UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 1, 2010
ARMSTRONG WORLD INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
         
Pennsylvania   1-2116   23-0366390
         
(State or other jurisdiction
of incorporation) 		  (Commission File Number)   (IRS Employer Identification No.)
     

2500 Columbia Avenue, Lancaster, Pennsylvania 		   
17603
     
(Address of principal executive offices)   (Zip Code)
Registrant’s telephone number, including area code: (717) 397-0611
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

Section 5 — Corporate Governance and Management
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) On April 1, 2010, the Armstrong World Industries, Inc. (“Company”) Board of Directors authorized grants of stock options to certain employees including: Thomas B. Mangas, Senior Vice President and Chief Financial Officer; Frank J. Ready, Executive Vice President and Chief Executive Officer Armstrong Floor Products; Jeffrey D. Nickel, Senior Vice President, Chief Counsel and Secretary and Stephen F. McNamara, Vice President and Controller. The grants were made under the Company’s 2006 Long-Term Incentive Plan (“Plan”). The Plan is incorporated by reference from the 2008 Annual Report on Form 10-K, wherein it appeared as Exhibit 10.13. The options vest and become exercisable in three equal installments at one, two and three years from the grant date, contingent upon the officer’s continued employment through such date. The form of grant letter for Mr. Mangas is attached to this filing as Exhibit 10.1 and the form of grant letter for Messrs. McNamara, Nickel and Ready is attached to this filing as Exhibit 10.2.
Section 8 — Other Events
Item 8.01. Other Events.
During March 2010, President Obama signed into law comprehensive health care reform legislation under the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (together, the “Act”). The federal government currently provides a subsidy, on a tax-free basis, to companies that provide certain retiree prescription drug benefits (the “Medicare Part D subsidy”). The Act would reduce the tax deductibility of retiree health costs to the extent of any Medicare Part D subsidy received starting in 2013. Based on the change in tax treatment, Armstrong expects to record a non-cash income tax charge of approximately $22 million in the first quarter of 2010.
Section 9 — Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
     
No. 10.1  
The form of grant letter to Thomas B. Mangas.
   
 
No. 10.2  
The form of grant letter to Messrs. McNamara, Nickel and Ready.

 

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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: April 6, 2010
         
  ARMSTRONG WORLD INDUSTRIES, INC.
  		 
  By:   /s/ Jeffrey D. Nickel    
    Name:   Jeffrey D. Nickel   
    Title:   Senior Vice President, Secretary and General Counsel    

 

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INDEX TO EXHIBITS
         
Exhibit No.   Description
       
 
  10.1    
The form of grant letter to Thomas B. Mangas.
       
 
  10.2    
The form of grant letter to Messrs. McNamara, Nickel and Ready.

 

 

Exhibit 10.1
     
(ARMSTRONG LOGO)
  ARMSTRONG WORLD INDUSTRIES, INC.
2500 COLUMBIA AVE., P.O. BOX 3001
LANCASTER, PA 17604

717.397.0611           www.armstrong.com
April 5, 2010
Thomas B. Mangas
Senior Vice President & CFO
Subject: 2010 Long-Term Incentive Equity Grant
Dear Tom:
This letter is to inform you that Armstrong’s Management Development and Compensation Committee granted you 63,172 stock options effective April 1, 2010 as part of company’s long-term incentive program. This award provides meaningful incentive to strive for the aspirational targets which have been established, and recognizes the importance of your impact on the company’s performance.
The award is subject to the terms of the 2006 Long-Term Incentive Plan and this grant letter. Each stock option entitles you to purchase one share of AWI common stock at an exercise price equal to $38.06, the New York Stock Exchange closing price of AWI stock on April 1, 2010. You may pay the option exercise price in cash or by delivering shares of AWI stock you have owned for at least six months.
The options are non-qualified and have a ten-year term starting April 1, 2010. They will vest and become exercisable in three installments at one, two and three years as follows: 21,057 shares on April 1, 2011; 21,057 shares on April 1, 2012; and 21,058 shares on April 1, 2013.
Employment Events
The following chart outlines the provisions which apply to the grant for various employment events:
         
Event   Provisions
 
       
Voluntary resignation
  •   Forfeit vested and unvested options
 
       
Retirement
  •   Forfeit unvested options
 
 
  •   5 years or expiration to exercise vested options
 
       
Involuntary termination
  •   Forfeit unvested options
 
 
  •   3 months or expiration to exercise vested options
 
       
Willful, deliberate or gross misconduct
  •   Forfeit vested and unvested options
 
       
Death
  •   Accelerated vesting if death occurs after 12/31/10, otherwise forfeit
 
 
  •   3 years or expiration (minimum 1 year from death) to exercise options
 
       
Long-Term disability
  •   Accelerated vesting if disability occurs after 12/31/10, otherwise forfeit
 
 
  •   3 years or expiration to exercise options

 

 

 

Please contact Eileen Beck (x4050) if you have questions.
         
  Sincerely,
  		 
  /s/ Jeffrey D. Nickel    
  Jeffrey D. Nickel   
  Senior Vice President, General Counsel & Secretary   
Enclosure
2006 Long-Term Incentive Plan

 

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Exhibit 10.2
     
(ARMSTRONG LOGO)
  ARMSTRONG WORLD INDUSTRIES, INC.
2500 COLUMBIA AVE., P.O. BOX 3001
LANCASTER, PA 17604

717.397.0611          www.armstrong.com
April 5, 2010
Subject: 2010 Long-Term Incentive Equity Grants
Dear  _____:
This letter is to inform you that Armstrong’s Management Development and Compensation Committee granted you the following long-term incentive equity grant effective April 1, 2010:
XXXX Stock Options
XXXX Performance Restricted Shares
This award provides meaningful incentive to strive for the aspirational targets which have been established and recognizes the importance of your impact toward achieving the company’s performance. The award is subject to the terms of the 2006 Long-Term Incentive Plan and this grant letter.
Stock Options
Each Stock Option entitles you to purchase one share of AWI common stock at an exercise price equal to $XXXX, the New York Stock Exchange closing price of AWI stock on April 1, 2010. You may pay the option exercise in cash or by delivering shares of AWI stock you have owned for at least six months.
The options are non-qualified and have a ten-year term starting April 1, 2010. They will vest and become exercisable in three installments at one, two and three years as follows: XXXX shares on April 1, 2011; XXXX shares on April 1, 2012; and XXXX shares on April 1, 2013.
Performance Restricted Shares
The Committee has established the following performance schedule that allows participants to earn up to 105% of the performance restricted shares if the company achieves 100% of the 2010 corporate operating income goal.
         
    % of  
% of Operating   Performance  
Income Target   Restricted  
Achieved   Shares Earned  
less than 69%
    0 %
69%
    40 %
73%
    47 %
76%
    54 %
79%
    62 %
83%
    69 %
86%
    76 %
90%
    83 %
93%
    90 %
98%
    100 %
100%
    105 %
(PERFORMANCE GRAPH)

 

 

 

The performance restricted shares have a 1-year performance period followed by a 2-year service vesting period for a total 3-year restriction period. Restrictions will lapse December 31, 2012. AWI common stock will be distributed to you following the conclusion of the restriction period. The company will use share tax withholding to satisfy your tax obligations unless you provide a payment to cover the taxes.
Each Performance Restricted Share granted is credited to an account maintained for you. During the 3-year restriction period you have no ownership or voting rights relative to these shares. If Armstrong makes cash dividend payments during the restriction period, the value of the dividends will accrue in a non-interest bearing account. You will receive a cash payment for the accrued dividends at the end of the restriction period. The payment would be adjusted proportionate to the earned shares.
Employment Events
The following chart outlines the provisions which apply to the grant for various employment events.
         
        Performance Restricted Share
Event   Stock Option Provisions   Provisions
Voluntary resignation
 
•     Forfeit vested and unvested options
 
•     Forfeit unvested shares and accrued dividends
 
       
Retirement
 
•     Forfeit unvested options
 
•     Forfeit unvested shares and accrued dividends
 
 
•     5 years or expiration to exercise vested options
   
 
       
Involuntary termination
 
•     Forfeit unvested options
 
•     Forfeit unvested shares and accrued dividends
 
 
•     3 months or expiration to exercise vested options
   
 
       
Willful, deliberate or
gross misconduct
 
•     Forfeit vested and unvested options
 
•     Forfeit shares and accrued dividends
 
       
Death
 
•     Accelerated vesting if death occurs
after 12/31/10, otherwise forfeit
 
•     Accelerated vesting if death
occurs after 12/31/10, otherwise forfeit
 
 
•     3 years or expiration (minimum 1 year from death) to exercise options
   
 
       
Long-Term disability
 
•     Accelerated vesting if disability occurs after 12/31/10, otherwise forfeit
 
•     Accelerated vesting if disability
occurs after 12/31/10, otherwise forfeit
 
 
 
•     3 years or expiration to exercise options
   
Please contact Eileen Beck (ext. 4050) if you have questions.
         
 
  Sincerely,    
 
       
 
  /s/ Jeffrey D. Nickel
 
Jeffrey D. Nickel 		   
 
  Senior Vice President, General Counsel & Secretary    
 
  or    
 
  /s/ Thomas B. Mangas
 
Thomas B. Mangas, Senior Vice President 		   
 
    & Chief Financial Officer    
Enclosure
2006 Long-Term Incentive Plan

 

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