EXHIBIT 10.9
USG CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
DATE OF GRANT: _______________
WHEREAS, _________________ (the "Optionee") is an employee of USG
Corporation (the "Company") or a Subsidiary;
WHEREAS, the Board of Directors of the Company (the "Board") has granted to
the Optionee, effective as of ___________, 20__ (the "Date of Grant"), an
Option Right (the "Option") pursuant to the Company's Long-Term Incentive Plan,
as amended (the "Plan") to purchase _________ Common Shares of the Company at a
price of $______ per share, which represents the Market Value per Share on the
Date of Grant (the "Option Price"), subject to the terms and conditions of the
Plan and the terms and conditions hereinafter set forth;
WHEREAS, the execution of a Nonqualified Stock Option Agreement
substantially in the form hereof to evidence the Option has been authorized by a
resolution of the Board; and
WHEREAS, the Option is intended as a nonqualified stock option and shall
not be treated as an "incentive stock option" within the meaning of that term
under Section 422 of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, the Company and the Optionee agree as follows:
1. RIGHT TO EXERCISE.
(a) Subject to Sections 1(b) and (c), Section 3 and Section 5 below, the
Option will become exercisable to the extent of twenty percent (20%)
of the total number of Common Shares underlying the Option on each of
the first five anniversaries of the Date of Grant if the Optionee
remains continuously employed until such time. To the extent the
Option is exercisable, it may be exercised in whole or in part.
(b) Notwithstanding Section 1(a) above, the Option shall become
immediately exercisable in full, if at any time prior to the
termination of the Option, a Change in Control shall occur.
(c) Notwithstanding Section 1(a) above:
(i) If the Optionee should die or become permanently and totally
disabled while in the employ of the Company or any Subsidiary,
this Option shall immediately become exercisable in full and
shall remain exercisable until terminated in accordance with
Section 3 below.
(ii) If, following January 1, 2007, the Optionee should retire under a
retirement plan (including, without limitation, any supplemental
retirement plan) of the Company or any Subsidiary at or after the
earliest voluntary retirement age provided for in any such
retirement plan ("Retirement"), one-half of the unexercisable
portion of this Option at the time of such Retirement shall
continue to become exercisable pursuant to the original vesting
schedule and shall remain exercisable until terminated in
accordance with Section 3 below. The remaining one-half of the
unexercisable portion of the Option at the time of Retirement
shall be immediately forfeited and of no further force or effect.
2. PAYMENT. The Option Price shall be payable (a) in cash or by check
acceptable to the Company, (b) by actual or constructive transfer to the
Company of nonforfeitable, unrestricted Common Shares that have been owned
by the Optionee for more than six (6) months prior to the date of exercise,
or (c) by a combination of such methods of payment. The requirement of
payment in cash shall be deemed satisfied if the Optionee shall have made
arrangements satisfactory to the Company with a bank or a broker who is a
member of the National Association of Securities Dealers, Inc. to sell on
the exercise date a sufficient number of the shares being purchased so that
the net proceeds of the sale transaction will at least equal the Option
Price plus payment of any applicable withholding taxes and pursuant to
which the bank or broker undertakes to deliver the full Option Price plus
payment of any applicable withholding taxes to the Company on a date
satisfactory to the Company, but not later than the date on which the sale
transaction will settle in the ordinary course of business.
3. TERMINATION. This Option shall terminate on the earliest of the following
dates:
(a) Six (6) months after the Optionee ceases to be an employee of the
Company or a Subsidiary, unless the Optionee ceases to be such
employee by reason of death, permanent and total disability or
Retirement;
(b) One (1) year after the death of the Optionee if the Optionee dies
while an employee of the Company or a Subsidiary (in which case the
Option becomes immediately exercisable in full pursuant to Section
1(c) herein), or if the same occurs within the six (6) month period
referred to in subsection (a) hereof;
(c) Three (3) years after the permanent and total disability of the
Optionee if the Optionee becomes permanently and totally disabled
while an employee of the Company or a Subsidiary (in which case the
Option becomes immediately exercisable in full pursuant to Section
1(c) herein), or if the same occurs within the six (6) month period
referred to in subsection (a) hereof;
(d) Five (5) years after the Retirement of the Optionee; and
(e) Ten (10) years from the Date of Grant.
4. OPTION NONTRANSFERABLE. This Option is not transferable by the Optionee
otherwise than by will or the laws of descent and distribution.
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5. COMPLIANCE WITH LAW. This Option shall not be exercisable if such exercise
would involve a violation of any applicable federal, state or other
securities law.
6. ADJUSTMENTS. The Board (or a committee of the Board) shall make such
adjustments in the Option Price and in the number or kind of Common Shares
or other securities covered by this Option as the Board (or a committee of
the Board) in its sole discretion, exercised in good faith, may determine
is equitably required to prevent dilution or enlargement of the rights of
the Optionee that otherwise would result from (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. Moreover, in the event of any such
transaction or event, the Board (or a committee of the Board), in its
discretion, may provide in substitution for any or all of the Option Rights
provided for herein such alternative consideration as it may determine to
be equitable in the circumstances.
7. TAXES AND WITHHOLDING. If the Company shall be required to withhold any
federal, state, local or foreign tax in connection with exercise of this
Option, it shall be a condition to such exercise that the Optionee pay or
make provision satisfactory to the Company for payment of all such taxes.
The Optionee may elect that all or any part of such withholding requirement
be satisfied by retention by the Company of a portion of the shares
purchased upon exercise of this Option. If such election is made, the
shares so retained shall be credited against such withholding requirement
at the Market Value per Share on the date of exercise. In no event,
however, shall the Company accept Common Shares for payment of taxes in
excess of required tax withholding rates.
8. CONTINUOUS EMPLOYMENT. For purposes of this Agreement, the continuous
employment of the Optionee with the Company or a Subsidiary shall not be
deemed to have been interrupted, and the Optionee shall not be deemed to
have ceased to be an employee of the Company or Subsidiary, by reason of
the (i) transfer of the Optionee's employment among the Company and its
Subsidiaries or (ii) an approved leave of absence.
9. NO EMPLOYMENT CONTRACT. This Option is a voluntary, discretionary award
being made on a one-time basis and it does not constitute a commitment to
make any future awards. This Option and any payments made hereunder will
not be considered salary or other compensation for purposes of any
severance pay or similar allowance, except as otherwise required by law.
Nothing in this Agreement will give the Optionee any right to continue
employment with the Company or any Subsidiary, as the case may be, or
interfere in any way with the right of the Company or a Subsidiary to
terminate the employment of the Optionee.
10. INFORMATION. Information about the Optionee and the Optionee's
participation in the Plan may be collected, recorded and held, used and
disclosed for any purpose related to the administration of the Plan. The
Optionee understands that such processing of this information may need to
be carried out by the Company and its Subsidiaries and by third
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party administrators whether such persons are located within the Optionee's
country or elsewhere, including the United States of America. The Optionee
consents to the processing of information relating to the Optionee and the
Optionee's participation in the Plan in any one or more of the ways
referred to above.
11. 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 Board
(or a committee of the Board) 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 Option hereunder.
12. 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 Optionee under this Agreement without the Optionee's consent.
13. SEVERABILITY. 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.
14. SUCCESSORS AND ASSIGNS. Without limiting Section 4 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
Optionee, and the successors and assigns of the Company.
15. 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.
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Executed in the name and on behalf of the Company at______________________,
___________________, as of the ______ day of __________, 20__.
USG CORPORATION
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Name:
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Title:
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The undersigned Optionee hereby accepts the Option Rights evidenced by this
Nonqualified Stock Option Agreement on the terms and conditions set forth herein
and in the Plan.
Dated:
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[OPTIONEE NAME]
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