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BONUS REPLACEMENT RETIREMENT PLAN OF ARMSTRONG WORLD INDUSTRIES, INC

Employee Benefits Plan Agreement

BONUS REPLACEMENT RETIREMENT PLAN OF ARMSTRONG WORLD INDUSTRIES, INC | Document Parties: ARMSTRONG WORLD INDUSTRIES INC | Armstrong World Industries, Inc You are currently viewing:
This Employee Benefits Plan Agreement involves

ARMSTRONG WORLD INDUSTRIES INC | Armstrong World Industries, Inc

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Title: BONUS REPLACEMENT RETIREMENT PLAN OF ARMSTRONG WORLD INDUSTRIES, INC
Governing Law: Pennsylvania     Date: 2/29/2008
Industry: Constr. - Supplies and Fixtures     Sector: Capital Goods

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Exhibit 10.9

BONUS REPLACEMENT RETIREMENT PLAN

OF ARMSTRONG WORLD INDUSTRIES, INC.

As Amended and Restated

Effective January 1, 2007

 


BONUS REPLACEMENT RETIREMENT PLAN

OF ARMSTRONG WORLD INDUSTRIES, INC.

Foreword

Effective January 1, 1998, Armstrong World Industries, Inc. adopted the Bonus Replacement Retirement Plan of Armstrong World Industries, Inc. (the “Plan”) for the benefit of certain of its employees.

The Plan hereinafter set forth has been approved by the Board of Directors of Armstrong World Industries, Inc. and is intended to conform to the requirements of the Employee Retirement Income Security Act of 1974, as amended, and to qualify as a profit sharing plan under Section 401(a) of the Internal Revenue Code of 1986, as amended, or any other applicable sections thereof.

Since January 1, 1998, the Plan was amended as follows:

 

   

The Plan was amended in December of 2002, but effective January 1, 1998, in response to IRS comments to include specific changes to the definition of compensation used in applying the limitations of Article XI, and to add language addressing the treatment of military service.

 

   

Effective as of January 1, 2003, Armstrong Wood Products, Inc. (including its divisions AFP Wood Flooring and Armstrong Cabinet Products) was designated as a Participating Company and coverage was extended to include certain employees of AFP Wood Flooring and Armstrong Cabinet Products Divisions of Armstrong Wood Products, Inc. In addition, effective January 1, 2003, the Asset Manager Funds were removed from the Plan and the Fidelity Equity Income Fund, the Fidelity Intermediate Bond Fund, and the Fidelity Freedom Funds substituted in lieu thereof.

Effective January 1, 2003, the Plan was amended and restated to incorporate amendments adopted since the last restatement of the Plan. Since January 1, 2003, the Plan was amended from time to time to make various design and statutory changes, including the following:

 

   

Effective March 1, 2005, the Plan was amended to remove the Money Market Fund as an available investment alternative.

 

   

Effective January 1, 2007, the Plan was amended to remove the existing vesting schedule and 100% vest all contributions made to the Plan and to modify the default investment under the plan to be a target retirement Balanced Fund.

Unless a different date is specified in the Plan, a Plan amendment or in resolutions of the Retirement Committee or the Board of Directors of the Company, the Plan is hereby amended and restated effective as of January 1, 2007 to incorporate previous amendments to the Plan, with the intent that the amended and restated Plan shall be submitted to the Internal

 


Revenue Service for an advance determination that the Plan continues to be qualified under Code Section 401(a). However, any Plan provision necessary to comply with the requirements of federal legislation or regulations, which requirements have an earlier required effective date, shall be effective retroactively to the date required by the applicable law or regulation. In any case where a provision of the Plan has an effective date later than January 1, 2007, the language of the Plan as in effect immediately prior to this restatement shall continue to apply until such later effective date.

The rights to benefits of any eligible employee whose employment terminates prior to the effective date of any amendment to the Plan, and the rights of the Beneficiary of such eligible employee, shall be determined solely by the provisions of the Plan under which such eligible employee is covered, if any, as in effect at the time of such termination of employment, unless otherwise specifically provided herein.

 


BONUS REPLACEMENT RETIREMENT PLAN

OF ARMSTRONG WORLD INDUSTRIES, INC.

Table of Contents

 

          Page No.

ARTICLE I Definitions

   1

ARTICLE II Eligibility, Membership, and Beneficiary Designation

   4

2.1

   Eligibility    4

2.2

   Suspension of Membership due to Transfer to Non-Covered Employment    4

2.3

   Beneficiary Designation    4

ARTICLE III Company Contributions

   6

3.1

   Company Contributions    6

3.2

   Return of Contributions    6

3.3

   Vesting of Member’s Account and Forfeitures    7

ARTICLE IV Investment of Contributions

   8

4.1

   Investment Funds    8

4.2

   Investment Elections    9

4.3

   Change in Investment Options    9

4.4

   Transfer Between Funds    9

4.5

   Investment Options    10

4.6

   Voting Rights; Offer to Purchase Stock    10

4.7

   Limitations    11

ARTICLE V Valuation of a Member’s Account

   12

ARTICLE VI Distributions

   13

6.1

   Distributions on Termination of Employment Other than by Reason of a Member’s Death    13

6.2

   Distribution Upon a Member’s Death    13

6.3

   Lost Members or Beneficiaries    14

6.4

   Required Distributions    14

6.5

   Direct Rollover Distributions    15

6.6

   Distributions on Sales of Businesses    15

6.7

   Payments to Minors and Incompetents    16

ARTICLE VII Management of Funds

   17

7.1

   General Responsibilities    17

7.2

   Funding Agreements    17

7.3

   Investment Managers    17

ARTICLE VIII Administration of the Plan

   18

8.1

   The Committee    18

 


8.2

   Duties of the Committee    18

8.3

   Meetings    18

8.4

   Action by Majority    18

8.5

   Compensation    18

8.6

   Establishment of Rules    18

8.7

   Prudent Conduct    18

8.8

   Indemnification    19

ARTICLE IX Amendment and Termination

   20

ARTICLE X General Provisions

   21

10.1

   Expenses    21

10.2

   Source of Payment    21

10.3

   No Right of Employment    21

10.4

   Non-Alienation of Benefits    21

10.5

   Qualified Domestic Relations Orders    21

10.6

   Invalidity of Provisions    22

10.7

   Failure to Initially Qualify Plan    22

10.8

   Adoption of Plan by Subsidiary, Affiliated or Associated Company    22

10.9

   Mergers and Transfers    22

10.10

   Compliance with Securities Laws    22

10.11

   Governing Law    22

10.12

   Trust-to-Trust Transfers    22

10.13

   Construction    23

10.14

   Nondiscrimination Testing    23

10.15

   Military Service    23

ARTICLE XI Contribution Limitations

   24

11.1

   Annual Addition Limitation    24

11.2

   Top-Heavy Provisions    25

 

 


ARTICLE I

Definitions

As used herein, unless otherwise defined or required by the context, the following words and phrases shall have the meanings indicated. Some of the words and phrases used in the Plan are not defined in this Article I, but, for convenience, are defined as they are introduced into the text.

1.1 Account” means the Member’s account into which shall be credited the amounts in the Investment Funds attributable to contributions made by the Company on the Member’s behalf pursuant to Section 3.1.

1.2 “Affiliated Company” means any company which is related to the Company as a member of a controlled group of corporations in accordance with Section 414(b) of the Code, or as a trade or business under common control in accordance with Section 414(c) of the Code, or any other entity to the extent it is required to be treated as an Affiliated Company in accordance with Section 414(o) of the Code and any regulations thereunder, or any organization which is part of an affiliated service group in accordance with Section 414(m) of the Code. For the purposes under the Plan of determining whether or not a person is an employee and the period of employment of such person, each such company shall be considered an Affiliated Company only for such period or periods during which such other company is a member of the controlled group or under common control.

1.3 “Beneficiary” means such beneficiary as may be designated pursuant to Section 2.3.

1.4 “Board of Directors” means the Board of Directors of the Company.

1.5 “Code” means the Internal Revenue Code of 1986, as amended.

1.6 “Committee” means the committee appointed in accordance with Section 8.1.

1.7 “Company” means Armstrong World Industries, Inc., a Pennsylvania corporation, or any successor by merger, purchase or otherwise with respect to its employees.

1.8 “Company Contributions” mean those contributions made by the Company under Section 3.1.

1.9 “Continuous Employment” means, subject to all of the provisions set forth herein, service with the Company or one or more Affiliated Companies, including successive service with two or more Affiliated Companies.

(a) Notwithstanding the foregoing, periods while on an uncompensated leave of absence or an uncompensated layoff shall be disregarded in the determination of an Employee’s Continuous Employment.

 

1

 


(b) Continuous Employment shall be deemed terminated on the earliest of the following events:

(1) Death, retirement, resignation, or quit by the Employee;

(2) Discharge;

(3) Failure to return to work on:

(i) Expiration of approved leave of absence;

(ii) Recall after layoff;

(iii) Expiration of reemployment rights protected by law; or

(4) Elapse of 12 months following layoff without recall.

1.10 “Effective Date” means January 1, 1998, or such later date as of which the Plan is made applicable in accordance with Section 10.8.

1.11 “Employee” means a person in the employ of the Company or an Affiliated Company. The term “Employee” shall exclude any person who is (i) a leased employee, (ii) a member of a bargaining unit, and (iii) a foreign national or citizen of a territorial possession of the United States of America whose employment relationship or contract of employment originates at, and whose services are performed solely for and at, a branch facility of the Company outside the United States. The term “leased employee” shall mean any person (other than an Employee of the Company or an Affiliated Company) who pursuant to an agreement between the Company or Affiliated Company and any other person (“leasing organization”) has performed services for the Company or an Affiliated Company on a substantially full-time basis for a period of at least one year, and such services are performed under the primary direction or control by the Company or an Affiliated Company. A leased employee shall not be considered an Employee of the Company or an Affiliated Company if: (i) such individual is covered by a money purchase pension plan providing (1) an employer contribution of 10% of compensation as defined under Section 11.1, (2) immediate participation, and (3) full and immediate vesting; and (ii) leased employees do not constitute more than 20% of the Company’s nonhighly compensated workforce.

1.12 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

1.13 “Fund” or “Investment Fund” means any of the separate funds in which contributions to the Plan are invested in accordance with Article IV.

1.14 “Insurance Company” means the insurance company which issues a contact, and any successor insurance company thereto.

1.15 “Insurance Contract” means a contract issued by an Insurance Company to fund benefits under the Plan, and any successor contract thereto.

 

2

 


1.16 “Investing Institution” means a Trustee, or Insurance Company, mutual fund or investment manager which is designated by the Committee, by Trust Agreement or Insurance Contract, to manage the Funds.

1.17 “Member” means any Employee who becomes a Member of this Plan as provided in Section 2.1.

1.18 “Named Fiduciary” means the Board of Directors, the Committee, and the Trustee.

1.19 “Participating Company” means the Company or any other Affiliated Company approved by the Committee.

1.20 “Plan” means the Bonus Replacement Retirement Plan of Armstrong World Industries, Inc. , as described herein.

1.21 “Plan Year” means the 12-month period beginning on January 1 and ending on the following December 31.

1.22 “Trust Agreement” means the agreement entered into between the Company and the Trustee to fund benefits under the Plan.

1.23 “Trust Fund” means the cash and other properties arising from contributions made by the Company in accordance with the provisions of this Plan and held and administered by the Trustee pursuant to the Trust Agreement.

1.24 “Trustee” means any bank or trust company designated by the Board of Directors under a trust agreement to receive Company Contributions made in accordance with Section 3.1.

1.25 “Valuation Date” means the date or dates, as applicable, on which the Trust Fund is valued in accordance with Article V.

 

3

 


ARTICLE II

Eligibility, Membership, and Beneficiary Designation

2.1 Eligibility . Each Employee of a Participating Company who, on the first day of the Plan Year, is (1) at a grade level of 18 or more on the Participating Company’s organizational management system, and (2) eligible to participate in the Company’s Management Achievement Plan shall become a Member on the later of (A) the Effective Date of the Plan, or (B) the date the Employee first satisfies the criteria for Plan eligibility. An Employee who has transferred from the employment of a foreign subsidiary of the Company to the employment of a Participating Company and who is accruing benefits under a retirement program maintained by such foreign subsidiary shall not become a Member of the Plan until the earliest of the date on which:

(a) He becomes a United States citizen;

(b) He is granted permanent resident alien status under the laws of the United States; or

(c) He ceases to accrue benefits under such foreign subsidiary retirement program.

2.2 Suspension of Membership due to Transfer to Non-Covered Employment . If, in any Plan Year, a Member is not in a category of employment described in Section 2.1 above as of the last day of such Plan Year, but continues in the employment of the Company or an Affiliated Company, he shall be a suspended Member for the entire such Plan Year subject to the following conditions:

(a) During the period of his suspension, the Member shall not be entitled to share in any allocations of Company Contributions. If during the period of his suspension his employment terminates or he retires or dies, there shall be a distribution of his Account in accordance with Article VI.

(b) If and when a suspended Member again becomes employed by the Company at a grade level of 18 or above, he shall again be an active Member as of that date and may share in any allocations of Company Contributions (in accordance with the terms of the Plan).

2.3 Beneficiary Designation . Subject to the rules set forth below with respect to married Members, each Member has the right to name a Beneficiary to receive any death benefits payable hereunder. Each Member also has the right, from time to time, to change any designation of Beneficiary. A designation or change of Beneficiary must be in writing on forms supplied by the Committee and any change of Beneficiary will not become effective until such change of Beneficiary is filed with the Committee or its designee whether or not the Member is alive at the time of such filing; provided, however, that any such change will not be effective with respect to any payments made by the Trustee in accordance with the Member’s last designation and prior to the time such change was received by the Committee or its designee. In the case of any Member who is married on the date of his death, the Member’s spouse as of his

 

4

 


date of death shall be his Beneficiary unless such spouse shall have consented to a different Beneficiary on prescribed forms and before either a notary public or an individual designated by the Committee. Such spousal consent must acknowledge the effect of the Beneficiary designation. In the absence of an effective Beneficiary designation or if a named Beneficiary shall have died and no contingent Beneficiary shall have been properly designated, the first of the following classes of successive preference beneficiaries shall be the Beneficiary:

(a) the Member’s surviving spouse;

(b) the Member’s surviving children;

(c) the estate of the Member.

Any individual who is designated as an alternate payee under a “qualified domestic relations order” (as defined in Code Section 414(p)) relating to a Member’s Account under this Plan shall be treated as a Beneficiary hereunder, to the extent provided by such order. The Committee may require and rely upon such proof of death and such evidence of the right of any Beneficiary or other person to receive the undistributed value of a deceased Member’s Account as the Committee may deem proper, and its determination of death and of the right of such Beneficiary or other person to receive payment shall be conclusive.

 

5

 


ARTICLE III

Company Contributions

3.1 Company Contributions . The Company may contribute to the Plan the amounts necessary to make the following allocations.

(a) Allocations - Company Contributions for a Plan Year shall be allocated to the Accounts of Members who are employed in a category described in Section 2.1 on the last day of such Plan Year in accordance with the following:

(1) If a Member’s employment grade is at least grade 18 but not more than grade 19 under the Company’s organizational management system as of January 1 of the Plan Year, the Company Contributions allocated on behalf of such Member for the Plan Year shall be equal to the lesser of (i) 50% of the actual “gross bonus” (as such term is defined under the Company’s Management Achievement Plan) awarded to the Employee under the Company’s Management Achievement Plan with respect to services performed by the Member for the Company for the calendar year coinciding with such Plan Year, or (ii) $7,500.

(2) If a Member’s employment grade is at least grade 20 but not more than grade 21 under the Company’s organizational management system as of January 1 of the Plan Year, the Company Contributions allocated on behalf of such Member for the Plan Year shall be equal to the lesser of (i) 50% of the actual “gross bonus” awarded to the Employee under the Company’s Management Achievement Plan with respect to services performed by the Member for the Company for the calendar year coinciding with such Plan Year, or (ii) $15,000.

(3) If a Member’s employment grade is at least grade 22 under the Company’s organizational management system as of January 1 of the Plan Year, the Company Contributions allocated on behalf of such Member for the Plan Year shall be equal to the lesser of (i) 50% of the actual “gross bonus” awarded to the Employee under the Company’s Management Achievement Plan with respect to services performed by the Member for the Company for the calendar year coinciding with such Plan Year, or (ii) $20,000.

3.2 Return of Contributions . All Company Contributions are conditioned on their being allowed as a deduction for federal income tax purposes. Notwithstanding any provision of the Plan to the contrary, Company Contributions made to the Plan may be returned to the Company if:

(a) the contribution is made by reason of mistake of fact; or

(b) the contribution is conditioned on its deductibility under Code Section 404 and such deductibility is denied;

provided such return of contribution is made within one year of the mistaken payment of the contribution or the disallowance of the deduction, as the case may be. A contribution shall be considered to be made by reason of a mistake of fact if, for example, it is based on incorrect information as to eligibility or compensation of an Employee, a mathematical error or an erroneous belief that such contribution is consistent with the limitations of Section 11.1. So

 

6

 


much of the contribution as is attributable to the mistake of fact shall be repaid by the Trustee upon demand by the Company upon presentation of evidence of the mistake of fact and calculation as to the impact of the mistake.

3.3 Vesting of Member’s Account and Forfeitures . A Member shall have a vested and nonforfeitable interest in his Account immediately upon becoming a Member.

 

7

 


ARTICLE IV

Investment of Contributions

4.1 Investment Funds . Contributions to the Plan shall be invested by the Investing Institution in one or more of the following Investment Funds in accordance with Section 4.2:

(a) “Equity Investment Fund” is one or more diversified equity funds, as may be available from time to time, invested in equity securities or securities convertible into equity securities or in a commingled equity trust for the collective investment of funds of employee benefit plans qualified under Section 401(a) of the Code (or corresponding provisions of any subsequent Federal revenue law at the time in effect), excluding, however, any stocks or other securities of the Investing Institution. This exclusion shall not apply to any investment in a commingled trust or Insurance Company account not proscribed by applicable law. Pending the selection and purchase of suitable investments for this Fund, any part of this Fund may be invested in short-term and medium-term fixed income securities, such as commercial paper, notes of finance companies, and obligations of the U.S. Government and any agency or instrumentality thereof.

(b) “Stable Value Fund” is one or more stable value funds, as may be available from time to time, invested in investment contracts issued by insurance companies and other financial institutions, fixed income securities such as U.S. Treasury and agency bonds, corporate bonds, mortgage-backed securities, asset-backed securities and bond funds, futures contracts, option contracts and swap agreements, and money market funds and other short term investments to provide daily liquidity, and may also include investment in any commingled trust fund qualified under Section 401(a) of the Code (or corresponding provisions of any subsequent Federal revenue law at the time in effect), which is invested primarily in similar types of securities.

(c) “Company Stock Fund” is a fund designed solely to invest in the common stock of Armstrong Holdings, Inc. or to hold the common stock of Armstrong Holdings, Inc. contributed to the Plan by the Company. Up to 100% of the assets of the Plan may be invested in the Company Stock Fund. As of May 1, 2000, each share of Company Stock held by the Plan will be converted into a share of common stock of Armstrong Holdings, Inc. Thereafter, any reference to “Company Stock” or “Company common stock” in the Plan shall refer to the common stock of Armstrong Holdings, Inc. Notwithstanding the foregoing, beginning January 1, 2001, the Company Stock Fund shall not be available as an Investment Fund with respect to investment elections under Section 4.1, changes in investment options under Section 4.2, and transfers between Investment Funds under Section 4.4.

(d) “Balanced Fund” is one or more balanced funds, as may be available from time to time, that invest in a mixture of bonds, equities, and short-term instruments, as determined by the Fund manager.

Any such common, collective or commingled trust funds referred to in connection with the Funds referred to in Subsections 4.1(a), 4.1(b), or 4.1(d) shall satisfy such requirements of

 

8

 


ERISA governing the establishment of such funds for the investment of assets of employee benefit plans qualified under Section 401(a) and exempt under Section 501(a) of the Code whereupon the instrument or instruments establishing such common, collective or commingled trust funds, as amended from time to time, shall constitute a part of this Plan and the Trust Agreement with respect to any assets of the Investment Fund(s) which are at the time invested in such funds. Any portion of an Investment Fund may, pending permanent investment or distribution, be invested in short term securities issued or guaranteed by the United States of America or any agency or instrumentality thereof or any other investments of a short term nature, including corporate obligations or participation’s therein or through the medium of any common, collective or commingled trust fund maintained by the Trustee which is invested principally in property of the kind specified in this Section. A portion of an Investment Fund may be maintained in cash.

4.2 Investment Elections . Company Contributions made on a Member’s behalf under Section 3.1 will be invested in multiples of 1%, in any one or more of the Investment Funds (other than the Company Stock Fund, with respect to Company Contributions made on and after January 1, 2001), as elected by the Member in accordance with such uniform rules as the Committee may adopt from time to time. If Company Contributions are made prior to the time that a Member has made an election under this Section 4.2, such Company Contributions shall be invested in the Balanced Fund until such investment election is received. Any Company Contributions that are designated by the Member to be invested in the Company Stock Fund shall be invested in a Balanced Fund until the Member properly designates the investment of such Company Contributions in and among the other Investment Funds available under Section 4.1.

4.3 Change in Investment Options . A Member may change his election of the Investment Funds (other than the Company Stock Fund, with respect to Company Contributions made on and after January 1, 2001) at any time with respect to any subsequent Company Contributions to be allocated on his behalf, by giving notice (including telephonic notice) to the Committee in such manner and within the time limit prescribed by the Committee.

4.4 Transfer Between Funds .

(a) An active or inactive Member may elect to transfer all or any portion of the value of his Account in one of the Investment Funds to any other Investment Fund (other than the Company Stock Fund, with respect to transfer requests made on and after January 1, 2001) at the following times (and under such uniform rules as the Committee may adopt from time to time):

(1) Any election to transfer between and among the Equity Investment Fund, the Stable Value Fund and the Balanced Fund (and any related funds maintained in the Equity Investment Fund, the Stable Value Fund and the Balanced Fund) may be made at any time, to be effective as soon as practicable thereafter; and

(2) Any election to transfer from the Company Stock Fund may be made at any time. Effective January 1, 2007, transactions will be executed daily, and are subject to normal settlement timeframes and practices.

 

9

 


(b) Except as otherwise provided, transfers pursuant to this Section 4.4 may be made by telephoning notice to the Investing Institution, and shall be effective as soon as practicable following the Investing Institution’s receipt of the notice.

4.5 Investment Options . Each Member is solely responsible for the selection of his investment option. The Investing Institutions, the Committee, the Company or any of the officers or supervisors of the Company are not empowered to advise a Member as to the manner in which his Account shall be invested. The fact that a security is available to Members for investment under the Plan shall not be construed as a recommendation for the purchase of that security, nor shall the designation of any option impose any liability on the Company, its directors, officers or employees, the Investing Institutions, the Committee or any Member of the Plan.

4.6 Voting Rights; Offer to Purchase Stock .

(a) Voting - All Company stock (including fractional shares), the value of which is allocated to Members’ Accounts, shall be voted by the Trustee of


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