1995 LONG-TERM EQUITY PLAN OF USG CORPORATION
PERFORMANCE-BASED RESTRICTED STOCK AWARD AGREEMENT
1. Date of Award. This award is made as of January 2, 1996
("Date of Award").
2. Award of Performance-Based Restricted Stock. USG CORPORATION
(the "Corporation"), for good and valuable consideration, the
receipt of which is hereby acknowledged, hereby grants to
(the "Grantee") shares of performance-based
restricted common stock, $0.10 par value, of the
Corporation, upon the terms and subject to the restrictions and
conditions hereinafter stated. Such grant is made pursuant to
the 1995 Long-Term Equity Plan of the Corporation (the "Plan"),
all determinations by the Committee appointed under the Plan (the
"Committee") necessary or appropriate to the making of this
award, including the Committee's adoption of Operating Guidelines
(the "Guidelines") under the Plan pertaining to this award,
having been duly made.
3. Restrictions. Grantee shall not sell, assign, exchange,
donate, pledge, or encumber the shares granted pursuant to
paragraph 2 above through the termination of the Performance
Period (as defined in paragraph 4) and the determination by the
Committee of the vesting and release from restrictions of any
portion of the award hereunder (collectively, "Restriction
Period"). This award also shall be subject to the following
conditions:
3.1. Legend and Custody. The Corporation shall issue a
certificate or certificates representing the shares granted
pursuant to paragraph 2 above, which certificate or
certificates shall be registered in the name of the Grantee.
Such certificate or certificates shall bear a legend or
legends referring to the terms, conditions, and restrictions
applicable to the aforesaid award and such other provisions
as may be determined by the Corporation. Such certificate
or certificates shall be retained in the custody of the
Corporation at all times during the Restriction Period, and
Grantee shall execute and deliver to the Corporation,
promptly after the beginning of the Restriction Period, a
stock power, endorsed in blank, relating to such certificate
or certificates.
3.2. Change in Control. In the event of a Change in
Control, as defined in Section 10(b) of the Plan, the value
of the shares granted pursuant to paragraph 2 above shall be
converted to cash on the basis of the Change in Control
Price, as defined in Section 10(c) of the Plan, and such
cash shall be paid to the Grantee.
3.3. Termination by Disability, Death or Retirement After
Age 62. In the event employment of the Grantee by the
Corporation or any Subsidiary terminates, prior to the
termination of the Performance Period, by reason of
disability, death or retirement after attaining age 62, the
entire award hereunder shall be subject to the Performance
Determination (as defined in paragraph 4) and the shares
subjected thereto released or forfeited in accordance with
the provisions of paragraph 4 below (in the event of such
death, any such release of shares shall be only to the
executor or administrator of the estate of the Grantee or
the person or persons to whom this award shall pass by will
or the laws of descent and distribution).
For purposes of this document, "disability" shall mean an
inability due to physical or mental impairment to perform
the duties of the Grantee's position for the immediately
preceding six (6) months and an inability for the same
reasons to be gainfully employed for the rest of the
Grantee's life, both of which findings shall be certified by
a physician or physicians satisfactory to the Corporation or
the appropriate Subsidiary.
3.4. Termination by Reason of Early Retirement or Discharge
Without Cause. In the event employment of the Grantee by
the Corporation or any Subsidiary terminates, prior to the
termination of the Performance Period, by reason of
retirement before age 62 or discharge by the Corporation or
a Subsidiary without cause (a "Termination Event"), the
following portions of the award hereunder shall be subject
to the Performance Determination and the shares subjected
thereto released or forfeited in accordance with the
provisions of paragraph 4 below (the portions of the award
hereunder not so subject to the Performance Determination
shall be forfeited as of the date of the Termination Event):
- 33 1/3% of the total awarad on a cumulative basis
if Termination Event occurs before the first
anniversary of the Date of Award;
- 66 2/3% of the total award on a cumulative basis if
Termination Event occurs after first but before
second anniversary of the Date of Award; and
- 100% of the total award on a cumulative basis if
Termination Event occurs after second anniversary
of the Date of Award.
For purposes of this doument, the term "cause" shall mean a
Grantee's conviction of a felony or a determination by the
Committee that a Grantee has engaged in acts which have been
materially harmful to the Corporation or its Subsidiaries,
including the following: (i) an act of fraud, embezzlement
or theft in connection with the Grentee's employment; (ii)
wrongful damage to property of the Corporation or its
Subsidiaries; (iii) wrongful disclosure of secret processes
or confidential information of the Corporation or its
Subsidiaries; or (iv) wrongful competition with the
Corporation or its Subsidiaries.
3.5. Termination for Other Reasons. In the event employment
of the Grantee by the Corporation or any Subsidiary
terminates for any reason other than disability, death,
retirement, or discharge without cause, the entire award
hereunder shall be forfeited on the date of such termination.
4. Performance Determination. Subject to the provisions of
paragraph 3 above, the award hereunder shall be deemed earned and
freed from all restrictions and delivered to the Grantee in
accordance with the following schedule upon certification by the
Committee of the Corporation's total shareholder return during
the period beginning January 1, 1996 and ending December 31, 1998
(the "Performance Period"), relative to the total shareholder
return of each of the companies (other than the Corporation)
comprising the Value Line Building Materials Index ("Index"),
assuming in each case standard fixed investments and reinvestment
of dividends, and utilizing the average market price of a share
of each company for the last six months of 1995 and 1998 as the
market value of a share of such company on January 1, 1996 and
December 31, 1998, respectively (the "Performance
Determination"):
Total Shareholder Return of
Corporation as Percentile of
Returns of Other Index Percent of Award
Members Deemed Earned
70% or higher 100%
60% 70%
50% (median) 50%
40% 20%
Less than 40% 0
Any portion of the award hereunder not deemed earned in the
Performance Determination shall be forfeited as of the date of
the Performance Determination.
5. Other Benefits and Rights of Grantee. The Grantee shall be
entitled to the following benefits and rights.
5.1. Purchase Price. The purchase price for all of the
shares deemed earned in the Performance Determination shall
be zero.
5.2. Rights of Stockholder. During the Restriction Period,
Grantee shall have all the benefits and rights of a
registered stockholder, including, but not by way of
limitation, the right to vote all of the non-forfeited shares
subject to this award and to receive dividends thereon;
provided, however, that the restrictions imposed by the first
sentence of paragraph 3 above shall remain in force during
such time and shall be a limitation on such benefits and
rights.
5.3. End of Restriction Period. Following the Performance
Determination, the Corporation promptly shall deliver to the
Grantee a certificate or certificates for all the shares
deemed earned in the Performance Determination pursuant to
paragraph 4 above. The Grantee recognizes that, under
current provisions of federal income tax law, he will
recognize ordinary income at the time of the Performance
Determination in an amount equal to the aggregate market
value of the shares deemed earned pursuant to paragraph 4
above (based on the mean between the high and low trading
prices for a share of the Corporation's common stock on the
New York Stock Exchange composite tape on such date). Prior
to or simultaneously with any such delivery, Grantee shall
provide the Corporation with funds (or, in the discretion of
the Corporation, with the equivalent in shares of common
stock of the Corporation of such funds) necessary to
discharge any applicable income tax withholding obligations.
6. Changes in Capitalization or Organization. Nothing contained
in this document shall alter or diminish in any way the right and
authority of the Corporation to effect changes in its capital or
organizational structure; provided, however, that the following
procedures shall be recognized.
6.1. Stock Split, Stock Dividend, or Extraordinary
Distribution. In the event the number of shares of common
stock of the Corporation is increased at any time during the
Restriction Period by a stock split, by declaration by the
Board of Directors of the Corporation of a dividend payable
only in shares of such stock, or by any other extraordinary
distribution of shares, the number of shares granted pursuant
to paragraph 2 above shall be proportionately adjusted.
6.2. Organizational Changes. In the event a merger,
consolidation, reorganization, or other change in corporate
structure materially changes the terms or value of the common
stock of the Corporation, the number of shares granted
pursuant to paragraph 2 above shall be adjusted in such
manner as the Committee in its sole discretion shall
determine to be equitable and consistent with the purposes of
the Plan. Such determination shall be conclusive for all
purposes with respect to the grant made in paragraph 2 above.
7. Execution, Delivery, and Performance of Agreement. Grantee
shall have no rights with respect to the grant made in paragraph
2 above unless and until such Grantee has executed this Agreement
in the space provided below and has delivered one executed copy
of same to the Corporation, such delivery to be accomplished
within sixty (60) days of the date of award specified in
paragraph 1 above. Grantee likewise shall have no rights with
respect to the grant made in paragraph 2 above unless such
Grantee has otherwise complied with all the terms and conditions
contained in this Agreement.
8. Plan and Guidelines to Govern. The grant made in paragraph 2
above and all other provisions contained in this document shall
be subject to and interpreted in a manner consistent with the
terms and conditions of the Plan and the Guidelines.
USG CORPORATION
By
Corporate Secretary
ACCEPTED:
Grantee:
Date:
