<PAGE>   1
                                 EXHIBIT 10 (l)


                                      1999
                                     ANNUAL
                              MANAGEMENT INCENTIVE
                                     PROGRAM

                                 USG CORPORATION




                                     PURPOSE


To enhance USG Corporation's ability to attract, motivate, reward and retain key
employees of the Corporation and its operating subsidiaries and to strengthen
the existing mutual interest between such key employees and the Corporation's
stockholders by providing incentive award opportunities to such key employees
who discharge their accountabilities in a manner which makes a measurable
contribution to the Corporation's earnings.

                                  INTRODUCTION

This Annual Management Incentive Program is in effect from January 1, 1999
through December 31, 1999.

                                   ELIGIBILITY

Individuals eligible for participation in this Program are those officers and
other key employees occupying management positions in Broadband 13 or higher
(775 or more points). Employees who participate in any other annual incentive
program of the Corporation or any of its subsidiaries are not eligible to
participate in this Program.

                                      GOALS

For the 1999 Annual Management Incentive Program, Net Earnings, Goal Income and
Strategic Targets for USG Corporation, Subsidiaries and Profit Centers will be
determined by the Grants and Awards Subcommittee of the Compensation and
Organization Committee of the USG Board of Directors (the "Subcommittee") after
considering recommendations submitted from USG Corporation and Operating
Subsidiaries. Except in the case of a Named Executive Officer (as defined in the
Administrative Guidelines below), Profit Center goals may be adjusted by the
Chairman of USG Corporation if business conditions or other significant
unforeseen circumstances beyond the control of the Profit Center have a major
impact on opportunity.




                                       42

<PAGE>   2

                                  AWARD VALUES

For the Annual Management Incentive Program, position target incentive values
are based on level of accountability and are expressed as a percent of approved
annualized salary. Resulting award opportunities represent a fully competitive
incentive opportunity for 100% (target) achievement of Corporate, Operating
Subsidiary and/or Profit Center goals:

-------------------------------------------------------------------------------
                                                      POSITION TARGET INCENTIVE
Chairman & CEO - USG Corporation                                          70%
-------------------------------------------------------------------------------
President & COO, USG Corporation;                                         60%
President & CEO, L&W Supply Corporation
-------------------------------------------------------------------------------
Executive Vice President & Chief Financial Officer                        50%

Senior Vice President & General Counsel

Senior Vice President & Chief Administrative Officer

Vice President, USG Corporation;
President & CEO, U.S. Gypsum Company

Vice President, USG Corporation;
President & CEO, USG Interiors, Inc
-------------------------------------------------------------------------------
USG CORPORATION & OPERATING SUBSIDIARIES
         OFFICERS AND MANAGERS
         Vice President, USG Corporation;                                 45%
         Executive Vice President Strategic Mfg & Capital Investments,
         North American Gypsum and Worldwide Ceilings

         Executive Vice President - Operations, North American Gypsum

         Senior Vice President & Controller, USG Corporation;
         Executive Vice President Financial Operations
         North American Gypsum and Worldwide Ceilings
-------------------------------------------------------------------------------
         Vice President Research & Technology, USG Corporation            40%
         Executive Vice President & COO, L&W Supply Corporation
         Sr Vice President International, USG Interiors, Inc.
         Vice President, Human Resources, USG Corporation
         President & CEO, CGC, Inc.
         Vice President & Chief Information Officer, USG Corporation
         Vice President Communications, USG Corporation
-------------------------------------------------------------------------------
USG CORPORATION, OPERATING SUBSIDIARIES & PROFIT CENTERS
         OFFICERS AND MANAGERS
         Position Reference Point: $148,980 and over                      35%
         Position Reference Point: $132,720 - $148,979                    25%
         Position Reference Point: $118,380 - $132,719                    20%
         Position Reference Point: $94,860  - $118,379                    15%
         Position Reference Point: $91,320  - $94,859                     10%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------


                                       43

<PAGE>   3

AWARDS

Incentive awards for all participants in the 1999 Annual Management Incentive
Program will be reviewed and approved by the Subcommittee.

THE TOTAL OF ALL INCENTIVE AWARDS PAID UNDER THIS PROGRAM WILL NOT EXCEED 4.0%
OF USG CORPORATION'S 1999 CONSOLIDATED GOAL INCOME. IN THE EVENT THAT AWARDS
OTHERWISE PAYABLE PURSUANT TO THE ANNUAL MANAGEMENT INCENTIVE PROGRAM EXCEED
SUCH AMOUNT, ALL AWARDS WILL BE REDUCED PRORATA TO AN AGGREGATE AMOUNT EQUAL TO
4.0%.

For all participants, the annual incentive award opportunity is the annualized
salary in effect at the beginning of the calendar year (March 1 of the calendar
year for the twenty-two most senior executives) multiplied by the applicable
position target incentive value percent.

Incentive awards for 1999 will be based on:

         NET EARNINGS:                             20% - 60% OF INCENTIVE
         based on the Corporation's year-end financial statements.

         GOAL INCOME:                              20% - 60% OF INCENTIVE
         (net sales less cost of sales and selling and administrative
         expenses) based on the Corporation's year-end financial
         statements.

         STRATEGIC FOCUS TARGET:                   20% OF INCENTIVE

         PERSONAL PERFORMANCE:                     20% OF INCENTIVE
         [except in the case of the twenty-two (22) most senior executives whose
         awards are based solely on degree of achievement of Net Earnings and/or
         Goal Income (60%) and Strategic Focus Target (40%) results].

Except in the case of a Named Executive Officer, other appropriate performance
measures as approved by the Subcommittee.

1.    For participants to qualify for the NET EARNINGS and/or GOAL INCOME
      segment comprising 60% of their award, their respective organization (e.g.
      Corporation/Group/ Subsidiary, etc. as described on page 6) must achieve
      75% or higher of its net earnings or goal income target.

2.    NET EARNINGS and GOAL INCOME segment award amounts will be determined
      according to the following schedule:

Net Earnings/                       Adjustment Factor for Corporate, Group,
Goal Income Achievement             Subsidiary or Profit Center Performance
---------------------------------------------------------------------------
Below     75%                                   0%
          75%                                   50%
          80%                                   60%
          90%                                   80%
         100%                                  100%
         110%                                  120%
         120%                                  140%
         140%                                  180%
         150%                                  200%



                                       44

<PAGE>   4

3.    For participants to qualify for the STRATEGIC FOCUS TARGET segment
      comprising 20% (40% for the twenty-two most senior executives) of their
      incentive award, their respective organization must achieve a minimum
      level of performance related to the specified strategic focus. The
      Strategic Focus Targets will be measurable, verifiable and derived from
      the formal strategic planning process (e.g., cost reduction, sales growth,
      market share gain, margins, etc.). The award adjustment factor for this
      segment will range from 0.5 (after achieving minimum performance levels)
      to 2.0 for maximum attainment. Participants will receive schedules of
      Strategic Focus Targets upon approval by the Subcommittee.

4.    Except with respect to the twenty-two (22) most senior executives
      (including the Named Executive Officers) whose awards are based solely on
      achievement of Net Earnings, Goal Income and Strategic Focus Targets,
      participants will have a third segment comprising 20% of their incentive
      award based upon their individual Personal Performance Rating according to
      the following schedule:

      Personal                                       Personal Performance
      Performance Rating                               Adjustment Range
      -------------------------------------------------------------------
      Far Exceeded Expectations                         1.70 - 2.00
      -------------------------------------------------------------------
      Exceeded Expectations                             1.20 - 1.50
      -------------------------------------------------------------------
      Achieved Expectations                             1.00 - 1.10
      -------------------------------------------------------------------
      Partially Achieved Expectations                   0.80 - 0.90
      -------------------------------------------------------------------

      THE MAXIMUM INCENTIVE AWARD INCLUDING ALL SEGMENTS OF THIS PROGRAM IS 200%
      OF THE TARGET INCENTIVE OPPORTUNITY.

      The Subcommittee may eliminate awards to any participant who fails to
      receive a Personal Performance Rating of "Partially Achieved Expectations"
      or better under the Corporation's Performance Planning and Review (PPR)
      system.

5.    Target incentive award opportunities and calculations of awards for
      participants will be based on the achievement of specific Corporate,
      Group, Subsidiary and/or Profit Center net earnings, goal income and
      strategic focus targets as displayed on the following page or as otherwise
      may be established subject to approval of the Chairman:


                                       45

<PAGE>   5

<TABLE>
<CAPTION>

                                           BASIS FOR
                                           FINANCIAL MEASURES                         BASIS FOR
                                           INCENTIVE AWARD                            STRATEGIC FOCUS
PARTICIPANTS                               (60% OF TARGET INCENTIVE)                  INCENTIVE AWARD
<S>                                        <C>                                        <C>
USG CORPORATION

    Senior Executive Management            60% Net Earnings, USG Corporation               40%
    USG Corporation Staff                  60% Net Earnings, USG Corporation               20%

NORTH AMERICAN GYPSUM

    - VP, USG Corporation                  20% Net Earnings, USG Corporation
      President & CEO, U.S. Gypsum Co.     40% Goal Income, U.S. Gypsum Co.
    - Exec. VP - Operations, NAG                                                           40%

    - General Mgr - IGD                    10% Goal Income, North American Gypsum          20%
    - General Mgr - Materials Division     20% Goal Income, U.S. Gypsum Company
    - Profit Center Staff                  30% Goal Income, Profit Center/Division

    - President & CEO, CGC, Inc            20% Net Earnings, USG Corporation               40%
                                           20% Goal Income, North American Gypsum
                                           20% Goal Income, CGC, Inc

    - President & General Mgr, YPSA        25% Goal Income, North American Gypsum          20%
                                           35% Goal Income, YPSA

    - Customer Service Staff               20% Net Earnings, USG Corporation               20%
                                           20% Goal Income, U.S. Gypsum Company
                                           20% Goal Income, USG Interiors, Inc.

    - U.S. Gypsum Staff                    25% Goal Income, North American Gypsum          20%
                                           35% Goal Income, U.S. Gypsum Company

    - CGC, Inc Staff                       20% Goal Income, North American Gypsum          20%
                                           40% Goal Income, CGC, Inc

WORLDWIDE CEILINGS

    - VP USG Corporation                   20% Net Earnings, USG Corporation               40%
      President & CEO, USG Interiors       40% Goal Income, Worldwide Ceilings
    - Sr VP International, USG Interiors

    USG Interiors, Inc Staff               25% Goal Income, Worldwide Ceilings             20%
                                           35% Goal Income, USG Interiors, Inc

L&W SUPPLY CORPORATION

    Exec VP & COO, L&W Supply              20% Net Earnings, USG Corporation               40%
                                           20% Goal Income, North American Gypsum
                                           20% Goal Income, L&W Supply

    L&W Supply Corporation Staff           20% Goal Income, North American Gypsum          20%
                                           40% Goal Income, L&W Supply

                                           10% Goal Income, North American Gypsum          20%
                                           20% Goal Income, L&W Supply Corporation
                                           30% Goal Income, Profit Center (Business Unit)
</TABLE>


                                       46

<PAGE>   6

6.    SPECIAL AWARDS

      In addition to the incentive opportunity provided by this Program, a
      special award may be recommended for any participant or non-participant,
      other than a Named Executive Officer, who has made an extraordinary
      contribution to the Corporation's welfare or earnings.

GENERAL PROVISIONS

1.    The Subcommittee shall review and approve the awards recommended for
      officers and other employees who are eligible participants in the 1999
      Annual Management Incentive Program. The Subcommittee shall submit to the
      Board of Directors, for their ratification, a report of the awards for all
      eligible participants including corporate officers approved by the
      Subcommittee in accordance with the provisions of the Program.

2.    The Subcommittee shall have full power to make the rules and regulations
      with respect to the determination of achievement of goals and the
      distribution of awards. No awards will be made until the Subcommittee has
      certified goal achievement and applicable awards in writing.

3.    The judgement of the Subcommittee in construing this Program or any
      provisions thereof, or in making any decision hereunder, shall be final
      and conclusive and binding upon all employees of the Corporation and its
      subsidiaries whether or not selected as beneficiaries hereunder, and their
      heirs, executors, personal representatives and assigns.

4.    Nothing herein contained shall limit or affect in any manner or degree the
      normal and usual powers of management, exercised by the officers and the
      Board of Directors or committees thereof, to change the duties or the
      character of employment of any employee of the Corporation or to remove
      the individual from the employment of the Corporation at any time, all of
      which rights and powers are expressly reserved.

5.    No award will be paid to a Program participant who is not a regular
      full-time employee in good standing at the end of the calendar year to
      which the award applies; except an award which would otherwise be payable
      based on goal achievement may be recommended in the event of retirement,
      disability or death or in the event the participant is discharged without
      cause from the employment of the company during the year.

6.    The awards made to employees shall become a liability of the Corporation
      or the appropriate subsidiary as of December 31,1999 and all payments to
      be made hereunder will be made as soon as practicable after said awards
      have been approved.

ADMINISTRATIVE GUIDELINES

1.    Award values will be based on annualized salary in effect for each
      qualifying participant at the beginning of the year (March 1 for the
      twenty-two most senior executives). Any change in duties, dimensions or
      responsibilities of a current position resulting in a new evaluation and
      an increase or decrease in reference points will be applied for Incentive
      Program purposes on a prorata basis with the respective reference point
      and target incentive value to apply for the actual number of full months
      of service at each evaluation except for such a change with respect to a
      Named Executive Officer, in which case any change in reference points and
      target incentive value, for any reason, shall not become effective until
      January 1 of the following year.

2.    As provided by the Program, no award is to be paid any participant who is
      not a regular full-time employee in good standing at the end of the
      calendar year to which the award applies. However, in the event an
      eligible participant with three (3) or more months of active service in
      the Program


                                       47

<PAGE>   7

      year subsequently retires, becomes disabled or dies, or is discharged from
      the employment of the Company without cause, the participant (or
      beneficiary) may receive an award which would otherwise be payable based
      on goal achievement, prorated for the actual months of active service
      during the year.

3.    Employees participating in any other incentive or bonus program of the
      parent Corporation or a Subsidiary who are transferred during the year to
      a position covered by the Annual Management Incentive Program (other than
      a Named Executive Officer) will be eligible to receive a potential award
      prorated for actual full months of service in the two positions with the
      respective incentive program and target incentive values to apply. For
      example, a Marketing Manager promoted to Director, Marketing on August 1,
      will be eligible to receive a prorata award for seven months based on the
      Marketing Manager Plan provisions and values, and for five months under
      the Annual Management Incentive Program provisions and target incentive
      values.

4.    In the event of transfer of an employee (other than a Named Executive
      Officer) from an assignment which does not qualify for participation in
      any incentive or bonus plan to a position covered by the 1999 Annual
      Management Incentive Program, the employee is eligible to participate in
      the Annual Incentive Program with any potential award prorated for the
      actual months of service in the position covered by the Program during the
      year. A minimum of three months of service in the eligible position is
      required.

5.    Participation during the current Program year for individuals employed
      from outside the Corporation is possible with any award to be prorated for
      actual full months of service in the eligible position. A minimum of three
      full months of service is required for award consideration.

6.    Exceptions to established administrative guidelines can only be made by
      the Subcommittee and only with respect to participants other than Named
      Executive Officers.

7.    For purposes of this Program, a "NAMED EXECUTIVE OFFICER" will include any
      executive officer who is deemed a "named executive officer" for 1999 under
      Item 402 (a)(3) of Regulation S-K under the Securities Exchange Act of
      1934 and was employed by the Corporation or a Subsidiary on the last day
      of the year.



                                       48