Exhibit 10.23






Exhibit No. 10.23




Armstrong World Industries Inc.




2008 Directors Stock Unit Plan



Adopted by Armstrong World Industries, Inc. Board of Directors on April 11, 2008



I. Purpose




The purposes of this 2008 Directors Stock Unit Plan (the “Plan”) are to promote the growth and
profitability of Armstrong World Industries, Inc. (the “Corporation”) by increasing the mutuality
of interests between directors and the shareholders of the Corporation.



II. Definitions




The following terms shall have the meanings shown:




	 	2.1	 	“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”).
	 
	 	2.2	 	“Board” shall mean the Board of Directors of the Corporation.
	 
	 	2.3	 	“Change in Control Event” shall mean the occurrence of the event set forth in any one of
the following paragraphs with respect to the Corporation:






	 	(a)	 	Any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of
the Corporation (not including in the securities beneficially owned by such Person any securities
acquired directly from the Corporation or its affiliates) representing 20% or more of either the
then outstanding shares of common stock of the Corporation or the combined voting power of the
Corporation’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner
in connection with a transaction described in clause (i) of paragraph (c) below; or
	 
	 	(b)	 	The following individuals cease for any reason to constitute a majority of the number of
directors then serving: individuals who, on the date hereof, constitute the Board and any new
director (other than a director whose initial assumption of office is in connection with an actual
or threatened election contest, including but not limited to a consent solicitation, relating to
the election of directors of the Corporation) whose appointment or election by the Board or
nomination for election by the Corporation’s shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors on the date hereof
or whose appointment, election or nomination for election was previously so approved; or
	 
	 	(c)	 	There is consummated a merger or consolidation of the Corporation (including a
triangular merger to which the Corporation is a party) with any other corporation other than (i) a
merger or consolidation which would result in the voting securities of the Corporation outstanding
immediately prior to such merger or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity or any parent
thereof) at least 66 2/3% of the combined voting power of the voting securities of the Corporation
or such surviving entity or any parent thereof outstanding immediately after such merger or
consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of
the Corporation (or similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Corporation (not including in the securities
Beneficially Owned by such Person any securities acquired directly from the Corporation or its
subsidiaries) representing 20% or more of either the then outstanding shares of common stock of the
Corporation or the combined voting power of the Corporation’s then outstanding securities; or



 


 









 






	 	(d)	 	The shareholders of the Corporation approve a plan of complete liquidation or dissolution
of the Corporation or there is consummated an agreement for the sale or disposition by the
Corporation of all or substantially all of the Corporation’s assets, other than a sale or
disposition by the Corporation of all or substantially all of the Corporation’s assets to an
entity, at least 75% of the combined voting power of the voting securities of which are owned by
shareholders of the Corporation in substantially the same proportions as their ownership of the
Corporation immediately prior to such sale. Notwithstanding the foregoing, no “Change in Control”
shall be deemed to have occurred if there is consummated any transaction or series of integrated
transactions immediately following which the record holders of the common stock of the Corporation
immediately prior to such transaction or series of transactions continue to have substantially the
same proportionate ownership in an entity which owns all or substantially all of the assets of the
Corporation immediately following such transaction or series of transactions.






	 	2.4	 	“Committee” shall mean the Nominating and Governance Committee of the Board, or any
successor committee.
	 
	 	2.5	 	“Common Stock” shall mean Common Stock of the Corporation.
	 
	 	2.6	 	“Delivery Date” shall have the meaning set forth in Section 4.4(b).
	 
	 	2.7	 	“Fair Market Value” shall mean the closing price of the Common Stock on the stock exchange
on which the Common Stock is listed on the relevant date, or, if no sale shall have been made on
such exchange on that date, the closing price on the following day on which there was a sale.
	 
	 	2.8	 	“Participant” shall mean a non-employee director to whom Units are granted under the Plan.
	 
	 	2.9	 	“Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the
Corporation or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under
an employee benefit plan of the Corporation or any of its subsidiaries, (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities, (iv) a corporation
owned, directly or indirectly, by the shareholders of the Corporation in substantially the same
proportions as their ownership of stock of the Corporation, or (v) an entity or entities which are
eligible to file and have filed a Schedule 13G under Rule 13d-1(b) of the Exchange Act, which
Schedule indicates beneficial ownership of 15% or more of the outstanding shares of common stock of
the Corporation or the combined voting power of the Corporation’s then outstanding securities.
	 
	 	2.10	 	“Unit” shall mean a right granted by the Committee pursuant to Section 4.1 to receive one
share of Common Stock as of a specified date, which right may be made conditional upon the
occurrence or nonoccurrence of other specified events as herein provided.



 


 









 






	 	2.11	 	“Section 409A Change in Control Event” shall mean the
first to occur of any of the following events with respect to the Corporation:






	 	(a)	 	Any one person, or more than one person acting as a group (as determined for
purposes of 13d-3 of the Securities Exchange Act of 1934, as amended), acquires
ownership of stock of the Corporation that, together with stock held by such
person or group, constitutes more than 50% of the total fair market value or
total voting power of the stock of the Corporation. However, if any one person,
or more than one person acting as a group, is considered to own more than 50% of
the total fair market value or total voting power of the stock of the
Corporation, the acquisition of additional stock by the same person or persons
is not considered to cause a change in the ownership of the Corporation (or to
cause a change in the effective control of the corporation (as determined for
purposes of 13d-3 of the Securities Exchange Act of 1934, as amended). An
increase in the percentage of stock owned by any one person, or persons acting
as a group, as a result of a transaction in which the Corporation acquires its
stock in exchange for property will be treated as an acquisition of stock for
purposes of this paragraph. This paragraph applies only when there is a
transfer of stock of the Corporation (or issuance of stock of the Corporation)
and stock in the Corporation remains outstanding after the transaction.
	 
	 	(b)	 	(i) Any one person, or more than one person acting as a group (as determined
for purposes of 13d-3 of the Securities Exchange Act of 1934, as amended),
acquires (or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or persons) ownership of stock of the
Corporation possessing 30% or more of the total voting power of the stock of the
Corporation; or (ii) A majority of members of the Corporation’s Board of
Directors is replaced during any 12-month period by directors whose appointment
or election is not endorsed by a majority of the members of the Corporation’s
Board of Directors before the date of the appointment or election.
	 
	 	 	 	Notwithstanding the foregoing, if any one person, or more than one person acting
as a group, is considered to effectively control the Corporation (as determined
for purposes of 13d-3 of the Securities Exchange Act of 1934, as amended), the
acquisition of additional control of the Corporation by the same person or
persons is not considered to cause a change in the effective control of the
Corporation (or to cause a change in the ownership of the Corporation within the
meaning of Treas. Reg. §1.409A-3(i)(5)(v)).
	 
	 	(c)	 	Any one person, or more than one person acting as a group (as determined for
purposes of 13d-3 of the Securities Exchange Act of 1934, as amended), acquires (or has
acquired during the 12-month period ending on the date of the most recent acquisition
by such person or persons) assets from the Corporation that have a total gross fair
market value equal to or more than 40% of the total gross fair market value of all of
the assets of the Corporation immediately before such acquisition or acquisitions. For
this purpose, gross fair market value means the value of the assets of the Corporation,
or the value of the assets being disposed of, determined without regard to any
liabilities associated with such assets. Notwithstanding the foregoing, there is no
change in control event when there is a transfer to an entity that is controlled by the
shareholders of the Corporation immediately after the transfer. A transfer of assets
by the Corporation is not treated as a change in the ownership of such assets if the
assets are transferred to: (i) a shareholder of the Corporation (immediately before the
asset transfer) in exchange for or with respect to its stock; (ii) an entity, 50% or
more of the total value or voting power
of which is owned, directly or indirectly, by the Corporation; (iii) a person, or more
than one person acting as a group, that owns, directly or indirectly, 50% or more of
the total value or voting power of all the outstanding stock of the Corporation; or
(iv) an entity, at least 50% of the total value or voting power of which is owned,
directly or indirectly, by a person described in (iii) of this paragraph.



 


 









 











III. General





	 	3.1	 	Administration. The Plan may be administered by the Board or, if delegated, to the
Committee. Administration shall be delegable to the extent provided by law. If authority is
delegated to the Committee, the following provisions would apply:






	 	(a)	 	Each member of the Committee shall at the time of any action under the Plan be a
“disinterested person” as then defined under Rule 16b-3 under the Exchange Act or any successor
rule.
	 
	 	(b)	 	The Committee shall have the authority in its sole discretion from time to time: (i) to
make discretionary grants of Units to eligible directors as provided herein; (ii) to prescribe such
terms, conditions, limitations and restrictions, not inconsistent with the Plan, applicable to any
grant as deemed appropriate; and (iii) to interpret the Plan, to adopt, amend and rescind rules and
regulations relating to the Plan, and to make all other determinations and take all other action
necessary or advisable for the implementation and administration of the Plan. A majority of the
Committee shall constitute a quorum, and the action of a majority of the members of the Committee
present at any meeting at which a quorum is present, or acts unanimously adopted in writing without
the holding of a meeting, shall be the acts of the Committee.
	 
	 	(c)	 	All such actions shall be final, conclusive and binding upon the Participant. No member of
the Committee shall be liable for any action taken or decision made in good faith relating to the
Plan or any grant thereunder.






	 	3.2	 	Eligibility. A grant of Units under the Plan may be made to any non-employee
director of the Corporation.
	 
	 	3.3	 	Aggregate Limit on Grants. The aggregate number of shares of Common Stock which
may be issued in connection with Units granted under the Plan shall not exceed 300,000 shares,
subject to adjustments pursuant to Sections 5.4 and 5.5. Shares subject to grants under this Plan
may either be authorized but unissued shares or previously issued shares that have been reacquired
by the Corporation. Shares authorized under the Plan may be used to satisfy obligations of the
Corporation for units granted under the 2006 Phantom Stock Unit Plan based upon election by
Participants holding such units.



 


 









 






	 	3.4	 	Election to Satisfy Units under the 2006 Plan. Participants who hold units granted
under the 2006 Phantom Stock Unit Plan may elect to have the Corporation satisfy its payment
obligations in respect of such units in the same manner in which the Corporation satisfies its
payment obligations for units granted under this Plan, e.g., by delivering one share of common
stock for each unit granted under that plan out of the reserve for shares authorized for issuance
under this Plan. Payments to Participants who have made such election in respect of units under
that 2006 Plan will be made according to the terms of this Plan.
	 
	 	3.5	 	Term. Grants under this Plan may be made through October 2017. No further grants
may be made after that date unless shareholders have approved an extension of the Plan.





IV. Units





	 	4.1	 	Grant of Units. Each non-employee director of the Corporation shall be granted the
number of Units set forth below, contingent upon their service on the Board in such capacity on the
date of grant:






	 	(a)	 	Annual Grants. On the first business day following the first regular Board meeting
following the annual meeting of shareholders, each non-employee director shall be granted a number
of Units equal to (i) 55% of the total compensation payable to the non-employee director as an
annual retainer divided by (ii) the Fair Market Value of a share of Common Stock on that date,
rounded to the next highest whole number.
	 
	 	(b)	 	Discretionary Grants. Units may also be granted at such times, and in amounts to
such eligible non-employee directors, upon such terms and conditions as are deemed appropriate.
	 
	 	(c)	 	Pro-rated Grants. In the case of a non-employee director who is elected other
than at the annual meeting of shareholders, the Board may pro-rate the amount of the annual grant
of stock Units awarded to such director to correspond to the period of the time to be served by the
director between such director’s election and the next annual meeting of shareholders.






	 	4.2	 	Grant Agreements. The grant of any Units shall be evidenced by a written agreement
executed by the Corporation and the Participant, stating the number of Units granted and such other
terms and conditions of the grant as the Board or the Committee may from time to time determine.
The Plan has been written with the intent of complying with Section 409A of the U.S. Internal
Revenue Code. However, if any grant shall be deemed to constitute a deferral of compensation
subject to said section, in the discretion of the Committee, the grant may be unilaterally modified
to comply with the requirements of said section or cancelled.
	 
	 	4.3	 	Optional Terms and Conditions of Units. To the extent not inconsistent with the
Plan, the Board or the Committee may prescribe such terms and conditions applicable to any grant of
Units as it may in its discretion determine.



 


 









 






	 	4.4	 	Standard Terms and Conditions of Units. Unless otherwise determined by the Board
or the Committee pursuant to Section 4.3, each grant of Units shall be made on the following terms
and conditions, in addition to such other terms, conditions, limitations and restrictions as the
Board or Committee, in its discretion, may determine to prescribe:






	 	(a)	 	Vesting. The date on which each Unit shall vest, contingent upon the Participant’s
continued service as a director of the Corporation on such date, shall be the earlier of:






	 	(i)	 	the one-year anniversary of the grant;
	 
	 	(ii)	 	the death or total and permanent disability of the Participant; or
	 
	 	(iii)	 	the date of any Change in Control Event.






	 	(b)	 	Delivery Date. The date on which each vested Unit shall be paid (“Delivery Date”)
shall be the earlier of:






	 	(i)	 	the six-month anniversary of the director’s separation from service from the Corporation
for any reason other than a removal for cause; or
	 
	 	(ii)	 	the date of any Change in Control Event, provided that Participant is a director of the
Corporation on such date and that such Change in Control Event also qualifies as a Section 409A
Change in Control Event.
	 
	 	 	 	Upon the Delivery Date, the Corporation shall deliver to the Participant
shares of Common Stock in payment for the vested Units, with one share of
Common Stock delivered for each vested Unit.






	 	(c)	 	Forfeiture of Units. Upon the effective date of a separation of the
Participant’s service as a director with the Corporation for cause, as determined by the Board or
the Committee, all Units for which the Delivery Date has not occurred, whether or not vested, shall
immediately be forfeited to the Corporation without consideration or further action being required
of the Corporation. Upon the effective date of a separation of the Participant’s service as a
director with the Corporation for any reason other than cause, as determined by the Board or the
Committee, all unvested Units shall immediately be forfeited to the Corporation without
consideration or further action being required of the Corporation. For purposes of the two
immediately preceding sentences, the effective date of the Participant’s separation shall be the
date on which the Participant ceases to perform services as a director of the Corporation as
determined under Section 409A of the Code.
	 
	 	(d)	 	Dividend Equivalents. If an award of Units is outstanding as of the record date
for determination of the shareholders of the Corporation entitled to receive a cash dividend on its
outstanding shares of Common Stock, Participants shall be entitled to dividend equivalents as
described in this subsection (d). In the event of such a cash dividend, a Participant shall
receive a cash payment in an amount equal to (i) the per share amount of such dividend, multiplied
by (ii) the number of the Participant’s outstanding Units, which shall be paid on the payment date
for such dividend, provided the Participant is serving as a director of the Corporation on such
date. If a Participant separated from service for any reason other than a removal for cause and
the Participant’s vested Units have not yet been paid pursuant to section 4.4(b) on the record date
for the cash dividend, the Participant shall be entitled to receive a cash payment in an amount
equal to (i) the per share amount of such dividend, multiplied by (ii) the number of the
Participant’s outstanding vested Units, which shall be paid on the payment date for such dividend.



 


 









 












	 	4.5	 	Transfer Restriction. No Unit shall be assignable or transferable by another than
by will, or if the Participant dies intestate, by the laws of descent and distribution of the state
of domicile at the time of death.





V. Miscellaneous





	 	5.1	 	No Right to Continued Service. Nothing in the Plan or in any agreement entered
into pursuant to the Plan shall confer upon any Participant the right to continue in the service as
a director of the Corporation or affect any right which the Corporation or its shareholders may
have to elect or remove directors.
	 
	 	5.2	 	Non-Uniform Determinations. The Board’s or Committee’s determinations under the
Plan need not be uniform and may be made by it selectively among persons who receive, or are
eligible to receive, grants under the Plan, whether or not such persons are similarly situated.
	 
	 	5.3	 	No Rights as Shareholders. Recipients of grants under the Plan shall have no
rights as shareholders of the Corporation with respect thereto until shares of Common Stock are
delivered in payment therefor.
	 
	 	5.4	 	Adjustments of Stock. In the event of any change or changes in the outstanding
Common Stock, the Committee shall in its discretion appropriately adjust the number of Units which
may be granted under the Plan, the number of Units subject to grants made under the Plan and any
and all other matters deemed appropriate by the Committee.
	 
	 	5.5	 	Reorganization. In the event that the outstanding Common Stock shall be changed in
number, class or character by reason of any split-up, change of par value, stock dividend,
combination or reclassification of shares, merger, consolidation or other corporate change, or
shall be changed in value by reason of any spin-off, dividend in partial liquidation or other
special distribution, the Board or the Committee shall make such changes as it may deem equitable
in outstanding Units granted pursuant to the Plan and the number and character of Units available
for future grants.
	 
	 	5.6	 	Amendment or Termination of the Plan. The Board may at any time terminate the Plan
and may from time to time amend the Plan as it may deem advisable; provided, however, that approval
of the shareholders of the Corporation will be required for any amendment:






	 	(a)	 	To increase the total number of shares issuable under the Plan under Section 3.3 (except
for adjustments under Section 5.4 or 5.5); or
	 
	 	(b)	 	That would otherwise constitute a “material revision” within the meaning of applicable
rules of the New York Stock Exchange in effect at that time.



 


 









 











An amendment of this Plan will, unless the amendment provides otherwise, be immediately and
automatically effective for all outstanding grants. The Board may also amend any outstanding grants
under this Plan, provided the grants, as amended, contain only such terms and conditions as would
be permitted or required for a new grant under this Plan.





	 	5.7	 	Governing Law. This Plan will be governed by the laws of the
Commonwealth of Pennsylvania, without regard to any conflict of law
rules.





(Amendments adopted August 5, 2010, effective November 30, 2010)




(Amendments adopted November 23, 2010, effective November 23, 2010)