Document:

EX-10.18

 EXHIBIT 10.18 
 SUPPLEMENT dated as of November 21, 2011 (this “Supplement”), to the Pledge and Security Agreement dated as of January 7, 2009 (as amended, supplemented or otherwise modified
from time to time, the “Security Agreement”), among USG Corporation, a Delaware corporation (the “Borrower”), the Subsidiaries of USG Corporation from time to time party thereto (each such Subsidiary and the
Borrower, a “Grantor” and, collectively, the “Grantors”) and JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the “Administrative Agent”) for the lenders party to the Credit
Agreement referred to below. 
 A. Reference is made to the Third Amended and Restated Credit Agreement dated as of
December 21, 2010 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the Lenders from time to time party thereto, the Administrative Agent and Bank of America, N.A.
and Wells Fargo Bank, N.A., as Co-Syndication Agents. 
 B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement or the Security Agreement, as applicable. 
 C. The Grantors
have entered into the Security Agreement in order to induce the Lenders to make Loans. Section 8.14 of Security Agreement provides that certain Subsidiaries must become Grantors under the Security Agreement by execution and delivery of an
instrument in the form of this Supplement. The undersigned such Subsidiary (the “New Subsidiary”) is executing this Supplement in accordance with the requirements of the Credit Agreement to become a Grantor under the Security
Agreement in order to induce the Lenders to make additional Loans and as consideration for Loans previously made. 

Accordingly, the Administrative Agent and the New Subsidiary agree as follows: 

SECTION 1. In accordance with Section 8.14 of the Security Agreement, the New Subsidiary by its signature below becomes a Grantor
under the Security Agreement with the same force and effect as if originally named therein as a Grantor and the New Subsidiary hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it as a Grantor thereunder
and (b) represents and warrants that the representations and warranties made by it as a Grantor thereunder are true and correct on and as of the date hereof. In furtherance of the foregoing, the New Subsidiary, as security for the payment and
performance in full of the Secured Obligations, does hereby create and grant to the Administrative Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and Lien on all of

 
the New Subsidiary’s right, title and interest in and to the Collateral of the New Subsidiary. Each reference to a “Grantor” in the Security Agreement shall be deemed to include
the New Subsidiary. The Security Agreement is hereby incorporated herein by reference. 
 SECTION 2. The New Subsidiary
represents and warrants to the Administrative Agent and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms. 
 SECTION 3. This Supplement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Administrative Agent shall have received a counterpart of
this Supplement that bears the signature of the New Subsidiary and the Administrative Agent has executed a counterpart hereof. Delivery of an executed signature page to this Supplement by facsimile or electronic transmission (including Adobe PDF
file) shall be as effective as delivery of a manually signed counterpart of this Supplement. 
 SECTION 4. The New Subsidiary
hereby represents and warrants that (a) set forth on Schedule I attached hereto is the true and correct legal name of the New Subsidiary, its state of organization, the organizational number issued to it by its state of organization, its
federal employer identification number and the location of its place of business (if it has only one) or its chief executive office (if it has more than one place of business), the location of any other place of business of such New Subsidiary and
the location of any and all Collateral of the New Subsidiary and (b) set forth on Schedule II attached hereto is a complete list of all Collateral Deposit Accounts maintained by such New Subsidiary, together with applicable
identifying information for such Collateral Deposit Accounts . The information set forth on such Schedule I shall be deemed to supplement Exhibit A to the Security Agreement, effective as of the date hereof. The information set forth
on such Schedule II in respect of Collateral Deposit Accounts shall be deemed to supplement Exhibit B to the Security Agreement, effective as of the date hereof. 
 SECTION 5. Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect. 
 SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 
 SECTION 7. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF 

 
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7. 
 SECTION 8. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and in the Security Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as
close as possible to that of the invalid, illegal or unenforceable provisions. 
 SECTION 9. All communications and notices
hereunder shall be in writing and given as provided in Section 9.01 of the Security Agreement. 
 SECTION 10. The New
Subsidiary agrees to reimburse the Administrative Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Administrative Agent. 

 IN WITNESS WHEREOF, the New Subsidiary and the Administrative Agent have duly executed this
Supplement to the Security Agreement as of the day and year first above written. 
  

					
	USG INTERIORS, LLC,
			
	      by	 		 	
		 	 /s/ Karen L. Leets

		 	Name: Karen L. Leets
		 	Title: Vice President and Treasurer

  

					
	 JPMORGAN CHASE BANK, N.A.,
 as Administrative Agent,

			
	      by	 		 	
		 	 /s/ Peter S. Predun

		 	Name: Peter S. Predun
		 	Title: Executive Director

 Schedule I to 
 Supplement to 
 the Pledge and Security 

Agreement 

INFORMATION OF USG INTERIORS, LLC 
  

	I.	Name of Grantor: USG Interiors, LLC 

  

	II.	State of Incorporation or Organization: Delaware 

  

	III.	Type of Entity: Limited Liability Company 

  

	IV.	Organizational Number assigned by State of Incorporation or Organization: 5065657 

 

	V.	Federal Identification Number: 45-3811432 

  

	VI.	Place of Business (if it has only one) or Chief Executive Office (if more than one place of business): 

 

							
	     550 West Adams Street
	 		  	
	     Chicago, IL 60661-3676
	 		  	
	  
	 		  	
	  
	 		  	
	  
	 		  	
				
	Attention:	 	 Vice President and Treasurer
	 		  	

  

	VII.	Other Places of Business: None 

  

	VIII.	Locations of Collateral: 

  

	 	(a)	Properties Owned by the Grantor: None 

  

	 	(b)	Properties Leased by the Grantor (Include Landlord’s Name): None 

 Schedule I to 
 Supplement to 
 the Pledge and Security 

Agreement 
  

	 	(c)	Public Warehouses or other Locations pursuant to Bailment or Consignment Arrangements (include name of Warehouse Operator or other Bailee or Consignee): None

 Schedule II to 
 Supplement to 
 the Pledge and Security 

Agreement 

COLLATERAL DEPOSIT ACCOUNTS 
  

							
	 Name of Grantor
	  	 Name of Institution
	  	Location of
Institution	  	Account Number

 NoneEX-10.20

 Exhibit 10.20 
 Year 2012 
 Annual 

Management Incentive 
 Program 
 (Executive Officers Only) 

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 align management’s interests with those of the Corporation’s stockholders by providing incentive award opportunities to managers who make a measurable contribution to the Corporation’s business objectives.

 INTRODUCTION 
 This Annual Management Incentive Program (the “Program”) is in effect from January 1, 2012 through December 31, 2012. 

ELIGIBILITY 
 Individuals eligible for participation in this Program are the Corporation’s executive officers. This Program is executive officers only. 

GOALS 
 For the 2012 Annual Management Incentive Program, Consolidated Net Earnings and consolidated, subsidiary and profit center Focus Targets will be determined by the USG Board of Directors after review by
the Compensation and Organization Committee of the USG Board of Directors (the “Committee”) . The Committee will consider recommendations submitted from management of USG Corporation. 

  
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 AWARD VALUES 

For this 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 goals: 
  

					
	 Position Title or Salary Reference Point
	  	Position Target
Incentive	 
	 •      Chairman, President & Chief Executive Officer, USG Corporation
	  	 	100	% 
	 •      Executive Vice President & Chief Financial Officer, USG
Corporation
	  	 	70	% 
	 •      Executive Vice President & General Counsel, USG Corporation
	  			
	 •      Executive Vice President, Operations, USG Building Systems
	  	 	60	% 
		
	 •      Senior Vice President; President & CEO, L & W Supply Corp
	  	 	50	% 
	 •      Senior Vice President, Human Resources, USG Corporation
	  			
	 •      Senior Vice President Business Development and Operational Services, USG
Corporation
	  			
	 •      Vice President; President, USG International
	  			
	 •      Senior Vice President and Chief Technology Officer, USG Corporation
	  			
	 •      Vice President and Corporate Secretary & Associate General Counsel, USG
Corporation
	  	 	45	% 
	 •      Vice President & Treasurer, USG Corporation
	  			
	 •      Vice President and Controller, USG Corporation
	  			
	 •      Vice President and Associate General Counsel, USG Corporation
	  			
	 •      Vice President, Compensation, Benefits, and Corporate Services, USG
Corporation
	  			

  
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 AWARDS 

Incentive awards for all participants in this Program will be reviewed and approved by the Committee. For all participants, the annual
incentive award par opportunity is the annualized salary approved by March 31, 2012 that is in effect on March 1, 2012 multiplied by the applicable position target incentive value percent. 

Incentive awards for 2012 will be based on a combination of the following elements: 

 

					
	I.	 	CONSOLIDATED NET EARNINGS	 	50% OF INCENTIVE

 Consolidated Net Earnings will be as reported on the Corporation’s year-end financial statements with
adjustments for significant non-operational charges. Such adjustments will be defined by March 31, 2012 and have in the past been for Fresh Start Accounting, asbestos, restructuring charges, bankruptcy expenses and the cumulative impact of new
accounting pronouncements. For all participants, this portion of the award represents 50% of the incentive par. This portion of the award will be paid from a pool funded by Consolidated Net Earnings. Ten percent of Consolidated Net Earnings will
fund the pool once a threshold of $10 million of Consolidated Net Earnings is achieved. Below $10 million there is no funding. Funding at par is attained at $50 million. The maximum award for this segment is capped at two times attainment or
generally $100 million of Consolidated Net Earnings. 
 This is the same pool from which awards based on Consolidated Net
Earnings will be paid under the USG Corporation 2012 Annual Management Incentive Program for employees, other than executive officers, occupying positions in Broadband 11 or higher (the “Other Program”). For each executive officer,
(i) their individual Net Earnings par shall be determined by March 31, 2012, and (ii) their individual factor shall be determined by taking into account the Net Earnings par of all participants eligible to participate in the Program
and the Other Program as of March 31, 2012 and based on the sum of all such participants’ Net Earnings par as determined by March 31, 2012. Notwithstanding the prior sentence nor any other provision in this Program, each executive
officer’s factor may be decreased, but not increased, due to changes in the total Program and Other Program par after March 31, including, but not limited to, changes triggered by the addition or removal of a participant from the Program
or the Other Program or changes in any participant’s Net Earnings par. 
  

					
	II.	 	FOCUS TARGETS:	 	50% OF INCENTIVE

 Focus Targets will be measurable, verifiable and derived from the formal strategic planning process. For
2012, Focus Targets are expected to include Building Systems, L&W and International Gross Profit, Adjusted EBITDA, Working Capital, Wallboard Cost and Spread or other operational priorities. The Focus Targets will be determined by March 31,
2012. The award adjustment factor for this segment will range from 0.5 (after achieving a minimum threshold performance level) to 2.0 for maximum attainment. 
 The weighting on any individual Focus Target generally will be in 5% increments and not be less than 10%. The weighting of all assigned Focus Targets will equal 50% of the individual’s total par.

  
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 PAYOUT CRITERIA 

No awards will be paid under this Program unless the Corporation’s consolidated EBITDA for 2012 is at least equal to zero.

 EBITDA is defined as net earnings before (1) interest, taxes, depreciation and amortization, (2) the annual
Long-Term Incentive Plan non-cash charge, (3) other non-cash charges, such as asset impairments, (4) restructuring charges, (5) EBITDA being calculated net of all expenses associated with all incentive programs. 

Total payments to a participant under this Program must be two times or less of the participant’s par value amount. No payments will
be made beyond this two times maximum payment level. 
 No awards under this Program will be paid until the Corporation achieves
positive annual adjusted operating profit. Positive annual adjusted operating profit is defined as calendar year gross profit less overhead expenses and before other special items that are included within operating profit/loss as reflected on the
consolidated statement of operations. Special items include litigation settlement income/expense, restructuring and long-lived asset impairment charges, goodwill and other intangible asset impairment charges, unusual or non-recurring items, and
changes in accounting principles. If achieved in 2012 200% of award will be paid. Adjustments may also be made for acquisitions, divestitures, and discontinued operations. If the Corporation fails to achieve positive annual adjusted operating profit
in 2012 but achieves it in 2013 125% of award will be paid. If Corporation fails to achieve positive annual adjusted operating profit in 2012 or 2013 any award under this Program will not be earned and will not be paid. For purpose of determining
whether an award will be paid for 2012, adjusted operating profit shall be calculated as if (i) no amount is earned under the Consolidated Net Earnings portion of the Program and the Other Program and (ii) par awards are earned under all
other portions of the Program and the Other Program. 
 WEIGHTINGS OF PROGRAM ELEMENTS 

All Corporate Officer participants in this Program, including the most senior executives, will have the same overall weightings of 50% on
Consolidated Net Earnings and 50% on Operating Focus Targets. 

  
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 GENERAL PROVISIONS 

 

	 	1.	If the Board, or an appropriate committee thereof, has determined that any fraud or intentional misconduct by an executive officer was a significant contributing factor
to the Corporation having to restate all or a portion of its financial statement(s), the Board or committee shall take, in its discretion, such action as it deems necessary to remedy the misconduct and prevent its recurrence. In determining what
remedies to pursue, the Board or committee will take into account all relevant factors, including whether the restatement was the result of fraud or intentional misconduct. The Board may, to the extent permitted by applicable law, require
reimbursement of any award under this Program paid to the executive officer after January 1, 2012, if and to the extent that a) the amount of the award was calculated based upon the achievement of certain financial results that were
subsequently reduced due to a restatement, b) the executive officer engaged in any fraud or intentional misconduct that caused or contributed to the need for the restatement, and c) the amount of the compensation that would have been awarded to the
executive officer under this Program had the financial results been properly reported would have been lower than the amount actually awarded. The remedy specified herein shall not be exclusive and shall be in addition to every other right or remedy
at law or in equity that may be available to the Corporation. If this paragraph 1 is held invalid, unenforceable or otherwise illegal, the remainder of this Program shall be deemed to be unenforceable due to a failure of consideration, and the
executive officer’s rights to any incentive compensation that would otherwise be awarded under this Program shall be forfeited. 

 In order to be entitled to an award of compensation under this Program, an executive officer must execute a written acknowledgement that such award shall be subject to the terms and conditions of this
paragraph 1. 
  

	 	2.	The Committee reserves the right to adjust award amounts under this Program down based on its assessment of the Corporation’s overall performance relative to
market conditions, provided, however, in no event may the Committee adjust an award under this Program upward. 

  

	 	3.	The Committee shall review and approve the awards recommended eligible participants in this Program. The Committee shall submit to the Board of Directors, for its
ratification, a report of the awards for all eligible participants approved by the Committee in accordance with the provisions of the Program. 

  

	 	4.	The Committee 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 Committee has certified financial achievements and applicable awards in writing. 

  

	 	5.	The judgment of the Committee 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 assignees. 

  
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	 	6.	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.

 The awards made to employees shall become a liability of the Corporation or the appropriate subsidiary as of
December 31 of the year earned and all payments to be made hereunder will be made as soon as practicable, but in any event before two and one half months after December 31 of the year earned, after said awards have been approved by the
Committee. 
 ADMINISTRATIVE GUIDELINES 

 

	 	1.	Award values will be based on annualized salary in effect on March 1, 2012 for each qualifying participant. Any change in duties, dimensions or responsibilities of
a current position resulting in an increase or decrease in salary range reference point or market rate will result in a pro-rata incentive award. Respective reference points, target incentive values or goals will be applied based on the actual
number of full months of service at each position. 

  

	 	2.	No award is to be paid to any participant who is not a regular full-time employee, (or a part time employee as approved by the Senior Vice President, Human Resources,
USG Corporation) in good standing at the end of the calendar year to which the award applies. However, if an eligible participant with three (3) or more months of active service in the Program year subsequently retires, becomes disabled, dies,
is discharged from the employment of the Company without cause, or is on an approved unpaid leave, the participant (or beneficiary) may be recommended for an award which would otherwise be payable based on goal achievement, prorated for the actual
months of active service during the year. In the event that an award is not earned for 2012 due to failure to meet the adjusted operating profit trigger in 2012, the provisions referenced in Exhibit 1 hereto shall be applicable.

  

	 	3.	Employees participating in any other incentive or bonus program of the Corporation or a Subsidiary who are transferred during the year to a position covered by this
Program 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. 

 

	 	4.	In the event of transfer of an employee from an assignment which does not qualify for participation in any incentive or bonus plan to a position covered by this
Program, the employee is eligible to participate in this Program with any potential award prorated for the actual months of service in the position covered by this 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 eligible service is required for award consideration. 

  

	 	6.	Exceptions to established administrative guidelines can only be made by the Committee. 

  
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