EXHIBIT 10(iii)(f)
ARMSTRONG
DEFERRED COMPENSATION PLAN
The Armstrong Deferred Compensation Plan (the "Plan") was initially
established by the Board of Directors of Armstrong World Industries, Inc.
effective September 30, 1985, and was amended and restated effective as of
January 1, 2000 and as of February 28, 2000. The Plan is hereby amended
effective May 1, 2000 to reflect the establishment of Armstrong Holdings, Inc.
by changing the sponsorship of the Plan from Armstrong World Industries, Inc. to
Armstrong Holdings, Inc. and to make other related changes.
The Plan allows certain directors of the Corporation and management
employees of the Companies to defer receipt of a portion of their Compensation
and, as a result, to receive certain supplemental retirement or survivor
benefits. In addition, effective January 1, 1996, certain directors are required
to defer receipt of a portion of their Compensation until termination of Board
service.
1. DEFINITIONS
1.01 "Corporation" shall mean Armstrong Holdings, Inc. or any successor by
merger, purchase or otherwise.
1.02 "Company" shall mean Armstrong World Industries, Inc. and any other
subsidiary corporation controlled by the Corporation that adopted this Plan
prior to May 1, 2000, or that adopts this Plan on or after May 1, 2000 with the
permission of the Board of Directors of the Corporation.
1.03 "Committee" shall mean the Deferred Compensation Committee whose
membership shall include the Chief Executive Officer of the Corporation and at
least two (2) other employees of the Corporation or Armstrong World Industries,
Inc. selected by the Chief Executive Officer.
1.04 "Compensation" for an employee Participant shall include a
Participant's annual base salary and any actual bonus payable under the
Participant's employing Company's annual bonus plan received by the employee for
services with such Company and, in the case of a nonemployee director
Participant, shall include payments by the Corporation to the director in the
form of retainer fees, meeting fees, and special assignment fees, as well as
share awards made by the Corporation to the director's Stock Subaccount. Upon
the prior approval of the Committee and subject to any conditions imposed by the
Committee, an employee Participant may elect to include in annual base salary an
applicable amount of any "severance pay" to be provided to a Participant under
the Employment Protection Plan for Salaried Employees, the Severance Pay Plan
for Salaried Employees or any individual agreement.
1.05 "Participant" shall be each nonemployee director and employee who
has been selected for participation by the Committee, who satisfies all
conditions of eligibility, and who elects to participate by entering into a
Participation Agreement.
1.06 "Participation Agreement" is the contract between a Participant
and the Corporation or the Participant's employing Company (as the case may be)
covering the Participant's participation in the Plan.
1.07 "Change in Control" shall occur if and when (i) any person
acquires "beneficial ownership" of more than twenty-eight percent (28%) of the
then outstanding "voting stock" of the Corporation and, within five (5) years
thereafter, "disinterested directors" no longer constitute at least a majority
of the entire Board of Directors of the Corporation, or (ii) there shall occur a
"Business Combination" with an "Interested Shareholder." For those individuals
with individual agreements, "Change in Control" shall occur as defined within
such agreement.
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 Corporation's Articles of Incorporation as in effect on May 1, 2000.
1.08 "Supplemental Retirement Account Balance" at any date shall mean
with respect to any Participant an amount equal to the amounts credited
(including deferrals and earnings thereon) to the Participant's Cash Subaccount,
the Participant's Stock Subaccount, and the Participant's Fund Subaccount, as
determined pursuant to Sections 1.09, 1.10 and 1.11.
1.09 "Termination Account Balance" at any date shall mean with respect
to any Participant the sum of (a) plus (b), where (a) equals one hundred percent
(100%) of the amount credited to the Participant's Cash Subaccount attributable
to deferrals made prior to January 1, 1993, and earnings thereon, as determined
pursuant to Section 1.09; and (b) equals ninety-four percent (94%) of the sum of
(i) the amount credited to the Participant's Cash Subaccount attributable to
deferrals made on or after January 1, 1993, and earnings thereon, as determined
pursuant to Section 1.09, (ii) the amount credited to the Participant's Stock
Subaccount (including deferrals and earnings thereon), as determined pursuant to
Section 1.10, plus (iii) the amount credited to the Participant's Fund
Subaccount (including deferrals and hypothetical earnings thereon), as
determined pursuant to Section 1.11.
1.10 "Cash Subaccount" shall mean with respect to any Participant:
(a) The amount which the Participant actually defers under this
Plan unless such Participant elects in writing that all or a portion of
such deferral be credited to his Stock Subaccount or his Fund
Subaccount in accordance with subsection 3.02(g) or 3.02(h) of this
Plan, plus
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(b) Interest which is credited on each such deferral at a rate
equal to the rate specified in the Participant's individual
Participation Agreement for purposes of determining the Participant's
Supplemental Retirement Account Balance, for the following period:
(i) From the date on which the deferred Compensation normally
would have been paid in the case of deferrals to the Cash
Subaccount or, in all other cases, from the date of transfer from
the Stock Subaccount or the Fund Subaccount pursuant to subsection
3.02(h),
(ii) Until the earlier of the date of payment or the date of
transfer to the Stock Subaccount or the Fund Subaccount pursuant
to subsection 3.02(h).
1.11 "Stock Subaccount" at any date shall mean with respect to any
Participant the amount which the Participant elects to defer and have credited
to his Stock Subaccount in accordance with subsection 3.02(g) of this Plan or,
in the case of a nonemployee director Participant, the share awards made by the
Corporation on or after May 1, 2000 (and by Armstrong World Industries, Inc.
prior to May 1, 2000) which the Participant defers in accordance with Subsection
3.02(i), plus any amounts the Participant elects to transfer to this Subaccount
from the Cash Subaccount or the Fund Subaccount in accordance with the
provisions of Section 3.02(h), reduced by any amounts the Participant elects to
transfer from this Subaccount to the Cash Subaccount or the Fund Subaccount in
accordance with the provisions of Section 3.02(h). The Stock Subaccount shall be
credited with a bookkeeping entry indicating the number of whole and fractional
shares of the Corporation's common stock that were awarded or that could have
been purchased with the amounts actually deferred under or transferred to the
Stock Subaccount by the Participant, based on the fair market value of such
stock on the date the deferral is made or the transfer is credited to the
Participant's Stock Subaccount. The Stock Subaccount also shall be credited with
a bookkeeping entry indicating the number of additional whole or fractional
shares which would be payable as a stock dividend on the shares previously
credited to the Stock Subaccount. Any amounts which would represent cash
dividends on the Corporation's common stock credited to a Participant's Stock
Subaccount shall be converted to an entry representing the number of additional
shares of the Corporation's common stock which could be purchased at fair market
value with such dividends as of the date such dividends are credited to the
Subaccount.
For purposes of this section, "fair market value" of a share of the
Corporation's common stock shall mean the closing price of a single share of
common stock of the Corporation as reported by the New York Stock Exchange on
the applicable date or, if no sales were made on such date, on the next
preceding date on which sales of such common stock were made. The "applicable
date" for deferred amounts shall be the date on which the deferred Compensation
would have been paid. The "applicable date" for transfers to or from the Stock
Subaccount shall be the effective date of the Participant's conversion election
under Section 3.02(h).
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In the event of any changes in the outstanding shares of the
Corporation's common stock by reason of stock dividends, stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges, or other relevant changes in capitalization occurring after the date
of deferral, the Committee shall adjust the balance in the Participant's Stock
Subaccount appropriately to reflect such change.
1.12 "Fund Subaccount" at any date shall mean with respect to any
Participant the amount which the Participant elects to defer and have credited
to his Fund Subaccount in accordance with subsection 3.02(g) of this Plan, plus
any amounts the Participant elects to transfer to this Subaccount from the Cash
Subaccount or the Stock Subaccount in accordance with the provisions of Section
3.02(h), reduced by any amounts the Participant elects to transfer from this
Subaccount to the Cash Subaccount or the Stock Subaccount in accordance with the
provisions of Section 3.02(h). The Participant shall designate his preference
for the investment of the funds deferred by him under this Subaccount. Such
designation shall be limited to the selection of one or more investment funds
designated on the Participant's Deferral Election forms for the period in
question. The Corporation or the Participant's employing Company and the
Trustee, if a trust is funded, may elect to invest trust assets in such
designated investment funds, but shall not be required to do so. In any event,
the Participant's Fund Subaccount shall be credited with the hypothetical
earnings, gains, losses, and changes in the fair market value of such Fund
Subaccount for the time period that a Participant has amounts credited to the
Fund Subaccount as if such investment designation had been followed (such amount
being referred to herein as the "hypothetical earnings"). A bookkeeping entry
shall be made of the amounts deferred or transferred to the Fund Subaccount,
along with the hypothetical earnings on such amounts for each investment fund
selected by the Participant.
Deferrals credited to the Fund Subaccount under the Plan may be deemed
to be invested in one or more investment funds as approved by the Committee,
including but not limited to the following:
(a) Equity Investment Fund - One or more diversified equity funds
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invested in equity securities or securities convertible into equity
securities.
(b) Fixed Income Investment Fund - One or more fixed income
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funds invested in, but not limited to, guaranteed income contracts,
bonds, notes, debentures, asset-backed securities and fixed income
derivatives.
(c) Money Market Fund - One or more money market funds invested
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in short-term obligations of the United States Government, bank
certificates of deposit, commercial paper, bankers' acceptances, shares
of money market mutual funds and other similar types of short-term
investments.
(d) Balanced Fund - One or more balanced funds, as may be
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available from time to time, that invest in a mixture of bonds,
equities, and short-term instruments.
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Dividends, interest and other distributions which would otherwise be
received in respect to each hypothetical investment under the Fund Subaccount
shall be deemed to be reinvested in the respective investment fund.
2. ELIGIBILITY FOR PARTICIPATION
Participation in the Plan is limited to nonemployee directors of the
Corporation and those management employees of a Company who have been selected
for participation by the Committee.
3. DEFERRAL OF COMPENSATION
3.01 Deferral Period: During such period or periods as may, from time
to time, be selected by the Committee (the "Deferral Period"), each person
eligible to participate in the Plan shall be given the opportunity to elect to
defer a portion of his or her Compensation. The length of the current Deferral
Period shall be four (4) years, commencing on January 1, 1997.
3.02 Deferral Rules:
(a) There shall be no minimum amount a Participant is required to
defer.
(b) The maximum amount an employee Participant may defer for each
year of the Deferral Period shall be twenty percent (20%) of the
Participant's annual base salary at the time of the deferral election
and one hundred percent (100%) of the Participant's actual bonus
payable under the Company's annual bonus plan; or, with the approval of
the Board of Directors, up to the sum of twenty percent (20%) of the
Participant's annual base salary and one hundred percent (100%) of the
Participant's target bonus award. The amount of any bonus deferral may
not exceed the gross amount of the bonus reduced by any tax required to
be withheld from such amounts under Sections 3111(a) and (b) of the
Internal Revenue Code of 1986, as amended, or any state or local
statute. Subject to the above deferral limitations, the Board of
Directors may also approve deferrals from any payment of cash
Compensation to the employee Participant. The maximum amount of
Compensation a nonemployee director may defer for each year of the
Deferral Period shall be determined by the director.
(c) The amount deferred by an employee Participant shall be
deferred by means of reductions in the employee's annual base salary or
bonus, whichever is applicable under the Participant's deferral
election. Amounts deferred by a nonemployee director shall be made from
the director's retainer fees, meeting fees and special assignment fees,
and share awards made by the Corporation to the director's Stock
Subaccount under Section 3.02(i).
(d) The decision by a Participant to defer a portion of
Compensation (other than share awards to nonemployee directors under
Section 3.02(i)) is an election for the
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full Deferral Period which must be made by the December 1 prior to the
Deferral Period to which an election to defer Compensation relates;
provided, however, that in the case of a Participant whose eligibility
to participate in the Plan initially commences after January 1 of a
year, a decision to defer a portion of Compensation earned after such
a deferral election and during the remaining part of a Deferral Period
must be made no later than thirty (30) days after the Participant's
commencement of participation.
The decision by a Participant of the amount to be deferred under
this Plan for each calendar year in the Deferral Period (other than
share awards to nonemployee directors under Section 3.02(i)) is an
annual election which must be made by December 1 of the calendar year
prior to the year in which the amount is to be deferred.
Deferrals of share awards to nonemployee directors under Section
3.02(i) shall be automatic at the time such award is made and shall not
require a deferral election other than the initial election described
in Section 3.02(i) for Participants who were directors prior to January
1, 1996.
(e) Except as provided below, a Participant's election to defer
Compensation shall be irrevocable for the Deferral Period and a
Participant's election of the amount to be deferred shall be
irrevocable for the calendar year in which the election is effective.
Notwithstanding the prior sentence, the Committee may permit a
Participant to waive the remainder of the deferral commitment upon a
finding based upon uniform standards established by the Committee that
the Participant has suffered a severe financial hardship.
For these purposes, a severe financial hardship includes a sudden
and unexpected illness or accident of the Participant or a dependent
(as defined under Section 152(a) of the Internal Revenue Code of 1986,
as amended), loss of the Participant's property due to casualty, or
other similar extraordinary and unforeseeable circumstances arising as
a result of events beyond the control of the Participant, to the extent
not reimbursed by insurance or otherwise, and to the extent the
Participant does not have other funds reasonably available to alleviate
the hardship.
(f) Notwithstanding the above, any employee Participant, after
approval by the Committee, may elect to complete the deferral of annual
base salary as specified in the current Deferral Election from any
"severance pay" which the Participant is eligible to receive following
the Participant's date of termination under the Employment Protection
Plan for Salaried Employees, the Severance Pay Plan for Salaried
Employees or any individual agreement.
(g) At the time a Participant makes an election for the amount to
be deferred for a calendar year during the Deferral Period in
accordance with this Section 3.02, such Participant may elect in
writing that a specified percentage (stated in five percent (5%)
increments) of the Compensation he is deferring pursuant to the Plan
for
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such calendar year be credited to his Cash Subaccount, to his Stock
Subaccount or to the individual investment funds elected by the
Participant in his Fund Subaccount. Such percentage allocation may be
changed with respect to future deferrals at any time. If the
Participant's election fails to specify the percentage to be allocated
to each Subaccount or allocates less than one hundred percent (100%)
of the amounts to be deferred, the amounts deferred by the Participant
for which no allocation election has been made for the calendar year
shall be credited to the Participant's Cash Subaccount.
(h) At any time, a Participant may elect to convert all or a
portion of amounts previously deferred under one Subaccount to any
other Subaccount. The Participant's election shall be effective on the
first day of the month following the receipt of such election by the
Secretary of the Committee, provided that the Secretary is notified of
such election by the twenty-fifth (25th) day of the month prior to the
conversion date. Notice by telephone or facsimile shall be deemed to
constitute notice to the Secretary of the conversion election, provided
that a written form is submitted immediately subsequent to such notice.
The number of shares to be credited to a Participant's Stock
Subaccount, or the number of shares to be debited from a Participant's
Stock Subaccount and the cash to be credited to the Participant's Cash
Subaccount, or an investment fund in the Fund Subaccount, shall be
based on the fair market value of Company common stock (as determined
in Section 1.10 of the Plan) on the date that the conversion election
is effective. The interest rate for amounts transferred to the Cash
Subaccount shall be the rate in effect under the Participant's
individual Participation Agreement in effect during the Deferral Period
in which the conversion election is effective. Hypothetical earnings
credited on amounts transferred to the Fund Subaccount shall be based
on the actual investment performance of each applicable investment fund
for the time period that a Participant has an account balance in such
investment funds.
(i) Effective January 1, 1996, nonemployee directors of
Armstrong World Industries, Inc. who were members of the Board of
Directors of Armstrong World Industries, Inc. prior to January 1, 1996,
were able to elect to discontinue their participation in the Directors'
Retirement Income Plan ("Directors' Plan") and waive their right to any
benefit accrued under the Directors' Plan. If a nonemployee director
made this election, such director became eligible to receive an annual
award equivalent to the value of two hundred (200) shares of Company
common stock which shall be credited to his Stock Subaccount. The
annual share award shall be made each January 1 up until the time a
director attains twelve (12) years of Board service, including years of
Board service prior to January 1, 1996. The first such award was made
on January 1, 1996. Further, such director received, effective January
1, 1996, a share award grant to replace the value of the accrued
Directors' Plan benefit the director elected to forfeit. This share
award grant was credited to the director's Stock Subaccount and was the
greater of:
(i) Two hundred (200) shares times the number of full
years of Board service as of January 1, 1996, up to a maximum of
twelve (12) years, or
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(ii) The number of shares whose value (based on the fair
market value of Armstrong World Industries, Inc. common stock on
January 1, 1996) equated to the present value of the benefits
accrued under the Directors' Plan using a six and one-half percent
(6-1/2%) discount rate and assuming benefit payments commence on
the first day of the month following the director's sixty-fifth
(65th) birthday (January 1, 1996, if the director was older than
sixty-five (65)).
Nonemployee directors who joined the Armstrong World
Industries, Inc. Board after January 1, 1996 and nonemployee directors
who join the Corporation's Board of Directors on or after May 1, 2000,
shall be eligible to receive an annual award equivalent to two hundred
(200) shares of Company common stock which shall be credited to their
Stock Subaccount unless the director elects to receive stock options in
lieu of this award. The annual share award shall be made each January 1
until such time as a director attains twelve (12) years of Board
service.
Notwithstanding any provision to the contrary, for purposes
of this subsection (i), the term "Company common stock" refers, prior
to May 1, 2000, to the common stock of Armstrong World Industries, Inc.
and on or after May 1, 2000, to the common stock of the Corporation.
3.03 Manner of Electing Deferral and Payment of Benefits: A Participant
shall elect to defer Compensation by giving written notice to the Company on
forms provided for such purposes, which notice shall include:
(a) The amount and manner of Compensation to be deferred in
each calendar year of a specified Deferral Period. An employee
Participant shall make a separate election for amounts of annual base
salary to be deferred and amounts of bonus awards to be deferred.
(b) A Designation of Beneficiary.
(c) The date the installment payments of the Participant's
deferred Compensation and interest thereon are to commence, subject to
the limitations of Section 4.03.
(d) The designation of the Subaccount (Cash, Stock or Fund
and, if applicable, the investment fund or funds under the Fund
Subaccount) to which deferrals are to be credited for each calendar
year of the specified Deferral Period.
The Designation of the Beneficiary shall continue to be effective until
and unless a new election is filed in writing with the Committee. The
designation of the date that the installment payments of the Participant's
benefits are to commence shall be irrevocable, except as provided in Article 4.
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3.04 Deferral of Severance Pay: Each person eligible to participate in
the Plan who is eligible to receive severance pay under a "change in control"
provision shall be given the opportunity to elect to defer up to one hundred
percent (100%) of any lump sum severance payment (hereinafter referred to as
"Severance Pay") that becomes payable under such change in control provision.
Any such deferral election and the payment of any deferred Severance Pay shall
be in accordance with and subject to the following rules:
(a) The decision by a Participant to defer all or part of any
Severance Pay must be made at least thirty (30) days prior to a "change
in control," as such term is defined under the change in control
provision under which the Participant is eligible to receive Severance
Pay. The Participant's election to defer shall be made by the
Participant giving written notice to the Corporation on the form
provided for such purpose. The notice shall include the designation of
the Subaccount (Cash, Stock or Fund, and if applicable, the investment
fund or funds under the Fund Subaccount) to which any deferral of
Severance Pay is to be credited. The designation of the Subaccounts
shall be in accordance with the rules set forth in Section 3.02(g).
Notwithstanding the above, a Participant may make an election
subsequent to the above date, provided no such election shall be valid
if made within 12 months of the Participant's termination of
employment.
(b) At any time after the deferral of all or part of any Severance
Pay, the Participant may elect to convert all or a portion of such
deferred amount under one Subaccount to any other Subaccount. Any such
election under this subsection (b) shall be in accordance with the
rules and subject to the restrictions set forth in Section 3.02(h)
above.
(c) The payment of any deferred Severance Pay shall be made in
the same form and on the same date or dates as the Participant's
supplemental retirement benefits attributable to the Deferral Period
during which the Participant makes his or her election to defer all or
part of any Severance Pay, in accordance with the provisions of Article
4.
(d) The Participant's designation of Beneficiary under Section
3.03(b) shall govern for purposes of paying any survivor benefit under
Article 5 attributable to any deferred Severance Pay. The survivor
benefit attributable to any deferred Severance Pay shall be paid in the
same form and on the same date or dates as the survivor benefit under
Article 5; provided, however, in calculating the survivor benefit
attributable to the Participant's Severance Pay, the provisions of
Section 5.01(b) and any other provision in Article 5 that references
Section 5.01(b) shall not apply.
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4. PAYMENT AND AMOUNT OF BENEFITS
4.01 A Participant's supplemental retirement benefits under this Plan
shall be paid in substantially equal monthly installments under the declining
balances methodology for one hundred twenty (120) months in the case of a
nonemployee director Participant and for one hundred eighty (180) months in the
case of an employee Participant; provided, however, that alternative payment
schedules may be established by the Management Development and Compensation
Committee (or such similar committee) of the Corporation's Board of Directors.
The Participant's installment payments of his supplemental retirement benefits
shall commence in accordance with the election made by the Participant pursuant
to Section 3.03, provided, however, that:
(a) For a Participant who is a nonemployee director, payment may
commence at any time following termination of service as a director,
but in no event earlier than age sixty-five (65) for directors who
begin Plan participation before January 1, 1996; provided that payment
will commence in all events not later than the first day of the month
following the Participant's seventieth (70th) birthday, regardless of
whether service as a director has terminated at that time.
(b) For a Participant who is an employee, payment may commence at
any time subsequent to termination or retirement; provided, however,
that payment will commence in all events not later than the first day
of the month following the Participant's sixty-fifth (65th) birthday,
regardless of whether the Participant has actually retired at that
time.
Notwithstanding the foregoing, the Corporation reserves the right to
impose conditions, including with respect to payment commencement, in connection
with early retirement opportunities or any other severance arrangements which
otherwise enhance an employee Participant's retirement income.
4.02 The supplemental retirement benefits for a Deferral Period will
be paid, but in a lesser amount, if:
(a) By the end of the Deferral Period the Compensation payable to
a Participant has proved insufficient to accommodate full deferral;
(b) Prior to the end of the Deferral Period, a nonemployee
director ceases to be a director after completing one (1) year of
service on the Board of Directors for any reason other than death;
(c) A Participant ceases to be a Participant within the Deferral
Period because his or her employment with the Company ceases or such
Participant retires under any Company Pension Plan within that period;
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(d) A Participant discontinues deferrals within the Deferral
Period due to severe financial hardship.
4.03 Notwithstanding any other provision of the Plan (including but not
limited to Sections 4.05 and 4.06), if an employee Participant resigns without
the written approval of the Committee or is discharged for willful, deliberate
or gross misconduct as determined by the Committee or if a nonemployee director
Participant terminates service on the Board of Directors prior to the completion
of one (1) year of service, then in lieu of any other benefit under the Plan
(including any single sum previously requested by the Participant under Section
4.05(b) or Section 4.06), the Participant shall be paid a single sum amount, as
soon as practical following such resignation, discharge or termination (as the
case may be) equal to the Participant's Termination Account Balance, and shall
permanently forfeit the amount that represents the difference between the
Participant's Supplemental Retirement Account Balance and Termination Account
Balance.
4.04 Notwithstanding Section 4.03, if an employee Participant is
terminated or terminates for good reason as set forth in the Employment
Protection Plan for Salaried Employees or an individual agreement within three
(3) years following a Change in Control or if an employee Participant retires
pursuant to an early retirement opportunity or any other severance arrangement
in which the Participant agrees to commence payment of the supplemental
retirement benefits following the Participant's sixty-fifth (65th) birthday and
a Change in Control precedes the commencement of such payments, the Participant
may request the payment of his Supplemental Retirement Account Balance in a
single sum. Notwithstanding the preceding sentence, if such Participant requests
that the single sum be paid on a date that is less than twelve (12) months from
the date of such request, the Participant shall receive a single sum payment
equal to the Participant's Termination Account Balance, and shall permanently
forfeit the amount that represents the difference between the Participant's
Supplemental Retirement Account Balance and Termination Account Balance.
4.05 Notwithstanding any other provision of the Plan to the contrary, a
Participant may elect, upon written request to the Committee, to accelerate the
commencement date of the installment payments to be made to the Participant
and/or to receive a specified portion (including one hundred percent (100%)) of
his supplemental retirement benefits under the Plan in a single sum payment, in
accordance with the rules set forth below:
(a) A Participant may accelerate the commencement date upon which
the installment payments of his supplemental retirement benefits are
otherwise scheduled to commence, provided that the accelerated
commencement date is otherwise permissible under Section 4.01 and is at
least twelve (12) months from the date of such request.
(b) A Participant may request at any time the single sum payment
of a specified dollar amount or percentage (including one hundred
percent (100%)) of his supplemental retirement benefits. The
Participant's single sum payment shall equal the specified dollar
amount or percentage of the Participant's Supplemental Retirement
Account Balance as of the payment date. Notwithstanding the preceding
sentence, if
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such Participant requests that the single sum be paid on a date that
is less than twelve (12) months from the date of such request, the
Participant shall receive a single sum payment equal to the specified
dollar amount or percentage of the Participant's Termination Account
Balance as of the payment date and shall permanently forfeit the
proportionate amount of his Supplemental Retirement Account Balance
that would otherwise have been paid in a single sum if the Participant
had requested that the single sum be paid on a date that is at least
twelve (12) months from the date of the such request. If a Participant
has commenced receiving installment payments of his supplemental
retirement benefits, and the Participant is paid a single sum payment
under this Section 4.05(b), each subsequent installment payment shall
be reduced as necessary to reflect the single sum payment and the
permanent forfeiture. A Participant shall be limited to two (2) single
sum requests in any calendar year.
(c) Notwithstanding any other provision in the Plan to the
contrary, a Participant who has requested, but not received, a single
sum payment of all or part of his supplemental retirement benefits
under the Plan may elect, upon written request to the Committee, to
change the payment date of such single sum or revoke the payment of
such single sum provided the payment date in the absence of such
request is not within twelve (12) months of the date of the request. If
the Participant requests an amended payment date that is less than
twelve (12) months from the date of the request, the Participant shall
receive a single sum payment equal to the specified dollar amount or
percentage of the Participant's Termination Account Balance as of the
payment date. Any such single sum paid under this Section 4.05(c), the
forfeiture of a portion of the Participant's Supplemental Retirement
Account, and the Participant's remaining installment payments in the
event the Participant has commenced receiving installment payments,
shall be administered in accordance with the provisions of Section
4.05(b) above.
4.06 Further, notwithstanding any other provision of the Plan to the
contrary, a Participant may request a single sum payment of an amount necessary
to satisfy a severe financial hardship. The Committee shall determine, based
upon uniform, established standards, whether the Participant has suffered a
severe financial hardship. For these purposes, a severe financial hardship shall
have the same meaning as under Section 3.02(e). Upon such determination, the
Participant will receive an amount necessary to satisfy such financial hardship
but in no event more than the balance of the Participant's Supplemental
Retirement Account Balance as of the date of payment.
4.07 For purposes of any single sum payment made under Section 4.05(b)
or 4.06, the Participant's request for such single sum payment shall designate
the deferral period or periods and the dollar amount or percentage of the
Participant's interest in his Cash Subaccount, Fund Subaccount and/or Stock
Subaccount with respect to each such deferral period that shall be debited to
derive the proceeds of the single sum payment. If the Participant designates
more than one deferral period, the actual proceeds of the single sum shall be
derived from the deferral periods in the order designated by the Participant,
with the deferrals and earnings in a deferral period being fully exhausted
before accessing each other deferral period according to the order designated by
the Participant. With respect to each such deferral period, the proceeds shall
be
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derived first from the Participant's deferrals to the Subaccount or Subaccounts
designated by the Participant on a last deferred, first distributed basis, and
then from earnings thereon.
5. SURVIVOR BENEFIT
5.01 If a Participant dies prior to the full distribution of his
supplemental retirement benefits and prior to the commencement of the
installment payments of his supplemental benefits, the Participant's designated
beneficiary or the Participant's estate (in the event no beneficiary is
designated) shall be entitled to a survivor benefit equal to the greater of (a)
the Participant's Supplemental Retirement Account Balance as of the
Participant's date of death, or (b) an amount equal to three (3) times the
deferrals (but not earnings) credited to the Participant's Cash Subaccount,
Stock Subaccount and Fund Subaccount for each Deferral Period that have not been
previously distributed to the Participant under Article 4. Such survivor benefit
shall be paid to the Participant's designated Beneficiary or estate (as the case
may be) in substantially equal monthly installments under the declining balances
methodology for a period of one hundred twenty (120) months, beginning as soon
as practical after the Participant's death. Notwithstanding the preceding
sentence, the Participant's designated beneficiary or the representative of the
Participant's estate (as the case may be) may at any time request a single sum
distribution equal to the survivor benefit determined under the first sentence
of this Section 5.01 that remains to be paid to the beneficiary or the estate;
provided, however, if the beneficiary or the estate's representative (whichever
is applicable) requests a payment date within twelve (12) months of the date of
such request, the single sum payment shall equal the remaining balance in the
Participant's Termination Account if the survivor benefit is determined under
clause (a) of the second preceding sentence and shall equal 94% of the remaining
survivor benefit if the survivor benefit is determined under clause (b) of the
second preceding sentence, and the remaining survivor benefit shall be
permanently forfeited. Further, notwithstanding the second preceding sentence,
the Committee may approve a single sum payment of the entire survivor benefit if
such single sum is requested by the Beneficiary and necessitated by severe
financial hardship (as defined in Section 3.02(e)).
5.02 If a Participant dies prior to the full distribution of his
supplemental retirement benefits and after the commencement of the installment
payments of his supplemental benefits, the remaining installments shall be paid,
on their respective due dates, to the Participant's designated beneficiary or
the Participant's estate (in the event no beneficiary is designated).
Notwithstanding the preceding sentence, the Participant's designated beneficiary
or the representative of the Participant's estate (as the case may be) may
request a single sum distribution equal to the Participant's Supplemental
Retirement Account Balance as of the payment date; provided, however, if the
beneficiary or the representative of the estate (as the case may be) requests a
payment date within twelve (12) months of the date of such request, the single
sum payment shall equal the Participant's Termination Account Balance as of the
payment date and the amount that represents the difference between the
Participant's Supplemental Retirement Account Balance and Termination Account
Balance shall be permanently forfeited.
5.03 If a beneficiary dies prior to the full distribution of the
survivor benefit described in Section 5.01 or 5.02, the remaining installments
of the survivor benefit payable to
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the beneficiary shall be paid, on their respective due dates, to the
beneficiary's estate. Notwithstanding the preceding sentence, the representative
of the beneficiary's estate may request a single sum distribution equal to the
portion of the beneficiary's survivor benefit that remains to be paid as of the
beneficiary's death; provided, however, if the estate's representative requests
a payment date within twelve (12) months of the date of such request, the single
sum payment shall equal the remaining balance in the Participant's Termination
Account if the survivor benefit is determined under clause (a) of the first
sentence of Section 5.01 or Section 5.02 and shall equal 94% of the remaining
survivor benefit if the survivor benefit is determined under clause (b) of the
first sentence of Section 5.01, and the remaining survivor benefit shall be
permanently forfeited.
6. AMOUNTS OF SUPPLEMENTAL RETIREMENT AND SURVIVOR BENEFITS
The amount of the supplemental retirement and survivor benefits shall
be prescribed in accordance with a general plan applicable to all Participants
which has been established by the Committee and approved by the Management
Development and Compensation Committee (or such similar committee) of the
Corporation's Board of Directors.
7. FINANCING
Obligations under this Plan may be financed by the purchase of one (1)
or more policies of life insurance upon the lives of Participants, with the
Corporation or the Company as owner of and beneficiary under such policies. No
Participant shall have any right or interest in any such policy or the proceeds
thereof or in any other specific fund or asset the Corporation or the Company as
a result of the Plan. The rights of Participants to benefit payments hereunder
shall be no greater than those of an unsecured creditor. Each Participant shall
cooperate fully in the application for, and in the maintenance of, any such
policy or policies of insurance upon the Participant's life.
8. AMENDMENT OR TERMINATION
8.01 The Corporation's Board of Directors may, through written
resolutions, terminate or amend this Plan at any time, including a retroactive
amendment if necessary to bring this Plan into conformity with any law or
governmental regulation relating to plans or trusts of this character; provided,
however, that if the Plan is amended to discontinue or reduce the amount of
supplemental retirement benefits payments (except as may be required pursuant to
any plan arising from insolvency or bankruptcy proceedings) (a) any Participant
who has commenced receiving installment payments of his supplemental retirement
benefits prior to the effective date of the amendment shall continue to be paid
his supplemental retirement benefits in the amount and manner (as provided under
Articles 3 and 4 hereof) as they were being paid at the time of such amendment,
and (b) any Participant who has not commenced receiving installments payment of
his supplemental retirement benefits prior to the effective date of the
amendment shall be entitled to receive (i) the supplemental retirement benefits
accrued by such Participant as of the effective date of the amendment, with such
supplemental retirement benefits being paid in the form and at the time elected
by the Participant under Articles 3 and 4, and (ii) any legal fees and related
expenses incurred by the Participant in receiving such supplemental retirement
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benefits (as permitted under Section 10.05) and interest under Section 10.06 (to
the extent applicable). Notwithstanding the preceding sentence, any written
employment agreement between the Executive Committee of a Company and any
Participant described in clause (b) of the preceding sentence shall govern to
the extent such agreement either amends or discontinues the Participant's
supplemental retirement benefits under the Plan, and Section 4.03 shall govern
to the extent any Participant is discharged for willful, deliberate or gross
misconduct.
8.02 Notwithstanding the preceding provisions of Section 8.01, if the
reason for termination or amendment is a change in the tax laws adversely
affecting the financing of the supplemental retirement benefits or survivor
benefits under the Plan, then the Corporation's Board of Directors may terminate
all (but not less than all) of the then existing Participation Agreements except
any under which benefits are then being paid.
(a) Each Participant with a terminated Agreement will be paid in
lieu of any and all other benefits hereunder an amount equal to the
Participant's Supplemental Retirement Account balance as of the date of
termination.
(b) Such amount resulting from termination may be paid in a single
sum within forty-five (45) days of the date of such termination or in
such other manner and at such other time or times as the Committee may
reasonably determine.
9. ADMINISTRATION
9.01 Responsibility for establishing the requirements for participation
and for administration of the Plan shall be vested in the Committee, which shall
have the full and exclusive discretionary authority to interpret the Plan or the
Participation Agreements, to determine all benefits and to resolve all questions
arising from the administration, interpretation, and application of their
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 Committee. The Committee may
delegate administrative tasks as necessary to persons who are not Committee
members. All decisions of the Committee shall be conclusive and binding upon all
affected persons.
9.02 The expenses of administering the Plan shall be borne by the
Corporation and the Companies. No member of the Committee shall receive any
remuneration for service in such capacity. However, expenses of the Committee or
its members paid or incurred in connection with administering the Plan shall be
reimbursed by the Corporation and the Companies.
9.03 The Corporation shall indemnify and hold harmless the members of
the Committee against any and all claims, loss, damage, expense or liability
arising from any action or failure to act with respect to this Plan, except in
the case of gross negligence or willful misconduct.
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10. CLAIMS PROCEDURE
10.01 Claim. 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.
10.02 Denial of Claim. If the claim or request is denied, the written
notice of denial shall state:
(a) The reasons for denial, with specific reference to the Plan
provisions on which the denial is based.
(b) A description of any additional material or information
required and an explanation of why it is necessary.
(c) An explanation of the Plan's claim review procedure.
10.03 Review of Claim. 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.
10.04 Final Decision. 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.
10.05 Attorney's Fees and Expenses. In the event a Participant's claim
for benefits under this Plan is denied and the Participant successfully appeals
the denial of such claim under the foregoing procedures, the Corporation or the
Company shall pay or reimburse the legal fees and expenses directly incurred by
the Participant in connection with his appeal subject to a maximum payment or
reimbursement of one-third of the supplemental retirement benefits to which the
Participant is entitled. Any such legal fees and expenses shall be paid to, or
on behalf of, the Participant no later than thirty (30) days following the
Participant's written request for the payment of such legal fees and expenses,
provided the Participant supplies the Committee with evidence of the fees and
expenses incurred by the Participant that the Committee, in its sole discretion,
determines is sufficient.
10.06 Interest on Delayed Payments. Further, in the event a
Participant's claim for supplemental retirement benefits under this Plan is
denied and the Participant successfully appeals the denial of such claim under
the foregoing procedures, the Corporation or the Company shall pay to the
Participant interest on the portion of the Participant's supplemental
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retirement 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 retirement 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 Participant.
11. MISCELLANEOUS
11.01 No amount payable under the Plan or any Participation Agreement
shall be subject to assignment, transfer, sale, pledge, encumbrance, alienation
or charge by a Participant or the Beneficiary of a Participant except as may be
required by law.
11.02 Neither the Plan nor any action taken hereunder shall be
construed as giving any employee who is a Participant or who becomes a
Participant any right to be retained in the employ of the Company.
11.03 "Retirement" under the Company Pension Plan shall mean retirement
under the Armstrong World Industries, Inc. Retirement Income Plan. However, in
the event of any retirement arising by reason of a "Change in Control" and
which, as set forth in the Retirement Income Plan, results in an enhancement of
an employee Participant's retirement income then:
(a) "Retirement" for purposes of this Plan shall mean the
Participant's sixty-fifth (65th) birthday; or
(b) A Participant may elect to treat retirement as "retirement"
under the Plan subject to the penalties imposed in an early retirement
opportunity under Section 4.04 of this Plan.
11.04 The Management Development and Compensation Committee (or such
similar committee) of the Corporation's Board of Directors may at any time
establish a trust to secure part or all of the obligations with respect to
payments and benefits to be paid to Participants under this Plan. Funding of the
trust shall be at the direction of the Board of Directors and shall be
irrevocable in nature.
11.05 In the event that the Committee shall find that a Participant or
other person entitled to benefits hereunder is unable to care for his or her
affairs because of illness or accident, the Committee may direct that any
benefit payment due him or her, unless claim shall have been made therefor by a
duly appointed legal representative, be paid to the Participant's spouse, child,
parent or other blood relative, or to a person with whom he or she resides, and
any such payment so made shall be a complete discharge of the liabilities of the
Corporation, any employing Company and the Plan therefor.
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