USG CORPORATION
PERFORMANCE BASED
RESTRICTED STOCK UNITS AGREEMENT
WHEREAS, ____________ (the “Grantee”) is an employee of USG Corporation, a
Delaware corporation (the “Company”) or a Subsidiary;
WHEREAS, the Board of Directors of the Company (the “Board”) has granted to the
Grantee, effective as of July 18, 2012 (the “Date of Grant”), _______
performance based Restricted Stock Units (as defined in the Plan) (the “PBRSUs”)
pursuant to the Company’s Long-Term Incentive Plan, as amended (the “Plan”),
subject to the terms and conditions of the Plan and the terms and conditions
hereinafter set forth; and
WHEREAS, the execution of this Performance Based Restricted Stock Units
Agreement to evidence the PBRSUs (the "Agreement") has been authorized by a
resolution of the Board.
NOW, THEREFORE, the Company and the Grantee agree as follows:
1.
Payment of PBRSUs. The PBRSUs covered by this Agreement shall become payable to
the Grantee if they become nonforfeitable in accordance with Section 2, Section
3 or Section 4 hereof.

2.
Vesting of PBRSUs. Subject to the terms and conditions of Sections 3, 4 and 5
hereof, (a) the Grantee’s right to receive the Common Shares subject to 50% of
the PBRSUs shall become nonforfeitable upon the anniversary of the Date of Grant
that next follows the first full calendar year during the period from January 1,
2012 through December 31, 2014 (the “Performance Period”) during which the
Company’s ____________ business unit (the “Unit”) shall have achieved audited
positive adjusted operating profit (the “First Achievement Year”), if the
Grantee shall have remained in continuous employment with the Company from the
Date of Grant until the anniversary of the Date of Grant that next follows the
First Achievement Year; and (b) if the First Achievement Year is 2012 or 2013,
the remaining 50% of the PBRSUs will become nonforfeitable upon the anniversary
of the Date of Grant that next follows the calendar year following the First
Achievement Year if (i) the Unit achieves audited positive adjusted operating
profit for the calendar year that follows the First Achievement Year, and (ii)
the Grantee shall have remained in continuous employment with the Company from
the Date of Grant until the anniversary of the Date of Grant that next follows
the calendar year that follows the First Achievement Year. Subject to Section 3
hereof, (x) if the Unit does not achieve audited positive adjusted operating
profit for any full calendar year during the Performance Period, the PBRSUs
shall be forfeited, (y) if the Unit achieves audited positive adjusted operating
profit for only one full calendar year during the Performance Period (including
if the First Achievement Year is 2014), 50% of the PBRSUs shall be forfeited,
and (z) if the Grantee’s right to receive the Common Shares subject to 50% of
the PBRSUs becomes nonforfeitable based on the Unit’s achievement of audited
positive adjusted operating profit for 2012 or 2013 but the Unit does not
achieve audited positive adjusted

CLI-2000354v2

--------------------------------------------------------------------------------

operating profit for the next calendar year, 50% of the PBRSUs shall be
forfeited. The PBRSUs are also subject to forfeiture pursuant to Section 5
hereof. The nonforfeitability of the PBRSUs pursuant to this Section 2 or
pursuant to Section 4 shall be contingent upon a determination of the Board (or
a committee of the Board) that the performance objective described in this
Section 2 has been satisfied and the satisfaction of any other condition to such
nonforfeitability.
3.
Effect of Change in Control. In the event that a Change in Control occurs during
the Performance Period, but before all of the PBRSUs become nonforfeitable as
set forth in Section 2 or Section 4 and at a time when all or a portion of the
PBRSUs have not been forfeited, a pro rata number of the PBRSUs that remain
nonforfeitable at the time of the Change in Control shall become nonforfeitable
at the time of the Change in Control and shall be payable to the Grantee
pursuant to Section 6. Such pro rata number of the PBRSUs that remain
nonforfeitable at the time of the Change in Control shall be based on the number
of full calendar months that have elapsed between July 18, 2012 and the Change
in Control (as compared to the number of full calendar months between July 18,
2012 and the end of calendar year 2014), and the remaining PBRSUs will be
forfeited.

4.
Effect of Death or Disability. Notwithstanding Section 2 above, if the Grantee
should die or become permanently and totally disabled while in the employ of the
Company or any Subsidiary during the Performance Period, but before all of the
PBRSUs become nonforfeitable as set forth in Section 2 and at a time when all or
a portion of the PBRSUs have not been forfeited, the PBRSUs that remain
nonforfeitable at the time of the Grantee’s death or disability shall remain in
effect and the Grantee (or his beneficiary in the event of his death) shall
retain the right to receive Common Shares with respect to a pro rata number of
the PBRSUs that remain nonforfeitable at the time of the Grantee’s death or
disability. Such pro rata number of PBRSUs shall become nonforfeitable upon the
completion of any full calendar year during the Performance Period, beginning
with the calendar year in which the death or disability occurs for which PBRSUs
would have become nonforfeitable pursuant to Section 2 if the Grantee had not
died or become disabled. Such pro rata number shall be based on (a) the number
of PBRSUs that would have become nonforfeitable for any such calendar year
pursuant to Section 2 if the Grantee had not died or become disabled, and (b)
the number of full calendar months that shall have elapsed between July 18, 2012
and the date of the Grantee's death or disability (as compared to the number of
full calendar months between July 18, 2012 and the end of the applicable
calendar year during the Performance Period (if any) in which the Unit achieves
audited positive net earnings). Payment in respect of such pro rata number of
the PBRSUs shall be made in accordance with Section 6 and any remaining PBRSUs
at that time that would have become nonforfeitable for such calendar year had
the Grantee not died or become disabled shall be forfeited. The Grantee shall be
considered to have become permanently and totally disabled if the Grantee has
suffered a total disability within the meaning of the Company's Long Term
Disability Plan for Salaried Employees and is “disabled” within the meaning of
Section 409A(a)(2)(C) of the Code.

-2-

--------------------------------------------------------------------------------

5.
Forfeiture. In the event (i) that the Grantee’s employment shall, at a time when
the PBRSUs remain forfeitable, terminate in a manner other than any specified in
Section 4 hereof or (ii) of a determination by the Board (or a committee of the
Board) pursuant to Section 20 hereof, the Grantee shall forfeit any PBRSUs that
have not become nonforfeitable by such Grantee at the time of such termination
or determination, as applicable.

6.
Form and Time of Payment of PBRSUs. Except as otherwise provided for in Section
9, payment for the PBRSUs, after and to the extent they have become
nonforfeitable, shall be made in the form of Common Shares. Payment shall be
made within ten (10) days following the date that the PBRSUs become
nonforfeitable pursuant to Section 2, 3 or 4 (subject to the determination
described in the final sentence of Section 2, if applicable). Payment shall be
made in any event not later than the fifteenth day of the third month after the
end of the calendar year in which the PBRSUs become nonforfeitable. To the
extent that the Company is required to withhold federal, state, local or foreign
taxes in connection with the delivery of Common Shares to the Grantee or any
other person under this Agreement, the number of Common Shares to be delivered
to the Grantee or such other person shall be reduced (based on the Market Value
per Share as of the date the Common Shares are delivered to the Grantee) to
provide for the minimum amount of taxes required to be withheld, with any
fractional shares that would otherwise be delivered being rounded up to the next
nearest whole share. The Board (or a committee of the Board) may, at its
discretion, adopt any alternative method of providing for taxes to be withheld.

7.
Payment of Dividend Equivalents. From and after the Date of Grant and until the
earlier of (a) the time when all of the Common Shares are delivered to the
Grantee as described in Section 6 or (b) the time when the Grantee’s right to
receive Common Shares upon payment of PBRSUs is forfeited, on the date that the
Company pays a cash dividend (if any) to holders of Common Shares generally, the
Grantee shall be entitled to a number of additional whole PBRSUs determined by
dividing (i) the product of (A) the dollar amount of the cash dividend paid per
Common Share on such date and (B) the total number of PBRSUs (including dividend
equivalents paid thereon) credited to the Grantee as of such date, by (ii) the
Market Value per Share on such date. Such dividend equivalents (if any) shall be
subject to the same terms and conditions and shall be settled or forfeited in
the same manner and at the same time as the PBRSUs to which the dividend
equivalents were credited.

8.
PBRSUs Nontransferable. Neither the PBRSUs granted hereby nor any interest
therein or in the Common Shares related thereto shall be transferable other than
by will or the laws of descent and distribution prior to payment.

9.
Adjustments. In the event of any change in the aggregate number of outstanding
Common Shares by reason of (a) any stock dividend, extraordinary dividend, stock
split, combination of shares, recapitalization or other change in the capital
structure of the Company, or (b) any Change in Control, merger, consolidation,
spin-off, split-off, spin-

-3-

--------------------------------------------------------------------------------

out, split-up, reorganization or partial or complete liquidation, or other
distribution of assets, issuance of rights or warrants to purchase securities,
or (c) any other corporate transaction or event having an effect similar to any
of the foregoing, then the Board (or a committee of the Board) shall adjust the
number of PBRSUs then held by the Grantee in such manner as to prevent dilution
or enlargement of the rights of the Grantee that otherwise would result from
such event. Moreover, in the event of any such transaction or event, the Board
(or a committee of the Board), in its discretion, may provide in substitution
for any or all of the Grantee’s rights under this Agreement such alternative
consideration as it may determine to be equitable in the circumstances.
10.
Compliance with Section 409A of the Code. To the extent applicable, it is
intended that this Agreement and the Plan 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 Grantee. This Agreement and the Plan 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.

11.
No Right to Future Grants; No Right of Employment; Extraordinary Item. In
accepting the grant, Grantee acknowledges that:  (a) the Plan is established
voluntarily by the Company, it is discretionary in nature and it may be
modified, suspended or terminated by the Company at any time, as provided in the
Plan and this Award Agreement; (b) the grant of the PBRSUs is voluntary and
occasional and does not create any contractual or other right to receive future
grants of PBRSUs, or benefits in lieu of PBRSUs, even if PBRSUs have been
granted in the past; (c) all decisions with respect to future grants, if any,
will be at the sole discretion of the Company; (d) Grantee's participation in
the Plan is voluntary; (e) the PBRSUs are an extraordinary item that does not
constitute compensation of any kind for services of any kind rendered to the
Company, its Affiliates and/or Subsidiaries, and which is outside the scope of
Grantee's employment contract, if any; (f) the PBRSUs are not part of normal or
expected compensation or salary for any purposes, including, but not limited to,
calculating any severance, resignation, termination, redundancy, end of service
payments, bonuses, long-service awards, pension or retirement benefits or
similar payments; (g) in the event that Grantee is an employee of an Affiliate
or Subsidiary of the Company, the grant will not be interpreted to form an
employment contract or relationship with the Company; and furthermore, the grant
will not be interpreted to form an employment contract with the Affiliate or
Subsidiary that is Grantee's employer; (h) the future value of the underlying
Shares is unknown and cannot be predicted with certainty; (i) no claim or
entitlement to compensation or damages arises from forfeiture or termination of
the PBRSUs or diminution in value of the PBRSUs or the Common Shares and Grantee
irrevocably releases the Company, its Affiliates and/or its Subsidiaries from
any such claim that may arise; and (j) notwithstanding any terms or conditions
of the Plan to the contrary, except as specifically provided in this Agreement,
in the event of involuntary termination of Grantee's employment, Grantee's right
to receive PBRSUs and vest in PBRSUs under the

-4-

--------------------------------------------------------------------------------

Plan, if any, will terminate effective as of the date that Grantee is no longer
actively employed and will not be extended by any notice period mandated under
local law (e.g., active employment would not include a period of “garden leave”
or similar period pursuant to local law); furthermore, in the event of
involuntary termination of employment, Grantee's right to vest in the PBRSUs
after termination of employment, if any, will be measured by the date of
termination of Grantee's active employment and will not be extended by any
notice period mandated under local law.
12.
Employee Data Privacy. Grantee hereby explicitly and unambiguously consents to
the collection, use and transfer, in electronic or other form, of Grantee's
personal data as described in this document by and among, as applicable, the
Company, its Affiliates and its Subsidiaries (“the Company Group”) for the
exclusive purpose of implementing, administering and managing Grantee's
participation in the Plan. Grantee understands that the Company Group holds
certain personal information about Grantee, including, but not limited to,
Grantee's name, home address and telephone number, date of birth, social
insurance number or other identification number, salary, nationality, job title,
any Shares of stock or directorships held in the Company, details of all PBRSUs
or any other entitlement to Shares of stock awarded, canceled, exercised,
vested, unvested or outstanding in Grantee's favor, for the purpose of
implementing, administering and managing the Plan (“Data”). Grantee understands
that Data may be transferred to any third parties assisting in the
implementation, administration and management of the Plan, that these recipients
may be located in Grantee's country or elsewhere, and that the recipient’s
country may have different data privacy laws and protections than Grantee's
country. Grantee understands that Grantee may request a list with the names and
addresses of any potential recipients of the Data by contacting Grantee's local
human resources representative. Grantee authorizes the recipients to receive,
possess, use, retain and transfer the Data, in electronic or other form, for the
purposes of implementing, administering and managing Grantee's participation in
the Plan, including any requisite transfer of such Data as may be required to a
broker or other third party with whom Grantee may elect to deposit any Shares
acquired. Grantee understands that Data will be held only as long as is
necessary to implement, administer and manage Grantee's participation in the
Plan. Grantee understands that Grantee may, at any time, view Data, request
additional information about the storage and processing of Data, require any
necessary amendments to Data or refuse or withdraw the consents herein, in any
case without cost, by contacting in writing Grantee's local human resources
representative. Grantee understands, however, that refusing or withdrawing
Grantee's consent may affect Grantee's ability to participate in the Plan. For
more information on the consequences of Grantee's refusal to consent or
withdrawal of consent, Grantee understand that Grantee may contact Grantee's
local human resources representative.

13.
Continuous Employment. For purposes of this Agreement, the continuous employment
of the Grantee with the Company or a Subsidiary shall not be deemed to have been
interrupted, and the Grantee shall not be deemed to have ceased to be an
employee of the Company or Subsidiary, by reason of (a) the transfer of the
Grantee’s employment among the Company and its Subsidiaries or (b) an approved
leave of absence.

-5-

--------------------------------------------------------------------------------

14.
Relation to Plan. This Agreement is subject to the terms and conditions of the
Plan. In the event of any inconsistency between the provisions of this Agreement
and the Plan, the Plan shall govern. All terms used herein with initial capital
letters and not otherwise defined herein that are defined in the Plan shall have
the meanings assigned to them in the Plan. The Board (or a committee of the
Board) acting pursuant to the Plan, as constituted from time to time, shall,
except as expressly provided otherwise herein, have the right to determine any
questions which arise in connection with the grant of the PBRSUs.

15.
Amendments. Any amendment to the Plan shall be deemed to be an amendment to this
Agreement to the extent that the amendment is applicable hereto; provided,
however, that no amendment shall adversely affect the rights of the Grantee
under this Agreement without the Grantee’s consent. Notwithstanding the
foregoing, the limitation requiring the consent of a Grantee to certain
amendments shall not apply to any amendment that is deemed necessary by the
Company to ensure compliance with Section 409A of the Code.

16.
Severability. Subject to Section 20, if any provision of this Agreement or the
application of any provision hereof to any person or circumstances is held
invalid, unenforceable or otherwise illegal, the remainder of this Agreement and
the application of such provision to any other person or circumstances shall not
be affected, and the provisions so held to be invalid, unenforceable or
otherwise illegal shall be reformed to the extent (and only to the extent)
necessary to make it enforceable, valid and legal.

17.
Successors and Assigns. Without limiting Section 8 hereof, the provisions of
this Agreement shall inure to the benefit of, and be binding upon, the
successors, administrators, heirs, legal representatives and assigns of the
Grantee, and the successors and assigns of the Company.

18.
Governing Law. This Agreement shall be governed by and construed in accordance
with the internal substantive laws of the State of Delaware, without giving
effect to any principle of law that would result in the application of the law
of any other jurisdiction.

19.
The Grantee acknowledges that by clicking on the “Accept” button on the Morgan
Stanley Smith Barney web page titled “Step 3: Confirm the Review/Acceptance of
your Award,” the Grantee agrees to be bound by the electronic execution of this
Award Agreement.

20.
In accordance with Section 20(d) of the Plan, if the Board (or a committee of
the Board) has determined that any fraud or intentional misconduct by the
Grantee was a significant contributing factor to the Unit having to restate all
or a portion of its financial statement(s), to the extent permitted by
applicable law the Grantee shall: (a) return to the Company all Common Shares
that the Grantee has not disposed of that were paid out pursuant to this
Agreement; and (b) with respect to any Common Shares that the Grantee has
disposed of that were paid out pursuant to this Agreement, pay to the Company in
cash the value of such Common Shares on the date such Common Shares were paid
out. The remedy specified herein shall not be exclusive, and shall be in
addition to every other

-6-

--------------------------------------------------------------------------------

right or remedy at law or in equity that may be available to the Company.
Notwithstanding any other provision of this Agreement or the Plan to the
contrary, if this Section 20 is held invalid, unenforceable or otherwise
illegal, the remainder of this Agreement shall be deemed to be unenforceable due
to a failure of consideration, and the Grantee's rights to the PBRSUs that would
otherwise be granted under this Agreement shall be forfeited.

-7-

--------------------------------------------------------------------------------

Executed in the name and on behalf of the Company at Chicago, Illinois as of the
18th day of July, 2012.

USG CORPORATION

                            
                            
Name: Brian J. Cook
Title: Senior Vice President,
Human Resources

The undersigned Grantee hereby accepts the award of PBRSUs evidenced by this
Restricted Stock Units Agreement on the terms and conditions set forth herein
and in the Plan.

_____________________________

-8-