AWI

Business Context and Reporting Period

Company: Armstrong World Industries, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: November 17, 2014
Subject: Appointment of Donald R. Maier as Executive Vice President and Chief Executive Officer of Armstrong Flooring Products and execution of a Change in Control Severance Agreement.

Key Financial Metrics

This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation arrangements.

Material Changes

Executive Appointment: Donald R. Maier was appointed Executive Vice President and Chief Executive Officer of Armstrong Flooring Products.
Agreement Update: A new Change in Control Severance Agreement (CIC Agreement) dated November 17, 2014, replaced Mr. Maier's prior agreement dated October 31, 2011 (as amended December 31, 2012).

Guidance, Outlook, and Management Commentary

Severance Terms: The CIC Agreement provides for specific benefits if Mr. Maier is terminated without Cause or resigns for Good Reason within six months prior to or two years following a Change in Control. Benefits include:

• Severance Payment: A lump sum equal to two times the sum of base salary and average annual bonus for the three fiscal years prior to termination.
• Incentive Compensation: Payment of unpaid incentives for completed years and a pro rata portion for the current year.
• Benefits Continuation: Life, disability, accident, and health insurance for 24 months post-termination.
• Retirement Eligibility: Potential participation in post-retirement health and life plans if eligibility would have been reached within 24 months.
• Outplacement: Up to $30,000 in assistance fees.
• Equity: Immediate vesting of all unvested equity awards and lapse of restrictions.

Term: The agreement is effective through December 31, 2015, with automatic one-year extensions unless notice is provided by September 30 of the preceding year. The term automatically extends for 24 months following a Change in Control.
Tax Considerations: Payments are subject to reduction to avoid excise tax under Internal Revenue Code Section 280G if the after-tax benefit of the reduced amount is higher.

Investor Verification Checklist

• Review the full text of the Change in Control Severance Agreement attached as Exhibit 10.1 for complete definitions of "Cause," "Good Reason," and "Change in Control."
• Verify the specific base salary and bonus history for Mr. Maier to estimate potential severance liability.
• Confirm the status of any other executive compensation agreements that may be affected by this appointment.
• Monitor future filings for any actual triggering events related to the Change in Control provisions.