EXHIBIT 10.8
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INDEMNIFICATION AGREEMENT
FOR
DIRECTORS AND OFFICERS OF ARMSTRONG WORLD INDUSTRIES, INC.
This Agreement is made effective as of the 2nd day of October 2006,
by
and between Armstrong World Industries, Inc., a Pennsylvania
corporation (the
"Corporation") and referred to herein as the "Indemnitor") and
[insert director
name] (the "Indemnitee").
WHEREAS, it is essential to the Corporation that the Corporation
retain
and attract as directors and officers the most capable persons
available; and
WHEREAS, Indemnitee is an officer and/or a member of the Board
of
Directors of the Corporation and in that capacity is performing a
valuable
service for the Corporation; and
WHEREAS, the Indemnitor has purchased and maintains one or more
policies of Directors and Officers Liability Insurance ("D & O
Insurance")
covering certain liabilities which may be incurred by directors and
officers in
their performance of services for the Corporation; and
WHEREAS, there is concern over the continued adequacy and
reliability
of D & O Insurance protection available to corporate directors
and officers; and
WHEREAS, the Corporation has provisions in both its Articles of
Incorporation and its Bylaws (together referred to herein as the
"Bylaw") which
provide for indemnification of and advancement of expenses to the
officers and
directors of the Corporation to the full extent permitted by law,
and the Bylaw
and the applicable indemnification statutes of the Commonwealth of
Pennsylvania
provide that they are not exclusive; and
WHEREAS, in recognition of Indemnitee's need for substantial
protection
against personal liability in order to induce and retain
Indemnitee's service to
the Corporation, the increasing difficulty in obtaining
satisfactory D & O
Insurance coverage, and Indemnitee's reliance on the Bylaw, and in
part to
provide Indemnitee with specific contractual assurance that the
protection
promised by the Bylaw will be available to Indemnitee (regardless
of, among
other things, any amendment to or revocation of the Bylaw or any
change in the
composition of the Corporation's Board of Directors or acquisition
transaction
relating to the Corporation), the Indemnitor wishes to provide in
this Agreement
for the indemnification of and the advancing of expenses to
Indemnitee to the
fullest extent (whether partial or complete) permitted by law on
the date hereof
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and as set forth in this Agreement, and, to the extent insurance is
maintained,
for the continued coverage of Indemnitee under the Indemnitor's D
& O Insurance
policies.
NOW, THEREFORE, in consideration of the premises and of
Indemnitee
agreeing to serve or continuing to serve the Corporation directly
or, at its
request, another enterprise, and intending to be legally bound
hereby, the
parties hereto agree as follows:
1.
INDEMNITY OF INDEMNITEE.
(a) The Indemnitor shall hold harmless and indemnify the
Indemnitee
against any and all reasonable expenses, including attorneys' fees,
and any and
all liability and loss, including judgments, fines, ERISA excise
taxes or
penalties and amounts paid or to be paid in settlement, incurred or
paid by
Indemnitee in connection with any threatened, pending or
contemplated action,
suit or proceeding, whether civil, criminal, administrative or
investigative
(hereinafter "a proceeding") and whether or not by or in the right
of the
Corporation or otherwise, to which the Indemnitee is, was or at any
time becomes
a party, or is threatened to be made a party or is involved (as a
witness or
otherwise) by reason of the fact that Indemnitee is or was a
director or officer
of the Corporation or is or was serving as director, officer,
trustee or
representative of another corporation or of a partnership, joint
venture, trust
or other enterprise, including service with respect to employee
benefit plans or
the Armstrong Foundation, whether the basis of such proceeding is
alleged action
in an official capacity, or in any other capacity while serving, as
a director,
officer, trustee or representative, unless the act or failure to
act giving rise
to the claim for indemnification is determined by a court to have
constituted
willful misconduct or recklessness; provided, however, that the
Indemnitor shall
indemnify the Indemnitee in connection with a proceeding (or part
thereof)
initiated by the Indemnitee (other than a proceeding to enforce the
Indemnitee's
rights to indemnification under this Agreement or otherwise) prior
to a Change
of Control, as defined in Section 2(e), only if such proceeding (or
part
thereof) was authorized by the Board of Directors of the
Corporation.
(b) Subject to the foregoing limitation concerning certain
proceedings
initiated by the Indemnitee prior to a Change of Control, the
Indemnitor shall
pay the expenses (including attorneys' fees) incurred by Indemnitee
in
connection with any proceeding in advance of the final disposition
thereof
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promptly after receipt by the Indemnitor of a request therefor
stating in
reasonable detail the expenses incurred or to be incurred.
(c) If a claim under paragraph (a) or (b) of this section is not
paid
in full by the Indemnitor within forty-five (45) days after a
written claim has
been received by the Corporation, the Indemnitee may, at any time
thereafter,
bring suit against the Indemnitor to recover the unpaid amount of
the claim. The
burden of proving that indemnification or advances are not
appropriate shall be
on the Indemnitor. The Indemnitee shall also be entitled to be paid
the expenses
of prosecuting such claim to the extent he or she is successful in
whole or in
part on the merits or otherwise in establishing his or her right
to
indemnification or to the advancement of expenses. The Indemnitor
shall pay such
fees and expenses in advance of the final disposition of such
action on the
terms and conditions set forth in Section 1(b).
2.
MAINTENANCE OF INSURANCE AND FUNDING.
(a) The Indemnitor represents that as of the present date, it has
in
force and effect one or more policies of D & O Insurance (the
"Insurance
Policies"), providing a minimum of $75,000,000 in coverage. Subject
only to the
provisions of Section 2(b) hereof, the Indemnitor agrees that, so
long as
Indemnitee shall continue to serve as an officer or director of the
Corporation
(or shall continue to serve as a director, officer, trustee or
representative of
another Armstrong corporation, partnership, joint venture, trust,
foundation or
other enterprise, including service with respect to an employee
benefit plan)
and thereafter so long as Indemnitee shall be subject to any
possible claim or
threatened, pending or contemplated action, suit or proceeding,
whether civil,
criminal or investigative, by reason of the fact that Indemnitee
was a director
or officer of the Corporation (or served in any of said other
capacities),
except as indicated in (b) below, the Indemnitor shall purchase and
maintain in
effect for the benefit of Indemnitee a binding and enforceable
policy or
policies of D & O Insurance providing coverage at least
comparable to that
provided pursuant to the Insurance Policies.
(b) The Corporation shall not be required to maintain said policy
or
policies of D & O Insurance in effect if, in the reasonable
business judgment of
the then directors of the Corporation (i) the premium cost for such
insurance is
substantially disproportionate to the amount of coverage, (ii) the
coverage
provided by such insurance is so limited by exclusions that there
is
insufficient benefit from such insurance or (iii) said insurance is
not
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otherwise reasonably available; provided however, that in the event
those
directors make such a judgment, the Indemnitor shall purchase and
maintain in
force a policy or policies of D & O Insurance in the amount and
with such
coverage as such directors determine to be reasonably available.
Notwithstanding
the general provisions of this Section 2(b), following a Change of
Control, any
decision not to maintain any policy or policies of D & O
Insurance or to reduce
the amount or coverage under any such policy or policies shall be
effective only
if there are "disinterested directors" (as defined in Section 2(e)
hereof) and
shall require the concurrence of a majority of such "disinterested
directors."
(c) If and to the extent the Indemnitor, acting under Section
2(b),
does not purchase and maintain in effect the policy or policies of
D & O
Insurance described in Section 2(a), the Indemnitor shall indemnify
and hold
harmless the Indemnitee to the full extent of the coverage which
would otherwise
have been provided by such policies. The rights of the Indemnitee
hereunder
shall be in addition to all other rights of Indemnitee under the
remaining
provisions of this Agreement.
(d) In the event of a Potential Change of Control or if and to
the
extent the Indemnitor is not required to maintain in effect the
policy or
policies of D & O Insurance described in Section 2(a) pursuant
to the provisions
of Section 2(b), the Indemnitor shall, upon written request by
Indemnitee,
create a "Trust" for the benefit of Indemnitee and from time to
time, upon
written request by Indemnitee, shall fund such Trust in an amount
sufficient to
pay any and all expenses, including attorneys' fees, and any and
all liability
and loss, including judgments, fines, ERISA excise taxes or
penalties and
amounts paid or to be paid in settlement actually and reasonably
incurred by
Indemnitee or on his or her behalf for which the Indemnitee is
entitled to
indemnification or with respect to which indemnification is
claimed, reasonably
anticipated or proposed to be paid in accordance with the terms of
this
Agreement or otherwise; provided that in no event shall more than
$100,000 be
required to be deposited in any Trust created hereunder in excess
of the amounts
deposited in respect of reasonably anticipated expenses, including
attorneys'
fees. The amounts to be deposited in the Trust pursuant to the
foregoing funding
obligation shall be determined by the Reviewing Person whose
determination shall
be final and conclusive. The Reviewing Person shall have no
liability to the
Indemnitee for his or her decisions hereunder. The terms of the
Trust shall
provide that upon a Change of Control (i) the Trust shall not be
revoked or the
principal thereof invaded, without the written consent of the
Indemnitee, (ii)
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the Trust shall advance, within two business days of a request by
the
Indemnitee, any and all expenses, including attorneys' fees, to the
Indemnitee
(and the Indemnitee hereby agrees to reimburse the Trust under the
circumstances
under which the Indemnitee would be required to reimburse the
Indemnitor under
Section 5 of this Agreement), (iii) the Trust shall continue to be
funded by the
Indemnitor in accordance with the funding obligation set forth
above, (iv) the
Trustee shall promptly pay to the Indemnitee all amounts for which
the
Indemnitee shall be entitled to indemnification pursuant to this
Agreement or
otherwise, and (v) all unexpended funds in such Trust shall revert
to the
Indemnitor upon a final determination by the Reviewing Party or a
court of
competent jurisdiction, as the case may be, that the Indemnitee has
been fully
indemnified under the terms of this Agreement. The Trustee shall be
a bank or
trust company or other individual or entity chosen by the
Indemnitee and
acceptable to and approved of by the Indemnitor.
(e) For the purposes of this Agreement:
(i) a "Change of Control" shall occur if, after the date
hereof, (A) any person acquires "beneficial ownership" of more than
28% of the
then outstanding "voting stock" of the Corporation and within five
years
thereafter, "disinterested directors" no longer constitute at least
a majority
of its entire Board of Directors or (B) there shall occur a
"business
combination" with an "interested shareholder" not approved by a
majority of the
"disinterested directors".
(ii) a "Potential Change of Control" shall occur if (A) the
Corporation enters into an agreeme
