Exhibit 10.1
USG CORPORATION
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this “Agreement”) is effective as of October 1, 2008
(the “Effective Date”) between USG Corporation, a Delaware corporation (the
“Company”), and                      (the “Executive”).
RECITALS:
WHEREAS, the Company desires to employ the Executive and the Executive desires
to accept such employment with the Company;
WHEREAS, as of the Effective Date, the Company shall employ the Executive on the
terms and conditions set forth in this Agreement, and the Executive shall be
retained and employed by the Company to perform services under the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

1.   Certain Definitions. Certain words or phrases with initial capital letters
not otherwise defined herein shall have the meanings set forth in Section 9
hereof.

2.   Employment. The Company shall employ the Executive, and the Executive
accepts employment with the Company, as of the Effective Date, upon the terms
and conditions set forth in this Agreement for the period beginning on the
Effective Date and ending as provided in Section 5 hereof (the “Employment
Period”).

3.   Position and Duties. During the Employment Period, the Executive shall
serve as the [Title] of the Company and shall have the normal duties,
responsibilities and authority of an executive serving in such position, subject
to the power of the Chief Executive Officer to expand or limit such duties,
responsibilities and authority, either generally or in specific instances. The
Executive shall perform the Executive’s duties and responsibilities to the best
of the Executive’s abilities in a diligent, trustworthy, businesslike and
efficient manner.   4.   Compensation and Benefits.

  (a)   Salary. The Company agrees to pay the Executive a salary (“Base Salary”)
during the Employment Period in installments based on the Company’s practices as
may be in effect from time to time. The Executive’s initial Base Salary shall be
at the rate of $                     per year. The Executive’s Base Salary shall
be reviewed annually and may be increased from time to time.

 

 

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  (b)   Incentive Plans. The Executive shall be eligible to participate in the
Company’s annual and long-term incentive plans, on a basis comparable to other
similarly situated executives of the Company.

  (c)   Expense Reimbursement. The Company shall reimburse the Executive for all
reasonable expenses incurred by the Executive during the Employment Period in
the course of performing the Executive’s duties under this Agreement that are
consistent with the Company’s policies in effect from time to time with respect
to travel, entertainment and other business expenses, subject to the Company’s
requirements applicable generally with respect to reporting and documentation of
such expenses. To the extent that the right to receive such reimbursement would
constitute a “deferral of compensation” under Section 409A of the Code, any such
reimbursement shall be made not later than the last day of the Executive’s tax
year following the year in which the Executive incurs the expense. In no event
will the amount of expenses so reimbursed by the Company in one year affect the
amount of expenses eligible for reimbursement to be provided in any other
taxable year.

  (d)   Standard Executive Benefits. The Executive shall be entitled during the
Employment Period to participate (on the same basis as other similarly situated
executives of the Company) in the Company’s benefit plans (including health and
life insurance, retirement and investment plans (including supplements thereto),
vacation, perquisites and other benefits, but excluding, except as hereinafter
provided in Section 6, any severance pay program or policy of the Company) for
which substantially all other similarly situated executives of the Company are
from time to time generally eligible, as determined from time to time by the
Board or a committee of the Board.

  (e)   Indemnification. The Executive shall be eligible to enter into the
Company’s standard Indemnification Agreement that is entered into with other
similarly situated senior executives of the Company.

5.   Employment Period.

  (a)   Except as hereinafter provided, the Employment Period shall begin on the
Effective Date and shall extend until January 1, 2011, with automatic one-year
renewals thereafter unless either party notifies the other at least 120 days
before the scheduled expiration date that the Employment Period is not to renew.

  (b)   Notwithstanding (a) above, the Employment Period shall end early upon
the first to occur of any of the following events:

  (i)   the Executive’s death;

  (ii)   the Company’s termination of the Executive’s employment on account of
Disability;

  (iii)   a Termination for Cause;

  (iv)   a Termination without Cause; or

  (v)   a Voluntary Termination.

 

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6.   Post-Employment Period Payments.

  (a)   At the end of the Employment Period for any reason, the Executive shall
cease to have any rights to salary, bonus, expense reimbursements or other
benefits, except that the Executive shall be entitled to receive: (i) on the
sixty-first (61st) day after the Termination Date, any Base Salary which has
accrued but is unpaid, any reimbursable expenses which have been incurred but
are unpaid, and payment for any unexpired vacation days which have accrued under
the Company’s or a Subsidiary’s vacation policy but are unused, as of the end of
the Employment Period, (ii) any plan benefits which by their terms extend beyond
termination of the Executive’s employment (but only to the extent provided in
any such benefit plan in which the Executive has participated as an employee of
the Company or a Subsidiary and excluding, except as hereinafter provided in
Section 6, any severance pay program or policy of the Company or a Subsidiary),
(iii) payments or benefits payable pursuant to the terms of any annual and/or
long-term incentive plan of the Company or a Subsidiary in accordance with the
terms thereof, and (iv) any benefits to which the Executive is entitled under
Part 6 of Subtitle B of Title I of the Employee Retirement Income Security Act
of 1974, as amended (“COBRA”). In addition, the Executive shall be entitled to
the additional benefits and amounts described in the succeeding subsections of
this Section 6, in the circumstances described in such subsections.

  (b)   If the Employment Period ends pursuant to Section 5 hereof on account of
death, a Voluntary Termination, a Termination for Cause or a termination on
account of the Executive’s Disability, the Company shall make no further
payments to the Executive except as contemplated in Section 6(a) above.

  (c)   If the Employment Period ends early pursuant to Section 5 on account of
a Termination without Cause, the Executive shall be entitled to the payments
contemplated in Section 6(a) above and as set forth below:

  (i)   On the sixty-first (61st) day after the Termination Date, the Executive
shall be entitled to a lump sum payment in an amount equal to two (2) times the
sum of (A) Base Salary (at the highest rate in effect for any period within two
years prior to the Termination Date), plus (B) annual bonus (in an amount equal
to target annual bonus for the year in which the Termination Date occurs).

 

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  (ii)   On the sixty-first (61st) day after the Termination Date, the Executive
shall be entitled to a lump sum payment equal to the total cost (including both
the Executive’s and the Company’s portion of such costs as paid while the
Executive was employed) of continuing the medical, dental, vision, long-term
disability and life insurance benefits (excluding benefits under the executive
death benefit plan) substantially similar to those that the Executive was
receiving or entitled to receive immediately prior to the Termination Date for a
period of eighteen (18) months; provided, however, if any benefit described in
this Section 6(c)(ii) is subject to tax, the Company will pay to the Executive,
at the same time the lump sum cash payment is made, an additional amount such
that after payment by the Executive or the Executive’s dependents or
beneficiaries, as the case may be, of all taxes so imposed, the recipient
retains an amount equal to such taxes.

  (iii)   In addition to the retirement and other benefits to which the
Executive is entitled under the Company’s defined benefit retirement plans
(including any supplemental plans) with respect to the Executive’s employment
through the Termination Date, the Executive shall be entitled to a lump sum
payment, payable on the sixty-first (61st) day after the Termination Date, in an
amount equal to the present value (calculated in accordance with the terms of
the Company’s defined benefit plans or supplemental plans, based on the age of
the Executive at the date entitlement to benefits under this Section 6(c)(iii)
arises) of the excess of (A) the retirement income and other benefits that would
be payable to the Executive under the defined benefit plans (including any
supplemental plans) of the Company if the Executive was credited with an
additional two years of age and two years of benefit and credited service in
addition to the age and total number of years of benefit and credited service
the Executive has accrued under such plans over (B) the retirement income and
other benefits the Executive is entitled to receive (either immediately or on a
deferred basis) under the defined benefit plans (including any supplemental
plans) of the Company. In the event that the Executive, after credit for the
additional two years, has a total of less than five years of credited service,
the Executive nonetheless shall be treated as fully vested under the defined
benefit retirement plans and any supplemental retirement plans, but with
benefits computed solely on the basis of total benefit service.

  (iv)   The Executive shall be entitled to outplacement services for a time
period (not less than six (6) months) established by the Company, by a firm
selected by the Company in its sole discretion, and at the expense of the
Company; provided, however, that all such outplacement services must be
completed by December 31 of the second calendar year following the calendar year
in which the Termination Date occurs and the Company will be required to make
all payments to the Executive for such outplacement services by December 31 of
the third calendar year following the calendar year in which the Termination
Date occurs.

 

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  (v)   Notwithstanding anything to the contrary contained in this Agreement, if
any payment or reimbursement, or the provision of any benefit under this
Agreement that is paid or provided upon the Executive’s “separation from
service” with the Company and its Subsidiaries within the meaning of Section
409A(a)(2)(A)(i) of the Code would constitute a “deferral of compensation” under
Section 409A of the Code and the Executive is a “specified employee” (as
determined pursuant to procedures adopted by the Company in compliance with
Section 409A of the Code) on the date of the Executive’s “separation from
service” with the Company and its Subsidiaries within the meaning of
Section 409A(a)(2)(A)(i) of the Code, the Executive (or the Executive’s
beneficiary) will receive payment or reimbursement of such amounts or the
provision of such benefits upon the earlier of (i) the first day of the seventh
month following the date of the Executive’s “separation from service” with the
Company and its Subsidiaries within the meaning of Section 409A(a)(2)(A)(i) of
the Code or (ii) the Executive’s death. In addition, if payment to the Executive
of any amount pursuant to Section 6(a) or this Section 6(c) would constitute a
“deferral of compensation” under Section 409A of the Code and if the Executive’s
termination does not constitute a “separation from service” with the Company and
its Subsidiaries within the meaning of Section 409A(a)(2)(A)(i) of the Code,
then payment of such amount shall be made, to the extent necessary to comply
with Section 409A of the Code and subject to the preceding sentence, to the
Executive on the later of (i) the payment date identified in the applicable
paragraph of this Section 6 or (ii) on the earlier of (A) the Executive’s
“separation from service” with the Company and its Subsidiaries within the
meaning of Section 409A(a)(2)(A)(i) of the Code, (B) the Executive’s disability
(within the meaning of Section 409A of the Code), (C) a change in control of the
Company within the meaning of Section 409A of the Code or (D) the Executive’s
death.

  (d)   It is expressly understood that the Company’s payment obligations under
Section 6(c) shall cease in the event the Executive breaches any of his or her
agreements in Section 7 hereof and, in the event of any such breach, the
Executive shall repay in cash immediately to the Company any amounts previously
paid to the Executive under Section 6(c) of this Agreement.

  (e)   The Executive shall not be required to mitigate the amount of any
payment or benefit provided for in this Agreement by seeking other employment or
otherwise.

7.   Competitive Activity; Confidentiality; Nonsolicitation.

  (a)   Acknowledgements and Agreements. The Executive hereby acknowledges and
agrees that in the performance of the Executive’s duties for the Company during
the Employment Period, the Executive will be brought into frequent contact,
either in person, by telephone or through the mails, with existing and potential
customers of the Company throughout the United States. The Executive also agrees
that trade secrets and confidential information of the Company, more fully
described in Section 7(i) of this Agreement, gained by the Executive during the
Executive’s association with the Company, have been developed by the Company
through substantial expenditures of time, effort and money and constitute
valuable and unique property of the Company. The Executive further understands
and agrees that the foregoing makes it necessary for the protection of the
business of the Company that the Executive not compete with the Company during
the Employment Period and not compete with the Company for a reasonable period
thereafter, as further provided in the following subsections.

 

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  (b)   Covenants During the Employment Period. During the Employment Period,
the Executive will not compete with the Company anywhere that the Company
conducts its business. In accordance with this restriction, but without limiting
its terms, during the Employment Period, the Executive will not:

  (i)   enter into or engage in any business which competes with the business of
the Company;

  (ii)   solicit customers, business, patronage or orders for, or sell, any
products and services in competition with, or for any business that competes
with, the business of the Company;

  (iii)   divert, entice or otherwise take away any customers, business,
patronage or orders of the Company or attempt to do so; or

  (iv)   promote or assist, financially or otherwise, any person, firm,
association, partnership, corporation or other entity engaged in any business
which competes with the business of the Company.

  (c)   Covenants Following Termination. For a period of two (2) years following
the termination of the Executive’s employment for any reason, unless the
Executive is entitled to severance benefits under a severance agreement between
the Executive and the Company providing for payment of benefits upon a
termination of employment following a change in control of the Company and
containing covenants made by the Executive with respect to the subject matter of
this Section 7(c) (a “Severance Agreement”), in which case those covenants
contained in such Severance Agreement shall apply to the Executive in lieu of
the application of this Section 7, the Executive will not:

  (i)   enter into or engage in any business which competes with the Company’s
business within the United States;

  (ii)   solicit customers, business, patronage or orders for, or sell, any
products and services in competition with, or for any business, wherever
located, that competes with, the Company’s business within the United States;

  (iii)   divert, entice or otherwise take away any customers, business,
patronage or orders of the Company within the United States, or attempt to do
so; or

  (iv)   promote or assist, financially or otherwise, any person, firm,
association, partnership, corporation or other entity engaged in any business
which competes with the Company’s business within the United States.

 

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  (d)   Indirect Competition. For the purposes of Sections 7(b) and 7(c), but
without limitation thereof, the Executive will be in violation thereof if the
Executive engages in any or all of the activities set forth therein directly as
an individual on the Executive’s own account, or indirectly as a general
partner, joint venturer, employee, agent, salesperson, consultant, officer
and/or director of any firm, association, partnership, corporation or other
entity, or as a limited partner, member or stockholder of any limited
partnership, limited liability company, or corporation in which the Executive or
the Executive’s spouse, child or parent owns, directly or indirectly,
individually or in the aggregate, more than five percent (5%) of the limited
partnership interests, limited liability company interests or outstanding stock,
as the case may be.

  (e)   The Company. For purposes of this Section 7, the Company shall include
any and all Subsidiaries of the Company.

  (f)   The Company’s Business. For the purposes of Sections 7(b), 7(c), 7(j)
and 7(k), the Company’s business is defined to be the manufacture and
distribution of gypsum wallboard, joint compound and related gypsum products,
cement board, gypsum fiber panels, ceiling panels and grid, the distribution of
building products and any future businesses the Company may enter, as further
described in any and all manufacturing, marketing and sales manuals and
materials of the Company as the same may be altered, amended, supplemented or
otherwise changed from time to time, or of any other products or services
substantially similar to or readily substitutable for any such described
products and services.

  (g)   Extension. If it shall be judicially determined that the Executive has
violated any of the Executive’s obligations under Section 7(c), then the period
applicable to each obligation that the Executive shall have been determined to
have violated shall automatically be extended by a period of time equal in
length to the period during which such violation(s) occurred.

  (h)   Non-Solicitation. Until the expiration of three (3) years following the
Termination Date, the Executive will not directly or indirectly at any time
solicit or induce or attempt to solicit or induce any employee(s), sales
representative(s), agent(s) or consultant(s) of the Company and/or of its
Subsidiaries to terminate their employment, representation or other association
with the Company and/or its Subsidiaries.

 

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  (i)   Further Covenants.

  (i)   The Executive will keep in strict confidence, and will not, without the
prior written consent of the Company or as may otherwise be required by law or
legal process, directly or indirectly, at any time during or after the
Executive’s employment with the Company, disclose, furnish, disseminate, make
available or, except in the course of performing the Executive’s duties of
employment, use any trade secrets or non-public confidential business and
technical information of the Company or its customers or vendors, including
without limitation as to when or how the Executive may have acquired such
information before or during employment. Such confidential information shall
include, without limitation, the Company’s unique non-public confidential
selling, manufacturing and servicing methods and business techniques, training,
service and business manuals, promotional materials, training courses and other
training and instructional materials, vendor and product information, customer
and prospective customer lists, other customer and prospective customer
information and other business information. The Executive specifically
acknowledges that all such non-public confidential information, whether reduced
to writing, maintained on any form of electronic media, or maintained in the
Executive’s mind or memory and whether compiled by the Company and/or the
Executive, derives independent economic value from not being readily known to or
ascertainable by proper means by others who can obtain economic value from its
disclosure or use, that reasonable efforts have been made by the Company to
maintain the secrecy of such information, that such information is the sole
property of the Company and that any retention and use of such information by
the Executive during the Executive’s employment with the Company (except in the
course of performing the Executive’s duties and obligations to the Company) or
after the termination of the Executive’s employment shall constitute a
misappropriation of the Company’s trade secrets.

  (ii)   The Executive agrees that upon termination of the Executive’s
employment with the Company, for any reason, the Executive shall return to the
Company, in good condition, all property of the Company, including without
limitation, the originals and all copies of any materials which contain,
reflect, summarize, describe, analyze or refer or relate to any items of
information listed in Section 7(i)(i) of this Agreement. In the event that such
items are not so returned, the Company will have the right to charge the
Executive for all reasonable damages, costs, attorneys’ fees and other expenses
incurred in searching for, taking, removing and/or recovering such property.

 

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  (j)   Discoveries and Inventions; Work Made for Hire.

  (i)   The Executive hereby assigns and agrees to assign to the Company, its
successors, assigns or nominees, all of the Executive’s rights to any
discoveries, inventions and improvements, whether patentable or not, made,
conceived or suggested, either solely or jointly with others, by the Executive
while in the Company’s employ with the use of the Company’s time, material or
facilities or in any way within or related to the existing or contemplated scope
of the Company’s business. Any discovery, invention or improvement relating to
any subject matter with which the Company was concerned during the Executive’s
employment and made, conceived or suggested by the Executive, either solely or
jointly with others, within one (1) year following termination of the
Executive’s employment under this Agreement or any successor agreements shall be
irrebuttably presumed to have been so made, conceived or suggested in the course
of such employment with the use of the Company’s time, materials or facilities.
Upon request by the Company with respect to any such discoveries, inventions or
improvements, the Executive will execute and deliver to the Company, at any time
during or after the Executive’s employment, all appropriate documents for use in
applying for, obtaining and maintaining such domestic and foreign patents as the
Company may desire, and all proper assignments therefor, when so requested, at
the expense of the Company, but without further or additional consideration.

  (ii)   The Executive acknowledges that, to the extent permitted by law, all
work papers, reports, documentation, drawings, photographs, negatives, tapes and
masters therefor, prototypes and other materials (hereinafter, “items”),
including without limitation, any and all such items generated and maintained on
any form of electronic media, generated by the Executive during the Executive’s
employment with the Company shall be considered a “work made for hire” and that
ownership of any and all copyrights in any and all such items shall belong to
the Company. The item will recognize the Company as the copyright owner, will
contain all proper copyright notices, e.g., “(creation date) [Company Name], All
Rights Reserved,” and will be in condition to be registered or otherwise placed
in compliance with registration or other statutory requirements throughout the
world.

  (k)   Communication of Contents of Agreement. During the Executive’s
employment and for two (2) years thereafter, the Executive will communicate the
contents of this Agreement to any person, firm, association, partnership,
corporation or other entity which the Executive intends to be employed by,
associated with, or represent and which is engaged in a business that is
competitive to the business of the Company.

  (l)   Non-Disparagement. The Executive and his immediate family agree to
refrain from criticizing or making disparaging or derogatory comments about the
Company or any Subsidiary and any of their respective officers, directors,
employees and agents or any products or services of the Company or any
Subsidiary.

 

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  (m)   Relief. The Executive acknowledges and agrees that the remedy at law
available to the Company for breach of any of the Executive’s obligations under
this Agreement would be inadequate. The Executive therefore agrees that, in
addition to any other rights or remedies that the Company may have at law or in
equity, temporary and permanent injunctive relief may be granted in any
proceeding which may be brought to enforce any provision contained in
Sections 7(b), 7(c), 7(h), 7(i), 7(j) 7(k) and 7(l) of this Agreement, without
the necessity of proof of actual damage.

  (n)   Reasonableness. The Executive acknowledges that the Executive’s
obligations under this Section 7 are reasonable in the context of the nature of
the Company’s business and the competitive injuries likely to be sustained by
the Company if the Executive was to violate such obligations. The Executive
further acknowledges that this Agreement is made in consideration of, and is
adequately supported by, the agreement of the Company to perform its obligations
under this Agreement and by other consideration, which the Executive
acknowledges constitutes good, valuable and sufficient consideration.

8.   Golden Parachute Excise Tax. The amounts payable to the Executive under
Section 6 shall be adjusted as set forth in this Section 8 if the sum (the
“combined amount”) of the amounts payable under Section 6 and all other payments
or benefits which the Executive has received or has the right to receive from
the Company which are defined in Section 280G(b)(2)(A)(i) of the Code, would
constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code).
In such event, the combined amount shall, unless the following sentence applies,
be decreased by the smallest amount that will eliminate any parachute payment.
If the decrease referred to in the preceding sentence is 10% or more of the
combined amount, the combined amount shall not be decreased, but rather shall be
increased by an amount (the “Gross Up Payment”) sufficient to provide the
Executive, after tax, a net amount equal to the Code Section 4999 excise tax
imposed on such combined amount, as increased pursuant to this section. For this
purpose, “after tax” means the amount retained by the Executive after
satisfaction (whether through withholding, direct payment or otherwise) of all
applicable federal, state, provincial and local income taxes at the highest
marginal tax rate, and the employee share of any applicable FICA taxes. To the
extent the decrease referred to in the second sentence of this Section 8
applies, such decrease shall be made to the combined amount by reduction of the
lump sum payment described in Section 6(c)(i) of this Agreement and, to the
extent further reductions are required, in such payments due to the Executive as
the Company may determine. If at a time subsequent to any payment under
Section 6, an additional amount of Code Section 4999 excise tax is definitively
determined to be due by either the Internal Revenue Service or a court of
competent jurisdiction, the Company shall pay to the Executive an additional
amount which, net of Federal, state, provincial and local income, FICA and Code
Section 4999 excise taxes, will satisfy such additional Code Section 4999 excise
tax, including applicable interest and penalties. The parties acknowledge that,
if the decrease referred to in the second sentence of this Section 8 is 10% or
more of the combined amount, the intention of the preceding sentences in this
Section 8 is to place the Executive in the position in which the Executive would
be if the Code Section 4999 excise tax did not exist. Notwithstanding any other
provision of this Section 8 to the contrary, all taxes and expenses described in
this Section 8 shall be paid or reimbursed within fifteen (15) days after the
Executive submits evidence of the incurrence of such taxes and/or expenses,
provided that in all events such payment or reimbursement shall be made on or
before the last day of the year following (a) the year in which the applicable
taxes are remitted or expenses are incurred or (b), in the case of reimbursement
of expenses incurred due to a tax audit or litigation in which there is no
remittance of taxes, the year in which the audit is completed or there is a
final or nonappealable settlement or other resolution of the litigation, in
accordance with Treas. Reg. § 1.409A-3(i)(1)(v). The Executive shall be required
to submit all requests for payment or reimbursement no later than thirty
(30) days prior to the last day for payment or reimbursement described in the
preceding sentence. Any expense paid or reimbursed by the Company in one taxable
year in no event will affect the amount of expenses required to be paid or
reimbursed by the Company in any other taxable year.

 

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9.   Definitions.

  (a)   “Board” means the Board of Directors of the Company.

  (b)   “Cause” means that, prior to the termination of the Employment Period,
the Executive shall have:

  (i)   committed a felony or a fraud;

  (ii)   engaged in conduct that brings the Company or any of its Subsidiaries
into substantial public disgrace or disrepute;

  (iii)   committed gross negligence or gross misconduct with respect to the
Company or any of its Subsidiaries;

  (iv)   repudiated this Agreement or abandoned employment with the Company;

  (v)   failed to follow the directives of the Board or the Chief Executive
Officer and such failure is not cured within five (5) business days after
written notice thereof to the Executive from the Company;

  (vi)   breached any of the agreements in Section 7 hereof;

  (vii)   breached a material employment policy of the Company which is not
cured within five (5) business days after written notice thereof to the
Executive from the Company; or

  (viii)   committed any other breach of this Agreement which is material and
which is not cured within thirty (30) days after written notice thereof to the
Executive from the Company.

  (c)   “Code” means the Internal Revenue Code of 1986, as amended.

  (d)   “Disability” means the Executive’s having become unable (as determined
in good faith by the Chief Executive Officer), with reasonable accommodations,
to regularly perform the Executive’s duties hereunder by reason of illness or
incapacity.

 

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  (e)   “Release Agreement” means an agreement, in substantially the form
customarily used by the Company for similarly situated executives of the Company
in similar instances, pursuant to which the Executive releases, to the extent
permitted by law, all current or future claims, known or unknown, arising on or
before the date of the release against the Company, its subsidiaries and its
officers.

  (f)   “Subsidiary” means a corporation, company or other entity (i) at least
50 percent of whose outstanding shares or securities (representing the right to
vote for the election of directors or other managing authority) are, or
(ii) which does not have outstanding shares or securities (as may be the case in
a partnership, joint venture or unincorporated association), but at least
50 percent of whose ownership interest representing the right generally to make
decisions for such other entity is, now or hereafter, owned or controlled,
directly or indirectly, by the Company.

  (g)   “Termination Date” means the date on which the Executive’s employment is
terminated by the Company or any Subsidiary.

  (h)   “Termination for Cause” means the Company’s termination of the
Executive’s employment for Cause.

  (i)   “Termination without Cause” means the Company’s termination of the
Executive’s employment other than a Termination for Cause.

  (j)   “Voluntary Termination” means Executive’s termination of the Executive’s
employment for any reason, including retirement.

10.   Representations.

  (a)   Executive Representations. The Executive represents and warrants to the
Company that (i) the execution, delivery and performance of this Agreement by
the Executive does not and will not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which the Executive is a party or by which the Executive is bound, (ii) the
Executive is not a party to or bound by any employment agreement, noncompete
agreement or confidentiality agreement with any other person or entity and
(iii) upon the execution and delivery of this Agreement by the Company, this
Agreement shall be the valid and binding obligation of the Executive,
enforceable in accordance with its terms.

  (b)   Company Representation. The Company represents and warrants to the
Executive that upon the execution and delivery of this Agreement by the
Executive, this Agreement shall be the valid and binding obligation of the
Company, enforceable in accordance with its terms.

 

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11.   Release Agreement. No payments shall be made under Section 6(c) hereof
unless the Executive, on or before the sixtieth (60th) day following the
Executive’s Termination Date, (i) signs and returns the Release Agreement within
the number of days that the Company determines is required under applicable law,
but in no event more than forty-five (45) days after the Company delivers the
Release Agreement to the Executive and (ii) does not revoke the Release
Agreement within the time period provided therein, such time period not to
exceed seven (7) days. If the Executive becomes entitled to payments under
Section 6(c) hereof, the Company shall deliver to the Executive a copy of the
Company’s standard form of Release Agreement within seven (7) days of the
Executive’s Termination Date.

12.   Survival. Subject to any limits on applicability contained therein,
Section 7 hereof shall survive and continue in full force in accordance with its
terms notwithstanding any termination of the Employment Period.

13.   Withholding of Taxes. The Company may withhold from any amounts payable
under this Agreement all federal, state, city or other taxes as the Company is
required to withhold pursuant to any applicable law, regulation or ruling.

14.   Notices. For all purposes of this Agreement, all communications, including
without limitation notices, consents, requests or approvals, required or
permitted to be given hereunder will be in writing and will be deemed to have
been duly given when hand delivered or dispatched by electronic facsimile
transmission (with receipt thereof orally confirmed), or five business days
after having been mailed by United States registered or certified mail, return
receipt requested, postage prepaid, or three business days after having been
sent by a nationally recognized overnight courier service such as FedEx or UPS,
addressed to the Company (to the attention of the Secretary of the Company) at
its principal executive office and to the Executive at the Executive’s principal
residence, or to such other address as any party may have furnished to the other
in writing and in accordance herewith, except that notices of changes of address
will be effective only upon receipt.

15.   Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity or unenforceability shall not affect any other provision of this
Agreement, but this Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid or unenforceable provision had never been
contained herein.

16.   Complete Agreement. This Agreement embodies the complete agreement and
understanding between the parties with respect to the employment of the
Executive and the subject matter hereof and effective as of its date supersedes
and preempts any prior understandings, agreements or representations by or
between the parties, written or oral, which may have related to the subject
matter hereof in any way, including any prior Employment Agreements between the
Company and the Executive. The severance benefits provided in Section 6(c)
hereof shall be in lieu of any severance benefits under any plans, programs,
policies or practices of the Company; provided, however, that if the Executive
is entitled to benefits under this Agreement and a Severance Agreement, the
Executive will be entitled to severance benefits under either this Agreement or
such Severance Agreement, whichever agreement provides for greater benefits, but
will not be entitled to benefits under both agreements.

 

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17.   Counterparts. This Agreement may be executed in separate counterparts,
each of which shall be deemed to be an original and both of which taken together
shall constitute one and the same agreement.

18.   Successors and Assigns. This Agreement shall bind and inure to the benefit
of and be enforceable by the Executive, the Company and their respective heirs,
executors, personal representatives, successors and assigns, except that neither
party may assign any rights or delegate any obligations hereunder without the
prior written consent of the other party. The Executive hereby consents to the
assignment by the Company of all of its rights and obligations hereunder to any
successor to the Company by merger or consolidation or purchase of all or
substantially all of the Company’s assets, provided such transferee or successor
assumes the liabilities of the Company hereunder.

19.   Governing Law. The validity, interpretation, construction and performance
of this Agreement will be governed by and construed in accordance with the
substantive laws of the State of Delaware and federal law, without giving effect
to the principles of conflict of laws of such State, except as expressly
provided herein.

20.   Amendment and Waiver. The provisions of this Agreement may be amended or
waived only with the prior written consent of the Company and the Executive, and
no course of conduct or failure or delay in enforcing the provisions of this
Agreement shall affect the validity, binding effect or enforceability of this
Agreement.

21.   Section 409A of the Code. Each payment or reimbursement and the provision
of each benefit under this Agreement shall be considered to be a separate
payment and not one of a series of payments for purposes of Section 409A of the
Code. To the extent applicable, it is intended that this Agreement comply with
the provisions of Section 409A of the Code, so that the income inclusion
provisions of Section 409A(a)(1) of the Code do not apply to the Executive. This
Agreement shall be administered in a manner consistent with this intent.
Reference to Section 409A of the Code is to Section 409A of the Internal Revenue
Code of 1986, as amended, and will also include any regulations or any other
formal guidance promulgated with respect to such Section by the U.S. Department
of the Treasury or the Internal Revenue Service.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

            USG CORPORATION
      By:           Name:           Title:               Executive         

 

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