MANAGEMENT ACHIEVEMENT PLAN
PLAN TEXT AND ADMINISTRATIVE GUIDELINES
ADOPTED BY BOARD OF DIRECTORS
NOVEMBER 28, 1983
AS AMENDED FEBRUARY 25, 1985
AS AMENDED FEBRUARY 23, 1987
AS AMENDED NOVEMBER 30, 1987
AS AMENDED NOVEMBER 28, 1988
AS AMENDED FEBRUARY 25, 1991
AS AMENDED NOVEMBER 25, 1991
AS AMENDED NOVEMBER 30, 1992
AS AMENDED SEPTEMBER 27, 1993
AS AMENDED NOVEMBER 24, 1993
AS AMENDED FEBRUARY 22, 1994
AS AMENDED NOVEMBER 21, 1994
ARMSTRONG WORLD INDUSTRIES, INC.
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MANAGEMENT ACHIEVEMENT PLAN FOR KEY EXECUTIVES
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(PLAN TEXT)
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1. Purpose
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The Armstrong World Industries, Inc. (the "Company") Management Achievement
Plan (the "Plan") is designed to promote the financial success of the Company
by recognizing the significant contributions individual employees can make to
the achievement of Company goals. Its objectives are to motivate key Company
and subsidiary employees to produce outstanding results by providing the
opportunity to earn financial rewards in relation to the attainment of the
corporate, business unit and individual goals.
The Plan is based on the concept that the Company establishes for each
participant at the beginning of the year a target incentive award based on
the achievement of specific corporate, business unit and individual goals.
When the year is over, the results actually achieved will be evaluated
against these goals to determine the amount, if any, of additional
compensation earned by individuals participating in the Plan.
2. Administration
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The Plan shall be administered by the Management Development and Compensation
Committee (the "Committee") of the Board of Directors with the advice and
counsel of the Chief Executive Officer of the Company. Designated subsidiary
companies may adopt this Plan.
3. Eligibility
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The intent of the Plan is to extend participation only to those key employees
whose duties and responsibilities give them the opportunity to make a
continuing material and substantial impact on the achievement of organization
goals. The Chief Executive Officer will annually determine the non-officer
participants and recommend officer participants to the Committee.
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4. Incentive Awards
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A) At the beginning of each year, the Chief Executive Officer shall present
to the Committee criteria for evaluating performance against corporate,
business unit and individual goals for the purposes of determining the
incentive awards which shall be paid for the year.
B) At the same time, the Chief Executive Officer shall recommend to the
Committee a target award expressed as a percentage of salary for each
participant.
C) As soon as practical following the close of each year, the Chief Executive
Officer shall evaluate the levels of corporate, business unit and
individual achievement and recommend to the Committee the incentive amount
earned by the participants.
D) Absent specific Board authorization to the contrary, no awards under the
corporate achievement segment of the Plan shall be authorized as to any
year in which the consolidated Company results fail to achieve a minimum
return on stockholders' equity of 8.5%.
5. Time of Payment
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Awards under this Plan shall be paid as soon as practicable after the yearly
financial results have been determined.
6. Miscellaneous Provisions
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A) Condition of Award - Plan participants who terminate employment for
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reasons other than retirement, disability, death or involuntary
termination not for cause prior to the completion of the Plan year are not
entitled to receive any awards under this Plan. Plan participants who
retire, become disabled, die, are involuntarily terminated for reasons
other than cause or are reassigned to a noneligible position on or after
the last workday of March may be eligible for awards on a prorated basis.
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B) No Assignment or Transfer - Awards are payable only to the participant,
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except in the case of death or legal incapacity at the time of payment,
award may be paid to his heirs, estate or legal guardian. No awards under
the Plan or any rights or interests therein shall be assignable or
transferable by a participant.
C) No Rights to Awards - No employee or other person shall have any claim
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or right to be granted an award under the Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee any right
to be retained in the employ of the Company or any of its subsidiaries.
D) Withholding Taxes - The Company shall have the right to deduct from all
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awards hereunder paid all taxes required by law to be withheld with
respect to such awards.
E) Funding of Plan - The Company shall not be required to establish any
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special or separate fund or to make any other segregation of assets to
assure the payment of any award under the Plan.
7. Effective Date of the Plan
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The effective date of the Plan shall be November 28, 1983.
ARMSTRONG WORLD INDUSTRIES, INC.
MANAGEMENT ACHIEVEMENT PLAN FOR KEY EXECUTIVES
ADMINISTRATIVE GUIDELINES
AMENDED NOVEMBER 21, 1994
1. Purpose
-------
The Armstrong World Industries, Inc. (the "Company") Management Achievement
Plan (the "Plan") is designed to promote the financial success of the Company
by recognizing the significant contributions individual employees can make to
the achievement of Company goals. Its objectives are to motivate key Company
and subsidiary employees to produce outstanding results by providing the
opportunity to earn financial rewards in relation to the attainment of
corporate, business unit and individual goals.
The Plan is based on the concept that the Company establishes for each
participant at the beginning of the year a target incentive award based on
the achievement of specific corporate, business unit and individual goals.
When the year is over, the results actually achieved will be evaluated
against these goals to determine the amount, if any, of additional
compensation earned by individuals participating in the Plan.
2. Administration
--------------
The Plan shall be administered by the Management Development and Compensation
Committee (the "Committee") of the Board of Directors with the advice and
counsel of the Chief Executive Officer of the Company. Designated subsidiary
companies may adopt and implement the Plan consistent with the above stated
purpose.
3. Eligibility
-----------
The intent of the Plan is to extend participation only to those key employees
whose duties and responsibilities give them the opportunity to make a
continuing material and substantial impact on the achievement of organization
goals. The Executive Office will annually determine the non-officer
participants and recommend officer participants to the Committee.
- 2 -
As a general rule, only positions graded 800 points and above under the
corporate job evaluation program will be considered for participation. To be
eligible for an award, an employee must be in an eligible position for at
least three full months of the Plan year. However, Plan participants who
retire, become disabled, die, are involuntarily terminated for reasons other
than cause or are assigned to a noneligible position on or after the
last workday of March may be eligible for awards on a prorated basis.
4. Performance Targets
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A) Target Award
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A target award, expressed as a percentage of the individual's base salary,
will be established for each participant. Target awards will vary with the
participant's level of responsibility and will be set with an awareness of
competitive practice for comparable positions in similar companies. Target
award levels are shown in Schedule A.
Target awards for employees eligible to participate in the Plan may be
allocated to corporate, unit, and individual goals as illustrated in
Schedule D.
B) Corporate and Business Unit Performance Segments
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Annually, the Executive Office in consultation with the Committee, shall
establish financial objectives such as economic value added (EVA) or other
appropriate measures for the overall Company and for each business unit.
In addition, they shall set a threshold level below which no award under
the corporate achievement segment of the Plan is earned. The amount of
incentive earned at each level of achievement shall be determined by an
award earnings schedule established for the overall Company and for each
business unit.
C) Individual Performance Segment
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Concurrent with the setting of corporate and business unit objectives, the
participant and manager shall establish specific goals for the individual
for the Plan year.
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At year-end, the participant's manager will evaluate the performance
against the predetermined goals, according to the scale shown in Schedule
B.
5. Award Determination
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A) Threshold Corporate Performance
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A threshold of a minimum Company performance as determined by the Board of
Directors has been established at 8.5% return on stockholders' equity.
Further, a threshold will be established by the Committee. If actual
corporate results are less than either specified minimum: (i) There will
be no awards under the corporate achievement segment of the Plan. (ii)
Executive officer participants will be ineligible for payment under the
business unit segment if the business unit fails to reach or exceed 100%
of target. (iii) Payments under the individual segment of the Plan will be
made only to non-executive officer participants who achieve a rating of
100% or higher against individual objectives. Executive officer
participants will be ineligible for payment under the individual segment
unless the Committee decides otherwise.
B) Individual Performance Requirement
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An employee whose individual evaluation indicates "unacceptable results"
will not be eligible to participate in the corporate and business unit
achievement segments of the Plan and thus will not receive a payment under
the Plan for that Plan year.
C) Calculation of Award
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Unless the minimum corporate or individual performance thresholds
established above disqualify awards under the Plan, the actual award
payable shall be determined by multiplying each segment of the target
award by the appropriate percentage of award earned. The sum of these
calculations shall determine an eligible employee's recommended award.
This calculation is illustrated in Schedule C.