Document:

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                                                              EXHIBIT 10(iii)(b)

                                                        [Translation]

                                 [Letterhead]

DLW Aktiengesellschaft          August 2, 1999
Dr. Pelz
Stuttgarter Str. 75

74321 Bietigheim-Bissingen

Telefax-No.:  07142/71 270

Dear Dr. Pelz,

Service Agreement

Paragraph 6, section 1 of the service agreement which has already been signed by
me reads as follows:

"If you leave the Company due to (a) permanent disability; (b) at the end of
your 65th year, or (c) termination through no fault of your own,

You will receive a pension according to the following formula...."

This provision is to be interpreted such that its contents are the following:

"According to paragraph 6, section 2 through section 5 you will receive the
agreed upon pension under the following provisions

a)    if you leave because of permanent disability

b)    if your current contract which expires on March 31, 2002, is terminated by
      the Company on or prior to March 31, 2002, and/or if your contract as
      member of the board of
<PAGE>

                                      2                          [Translation]

     the company is terminated prior to March 31, 2002, and thus the service
     agreement is automatically terminated (number 1 of the service agreement)

c)   if the Company does not extend the service agreement beyond March 31, 2002,
     once or several times up to the end of your 65/th/ year or if such
     agreement is ended prior to its expiration date due to reasons mentioned
     under b)

d)   at the end of your 65/th/ year.

There is no entitlement for pension payments prior to the end of your /65th/
year resulting from b) and c), if the prior termination of the service agreement
or its non-extension is deemed to be your fault."

The above explanations are based on a circular decision of the presidial
committee.

This clarification related to the interpretation of paragraph 6, section 1 of
the service agreement is valid only in combination with the service agreement.
May I therefore ask you to sign and return to me the second copy of your service
agreement and the second copy of this contract. Also I am asking you to initial
every page.

Kind regards,                                                Dr. Bernd F. Pelz

  /s/                                                           /s/
________________                                             ___________________

Dr. Dirk Dirksen                                                August 8, 1999
<PAGE>

                                                                   [Translation]

Private/Confidential
--------------------

Dr. Bernd F. Pelz
-Chairman of the Board
of DLW AG -
Stuttgarter Strabe 75

Frankfurt am Main, May 14, 1999

Service Agreement

Dear Dr. Pelz:

The following details the provisions of the transition service agreement that
you discussed with Bob Shannon on December 21, 1998. This is a transition
service agreement between you and DLW AG (the "Company"), a subsidiary of
Armstrong World Industries, Inc., U.S.A., concerning your service as chairman of
the board of the Company. This agreement includes the following provisions:

1.  This agreement will be effective from January 1, 1999 until March 31, 2002.
    This agreement expires in any event - even before this date - with the end
    of your service as member of the board of the Company.

<PAGE>

                                      -2-                        [Translation]

2.  Your annual base salary will be DM 500,000, subject to annual review on
    April 1 of each year beginning April 1, 2000.

3.  With effect as of January 1, 1999, you will participate in the Management
    Achievement Plan of Armstrong as amended from time to time in the sole
    discretion of Armstrong. Our target bonus award will be 50% of your annual
    actual base salary earnings. The Management Achievement Plan document
    contains the rules and parameters of the programs under which a bonus
    payment will be made for 1999. Your bonus opportunity will be based 30% on
    Armstrong Corporate EVA results and 70% on Floor Products Europe/DLW Floors.

    For calendar year 1999, a minimum bonus payment of DM250,000 will be
    guaranteed.

    Bonus payments in prior years do not give rise to an obligation for bonus
    payments in subsequent years.

4.  Vacation:  Five weeks
    --------

5.  Illness:  Six months of salary continuation, not to extend beyond the end of
    -------
    this agreement.

    Death:  Your widow or children shall receive full base salary for a period
    -----
    of three months, starting the month after death occurred, as well as a
    prorated bonus in accordance with Section 3 for the three months.

6.  Retirement:  If you leave the Company due to (a) permanent disability; (b)
    ----------
    age 65; or (c) termination through no fault of your own, you will receive a
    pension according to the following formula:
<PAGE>

                                      -3-                         [Translation]

     45 % of your annual base salary at the time of retirement,

     this amount increases at 1% per year for each full year of service, up to
     60%.

If you are permanently disabled within the next five years, the amount will
automatically become 60% of your annual base salary.

The pension will increase in the same manner as any increase in the salary of a
senior federal civil servant to account for inflation.

In the case of termination through no fault of your own pursuant to letter (C),
your salary from other professional activities shall be set off against the
pension to the extent the salary exceeds the annual base salary set forth in
paragraph 2.

7.   Bonus during retirement:  In the cases set out in paragraph 6 you will
     -----------------------
     receive a bonus in the following manner in addition to your pension. All
     payments will be made based upon the actual bonus you received in your
     final year of active full time employment:

     a)   For each year in which you retire, you will receive a full bonus based
          upon the prior year's results;

     b)   For the year following retirement, you will receive a full bonus for
          the number of months you worked full time in the previous year, plus
          75% of the bonus for months you did not work;

     c)   For the third year of retirement, you will receive one half of the
          full bonus;

     d)   For the fourth year of retirement, you will receive one quarter of the
          full bonus.

8.   Widow's Pension:  Upon your death, your wife will receive 60% of your
     ---------------
     pension for life. This shall cease upon remarriage  or death.
<PAGE>

                                     -4-                           [Translation]

9.   Voluntary resignation:  Should you leave the Company voluntarily before you
     ---------------------
     reach age 65 due to reasons not listed in paragraph 6 above, then
     compensations and benefits provided under this agreement shall cease. You
     shall become entitled to your maintenance settlement if and so far as the
     legal requirements for nonforfeitability are met.

10.  The undertaking not to compete between you and the Company dated October
     13, 1989 shall remain unaffected. Apart from that, this agreement
     supersedes all oral statements and prior writings between you and the
     Company. Any modifications or additions to this agreement have to be in
     writing.

If the above is acceptable, please sign both copies of this letter of agreement
and return one copy to me for our file.

          Sincerely,

/s/
_______________________________________________
          Dr. Burkhardt Meister
-President of the Supervisory Board of DLW AG -

Accepted:

Dated:  June 10, 1999
        ---------------

Signature:  /s/_________________________
             Dr. Bernd F. Pelz<PAGE>

                                                              EXHIBIT 10(iii)(d)

                          MANAGEMENT ACHIEVEMENT PLAN

                    PLAN TEXT AND ADMINISTRATIVE GUIDELINES

                         ADOPTED BY BOARD OF DIRECTORS

                               NOVEMBER 28, 1983

                         AS AMENDED DECEMBER 13, 1999
<PAGE>

                       ARMSTRONG WORLD INDUSTRIES, INC.
                       --------------------------------

                MANAGEMENT ACHIEVEMENT PLAN FOR KEY EXECUTIVES
                ----------------------------------------------

                                  (PLAN TEXT)
                                  -----------

1.   Purpose
     -------

     The Armstrong World Industries, Inc. (the "Company") Management Achievement
     Plan (the "Plan") is designed to promote the financial success of the
     Company by recognizing the significant contributions individual employees
     can make to the achievement of Company goals. Its objectives are to
     motivate key Company and subsidiary employees to produce outstanding
     results by providing the opportunity to earn financial rewards in relation
     to the attainment of corporate and business unit goals.

     The Plan is based on the concept that the Company establishes for each
     participant at the beginning of the year a target incentive award based on
     the achievement of specific corporate and business unit goals. When the
     year is over, the results actually achieved will be evaluated against these
     goals to determine the amount, if any, of additional compensation earned by
     individuals participating in the Plan.

2.   Administration
     --------------

     The Plan shall be administered by the Management Development and
     Compensation Committee (the "Committee") of the Board of Directors with the
     advice and counsel of the Chief Executive Officer of the Company.
     Designated subsidiary companies may adopt this Plan. Subject to compliance
     with the requirements of Section 162(m) of the Internal Revenue Code for
     deductibility of awards, the Board may amend or terminate the Plan from
     time to time so long as the amendment or termination does not adversely
     affect any rights or obligations with respect to awards for the then
     current year or any prior year which has not yet been paid.

3.   Eligibility
     -----------

     The intent of the Plan is to extend participation only to those key
     employees whose duties and responsibilities give them the opportunity to
     make a continuing material and
<PAGE>

                                      -2-

     substantial impact on the achievement of organization goals. The Chief
     Executive Officer will annually determine the non-officer participants and
     recommend officer participants to the Committee.

4.   Incentive Awards
     ----------------

     A)  At the beginning of each year, the Chief Executive Officer shall
         present to the Committee criteria for evaluating performance against
         corporate and business unit goals for the purposes of determining the
         incentive awards which shall be paid for the year.

     B)  At the same time, the Chief Executive Officer shall recommend to the
         Committee a target award expressed as a percentage of salary for each
         participant.

     C)  As soon as practical following the close of each year, the Chief
         Executive Officer shall evaluate the levels of corporate and business
         unit achievement and recommend to the Committee the incentive amount
         earned by the participants.

     D)  Absent specific Board authorization to the contrary, no awards under
         the corporate achievement segment of the Plan shall be authorized as to
         any year in which the consolidated Company results fail to achieve a
         minimum return on stockholders' equity of 8.5%.

     E)  The incentive award determined in accordance with the provisions of
         Paragraphs A through D of this Section 4 shall be reduced for such year
         as follows for Plan participants who are eligible to participate in the
         Bonus Replacement Retirement Plan of Armstrong World Industries, Inc.:

         (1)  If a Plan participant's grade level is 18 or 19 as of January 1 of
              the calendar year for which the incentive award is determined, the
              incentive award otherwise payable shall be reduced by the lesser
              of (i) 50% of the amount determined
<PAGE>

                                      -3-

              under Paragraphs A through D, (ii) $7,500 or (iii) the authorized
              contribution to the Bonus Replacement Retirement Plan.

         (2)  If a Plan participant's grade level is 20 or 21 as of January 1 of
              the calendar year for which the incentive award is determined, the
              incentive award otherwise payable shall be reduced by the lesser
              of (i) 50% of the amount determined under Paragraphs A through D,
              (ii) $15,000 or (iii) the authorized contribution to the Bonus
              Replacement Retirement Plan.

         (3)  If a Plan participant's grade level is 22 or higher as of January
              1 of the calendar year for which the incentive award is
              determined, the incentive award otherwise payable shall be reduced
              by the lesser of (i) 50% of the amount determined under Paragraphs
              A through D, (ii) $20,000 or (iii) the authorized contribution to
              the Bonus Replacement Retirement Plan.

5.   Time of Payment
     ---------------

     Awards under this Plan shall be paid as soon as practicable after the
     yearly financial results have been determined.

6.   Miscellaneous Provisions
     ------------------------

     A)  Condition of Award - Plan participants who retire, become disabled, die
         ------------------
         or are involuntarily terminated for reasons other than cause on or
         after the last workday of March may be eligible for awards on a
         prorated basis. Employees who voluntarily terminate employment at any
         time from the beginning of the year until the award for that year is
         paid are not eligible for an award unless otherwise approved by the
         Committee.
<PAGE>

                                      -4-

     B)  No Assignment or Transfer - Awards are payable only to the participant,
         -------------------------
         except in the case of death or legal incapacity at the time of payment,
         award may be paid to his heirs, estate or legal guardian. No awards
         under the Plan or any rights or interests therein shall be assignable
         or transferable by a participant.

     C)  No Rights to Awards - No employee or other person shall have any claim
         -------------------
         or right to be granted an award under the Plan. Neither the Plan nor
         any action taken hereunder shall be construed as giving any employee
         any right to be retained in the employ of the Company or any of its
         subsidiaries.

     D)  Withholding Taxes - The Company shall have the right to deduct from all
         -----------------
         awards hereunder paid all taxes required by law to be withheld with
         respect to such awards.

     E)  Funding of Plan - The Company shall not be required to establish any
         ---------------
         special or separate fund or to make any other segregation of assets to
         assure the payment of any award under the Plan.

7.   Effective Date of the Plan
     --------------------------
     The effective date of the Plan shall be November 28, 1983.

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