) days after
the Board (or committee, as the case may be) first learns of
the Injurious Conduct, but in no event later than twenty-four
(24) months after the Member's termination of employment with
the Company. A Member may request the Board of Directors or a
duly constituted committee thereof, in writing, to determine
whether any proposed business or employment activity would
constitute Injurious Conduct. Such a request shall fully
describe the proposed activity and the Board's (or the
committee's, as the case may be) determination shall be limited
to the specific activity so described.
(b) Notwithstanding the foregoing, benefits shall not cease or be
forfeited or be required to be repaid merely because the Member
(1) owns publicly traded shares of stock of a corporation which
competes with the Company, or (2)(a) acts as a consultant for,
(b) has an investment in, or (c) is a Board member of a
business where after the Member notifies the Company in writing
in advance of his potential involvement under (2)(a), (b) or
(c), the Company's Board of Directors or a duly constituted
committee thereof determines that the Member will not be in
violation of the Company's Conflicts of Interest policy, or (3)
becomes associated with a business which competes with the
Company within two years following a "change in control" and is
eligible for benefits under the Employment Protection Plan for
Salaried Employees or any individual severance agreement.
(c) A "change in control" shall occur if and when (i) any person
acquires "beneficial ownership" of more than 28% of the then
outstanding "voting stock" of the Company and within five years
thereafter, "disinterested directors" no longer constitute at
least a majority of the entire Board of Directors or (ii) there
shall occur a "business combination" with an "interested
shareholder." For the purpose of this Section, the terms
"person," "beneficial ownership," "voting stock,"
"disinterested director," "business combination," and
"interested shareholder" shall have the meaning given to them
in Article 7 of the Company's Articles of Incorporation as in
effect on May 1, 1985. Notwithstanding the preceding sentence,
for any Member who is covered by an individual severance
agreement, a "change in
8
control" shall have the meaning assigned to such term by the
individual severance agreement.
5.06 The Plan shall be constructed, regulated and administered under the
laws of the Commonwealth of Pennsylvania.
5.07 The masculine pronoun shall mean the feminine wherever appropriate.
5.08 The Board of Directors may, through written resolutions adopted by
the Board of Directors, amend or discontinue the Retirement Benefit
Equity Plan at any time; provided, however, that if the Plan is
amended to discontinue or reduce the amount of supplemental benefit
payments (except as may be required pursuant to any plan arising
from insolvency or bankruptcy proceedings) (a) any Member who is
being paid his supplemental benefits immediately prior to the
effective date of the amendment shall continue to be paid his
supplemental benefits in the amount and manner (as provided under
Article 3 hereof) as they were being paid at the time of such
amendment, and (b) any Member who is not being paid his supplemental
benefits immediately prior to the effective date of the amendment
shall be entitled to receive (i) the supplemental benefits accrued
by such Member as of the effective date of the amendment, with such
supplemental benefits being paid in the form and at the time elected
by the Member under Section 3.02, and (ii) any legal fees and
related expenses incurred by the Member in receiving such
supplemental benefits (as permitted under Section 5.09(e)) and
interest under Section 5.09(f) (to the extent applicable).
Notwithstanding the preceding sentence, any written employment
agreement between the Executive Committee and any Member described
in clause (b) of the preceding sentence shall govern to the extent
such agreement either amends or discontinues the Member's
supplemental benefits under the Plan, and Section 5.05 shall govern
to the extent any Member engages in Injurious Conduct as defined
under that section.
In addition, the Board of Directors may by written resolution
delegate to the Executive Committee of the Board of Directors this
authority to amend the Plan. The Executive Committee shall amend the
Plan by means of written resolution in accordance with the
authorization of the Board of Directors, provided, however, that any
such amendment by the Executive Committee also may be made through
the terms of a written employment agreement entered into between a
Member and the Executive Committee.
5.09 (a) Any person claiming a benefit, requesting an interpretation or
ruling under the Plan, or requesting information under the Plan
shall present the request in writing to the Committee which
shall respond in writing as soon as practicable.
(b) If the claim or request is denied, the written notice of denial
shall state:
(i) The reasons for denial, with specific reference to the
Plan provisions on which the denial is based.
(ii) A description of any additional material or information
required and an explanation of why it is necessary.
(iii) An explanation of the Plan's claim review procedure.
9
(c) Any person whose claim or request is denied or who has not
received a response within thirty (30) days may request review
by notice given in writing to the Committee. The claim or
request shall be reviewed by the Committee who may, but shall
not be required to, grant the claimant a hearing. On review,
the claimant may have representation, examine pertinent
documents, and submit issues and comments in writing.
(d) The decision on review shall normally be made within sixty (60)
days. If an extension of time is required for a hearing or
other special circumstances, the claimant shall be notified and
the time limit shall be one hundred twenty (120) days. The
decision shall be in writing and shall state the reasons and
the relevant Plan provisions. All decisions on review shall be
final and bind all parties concerned.
(e) In the event a Member's claim for supplemental benefits under
this Plan is denied and the Member successfully appeals the
denial of such claim under the foregoing procedures, the
Company shall pay or reimburse the legal fees and expenses
directly incurred by the Member in connection with his appeal
subject to a maximum payment or reimbursement of one-third of
the Actuarial Equivalent Present Value of the supplemental
benefits to which the Member is entitled. For purposes of the
preceding sentence, actuarial equivalence shall be determined
using the Present Value Factors. Any such legal fees and
expenses shall be paid by the Company to, or on behalf of, the
Member no later than thirty (30) days following the Member's
written request for the payment of such legal fees and
expenses, provided the Member supplies the Committee with
evidence of the fees and expenses incurred by the Member that
the Committee, in its sole discretion, determines is
sufficient.
(f) Further, in the event a Member's claim for supplemental
benefits under this Plan is denied and the Member successfully
appeals the denial of such claim under the foregoing
procedures, the Company shall pay to the Member interest on the
portion of the Member's supplemental benefits that were not
otherwise paid when due because of the initial denial of the
claim. For purposes of the preceding sentence, interest shall
accrue at an annual rate equal to the prime rate as quoted in
the Wall Street Journal as of the date the supplemental
benefits would otherwise have been paid if the claim had not
initially been denied, plus five percent (5%), and shall be
adjusted as necessary to reflect any partial payment or
payments of the amounts owed to the Member.
As Amended Through December 13, 1999
10