Document:

exv10w1

 

Exhibit 10.1

 

 

Year 2005

 

 

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 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, 2005
through December 31, 2005.

ELIGIBILITY

Individuals eligible for participation in this Program are those officers and other key
employees occupying management positions in Broadband 11 or higher. 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 but could be considered for special awards.

GOALS

For the 2005 Annual Management Incentive Program, Consolidated Net Earnings and consolidated,
subsidiary and profit center Strategic Focus Targets will be determined by the Compensation and
Organization Committee of the USG Board of Directors (the “Committee”) after considering
recommendations submitted from management of USG Corporation and the Operating Subsidiaries.

1

 

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 goals:

	 	 	 	 	 	 	 
	 	               Position Title or	 	 	Position Target Incentive
	 	          Salary Reference Point	 	 	 
	 	 
	 

	 	 
	 	 	 	 	 
	 	•      Chairman & CEO, USG Corporation

	 	 	 	90	%
	 	 
	 	 	 	 	 
	 	 
	 

	 	 
	 	 	 	 	 
	 	•      Executive Vice President & Chief Financial Officer, USG Corporation

	 	 	 	60	%
	 	 
	 	 	 	 	 
	 	•      Executive Vice President, USG Corporation & President Building Systems
	 	 	 	 	 
	 	 
	 	 	 	 	 
	 	•      Executive Vice President Marketing & Corporate Strategy, USG
Corporation
and President International
	 	 	 	 	 
	 	 
	 	 	 	 	 
	 	•      Executive Vice President & General Counsel, USG Corporation
	 	 	 	 	 
	 	 
	 	 	 	 	 
	 	 
	 

	 	 
	 	 	 	 	 
	 	•      Vice President Human Resources, USG Corporation

	 	 	 	45	%
	 	 
	 	 	 	 	 
	 	•      Vice President Communications, USG Corporation
	 	 	 	 	 
	 	 
	 	 	 	 	 
	 	 
	 

	 	 
	 	 	 	 	 
	 	•      Vice President, USG Corporation & President & COO, L & W Supply Corp.

	 	 	 	40	%
	 	 
	 	 	 	 	 
	 	•       Vice President & Chief Technology Officer
	 	 	 	 	 
	 	 
	 	 	 	 	 
	 	•      Vice President & Controller, USG Corporation
	 	 	 	 	 
	 	 
	 	 	 	 	 
	 	•      Vice President & Treasurer, USG Corporation
	 	 	 	 	 
	 	 
	 	 	 	 	 
	 	•      Vice President Research & Technology, USG Corporation
	 	 	 	 	 
	 	 
	 	 	 	 	 
	 	•      Vice President Compensation, Benefits & Administration, USG Corporation
	 	 	 	 	 
	 	 
	 	 	 	 	 
	 	•      Corporate Secretary & Associate General Counsel, USG Corporation
	 	 	 	 	 
	 	 
	 	 	 	 	 
	 	 
	 

	 	 
	 	 	 	 	 
	 	•      Position Reference Point: $182,160 and over

	 	 	 	35	%
	 	 
	 	 	 	 	 
	 	•      Position Reference Point: $167,280 — $182,159

	 	 	 	30	%
	 	 
	 	 	 	 	 
	 	•      Position Reference Point: $152,520 — $167,279

	 	 	 	25	%
	 	 
	 	 	 	 	 
	 	•      Position Reference Point: $137,040 — $152,519

	 	 	 	20	%
	 	 
	 	 	 	 	 
	 	•      Position Reference Point: $122,040 — $137,039

	 	 	 	15	%
	 	 
	 	 	 	 	 
	 	•      Position Reference Point: $107,520 — $122,039

	 	 	 	10	%
	 	 

2

 

AWARDS

	   	Incentive awards for all participants in the 2005 Annual Management Incentive Program will be
reviewed and approved by the Committee. For all participants, the annual incentive award par
opportunity is the annualized salary in effect on April 1, 2005 multiplied by the applicable
position target incentive value percent.
	 
	   	Incentive awards for 2005 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 have in the past been
for Fresh Start Accounting, asbestos, restructuring charges, bankruptcy expenses and the cumulative
impact of new accounting pronouncements (goodwill impairment). For 2005, likely adjustments would
include bankruptcy expenses. 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 results according to the following schedule:

	 	 	 
	$0 to $50 Million Net Earnings

	 	2.50% of this tier will fund the pool
	$51 to $150 Million Net Earnings

	 	2.25% of this tier will fund the pool
	$151 to $400 Million Net Earnings

	 	1.75% of this tier will fund the pool
	$401 Million and above

	 	1.00% of this tier will fund the pool

	   	Each tier of earnings is calculated separately and added together to determine the total pool.
This amount is then divided by the total plan par (sum of each individual participant’s Net
Earnings par, which is 50% of each participant’s total par). The factor derived from this method
is then applied to each participant’s Net Earnings par to determine the individual award for this
segment. There is no maximum award in this segment.
	 
	II.  	STRATEGIC FOCUS TARGETS:         
                
                
                
                
                           50% OF INCENTIVE
	 
	   	Strategic Focus Targets will be measurable, verifiable and derived from the formal strategic
planning process. For 2005, Strategic Focus Targets will generally include Overhead Reduction,
Working Capital Reduction, Cost Reduction, Business Unit Operating Profit and other operational
priorities. 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 Strategic Focus Target will be in 5% increments and not be less than 10%. The weighting
of all assigned Strategic Focus Targets will equal 50% of the individual’s total par.

3

 

WEIGHTINGS OF PROGRAM ELEMENTS

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

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 Corporation Officer, who has made
an extraordinary contribution to the Corporation’s welfare or earnings.

GENERAL PROVISIONS

	1.  	The Compensation and Organization Committee of the USG Board of Directors reserves the
right to adjust award amounts either up or down based on its assessment of the Corporation’s
overall performance relative to market conditions.
	 
	2.  	The Committee shall review and approve the awards recommended for officers and other
employees who are eligible participants in the 2005 Annual Management Incentive Program. The
Committee 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 Committee in
accordance with the provisions of the Program.
	 
	3.  	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.
	 
	4.  	The judgement 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.
	 
	5.  	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.
	 
	6.  	The awards made to employees shall become a liability of the Corporation or the appropriate
subsidiary as of December 31, 2005 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, 2005, after
said awards have been approved by the Committee.

4

 

ADMINISTRATIVE GUIDELINES

	1.  	Award values will be based on annualized salary in effect on April 1, 2005 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 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.  	As provided by the Program, 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 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.
	 
	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 the Annual Management
Incentive 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. For example, a Marketing Manager promoted to Director, Marketing
on August 1, will be eligible to receive a pro-rata 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 from an assignment which does not qualify for
participation in any incentive or bonus plan to a position covered by the Annual Management
Incentive Program, the employee is eligible to participate in the Annual Management 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 eligible service is required for award
consideration.
	 
	6.  	Exceptions to established administrative guidelines can only be made by the Committee.

5<PAGE>
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                                                                    EXHIBIT 10-L

                              QUALITY DINING, INC.
                              RELATED PARTY LEASES

<TABLE>
<CAPTION>
                                                                       Lease             Expiration Date         Annual
                 Location:                                          Commencement                of                Base
Store #        Burger King                   Landlord                   Date              Initial Term           Rental
-------      -------------          --------------------------      ------------         ---------------       ----------
<S>          <C>                    <C>                             <C>                  <C>                   <C>
             Indiana
467          Michigan City          Bendan Properties                 3-Sep-1986           30-Sep-2006             85,407
4124         Plymouth               Bendan Properties                22-Jun-1984           30-Jun-2004             52,592
4216         Mishawaka              Bendan Properties                29-Aug-1984           31-Aug-2004             63,043
4276         Goshen                 Bendan Properties                25-Oct-1984           31-Oct-2004             80,491
4435         LaPorte                F & S Realty                     26-Mar-1985           31-Mar-2005             73,900
4505         Mishawaka              Bendan Properties                15-May-1985           31-May-2005             75,322
5250         Fort Wayne             B.K. Fort Wayne Properties       18-Aug-1986           31-Aug-2006             58,632
5298         Mishawaka              Bendan Properties                19-Sep-1986           30-Sep-2006             73,251
5323         Fort Wayne             B.K. Fort Wayne Properties        3-Nov-1986           30-Nov-2006             78,242
5397         Warsaw                 Bendan Properties                22-Nov-1986           30-Nov-2006             69,873
5398         South Bend             Bendan Properties                 8-Jan-1987           31-Jan-2007             82,033
5413         Fort Wayne             B.K. Fort Wayne Properties       15-Jun-1987           30-Jun-2007             54,960
5753         Fort Wayne             B.K. Fort Wayne Properties       26-Oct-1987           31-Oct-2007             95,004
5790         Fort Wayne             B.K. Fort Wayne Properties        1-Dec-1987           31-Dec-2007             94,000
6389         Columbia City          B.K. Fort Wayne Properties       16-Apr-1989           30-Apr-2009             94,500
6485         Angola                 B.K. Fort Wayne Properties       14-Jun-1989           30-Jun-2009             94,500
6574         South Bend             Bendan Properties                26-Sep-1989           30-Sep-2009             72,090
6622         South Bend             Bendan Properties                13-Dec-1989           31-Dec-2009             94,497
7014         Bluffton               B.K. Fort Wayne Properties       10-Dec-1990           10-Dec-2010             84,375
7055         South Bend             Bendan Properties                21-Jan-1991           21-Jan-2011            111,675
7060         Kendallville           B.K. Fort Wayne Properties       11-Apr-1991           11-Apr-2011             74,250
7433         Goshen                 Bendan Properties                 1-Jul-1992            1-Jul-2012             86,400
8448         South Bend             Silver Creek Plaza, Inc.         27-May-1994           31-May-2009            115,092
10568        Goshen                 F & S Realty                     20-Feb-1997           28-Feb-2007             40,000
                                                                                                               ----------
             Total                                                                                              1,904,129
             Michigan
328          Benton Harbor          Bendan Properties                15-Feb-1983           14-Feb-2008            103,121
1606         St. Joseph             Bendan Properties                31-Dec-1986           31-Dec-2006            108,154
3172         Benton Harbor          J & B Realty                     24-Aug-1981           31-Aug-2010             68,107
2624         Woodhaven              Fitzpatrick Properties           23-Oct-1985           31-Oct-2005             95,200
4102         Highland               Fitzpatrick Properties           30-May-1984           30-Apr-2004             72,026
300          Muskegon               B.K. Muskegon Properties          1-Jul-1984           30-Jun-2009             72,884
458          Norton Shores          B.K. Muskegon Properties          1-Jul-1984           30-Jun-2009             66,536
5118         Hartland               Fitzpatrick Properties            9-May-1986           31-May-2006             77,211
5193         Stevensville           Bendan Properties                19-Jun-1986           30-Jun-2006             72,807
5188         Muskegon               B.K. Muskegon Properties          1-Jul-1986           31-Jul-2006             68,993
5603         Howell                 Fitzpatrick Properties            6-Jul-1987           31-Jul-2007             78,300
5988         Fremont                B.K. Muskegon Properties         14-Apr-1988           30-Apr-2008             78,100
5987         South Haven            Bendan Properties                 5-May-1988           31-May-2008             74,000
810          Taylor                 Fitzpatrick Properties           12-Sep-1989           30-Sep-2009             87,750
6843         Whitehall              B.K. Muskegon Properties          6-Jul-1990           31-Jul-2010             92,475
7113         Dowagiac               Bendan Properties                10-Apr-1991           10-Apr-2011             74,250
988          Brighton               Fitzpatrick Properties           17-Sep-1992           17-Sep-2012            121,500
2148         Southfield             Fitzpatrick Properties           21-May-2003           17-Sep-2008             99,020
6296         Taylor                 Fitzpatrick Properties           21-May-2003           28-Dec-2008             46,724
                                                                                                               ----------
             Total                                                                                              1,557,158
                                                                                                               ----------
             Total Rent Payments                                                                                3,461,287
                                                                                                               ==========
</TABLE>

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