Document:

Exhibit

EXHIBIT 10.30

                                          
                                    

Year 2017

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, 2017 through December 31, 2017. The Program is established under the USG Corporation Management Incentive Plan, as Amended and Restated effective May 13, 2015 (the “Plan”) and is subject in all respects to the terms and conditions therein.

ELIGIBILITY

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

GOALS

For the 2017 Annual Management Incentive Program, Consolidated Net Earnings adjusted for incentive plan purposes 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. 

1

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
	Position Target Incentive

	•    President & Chief Executive Officer, USG Corporation

	110%

	•    Executive Vice President & Chief Financial Officer, USG Corporation

	75%

	•    Senior Vice President & General Counsel, USG Corporation
•    Senior Vice President, USG Corporation; President, North America

	70%

	•    Executive Vice President, Chief Operations and Innovation Officer, USG Corporation
•    Executive Vice President and Chief Administrative Officer, USG Corporation

	65%

	•    Senior Vice President, Human Resources, USG Corporation
•    Vice President and Associate General Counsel, USG Corporation
•    Vice President and Treasurer, USG Corporation
•    Vice President and Controller, USG Corporation
•    Vice President, Corporate Innovation Center, USG Corporation

	45%

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, 2017 that is in effect on March 1, 2017 multiplied by the applicable position target incentive value percent. 
 
Awards are subject to achievement of any Management Objective(s) (as defined in the Plan) established by the Committee.  If such Management Objective(s) is/are not achieved, no bonuses will be paid under this Program.  After the Management Objective(s) has/have been met, incentive awards for 2017 will thereafter be based on a combination of the following elements:

		
	I.
	CONSOLIDATED NET EARNINGS ADJ. FOR IC PLAN PURPOSES:    50% OF INCENTIVE

Consolidated Net Earnings adjusted for incentive plan purposes 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 impairments or other non-recurring gains or charges.  For all participants, this portion of the award represents 50% of the incentive par. This portion of the award will be paid once threshold is met, subject to achievement of the Management Objective(s) as noted above. The threshold award begins at 50% of segment par.  The maximum award for this segment is capped at two times par. Straight line interpolation will be used to determine points between par and minimum or maximum.         
  
For each executive officer their individual Net Earnings par and their individual factors shall be determined by the Committee. 

		
	II.
	FOCUS TARGETS:    50% OF INCENTIVE

Focus Targets will be measurable, verifiable and derived from the formal strategic planning process.  For 2017, Focus Targets are expected to include Adjusted Operating Margin, Growth Index – Incremental Sales, Wallboard Cost, and SG&A or other operational priorities. The Focus Targets will be determined by the Committee. 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, subject to achievement of the Management Objective(s) as noted above.  

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.

PAYOUT CRITERIA

The maximum payment to a participant is two times the participant’s par value amount. No payments will be made beyond this two times maximum payment level.

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 adjusted for incentive plan purposes and 50% on Focus Targets.

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, 2017,  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.
	Consistent with the terms of the Plan, 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 (including of the Management Objective(s)) and applicable awards in writing as provided in the Plan.

		
	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.

		
	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.
	The following administrative guidelines will be applied and administered by the Committee consistent with the requirements for “performance-based compensation” in Section 162(m) of the Internal Revenue Code and the applicable regulations thereunder.

		
	2.
	Award values will be based on annualized salary in effect on March 1, 2017 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. 

		
	3.
	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 Executive Vice President and Chief Administrative Officer, 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. 

		
	4.
	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.  

		
	5.
	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.

		
	6.
	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.

		
	7.
	Exceptions to established administrative guidelines can only be made by the Committee.Exhibit

EXHIBIT 10.42

 
USG CORPORATION 
 
RESTRICTED STOCK UNITS AGREEMENT 
 

WHEREAS, the “Grantee” is an employee of USG Corporation, a Delaware corporation (the “Company”), or a Subsidiary;
WHEREAS, the Compensation and Organization Committee of the Board of Directors of the Company (the “Committee”) has granted to the Grantee, and the outside directors (as such term is used for purposes of Section 162(m) of the Code) of the Board of Directors have ratified, 
as set forth in the Award Summary on the Morgan Stanley Wealth Management website on the “Date of Grant”, Restricted Stock Units (as defined in the Plan) (the “RSUs”) pursuant to the USG Corporation 2016 Long-Term Incentive Plan (the “Plan”), subject to the terms and conditions of the Plan and the terms and conditions hereinafter set forth;

WHEREAS, Exhibit A to this Restricted Stock Units Agreement (this “Agreement”) contains defined terms that are used in this Agreement with initial capital letters, and other terms are defined in this Agreement for further use herein with initial capital letters; and

WHEREAS, the execution of a Restricted Stock Units Agreement substantially in the form hereof to evidence the RSUs has been authorized by a resolution of the Committee.

NOW, THEREFORE, the Company and the Grantee agree as follows:

		
	1.
	Payment of RSUs.  The RSUs 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 RSUs.  Subject to the terms and conditions of Sections 3, 4 and 5 hereof, the Grantee’s right to receive the Common Shares subject to the RSUs shall become nonforfeitable as and to the extent set forth in the Award Acceptance documentation on the Morgan Stanley Wealth Management website if the Grantee remains continuously employed until such time as is set forth therein as the Grantee’s Vest Date.

		
	3.
	Effect of Change in Control.  In the event of a Change in Control prior to the RSUs becoming nonforfeitable as provided in Section 2 above, and at a time when the RSUs have not been forefeited, the RSUs covered by this Agreement shall be treated in connection with such Change in Control as set forth in this Section 3.  If the entity effecting the Change in Control Assumes the RSUs, Section 3(a) shall apply.  If the entity effecting the Change in Control does not Assume the RSUs, Section 3(b) shall apply. 

		
	(a)
	RSUs Assumed by Successor:  If the RSUs that are outstanding at the time of a Change in Control are Assumed by the entity effecting the Change in Control, the RSUs shall become nonforfeitable and payable to the Grantee pursuant to Section 2 above.  Subject to the following sentence, all of the RSUs that are outstanding at the time of the Grantee’s termination of employment prior to the RSUs becoming nonforfeitable and payable to the Grantee shall be forfeited.  Notwithstanding the preceding sentence, any RSUs that have not become nonforfeitable and payable to the Grantee shall become nonforfeitable and payable to the Grantee on the first to occur of the following events between the date on which the Change in Control occurs (the “CIC Date”) and the end of the time period referenced in Section 2 above:

		
	(A)
	the involuntary termination of the Grantee’s employment for reasons other than Cause (as defined in Exhibit A);

		
	(B)
	the Grantee’s voluntary termination of employment for Good Reason (as defined in Exhibit A); or

		
	(C)
	the termination of the Grantee’s employment due to the Grantee’s death or Disability (as such term is defined in Exhibit A).

		
	(b)
	RSUs Not Assumed by Successor.  If the RSUs that are outstanding at the time of a Change in Control are not Assumed by the entity effecting the Change in Control, such RSUs shall immediately become nonforfeitable and payable to the Grantee.

 

		
	4.
	Effect of Death or Disability.  Notwithstanding Section 2 above, if the Grantee’s employment with the Company or a Subsidiary terminates due to the Grantee’s death or Disability before the RSUs become nonforfeitable, at a time when the RSUs have not been forfeited and before the occurrence of a Change in Control, the RSUs covered by this Agreement shall immediately become nonforfeitable and payable to the Grantee.

		
	5.
	Other Employment Terminations.  Notwithstanding any other provision herein, in the event that either (i) the Grantee’s employment shall, at a time when the RSUs remain forfeitable, terminate in a manner other than any specified in Section 3 or 4 above, or (ii) the Committee finds that the Grantee has engaged in any fraud or intentional misconduct as described in Section 20 hereof,  the Grantee shall forfeit any RSUs that have not become nonforfeitable by such Grantee upon such termination or finding, as applicable.  RSUs shall be considered to have been forfeited upon the event that causes such forfeiture and shall not be considered to be outstanding thereafter.

		
	6.
	Form and Time of Payment of RSUs.  Except as otherwise provided for in Section 9, payment for the RSUs, 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 on which the RSUs become nonforfeitable in accordance with Section 2, Section 3 or Section 4 hereof.  Upon and after payment for any RSUs pursuant to this Section 6, such RSUs shall not be considered to be outstanding.  Notwithstanding the foregoing, if the event that causes the RSUs to become nonforefeitable is a Change in Control that does not constitute a change of control for purposes of Section 409A of the Code, then to the extent necessary to comply with Section 409A of the Code, payment will be made on the next date or event under the Agreement that constitutes a permissible payment date or event under Section 409A of the Code.  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 on the date Common Shares are delivered to the Grantee) to provide for the taxes required to be withheld, with any fractional shares that would otherwise be delivered being rounded up to the next nearest whole share.  

		
	7.
	Payment of Dividend Equivalents.  From and after the Date of Grant and until the earlier of (a) the time when 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 RSUs 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 RSUs 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 RSUs (including dividend equivalents paid thereon) previously 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 RSUs to which the dividend equivalents were credited.
		
	8.
	RSUs Nontransferable.  Neither the RSUs 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.  Subject to Section 11 of the Plan, 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-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 Committee shall adjust the number of RSUs then held by the Grantee and the other terms of this award 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 Committee, 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, subject to the provisions of Section 3 of this Agreement.

		
	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.  If the event triggering the right to payment under this Agreement is the Grantee’s separation from service with the Company and its Subsidiaries within the meaning of Section 409A(a)(2)(A)(i) of the Code and the Grantee is a “specified employee” as determined pursuant to procedures adopted by the Company in compliance with Section 409A of the Code, the date of payment under Section 6 above shall be the first day of the seventh month after the date of the Grantee’s separation from service or, if earlier, the date of the Grantee’s death.  

		
	11.
	No Right to Future Grants; No Right of Employment; Extraordinary Item. In accepting the grant, the 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 

 

Agreement; (b) the grant of the RSUs is voluntary and occasional and does not create any contractual or other right to receive future grants of RSUs, or benefits in lieu of RSUs, even if RSUs have been granted repeatedly in the past; (c) all decisions with respect to future grants, if any, will be at the sole discretion of the Company; (d) the Grantee’s participation in the Plan is voluntary; (e) the RSUs 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 the Grantee’s employment contract, if any; (f) the RSUs 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 the 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 the Grantee’s employer; (h) the future value of the underlying Common 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 RSUs or diminution in value of the RSUs or the Common Shares and the 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, in the event of the involuntary termination of the Grantee’s employment, the Grantee’s right to receive RSUs and vest in RSUs under the Plan, if any, will terminate effective as of the date that the 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 the involuntary termination of employment, the Grantee’s right to vest in the RSUs after termination of employment, if any, will be measured by the date of termination of the Grantee’s active employment and will not be extended by any notice period mandated under local law. 
		
	12.
	Employee Data Privacy.  The Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the 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 the Grantee’s participation in the Plan. The Grantee understands that the Company Group holds certain personal information about the Grantee, including, but not limited to, the 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 RSUs or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in the Grantee’s favor, for the purpose of implementing, administering and managing the Plan (“Data”). The 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 the Grantee’s country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than the Grantee’s country. The Grantee understands that the Grantee may request a list with the names and addresses of any potential recipients of the Data by contacting the Grantee’s local human resources representative. The 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 the 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 the Grantee may elect to deposit any Common Shares acquired. The Grantee understands that Data will be held only as long as is necessary to implement, administer and manage the Grantee’s participation in the Plan. The Grantee understands that the 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 the Grantee’s local human resources representative. The Grantee understands, however, that refusing or withdrawing the Grantee’s consent may affect the Grantee’s ability to participate in the Plan. For more information on the consequences of the Grantee’s refusal to consent or withdrawal of consent, the Grantee understands that the Grantee may contact the 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.

		
	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 Committee 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 RSUs. 

		
	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.

		
	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.
	Electronic Delivery.  The Company may, in its sole discretion, deliver any documents related to the RSUs and the Grantee’s participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request the Grantee’s consent to participate in the Plan by electronic means.  The Grantee hereby consents to receive such documents by electronic delivery and the Grantee acknowledges that by clicking on the “Accept” button on the Morgan Stanley Wealth Management web page titled “Step 3: Confirm the Review/Acceptance of your Award,” the Grantee agrees to be bound by the electronic execution of this Agreement.

		
	20.
	Clawback.  In accordance with Section 20(d) of the Plan, if the Committee has determined that any fraud or intentional misconduct by the Grantee was a significant contributing factor to the Company 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 RSUs and/or Common Shares that the Grantee has not disposed of that were paid out pursuant to this Agreement; and (b) with respect to any RSUs and/or 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 RSUs on the date such RSUs were paid out.  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 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 RSUs and/or Common Shares that would otherwise be granted or paid under this Agreement shall be forfeited.  Further, notwithstanding anything in this Agreement to the contrary, the Grantee acknowledges and agrees that this Agreement and the award described herein (and any settlement thereof) are subject to the terms and conditions of the Company’s clawback policy (if any) as may be in effect from time to time specifically to implement Section 10D of the Securities Exchange Act of 1934, as 

 

amended, and any applicable rules or regulations promulgated thereunder (including applicable rules and regulations of any national securities exchange on which the Common Shares may be traded) (the “Compensation Recovery Policy”), and that this Section 20 shall be deemed superseded by and subject to the terms and conditions of the Compensation Recovery Policy from and after the effective date thereof.
 

 

Executed in the name and on behalf of the Company at Chicago, Illinois as of the [__] day of [______], [___].

    

USG CORPORATION                
                                    
_____________________________
Name:  
Title:  

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

____________________________
Name:

PLEASE PRINT AND KEEP A COPY FOR YOUR RECORDS.

 

EXHIBIT A TO
 USG CORPORATION 
RESTRICTED STOCK UNITS AGREEMENT

This Exhibit A is attached to and forms a part of the USG Corporation Restricted Stock Units Agreement, dated as of [________].

Solely for the purposes of this Agreement, the following terms shall be defined as follows:

		
	(A)
	An award of RSUs shall be considered “Assumed” in connection with a Change in Control if each of the following conditions is met:

		
	(1)
	The award of RSUs is converted into a replacement award that preserves the value of such award at the time of the Change in Control;

		
	(2)
	the replacement award contains provisions for scheduled vesting and treatment on termination of employment (including the definitions of Cause and Good Reason) that are no less favorable to the Grantee than as set forth in this Agreement, and all other terms of the replacement award (other than the security and number of shares represented by the replacement awards) are substantially similar to, or more favorable to the Grantee than, those set forth in this Agreement; and

		
	(3)
	the security represented by the replacement award, if any, is of a class that is publicly held and widely traded on an established stock exchange.

		
	(B)
	“Base Pay” means the Grantee’s annual base salary rate as in effect from time to time.

		
	(C)
	“Cause” shall mean that the Grantee shall have:

		
	(1)
	been convicted of a criminal violation involving fraud, embezzlement or theft in connection with the Grantee’s duties or in the course of the Grantee’s employment with the Company or any Subsidiary;

		
	(2)
	committed intentional wrongful damage to tangible or intangible property of the Company or any Subsidiary; or

		
	(3)
	committed intentional wrongful disclosure of secret processes or confidential information of the Company or any Subsidiary.

For purposes of this Agreement, no act or failure to act on the part of the Grantee will be deemed “intentional” if it was due primarily to an error in 

 

judgment or negligence, but will be deemed “intentional” only if done or omitted to be done by the Grantee not in good faith and without reasonable belief that the Grantee’s action or omission was in the best interest of the Company.  Notwithstanding the foregoing, the Grantee will not be deemed to have been terminated for “Cause” hereunder unless and until there shall have been delivered to the Grantee a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the Committee then in office (excluding the Grantee if the Grantee is then a member of the Committee) at a meeting of the Committee called and held for such purpose, after reasonable notice to the Grantee and an opportunity for the Grantee, together with the Grantee’s counsel (if the Grantee chooses to have counsel present at such meeting), to be heard before the Committee, finding that, in the good faith opinion of the Committee, the Grantee had committed an act constituting “Cause” as herein defined and specifying the particulars thereof in reasonable detail.  Nothing herein will limit the right of the Grantee or the Grantee’s beneficiaries to contest the validity or propriety of any such determination.
		
	(D)
	“Disability” shall mean that 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.

		
	(E)
	“Good Reason” shall mean the occurrence of any of the following events, and the failure of the Company to remedy any of the following events within 10 calendar days after receipt by the Company of written notice thereof from the Grantee:

		
	(1)
	a material diminution in the Grantee’s normal duties and responsibilities, including, but not limited to, the assignment without the Grantee’s written consent of any diminished duties and responsibilities which are inconsistent with the Grantee’s positions, duties and responsibilities with the Company immediately prior to a Change in Control, or a materially adverse change in the Grantee’s reporting responsibilities or titles as in effect immediately prior to the Change in Control, whether or not resulting from an act of the Company or otherwise, or any removal of the Grantee from or any failure to re-elect the Grantee to any of such positions, except in connection with the termination of the Grantee’s employment for Disability, Retirement, or Cause or as a result of the Grantee’s death or by the Grantee other than for Good Reason;

		
	(2)
	a reduction by the Company in the Grantee’s Base Pay as in effect on the Date of Grant or as the same may be increased from time to time;

 

		
	(3)
	a change in the Grantee’s Target Annual Direct Compensation that results in an aggregate decrease in such Target Annual Direct Compensation in excess of ten percent (10%);

		
	(4)
	the Company’s requiring the Grantee, without the Grantee’s written consent, to be based anywhere other than within fifty (50) miles of the Grantee’s office location immediately prior to the Change in Control, except for required travel on the Company’s business to an extent substantially consistent with business travel obligations immediately prior to the Change in Control;

		
	(5)
	the failure by the Company to continue in effect any investment plan, retirement plan, savings plan, supplemental retirement plan, deferred compensation plan, supplemental investment plan, life insurance plan, health and accident plan, disability plan or other welfare benefit plan in which the Grantee was participating at the time of the Change in Control (or plans providing the Grantee with substantially similar benefits), the taking of any action by the Company which would adversely affect the Grantee’s participation or materially reduce the Grantee’s benefits or value under any of such plans or deprive the Grantee of any material fringe benefit enjoyed by the Grantee at the time of the Change in Control, or the failure by the Company to provide the Grantee with the number of paid vacation days to which the Grantee was then entitled in accordance with the Company’s normal vacation policy in effect on the date of the Change in Control; or

		
	(6)
	the failure by the Company to obtain the assumption of the obligation to perform any Change in Control Severance Agreement between the Company and Grantee by any successor as contemplated in such Change in Control Severance Agreement.

		
	(F)
	“Retirement” shall mean the Grantee’s retirement under a retirement plan (including, without limitation, any supplemental retirement plan) of the Company or any Subsidiary, or the Grantee’s retirement from employment with the Company or any Subsidiary after completing at least three years of continuous service with the Company or any Subsidiary and attaining the age of 62.  Without limiting the generality of the foregoing, in no event shall “Retirement” include the involuntary termination of the Grantee’s employment by the Company (i) for Cause or (ii) without Cause if, as a result of such termination without Cause, the Grantee becomes eligible to receive payments on account of such termination under an employment agreement between the Grantee and the Company.

 

		
	(G)
	 “Target Annual Direct Compensation” means the sum of the Grantee’s Base Pay, target annual incentive opportunity, and the annualized value of the most recent long-term incentive award approved by the Committee prior to the Change in Control.  For purposes of measuring annualized long-term incentives, the awards shall be measured on their date of grant using reasonable assumptions, including, but not limited to, fair value principles such as those identified in Financial Accounting Standards Board Accounting Standards Codification Topic 718; the value of such awards shall be annualized over the frequency of their grant.

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