LANCASTER, PA.—Michael Lock- hart has resigned as chairman, president and CEO of Armstrong World Industries, effective Feb. 28. He has been with the company since 2000.
James O’Connor, the company’s lead independent director, was elected to replace Lockhart as chairman and said he will head a search committee to identify and evaluate candidates for the CEO position, while the mill’s board stated it expects to name an interim president in the near future.
O’Connor, who has been on Armstrong’s board since 2007, said Lockhart’s departure was a mutual agreement between him and the board. “[Both sides] agreed this was the right time to look for new leadership to take the company into its next phase of growth. Operationally, the company is performing well with a strong team of senior leaders; well-known, trusted brands; a solid balance sheet and dedicated employees.”
Armstrong’s board praised Lockhart for his leadership in steering the company successfully through the toughest period in its 150-year history. “Under his leadership, the company resolved its asbestos liability and emerged successfully from bankruptcy reorganization. [In addition], the company’s North American flooring business regained its position as an industry leader through enhanced product quality and design, and increased investment in the brand.”
The board also pointed to Lockhart’s “prudent management during the sharp economic downturn of the last two years” as a key reason Armstrong has been able to remain profitable. “The company will reap the benefits of his stewardship.”
Lockhart was Armstrong’s 12th CEO and the first person hired from outside the company to run it since its inception in 1860. “I have been proud to serve as Armstrong’s CEO for nearly 10 years,” he said. “Armstrong is about to enter a period that has the potential to be the best in its long history. The prospects for the company are genuinely exciting and I wish my colleagues continued success.”
According to Armstrong’s filing with the Securities and Exchange Commission (SEC), Lockhart will get approximately $12.5 million, which includes $10.9 million triggered under “change of control” provisions in his employment contract; a performance bonus for 2009 of $1.5 million; three weeks vacation pay totaling $78,500, and up to $65,000 a year for three years of outplacement services. In addition, he has options to buy more than 650,000 shares of Armstrong stock, on top of the 245,000 he currently owns.