Exhibit No. 10(iii)(h)
RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
Section 1. Purpose
The purpose of the Plan is to enable the Company to promote the long-
term, continuing success of the Company by providing a portion of the com-
pensation for nonemployee directors in shares of Common Stock pursuant to the
terms of the Plan in order to attract and retain persons of outstanding com-
petence to serve on its Board of Directors; to provide competitive remuneration
for such services; and to directly link a portion of the nonemployee director's
long-term compensation to enhancement of stock value as a further incentive to
promote a shareholder value perspective throughout the Company.
Section 2. Administration
The Plan shall be administered by the Board Affairs and Governance
Committee (the "Committee") of the Board. The Committee shall have responsi-
bility to interpret conclusively provisions of the Plan and to decide all
questions of fact arising in its application. Determinations made with respect
to any individual Participant shall be made without participation by that
Participant in such determination.
Section 3. Participants
Participation in the Plan is limited to persons who serve on the Board
at any time while the Plan is in effect and who are not then currently
"employees" of the Company (or its subsidiaries) within the meaning of the
Employee Retirement Income Security Act of 1974, as amended. It is intended that
all nonemployee Board members will be Participants in the Plan.
Section 4. Shares Subject to Plan
There is hereby reserved for the purpose of the Plan 100,000 shares of
Common Stock which may be either authorized and unissued shares or treasury
shares. The number of shares reserved pursuant to this Section 4 shall be
subject to adjustment as provided in Section 7.2 of the Plan. In the event any
shares issued pursuant to a restricted stock Award under the Plan are forfeited
for any reason, such shares shall again be available for issuance pursuant to
other restricted stock Awards under the Plan.
Section 5. Awards
Upon the effective date of the Plan, each Participant in the Plan
shall receive an Award of 200 restricted shares of the Common Stock.
Furthermore, upon the initial election of a director to the Board, whether at an
annual election or to fill a vacancy, an award consisting of 200 restricted
shares of the Common Stock shall be made to such director. Additional Awards of
restricted shares of Common Stock will be made to each Participant in the Plan,
who continues on the Board, each year effective as of July 1st of such year in
the following amounts:
Years Amount
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1995-1996 200
1997-1998 300
1999-2000 400
2001 and thereafter 500
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Section 6. Terms of the Awards
6.1 Registration
Each Award of restricted shares of Common Stock under the Plan shall
be immediately registered on the transfer ledgers of the Company in the name of
the Participant who receives the Award, subject to the other terms and
conditions set forth in this Section 6.
6.2 Dividends
Each Participant shall have the right to receive all dividends and
other distributions made with respect to restricted shares of Common Stock
registered in his or her name, unless and until such shares are forfeited
pursuant to the provisions of the Plan.
6.3 Voting Rights
Each Participant shall have the right to vote or execute proxies with
respect to restricted shares of Common Stock registered in his or her name,
unless and until such shares are forfeited pursuant to the provisions of the
Plan.
6.4 Possession, Issuance and Delivery
Possession of the certificate representing restricted shares of Common
Stock shall be retained by the Treasurer of the Company for the benefit of each
Participant, but subject to the terms and conditions of the Plan, until the
provisions of the Plan relating to removal of the restrictions have been
satisfied as to particular restricted shares of Common Stock. Thereupon, the
Treasurer of the Company shall promptly deliver the certificates for such shares
to the Participant. Notwithstanding any other provision of the Plan, the
issuance or delivery of any shares of Common Stock may be postponed for such
period as may be required to comply with any applicable requirements of any
national securities exchange or any requirements under any other law or
regulation applicable to the issuance or delivery of such shares. The Company
shall not be obligated to issue or deliver any such shares if the issuance or
delivery thereof shall constitute a violation of any provision of any law or of
any regulation of any governmental authority or any national securities
exchange.
6.5 Transfer Restrictions
The shares of Common Stock awarded pursuant to the Plan may not be
sold, assigned, pledged or otherwise transferred or encumbered by the
Participant, unless and until the provisions of the Plan relating to removal of
restrictions have been satisfied. Thereafter, a Participant may transfer or
encumber such shares of Common Stock free from any restrictions under the Plan.
6.6 Removal of Restrictions
All of the shares of Common Stock issued pursuant to the Plan shall
become free of the restrictions imposed by this Section 6 and shall become
nonforfeitable upon the earliest to occur of the following:
(a) the Participant's death or Disability while serving as a
member of the Board;
(b) failure of the Participant to be reelected to the Board after
being duly nominated;
(c) retirement from the Board after six years of Board
service; or
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(d) removal from the Board or failure to be duly nominated for
reelection to the Board, in either event, following a Change
in Control of the Company.
In the event of any other termination of Board service by a Participant,
except in the case of removal from the Board or failure to be duly nominated for
reelection to the Board, a portion of the shares of Common Stock issued pursuant
to the Plan shall thereupon become free of the restrictions imposed by this
Section 6 and shall thereupon become nonforfeitable in accordance with the
following schedule:
Full Years of Service
---------------------
From Date of Initial Award
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To Participant Under the Plan Portion Freed of Restrictions
- ----------------------------- -----------------------------
1 33%
2 66%
3 100%
For the purposes of this Section 6.6, the term "failure to be duly
nominated for reelection to the Board" shall not include a failure to be
nominated that results from a notification to the Company of the Participant's
intention not to stand for reelection to the Board.
6.7 Forfeiture
Any termination from the Board of a Participant shall result in
forfeiture of any restricted shares of Common Stock from which the restrictions
have not been or are not thereby removed pursuant to Section 6.6. All forfeited
shares of Common Stock shall revert to the Treasury of the Company.
Section 7. General Provisions
7.1 Definitions
The capitalized terms as used in the Plan shall have the meaning set forth
in this Section 7.1.
(a) Award - Each grant of shares to each Participant.
(b) Board - The Board of Directors of the Company.
(c) Change in Control - If, within the previous five years, any
"person" acquired "beneficial ownership" of 28% or more of the
then outstanding "voting stock" of the Company or there has
been a "business combination" with an "interested shareholder"
that has not been approved by a majority of "disinterested
directors." For the purpose of this subsection, 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.
(d) Common Stock - Common Stock of the Company of the par value
of $1.00 per share.
(e) Company - Armstrong World Industries, Inc.
(f) Disability - A medically determinable physical or mental
impairment which renders a Participant substantially unable
to function as a member of the Board.
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(g) Participant - Each director of the Board as described in
Section 3 of the Plan.
(h) Plan - The Restricted Stock Plan for Nonemployee Directors.
(i) Retirement - Termination of status as a director pursuant to
a written declaration by the director delivered to the
Chairman of the Board; provided, that if such declaration is
made (i) by a director who has not yet reached age 62 and
(ii) in the year in which the director's term is scheduled to
expire, it must be received by the Chairman of the Board
prior to the Board's receipt of the Committee's recommen-
dations regarding persons to be nominated (or renominated)
for election as a director at the next annual meeting of
shareholders.
7.2 Adjustment in Number of Shares
The number of shares of Common Stock specified in Section 4 to be
reserved for the purposes of the Plan, and the number of shares of Common Stock
specified in Section 5 to be included in the Awards to Participants, and the
class of shares subject to the Plan shall be adjusted by the Board at such time
and in such manner as the Board, in its discretion, may determine to be
appropriate to give effect to any subdivision or combination of the outstanding
shares of Common Stock into a greater or lesser number of shares, stock
dividend, reclassification of shares, reorganization, merger, consolidation,
exchange of shares, change in par value, or other change in the capitalization.
7.3 Amendment and Discontinuance
The Company reserves the right to amend, modify, suspend or terminate
the Plan at any time by action of the Board, provided that such action shall not
adversely affect any Participant's rights under the provisions of the Plan with
respect to Awards which were made prior to such action, and further provided
that any change in the definition of Participant under the Plan or in the number
of shares available for grant under the Plan will be subject to the approval of
the shareholders of the Company.
7.4 Effective Date and Duration
The Plan shall become effective June 25, 1990, subject to the
subsequent approval of the shareholders of the Company. The Plan shall remain in
effect until the earlier of the grant of all shares of Common Stock reserved for
Awards under the Plan or the discontinuance of the Plan under Section 7.3.
As amended 12/16/96