Document:

Filed by Bowne Pure Compliance

Exhibit No. 10.18

Armstrong World Industries Inc.

2006 Phantom Stock Unit Plan

	I.	 	Purpose

The purposes of this 2006 Phantom 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:

	 	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.	 	“Board” shall mean the Board of Directors of the Corporation.
	 
	 	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.

	 	4.	 	“Committee” shall mean the Nominating and Governance Committee of the
Board, or any successor committee.
	 
	 	5.	 	“Common Stock” shall mean Common Stock of the Corporation.
	 
	 	6.	 	“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.

 

 

 

	 	7.	 	“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.
	 
	 	8.	 	“Unit” shall mean a right granted by the Committee pursuant to
Section 4.1 to receive the Fair Market Value of a 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.
	 
	 	9.	 	“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 Rule 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 Rule 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 Rule 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 Rule 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 Rule 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

	 	1.	 	Administration. The Plan may be administered by the Board or,
if delegated, to the Committee, in which case 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 award Units to eligible directors as
provided herein; (ii) to prescribe such terms, conditions, limitations and
restrictions, not inconsistent with the Plan, applicable to any such award
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 participating director. No member of the Committee shall
be liable for any action taken or decision made in good faith relating to
the Plan or any award thereunder.

	 	2.	 	Eligibility. The Board or the Committee may award Units under
the Plan to any outside director of the Corporation.

	 	3.	 	Aggregate Limitation on Awards. The aggregate number of Units
which may be awarded under the Plan shall not exceed 150,000 Units, subject to
adjustments pursuant to Sections 5.4 and 5.5. If any Unit is surrendered or
forfeited to the Corporation for any reason prior to payment thereof, such Unit
shall again be available for award under the Plan.

	IV.	 	Units

	 	1.	 	Award of Units. Each outside director of the Corporation
shall be awarded the number of Units set forth below, contingent upon their
service on the Board in such capacity on the date of award:

	 	(a)	 	On October 23, 2006, the number of units equal to (i) $85,000, divided by (ii)
the Fair Market Value of a share of Common Stock on the date of award, rounded to
the next highest whole number; and

 

 

	 	(b)	 	On October 22, 2007, the number of units equal to (i) $85,000, divided by
(ii) the Fair Market Value of a share of Common Stock on the date of award, rounded
to the next highest whole number.

In addition, discretionary awards of Units may be made under the Plan.

	 	2.	 	Award Agreements. The award of any Units shall be evidenced
by a written agreement executed by the Corporation and the awardee, stating the
number of Units awarded and such other terms and conditions of the award as the
Board or the Committee may from time to time determine.

	 	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 award of Units as it may in its discretion
determine; provided, however that the terms and conditions of any award of Units
shall be such that the Units shall not constitute “equity securities” of the
Corporation for purposes of Section 16 of the Exchange Act.

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

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

(i) the one-year anniversary of the award of the Units; or

(ii) the date of any Change in Control Event.

	 	b.	 	Payment Date. The date on which each vested
Unit shall become payable (“Payment 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 awardee 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 Payment Date, the Corporation shall pay to the awardee in cash an
amount equal to the number of vested Units on that date multiplied by the
Fair Market Value on the Payment Date of a share of Common Stock.

 

 

 

	 	c.	 	Forfeiture of Units. Upon the effective date
of a separation of the awardee’s service as a director with the
Corporation for cause, as determined by the Board or the Committee, all
Units for which the Payment 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 awardee’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 awardee’s separation shall be the date on which the
awardee 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, the awardee shall be entitled to a cash payment in
an amount equal to (a) the per share amount of such dividend, multiplied
by (b) the number of outstanding Units awarded, which amount shall be
payable on the six-month anniversary of the awardee’s separation from
service from the Corporation, without interest.

	 	5.	 	Transfer Restriction. No Unit shall be assignable or
transferable by an awardee other than by will, or if the awardee dies intestate,
by the laws of descent and distribution of the state of domicile of the awardee at
the time of death. All units shall be payable during the lifetime of the awardee.

	V.	 	Miscellaneous

	 	1.	 	No Right to Continued Service. Nothing in the Plan or in any
agreement entered into pursuant to the Plan shall confer upon any awardee 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.
	 
	 	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, awards under
the Plan, whether or not such persons are similarly situated.
	 
	 	3.	 	No Rights as Shareholders. Recipients of awards under the
Plan shall have no rights as shareholders of the Corporation with respect thereto.
	 
	 	4.	 	Adjustments of Stock. In the event of any change or changes
in the outstanding Common Stock, the Board or the Committee may in its discretion
appropriately adjust the number of Units which may be awarded under the Plan, the
number of Units subject to awards outstanding under the Plan and any and all other
matters deemed appropriate by the Committee.

 

 

 

	 	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 awarded pursuant to the Plan and the number and
character of Units available for future awards.
	 
	 	6.	 	Amendment or Termination of the Plan. The Committee or 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 without shareholder approval,
the Board or the Committee may not amend the Plan in a manner which would cause
Units to be treated as “equity securities” of the Corporation for purposes of
Section 16 of the Exchange Act. The termination or amendment of the Plan shall
not, without the consent of the awardee, affect such awardee’s rights under an
award previously granted, but may eliminate or reduce any rights or expectation of
future awards.Filed by Bowne Pure Compliance

Exhibit No. 10.27

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 regular meeting
of the Board each October (or if there is no regular meeting scheduled
in that month, then the last business day of that month), 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.

 

 

 

	 	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, the awardee shall be entitled to a cash payment in an
amount equal to (a) the per share amount of such dividend, multiplied
by (b) the number of outstanding Units awarded to be paid on the
payment date for such dividend, provided the Participant is serving as
a director of the Corporation on such date.

	 	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.

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