*RETIREMENT BENEFIT EQUITY PLAN*
OF
ARMSTRONG WORLD INDUSTRIES, INC.
This Retirement Benefit Equity Plan has been authorized by the Board of
Directors of Armstrong World Industries, Inc. to be applicable effective on and
after 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.
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 "Board of Directors" shall mean the Board of Directors of the Company.
1.02 "Committee" shall mean the Retirement Committee as provided for in
Article 4.
1.03 "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.
1.04 "Compensation" shall mean "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 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 Plan") on
behalf of a Member in the year in which such contribution is made.
1.05 Effective Date" shall mean January 1, 1976.
1.06 "Member" shall mean any person included in the membership of the Plan
as provided in Article 2.
1.07 "Plan" shall mean the Retirement Benefit Equity Plan of Armstrong
World Industries, Inc. as described herein or as hereafter amended.
1.08 "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,
1982 shall remain a Member of the Plan on or after January 1, 1983.
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:
(a) his benefit calculated under the Retirement Income Plan exceeds
the allowed benefit under Section 415 of the Internal Revenue
Code,
(b) his compensation exceeds the maximum allowed under Section
401(a)(17) of the Internal Revenue Code,
(c) he has compensation deferred under the terms of the Armstrong
Deferred Compensation Plan,
* AMENDED THROUGH FEBRUARY 28, 1999
(d) he 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) he has a contribution made on his behalf to the Bonus Replacement
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.
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 and is entitled
to benefits under the Retirement Income Plan; provided, however, that
the benefit under Section 3.01(a)(iii) hereof shall not be payable
(and the offset under Section 3.01(c) hereof shall not be applied)
with respect to a Member described in Section 2.02(d) unless following
his date of hire with the Company the Member remains employed by the
Company for a period of at least 5 full years. 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. The supplemental
benefits under this Plan shall be payable under the same terms and
conditions, including the same time, and to the same person as the
benefits payable to or on account of a Member under the Retirement
Income Plan.
The amount of any supplemental benefits payable to or on account of a
Member pursuant to this Plan shall be equal to (a) minus (b) minus
(c), 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;
(iv) including, for purposes of determining compensation, any
amounts contributed on a Member's behalf to the Bonus
Replacement Plan.
(b) is the actual amount of benefits payable to or on account of the
Member as calculated under the Retirement Income Plan; and
(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
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paragraph (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
factors applied by the Pension Benefit Guaranty Corporation for
purposes of determining the present value of benefit upon
termination of a plan with insufficient assets.
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, 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
overpayments 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 If a Member described in Section 2.02 (d) is involuntarily terminated
after completing one year of service but prior to becoming vested in
the Retirement Income Plan and who 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., a
supplemental benefit will be paid under this Plan. The benefit will
be calculated using the guaranteed pension schedule for Salaried
Employees of Armstrong World Industries, Inc., from 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. This benefit is payable
at age 62 or the Member's termination date, whichever is later, as a
single life annuity.
3.03 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.
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.
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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.
5.05 (a) In the event that a Member shall at any time be convicted of a
crime involving dishonesty or fraud on the part of such Member in
his relationship with the Company, all benefits which would
otherwise be payable to him under the Plan shall be forfeited.
Notwithstanding the foregoing, if the Company's Board of
Directors or a duly constituted Committee thereof, in its
discretion, shall determine that the Member had no reasonable
cause to believe his conduct was unlawful, then the Board of
Directors may determine that such benefits shall not be
forfeited.
(b) In the event that a Member becomes associated in any capacity
with a business which competes with the Company, all future
benefit payments under the Plan shall cease and be forfeited.
Notwithstanding the foregoing, benefits shall not cease or be
forfeited 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 (i) 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.
(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.
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
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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) (1) Members who have retired
under the Plan shall continue to be paid in the amount and manner (as
provided under Article 3 hereof) as they were being paid at the time
of amendment or discontinuance of the Plan, and (2) future retirees
under the Plan for whom supplemental benefits have been pre-funded in
a trust prior to any such discontinuance or reduction in benefits,
shall notwithstanding the amendment be entitled upon retirement to
receive such pre-funded supplemental benefits, subject, however, to
any amendment or discontinuation of such pre-funded benefits made
under a written employment agreement entered into between the
Executive Committee and the future retiree.
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.
(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.
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