0000731939-07-000050.txt : 20071231 0000731939-07-000050.hdr.sgml : 20071231 20071231164747 ACCESSION NUMBER: 0000731939-07-000050 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20071228 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071231 DATE AS OF CHANGE: 20071231 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEMPLE INLAND INC CENTRAL INDEX KEY: 0000731939 STANDARD INDUSTRIAL CLASSIFICATION: PAPERBOARD MILLS [2631] IRS NUMBER: 751903917 STATE OF INCORPORATION: DE FISCAL YEAR END: 1230 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08634 FILM NUMBER: 071334816 BUSINESS ADDRESS: STREET 1: 1300 MOPAC EXPRESSWAY SOUTH CITY: AUSTIN STATE: TX ZIP: 78746 BUSINESS PHONE: 5124345800 MAIL ADDRESS: STREET 1: 1300 MOPAC EXPRESSWAY SOUTH CITY: AUSTIN STATE: TX ZIP: 78746 8-K 1 tin8kspins20071231.htm 8-K ANNOUNCING COMPLETION OF GUARANTY AND FORESTAR SPIN-OFFS

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

_________________

Date of Report: December 28, 2007

(Date of earliest event reported)

TEMPLE-INLAND INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	001-08634	75-1903917
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1300 MoPac Expressway South, Austin, Texas 78746

(Address of Principal Executive Offices, including Zip code)

(512) 434-5800

(Registrant's telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240. 13e-4(c))

Item 2.01. Completion of Acquisition or Disposition of Assets.

On December 28, 2007, Temple-Inland Inc. (“Temple-Inland”) completed the spin-off distributions (the “Distributions”) of all of the shares of common stock, par value $1.00 per share, of Forestar Real Estate Group Inc. (“Forestar”), a wholly-owned subsidiary of Temple-Inland that holds directly or indirectly the assets and liabilities associated with Temple-Inland’s real estate business, and Guaranty Financial Group Inc. (“Guaranty”), a wholly-owned subsidiary of Temple-Inland that holds directly or indirectly the assets and liabilities associated with Temple-Inland’s financial services business. As a result of the Distributions, Temple-Inland stockholders of record as of December 14, 2007 (the “Record Date”) received one share of Forestar common stock and one share of Guaranty common stock for every three shares of Temple-Inland common stock held as of the Record Date. Temple-Inland distributed to its stockholders approximately 35.5 million shares of Forestar and Guaranty common stock, respectively, in the Distributions. Cash will be distributed in lieu of fractional shares.

Forestar and Guaranty are now independent public companies trading on the New York Stock Exchange under the symbols “FOR” and “GFG,” respectively. Details of the Distributions can be found in Guaranty’s and Forestar’s information statements, which were attached as Exhibit 99.1 to each company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on December 14, 2007 (the “Information Statements”).

As disclosed in the Current Report on Form 8-K filed with the SEC on April 2, 2007, upon completion of the Distributions, Kenneth M. Jastrow II retired from Temple-Inland and Doyle R. Simons became Chairman of the Board and Chief Executive Officer. In addition, J. Patrick Maley III became President and Chief Operating Officer and a director of Temple-Inland.

A copy of Temple-Inland’s press release dated December 31, 2007 announcing the completion of the Distributions of Forestar and Guaranty is attached hereto as Exhibit 99.1.

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors;

Appointment of Certain Officers; Compensatory Arrangements of

Certain Officers.

In connection with the Distributions, Temple-Inland modified the Nonqualified Deferred Compensation Plan (formerly known as the Stock Deferral and Payment Plan), the Directors’ Fee Deferral Plan, the Supplemental Executive Retirement Plan, and outstanding Option Agreements and Restricted Stock Agreements. These amendments (1) provide for vesting and distribution in 2008 of benefits accrued by departing executives who will work for Guaranty and Forestar, (2) provide for distribution in 2008 of Guaranty and Forestar stock and the special dividend paid out of timberland sale proceeds accrued to directors from their deferred fee accounts, (3) give effect to terms contained in the Employee Matters Agreement dated December 11, 2007 by and among Temple-Inland, Guaranty, and Forestar, and (4) conform plan provisions to the requirements of Internal Revenue Code Section 409A. The amended and restated Nonqualified Deferred Compensation Plan is attached hereto as Exhibit 10.1, the amended and restated Directors’ Fee Deferral Plan is attached hereto as Exhibit 10.2, the amended and restated Supplemental Executive Retirement Plan is attached hereto as Exhibit 10.3, and the amendment

to outstanding Option Agreements and Restricted Stock Agreements is attached hereto as Exhibit 10.4.

Item 9.01.

Financial Statements and Exhibits.

(b) Pro Forma Financial Information.

The unaudited pro forma consolidated balance sheet as of September 29, 2007, and unaudited pro forma consolidated statements of income for first nine months 2007 and for the years 2006, 2005, and 2004 are included as Exhibit 99.2 to this Current Report on Form 8-K and are incorporated herein by reference.

(d)	Exhibits.

10.1

Amended and restated Temple-Inland Nonqualified Deferred Compensation Plan

10.2

Amended and restated Temple-Inland Directors’ Fee Deferral Plan

10.3

Amended and restated Temple-Inland Supplemental Executive Retirement Plan

10.4

Amendment to outstanding Temple-Inland Option Agreements and Restricted Stock Agreements

99.1

Press release dated December 31, 2007 announcing the completion of the Distributions of Forestar and Guaranty

99.2

Unaudited pro forma consolidated balance sheet as of September 29, 2007, and unaudited pro forma consolidated statements of income for first nine months 2007 and for the years 2006, 2005, and 2004

SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TEMPLE-INLAND INC.
Date: December 31, 2007	By:	/s/ Doyle R. Simons
		Name: Doyle R. Simons
		Title: Chief Executive Officer

EXHIBIT INDEX

Exhibit	Description	Page

10.1	Amended and restated Temple-Inland Nonqualified Deferred Compensation Plan	5
10.2	Amended and restated Temple-Inland Directors’ Fee Deferral Plan	15
10.3	Amended and restated Temple-Inland Supplemental Executive Retirement Plan	23
10.4	Amendment to outstanding Temple-Inland Option Agreements and Restricted Stock Agreements	36
99.1	Press release dated December 31, 2007 announcing the completion of the Distributions of Forestar and Guaranty	40
99.2	Unaudited pro forma consolidated balance sheet as of September 29, 2007, and unaudited pro forma consolidated statements of income for first nine months 2007 and for the years 2006, 2005, and 2004	42

EX-10 2 tinex101defcomp.htm AMENDED DEFERRED COMP PLAN

Exhibit 10.1

TEMPLE-INLAND INC.

NONQUALIFIED DEFERRED COMPENSATION PLAN

(as amended and restated effective November 2, 2007)

ARTICLE 1

Intent

This Temple-Inland Inc. Nonqualified Deferred Compensation Plan is maintained by Temple-Inland Inc. for the purpose of allowing eligible employees to defer the receipt of compensation. The Plan is intended to qualify as a “top-hat” plan for purposes of ERISA and shall cover a select group of management or highly compensated employees.

ARTICLE 2

Definitions

2.1 "Account" means the Account maintained for each Participant in accordance with the terms of Article 4 hereof and shall include a Participant’s Bonus Deferral Account and Section 162(m) Deferral Account (both as defined under this Plan prior to the date of this amendment and restatement).

2.2 “Affiliate” means each trade or business, whether or not incorporated, that together with the Company, is treated as a “single employer” under Section 414(b) or 414(c) of the Code.

2.3

“Board” means the Board of Directors of the Company.

2.4 “Bonus” means (a) an Eligible Employee’s annual bonus, and (b) such other bonuses payable to an Eligible Employee as may be specified by the Committee in its discretion from time to time.

2.5 “Change in Control” means the occurrence of a “change in control event” (within the meaning of Section 409A of the Code) with respect to the Company.

2.6

“Code” means the Internal Revenue Code of 1986, as amended.

2.7 “Committee” means the Management Development and Executive Compensation Committee of the Board of Directors of the Company.

2.8 “Common Stock” means the common stock, $1.00 par value, of the Company and, in the event such common stock is converted to another security or property, such other security or property.

2.9 "Company" means Temple-Inland Inc., a Delaware corporation, and its successors by merger, sale of assets or otherwise.

2.10 “Crediting Date” means the date on which Eligible Compensation would have been paid to an Eligible Employee absent the Deferral Election covering such Eligible Compensation, provided that in the case of a Bonus, “Crediting Date” means that date as of which the Board, Committee, or other person approves the Bonus, whether or not the Bonus would have been paid on such date.

2.11 “Deferral Election” means an irrevocable election by an Eligible Employee, made on a form prescribed by the Committee and delivered to the Committee or its designee, to defer under this Plan the receipt of all or a specified portion of Eligible Compensation otherwise payable to the Participant. A Deferral Election shall be effective when the form is countersigned on behalf of the Company.

2.12 "Deferred Compensation" means Eligible Compensation that is deferred by a Participant pursuant to the terms of this Plan.

2.13 “Eligible Compensation” means an Eligible Employee’s Bonus and such other compensation, if any, that the Committee may designate as being Eligible Compensation for purposes of the Plan.

2.14 "Eligible Employee" means an employee of the Company or one of its Affiliates who is specifically designated by the Committee as being eligible under the Plan.

2.15 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

2.16 “Fair Market Value” means, unless otherwise determined by the Committees, the closing price of a share of Common Stock on the New York Stock Exchange (“NYSE”) as of the relevant date (or if the NYSE is not open on such date or the Common Stock is not traded on that day, the most recent prior date that the NYSE was open for trading and the Common Stock was traded).

2.17 “Matched Bonus Deferral” means a Bonus covered by a Deferral Election to the extent that the Payment Date with respect to the Bonus is at least five years after the Crediting Date for the Bonus and to the extent that the Bonus and amounts attributable thereto are credited to the Participant’s Account as Phantom Shares.

2.18 “Participant" means an Eligible Employee who has deferred Eligible Compensation pursuant to the terms of this Plan.

2.19 “Payment Date” means the date(s) or event(s) specified by the Participant in the Participant’s Deferral Election for the payment of Deferred Compensation, provided that in no event shall any such date or event fail to satisfy Section 409A of the Code.

2.20 “Period of Service” means a Participant’s Period of Service as determined in accordance with the terms of the Temple-Inland Salaried Savings Plan, whether or not the Participant is a participant in such plan.

2.21 “Phantom Shares” means hypothetical shares of Common Stock credited to a Participant’s Account having a value equal to the Fair Market Value of an equal number of shares of Common Stock.

2.22 "Plan" means the Temple-Inland Inc. Nonqualified Deferred Compensation Plan, as set forth herein and amended from time to time. Prior to November 2, 2007 the Plan was named the Temple-Inland Inc. Stock Deferral and Payment Plan.

2.23 “Pre-Retirement Termination” means a Participant’s Voluntary Termination prior to attaining (a) at least age 65 or (b) at least age 55 and completing a Period of Service of at least five years.

2.24 “Separation from Service” means a “separation from service” (within the meaning of Section 409A of the Code) from the Company and its Affiliates.

2.25 "Stock Plan” means the Temple-Inland Inc. 1988 Stock Option Plan, the Temple-Inland Inc. 1993 Stock Option Plan, the Temple-Inland Inc. 1997 Stock Option Plan, the Temple-Inland Inc. 2001 Stock Incentive Plan, the Temple-Inland Inc. 2003 Stock Incentive Plan, and any other plan adopted by the Company that provides for the grant of stock options, phantom stock, or restricted stock to employees.

2.26 “Unforeseeable Emergency" means an “unforeseeable emergency” within the meaning of Section 409A of the Code.

2.27 “Voluntary Termination” means a Participant’s Separation from Service, other than (a) by reason of death or disability or (b) by the Company and its Affiliates without cause (as determined by the Company in good faith).

ARTICLE 3

Deferral of Compensation

3.1 Deferral Elections. In order to defer Eligible Compensation hereunder, an Eligible Employee must file a Deferral Election before the first day of the calendar year during which the Eligible Compensation will be earned. Notwithstanding the foregoing, a Deferral Election may be filed on or after the first day of a calendar year (a) in the case of an Eligible Employee who first becomes an Eligible Employee on or after the first day of the calendar year, provided that the Deferral Election is made within 30 days after the date on which the Eligible Employee first becomes eligible to participate in the Plan and the Deferral Election applies only to Eligible Compensation earned after the date of the election, and (b) with respect to any Eligible Compensation that consitutes “performance-based compensation,” to the extent permitted under Section 409A of the Code and authorized by the Committee. Pursuant to each Deferral Election, a Participant shall specify the Eligible Compensation to be deferred and elect the Payment Date for that portion of the Participant’s Account attributable to such Deferral Election.

3.2 Revocation or Modification of Deferral Elections. A Participant’s Deferral Election may not be revoked or modified except to the extent authorized by the Committee and permitted by Section 409A of the Code.

ARTICLE 4

Accounts

4.1 Establishment of Accounts. The Company shall establish an Account for each Participant who makes a Deferral Election hereunder. The Company shall maintain each Account in a manner such that the portion of the Account attributable to each Deferral Election and any Matching Phantom Shares (as defined in Section 4.3 herein) credited in respect of such elections can be determined.

4.2 Crediting of Phantom Shares Upon Deferral of Compensation. Except as provided in Section 4.8 below, as of the Crediting Date for Eligible Compensation covered by a Deferral Election, the applicable Participant’s Account shall be credited with a number of Phantom Shares equal to the quotient obtained by dividing (a) the amount of the Eligible Compensation covered by the Deferral Election (and reduced by the amount of any federal, state, local or other taxes required by law to be withheld upon the Eligible Compensation to the extent not otherwise satisfied), by (b) the Fair Market Value of a share of Common Stock as of such date. Such Participant’s Account shall also be credited with Matching Phantom Shares to the extent provided by Section 4.3 hereof.

4.3 Matching Phantom Shares. The Account of a Participant who has made a Matched Bonus Deferral shall be credited, as of the applicable Crediting Date, with an additional number of Phantom Shares (“Matching Phantom Shares”) equal to the quotient obtained by dividing (a) by (b), where:

• is the product of (i) 2% of the amount of the Matched Bonus Deferral and (ii) the number of full years (not in excess of ten) from the applicable Crediting Date to the applicable Payment Date; and

• is the Fair Market Value of a share of Common Stock as of the applicable Crediting Date.

Matching Phantom Shares shall have the same value, and be subject to adjustment in the same manner, as other Phantom Shares credited to a Participant’s Account; provided, however, that if the Participant incurs a Voluntary Termination prior to the earlier of completing a Period of Service of at least three years or the occurrence of a Change in Control, the entire portion of the Participant’s Account attributable to such Matching Phantom Shares shall be immediately forfeited.

4.4

Deemed Dividends.

(a) Before 2008. Each Participant’s Account shall, upon the payment of any cash dividend or cash distribution on Common Stock prior to January 1, 2008, be credited with an additional number of Phantom Shares (including any fractional share) equal to the quotient

obtained by dividing (a) the amount of cash dividends or distributions that would have been paid with respect to the Phantom Shares theretofore credited to the Participant’s Account had they been actual issued and outstanding shares of Common Stock by (b) the Fair Market Value of a share of Common Stock on the dividend or distribution payment date. Phantom Shares credited to a Participant’s Account in accordance with this Section 4.4(a) shall, upon payment, be settled in the form of cash; provided, however, that Phantom Shares credited to a Participant’s Account in accordance with this Section 4.4(a) either (i) on or before December 31, 2005, or (ii) after December 31, 2005, but before December 1, 2007, to the extent attributable to the Participant’s Bonus Deferal Account, shall be settled in the form of Common Stock.

(b) After 2007. Not later than 30 days after the payment date of any cash dividend or cash distribution declared on the Common Stock on or after January 1, 2008, the Company shall pay to each Participant, in cash, an amount equal to the amount of the cash dividend or other cash distribution that would have been paid to the Participant if the Phantom Shares allocated to the Participant's Account were actual issued and outstanding shares of Common Stock held by the Participant.

4.5 Phantom Share Adjustments. If any of the following events occur, the Committee shall make appropriate adjustments with respect to Phantom Shares credited to a Participant’s Accounts: (a) any extraordinary non-cash dividend or other extraordinary non-cash distribution in respect of Common Stock (whether in the form of Common Stock, other securities or other property); (b) any recapitalization, stock split (including a stock split in the form of a stock dividend), reverse stock split, reorganization, merger, combination, consolidation, split-up, spin-off, combination, repurchase or exchange of Common Stock or other securities of the Company; (c) any issuance of warrants or other rights to purchase shares of Common Stock or other securities of the Company (other than to employees); or (d) any other like corporate transaction or event in respect of the Common Stock.

4.6 Certain Spin-Off Adjustments. If the Company spins off all its stock of Guaranty Financial Group Inc. (“Guaranty”) and/or all of its stock of Forestar Real Estate Group Inc. (“Forestar”), Participants’ Accounts shall be adjusted in accordance with the terms of the Employee Matters Agreement entered into by and among the Company, Guaranty, and Forestar (the “Employee Matters Agreement”), and Guaranty and Forestar shall assume the obligation to make payments to Participants with respect to Guaranty stock (or phantom stock) and Forestar stock (or phantom stock) allocated to Participants’ Accounts as provided in the Employee Matters Agreement.

4.7 Payments. A Participant’s Accounts shall be reduced by any payments made to the Participant, his or her beneficiary, estate, or representative.

4.8 Alternative Deemed Investments. The Committee may, in its discretion, provide for all or a portion of a Particicipant’s Account to be deemed invested in such investments as the Committee may designate from time-to-time. In such event, the Committee shall specify such rules from time-to-time relating to Participant investment elections and valuation dates as it may determine in its discretion.

4.9 No Funding of Benefits. All adjustments to a Participant’s Accounts shall be bookkeeping entries only and shall not represent a special reserve or otherwise constitute a funding of the Company’s unsecured promise to pay any amounts hereunder. To the extent a Participant or any other person acquires a right to receive payments from the Company under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Company, and such person shall have only the unsecured promise of the Company that such payments shall be made.

ARTICLE 5

Payment of Deferred Compensation

5.1 Payment in Accordance with Elections. Subject to Section 5.2 and Sections 5.4 through 5.8, a Participant’s Account shall be paid to the Participant in the form of a lump sum on or as soon as practicable following the applicable Payment Date(s) elected by the Participant in the Participant’s Deferral Elections(s) (but in no event more than 60 days after such Payment Date(s)).

5.2 Payment Upon Pre-Retirement Termination or Death. Notwithstanding Section 5.1 and the Payment Date(s) specified in a Participant’s Deferral Elections, in the event of a Participant’s Pre-Retirement Termination or death, the entire balance of the Participant’s Account (as reduced by any amount forfeited pursuant to Section 4.3 hereof) shall be paid to the Participant (or the Participant’s beneficiary, as determined in accordance with Section 8.2 hereof) in the form of a single payment as soon as practicable after such Pre-Retirement Termination or death (and in no event more than 90 days after such termination or death).

5.3 Form of Payment. Phantom Shares credited to a Participant’s Account shall, upon payment, be settled in the form of cash; provided, however, that Phantom Shares credited to a Participant’s Account either (a) on or before December 31, 2005, or (b) after December 31, 2005, to the extent attributable to the Participant’s Bonus Deferal Account, shall be settled in the form of Common Stock, except to the extent provided in Section 4.4(a) hereof. If any Phantom Share payable in the form of Common Stock represents a fractional share of Common Stock, the Fair Market Value of such fractional share on the date the payment is calculated shall be paid in cash. Amounts credited to a Participant’s Account in a form other than Phantom Shares shall be paid in the form of cash.

5.4 Change in Control. Notwithstanding any Deferral Election, the entire balance of a Participant’s Account shall be paid in accordance with Section 5.3 upon the occurrence of a Change in Control.

5.5 Unforeseeable Emergency. The Committee may accelerate payment of all or a portion of a Participant’s Account upon the occurrence of an Unforseeable Emergency. The amount of such payment shall be limited to the amount reasonably necessary to satisfy the emergency need (which may include amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from such payment). The determination of whether a Participant has experienced an Unforseeable Emergency and the amount reasonably necessary to satisfy the emergency need shall be based on all the facts and circumstances taking

into consideration the financial resources available to the Participant and shall be made in accordance with Section 409A of the Code.

5.6 Pre-November 2, 2007 Deferral Elections. A Participant’s Account, to the extent attributable to a Deferral Election made prior to November 2, 2007, shall be paid in accordance with the terms of such election. If such election provides for payment in the form of installment payments, such payments shall be made in accordance with Section 5.3 of the Plan as in effect as of November 1, 2007. In all events, such Deferral Elections and payments shall be subject to Sections 5.2 and 5.8 hereof.

5.7 Certain Consents to Payments. Notwithstanding anything in this Article 5 to the contrary, in the case of any Participant who has executed a “Consent to Distribution” relating to this Plan, the Participant’s Account shall be paid in accordance with such Consent to Distribution.

5.8 Section 409A Mandatory Delay in Benefit Payments for Specified Employees. Notwithstanding the preceding provisions of this Article 5, to the extent required by Section 409A of the Code, the Committee shall delay payment of the Account of a Participant who is a “specified employee” (within the meaning of Section 409A of the Code) until the earlier of (a) the date that is six months after the date of the Participant’s Separation From Service, or (b) the date of the specified employee’s death. The aggregate amount of payment(s) otherwise payable during the delay period (plus interest thereon at a rate equal to the simple average of the rate for the last four reported quarters preceding the Participant’s Separation from Service under the Vanguard U.S. Treasury Fund under the Temple-Inland Salaried Savings Plan or any successor thereto) shall be payable to the specified employee upon the expiration of the delay period.

5.9 Withholding. Notwithstanding anything herein, in order to satisfy any withholding obligations under federal, state or local law in respect of amounts paid (whether in cash or Common Stock) or credited to a Participant under this Plan, the Company and its Affiliates shall have the right to (a) withhold such amounts from any payment to be made pursuant to this Plan or any other payment to be made to a Participant by the Company or any of its Affiliates, or (b) reduce the number of Phantom Shares (or other amount) credited or to be credited to a Participant’s Account.

ARTICLE 6

Claims

6.1 Claims Procedure. Claims for benefits under the Plan shall be filed with the Committee. If any Participant, beneficiary or other payee (a “claimant”) claims to be entitled to a benefit under the Plan and the Committee determines that such claim should be denied in whole or in part, the Committee shall notify such claimant of its decision in writing (which may be provided electronically). Such notification will be written in a manner calculated to be understood by the claimant and will contain (a) specific reasons for the denial, (b) specific reference to pertinent Plan provisions, (c) a description of any additional material or information necessary for the claimant to perfect such claim and an explanation of why such material or information is necessary, and (d) a description of the Plan’s review procedures and the time

limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA following the rendering of an adverse decision on review. Such notification will be given within a reasonable period of time, but not later than 90 days after the claim is received by the Committee, unless the Committee determines that special circumstances require an extension of time for processing the claim. If the Committee determines that such an extension of time is required, written notice of the extension shall be provided to the claimant prior to the end of the initial 90-day period. The extension notice shall indicate the special circumstances requiring the extension of time and the date by which the Committee expects to render its decision. In no event shall the extension exceed an additional 90 days from the end of the initial 90-day period. Any electronic notification provided by the Committee under this Section 6.1 or Section 6.2 shall comply with the standards imposed by 29 C.F.R. 2520.104b-1(c)(1)(i)-(iv).

6.2

Review of Claims Decision.

• Procedures. Within 60 days after the date on which a claimant receives a written notice of a denied claim, the claimant may file a written request with the Committee for a review of the denied claim. If the claimant requests a review of the denied claim, the claimant shall be entitled to submit to the Committee written comments, documents, records and other information relating to the claim for benefits and to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits. The Committee shall perform its review taking into account all comments, documents, records and other information submitted by the claimant relating to the claim without regard to whether such information was submitted or considered in the initial benefit determination. The Committee will notify the claimant of its decision in writing (which may be provided electronically). If the claim is denied, the notification will be written in a manner calculated to be understood by the claimant and will contain (a) the specific reasons for the denial, (b) references to pertinent provisions of the Plan, (c) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits, and (d) a statement of the claimant’s right to bring an action under Section 502(a) of ERISA.

• Timing of Review. The review provided for by Section 6.2(a) will be made within a reasonable period of time, but not later than 60 days after the Committee receives the request for review, unless the Committee determines that special circumstances require an extension of time for processing the claim. If the Committee determines that an extension of time is required, written notice of the extension shall be furnished to the claimant prior to the end of the initial 60-day period. The extension notice shall indicate the special circumstances requiring the extension of time and the date by which the Committee expects to render its decision. In no event shall the extension exceed an additional 60 days from the end of the initial 60-day period. If the extension of time is needed due to the claimant’s failure to submit information necessary to make a decision, the period during which the Committee must make a decision shall be tolled from the date the extension notice is sent to the claimant until the date the claimant responds to the request for additional information.

ARTICLE 7

Administration

7.1 Administration. This Plan shall be administered by the Committee. The Committee shall have all powers necessary to carry out the provisions of this Plan, including, without reservation, the power to delegate administrative matters to other persons and to interpret this Plan in its discretion.

ARTICLE 8

Miscellaneous

8.1 Amendment or Termination. The Committee may modify or amend, in whole or in part, any or all of the provisions of this Plan, or suspend or terminate the Plan entirely; provided, however, that any such modification, amendment, suspension or termination may not, without a Participant's written consent, adversely affect (as reasonably determined by the Committee) the terms and conditions under which any amounts previously credited to a Participant's Account are administered.

8.2 Beneficiary Designation. Each Participant shall designate a beneficiary to whom the Participant’s Account shall be payable on the Participant’s death. A Participant may also designate an alternate beneficiary to receive such payment in the event that the designated beneficiary cannot receive payment for any reason. In the event no designated or alternate beneficiary can receive such payment for any reason, payment will be made to the Participant’s surviving spouse, if any, or if the Participant has no surviving spouse, then to the following beneficiaries if then living in the following order of priority: (a) to the Participant’s children (including adopted children and stepchildren) in equal shares, (b) to the Participant’s parents in equal shares, (c) to the Participant’s brothers and sisters in equal shares and (d) to the Participant’s estate. A Participant may at any time change his or her beneficiary designation. A change of beneficiary designation must be made in writing and delivered to the Committee or its designee for such purposes. The interest of any beneficiary who predeceases the Participant will terminate unless otherwise specified by the Participant.

8.3 Alienation of Benefits. A Participant's rights under this Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment pledge, encumbrance, attachment, or garnishment by creditors of a Participant or any beneficiary.

8.4 Phantom Stock Granted and Shares Issued Under Stock Plans. Phantom Shares credited to Participants’ Accounts under Article 4 shall constitute the grant of “Phantom Stock” under the Stock Plan then in effect and under which stock-based awards are then being made, unless otherwise specified by the Committee. Common Stock issued in payment of Phantom Shares credited to Participants’ Accounts hereunder shall be issued under the Stock Plan pursuant to which the applicable Phantom Stock was issued.

8.5 Expenses. All expenses and costs in connection with the operation of the Plan shall be borne by the Company.

8.6 Rules of Construction. The singular shall include the plural unless the context clearly indicates the distinction.

8.7 Applicable Law. This Plan shall be construed and enforced in accordance with the laws of the State of Texas except to the extent superseded by federal law.

8.8 Headings. The headings of sections of this Plan are for convenience of reference only and shall have no substantive effect on the provisions of this Plan.

8.9 Compliance with Section 409A of the Code. The Plan is intended to comply with the requirements of Section 409A of the Code, and the Committee shall administer and interpret the Plan in accordance with such requirements. If any provision of the Plan conflicts with the requirements of Section 409A of the Code, the requirements of Section 409A of the Code shall supersede any such Plan provision.

EX-10 3 tinex102dirdef.htm AMENDED DIRECTOR DEFERRAL PLAN

Exhibit 10.2

TEMPLE-INLAND INC.

DIRECTORS’ FEE DEFERRAL PLAN

(as amended and restated effective as of November 2, 2007)

ARTICLE 1

Definitions

When used herein the following terms shall have the following meanings:

1.1. “Account” means the Account maintained for each Participant in accordance with the terms of Article 3 hereof.

1.2. “Affiliate” means each trade or business, whether or not incorporated, that together with the Company, is treated as a “single employer” under Section 414(b) or 414(c) of the Code.

1.3. “Administrator” means the Board or such person(s) as may be designated by the Board to administer this Plan.

1.4.

“Board” means the Board of Directors of the Company.

1.5. “Board Fees” means annual retainer fees and meeting fees payable to an Eligible Director with respect to the Eligible Director’s service on the Board and/or one or more Board committees.

1.6. “Change in Control” means the occurrence of a “change in control event” (within the meaning of Section 409A of the Code) with respect to the Company.

1.7.

“Code” means the Internal Revenue Code of 1986, as amended.

1.8. “Common Stock” means the common stock, $1.00 par value, of the Company and, in the event such common stock is converted to another security or property, such other security or property.

1.9. “Company” means Temple-Inland Inc., a Delaware corporation, and its successors by merger, sale of assets or otherwise.

1.10. “Crediting Date” means the date on which Board Fees would have been paid to an Eligible Director absent the Deferral Election covering such Board Fees.

1.11. “Deferral Election” means an irrevocable election by an Eligible Director, made on a form prescribed by the Administrator and delivered to the Administrator, to defer under this Plan the receipt of all or a specified portion of Board Fees otherwise

payable to the Eligible Director. A Deferral Election shall be effective when the form is countersigned on behalf of the Company.

1.12. “Eligible Director” means a member of the Board who is not also an employee of the Company or any of its Affiliates.

1.13. “Fair Market Value” means, unless otherwise determined by the Administrator, the closing price of a share of Common Stock on the New York Stock Exchange (“NYSE”) as of the relevant date (or if the NYSE is not open on such date or the Common Stock is not traded on that day, the most recent prior date that the NYSE was open for trading and the Common Stock was traded).

1.14. “Matching Phantom Shares” means Matching Phantom Shares as defined in Section 3.3 hereof.

1.15. “Participant” means an Eligible Director who files a Deferral Election or is credited with Retainer Shares pursuant to the terms of the Plan.

1.16. “Phantom Shares” means hypothetical shares of Common Stock credited to a Participant’s Account having a value equal to the Fair Market Value of an equal number of shares of Common Stock.

1.17. “Plan” means the Temple-Inland Inc. Directors’ Fee Deferral Plan, as set forth herein and amended from time to time.

1.18. “Retainer Shares” means Phantom Shares credited to a Participant’s Account pursuant to Section 2.2 hereof.

1.19. “Separation from Service” means a “separation from service” (within the meaning of Section 409A of the Code) from the Company and its Affiliates.

1.20. "Stock Plan” means the Temple-Inland Inc. 1988 Stock Option Plan, the Temple-Inland Inc. 1993 Stock Option Plan, the Temple-Inland Inc. 1997 Stock Option Plan, the Temple-Inland Inc. 2001 Stock Incentive Plan, the Temple-Inland Inc. 2003 Stock Incentive Plan, and any other plan adopted by the Company that provides for the grant of stock options, phantom stock, or restricted stock to members of the Board.

1.21. “Unforeseeable Emergency" means an “unforeseeable emergency” within the meaning of Section 409A of the Code.

ARTICLE 2

Participation; Deferred Board Fees

2.1. Participation. Each Eligible Director shall be a Participant in this Plan.

2.2. Retainer Shares. On the date of the first regularly scheduled Board meeting each year, each Eligible Director’s Account shall be credited with a number of Phantom Shares equal to the quotient obtained by dividing (a) $50,000 (effective January 1, 2008) by (b) the Fair Market Value of a share of Common Stock as of such date.

2.3. Board Fee Deferrals. An Eligible Director may elect to defer hereunder the receipt of all or a portion of Board Fees payable to the Eligible Director by filing with the Administrator a Deferral Election prior to the start of the calendar year during which the Board Fees covered by the Deferral Election will be paid. An Eligible Director who defers Board Fees hereunder shall be credited with the number of Phantom Shares provided for by Sections 3.2 and 3.3 hereof.

2.4. Matching Phantom Shares. The Account of an Eligible Director who makes a valid Deferral Election shall be credited with Matching Phantom Shares in accordance with Section 3.3 hereof.

2.5. Payment Elections. At the time an Eligible Director makes a Deferral Election, or receives an annual credit of Retainer Shares pursuant to Section 2.2 hereof, or at such other time(s) as may be authorized by the Administrator and permitted under Section 409A of the Code, a Participant shall elect, in accordance with rules specified by the Administrator, to receive payment of amounts credited to the Participant’s Account in a method of payment permitted under Article 4 hereof.

ARTICLE 3

Accounts

3.1. Establishment of Accounts. The Company shall establish and maintain in accordance with this Article 3 a bookkeeping account for each Participant, which account shall record and reflect the Retainer Shares credited to the Participant pursuant to Section 2.2 hereof, Board Fees deferred hereunder by the Participant, and the Matching Phantom Shares credited to the Participant (each such account being referred to herein as an “Account”).

3.2. Crediting of Board Fee Deferrals. The Account of each Participant who defers Board Fees hereunder shall be credited with a number of Phantom Shares equal to the quotient obtained by dividing (a) the amount of Board Fees covered by the Deferral Election by (b) the Fair Market Value of a share of Common Stock as of such date.

3.3. Matching Phantom Shares. A Participant’s Account shall be credited, as of the Crediting Date of the Board Fees covered by a Deferral Election made by the Participant, with a number of Phantom Shares (“Matching Phantom Shares”) equal to the quotient obtained by dividing (a) 133% of the amount of Board Fees covered by the Deferral Election, by (b) the Fair Market Value of a share of Common Stock as of the Crediting Date of the Board Fees covered by the Deferral Election.

3.4. Certain Deemed Dividends. Each Participant’s Account shall, upon the payment of any cash dividend or cash distribution on Common Stock prior to January 1, 2008, be credited with an additional number of Phantom Shares (including any fractional share) equal to the quotient obtained by dividing (a) the amount of cash dividends or distributions that would have been paid with respect to the Phantom Shares theretofore credited to the Participant’s Account had they been actual issued and outstanding shares of Common Stock by (b) the Fair Market Value of a share of Common Stock on the dividend or distribution payment date.

3.5. Payments. A Participant’s Account shall be reduced by any payments made to the Participant, his or her beneficiary, estate, or representative.

3.6. Certain Spin-Off Adjustments. If the Company spins off all its stock of Guaranty Financial Group Inc. (“Guaranty”) and/or all of its stock of Forestar Real Estate Group Inc. (“Forestar”), Participants’ Accounts shall be adjusted in accordance with the terms of the Employee Matters Agreement entered into by and among the Company, Guaranty, and Forestar (the “Employee Matters Agreement”), and Guaranty and Forestar shall assume the obligation to make payments to Participants with respect to Guaranty stock (or phantom stock) and Forestar stock (or phantom stock) allocated to Participants’ Accounts as provided in the Employee Matters Agreement, subject to the provisions of any applicable “Election Form.”

3.7. Adjustments. If any of the following events occur, the Administrator shall make appropriate adjustments with respect to Phantom Shares credited to a Participant’s Account: (a) any extraordinary dividend or other extraordinary distribution in respect of Common Stock (whether in the form of cash, Common Stock, other securities or other property); (b) any recapitalization, stock split (including a stock split in the form of a stock dividend), reverse stock split, reorganization, merger, combination, consolidation, split-up, spin-off, combination, repurchase or exchange of Common Stock or other securities of the Company; or (c) any other like corporate transaction or event in respect of the Common Stock.

3.8. Vesting of Accounts. Each Participant’s Account shall be fully vested and nonforfeitable at all times.

3.9. Board Fees Covered by Elections. For purposes of this Article 3, the amount of Board Fees “covered” by a Deferral Election shall be the amount by which an Eligible Director’s Board Fees are to be reduced by reason of a Deferral Election. If a Deferral Election covers less than all of the Board Fees payable to an Eligible Director during a calendar year, the percentage of each payment of each type of Board Fee during the calendar year that shall be treated as being covered by the Deferral Election shall be equal to the percentage of total Board Fees of the same type for the calendar year that is covered by the Deferral Election.

3.10. No Funding of Benefits. All adjustments to a Participant’s Account shall be bookkeeping entries only and shall not represent a special reserve or otherwise constitute a funding of the Company’s unsecured promise to pay any amounts hereunder.

To the extent a Participant or any other person acquires a right to receive payments from the Company under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Company, and such person shall have only the unsecured promise of the Company that such payments shall be made.

ARTICLE 4

Payment of Deferred Compensation.

4.1. Payment in Accordance with Elections. Subject to the terms of this Article 4, a Participant’s Account shall be paid (or commence to be paid) to the Participant in the form(s) elected by the Participant in the Participant’s Deferral Election(s) as soon as practicable following the Participant’s Separation from Service (but in no event more than 60 days after such Separation From Service or, in the case of installments, such other applicable payment date under Section 4.3 hereof).

4.2. Form of Payment. Payment with respect to Phantom Shares credited to a Participant’s Account prior to January 1, 2006 shall be paid in the form of shares of Common Stock. Payment with respect to Phantom Shares credited to a Participant’s Account on or after January 1, 2006 shall be paid in the form of cash.

4.3. Permissible Payment Methods. A Participant may, pursuant to Section 2.5 hereof, elect to receive payment of Phantom Shares credited to the Participant’s Account in either of the following methods of payment:

(a) a single payment, payable within 60 days after the Participant’s Separation from Service, or

(b) annual installment payments, commencing within 60 days after the Participant’s Separation from Service (with subsequent payments being made on each anniversary of the Participant’s Separation from Service until completion of the installment period), over a period of years (selected by the Participant) not to exceed 15, with the amount of each annual installment calculated by dividing the balance of the relevant Account (or portion thereof) at the end of the prior year by the number of installments remaining to be paid.

Notwithstanding the foregoing or any election made by a Participant to the contrary, in the event that a Participant’s Separation from Service occurs within two years following a Change in Control, such Participant’s Account shall be paid in accordance with Section 4.3(a) hereof. If any annual installment (other than the last installment), calculated as set forth in Section 4.3(b) hereof, would result in the payment of a fractional share of Common Stock, such annual installment shall be reduced to the next lowest whole number of shares of Common Stock. If, as part of a single payment pursuant to Section 4.3(a) or a final installment payment, a fractional share of Common Stock would be paid, then in lieu thereof, the Fair Market Value of such fractional share on the date the payment is calculated shall be paid in cash.

4.4. Unforeseeable Emergency. The Administrator may accelerate payment of all or a portion of a Participant’s Account upon the occurrence of an Unforeseeable Emergency. The amount of such payment shall be limited to the amount reasonably necessary to satisfy the emergency need (which may include amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from such payment). The determination of whether a Participant has experienced an Unforeseeable Emergency and the amount reasonably necessary to satisfy the emergency need shall be based on all the facts and circumstances taking into consideration the financial resources available to the Participant and shall be made in accordance with Section 409A of the Code. If payment of less than all of a Participant’s Account is accelerated pursuant to this Section 4.4, the accelerated payment shall be deducted proportionately from all amounts credited to the Participant’s Account.

4.5. Certain Election Form Filings. Notwithstanding anything in this Article 4 to the contrary, in the case of any Participant who has executed an “Election Form” with respect to the payment of distributions of stock of Guaranty Financial Group Inc. and Forestar Real Estate Group Inc. and the payment of any special dividend made in connection with the Company’s sale of certain of its timberland assets, such distributions and dividends shall be paid in accordance with the Election Form.

4.6. Section 409A Mandatory Delay in Benefit Payments for Specified Employees. Notwithstanding the preceding provisions of this Article 4, to the extent required by Section 409A of the Code, the Administrator shall delay payment of the Account of a Participant who is a “specified employee” (within the meaning of Section 409A of the Code) until the earlier of (a) the date that is six months after the date of the Participant’s Separation From Service, or (b) the date of the specified employee’s death. The aggregate amount of payment(s) otherwise payable during the delay period (plus interest thereon at a rate equal to the simple average of the rate for the last four reported quarters preceding the Participant’s Separation from Service under the Vanguard U.S. Treasury Fund under the Temple-Inland Salaried Savings Plan or any successor thereto) shall be payable to the specified employee upon the expiration of the delay period.

4.7. Payment of Post-2007 Dividends. Not later than 30 days after the payment date of any cash dividend or cash distribution declared on the Common Stock on or after January 1, 2008, the Company shall pay to each Participant the amount of the dividend that would have been paid to the Participant with respect to the Phantom Shares credited to the Participant’s Account if such Phantom Shares were actual issued and outstanding shares of Common Stock held by the Participant.

4.8. Payment Upon Death. Notwithstanding Section 4.1, in the event of a Participant’s death, the entire balance of the Participant’s Account shall be paid to the Participant (or the Participant’s beneficiary, as determined in accordance with Section 6.2 hereof) in the form of a single payment as soon as practicable after death (and in no event more than 90 days after death).

4.9. Certain Additional Payments. If any payment to a Participant or his or her beneficiary under this Plan (a “Plan Payment”) will be subject to the excise tax

(the “Excise Tax”) imposed by Section 4999 of the Code, the Company shall pay to the Participant (or his or her surviving beneficiary) an additional amount (the “Gross-Up Payment”) such that the net amount retained by the Participant (or his or her surviving beneficiary), after deduction of any Excise Tax on the Plan Payment and any federal, state and local income tax and Excise Tax upon the payment of provided for by this Section 4.9, shall be equal to the Plan Payment. For purposes of determining whether any Plan Payment will be subject to the Excise Tax and the amount of such Excise Tax, (a) any other payments or benefits received or to be received by the Participant (or his or her surviving beneficiary) in connection with a Change in Control or the Participant’s termination of membership on the Board (whether pursuant to the terms of this Plan or any other plan, arrangement or agreement with the Company, any person whose actions result in a Change in Control or any person affiliated with the Company or such person) shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments” within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by the Company’s independent auditors and acceptable to the Participant (or the Participant’s surviving beneficiary) such other payments or benefits (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code in excess of the base amount (as defined in Section 280G(b)(3) of the Code), or are otherwise not subject to the Excise Tax, (b) the amount of the Plan Payment which shall be treated as subject to the Excise Tax Shall be equal to the lesser of (i) the total amount of the Plan Payment or (ii) the amount of excess parachute payments within the meaning of Section 280G(b)(1) (after applying clause (a), above), and (c) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. The Company shall pay the Gross-Up Payment to the Eligible Director within 30 days following the Eligible Director’s remittance of the tax in respect of which the Gross-Up Payment relates.

4.10. Withholding. The Company shall have the right to deduct from any payment to be made pursuant to this Plan any federal, state or local taxes required by law to be withheld.

ARTICLE 5

Administration

5.1. Administration. This Plan shall be administered by the Administrator. The Administrator shall have all powers necessary to carry out the provisions of this Plan, including, without reservation, the power to delegate administrative matters to other persons and to interpret this Plan in its discretion.

ARTICLE 6

Miscellaneous

6.1. Amendment and Termination of Plan. The Company may at any time by action of the Board modify or amend, in whole or in part, any or all of the provisions of this Plan, or suspend or terminate the Plan entirely. Upon termination of this Plan, no further Deferral Elections shall be permitted and no further credits shall be made pursuant to Sections 2.2 or 3.3 hereof; provided, however, that each Participant’s Account will be maintained and paid pursuant to the provisions of this Plan and the Participant’s elections hereunder.

6.2. Beneficiary Designation. Each Participant shall designate a beneficiary to whom the Participant’s Account shall be payable on the Participant’s death. A Participant may also designate an alternate beneficiary to receive such payment in the event that the designated beneficiary cannot receive payment for any reason. In the event no designated or alternate beneficiary can receive such payment for any reason, payment will be made to the Participant’s surviving spouse, if any, or if the Participant has no surviving spouse, then to the following beneficiaries if then living in the following order of priority: (a) to the Participant’s children (including adopted children and stepchildren) in equal shares, (b) to the Participant’s parents in equal shares, (c) to the Participant’s brothers and sisters in equal shares and (d) to the Participant’s estate. A Participant may at any time change his or her beneficiary designation. A change of beneficiary designation must be made in writing and delivered to the Administrator or its designee for such purposes. The interest of any beneficiary who predeceases the Participant will terminate unless otherwise specified by the Participant.

6.3. Alienation of Benefits. A Participant's rights under this Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment pledge, encumbrance, attachment, or garnishment by creditors of a Participant or any beneficiary.

6.4. Phantom Shares Issued Under Stock Plans. Phantom Shares credited to Participants’ Accounts under Article 3 shall constitute the grant of “Phantom Stock” under the Stock Plan then in effect and under which stock-based awards are then being made, unless otherwise specified by the Administrator. Common Stock issued in payment of Phantom Shares credited to Participants’ Accounts hereunder shall be issued under the Stock Plan pursuant to which the applicable Phantom Stock was issued.

6.5. Expenses. All expenses and costs in connection with the operation of the Plan shall be borne by the Company.

6.6. Rules of Construction. The singular shall include the plural unless the context clearly indicates the distinction.

6.7. Applicable Law. This Plan shall be construed and enforced in accordance with the laws of the State of Texas except to the extent superseded by federal law.

6.8. Headings. The headings of sections of this Plan are for convenience of reference only and shall have no substantive effect on the provisions of this Plan.

6.9. Compliance with Section 409A of the Code. The Plan is intended to comply with the requirements of Section 409A of the Code, and the Administrator shall administer and interpret the Plan in accordance with such requirements. If any provision of the Plan conflicts with the requirements of Section 409A of the Code, the requirements of Section 409A of the Code shall supersede any such Plan provision.

EX-10 4 tinex103serp.htm AMENDED SERP

Exhibit 10.3

TEMPLE-INLAND

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(as amended and restated effective as of November 2, 2007)

ARTICLE 1

Intent

This Temple-Inland Supplemental Executive Retirement Plan is maintained by TIN Inc. for the purpose of providing supplemental retirement benefits to eligible employees.

ARTICLE 2

Definitions

2.1 “Actuarially Equivalent” means an amount of equal actuarial value computed using the interest rate and mortality assumptions set forth in Appendix I hereto.

2.2 “Administrator” means the person(s) or committee appointed to administer the Retirement Plan.

2.3 “Affiliate” means any trade or business, whether or not incorporated, that together with the Company is treated as a single employer under Section 414(b) or 414(c) of the Code.

2.4 “Base Pension Benefit” means the sum of the following: (a) the total monthly retirement income benefit, if any, payable to a Participant (or any alternate payee with respect to the Participant) under the Defined Benefit Arrangements, calculated assuming that the Participant commences receiving such retirement income benefit as of the Participant’s Retirement Date in the form of a monthly single life annuity payable over the Participant’s lifetime; and (b) the monthly amount, if any, of the monthly single life annuity set forth on Schedule II hereto with respect to the Participant.

2.5 “Beneficiary” means (a) in the case of a Participant upon whose death a survivor benefit is payable under the Retirement Plan, the person to whom such survivor benefit is payable, or (b) in the case of a Participant upon whose death a survivor benefit is not payable under the Retirement Plan, such person as may be designated as the Participant’s Beneficiary in accordance with such rules and procedures as may be prescribed by the Committee.

2.6

“Board” means the Board of Directors of the Company.

2.7

“Code” means the Internal Revenue Code of 1986, as amended.

2.8

“Company” means TIN Inc. and any successor thereto.

2.9 “Deferred Compensation” means (a) bonus compensation deferred under the Temple-Inland Inc. Nonqualified Deferred Compensation Plan (or any successor thereto), and (b) cash compensation deferred under any plan, program or policy of the Company or any of its Affiliates requiring the deferral of compensation that would not be deductible by the Company or any of its Affiliates by reason of Section 162(m) of the Code.

2.10 “Defined Benefit Arrangements” means the Retirement Plan, the benefits provided under Articles 5 hereof and 6 hereof, and such other plans, arrangements and benefits, if any, as may be designated as “Defined Benefit Arrangements” in an appendix hereto.

2.11 “Early Retirement Benefit” means with respect to a Participant, a monthly annuity for the life of the Participant which, when combined with the Participant’s Base Pension Benefit, will equal 50 percent of the Participant’s Final Average Monthly Compensation, reduced by five percent for each year (including fractions thereof based on whole calendar months) that the Participant’s Termination of Employment precedes the date that the Participant would attain age 60 (assuming the Participant survives until such date). By way of example, if a Participant Termination of Employment occurs upon the Participant’s attainment of age 58, the 50 percent amount would be reduced to 40 percent.

2.12 “Early Retirement Date” means the first day of the month coinciding with or immediately following the date that a Participant incurs a Termination of Employment on or after the Participant’s Early Vesting Date but prior to the Participant’s Normal Vesting Date.

2.13 “Early Vesting Date” means (a) the first date that a Participant has attained at least age 55 and completed at least twenty years of Vesting Service, or (b) the date that a Participant incurs a Transformation Termination.

2.14 “Final Average Monthly Compensation” means “Final Average Monthly Compensation” as defined in the Retirement Plan, without taking into account the limit set forth in Section 401(a)(17) of the Code.

2.15 “Normal Retirement Benefit” means a monthly annuity for the life of the Participant which, when combined with the Participant’s Base Pension Benefit, will equal 50 percent of the Participant’s Final Average Monthly Compensation.

2.16 “Normal Retirement Date” means the first day of the month coinciding with or immediately following the date that a Participant incurs a Termination of Employment on or after the Participant’s Normal Vesting Date.

2.17 “Normal Vesting Date” means the first date that a Participant has attained at least age 60 and completed at least fifteen years of Vesting Service.

2.18 “Other Company Plan” means any tax-qualified defined benefit pension plan, other than the Retirement Plan, that (a) is sponsored or maintained (or formerly sponsored or maintained) by the Company or any of its Affiliates (or former Affiliates) and (b) has been merged into the Retirement Plan or as to which benefits accrued thereunder, or service credited thereunder for benefit accrual purposes, is taken into account in determining accrued benefits under a Retirement Plan (other than for purposes of applying Section 415 of the Code).

2.19 “Participant” means each person who is identified as a Participant for purposes of Articles 4, 5, 6 and/or 7 hereof.

2.20 “Plan” means the Temple-Inland Supplemental Executive Retirement Plan, as set forth herein and amended from time to time. Effective August 2, 2002, sponsorship of this Plan was transferred from Temple-Inland Inc. to the Company.

2.21 “Retirement Date” means a Participant’s Early Retirement Date or Normal Retirement Date, as applicable.

2.22 “Retirement Benefit” means the total of a Participant’s Executive SERP Retirement Benefit (if any), Section 415 Retirement Benefit (if any), Section 401(a)(17) Retirement Benefit (if any), and Individual Retirement Benefit (if any).

2.23 “Retirement Plan” means the Temple-Inland Retirement Plan (named the Temple-Inland Salaried Retirement Plan prior to December 31, 2002), as amended from time-to-time, and any successor thereto.

2.24 “Section 401(a)(17) Amount” means the amount payable under Article 6 hereof, excluding the portion thereof attributable to the taking into account, pursuant to clause (a)(ii) of the first sentence of Section 6.2 hereof, of Deferred Compensation in determining the amount payable under the Article 6 hereof.

2.25 “Spin-Off Date” means the effective date of the spin off by Temple-Inland Inc. of the stock of Guaranty Financial Group Inc.

2.26 “Supplemental Plan” means the Temple-Inland Supplemental Benefits Plan.

2.27 “Termination of Employment” means a Participant’s “separation from service” (within the meaning of Section 409A of the Code) with the Company and its Affiliates.

2.28 “Transformation Termination” means a Termination of Employment that occurs as a result of the Transformation Plan announced by the Temple-Inland Inc. on February 26, 2007, as determined by the Administrator.

2.29 “Vesting Service” means (a) in the case of a Participant who is an active participant in the Retirement Plan immediately prior to the Participant’s Termination of Employment, the Participant’s “Vesting Service” under such plan, and (b) in the case of

any Participant who is not an active participant in the Retirement Plan immediately prior to the Participant’s Termination of Employment, “Vesting Service” as defined in an appendix hereto.

ARTICLE 3

Amount of Retirement Benefit Under Plan

A Participant’s Retirement Benefit under this Plan shall be the aggregate of the Participant’s Executive SERP Retirement Benefit (if any) under Article 4, Section 415 Retirement Benefit (if any) under Article 5, Section 401(a)(17) Retirement Benefit (if any) under Article 6, and Individual Retirement Benefit (if any) under Article 7.

ARTICLE 4

Executive SERP Retirement Benefit

4.1 Eligibility. Each person listed on Schedule I hereto shall be a “Participant” for purposes of this Article 4 and shall be eligible to receive an “Executive SERP Retirement Benefit” in accordance with, and subject to the terms of, this Article 4.

4.2 Normal Retirement. If a Participant’s Termination of Employment occurs on or after the Participant’s Normal Vesting Date, the Participant shall be entitled to receive an Executive SERP Retirement Benefit, in the form of a lump sum payment, that is Actuarially Equivalent to the Participant’s Normal Retirement Benefit, payable as provided in Article 8 hereof. No Normal Retirement Benefit shall be payable hereunder if the Participant’s Base Pension Benefit as of the Participant’s Normal Retirement Date equals or exceeds 50 percent of the Participant’s Final Average Monthly Compensation.

4.3 Early Retirement. If a Participant’s Termination of Employment occurs on or after the Participant’s Early Vesting Date but before the Participant’s Normal Vesting Date, the Participant shall be entitled to receive an Executive SERP Retirement Benefit, in the form of a lump sum payment, that is Actuarially Equivalent to the Participant’s Early Retirement Benefit, payable as provided in Article 8 hereof. No Early Retirement Benefit shall be payable hereunder if the Participant’s Base Pension Benefit as of the Participant’s Early Retirement Date equals or exceeds 50 percent of the Participant’s Final Average Monthly Compensation, reduced by five percent for each year (including fractions thereof based on whole calendar months) that the Participant’s Termination of Employment precedes the date that the Participant would attain age 60 (assuming the Participant survives until such date).

4.4 Survivor Benefit. In the event of a Participant’s death after the Participant’s Early Vesting Date or Normal Vesting Date but before the Participant’s Termination of Employment, the Participant’s Beneficiary shall be entitled to receive a survivor benefit (“Survivor Benefit”) pursuant to this Article 4 equal to 50% of the lump sum amount that would be payable to the Participant hereunder assuming that the Participant’s Retirement Date occurred as of the day before the Participant’s death. In

the event of a Participant’s death after Termination of Employment but before actual payment to the Participant of the Participant’s Executive SERP Retirement Benefit, the full amount of the lump sum payment that would have been paid to the Participant shall be paid to the Participant’s Beneficiary. Any Survivor Benefit payable pursuant to this Article 4 shall be paid in accordance with Article 8 hereof.

4.5 Vesting. Unless a Participant’s Early Retirement Date or Normal Retirement Date occurs on or prior to the Participant’s Termination of Employment or death, no Executive SERP Retirement Benefit (or any other benefit) shall be payable pursuant to this Article 4 to the Participant or the Participant’s Beneficiary.

ARTICLE 5

Section 415 Retirement Benefit

5.1 Eligibility. Each person who is a participant in the Retirement Plan shall be a “Participant” for purposes of this Article 5 and shall be eligible to receive a “Section 415 Retirement Benefit” in accordance with, and subject to the terms, of this Article 5.

5.2 A Participant shall be entitled to receive upon Termination of Employment, a Section 415 Retirement Benefit, in the form of a lump sum payment, that is Actuarially Equivalent to the excess, if any, of (a) the amount the Participant would have been entitled to receive under the Retirement Plan from time to time, but determined without regard to the limitations imposed on benefits provided under the Retirement Plan by reason of Section 415 of the Code, over (b) the amount such Participant was entitled to receive under the Retirement Plan taking into account the limitations imposed on benefits provided under the Retirement Plan by reason of Section 415 of the Code, provided that the minimum Section 415 Retirement Benefit determined pursuant to this Article 5 shall be equal to the amount that would be payable under the Retirement Plan but for the application of Section 401(a)(17) of the Code and Section 415 of the Code, reduced by the Section 401(a)(17) Amount.

5.3 Survivor Benefit. In the event of a Participant’s death prior to the payment of any Section 415 Retirement Benefit to the Participant pursuant to this Article 5, this Article 5 shall apply to the Participant’s Beneficiary and terms of this Article 5 shall be applied by reference to the amount, if any, payable to the Beneficiary under the Retirement Plan.

5.4 Certain Reductions. Any payments to which a Participant or Beneficiary would otherwise be entitled under the preceding provisions of this Article 5 shall be reduced by an amount that is Actuarially Equivalent to the excess of (a) any benefits to which the Participant or Beneficiary is entitled (or has previously received) pursuant to this Article 5 or the terms of any plan, program, or arrangement that is (or was) intended to “make up” for reductions in accrued benefits under any Other Company Plan occurring by reason of Section 415 of the Code, Section 401(a)(17) of the Code, or the deferral of compensation, over (b) the amount of any reduction in the Participant’s benefits under Section 6.4 hereof.

ARTICLE 6

Section 401(a)(17) Retirement Benefit

6.1 Eligibility. Each person who is a participant in the Retirement Plan shall be a “Participant” for purposes of this Article 5 and shall be eligible to receive a “Section 401(a)(17) Retirement Benefit” in accordance with, and subject to the terms of, this Article 6.

6.2 A Participant shall be entitled to receive upon Termination of Employment, a Section 401(a) (17) Retirement Benefit, in the form of a lump sum payment, that is Actuarially Equivalent to the excess, if any, of (a) the amount the Participant would have been entitled to receive under the Retirement Plan from time to time, but determined (i) without regard to the compensation limitation imposed under the Retirement Plan by reason of Section 401(a)(17) of the Code, and (ii) by taking into account Deferred Compensation at the time such compensation would otherwise have been paid absent deferral, over (b) the amount the Participant was entitled to receive under the Retirement Plan taking into account the compensation limitation imposed under the Retirement Plan by reason of Section 401(a)(17) of the Code. Notwithstanding the foregoing provisions of this Article 6, the amount otherwise payable to a Participant pursuant to this Article 6 shall be reduced to the extent that the sum of (a) the amount payable pursuant to the terms of this Article 6, (b) any amount payable to the Participant pursuant to Article 5 hereof, and (c) amounts payable to the Participant under the Retirement Plan, exceed the amount that would be payable under the Retirement Plan but for the application of Sections 401(a)(17) and 415 of the Code and the exclusion of Deferred Compensation from the definition of “Compensation” under the Retirement Plan.

6.3 Survivor Benefit. In the event of a Participant’s death prior to the payment of any Section 401(a)(17) Retirement Benefit to the Participant pursuant to this Article 6, this Article 6 shall apply to the Participant’s Beneficiary and terms of this Article 6 shall be applied by reference to the amount, if any, payable to the Beneficiary under the Retirement Plan. Any survivor benefit payable pursuant to this Article 6 shall be paid in accordance with Article 8.

6.4 Certain Reductions. Any payments to which a Participant or Beneficiary would otherwise be entitled pursuant to the preceding provisions of this Article 6 shall be reduced by an amount that is Actuarially Equivalent to the amount of any benefits to which the Participant is entitled (or has previously received) pursuant to Article 6 hereof or the terms of any plan, program, or arrangement that is (or was) intended to “make up” for reductions in accrued benefits under any Other Company Plan occurring by reason of Section 401(a)(17) of the Code or the deferral of compensation.

ARTICLE 7

Individual Retirement Benefit

A person shall be a “Participant” for purposes of this Article 7 only to the extent specifically provided in an appendix to this Plan and shall be entitled to an Individual Retirement Benefit only to the extent specifically provided in the appendix. The amount and other terms and conditions of the Individual Retirement Benefit shall be governed by the terms of the applicable appendix and the terms of this Plan.

ARTICLE 8

Payment of Benefits

8.1 Termination of Employment On or After January 1, 2008. In the case of a Participant who incurs a Termination of Employment on or after January 1, 2008, the Participant’s Retirement Benefit shall be paid in the form of a lump-sum payment payable as soon as practicable after Termination of Employment (and in all events within thirty days after Termination of Employment).

8.2 Termination of Employment Before January 1, 2008. In the case of a Participant who incurs a Termination of Employment before January 1, 2008, the Participant’s Retirement Benefit shall be paid to the Participant in accordance with the terms of the Plan as in effect prior to the date of this amendment and restatement, any “Participant Consent to Payment” or “Consent to Distribution” (each, a “Consent”), and the requirements of Section 409A of the Code (to the extent applicable).

8.3 Certain Consents to Payment. Notwithstanding anything in this Article 8 to the contrary and whether or not the Participant has incurred a Termination of Employment, in the case of any Participant who has executed a Consent, the Participant’s Retirement Benefit shall be paid in accordance with such Consent and the Actuarially Equivalent amount to be paid shall be determined in accordance with the terms of such Consent.

8.4 Section 409A Mandatory Delay in Benefit Payments for Specified Employees. Notwithstanding the preceding provisions of this Article 8, to the extent required by Section 409A of the Code, the Administrator shall delay payment of the Retirement Benefit of a Participant who is a “specified employee” (within the meaning of Section 409A of the Code) until the earlier of (a) the date that is six months after the date of the Participant’s Termination of Employment, or (b) the date of the specified employee’s death. The aggregate amount of payment(s) otherwise payable during the delay period (plus interest thereon at a rate equal to the simple average of the rate for the last four reporter quarters preceding the Participant’s Termination of Employment under the Vanguard U.S. Treasury Fund under the Temple-Inland Salaried Savings Plan or any successor thereto) shall be payable to the specified employee upon the expiration of the delay period.

8.5 Survivor Benefits. Any survivor benefits payable to a Beneficiary pursuant to Articles 4, 5, 6, and/or 7 shall be paid on the first day of the second calendar month following the Participant’s death.

ARTICLE 9

Claims

9.1 Claims Procedure. Claims for benefits under the Plan shall be filed with the Administrator. If any Participant or other payee (a “claimant”) claims to be entitled to a benefit under the Plan and the Administrator determines that such claim should be denied in whole or in part, the Administrator shall notify such claimant of its decision in writing (which may be provided electronically). Such notification will be written in a manner calculated to be understood by the claimant and will contain (a) specific reasons for the denial, (b) specific reference to pertinent Plan provisions, (c) a description of any additional material or information necessary for the claimant to perfect such claim and an explanation of why such material or information is necessary, and (d) a description of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA following the rendering of an adverse decision on review. Such notification will be given within a reasonable period of time, but not later than 90 days after the claim is received by the Administrator, unless the Administrator determines that special circumstances require an extension of time for processing the claim. If the Administrator determines that such an extension of time is required, written notice of the extension shall be provided to the claimant prior to the end of the initial 90-day period. The extension notice shall indicate the special circumstances requiring the extension of time and the date by which the Administrator expects to render its decision. In no event shall the extension exceed an additional 90 days from the end of the initial 90-day period. Any electronic notification provided by the Administrator under this Article 9 shall comply with the standards imposed by 29 C.F.R. 2520.104b-1(c)(1)(i)-(iv).

9.2

Review Procedure.

(a) Within 60 days after the date on which a claimant receives a written notice of a denied claim, the claimant may file a written request with the Administrator for a review of the denied claim. If the claimant requests a review of the denied claim, the claimant shall be entitled to submit to the Administrator written comments, documents, records and other information relating to the claim for benefits and to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits. The Administrator shall perform its review taking into account all comments, documents, records and other information submitted by the claimant relating to the claim without regard to whether such information was submitted or considered in the initial benefit determination. The Administrator will notify the claimant of its decision in writing (which may be provided electronically). If the claim is denied, the notification will be

written in a manner calculated to be understood by the claimant and will contain (i) the specific reasons for the denial, (ii) references to pertinent provisions of the Plan, (iii) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits, and (iv) a statement of the claimant’s right to bring an action under Section 502(a) of ERISA.

(b) The review provided for by Section 9.2(a) will be made within a reasonable period of time, but not later than 60 days after the Administrator receives the request for review, unless the Administrator determines that special circumstances require an extension of time for processing the claim. If the Administrator determines that an extension of time is required, written notice of the extension shall be furnished to the claimant prior to the end of the initial 60-day period. The extension notice shall indicate the special circumstances requiring the extension of time and the date by which the Administrator expects to render its decision. In no event shall the extension exceed an additional 60 days from the end of the initial 60-day period. If the extension of time is needed due to the claimant’s failure to submit information necessary to make a decision, the period during which the Administrator must make a decision shall be tolled from the date the extension notice is sent to the claimant until the date the claimant responds to the request for additional information.

ARTICLE 10

Administration

This Plan shall be administered by the Administrator. The Administrator shall have all powers necessary to carry out the provisions of this Plan, including, without reservation, the power to delegate administrative matters to other persons and to interpret this Plan in its discretion.

ARTICLE 11

Miscellaneous

11.1 Amendment or Termination. The Board may amend or terminate the Plan at any time; provided, however, that (a) either the Board or the Chief Executive Officer of the Company may amend or modify Schedule I hereto at any time, and (b) no amendment or termination of the Plan (each, a “Plan Change”) may adversely affect in any material respect any vested portion of the Participant’s Retirement Benefits as of the date of the Plan Change without the consent of the Participant (or the Participant’s Beneficiary if the Participant is deceased as of the date of the Plan Change).

11.2 No Duplication of Benefits. Notwithstanding any provisions of this Plan to the contrary, the Section 415 Retirement Benefit and the Section 401(a)(17) Retirement Benefit payable under Articles 5 and 6, respectively, shall be determined and coordinated by the Administrator so as to prevent any duplication of benefits under this Plan and any Other Company Plan.

11.3 No Alienation of Benefits. Participants and Beneficiaries shall have no right to alienate, anticipate, commute, sell, assign, transfer, pledge, encumber or otherwise convey the right to receive any payment under this Plan, and any payment under this Plan or rights thereto shall not be subject to the debts, liabilities, contracts, engagements or torts of Participants or Beneficiaries nor to attachment, garnishment or execution, nor shall they be transferable by operation of law in the event of bankruptcy or insolvency. Any attempt, whether voluntary or involuntary, to effect any such action shall be null, void, and of no effect.

11.4 No Rights to Continued Employment. Nothing contained herein shall be construed as conferring upon a Participant the right to continue in the employ of the Company or any Affiliate.

11.5 Incapacity. If the Administrator determines that any Participant or Beneficiary is unable to care for his or her affairs because of illness or accident, any Retirement Benefit or Survivor Benefit payment due hereunder (unless a prior claim therefor shall have been made by a duly appointed guardian, committee, or other legal representative) may be paid to such Participant’s or Beneficiary’s spouse, child, brother or sister, or to any person deemed by the Administrator to have incurred expenses for such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liabilities of the Company hereunder.

11.6 Withholding. The Company shall have the right to deduct from any payment to be made pursuant to this Plan or any other payment to be made to a Participant or Beneficiary by the Company or any of its affiliates any Federal, state or local taxes required by law to be withheld with respect to the participation of the Participant in this Plan and payments made hereunder.

11.7 No Funding of Benefits. To the extent a Participant or any other person acquires a right to receive payments from the Company under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Company, and such person shall have only the unsecured promise of the Company that such payments shall be made.

11.8 Top-Hat Plan; Excess Plan. The Plan, except with respect to the Section 415 Retirement Benefits provided pursuant to Article 5 hereof, is intended to qualify as a “top-hat” plan for purposes of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and shall cover a select group of management or highly compensated employees. The Section 415 Retirement Benefits provided pursuant to Article 5 hereof and related provisions of the Plan shall constitute a separate plan that is an excess benefit plan within the meaning of Section 3(36) of ERISA.

11.9 Headings. The headings of Sections hereof are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of the Plan.

11.10 Applicable Law. This Plan shall be construed and enforced in accordance with the laws of the State of Texas, except to the extent preempted by federal law.

11.11 Section 409A of the Code. The Plan is intended to comply with the requirements of Section 409A of the Code, and the Administrator shall administer and interpret the Plan in accordance with such requirements. If any provision of the Plan conflicts with the requirements of Section 409A of the Code, the requirements of Section 409A of the Code shall supersede any such Plan provision.

SCHEDULE I

PARTICIPANTS

Kenneth R. Dubuque

Kenneth M. Jastrow, II

Randall D. Levy

J. Patrick Maley III

Doyle R. Simons

APPENDIX I

ACTUARIAL EQUIVALENCE

1. For purposes of the definition of Actuarial Equivalent for Retirement Benefits with an “annuity starting date” (within the meaning of Section 417 of the Code) on or after January 1, 2008, the following shall be used: (a) an interest rate equal to the “applicable interest rate” under Section 417(e)(3) of the Code for the second full calendar month immediately preceding the first day of the calendar year during which the annuity starting date occurs, and (b) the “applicable mortality table” under Section 417(a)(3) of the Code.

2. For purposes of Section 2.4(b) of the Plan, the amount of the monthly single life annuity payable over a Participant’s lifetime and commencing as of the Participant’s Retirement date shall be determined using the interest rate and the mortality assumptions under Section 1 above as in effect on the earlier of the date of Participant’s Termination of Employment or the Spin-Off Date, but applied as of the Participant’s Retirement Date.

EX-10 5 tinex104amends.htm AMENDMENTS TO OUTSTANDTING LTI AGREEMENTS

Exhibit 10.4

Temple-Inland Inc.

Amendment to Outstanding Option Agreements and

Restricted Stock Agreements

Change in Control Vesting and Definition of Retirement

1.	The change in control vesting provisions set forth in the Option Agreements and Restricted Stock Agreements are amended and replaced in their entirety to read as set forth in (a) below and (b) below, respectively, with the definition of Change in Control being as set forth in (c) below.

Notwithstanding any contrary waiting period, installment period or other limitation or restriction in any Option Agreement or in the Plan, each outstanding Option granted under the Plan before January 1, 2008 shall become exercisable in full for the aggregate number of shares covered thereby, upon the occurrence of a Change in Control.

Notwithstanding any contrary Vesting Period, installment period or other limitation or restriction in any Restricted Stock Agreement or in the Plan, each outstanding award of Restricted Stock granted under the Plan before 2004 (including shares of restricted stock of Guaranty and Forestar issued in respect of Restricted Stock granted under the Plan before 2004) shall become vested in full for the aggregate number of shares covered thereby, upon the occurrence of a Change in Control.

A Change in Control shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:

(1)

any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates) representing 20% or more of the combined voting power of the Company's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clauses (a), (b) or (c) of paragraph (3) below;

(2)

within any twenty-four (24) month period, the following individuals cease for any reason to constitute a majority of the number of directors then serving on the Board: individuals who, on the Effective Date, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company)

whose appointment or election by the Board or nomination for election by the Company's shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended;

(3)

there is consummated a merger, consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation or any recapitalization of the Company (for purposes of this paragraph (3), a “Business Event”) unless, immediately following such Business Event (a) the directors of the Company immediately prior to such Business Event continue to constitute at least a majority of the board of directors of the Company, the surviving entity or any parent thereof, (b) the voting securities of the Company outstanding immediately prior to such Business Event continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, at least 60% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such Business Event, and (c) in the event of a recapitalization, no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company or such surviving entity or any parent thereof (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 20% or more of the combined voting power of the then outstanding securities of the Company or such surviving entity or any parent thereof (except to the extent such ownership existed prior to the Business Event);

(4)

the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company;

(5)

there is consummated an agreement for the sale, disposition or long-term lease by the Company of substantially all of the Company's assets, other than (a) such a sale, disposition or lease to an entity, at least 50% of the combined voting power of the voting securities of which are owned by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale or disposition or (b) the distribution directly to the Company's shareholders (in one distribution or a series of related distributions) of all of the stock of one or more subsidiaries of the Company that represent substantially all of the Company's assets; or

(6)

any other event that the Board, in its sole discretion, determines to be a Change in Control for purposes of this Agreement.

(7)

Notwithstanding the foregoing, a “Change in Control” under clauses (1) through (5) above shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in one or more entities which, singly or together, immediately following such transaction or series of transactions, own all or substantially all of the assets of the Company as constituted immediately prior to such transaction or series of transactions.

If the employee is employed by Guaranty immediately after the Guaranty Spin-Off, effective as of the effective date of the Guaranty Spin-Off, for purposes of the definition of Change in Control set forth herein (a) “Company” shall mean Guaranty and (b) “Effective Date” shall mean the effective date of the Guaranty Spin-Off. If the employee is employed by Forestar immediately after the Forestar Spin-Off, effective as of the effective date of the Forestar Spin-Off, for purposes of the definition of Change in Control set forth herein (a) “Company” shall mean Forestar and (b) “Effective Date” shall mean the effective date of the Forestar Spin-Off.

Effective immediately after the Guaranty Spin-Off and/or the Forestar Spin-Off, the term “Option” shall mean any Temple-Inland Option, any Guaranty Option (if the Guaranty Spin-Off occurs), and any Forestar Option (if the Forestar Spin-Off occurs). Effective immediately after the Guaranty Spin-Off and/or the Forestar Spin-Off, the term “Plan” shall mean the Temple-Inland Stock Plans, the Guaranty Financial Group Inc. 2007 Stock Incentive Plan (if the Guaranty Spin-Off occurs), and the Forestar Real Estate Group Inc. 2007 Stock Incentive Plan (if the Forestar Spin-Off occurs).

2.	For purposes of this definition of “Change in Control”:

“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act.

“Effective Date” means November 2, 2007.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

“Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that

such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

The definitions of Retirement in the Option Agreements and the Restricted Stock Agreements are amended and replaced in their entirety to read as follows: “Retirement” means a Participant's separation from service (within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended) after attaining age 55 and completing at least five years of service with the Company or any of its Affiliates or after attaining age 65.

EX-99 6 tinex991pr20071231.htm SPIN COMPLETION PRESS RELEASE

Exhibit 99.1

NEWS

RELEASE___________________________________________________

FOR IMMEDIATE RELEASE

CONTACT: Chris Mathis

(512) 434-3766

TEMPLE-INLAND ANNOUNCES THE COMPLETION OF THE

SPIN-OFFS OF GUARANTY FINANCIAL GROUP INC. AND

FORESTAR REAL ESTATE GROUP INC.

AUSTIN, TEXAS, December 31, 2007— Temple-Inland Inc. (NYSE: TIN) today announced that the previously announced spin-offs of Guaranty Financial Group Inc. and Forestar Real Estate Group Inc. were completed as of the close of business on December 28, 2007 through tax-free distributions of Guaranty and Forestar common stock to Temple-Inland stockholders of record as of the close of business on December 14, 2007 (the “Record Date”).

As a result of the distributions, each Temple-Inland stockholder has received one common share of Guaranty and one common share of Forestar for every three common shares of Temple-Inland held at the close of business on the Record Date. Any Temple-Inland stockholder entitled to receive a fractional share of Guaranty or Forestar stock will receive a cash payment in lieu of such fractional share.

Temple-Inland no longer owns any of the common stock of Guaranty or Forestar, and each is an independent company. Beginning today, Guaranty and Forestar will be listed on the New York Stock Exchange under the respective trading symbols “GFG” and “FOR.”

Temple-Inland has received a ruling from the Internal Revenue Service indicating that the spin-offs qualify as tax-free distributions for U.S. federal income tax purposes to Temple-Inland and its stockholders. Cash received in lieu of fractional shares, however, will be taxable. Stockholders are urged to consult with their tax advisors as to the specific tax consequences of the distribution to them.

No action is required by Temple-Inland stockholders to receive their shares of Guaranty or Forestar common stock. Temple-Inland stockholders who are entitled to receive the common stock of Guaranty and Forestar will receive a book-entry account statement reflecting their ownership of Guaranty and Forestar common stock or their brokerage account will be credited for the shares. Information to help Temple-Inland stockholders determine their tax basis in each of the respective companies will be posted promptly to each company’s website. Temple-

Inland’s address on the World Wide Web is www.templeinland.com. Guaranty’s address on the World Wide Web is www.guarantygroup.com. Forestar’s address on the World Wide Web is www.forestargroup.com.

About Temple-Inland Inc.

Temple-Inland Inc. is a manufacturing company focused on corrugated packaging and building products. The fully integrated corrugated packaging operation consists of 5 linerboard mills and 1 corrugated medium mill, which produce 3.5 million tons of containerboard per year, and 64 converting facilities, which produce 3.6 million tons of corrugated packaging per year. The building products operation manufactures a diverse line of building products for new home construction, commercial and repair and remodeling markets. Temple-Inland's address on the World Wide Web is www.templeinland.com.

This release contains “forward-looking statements” within the meaning of the federal securities laws. These statements reflect management’s current views with respect to future events and are subject to risk and uncertainties. We note that a variety of factors and uncertainties could cause our actual results to differ significantly from the results discussed in the forward-looking statements. Factors and uncertainties that might cause such differences include, but are not limited to: assumptions or expectations regarding the spin-offs proving to be inaccurate or unrealized; general economic, market, or business conditions; the opportunities (or lack thereof) that may be presented to us and that we may pursue; fluctuations in costs and expenses including the costs of raw materials, purchased energy, and freight; demand for new housing; accuracy of accounting assumptions related to pension and postretirement costs and impaired assets; competitive actions by other companies; changes in laws or regulations; our ability to execute certain strategic and business improvement initiatives, including the Transformation Plan; and other factors, many of which are beyond our control. Except as required by law, we expressly disclaim any obligation to publicly revise any forward-looking statements contained in this news release to reflect the occurrence of events after the date of this news release.

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Exhibit 99.2

TEMPLE-INLAND INC.

UNAUDITED PRO FORMA FINANCIAL INFORMATION

As part of our previously announced transformation plan, we have completed the spin-off of Guaranty Financial Group Inc. (Guaranty) and Forestar Real Estate Group Inc. (Forestar). The following Unaudited Pro Forma Financial Information has been prepared to reflect our distribution of all the shares of common stock of Guaranty and Forestar to our shareholders. On December 28, 2007, we distributed one share of Guaranty common stock and one share of Forestar common stock for every three shares of Temple-Inland common stock held by our shareholders. Cash was issued in lieu of fractional shares of Guaranty and Forestar. We received a ruling from the Internal Revenue Service indicating that the spin-offs qualify as tax-free distributions for U.S. federal income tax purposes to Temple-Inland and its shareholders. However, cash received in lieu of fractional shares will be taxable.

At the time of the distribution Guaranty held all of the assets and liabilities associated with our financial services operations and Forestar held all of the assets and liabilities associated with our real estate operations. Following the distribution we do not own any of the common stock of Guaranty or Forestar, and each is an independent company.

The following Unaudited Pro Forma Consolidated Balance Sheet as of third quarter-end 2007 and the Unaudited Pro Forma Condensed Consolidated Statements of Income for the first nine months 2007 and for the years 2006, 2005 and 2004 have been adjusted to give effect to the spin-offs. The Unaudited Pro Forma Consolidated Balance Sheet assumes the spin-offs occurred at third quarter-end 2007 and the Unaudited Pro Forma Condensed Consolidated Statements of Income assume the spin-offs occurred as of the beginning of the earliest period presented.

Management believes that the assumptions used to derive the Unaudited Pro Forma Financial Information are reasonable. The Unaudited Pro Forma Financial Information has been provided for informational purposes only and is not necessarily indicative of future financial condition or results of operations or the financial condition or results of operations that would have occurred had we completed the spin-offs on the dates indicated. This Unaudited Pro Forma Financial Information should be read in conjunction with our historical consolidated financial statements, which can be found in our quarterly report on Form 10-Q for the period ended September 29, 2007, filed with the Securities and Exchange Commission on November 7, 2007, and our annual report on Form 10-K for the fiscal year ended December 30, 2006, filed with the Securities and Exchange Commission on February 23, 2007.

This Unaudited Pro Forma Financial Information does not reflect other aspects of our previously announced transformation plan including: (i) the sale of our timberlands for $2.38 billion, (ii) the pledge of the notes received in the sale of our timberlands as collateral for a non-recourse loan payable in 2027 with proceeds of $2.14 billion, (iii) the payment of a special dividend of $1.1 billion, (iv) the reduction of debt of $700 million, and (v) the payment or accrual of transformation related costs, all of which occurred in fourth quarter 2007.

TEMPLE-INLAND INC.

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

THIRD QUARTER-END 2007

		PRO FORMA ADJUSTMENTS
				OTHER
	HISTORICAL	GUARANTY	FORESTAR	ADJUSTMENTS		PRO FORMA
		A	B
	(In millions)
ASSETS
Cash and cash equivalents	$ 238	$ (197)	$ (6)	$ -		$ 35
Trade receivables, net of allowance for doubtful accounts of $15	446	-	-	-		446
Inventories	417	-	-	-		417
Assets held-for-sale	309	-	-	-		309
Timber and timberland	51	-	(41)	-		10
Real estate	613	-	(613)	-		-
Loans held for sale	19	(19)	-	-		-
Loans, net of allowance for losses of $91	9,561	(9,561)	-	-		-
Securities available-for-sale	1,970	(1,970)	-	-		-
Securities held-to-maturity	3,851	(3,851)	-	-		-
Investment in Federal Home Loan Bank stock	224	(224)	-	-		-
Property and equipment, net	1,848	(222)	(10)	(12)	C	1,604
Goodwill	509	(144)	-	-		365
Other intangible assets	27	(27)	-	-		-
Prepaid expenses and other assets	609	(269)	(10)	-		330
TOTAL ASSETS	$ 20,692	$ (16,484)	$ (680)	$ (12)		$ 3,516

TEMPLE-INLAND INC.

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

THIRD QUARTER-END 2007

	PRO FORMA ADJUSTMENTS
			OTHER
HISTORICAL	GUARANTY	FORESTAR	ADJUSTMENTS	PRO FORMA
	A	B
(in millions)

LIABILITIES
Accounts payable, accrued expenses, and other liabilities	$ 1,001	$ (184)	$ (79)	$ 6	D	$ 744
Long-term debt and other borrowings	1,726	(101)	(177)	110	E	1,558
Deposits	9,370	(9,370)	-	-		-
Federal Home Loan Bank borrowings	5,075	(5,075)	-	-		-
Obligations to settle trade date securities	435	(435)	-	-		-
Deferred income taxes	158	40	(4)	3	F	197
Liability for pension benefits	199	-	-	-		199
Liability for postretirement benefits	134	-	-	-		134
Subordinated notes payable to trust	314	(314)	-	-		-
TOTAL LIABILITIES	18,412	(15,439)	(260)	119		2,832

SHAREHOLDERS' EQUITY
Preferred stock -- par value $1 per share:
authorized 25,000,000 shares; none issued	-	-	-	-		-
Common stock -- par value $1 per share:
authorized 200,000,000 shares; issued 123,605,344 shares,
including shares held in the treasury	124	-	-	-		124
Additional paid-in capital	468	-	-	-		468
Accumulated other comprehensive loss, net	(196)	12	-	-		(184)
Retained earnings	2,552	(1,057)	(420)	(131)	G	944
	2,948	(1,045)	(420)	(131)		1,352
Cost of shares held in the treasury: 17,534,177 shares	(668)	-	-	-		(668)
TOTAL SHAREHOLDERS' EQUITY	2,280	(1,045)	(420)	(131)		684
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 20,692	$ (16,484)	$ (680)	$ (12)		$ 3,516

Please read notes to the unaudited pro forma consolidated balance sheet

TEMPLE-INLAND INC.

NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

A.	Represents third quarter-end 2007 carrying value of assets, liabilities and equity of Guaranty, the common stock of which was distributed to our shareholders on December 28, 2007.

B.	Represents third quarter-end 2007 carrying value of assets, liabilities and equity of Forestar, the common stock of which was distributed to our shareholders on December 28, 2007.

C.	Represents the carrying value of fractional ownership interests in corporate aircraft to be contributed to Guaranty and Forestar.

D.	Represents the carrying value of our equity interest in one of our subsidiaries to be contributed to Guaranty.

E.	Represents cash to be contributed to Guaranty.

F.	Represents deferred taxes primarily related to allocation of share-based compensation to be contributed to Guaranty.

G.	Represents the sum of equity contributions to (i) Guaranty and Forestar related to C above totaling $12 million (ii) Guaranty related to D above totaling $6 million (iii) Guaranty related to E above totaling $110 million and (iv) Guaranty related to F above totaling $3 million.

TEMPLE-INLAND INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

FIRST NINE MONTHS 2007

		PRO FORMA ADJUSTMENTS
					OTHER
	HISTORICAL	GUARANTY	FORESTAR		ADJUSTMENTS		PRO FORMA
		A	B
	(In millions)

REVENUES
Manufacturing and real estate	$ 3,112	$ -	$ (123)		$ -		$ 2,989
Financial services	866	(866)	-		-		-
	3,978	(866)	(123)		-		2,989

COSTS AND EXPENSES
Manufacturing and real estate	(2,903)	-	77		9	C	(2,817)
Financial services	(742)	742	-		-		-
	(3,645)	742	77		9		(2,817)
OPERATING INCOME	333	(124)	(46)		9		172
Parent company interest	(93)	-	7	D	-		(86)
Other non-operating income (expense)	2	-	(1)		-		1
INCOME BEFORE INCOME TAXES	242	(124)	(40)		9		87
Income tax (expense)	(94)	46	14		-		(34)
INCOME FROM CONTINUING OPERATIONS	$ 148	$ (78)	$ (26)		$ 9		$ 53

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic	105.9						105.9
Diluted	107.9						107.9

EARNINGS PER SHARE FROM CONTINUING OPERATIONS
Basic	$ 1.41						$ 0.50
Diluted	$ 1.38						$ 0.49

Please read notes to the unaudited pro forma condensed consolidated statements of income.

TEMPLE-INLAND INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

FOR THE YEAR 2006

		PRO FORMA ADJUSTMENTS
	HISTORICAL	GUARANTY	FORESTAR		PRO FORMA
		A	B
	(In millions)

REVENUES
Manufacturing and real estate	$ 4,389	$ -	$ (204)		$ 4,185
Financial services	1,169	(1,169)	-		-
	5,558	(1,169)	(204)		4,185

COSTS AND EXPENSES
Manufacturing and real estate	(3,880)	-	115		(3,765)
Financial services	(965)	965	-		-
	(4,845)	965	115		(3,765)
OPERATING INCOME	713	(204)	(89)		420
Parent company interest	(128)	-	5	D	(123)
Other non-operating income (expense)	92	-	1		93
INCOME BEFORE INCOME TAXES	677	(204)	(83)		390
Income tax (expense)	(208)	74	31		(103)
INCOME FROM CONTINUING OPERATIONS	$ 469	$ (130)	$ (52)		$ 287

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic	108.8				108.8
Diluted	110.8				110.8

EARNINGS PER SHARE FROM CONTINUING OPERATIONS
Basic	$ 4.31				$ 2.64
Diluted	$ 4.23				$ 2.59

Please read notes to the unaudited pro forma condensed consolidated statements of income.

TEMPLE-INLAND INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

FOR THE YEAR 2005

		PRO-FORMA ADJUSTMENTS
	HISTORICAL	GUARANTY		FORESTAR		PRO FORMA
		A		B
	(In millions)

REVENUES
Manufacturing and real estate	$ 3,978	$ -		$ (135)		$ 3,843
Financial services	983	(983)		-		-
	4,961	(983)		(135)		3,843

COSTS AND EXPENSES
Manufacturing and real estate	(3,797)	4	E	70		(3,723)
Financial services	(787)	787		-		-
	(4,584)	791		70		(3,723)
OPERATING INCOME	377	(192)		(65)		120
Parent company interest	(115)	-		6	D	(109)
Other non-operating income (expense)	-	-		-		-
INCOME BEFORE INCOME TAXES	262	(192)		(59)		11
Income tax (expense) benefit	(86)	71		22		7
INCOME FROM CONTINUING OPERATIONS	$ 176	$ (121)		$ (37)		$ 18

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic	112.6					112.6
Diluted	114.5					114.5

EARNINGS PER SHARE FROM CONTINUING OPERATIONS
Basic	$ 1.56					$ 0.16
Diluted	$ 1.54					$ 0.16

Please read notes to the unaudited pro forma condensed consolidated statements of income.

TEMPLE-INLAND INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

FOR THE YEAR 2004

		PRO-FORMA ADJUSTMENTS
	HISTORICAL	GUARANTY		FORESTAR		PRO FORMA
		A		B
	(In millions)

REVENUES
Manufacturing and real estate	$ 3,860	$ -		$ (166)		$ 3,694
Financial services	988	(988)		-		-
	4,848	(988)		(166)		3,694

COSTS AND EXPENSES
Manufacturing and real estate	(3,667)	2	E	115		(3,550)
Financial services	(827)	827		-		-
	(4,494)	829		115		(3,550)
OPERATING INCOME	354	(159)		(51)		144
Parent company interest	(130)	-		5	D	(125)
Other non-operating income (expense)	-	-		-		-
INCOME BEFORE INCOME TAXES	224	(159)		(46)		19
Income tax (expense) benefit	(67)	59		16		8
INCOME FROM CONTINUING OPERATIONS	$ 157	$ (100)		$ (30)		$ 27

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic	111.4					111.4
Diluted	112.4					112.4

EARNINGS PER SHARE FROM CONTINUING OPERATIONS
Basic	$ 1.40					$ 0.24
Diluted	$ 1.39					$ 0.24

Please read notes to the unaudited pro forma condensed consolidated statements of income.

TEMPLE-INLAND INC.

NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED

STATEMENTS OF INCOME

A.	Represents the historical results of operations of Guaranty, the common stock of which was distributed to our shareholders on December 28, 2007.

B.	Represents the historical results of operations of Forestar, the common stock of which was distributed to our shareholders on December 28, 2007.

C.	Represents expenses incurred related to the spin-off of Guaranty and Forestar.

D.	Represents interest expense on third-party debt and allocated interest related to the intercompany debt between Forestar and Temple-Inland.

E.	Represents the allocation of share-based compensation expense.