Exhibit 4.1
ARMSTRONG HOLDINGS, INC.
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STOCK AWARD PLAN
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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
compensation for officers, directors and key employees in shares of Common Stock
pursuant to the terms of the Plan. The Plan is designed to: (i) encourage
stock ownership by Participants to further align their interest in increasing
the value of the Company; and (ii) to assist in the attraction and retention of
officers, directors and key employees vital to the Company's success.
2. Administration
The Plan shall be administered by the Committee; provided, however,
that the Board shall administer the Plan as it relates to the terms, conditions
and grant of awards to non-employee directors. The Committee shall have
responsibility 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. All determinations by the Committee
shall be final and binding.
3. Participants
Participation in the Plan shall be limited to officers, who may also
be members of the Board, and other key employees of the Company and its
subsidiaries, and directors who are not employees.
4. Shares Subject to Plan
Up to 750,000 issued shares of Common Stock reacquired by the Company
and held in treasury may be used in this Plan. The number of shares reserved
pursuant to this Section 4 shall be subject to adjustment as provided in Section
8.2 of the Plan. No fractional shares shall be issued under the Plan. In the
event any shares issued pursuant to an Award under the Plan are forfeited for
any reason, such shares shall again be available for issuance pursuant to other
Awards under the Plan. Furthermore, shares of Common Stock that are tendered or
withheld in satisfaction of tax withholding obligations arising from any award
shall be available for issuance under the Plan.
5. Awards
The Committee may grant Restricted Stock Awards to officers and key
employees of the Company subject to such terms and conditions as the Committee
shall determine, provided that each Restricted Stock Award shall be subject to a
Restriction Period. The Committee may also grant Stock Awards. Restricted
Stock Awards and Stock Awards shall be used for the purposes of recruitment,
recognition and retention of officers, directors and key employees vital to the
Company's success and may be issued independent of or in lieu of other
compensation payable to a Participant. The Committee may, in its sole
discretion, require a Participant to deliver consideration in form of services
or cash as a condition to the grant of a Restricted Stock Award or Stock Award.
6. Terms of the Awards
6.1 Restricted Stock Award and Stock Award Agreements
Each Restricted Stock Award shall be evidenced by a written agreement
between the Company and the Participant to whom such award is granted. A Stock
Award will be evidenced by a written agreement in the event that the Committee
determines that an agreement is appropriate. The agreement shall specify the
number of shares awarded, the terms and conditions of the award and, in the case
of a Restricted Stock Award, the Restriction Period and the consequences of
forfeiture.
6.2 Awards and Certificates
Shares of Common Stock awarded pursuant to a Restricted Stock Award or
a Stock Award shall be registered in the name of the Participant. Certificates
evidencing Restricted Stock Awards shall be held in custody by the Company or
the Company shall maintain a book entry account until the restrictions thereon
are no longer in effect. After the lapse or waiver of the restrictions imposed
upon the Restricted Stock Award, the Company shall deliver in the Participant's
name one or more stock certificates, free of restrictions, evidencing the shares
of Common Stock subject to the Restricted Stock Award to which the restrictions
have lapsed or been waived.
6.3 Restriction Period
At the time a Restricted Stock Award is made, the Committee shall
establish a period of time (the "Restriction Period") applicable to such award
during which the shares of restricted stock are subject to the risk of
forfeiture and the Participant shall not be permitted to sell, assign, transfer,
pledge, or otherwise dispose of such shares during the period when such
restrictions are in place. The Committee may provide for the lapse of such
restrictions in installments and may accelerate or waive such restrictions, in
whole or in part, based on service and such other factors as the Committee may
determine.
6.4 Other Terms and Conditions of Restricted Stock Awards
Shares of Common Stock subject to Restricted Stock Awards shall be
subject to the following terms and conditions:
(a) Except as otherwise provided in the Plan or in the Restricted
Stock Award agreement, the Participant shall have all the rights
of a shareholder of the Company, including the right to vote the
shares.
(b) The Committee, in its sole discretion, shall establish the method
of distribution of cash dividends paid with respect to Common
Stock subject to a Restricted Stock Award by directing that the
Company either:
(i) reinvest the cash dividends to purchase additional shares
of Common Stock that shall be subject to the same terms,
conditions and restrictions that apply to the Restricted
Stock Award with respect to which such dividends were
issued; or
(ii) issue a cash payment in an amount equal to the cash
dividends declared on the Restricted Stock Award.
(c) Except as otherwise provided in the Plan or in the Restricted
Stock Award agreement, upon termination of a Participant's
employment, all shares subject to restriction shall be forfeited
by the Participant.
6.5 Termination of Employment
(a) In the event a Participant terminates employment during the
Restriction Period by reason of death or Disability, restrictions
shall lapse on all shares subject to restriction at the time of
such termination.
(b) In the event a Participant terminates employment during the
Restriction Period by reason of Retirement, restrictions shall
lapse on a proportion of any shares subject to restriction at the
time of such Retirement. Any applicable Restriction Period shall
continue in effect, but in no event beyond the end of the three-
year period following the Participant's Retirement. The number of
shares upon which the restrictions shall lapse shall be prorated
for the number of months of employment during the Restriction
Period prior to the Participant's termination of employment.
(c) If a Participant terminates employment for any reason other than
death, Disability, or Retirement, the Participant shall forfeit
all shares subject to restriction.
(d) Notwithstanding Sections 6.5(a), 6.5(b), and 6.5(c), in the event
a Participant's employment is terminated under special
circumstances, the
Committee may, in its sole discretion, waive in whole or in part
any or all remaining restrictions.
6.6 Change in Control Provisions
In the event of any Change in Control, all restrictions applicable to
any outstanding Restricted Stock Award shall lapse as of the date of such Change
in Control.
7. Tax Withholding and Deferral of Payment
7.1 Tax Withholding
(a) The Company may withhold from any payment of Common Stock to a
Participant or other person pursuant to the Plan an amount
sufficient to satisfy any required withholding taxes, including
the Participant's Social Security and Medicare taxes and federal,
state and local income tax with respect to income arising from the
payment of a Restricted Stock Award or a Stock Award. The Company
shall have the right to require the payment of any such taxes
before issuing Common Stock pursuant to the award.
(b) At the discretion of the Committee, share tax withholding may be
included as a term of any grant of an award.
(c) Share tax withholding shall entitle the Participant to elect in
advance of the end of the Restriction Period to satisfy, in whole
or in part, any tax withholding obligations in connection with the
issuance of shares of Common Stock earned under the Plan by
requesting that the Company either:
(i) withhold shares of Common Stock otherwise issuable to the
Participant; or
(ii) accept delivery of shares of Common Stock previously owned by
the Participant.
In either case, the Fair Market Value of such shares of Common
Stock will generally be determined on the date following the
Restriction Period.
(d) Notwithstanding any other provision hereof to the contrary, the
Committee, in its sole discretion may at any time suspend,
terminate, or disallow any or all entitlements to share tax
withholding previously granted or extended to any Participant.
7.2 Deferral of Payment
At the discretion of the Committee, a Participant may be offered the
right to defer the receipt of all or any portion of the Common Stock
distributable to such Participant with respect to Restricted Stock Awards. Such
right shall be exercised by execution of a written agreement by the Participant
prior to the expiration of the applicable Restriction Period. Upon any such
deferral, the number of shares of Common Stock subject to the deferral shall be
converted to stock units and a stock unit account shall be maintained by the
Company on behalf of the Participant. Such stock units shall represent only a
contractual right and shall not represent any interest in or title to Common
Stock. Such units shall earn dividend equivalents. All other terms and
conditions of deferred payments shall be as contained in said written agreement.
8. General Provisions
8.1 Definitions
The capitalized terms as used in the Plan shall have the meaning set
forth in this Section 8.1.
(a) Board - The Board of Directors of the Company.
(b) Change in Control - A situation where (i) any "person" acquires
"beneficial ownership" of 28% or more 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 Board or (ii) a "business combination" with an
"interested shareholder" occurs which 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.
(c) Code - Internal Revenue Code of 1986, as amended, including any
successor law thereto.
(d) Committee - The Management Development and Compensation Committee
of the Board or the full Board, as the case may be.
(e) Common Stock - Common Stock of the Company of the par value of
$1.00 per share.
(f) Company - Armstrong Holdings, Inc., including any successor
thereof.
(g) Disability - Total and permanent disability within the meanings
of Section 22(e)(3) of the Code.
(h) Participant - Any officer, director or key employee who has met
the eligibility requirements set forth in Section 3 hereof and to
whom a grant has been made and is outstanding under the Plan.
(i) Plan - This Restricted Stock Plan.
(j) Restriction Period - The period of time during which shares
issued pursuant to an Award are subject to forfeiture pursuant to
the Plan and an Award agreement and during which the Participant
shall not be permitted to sell, assign, transfer, pledge, or
otherwise dispose of such shares.
(k) Restricted Stock Award - The award of Common Stock granted to a
Participant which is subject to a Restriction Period.
(l) Retirement - Termination from employment with the Company after
the Participant has attained age 55 and has completed five years
of service with the Company or termination of employment under
circumstances which the Committee deems equivalent to retirement.
(m) Stock Award - The award of Common Stock granted to a Participant
which is not subject to a Restriction Period.
8.2 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 subject to awards
under the Plan shall be adjusted by the Committee at such time and in such
manner as the Committee, 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.
8.3 No Right to Employment
Nothing contained in the Plan, nor in any award pursuant to the Plan,
shall confer upon any Participant any right with respect to continuance of
employment by the Company or its subsidiaries (including with respect to
continuance of any officer position [or directorship]), nor interfere in any way
with the right of the Company or its subsidiaries to terminate the employment or
change the compensation of any employee at any time.
8.4 Nontransferability
A Participant's rights under the Plan, including the right to any
shares or amounts payable, may not be assigned, pledged, or otherwise
transferred except, in the event of a Participant's death, to the Participant's
designated beneficiary or, in the absence of such a designation, by will or by
the laws of descent and distribution.
8.5 Compliance with Government Regulations
(a) The Company shall not be required to issue or deliver shares upon
any Award granted under the Plan prior to complying with the
requirements of any governmental authority in connection with the
authorization, issuance, or sale of such shares.
(b) The Plan shall be construed and its provisions enforced and
administered in accordance with the laws of the Commonwealth of
Pennsylvania applicable to contracts entered into and performed
entirely in such State.
8.6 Rights as a Shareholder
Except as provided in Section 6.4 hereof, the recipient of any Award
under the Plan shall have no rights as a shareholder with respect thereto unless
and until certificates for shares of Common Stock are issued to such recipient
or such shares are represented by book entry in the name of such recipient.
8.7 Termination of Employment - Certain Forfeitures
Notwithstanding any other provision of the Plan (other than provisions
regarding Change in Control, which shall apply in all events) and except for
Restricted Stock Awards which would otherwise be free of restrictions and the
receipt of which has been deferred pursuant to Section 7.2, a Participant shall
have no right to receive payment of any Restricted Stock Award or Stock Award
if: (i) the Participant is discharged for willful, deliberate, or gross
misconduct as determined by the Committee in its sole discretion; or (ii) if
within a period of three years following the Participant's termination of
employment with the Company , the Participant engages in any business or enters
into any employment which the Committee in its sole discretion 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 above in (i) or (ii) of this Section 8.7 shall be referred to
herein as "Injurious Conduct"). Furthermore, notwithstanding any other
provision of the Plan to the contrary, in the event that a Participant receives
or is entitled to the delivery or vesting of Common Stock pursuant to a
Restricted Stock Award or a Stock Award during the 12 month period prior to the
Participant's termination of employment with the Company or during the 24 months
following the Participant's termination of employment, then the Committee, in
its sole discretion, may require the Participant to return or forfeit the Common
Stock received with respect to such award (or its economic value as of (i) the
date immediately following the end of the Restricted Period
for Restricted Stock Awards; and (ii) the date of grant with respect to Stock
Awards) in the event that the Participant engages in Injurious Conduct. A
Participant may request the Committee 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 Committee's
determination shall be limited to the specific activity so described. The
Committee's right to require the return of Common Stock (or its economic value)
under this Section 8.7 must be exercised within 90 days after the discovery of
an occurrence triggering the Committee's right to require such return but in no
event later than 24 months after the Participant's termination of employment
with the Company.
8.8 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.
8.9 Effective Date and Duration
The Plan shall become effective July 24, 2000. 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 8.8.