PERFORMANCE SHARES
AGREEMENT
DATE OF GRANT: MARCH 23,
2007
WHEREAS, _________
(the “Grantee”) is an employee of USG
Corporation, a Delaware corporation (the “Company”) or
a Subsidiary;
WHEREAS, the Board
of Directors of the Company (the “Board”) has granted
to the Grantee, effective as of March 23, 2007 (the
“Date of Grant”), the number of Performance Shares (as
defined in the Plan) set forth below pursuant to the
Company’s Long-Term Incentive Plan, as amended (the
“Plan”), subject to the terms and conditions of the
Plan and the terms and conditions hereinafter set forth;
and
WHEREAS, the
execution of a Performance Shares Agreement substantially in the
form hereof to evidence such grant has been authorized by a
resolution of the Board.
NOW, THEREFORE,
the Company and the Grantee agree as follows:
|
1.
|
|
Grant of Performance Share
Right. Subject to the terms of the Plan,
the Company hereby grants to the Grantee a targeted number of
performance shares equal to _________ (the “Target
Performance Shares”), payment of which depends on the
Company’s performance as set forth in this Agreement and in
the Statement of Performance Goals (the “Statement of
Performance Goals”) approved by the Board.
|
(a) Performance
Measure . The Grantee’s right to receive all, any portion
of, or more than, the Target Performance Shares will be contingent
upon the achievement of specified levels of performance of the
Company’s total stockholder return (including reinvestment of
dividends) relative to the performance of the Dow Jones U.S.
Construction and Materials Index (“Total Stockholder
Return”), as set forth in the Statement of Performance Goals
and will be measured over the period from December 1, 2006
through December 31, 2009 (the “Performance
Period”).
(b) Below
Threshold . If, upon the conclusion of the Performance Period,
Total Stockholder Return for the Performance Period falls below the
threshold level, as set forth in the Performance Matrix contained
in the Statement of Performance Goals, no performance
shares
for the Performance Period shall become earned.
(c)
Threshold . If, upon the conclusion of the Performance
Period, Total Stockholder Return for the Performance Period equals
the threshold level, as set forth in
the Performance
Matrix contained in the Statement of Performance Goals, 35% of the
Target Performance Shares for the Performance Period shall become
earned.
(d) Between
Threshold and Target . If, upon the conclusion of the
Performance Period, Total Stockholder Return exceeds the threshold
level, but is less than the target level, as set forth in the
Performance Matrix contained in the Statement of Performance Goals,
the Target Performance Shares shall become earned based on
performance during the Performance Period, as determined by
mathematical straight-line interpolation between 35% of the Target
Performance Shares and 100% of the Target Performance
Shares.
(e) Target
. If, upon the conclusion of the Performance Period, Total
Stockholder Return for the Performance Period equals the target
level, as set forth in the Performance Matrix contained in the
Statement of Performance Goals, 100% of the Target Performance
Shares for the Performance Period shall become earned.
(f) Between
Target and Intermediate . If, upon the conclusion of the
Performance Period, Total Stockholder Return exceeds the target
level, but is less than the intermediate level, as set forth in the
Performance Matrix contained in the Statement of Performance Goals
the Target Performance Shares shall become earned based on
performance during the Performance Period, as determined by
mathematical straight-line interpolation between 100% of the Target
Performance Shares and 150% of the Target Performance
Shares.
(g)
Intermediate . If, upon the conclusion of the Performance
Period, Total Stockholder Return for the Performance Period equals
the intermediate level, as set forth in the Performance Matrix
contained in the Statement of Performance Goals, 150% of the Target
Performance Shares for the Performance Period shall become
earned.
(h) Between
Intermediate and Maximum . If, upon the conclusion of the
Performance Period, Total Stockholder Return exceeds the
intermediate level, but is less than the maximum level, as set
forth in the Performance Matrix contained in the Statement of
Performance Goals the Target Performance Shares shall become earned
based on performance during the Performance Period, as determined
by mathematical straight-line interpolation between 150% of the
Target Performance Shares and 200% of the Target Performance
Shares.
(i) Equals or
Exceeds Maximum . If, upon the conclusion of the Performance
Period, Total Stockholder Return for the Performance Period equals
or exceeds the maximum level, as set forth in the Performance
Matrix contained in the Statement of Performance Goals, 200% of the
Target Performance Shares shall become earned.
(j) Conditions;
Determination of Earned Award . Except as otherwise provided
herein, the Grantee’s right to receive any performance shares
is contingent upon his or her remaining in the continuous employ of
the Company or a Subsidiary through the end of the Performance
Period. Following the Performance Period, the Board
shall
USG Corporation — Performance
Shares Agreement
2
determine
whether and to what extent the goals relating to Total Stockholder
Return have been satisfied for the Performance Period and shall
determine the number of performance shares that shall have become
earned hereunder.
|
3.
|
|
Effect of Change in
Control. In
the event a Change of Control occurs during the Performance Period,
but before the payment of any performance shares as set forth in
Section 6 below, the Company shall pay to the Grantee, as soon
as practicable following the Change of Control, a pro rata number
of the Target Performance Shares based on the number of full months
that have elapsed during the Performance Period prior to the Change
of Control, and the remaining performance shares will be
forfeited.
|
|
4.
|
|
Termination Due to Death,
Disability, Retirement. If the Grantee’s employment
with the Company or a Subsidiary terminates during the Performance
Period, but before the payment of any performance shares as set
forth in Section 6 below due to (a) the Grantee’s
death or (b) the Grantee becoming permanently and totally disabled
while in the employ of the Company or any Subsidiary or
(c) the Grantee’s Retirement, the Company shall pay to
the Grantee or his or her executor or administrator, as the case
may be, as soon as practicable following the Performance Period and
based on the level of achievement of Total Stockholder Return
during the Performance Period, a pro rata number of the Target
Performance Shar
|
|
