EXHIBIT 10(iii)(q)
INDEMNIFICATION AGREEMENT
FOR
DIRECTORS AND OFFICERS OF ARMSTRONG HOLDINGS,
INC.
This Agreement is made effective as
of the day
of [month/year], by and among Armstrong Holdings, Inc., a
Pennsylvania corporation (the “Corporation”), Armstrong
World Industries, Inc., also a Pennsylvania corporation (the
“Subsidiary,” and together with the Corporation
referred to as the “Indemnitors”) and [NAME]
(the “Indemnitee”).
WHEREAS, it is essential to the
Corporation and the Subsidiary 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,
which inures to the benefit of the Subsidiary; and
WHEREAS, the Indemnitors have
purchased and maintain 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 a bylaw
(the “Bylaw”) which provides for indemnification of and
advancement of expenses to the officers and directors of the
Corporation 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, 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 Bylaws or any change
in the composition of the Corporation’s Board of Directors or
acquisition transaction relating to the
Corporation), the Indemnitors wish 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 and as set forth in this Agreement, and,
to the extent insurance is maintained, for the continued coverage
of Indemnitee under the Indemnitors’ 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:
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1.
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Indemnity
of Indemnitee .
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(a) The Indemnitors 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 at the request of the Corporation 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, 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 Indemnitors 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 Indemnitors shall pay
the expenses (including attorneys’ fees) incurred
by
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Indemnitee in connection with any proceeding in
advance of the final disposition thereof promptly after receipt by
the Indemnitors 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 Indemnitors
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 Indemnitors to recover the unpaid amount of
the claim. The burden of proving that indemnification or advances
are not appropriate shall be on the Indemnitors. 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 Indemnitors
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).
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2.
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Maintenance of Insurance and
Funding .
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(a) The Indemnitors represent that
as of the present date, they have in force and effect various
policies of D & O Insurance (the “Insurance
Policies”), with total aggregate limits of $150 million.
Subject only to the provisions of Section 2(b) hereof, the
Indemnitors agree that, so long as Indemnitee shall continue to
serve as an officer or director of the Corporation (or shall
continue at the request of the Corporation to serve as a director,
officer, trustee or representative of another Armstrong
corporation, partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan) and,
subject to the provisions of Armstrong World Industries,
Inc.’s plan of reorganization in its Chapter 11 case
concerning its payment of D & O insurance premiums for persons
who served as directors of the Corporation during that case,
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 Indemnitors 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.
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(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 otherwise reasonably
available; provided however, that in the event those directors make
such a judgment, the Indemnitors 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
Indemnitors, acting under Section 2(b), do not purchase and
maintain in effect the policy or policies of D & O Insurance
described in Section 2(a), the Indemnitors shall indemnify and
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