SC 14D9

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14D-9

SOLICITATION/RECOMMENDATION
STATEMENT UNDER SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934

TEMPLE-INLAND INC.

(Name of Subject Company)

TEMPLE-INLAND INC.

(Name of Persons Filing Statement)

Common Stock, $1.00 par value per share

(Title of Class of Securities)

879868107

(CUSIP Number of Class of Securities)

C. Morris Davis, Esq.
General Counsel
Temple-Inland Inc.
1300 MoPac Expressway South, 3^rd Floor
Austin, Texas 78746
Telephone: (512) 434-5800

(Name, address, and telephone number of persons authorized to receive notices and
communications on behalf of the person filing statement)

Copies to:

Daniel A. Neff, Esq.
Benjamin M. Roth, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
(212) 403-1000

o   Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

TABLE OF CONTENTS

			Page
	Item 1.	Subject Company Information		3
	Item 2.	Identity and Background of Filing Person		3
	Item 3.	Past Contacts, Transactions, Negotiations and Agreements		7
	Item 4.	The Solicitation or Recommendation		10
	Item 5.	Persons/Assets Retained, Employed, Compensated or Used		23
	Item 6.	Interest in Securities of the Subject Company		23
	Item 7.	Purposes of the Transaction and Plans or Proposals		23
	Item 8.	Additional Information		23
	Item 9.	Exhibits		28
EX-99.A.4
EX-99.A.5
EX-99.A.6
EX-99.A.7
EX-99.A.10
EX-99.A.11
EX-99.A.12
EX-99.E.1

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Item 1.   Subject Company Information

Name and Address

The name of the subject company to which this Solicitation/Recommendation Statement on Schedule 14D-9 (together with any exhibits attached hereto, this “Statement”) relates is Temple-Inland Inc., a Delaware corporation (“Temple-Inland” or the “Company”). Temple-Inland’s principal executive offices are located at 1300 MoPac Expressway South, 3^rd Floor, Austin, Texas 78746. Temple-Inland’s telephone number at this address is (512) 434-5800.

Securities

The title of the class of equity securities to which this Statement relates is Temple-Inland’s common stock, par value $1.00 per share, including the associated rights to purchase shares of Series B Junior Participating Preferred Stock (“Rights,” and together with the Temple-Inland common stock, the “Temple-Inland Common Shares”), issued pursuant to the Rights Agreement, dated as of June 7, 2011, between Temple-Inland and Computershare Trust Company, N.A., as Rights Agent (the “Rights Agreement”). As of July 2, 2011, there were 108,649,374 Temple-Inland Common Shares outstanding.

Item 2.   Identity and Background of Filing Person

Name and Address

The name, business address, and business telephone number of Temple-Inland, which is the subject company and the person filing this Statement, are set forth in Item 1 above.

Tender Offer

This Statement relates to the tender offer by International Paper Company (“IP”) through Metal Acquisition Inc., a Delaware corporation and wholly owned subsidiary of IP (“IP Sub”), to purchase all of the outstanding Temple-Inland Common Shares at a price of $30.60 per share, net to the seller in cash, without interest and less any required withholding taxes. The tender offer is being made on the terms and subject to the conditions described in the Tender Offer Statement on Schedule TO (together with the exhibits thereto, the “Schedule TO”) filed by IP and IP Sub with the Securities and Exchange Commission (the “SEC”) on July 12, 2011. The value of the consideration offered, together with all of the terms and conditions applicable to the tender offer, is referred to in this Statement as the “Offer.”

IP has stated that the purpose of the Offer is to acquire control of, and the entire equity interest in, Temple-Inland. IP has indicated that it intends, as soon as practicable after the completion of the Offer, to seek to consummate a merger of Temple-Inland and IP Sub (or one of IP’s other subsidiaries) (the “Second-Step Merger”). IP has also stated in the Schedule TO that it may nominate, and solicit proxies for the election of, a slate of nominees for election at Temple-Inland’s 2012 annual meeting of stockholders (the “Temple-Inland 2012 Annual Meeting”). In addition, whether or not IP proposes a merger or other business combination with Temple-Inland and whether or not its nominees are elected at the Temple-Inland 2012 Annual Meeting, the Schedule TO states that IP intends, as promptly as practicable after completion of the Offer, to seek maximum representation on the Board of Directors of Temple-Inland (the “Temple-Inland Board” or the “Board”) and, promptly after the consummation of the Offer, to request that some or all of the current members of the Temple-Inland Board resign and that IP’s designees be elected to fill the vacancies so created.

The Offer is subject to numerous conditions, which include the following, among others:

•  The “Minimum Tender Condition” — there being validly tendered and not withdrawn before the expiration of the Offer a number of Temple-Inland Common Shares that, together with the Temple-Inland Common Shares then owned by IP and its subsidiaries (including IP Sub), represents at least a majority of the total number of Temple-Inland Common Shares outstanding on a fully diluted basis;

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•  The “Rights Condition” — the Temple-Inland Board redeeming the Rights or IP being satisfied, in its reasonable discretion, that the Rights have been invalidated or are otherwise inapplicable to the Offer and the Second-Step Merger;

•  The “Section 203 Condition” — the Temple-Inland Board having approved the Offer and the Second-Step Merger under Section 203 (“Section 203”) of the Delaware General Corporation Law (the “DGCL”) or IP being satisfied, in its reasonable discretion, that Section 203 is inapplicable to the Offer and the Second-Step Merger;

•  The “Board Majority Condition” — IP Sub’s nominees constituting, or the Temple-Inland Board having approved arrangements that will cause IP Sub’s nominees to constitute, promptly after completion of the Offer, a majority of the Temple-Inland Board;

•  The “Antitrust Condition” — the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) and any similar waiting periods required under the antitrust laws of other countries, applicable to the purchase of Temple-Inland Common Shares under the Offer having expired or been terminated as described in the Schedule TO; and

•  The “Impairment Condition” — Temple-Inland not having entered into or effectuated any agreement or transaction with any person or entity that, in IP Sub’s reasonable judgment, has the effect of impairing the ability of IP or IP Sub to acquire Temple-Inland or otherwise diminishing the expected value to IP of the acquisition of Temple-Inland.

In addition, IP is not required to consummate the Offer and may terminate or amend the Offer if at any time before the expiration of the Offer any of the following conditions exist, which conditions may be asserted by IP or IP Sub in their sole discretion regardless of the circumstances giving rise to any such condition failing to be satisfied:

•  there is publicly announced, instituted, or pending (or IP is notified of a person’s intent to commence) any action or proceeding by any person before any court or governmental authority or agency challenging or seeking to restrain or prohibit the making of the Offer, the acceptance for payment of or payment for any of the Temple-Inland Common Shares, or the consummation of the Second-Step Merger or other similar business combination involving Temple-Inland; seeking to obtain material damages in connection with the Offer; seeking to restrain or prohibit the exercise of the full rights of ownership or operation by IP or any of its subsidiaries or affiliates of the business or assets of IP or Temple-Inland or any of IP’s or Temple-Inland’s respective subsidiaries or affiliates, or to compel IP or any of its subsidiaries or affiliates to dispose of or hold separate any portion of its business or assets or those of Temple-Inland or any of IP’s or Temple-Inland’s respective subsidiaries or affiliates; seeking to require divestiture by IP or any of its subsidiaries or affiliates of any Temple-Inland Common Shares; seeking any material diminution in the benefits expected to be derived by IP or any of its subsidiaries or affiliates from the transactions contemplated by the Offer or any merger or other business combination involving Temple-Inland; adversely affecting the financing of the Offer, the Second-Step Merger or other business combination involving Temple-Inland; or that otherwise, in the reasonable judgment of IP, has or may have material adverse significance with respect to either the value of Temple-Inland or any of its subsidiaries or affiliates or the value of the Temple-Inland Common Shares to IP or any of its subsidiaries or affiliates (the “No Lawsuits Condition”);

•  any action is taken, or any statute, rule, regulation, interpretation, judgment, injunction, order, or decree is proposed, enacted, enforced, promulgated, amended, issued, or deemed applicable to IP, IP Sub, or any of their subsidiaries or affiliates, the Offer, the acceptance for payment of or payment for Temple-Inland Common Shares, or any merger or other business combination involving Temple-Inland, by any court, government, or agency (other than the application of the waiting period provisions of the HSR Act to the Offer or to any such merger or other business combination) that, in the reasonable judgment of IP, does or may, directly or indirectly, result in any of the consequences referred to in the No Lawsuits Condition in the immediately preceding bullet (the “No Diminution of Benefits Condition”);

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•  any change occurs or is threatened (or any development occurs or is threatened involving a prospective change) in the business, assets, liabilities, financial condition, capitalization, operations, results of operations, or prospects of Temple-Inland or any of its affiliates that, in the reasonable judgment of IP, is or may be materially adverse to Temple-Inland or any of its affiliates, or IP becomes aware of any facts that, in its reasonable judgment, have or may have material adverse significance with respect to either the value of Temple-Inland or any of its affiliates or the value of the Temple-Inland Common Shares to IP or any of its affiliates;

•  there occurs any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market; any change in the general political, market, economic, or financial conditions in the United States or abroad that, in the reasonable judgment of IP, could have a material adverse effect on the business, assets, liabilities, financial condition, capitalization, operations, results of operations, or prospects of Temple-Inland and its subsidiaries, taken as a whole; the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States; any material adverse change (or development or threatened development involving a prospective material adverse change) in United States dollars or any other currency exchange rates or a suspension of, or a limitation on, the markets therefor; the commencement of a war, armed hostilities, or other international or national calamity directly or indirectly involving the United States or any attack on, outbreak, or act of terrorism involving the United States; any limitation (whether or not mandatory) by any governmental authority or agency on, or any other event that, in the reasonable judgment of IP, may adversely affect the extension of credit by banks or other financial institutions; or in the case of any of the foregoing existing as of the close of business on July 11, 2011, a material acceleration or worsening thereof (together with the condition in the bullet point immediately above this bullet point, the “No Material Adverse Effect Condition”);

•  any other person (including Temple-Inland or any of its subsidiaries or affiliates) publicly proposes to make or makes a tender or exchange offer for some or all of the Temple-Inland Common Shares or enters into any agreement or makes any proposal with respect to a tender or exchange offer, merger, consolidation, or other business combination with Temple-Inland, or has acquired or proposes to acquire beneficial ownership of more than five percent of any class or series of capital stock of Temple-Inland (including the Temple-Inland Common Shares), or is granted any option, right or warrant, conditional or otherwise, to acquire beneficial ownership of more than five percent of any class or series of capital stock of Temple-Inland (including the Temple-Inland Common Shares) other than acquisitions for bona fide arbitrage purposes only and other than as disclosed in a Schedule 13D or 13G on file with the SEC on July 11, 2011; any person that filed a Schedule 13D or 13G with the SEC prior to July 11, 2011 acquires or proposes to acquire beneficial ownership of additional shares of any class or series of capital stock of Temple-Inland constituting one percent or more of any such class or series, or is granted any option, right or warrant, conditional or otherwise, to acquire beneficial ownership of additional shares of any class or series of capital stock of Temple-Inland constituting one percent or more of any such class or series; or any person files a Notification and Report Form under the HSR Act or makes a public announcement reflecting an intent to acquire Temple-Inland or any assets or securities of Temple-Inland (the “Stockholder Ownership Condition”);

•  Temple-Inland or any of its subsidiaries has split, combined, or otherwise changed, or authorized or proposed the split, combination, or other change of, the Temple-Inland Common Shares or its capitalization; acquired or otherwise caused a reduction in the number of, or authorized or proposed the acquisition or other reduction in the number of, outstanding Temple-Inland Common Shares or other securities; issued or sold, or authorized or proposed the issuance or sale of, any additional Temple-Inland Common Shares, shares of any other class or series of capital stock, other voting securities or any securities convertible into, or options, rights or warrants, conditional or otherwise, to acquire, any of the foregoing (other than the issuance of Temple-Inland Common Shares pursuant to and in accordance with the terms in effect on July 11, 2011, of employee stock options outstanding prior to such date), or any other securities or rights in respect of, in lieu of, or in substitution or exchange for any shares of its capital stock; permitted the issuance or sale of any shares of any class of capital stock

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or other securities of any subsidiary of Temple-Inland; declared or paid, or proposed to declare or pay, any dividends (other than regular quarterly dividends of $0.13 or less per Temple-Inland Common Share with record and payment dates consistent with Temple-Inland’s past practice) or other distribution on any shares of capital stock of Temple-Inland (other than a distribution of the Rights certificates or a redemption of the Rights in accordance with the Rights Agreement as publicly disclosed to be in effect prior to the date of the Offer); or altered or proposed to alter any material term of any outstanding security, issued or sold, or authorized or proposed the issuance or sale of, any debt security or otherwise incurred or authorized or proposed the incurrence of any debt other than in the ordinary course of business (other than to amend the Rights Agreement to make the Rights inapplicable to the Offer and the Second-Step Merger);

•  Temple-Inland has authorized, recommended, proposed or announced its intent to enter into, or has entered into, an agreement with respect to or effected any merger or business combination, acquisition or disposition of assets or relinquishment of any material contract or other rights not in the ordinary course of business, or enters into (or authorizes, recommends, proposes or announces its intent to enter into) any agreement or arrangement with any person that, in the reasonable judgment of IP, has or may have material adverse significance with respect to either the value of Temple-Inland or any of its subsidiaries or affiliates or the value of the Temple-Inland Common Shares to IP or any of its subsidiaries or affiliates;

•  Temple-Inland has adopted, entered into or amended any employment, severance, change of control, retention, or other similar agreement, arrangement or plan, or made grants or awards thereunder, in each case other than in the ordinary course of business, or adopted, entered into or amended any such agreements or plans so as to provide for increased benefits to officers, directors, employees, or consultants as a result of or in connection with the Offer or IP’s consummation of any merger or other similar business combination involving Temple-Inland;

•  Temple-Inland has taken any action (except as required by law) to terminate or amend or materially increase liability under any employee benefit plan of Temple-Inland or any of its subsidiaries;

•  Temple-Inland has transferred into escrow (or other similar arrangement) any amounts required to fund any existing benefit, employment, severance, change of control or other similar agreement, in each case other than in the ordinary course of business;

•  Temple-Inland has amended or proposed any amendment to the certificate of incorporation or bylaws of Temple-Inland (the conditions in this bullet point and the immediately preceding five bullet points referred to together as the “No Material Change Condition”);

•  IP becomes aware that any material contractual right of Temple-Inland or any of its subsidiaries has been impaired or otherwise adversely affected or that any material amount of indebtedness of Temple-Inland or any of its subsidiaries (other than Temple-Inland’s revolving credit agreement) has been accelerated or has otherwise become due or become subject to acceleration prior to its stated due date in connection with the Offer or the consummation by IP or any of its subsidiaries or affiliates of a business combination with Temple-Inland; or of any covenant, term, or condition in any instrument or agreement of Temple-Inland or any of its subsidiaries that, in the reasonable judgment of IP, has or may have material adverse significance with respect to either the value of Temple-Inland or any of its affiliates or the value of the Temple-Inland Common Shares to IP or any of its affiliates (including any event of default that may ensue in connection with the Offer, the acceptance for payment of or payment for some or all of the Temple-Inland Common Shares by IP or the consummation of a business combination between IP and Temple-Inland) (the “No Adverse Effect on Contracts Condition”);

•  IP or any of its affiliates enters into a definitive agreement or announces an agreement in principle with Temple-Inland providing for a merger or other similar business combination with Temple-Inland or any of its subsidiaries, or the purchase of securities or assets of Temple-Inland or any of its subsidiaries, or IP and Temple-Inland reach any other agreement or understanding pursuant to which it is agreed that the Offer will be terminated;

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•  Temple-Inland or any of its subsidiaries shall have granted to any person proposing a merger or other business combination with or involving Temple-Inland or any of its subsidiaries or the purchase of securities or assets of Temple-Inland or any of its subsidiaries any type of option, warrant, or right that, in the reasonable judgment of IP, constitutes a “lock-up” device (including a right to acquire or receive any Temple-Inland Common Shares or other securities, assets, or business of Temple-Inland or any of its subsidiaries), or paid or agreed to pay any cash or other consideration to any party in connection with or in any way related to any such business combination or purchase; or

•  any required approval, permit, authorization, extension, action or non-action, waiver, or consent of any governmental authority or agency shall not have been obtained on terms satisfactory to IP and IP Sub or any waiting period or extension thereof imposed by any government or governmental authority or agency with respect to the Offer shall not have expired.

For a full description of the conditions to the Offer, please see Annex A attached hereto. The foregoing summary of the conditions to the Offer does not purport to be complete and is qualified in its entirety by reference to the contents of Annex A attached hereto.

The Schedule TO states that the principal executive offices of IP are located at 6400 Poplar Avenue, Memphis, Tennessee 38197 and that the telephone number of its principal executive offices is (901) 419-7000.

Item 3.   Past Contacts, Transactions, Negotiations and Agreements

Except as described in this Statement or in the excerpts from the Temple-Inland Definitive Proxy Statement on Schedule 14A, dated and filed with the SEC on March 23, 2011 (the “2011 Proxy Statement”), relating to the Temple-Inland 2011 annual meeting of stockholders, which excerpts are filed as Exhibit (e)(1) to this Statement and incorporated herein by reference, as of the date of this Statement there are no material agreements, arrangements or understandings, nor any actual or potential conflicts of interest, between Temple-Inland or any of its affiliates, on the one hand, and (i) Temple-Inland or any of its executive officers, directors, or affiliates, or (ii) IP, IP Sub, or any of their respective executive officers, directors, or affiliates, on the other hand. Exhibit (e)(1) is incorporated herein by reference and includes the following sections from the 2011 Proxy Statement: “Voting Securities and Principal Stockholders,” “Transactions with Related Persons,” “Director Compensation,” “Executive Compensation — Compensation Discussion and Analysis,” and “Executive Compensation Tables.”

Any information contained in the pages from the 2011 Proxy Statement incorporated by reference herein shall be deemed modified or superseded for purposes of this Statement to the extent that any information contained herein modifies or supersedes such information.

Relationship with IP

According to the Schedule TO, as of July 12, 2011, IP was the beneficial owner of 1,000 Temple-Inland Common Shares, representing less than one percent of the outstanding Temple-Inland Common Shares.

From time to time, Temple-Inland and IP may buy, sell, or trade containerboard. In 2010, Temple-Inland sold approximately $17.5 million in containerboard to IP and Temple-Inland purchased approximately $26 million in containerboard from IP, substantially all of which was in the form of trades. In the ordinary course of their respective businesses, Temple-Inland and IP participate together in several industry groups, primarily the American Forest and Paper Association.

Consideration Payable Pursuant to the Offer and the Second-Step Merger

If the directors and executive officers of Temple-Inland were to tender any Temple-Inland Common Shares they own pursuant to the Offer, they would receive the same cash consideration on the same terms and conditions as the other Temple-Inland stockholders. As of July 1, 2011, the directors and executive officers of Temple-Inland owned an aggregate of 1,326,530 Temple-Inland Common Shares. If the directors and executive officers of Temple-Inland were to tender all of such Temple-Inland Common Shares for purchase pursuant to the Offer and those Temple-Inland Common Shares were accepted for purchase by IP, the directors and

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executive officers of Temple-Inland would receive an aggregate of approximately $40,591,818 in cash. To the knowledge of Temple-Inland, none of the directors and executive officers of Temple-Inland currently intend to tender any Temple-Inland Common Shares held of record or beneficially owned by such person for purchase pursuant to the Offer.

As of July 1, 2011, the directors and executive officers of Temple-Inland held options to purchase an aggregate of 3,979,198 Temple-Inland Common Shares, with exercise prices ranging from $4.55 to $24.40 and an aggregate weighted average exercise price of $14.74 per share, 2,532,365 of which were vested and exercisable as of that date. Any options to acquire Temple-Inland Common Shares held by the directors and executive officers of Temple-Inland were issued pursuant to the Temple-Inland Inc. 1997 Stock Option Plan, Temple-Inland Inc. 2001 Stock Incentive Plan, Temple-Inland Inc. 2003 Stock Incentive Plan, Temple-Inland Inc. 2008 Stock Incentive Plan, or Temple-Inland Inc. 2010 Incentive Plan, filed (including amendments) as Exhibits (e)(2) through (e)(10) to this Statement, and incorporated herein by reference (collectively, the “Plans”). Under the Plans, consummation of the Offer would constitute a change of control of Temple-Inland, and upon a change of control of Temple-Inland, all unvested options to purchase 1,446,833 Temple-Inland Common Shares held by the directors and executive officers of Temple-Inland would vest.

The following table summarizes, with respect to (1) each Temple-Inland director, (2) each Temple-Inland named executive officer (the “Named Executive Officers”), and (3) all executive officers (other than the Named Executive Officers) (the “Other Executive Officers”) as a group, the aggregate, positive difference in value between $30.60 and the per share exercise prices (the “Spread Value”) of the options to purchase Temple-Inland Common Shares held by such directors and executive officers as of July 1, 2011:

	Temple-Inland				Temple-Inland
	Common		Aggregate Spread		Common		Aggregate Spread
	Shares Subject to		Value		Shares Subject to		Value
Name	Unvested Options (#)		of Unvested Options ($)		Vested Options (#)		of Vested Options ($)
Cassandra C. Carr		—		—		20,000	$	340,600
E. Linn Draper		—		—		—		—
Larry R. Faulkner		—		—		20,000	$	260,600
Jeffery M. Heller		—		—		20,000	$	364,400
W. Allen Reed		—		—		6,000	$	141,040
Richard M. Smith		—		—		20,000	$	277,800
Arthur Temple III		—		—		12,000	$	288,720
R.A. Walker		4,000	$	100,440		16,000	$	401,760
Doyle R. Simons		375,763	$	5,877,476		517,862	$	8,158,289
J. Patrick Maley, III		300,611	$	4,701,990		437,009	$	6,808,209
Randall D. Levy		165,362	$	2,639,441		329,791	$	5,390,953
Larry C. Norton		132,956	$	2,123,523		130,173	$	2,172,597
Dennis J. Vesci		—		—		301,057	$	4,583,120
Other Executive Officers (8 individuals)		468,141	$	7,585,880		702,473	$	9,127,727

Note: Mr. Vesci retired from the Company effective June 1, 2011.

Potential Payments Upon Change in Control

See “Item 8. Additional Information — Information Regarding Golden Parachute Compensation” below.

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Directors’ Compensation

Under the Temple-Inland director compensation program, only directors who are not employees of Temple-Inland receive compensation for their services as directors, as follows:

Annual Retainer Fee	$	70,000	Covers 5 board meetings and 5 meetings for each committee per year
Meeting Fee	$	2,500	Each additional meeting in excess of 5 board meetings and 5 meetings for each committee per year
Lead Director Annual Retainer Fee	$	20,000
Audit Committee Chairman Annual Retainer Fee	$	20,000
Other Committee Chairman Annual Retainer Fee	$	12,500
Committee Member Annual Retainer Fee	$	7,500
Stock Option Grant		20,000	Upon initial election to the board
Annual Restricted Stock Unit Grant	$	90,000	Payment deferred until retirement
Matching Gift to Charity	Up to $	3,000	Funded by the Temple-Inland Foundation

Fees may be taken in cash or may be deferred until retirement. Deferred fees accrue interest payable at retirement equal to 120 percent of the quarterly applicable federal long-term rate published by the Internal Revenue Service (the “IRS”).

The directors’ restricted stock units and fee deferral plan contain provisions for accelerating payment in the event a director’s service terminates due to a change in control, along with a gross-up provision in the event such director is required to pay excise tax on the accelerated payment.

Temple-Inland also reimburses its non-employee directors for their out-of-pocket expenses incurred in connection with attendance at Board, committee, and stockholder meetings and other company business.

Indemnification of Directors and Officers

Section 145 of the DGCL provides that a corporation may indemnify directors, officers, employees and agents of the corporation, as well as other individuals who are or were serving at the request of the corporation as directors, officers, employees and agents of other entities, against expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by them in connection with specified actions, suits, or proceedings, whether civil, criminal, administrative, or investigative (other than an action by or in the right of the corporation — a “derivative action”), if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceedings, had no reasonable cause to believe their conduct was unlawful.

A similar standard is applicable in the case of derivative actions, except where the person seeking indemnification has been adjudged liable to the corporation, the statute requires a court determination that such person is fairly and reasonably entitled to indemnity before there can be any indemnification.

Temple-Inland’s Certificate of Incorporation, as amended, eliminates director liability for monetary damages arising from any breach of the director’s duty of care.

Article VI of Temple-Inland’s Amended and Restated Bylaws generally provides that, subject to certain limitations, each person who was or is made a party or is threatened to be made a party to or is involved in any threatened, pending, or completed legal action, suit, or proceeding whether civil, criminal, administrative, or investigative by reason of the fact that he is or was a director, officer, or employee of Temple-Inland or is or was a director, officer, or employee of Temple-Inland or a direct or indirect wholly owned subsidiary of Temple-Inland or is or was serving at the request of the corporation as a director, officer, employee, or agent of any such subsidiary or another company, partnership, joint venture, trust, employee benefit plan, or other enterprise, shall be indemnified and held harmless by the corporation, to the full extent authorized by the

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DGCL, against all expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by such person in connection therewith, provided that such person acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of Temple-Inland (and with respect to a criminal action, had no reason to believe his conduct was unlawful), except that with respect to actions brought by or in the right of Temple-Inland, no indemnification shall be made in respect of any claim, issue, or matter as to which such person shall have been adjudicated to be liable to Temple-Inland, unless and only to the extent that the applicable court determines, upon application, that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper. Such indemnification shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be director, officer, employee, or agent and shall inure to the benefit of his or her heirs, executors, and administrators. Article VI provides that Temple-Inland shall pay the expenses incurred in defending any such proceeding in advance of its final disposition upon delivery to Temple-Inland of an undertaking, by or on behalf of such director, officer, employee, or agent to repay such amounts so advanced if it shall ultimately be determined that such person is not entitled to be indemnified under Article VI.

Both Section 145 of the DGCL and Article VI of Temple-Inland’s Bylaws specifically state that their indemnification provisions shall not be deemed exclusive of any other indemnity rights a director may have. Temple-Inland has entered into indemnification agreements with each of its directors that are intended to assure the directors that they will be indemnified to the fullest extent permitted by Delaware law.

Section 145 of the DGCL permits a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another entity, against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such. Under an insurance policy maintained by Temple-Inland, Temple-Inland is insured for certain amounts that it may be obligated to pay directors and officers by way of indemnity, and each such director and officer is insured against certain losses that he may incur by reason of his being a director or officer and for which he is not indemnified by Temple-Inland.

Item 4.   The Solicitation or Recommendation

Solicitation/Recommendation

After careful consideration, including review of the terms and conditions of the Offer in consultation with Temple-Inland’s independent financial and outside legal advisors, the Temple-Inland Board, by unanimous vote at a meeting on July 16, 2011, determined that the Offer grossly undervalues Temple-Inland and that the Offer is not in the best interests of Temple-Inland’s stockholders. Accordingly, for the reasons described in more detail below, the Temple-Inland Board unanimously recommends that Temple-Inland’s stockholders reject the Offer and NOT tender any of their Temple-Inland Common Shares to IP pursuant to the Offer. Please see “— Reasons for Recommendation” below for further detail.

If you have tendered any of your Temple-Inland Common Shares, you can withdraw them. For assistance in withdrawing your Temple-Inland Common Shares, you can contact your broker or Temple-Inland’s information agent, D.F. King & Co., Inc., at the address and phone number below.

D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, NY 10005

Banks and Brokers call collect: (212) 269-5550
All others call toll-free: (800) 431-9633

A copy of the press release relating to the recommendation of the Temple-Inland Board that Temple-Inland’s stockholders reject the Offer and not tender any of their Temple-Inland Common Shares to IP pursuant to the Offer is filed as Exhibit (a)(10) hereto and is incorporated herein by reference.

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Background of the Offer and Reasons for Recommendation

Background of the Offer

In 2007, Temple-Inland went through a significant transformation designed to create stockholder value through the separation of Temple-Inland into three focused, stand-alone, public companies and the sale of its strategic timberland. Following these transactions, Temple-Inland has been a manufacturing company focused on corrugated packaging and building products.

The new Temple-Inland has delivered outstanding results to its stockholders compared with its corrugated packaging peers (including IP), building products peers, and the S&P 500. Temple-Inland has achieved these results by following its strategy focused on maximizing return on investment (ROI) and profitably growing its business and because of its management team’s proven ability to execute. The Temple-Inland Board believes the Company is poised to further increase ROI and continue to provide superior results for its stockholders by adhering to this successful strategy.

The following charts demonstrate the new Temple-Inland’s proven track record.

Our total return to stockholders for the period from December 31, 2007 until June 2, 2011 has exceeded our primary corrugated packaging peers (including IP), building products peers, and the S&P 500:

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In our corrugated packaging segment, we have made consistent, strong progress toward our goals of increasing our absolute returns and achieving the highest returns in the industry. In 2009, we generated the highest return on assets (ROA) in the industry and reclaimed that position in first quarter 2011:

A key part of our strategy is to maximize ROI, because we believe ROI is fundamental to driving stockholder value. When making peer comparisons, however, we look at ROA because that is the closest metric that can be calculated from publicly available information.

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In our building products segment, we are one of the very few companies in the building products industry that has continued to generate positive cash flow throughout the downturn in housing:

Set forth below is a summary of the events and major contacts between IP and Temple-Inland leading up to the Offer:

On May 17, 2011, John Faraci, Chairman and CEO of IP, telephoned Doyle Simons, Chairman and CEO of Temple-Inland, and made an unsolicited proposal on behalf of IP to acquire all of Temple-Inland’s Common Shares for $30.60 per share in cash. Mr. Simons told Mr. Faraci that he believed IP’s proposal severely undervalued Temple-Inland. Mr. Faraci also requested an in-person meeting with Mr. Simons. That same day, Mr. Simons contacted E. Linn Draper, Lead Director of the Temple-Inland Board, and informed Dr. Draper of the proposal and discussed calling a meeting of the Temple-Inland Board to discuss the proposal. Mr. Simons also contacted Temple-Inland’s existing independent financial advisor, Goldman, Sachs & Co. (“Goldman Sachs”), and legal advisor, Wachtell, Lipton, Rosen & Katz (“Wachtell Lipton”).

The next day, Mr. Simons convened a telephonic meeting of the Temple-Inland Board. Also participating were representatives from Temple-Inland’s independent financial and legal advisors. Mr. Simons updated the Board as to IP’s proposal, and the Board discussed the process to be followed in analyzing and responding to the proposal, including the request for Mr. Simons to meet with Mr. Faraci in person. Mr. Simons explained that the Company and Goldman Sachs would analyze the financial terms of the proposal and that after this analysis was complete the Board would reconvene to consider the proposal. After the meeting, Mr. Simons called Mr. Faraci and agreed to meet in person on May 26, 2011.

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On May 20, 2011, Mr. Simons received a letter dated May 19, 2011 from Mr. Faraci summarizing the terms of the proposal that he had previously conveyed to Mr. Simons over the phone. The full text of this letter is set forth as Exhibit (a)(4) and is incorporated by reference herein.

As previously agreed, on May 26, 2011, Mr. Simons met with Mr. Faraci in person in Austin, Texas. Mr. Faraci repeated IP’s proposal to purchase all of the Temple-Inland Common Shares for a price of $30.60 per share in cash and presented Mr. Simons with certain advocacy materials relating to IP’s proposed price. Mr. Simons again told Mr. Faraci that he believed that the proposal severely undervalued Temple-Inland. Mr. Simons also informed Mr. Faraci that he was scheduling a Board meeting to review IP’s proposal and that such a meeting would take place within the next ten days. Mr. Simons asked Mr. Faraci if there was any additional information that Mr. Faraci would like to convey to him or to the Temple-Inland Board. Mr. Faraci responded that he did not have any additional information for Mr. Simons or the Temple-Inland Board. Mr. Simons told Mr. Faraci that he would contact Mr. Faraci following the Board meeting.

On May 27, 2011, Mr. Simons received a second letter from Mr. Faraci repeating IP’s proposal to acquire Temple-Inland for $30.60 per Temple-Inland Common Share. Mr. Faraci requested a response to the proposal no later than Saturday, June 4. Mr. Faraci concluded the letter by stating that although IP preferred to enter into a negotiated transaction with Temple-Inland, IP was prepared to make an unsolicited offer directly to the Temple-Inland stockholders. The full text of this letter is set forth as Exhibit (a)(5) and is incorporated by reference herein.

On June 4, 2011, the Temple-Inland Board met and, after careful consideration with Goldman Sachs and Wachtell Lipton, voted unanimously to reject IP’s proposal after the Board determined unanimously that the proposal grossly undervalues Temple-Inland and is not in the best interest of Temple-Inland’s stockholders. The Board authorized Mr. Simons to communicate its rejection to Mr. Faraci. Later that day, Mr. Simons called Mr. Faraci to communicate the Board’s rejection of the proposal. Mr. Simons asked Mr. Faraci if there was any additional information that Mr. Faraci would like to convey to him or to the Temple-Inland Board. Mr. Faraci responded that he did not have any additional information for Mr. Simons or the Temple-Inland Board. Shortly after the call, Mr. Simons also sent Mr. Faraci a letter, which is reproduced below:

June 4, 2011

Mr. John V. Faraci

Chairman and CEO

International Paper

6400 Poplar Avenue

Memphis, TN 38197

Dear John:

The Board of Directors of Temple-Inland has received your letters dated May 19 and May 27, 2011 containing IP’s proposal to acquire all of the outstanding shares of Temple-Inland for $30.60 per share in cash. The Board has also considered the additional information you provided me at our meeting held at your request on May 26. Earlier today, the Temple-Inland Board of Directors convened and carefully reviewed your company’s proposal with the assistance of its financial advisor, Goldman, Sachs & Co., and its legal counsel, Wachtell, Lipton, Rosen & Katz. After thorough consideration, it is the unanimous view of the Temple-Inland Board of Directors that your unsolicited proposal grossly undervalues Temple-Inland and its future prospects. Accordingly, the Temple-Inland Board unanimously rejects IP’s proposal of $30.60 per share.

Since we launched the “new” Temple-Inland in January 2008, we have delivered superior results to our stockholders compared with our corrugated packaging peers (including IP), building products peers, and the S&P 500. Since that time, our total returns to stockholders of 22% greatly exceed the 5% total return that IP has achieved. Through our proven ability to execute our strategy focused on maximizing return on investment (ROI) and profitably growing our business, the Board believes the Company will continue to provide superior results for our stockholders.

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A key part of our strategy is to maximize ROI, because we believe ROI is fundamental to driving stockholder value. In corrugated packaging, we generated record ROI of 16.5% in 2009 and 2010 and are positioned to generate significantly higher levels of ROI in 2011 and beyond due to fundamental changes in the industry and benefits from our box plant transformation. Indeed, we are now achieving the highest returns on assets in the corrugated packaging industry. Despite the worst housing markets since the Great Depression, our low-cost building products operation has continued to generate positive cash flow throughout the downturn and is positioned to generate very high levels of return for our stockholders when housing markets recover. As the economic recovery continues and the benefits from our strategy continue to be realized, it is the stockholders of Temple-Inland who should benefit from our company’s very strong prospects, not the stockholders of IP.

We take issue with a number of claims in the materials you have provided to us. You have overstated our net debt by $91 million (which was $737 million as of March 31, 2011, rather than the $828 million stated in your proposal) and the net present value of our timber finance liability by at least $200 million. More significantly, the “comparable” transactions you cite are simply not comparable — those transactions involved troubled or struggling companies or operations rather than a company such as Temple-Inland with its industry-leading returns, high-quality assets and low-cost structure. Further, the retrospective focus of these “comparables” does not take account of the profound changes that are occurring in the corrugated packaging industry, which have led to reduced pricing volatility, higher average prices and widely-held expectations that these positive industry trends will continue.

Your own public statements acknowledge the changes in the industry and make clear that “looking back at history” is not the correct way to understand the corrugated packaging industry’s future. If, as you so clearly state, the past is not prologue for your company, neither is it for ours. We believe that it is for this reason that your letter of May 27 insistently says “Timing and speed are important,” and you have threatened us with a hostile bid if we do not respond by your deadline. The speed that is “important” to you underscores an opportunistic attempt to deprive our stockholders of the value in their company that we believe will become increasingly evident as the benefits of profound change in the corrugated packaging industry, Box Plant Transformation II and our extremely low-cost building products business accrue to the benefit of our stockholders. Finally, the “certain” value you refer to overlooks the serious regulatory issues of your proposal, an attempt to forcibly combine the #1 and #3 participants in the corrugated packaging industry with the result that your company would have an approximate 40% share of industry capacity, nearly double the next largest competitor.

Our Board of Directors, our management team and our employees are dedicated to creating value for all of our stockholders, which we expect to do by continuing to effectively execute on our strategic plan.

Sincerely,

Doyle R. Simons

On June 6, 2011, Mr. Faraci called Mr. Simons to express his disappointment with the Temple-Inland Board’s rejection of the proposal. Shortly after the phone call, IP issued a press release announcing its proposal to acquire all outstanding Temple-Inland Common Shares for $30.60 in cash. After issuing the press release, Mr. Faraci sent a letter to Mr. Simons. The full text of this letter is set forth as Exhibit (a)(7) and is incorporated by reference herein.

Later that day, Temple-Inland issued a press release stating that after careful consideration with its independent financial and legal advisors, the Temple-Inland Board had voted unanimously to reject IP’s proposal after the Board had determined unanimously that the proposal grossly undervalues Temple-Inland and is not in the best interest of Temple-Inland’s stockholders.

At a meeting on June 7, 2011, the Temple-Inland Board, after presentations by Temple-Inland’s independent financial and legal advisors, and after careful consideration, voted unanimously to adopt a stockholder rights plan and declare a dividend distribution of one preferred share purchase right on each

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outstanding share of Temple-Inland common stock. Following the Board meeting, the Company issued a press release announcing its adoption of the stockholder rights plan.

On June 20, 2011, Mr. Faraci telephoned Mr. Simons. Mr. Faraci said that he had new information regarding IP’s proposal that he wished to convey to Mr. Simons in person in Washington, D.C. later in the week. Mr. Simons again stated that the current proposal severely undervalued the Company and that additional discussions regarding the current proposal were not likely to be fruitful. Mr. Simons then asked whether the new information would include an increase in IP’s proposal. Mr. Faraci told Mr. Simons that although the new information did not include an increased proposal, it would be “worth [Mr. Simons’s] while” to hear the new information. Mr. Simons indicated that he would consider Mr. Faraci’s request.

The next day, Mr. Simons called Mr. Faraci and agreed to Mr. Faraci’s request for a second in-person meeting later in the week.

On June 23, 2011, at Mr. Faraci’s request, Mr. Simons again met Mr. Faraci in person in Washington, D.C. Mr. Faraci stated that IP would like the opportunity to conduct due diligence with respect to the following aspects of the Company’s finances: what IP characterizes as “minority interest” in its net debt figure for the Company, net present value of the timber financing transaction, and liabilities for pension and retiree medical. Mr. Simons again informed Mr. Faraci that IP’s current proposal undervalued the Company. Mr. Simons added that if IP were to make a proposal that provided appropriate value to the Company’s stockholders, he would recommend to the Temple-Inland Board that IP be allowed to conduct due diligence and that the companies enter into negotiations.

Very shortly after the end of regular New York Stock Exchange trading on July 11, 2011, Mr. Faraci called Mr. Simons and informed Mr. Simons that IP intended to commence the Offer. A few minutes later, IP issued a press release announcing its intention to commence the Offer the following day. Later on July 11, 2011, Temple-Inland issued a press release acknowledging IP’s press release announcing its intention to commence the Offer and advising Temple-Inland stockholders to take no action pending the Temple-Inland Board’s consideration of the Offer and making a formal recommendation to Temple-Inland’s stockholders with respect thereto.

On July 12, 2011, IP commenced the Offer.

On July 16, 2011, the Temple-Inland Board met to review the terms of the Offer with the assistance of Goldman Sachs and Wachtell Lipton. During this meeting, Goldman Sachs rendered an oral opinion to the Board, subsequently confirmed in writing, that as of July 16, 2011 and based upon and subject to the factors and assumptions set forth in its written opinion, the consideration proposed to be paid to the holders of Temple-Inland Common Shares (other than IP Sub and its affiliates) pursuant to the Offer was inadequate from a financial point of view to such holders. At the meeting, the Temple-Inland Board unanimously determined that the Offer grossly undervalues Temple-Inland and is not in the best interests of Temple-Inland and its stockholders. Accordingly, the Temple-Inland Board unanimously determined to recommend that the Temple-Inland stockholders reject the Offer and not tender their Temple-Inland Common Shares into the Offer. The full text of the written opinion of Goldman Sachs, dated July 16, 2011, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with such opinion, is attached as Annex B. Goldman Sachs provided its opinions for the information and assistance of the Temple-Inland Board in connection with its consideration of the Offer. The opinion of Goldman Sachs is not a recommendation as to whether or not any holder of Temple-Inland Common Shares should tender such Temple-Inland Common Shares in connection with the Offer or any other matter.

Reasons for Recommendation

In reaching the conclusions and in making the recommendation described above, the Temple-Inland Board consulted with Temple-Inland management and its independent financial and legal advisors and took into account numerous factors, including but not limited to the factors listed below.

The Temple-Inland Board believes that the Offer (i) grossly undervalues Temple-Inland and its future prospects, (ii) is extremely opportunistic, and (iii) is subject to regulatory uncertainty.

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The Temple-Inland Board is unanimous in its belief that the Offer grossly undervalues Temple-Inland and that it fails to appropriately reflect the underlying value of Temple-Inland’s assets, operations, future cash flow, and strategic plan, including its position as the ROA leader in the corrugated packaging industry, benefits from box plant transformation, its low-cost building products operation, and its strategic place within the industry as the third largest producer of corrugated packaging in North America.

Since the “new” Temple-Inland was launched in early 2008, Temple-Inland has delivered superior total return to stockholders compared with its primary corrugated packaging peers (including IP), building products peers, and the S&P 500. Temple-Inland has achieved these results by following its strategy focused on maximizing ROI and profitably growing its business and because of its management team’s proven ability to execute. The Temple-Inland Board believes the Company is poised to further increase ROI and continue to provide superior results for its stockholders by adhering to this successful strategy. The Temple-Inland Board is confident that Temple-Inland will, consistent with its history, execute its strategic plan effectively and, accordingly, that Temple-Inland will deliver greater value to its stockholders by operating its business in accordance with this plan than would be obtained under the Offer.

I)   The Offer grossly undervalues Temple-Inland and its future prospects

The Board unanimously believes that the Offer grossly undervalues Temple-Inland and is not in the best interests of Temple-Inland stockholders:

•  The Offer does not appropriately reflect the value inherent in Temple-Inland’s future prospects.  In February 2011 (as it does every February) the Temple-Inland Board carefully reviewed and approved the Company’s strategic plan. In addition, the Board has reviewed the Company’s five-year financial plan. The Temple-Inland Board has confidence in the Company’s strategic and financial plans. This confidence is supported by the fact that Temple-Inland has a history of generally meeting or exceeding its forecasts and analysts’ earnings estimates.

The Board believes that the value to stockholders reflected in the Company’s current plans, derived by applying present value calculations to Temple-Inland’s projected stock prices (without including any control premium), is greater than $30.60 per Temple-Inland Common Share.

Temple-Inland’s outstanding prior results strongly support the Board’s confidence in the achievability of Temple-Inland’s plans. As reflected in the stockholder total return chart provided above, since the “new” Temple-Inland was launched in early 2008, Temple-Inland has delivered cumulative total stockholder returns to its owners that are superior to the return to stockholders of its primary corrugated packaging peers, building products peers, and the S&P 500. We have grown our ROI from 4.5 percent in 2008, to 7 percent in 2009, and to 8.2 percent in 2010. We had record ROI of 16.5 percent in corrugated packaging in 2009 and 2010, and 2010 was the fifth consecutive year we earned above our cost of capital in this business.

As reflected in the building products EBITDA chart provided above, despite the fact that housing starts were down 33 percent in 2008 compared with 2007, down another 39 percent in 2009, and have remained at the lowest levels since the Great Depression, we have improved our EBITDA from $8 million in 2008, to $17 million in 2009, and to $22 million in 2010 primarily due to significant changes we have made in our cost structure. We are one of the very few companies in the building products industry that has continued to generate positive EBITDA throughout the downturn in housing. Our low-cost structure and our proven ability to generate cash in the worst housing markets highlight the significant earning power of this business when housing markets recover.

•  IP overstates Temple-Inland’s net debt.  Temple-Inland’s net debt at the end of first quarter 2011 was $737 million, not $828 million as IP calculated for purposes of pricing the Offer. IP includes $91 million of what it characterizes as “minority interest” in its net debt figure. However, this non-controlling interest is not debt and IP’s characterization as a minority interest is incorrect. The $91 million represents the net equity of variable interest entities owned by the purchaser of Temple-Inland’s timberlands in 2007, which we are required to consolidate on our balance sheet under applicable accounting rules. Temple-Inland has no present or future cash obligation associated with the $91 million.

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•  IP wrongly characterizes Temple-Inland’s timber financing transaction as a liability rather than an asset.  The timber financing transaction consists of four components: (i) the $243 million of net equity in the timber notes we received; (ii) the interest income on the notes less the interest expense we pay on the borrowings; (iii) the settlement in 2027 of the $819 million tax on the deferred gain; and (iv) the alternative minimum tax credits of $281 million currently available to Temple-Inland related to the transaction. IP appears to have considered only the present value of the settlement of the tax on the deferred gain and ignored the remaining positive components of the transaction. In considering valuation, one should consider all of the components of the timber financing transaction, the value of which is a net positive of approximately $65 million, not the $385 million liability stated by IP.

•  IP’s claims about the Offer price rely on valuation metrics from “precedent transactions” that involved underperforming assets that are not comparable.  In the letter dated May 27, 2011 and in its press release of July 11, 2011 announcing the Offer, IP references valuation metrics from other transactions that it seeks to portray as comparable. However, none of those transactions related to acquired companies or operations that are comparable to Temple-Inland, with its industry-leading performance, high-quality assets, and low-cost structure. Instead, the transactions cited by IP involved underperforming assets. According to one securities analyst, Mark Connelly of CLSA, on June 7, 2011, “Temple is a vastly superior asset to Weyerhaeuser containerboard and obviously to the rag-tag assets of Smurfit-Stone.”*

•  IP’s characterization of the metrics associated with Rock-Tenn’s acquisition of Smurfit-Stone does not account for the significant appreciation in Rock-Tenn shares that occurred after announcement.  On January 23, 2011, Rock-Tenn announced it was acquiring Smurfit-Stone for $35 per share utilizing 50 percent cash and 50 percent stock as consideration. Between announcement and closing, Rock-Tenn shares increased 36 percent. Because 50 percent of the merger consideration was Rock-Tenn stock, Smurfit-Stone shareholders participated in the significant share price appreciation. Consequently, the implied LTM EBITDA (last twelve months earnings before interest, taxes, depreciation and amortization) multiple increased from 7.2x at announcement to 8.3x at closing, when the 36 percent increase in Rock-Tenn shares is considered. Similarly, what was a 40 percent premium at announcement (based on Smurfit-Stone’s average closing stock price over the 60 days prior to announcement), increased to a 65 percent premium at closing.

•  The Offer fails to appropriately compensate Temple-Inland stockholders for the significant synergies that would be created by an acquisition of Temple-Inland by IP.  IP has estimated synergies in connection with a potential acquisition of Temple-Inland in the range of $200 to $300 million, which we believe is conservative. When IP acquired Weyerhaeuser’s containerboard assets (which was a division rather than an entire company and therefore presented fewer synergy opportunities), IP realized synergies equal to 9.7 percent of sales, which would equate to approximately $325 million of synergies in a potential IP acquisition of Temple-Inland (taking into account only Temple-Inland’s corrugated packaging business). Utilizing synergies consistent with IP’s acquisition of Weyerhaeuser’s containerboard business, coupled with the financing available in the investment grade market, would result in a transaction that is more than 28 percent accretive to IP’s 2013 estimated earnings per share at IP’s current Offer price. This level of earnings accretion is extraordinary for a potential acquirer. The Temple-Inland Board wants to ensure that Temple-Inland stockholders are appropriately compensated for the value of the significant synergies that would be created were an IP/Temple-Inland transaction to occur.

•  The Offer does not appropriately reflect fundamental changes in the corrugated packaging industry.  The corrugated packaging industry has fundamentally changed over the past few years as industry participants have divested timberland and other non-core assets and rationalized capacity, in an effort to enhance stockholder value. For example, in 2010, approximately 80 percent of the revenue of the top four public companies in the industry came from the sale of containerboard compared with an industry average of approximately 60 percent in 2000.

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In addition to this shift in industry focus, industry capacity has been shrinking and is expected to shrink further. Over the past two years, approximately 7 percent, or 2.4 million tons, of capacity has been rationalized from the industry. Despite a weak economic environment, current industry fundamentals are constructive as indicated by low inventory levels, high operating rates, and higher prices, as reflected in the chart below:

Soon after Rock-Tenn’s acquisition of Smurfit-Stone, Rock-Tenn’s Chairman and CEO stated:

−  “People wonder what moves prices in the containerboard industry and the paperboard industry. It’s real simple, it’s supply/demand and there is two ways to move that needle on both sides. The most important one is capacity, and so the installed base of capacity has been coming down dramatically in 2010.... We are going to optimize the scale and footprint of the box plant system and the mill system.” — James A. Rubright, Chairman and CEO, Rock-Tenn Company, speaking at Goldman Sachs Basic Materials Conference, May 24, 2011.*

This view is shared by industry analysts such as Gail Glazerman of UBS, who wrote on July 6, 2011:

−  “We believe the medium to long-term outlook for the containerboard industry is strong... Our favorable outlook is not contingent on incremental consolidation... If the industry can prove that it can consistently earn cost of capital returns and managements demonstrate that they can be trusted to allocate increasing cash flows judiciously, we see a potential for a re-rating of this sector as has been witnessed in other sectors such as railroads.”*

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Mr. Faraci acknowledges that the containerboard industry is in a dynamic period:

−  “I think it’s all about what the industry shape and the supply and demand look like going forward... So I don’t think the past is any indicator of what margins will be or could be. They are going to be determined by what happens going forward.” — Mr. Faraci on an investor call on October 27, 2010.

The Offer does not appropriately reflect the value of the fundamental changes in the industry, improving pricing, and the resulting ROI benefit for Temple-Inland, the third largest producer of corrugated packaging in North America, as the economy continues to recover.

•  The Offer does not appropriately take into account the strategic value of Temple-Inland.  Temple-Inland is the largest remaining independent, publicly-held industry participant whose acquisition would fundamentally transform the industry. As Mark Connelly of CLSA said on July 12, 2011, “...Rock-Tenn’s acquisition of Smurfit was barely consolidation, and the IP/Weyerhaeuser deal, as much as it affected actual pricing behavior, didn’t radically change the business economics. This deal, by contrast, changes everything.”* Any acquisition of Temple-Inland must take into account Temple-Inland’s strategic place within the industry and appropriately compensate its stockholders for that value.

II)   The timing of the Offer is extremely opportunistic

The Board believes that the timing of the Offer is extremely opportunistic and disadvantageous to Temple-Inland stockholders:

•  Housing starts are at historically low levels.  Building products has historically been a very good business for Temple-Inland and its stockholders, generating returns well in excess of its cost of capital. Housing markets are at historically low levels, temporarily depressing the value of our building products operation. We believe IP understands this and is trying to take advantage of Temple-Inland stockholders by moving to grab the Company at a bargain price at a time when there is little or no market value being ascribed to the Company’s building products operation. Temple-Inland’s low-cost building products operation has continued to generate positive cash flow throughout the downturn and is positioned to generate very strong returns for stockholders as housing markets recover.

•  We are in the midst of our Box Plant Transformation II project, which will generate significant value for Temple-Inland and its stockholders.  An estimated $90 million of the annual cost savings from Box Plant Transformation II are still ahead of us. Over the past few years, we have been focused on changing the culture in our box plant system to run converting equipment near design capacity, thereby lowering costs through improved asset utilization. Historically, box plants are run at only 30 to 40 percent of design capacity. The first phase of this effort, which we called “Box Plant Transformation,” lowered our annual costs by $80 million per year and improved our ROI in corrugated packaging by 400 basis points. The capital investment to achieve these cost savings was $174 million, resulting in an ROI of 46 percent.

In February 2010, we announced the second phase of this effort, “Box Plant Transformation II,” which is designed to further reduce our box plant system cost by an additional $100 million per year. The capital investment for Box Plant Transformation II, which will be 85 percent completed by year-end 2011, is estimated to be about $250 million with an ROI of 40 percent. We achieved approximately $10 million of the anticipated $100 million annual benefit from Box Plant Transformation II in 2010, and we estimate the remaining $90 million will be achieved over the course of 2011, 2012, and 2013.

In addition to the cost savings we anticipate, the new equipment and technology we are putting in place as part of Box Plant Transformation II allow us to better serve our customers and target a higher value segment of the corrugated packaging market. High graphic boxes and short-order quantity boxes typically provide higher margins, and in 2010 we grew our business in this segment by 6 percent.

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When we complete Box Plant Transformation II, we will have the lowest cost, most highly profitable corrugated packaging business in the industry. Based on our success with the first phase of box plant transformation, we are confident in our ability to achieve the announced results from Box Plant Transformation II. We believe that box plant transformation is a “game changer” for us because it will enable us to sustain and increase our industry-leading ROA performance.

The Offer does not appropriately value the benefits from box plant transformation, and it is Temple-Inland’s stockholders, not IP’s, that deserve to receive the benefit of the significant capital we have invested in this project.

•  While corrugated packaging demand has improved, it is still significantly below prerecession levels.  As IP has consistently highlighted to the investment community, corrugated packaging demand is still 7 percent below prerecession levels, but is expected to return to prerecession levels in the near future. IP is attempting to time the Offer before corrugated packaging demand returns to prerecession levels and pricing further improves. This is further highlighted by IP’s comments in its May 27, 2011, letter that “timing and speed are important.” IP’s own public comments acknowledge the improving price dynamic in the industry:

−  “Shipments are up 3.5% from 2009 in 2010, but they’re still 7% below 2007...So from the perspective when we think about International Paper, and we tend to think of our earnings on a mid-cycle basis, we don’t see 2011 as a mid-cycle year. I’m not sure which year we do see as a mid-cycle year, but it’s not going to be 2011; it’s going to be 2012 or 2013.” — John Faraci, Chairman and CEO of IP, speaking at Credit Suisse Group Global Paper and Packaging Conference, February 23, 2011.

•  IP timed its initial public disclosure of its intent to acquire Temple-Inland in order to claim an inflated “premium.”  IP announced its proposal during a period of significant market weakness. Based on the Temple-Inland stock price of $24.04 on May 16, 2011, the day before Mr. Faraci first presented IP’s proposal to Mr. Simons, the premium would be 27 percent. Utilizing a 60-day or 30-day average ending June 6, 2011, which would normalize this period of weakness in the financial markets, reduces the 46 percent premium touted by IP to 34 and 32 percent, respectively.

•  IP’s tactics reflect an intention to avoid offering an appropriate value for Temple-Inland.  IP claims Temple-Inland has been unwilling to engage in meaningful discussions with respect to value and Temple-Inland’s price expectations are unrealistic. These claims mischaracterize the events leading up to the Offer. On each occasion that Mr. Faraci has requested a meeting, Mr. Simons has obliged. In each meeting that Mr. Faraci requested, he simply reiterated IP’s proposed price of $30.60. Repetition of the same price does not change our view that such price is inadequate and is not an appropriate starting point for discussions or negotiations.

III) The Offer is subject to regulatory and other uncertainty

The Board believes that the timing of the Offer is highly uncertain.

•  The Offer is subject to significant regulatory uncertainty.  Despite the public statements of IP designed to minimize the regulatory risks of its Offer, those regulatory risks are not insignificant. IP is proposing a combination of the largest and third largest producers of corrugated packaging in North America. Accordingly, the Offer creates considerable uncertainty regarding the timing of Temple-Inland stockholders’ receiving the “certain” value that IP claims to be offering.

•  The Offer contains a very lengthy list of conditions.  As described under Item 2 and in Annex A attached hereto, the Offer is subject to numerous conditions, including, among others, the following:

•  the Board Majority Condition,

•  the Impairment Condition,

•  the No Material Adverse Effect Condition,

•  the No Lawsuits Condition,

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•  the No Diminution of Benefits Condition,

•  the No Material Change Condition,

•  the No Adverse Effect on Contracts Condition,

•  the Stockholder Ownership Condition,

•  the Minimum Tender Condition,

•  the Rights Condition,

•  the Section 203 Condition, and

•  the Antitrust Condition.

•  Temple-Inland stockholders have no assurance that the Offer will ever be completed.  In addition to the regulatory uncertainty that is discussed above, many of the conditions to the Offer are subject to IP’s discretion and many establish a de minimis materiality standard, making it easy for IP to claim that a condition is not satisfied and terminate the Offer. Further, in analyzing the Board Majority Condition in the Offer, Temple-Inland stockholders should consider the Company’s classified board structure, the fact that its annual meetings are customarily held in May of each year, and the Temple-Inland Board’s unanimous rejection of the Offer and its view that the Offer price grossly undervalues the Company. Accordingly, based on current circumstances, the Board Majority Condition would, at best, require a considerable period of time to be satisfied, if it ever were to be satisfied.

IV)   Temple-Inland’s Board has received an inadequacy opinion from Goldman Sachs

The Temple-Inland Board considered the fact that Goldman Sachs rendered an opinion to the Temple-Inland Board, subsequently confirmed in writing, that as of July 16, 2011, and based upon and subject to the factors and assumptions set forth in the written opinion, the consideration proposed to be paid to the holders of Temple-Inland Common Shares (other than IP Sub or its affiliates) pursuant to the Offer was inadequate from a financial point of view to the stockholders. The full text of the written opinion of Goldman Sachs dated July 16, 2011, which sets forth the assumptions made, procedures followed, matters considered, and limitations on the review undertaken in connection with the opinion, is attached as Annex B. Goldman Sachs provided its opinion for the information and assistance of the Temple-Inland Board in connection with its consideration of the Offer. The opinion of Goldman Sachs is not a recommendation as to whether or not any holder of Temple-Inland Common Shares should tender Temple-Inland Common Shares in connection with the Offer or any other matter.

The foregoing discussion of the information and factors considered by the Board is not meant to be exhaustive, but includes the material information, factors, and analyses considered by the Board in reaching its conclusions and recommendations. The members of the Temple-Inland Board evaluated the various factors listed above in light of their knowledge of the business, financial condition, and prospects of Temple-Inland and considered the advice of the Board’s financial and legal advisors. In light of the number and variety of factors that the Board considered, the members of the Board did not find it practicable to assign relative weights to the foregoing factors. However, the recommendation of the Board was made after considering the totality of the information and factors involved. In addition, individual members of the Board may have given different weight to different factors.

In light of the factors described above, the Temple-Inland Board has unanimously determined that the Offer is not in the best interests of Temple-Inland’s stockholders. Therefore, the Temple-Inland Board unanimously recommends that the stockholders reject the Offer and not tender any of their shares to IP for purchase pursuant to the Offer.

Intent to Tender

To the knowledge of Temple-Inland after making reasonable inquiry, none of Temple-Inland’s directors, executive officers, affiliates or subsidiaries intends to tender any Temple-Inland Common Shares held of record or beneficially owned by such person pursuant to the Offer.

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Item 5.   Persons/Assets Retained, Employed, Compensated or Used

Temple-Inland has retained Goldman, Sachs & Co. in connection with, among other things, Temple-Inland’s analysis and consideration of, and response to, the Offer. Temple-Inland will pay Goldman Sachs customary fees for its services, reimburse it for its reasonable out-of-pocket expenses (including fees and disbursements of its legal counsel), and indemnify it against certain liabilities relating to or arising out of the engagement.

Temple-Inland has engaged D.F. King & Co., Inc. (“DF King”) to assist it in connection with Temple-Inland’s communications with its stockholders in connection with the Offer. Temple-Inland has agreed to pay customary compensation to DF King for such services. In addition, Temple-Inland has agreed to reimburse DF King for its reasonable out-of-pocket expenses and to indemnify it and certain related persons against certain liabilities relating to or arising out of the engagement.

Temple-Inland has also retained Kekst and Company (“Kekst”) as its public relations advisor in connection with the Offer. Temple-Inland has agreed to pay customary compensation to Kekst for such services. In addition, Temple-Inland has agreed to reimburse Kekst for its reasonable out-of-pocket expenses and to indemnify it and certain related persons against certain liabilities relating to or arising out of the engagement.

Except as set forth above, neither Temple-Inland nor any person acting on its behalf has or currently intends to employ, retain, or compensate any person to make solicitations or recommendations to the stockholders of Temple-Inland on its behalf with respect to the Offer.

Item 6.   Interest in Securities of the Subject Company

Securities Transactions

No transactions with respect to Temple-Inland Common Shares have been effected by Temple-Inland or, to the Company’s knowledge after making reasonable inquiry, by any of its executive officers, directors, affiliates, or subsidiaries during the 60 days prior to the date of this Statement.

Item 7.   Purposes of the Transaction and Plans or Proposals

Temple-Inland routinely maintains contact with third parties, including other participants in its industry, regarding a wide range of potential business transactions. It has not ceased, and expects to continue, such activity as a result of the Offer. Temple-Inland’s policy has been, and continues to be, not to disclose the existence or content of any such discussions with third parties (except as may be required by law) as any such disclosure could jeopardize any future negotiations that Temple-Inland may conduct.

Except as described in the preceding paragraph or otherwise set forth in this Statement (including in the Exhibits to this Statement) or as incorporated in this Statement by reference, Temple-Inland is not currently undertaking nor engaged in any negotiations in response to the Offer that relate to, or would result in, (i) a tender offer for, or other acquisition of, Temple-Inland Common Shares by Temple-Inland, any of its subsidiaries, or any other person; (ii) any extraordinary transaction, such as a merger, reorganization, or liquidation, involving Temple-Inland or any of its subsidiaries; (iii) any purchase, sale, or transfer of a material amount of assets of Temple-Inland or any of its subsidiaries; or (iv) any material change in the present dividend rate or policy, or indebtedness or capitalization, of Temple-Inland.

Except as described above or otherwise set forth in this Statement (including in the Exhibits to this Statement) or as incorporated in this Statement by reference, there are no transactions, resolutions of the Board, agreements in principle, or signed contracts in response to the Offer that relate to, or would result in, one or more of the events referred to in the preceding paragraph.

Item 8.   Additional Information

Information Regarding Golden Parachute Compensation

Temple-Inland has entered into an employment agreement with Mr. Simons that contains certain change in control provisions (the “Simons Agreement”). In addition, Temple-Inland has entered into change in control

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agreements (the “CIC Agreements”) with Messrs. Maley, Levy, Norton, and Vesci (who retired from the Company effective June 1, 2011) (collectively with the Simons Agreement, the “NEO CIC Agreements”). Each of the eight other executive officers have also entered into CIC Agreements. The terms of the NEO CIC Agreements provide salary and benefit continuation if (i) there is a change in control of Temple-Inland and (ii) Temple-Inland terminates the employment of a covered executive without cause or if the executive terminates employment for good reason, in each case within 24 months following a change in control (a “Qualifying Termination”). Good reason includes a material reduction of authority, duties, or responsibilities; a material diminution in base salary; a material change in the geographic location at which the executive must perform services; or other material breach of the agreement. The Offer, if consummated, would constitute a change in control for purposes of each of the NEO CIC Agreements.

Under the applicable provisions of the NEO CIC Agreements, the executives will receive upon a Qualifying Termination:

•  the amount of any annual incentive award that has been allocated or awarded for a completed annual bonus cycle and their current year annual incentive award (pro-rated if the termination is before the end of the first six months in the year or full annual incentive award if during the second half of the year) based on achievement of target performance (or, for executives other than the CEO, if higher, projected actual performance);

•  lump sum severance equal to three times their current salary and three times target annual incentive award, or if higher, the salary or target annual incentive award (Mr. Simons receives the higher of actual salary or annual incentive award) in any of the last three years;

•  health and welfare benefits provided through third party insurance for three years at no greater cost than currently paid;

•  acceleration of vesting of all options, restricted shares, restricted stock units, and performance stock units (maximum amount);

•  credit for three additional years’ service in the pension plan at the highest pay over the last three years;

•  lump sum payment of all nonqualified pension and deferred compensation;

•  lump sum payment equal to three years’ match on 401(k) plan;

•  any retiree medical or life insurance benefits to which the executive is entitled or would have been entitled within 3 years of termination;

•  reimbursement for outplacement services not to exceed 15 percent of base salary and, for executives other than the CEO, 15 percent of target annual incentive award; and

•  three years’ continuation of perquisites.

In the event that the Named Executive Officers are subject to the so-called “golden parachute” excise tax imposed under Section 4999 of the Internal Revenue Code, the executive will receive an additional payment such that he will be placed in the same after-tax position as if no excise tax had been imposed. However, the gross-up will only be paid if the change in control payments exceed 110 percent of the amount that would not be subject to excise tax. Otherwise, payments are reduced to the maximum amount that will not trigger the excise tax.

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The following table presents, with respect to each Named Executive Officer, an estimate of the amounts of severance benefits payable in the event of a Qualifying Termination, estimated as of July 1, 2011. For a quantification of the Spread Value of vested and unvested options to purchase Temple-Inland Common Shares based on a $30.60 per share value, see the table above under the heading “Consideration Payable Pursuant to the Offer and the Second-Step Merger.”

Golden Parachute Compensation

					Pension/		Perquisites/		Tax
	Cash		Equity		NQDC		benefits		reimbursement		Other		Total
Name	($)		($)		($)		($)		($)		($)		($)
(a)	(b)(1)		(c)(2)		(d)(3)		(e)(4)		(f)(5)		(g)(6)		(h)(7)
Simons	$	8,775,000	$	28,093,739	$	6,168,061	$	68,382	$	16,234,055	$	135,000	$	59,474,237
Maley	$	6,138,000	$	22,475,007	$	5,210,998	$	59,870	$	12,546,786	$	243,000	$	46,673,661
Levy	$	3,339,000	$	8,784,877	$	396,426	$	60,858	$	5,045,561	$	135,000	$	17,761,723
Norton	$	3,200,000	$	10,201,433	$	868,302	$	58,891	$	5,084,463	$	120,000	$	19,533,089
Vesci	$	0	$	6,955,874	$	4,678,907	$	0	$	2,742,398	$	0	$	14,377,179

(1) Includes the following amounts payable in a lump sum:

			Prorated Target
			Annual Incentive
	Severance		Award Payment
Simons	$	7,650,000	$	1,125,000
Maley	$	4,860,000	$	1,278,000
Levy	$	2,700,000	$	639,000
Norton	$	2,400,000	$	800,000
Vesci	$	0	$	0

(2)	Based on the $30.60 offer price for Temple-Inland shares.
(3)	For Mr. Vesci, amount consists of accelerated value of early payment of nonqualified deferred compensation and retirement benefits. For all other officers, amounts consist of retirement benefits.
(4)	Includes the following:

			3 Years		3 Years
	3 Years		401(k) Plan		Health &
	Continued		Contributions		Welfare
	Perquisites		($11,025/Year)		Benefits
Simons	$	7,189	$	33,075	$	28,118
Maley	$	1,762	$	33,075	$	25,033
Levy	$	1,762	$	33,075	$	26,021
Norton	$	1,762	$	33,075	$	24,054
Vesci	$	0	$	0	$	0

(5)	Assumes for illustration only that the IRS considers the entire accelerated value of the payments to be a “parachute payment” subject to a 20% excise tax. Any compensation not deemed to be a “parachute payment” will reduce the amount of excise tax and gross-up payable.
(6)	Includes the maximum value of outplacement services offered to executives.
(7)	All amounts included in the above table are subject to a double-trigger arrangement (i.e., there must be a change-in-control followed by the officer’s termination or resignation for good reason within a two-year period following the change-in-control) except amounts shown in Column (c)-Equity, which are triggered solely by the change-in-control event, any corresponding portion of the resulting excise tax/gross-up, and amounts payable to Mr. Vesci, who is already retired.

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Regulatory Approvals

U.S. Antitrust Clearance

Under the HSR Act, IP is required to file a Notification and Report Form with the Antitrust Division of the U.S. Department of Justice (the “Antitrust Division”) and the Federal Trade Commission (the “FTC”) relating to its proposed acquisition of Temple-Inland. IP filed this Notification and Report Form on July 12, 2011. Temple-Inland will be required to submit a responsive Notification and Report Form with the Antitrust Division and the FTC on or before 5:00 p.m. on July 22, 2011.

Under the provisions of the HSR Act applicable to the Offer, the acquisition of Temple-Inland voting securities pursuant to the Offer may be consummated following the expiration of a 15-day waiting period following the filing by IP of its Notification and Report Form with respect to the Offer, unless IP receives a request for additional information or documentary material from the Antitrust Division or the FTC or unless the antitrust agencies grant early termination of the waiting period. If, within the initial 15-day waiting period, either the Antitrust Division or the FTC issues a request for additional information or documentary material concerning the Offer, the waiting period will expire 10 days after the date IP certifies substantial compliance with the request, unless otherwise extended by court order.

At any time before or after IP’s acquisition of Temple-Inland voting securities pursuant to the Offer, the Antitrust Division or the FTC could take such action under the antitrust laws as either deems necessary or desirable in the public interest, including seeking to enjoin the purchase of Temple-Inland voting securities pursuant to the Offer or seeking the divestiture of Temple-Inland voting securities acquired by IP or the divestiture of substantial assets of Temple-Inland or its subsidiaries or IP or its subsidiaries. State attorneys general and private parties may also bring legal action under the antitrust laws. There can be no assurance that a challenge to the Offer on antitrust grounds will not be made or, if such a challenge is made, as to the result thereof.

If any waiting period under the HSR Act applicable to the Offer has not expired or been terminated prior to the expiration date of the Offer, or if the Antitrust Division, the FTC, a state attorney general, or a private party obtains an order enjoining the purchase of Temple-Inland voting securities, then IP will not be obligated to proceed with the Offer or the purchase of any Temple-Inland voting securities not previously purchased pursuant to the Offer. Additionally, IP may terminate the Offer if any action, proceeding, injunction, order, or decree becomes applicable to IP that seeks to restrain or prohibit the exercise by IP of its full rights of ownership or operation of all or a portion of IP’s business or assets or those of Temple-Inland. Please see Annex A for more information regarding conditions to the Offer.

Foreign Antitrust Considerations

Temple-Inland conducts operations outside of the United States, principally in Mexico. In 2010, Temple-Inland derived revenues from Mexico based on the point of sale were $228 million. The Offer may be subject to antitrust filings in Mexico. Competition authorities in Mexico may refuse to grant required approvals or clearances, bring legal action under applicable Mexican antitrust laws seeking to enjoin the purchase of Temple-Inland voting securities pursuant to the Offer, or seek the divestiture of Temple-Inland voting securities acquired by IP or the divestiture of substantial assets of Temple-Inland or its subsidiaries or of IP or its subsidiaries. There can be no assurance that IP will obtain all required Mexican antitrust approvals or clearances or that a challenge to the Offer by Mexican competition authorities will not be made or, if such a challenge is made, the result thereof.

Delaware Business Combinations Statute

Temple-Inland is subject to the provisions of Section 203 of the DGCL, which imposes certain restrictions upon business combinations involving Temple-Inland. The following description is not complete and is qualified in its entirety by reference to the provisions of Section 203 of the DGCL. In general, Section 203 of the DGCL prevents a Delaware corporation such as Temple-Inland from engaging in a “business combination” (which is defined to include a variety of transactions, including mergers such as the Second-Step Merger

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proposed by IP) with an “interested stockholder” for a period of three years following the time such person became an interested stockholder unless:

•  prior to such time the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

•  upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85 percent of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

•  at or subsequent to such time the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 662/3 percent of the outstanding voting stock which is not owned by the interested stockholder.

For purposes of Section 203 of the DGCL, the term “interested stockholder” generally means any person (other than the corporation and any direct or indirect majority-owned subsidiary of the corporation) that (i) is the owner of 15 percent or more of the outstanding voting stock of the corporation or (ii) is an affiliate or associate of the corporation and was the owner of 15 percent or more of the outstanding voting stock of the corporation at any time within the three-year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder, and the affiliates and associates of such person. A Delaware corporation may elect not to be covered by Section 203 of the DGCL in its original certificate of incorporation or through an amendment to its certificate of incorporation or bylaws approved by its stockholders. An amendment electing not to be governed by Section 203 of the DGCL is not effective until 12 months after the adoption of such amendment and does not apply to any business combination between a Delaware corporation and any person who became an interested stockholder of such corporation on or prior to such adoption.

Neither Temple-Inland’s Certificate nor Bylaws exclude Temple-Inland from the coverage of Section 203 of the DGCL. Unless IP’s acquisition of 15 percent or more of the Temple-Inland Common Shares is approved by the Board before the Offer closes, Section 203 of the DGCL will prohibit consummation of the Second-Step Merger (or any other business combination with IP) for a period of three years following consummation of the Offer unless each such business combination (including the Second-Step Merger) is approved by the Temple-Inland Board and holders of 662/3 percent of the Temple-Inland Common Shares, excluding IP, or unless IP acquires at least 85 percent of the Temple-Inland Common Shares in the Offer. The provisions of Section 203 of the DGCL would be satisfied if, prior to the consummation of the Offer, the Temple-Inland Board approves the Offer.

Stockholder Rights Agreement

With its stockholders’ interests in mind, and like many companies, Temple-Inland has taken measures to protect its value for its stockholders, including adoption of the Rights Agreement, which is similar to rights agreements adopted by many other public companies, including the one that Temple-Inland had in place prior to its expiration in 2009. The purpose of the Rights Agreement is to prevent third parties from opportunistically acquiring Temple-Inland in a transaction that the Temple-Inland Board believes is not in the best interests of Temple-Inland’s stockholders. The Rights Agreement requires any party seeking to acquire 10 percent or more of the outstanding Temple-Inland Common Shares to obtain the approval of the Temple-Inland Board or else the Rights held by Temple-Inland stockholders other than the acquiror become exercisable for Temple-Inland Common Shares or preferred stock of Temple-Inland or common stock of the acquiror, at a discounted price that would make the acquisition prohibitively expensive. The Temple-Inland Board believes the Rights Agreement has helped Temple-Inland’s stockholders at this time by effectively preventing IP from opportunistically acquiring Temple-Inland at a price that the Temple-Inland Board believes is inadequate for the reasons discussed above.

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Appraisal Rights

Holders of Temple-Inland Common Shares do not have appraisal rights as a result of the Offer. However, if the Second-Step Merger is consummated, holders of Temple-Inland Common Shares in connection with the Second-Step Merger will have certain rights pursuant to the provisions of Section 262 of the DGCL to dissent and demand appraisal of their Temple-Inland Common Shares. Under Section 262, dissenting stockholders who comply with the applicable statutory procedures will be entitled to receive a judicial determination of the fair value of their Temple-Inland Common Shares (exclusive of any element of value arising from the accomplishment or expectation of the proposed merger) and to receive payment of such fair value in cash, together with a fair rate of interest, if any. Any such judicial determination of the fair value of the Temple-Inland Common Shares could be based upon factors other than, or in addition to, the price per share to be paid in the proposed merger or the market value of the Temple-Inland Common Shares. The value so determined could be more or less than the price per share to be paid in the proposed merger.

Delaware Law

The Second-Step Merger would need to comply with various applicable procedural and substantive requirements of Delaware law. Several decisions by Delaware courts have held that, in certain circumstances, a controlling stockholder of a corporation involved in a merger has a fiduciary duty to the other stockholders that requires the merger to be fair to such other stockholders. IP would be a controlling stockholder if the holders of at least a majority of the Temple-Inland Common Shares accept the Offer and their shares are purchased by IP pursuant to the Offer. In determining whether a merger is fair to minority stockholders, Delaware courts have considered, among other things, the type and amount of consideration to be received by the stockholders and whether there were fair dealings among the parties.

* Permission to use quotation was neither sought nor obtained.

Cautionary Statement on Forward-Looking Statements

Forward-looking statements are made throughout this Statement. These forward-looking statements are sometimes identified by the use of terms and phrases such as “believe,” “should,” “would,” “expect,” “project,” “estimate,” “anticipate,” “intend,” “plan,” “will,” “can,” “may,” or similar expressions elsewhere in this Statement. All forward-looking statements are subject to a number of important factors, risks, uncertainties, and assumptions that could cause actual results to differ materially from those described in any forward-looking statements. These factors and risks include, but are not limited to, general economic conditions, demand for new housing, accuracy of certain accounting assumptions, changes in actual or forecasted cash flows, competitive pressures, future sales volume, significant increases in the costs of certain commodities, timely implementation of price increases, successful execution of cost saving strategies, changes in tax laws, integration risks associated with recent acquisitions, changes in weighted average shares for diluted EPS, increases in transportation costs, and other financial, operational, and legal risks and uncertainties detailed from time to time in Temple-Inland’s cautionary statements contained in its filings with the SEC. Temple-Inland disclaims and does not undertake any obligation to update or revise any forward-looking statement in this Statement except as required by law. Temple-Inland notes that forward-looking statements made in connection with a tender offer are not subject to the safe harbors created by the Private Securities Litigation Reform Act of 1995. Temple-Inland is not waiving any other defenses that may be available under applicable law.

Item 9.   Exhibits

(a)(1)	—	Press release issued by Temple-Inland Inc., dated June 6, 2011 (incorporated by reference to Exhibit 99.1 of Temple-Inland’s Current Report on Form 8-K filed on June 6, 2011)
(a)(2)	—	Investor presentation materials, dated June 6, 2011 (incorporated by reference to Exhibit 99.2 of Temple-Inland’s Current Report on Form 8-K filed on June 6, 2011)
(a)(3)	—	Press release issued by Temple-Inland Inc., dated June 7, 2011 (incorporated by reference to Exhibit 99.1 of Temple-Inland’s Current Report on Form 8-K filed on June 7, 2011)

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(a)(4)	—	Letter from Mr. John V. Faraci to Mr. Doyle R. Simons, dated May 19, 2011
(a)(5)	—	Letter from Mr. John V. Faraci to Mr. Doyle R. Simons, dated May 27, 2011
(a)(6)	—	Letter from Mr. Doyle R. Simons to Mr. John V. Faraci, dated June 4, 2011
(a)(7)	—	Letter from Mr. John V. Faraci to Mr. Doyle R. Simons, dated June 6, 2011
(a)(8)	—	Press release issued by Temple-Inland Inc., dated July 11, 2011 (incorporated by reference to the Schedule 14D-9/C filed by Temple-Inland on July 11, 2011)
(a)(9)	—	Memo to Employees and Employee FAQ, dated July 11, 2011 (incorporated by reference to the Schedule 14D-9/C filed by Temple-Inland on July 13, 2011)
(a)(10)	—	Press release issued by Temple-Inland Inc., dated July 18, 2011
(a)(11)	—	Letter to Stockholders of Temple-Inland Inc., dated July 18, 2011
(a)(12)	—	Memo to Employees, dated July 18, 2011
(e)(1)	—	Excerpts from the Temple-Inland Definitive Proxy Statement on Schedule 14A, dated and filed with the SEC on March 23, 2011
(e)(2)	—	Temple-Inland Inc. 1997 Stock Option Plan (incorporated by reference to the Company’s Definitive Proxy Statement in connection with the Annual Meeting of Shareholders held May 2, 1997, and filed with the Commission on March 17, 1997), as amended May 7, 1999 (incorporated by reference to the Company’s Definitive Proxy Statement in connection with the Annual Meeting of Shareholders held May 7, 1999, and filed with the Commission on March 26, 1999)
(e)(3)	—	First amendment to Temple-Inland Inc. 1997 Stock Option Plan (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended September 30, 2006, and filed with the Commission on November 7, 2006)
(e)(4)	—	Temple-Inland Inc. 2001 Stock Incentive Plan (incorporated by reference to the Company’s Definitive Proxy Statement in connection with the Annual Meeting of Shareholders held May 4, 2001, and filed with the Commission on March 23, 2001)
(e)(5)	—	First amendment to Temple-Inland Inc. 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended September 30, 2006, and filed with the Commission on November 7, 2006)
(e)(6)	—	Temple-Inland Inc. 2003 Stock Incentive Plan (incorporated by reference to Appendix A of the Company’s Definitive Proxy Statement dated March 31, 2003, and prepared in connection with the Annual Meeting of Stockholders held May 2, 2003)
(e)(7)	—	First amendment to Temple-Inland Inc. 2003 Stock Incentive Plan (incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q for the quarter ended September 30, 2006, and filed with the Commission on November 7, 2006)
(e)(8)	—	Temple-Inland Inc. 2008 Incentive Plan (incorporated by reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the year ended December 29, 2007, and filed with the Commission on February 27, 2008)
(e)(9)	—	Temple-Inland Inc. 2010 Incentive Plan (incorporated by reference to Exhibit 10.36 to the Company’s Form 10-K for the year ended January 2, 2010, and filed with the Commission on February 23, 2010)
(e)(10)	—	First Amendment to the Temple-Inland Inc. 2010 Incentive Plan (incorporated by reference to Exhibit 10.40 to the Company’s Form 10-K for the year ended January 1, 2011, and filed with the Commission on February 22, 2011)

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SIGNATURES

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete, and correct.

TEMPLE-INLAND INC.

By:  /s/  Doyle R. Simons

Name:     Doyle R. Simons

Title:  Chairman and Chief Executive Officer

Date: July 18, 2011

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ANNEX A

Conditions to the Offer

The Schedule TO provides that IP is not required to accept for payment or, subject to applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (relating to IP Sub’s obligation to pay for or return tendered Temple-Inland Common Shares promptly after termination or expiration of the Offer), pay for any Temple-Inland Common Shares, and may terminate or amend the Offer if, before the Offer expires, the following conditions have not been satisfied:

•  The “Minimum Tender Condition” — there being validly tendered and not withdrawn before the expiration of the Offer a number of Temple-Inland Common Shares that, together with the shares then owned by IP and its subsidiaries (including IP Sub), represents at least a majority of the total number of Temple-Inland Common Shares outstanding on a fully diluted basis;

•  The “Rights Condition” — the Temple-Inland Board redeeming the Rights or IP being satisfied, in its reasonable discretion, that the Rights have been invalidated or are otherwise inapplicable to the Offer and the Second-Step Merger;

•  The “Section 203 Condition” — the Temple-Inland Board having approved the Offer and the Second-Step Merger under Section 203 (“Section 203”) of the Delaware General Corporation Law (the “DGCL”) or IP being satisfied, in its reasonable discretion, that Section 203 is inapplicable to the Offer and the Second-Step Merger;

•  The “Board Majority Condition” — IP Sub’s nominees constituting, or the Temple-Inland Board having approved arrangements that will cause IP Sub’s nominees to constitute, promptly after completion of the Offer, a majority of the Temple-Inland Board;

•  The “Antitrust Condition” — the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and any similar waiting periods required under the antitrust laws of other countries, applicable to the purchase of Temple-Inland Common Shares under the Offer having expired or been terminated as described in the Schedule TO; and

•  The “Impairment Condition” — Temple-Inland not having entered into or effectuated any agreement or transaction with any person or entity that, in IP Sub’s reasonable judgment, has the effect of impairing the ability of IP or IP Sub to acquire Temple-Inland or otherwise diminishing the expected value to IP of the acquisition of Temple-Inland.

In addition, IP is not required to accept for payment or, subject to applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act, pay for any Temple-Inland Common Shares, and may terminate or amend the Offer, if at any time on or after the date of the Offer, and before the time of payment for Temple-Inland Common Shares (whether or not any Temple-Inland Common Shares have theretofore been accepted for payment pursuant to the Offer), any of the following conditions exist:

•  there is publicly announced, instituted or pending, or IP shall have been notified of a person’s intention to commence, any action or proceeding by any government, governmental authority or agency or any other person, domestic, foreign or supranational, before any court or governmental authority or agency, domestic, foreign or supranational:

•  challenging or seeking to, or which is reasonably likely to, make illegal, delay or otherwise, directly or indirectly, restrain or prohibit the making of the Offer, the acceptance for payment of or payment for some or all of the Temple-Inland Common Shares by IP or any of its subsidiaries or affiliates or the consummation by IP or any of its subsidiaries or affiliates of a merger or other similar business combination involving Temple-Inland;

•  seeking to obtain material damages in connection with, or otherwise directly or indirectly relating to, the transactions contemplated by the Offer or any such merger or other similar business combination;

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•  seeking to restrain or prohibit the exercise of IP’s full rights of ownership or operation by IP or any of its subsidiaries or affiliates of all or any portion of its business or assets or those of Temple-Inland or any of IP’s or Temple-Inland’s respective subsidiaries or affiliates or to compel IP or any of its subsidiaries or affiliates to dispose of or hold separate all or any portion of its business or assets or those of Temple-Inland or any of its or Temple-Inland’s respective subsidiaries or affiliates or seeking to impose any limitation on IP’s or any of its subsidiaries’ or affiliates’ ability to conduct such businesses or own such assets;

•  seeking to impose or confirm limitations on IP’s ability or that of any of its subsidiaries or affiliates effectively to exercise full rights of ownership of the Temple-Inland Common Shares, including the right to vote any Temple-Inland Common Shares acquired or owned by IP or any of its subsidiaries or affiliates on all matters properly presented to Temple-Inland’s stockholders;

•  seeking to require divestiture by IP or any of its subsidiaries or affiliates of any Temple-Inland Common Shares;

•  seeking any material diminution in the benefits expected to be derived by IP or any of its subsidiaries or affiliates as a result of the transactions contemplated by the Offer or any merger or other business combination involving Temple-Inland;

•  adversely affecting the financing of the Offer, the Second-Step Merger or other business combination involving Temple-Inland; or

•  that otherwise, in IP’s reasonable judgment, has or may have material adverse significance with respect to either the value of Temple-Inland or any of its subsidiaries or affiliates or the value of the Temple-Inland Common Shares to IP or any of its subsidiaries or affiliates; or

•  any action is taken, or any statute, rule, regulation, interpretation, judgment, injunction, order or decree is proposed, enacted, enforced, promulgated, amended, issued or deemed applicable to IP, IP Sub or any of their subsidiaries or affiliates, the Offer, the acceptance for payment of or payment for Temple-Inland Common Shares, or any merger or other business combination involving Temple-Inland, by any court, government or governmental authority or agency, domestic, foreign or supranational (other than the application of the waiting period provisions of the HSR Act to the Offer or to any such merger or other business combination), that, in IP’s reasonable judgment, does or may, directly or indirectly, result in any of the consequences referred to in any of the sub-bullets of the bullet point immediately above; or

•  any change occurs or is threatened (or any development occurs or is threatened involving a prospective change) in the business, assets, liabilities, financial condition, capitalization, operations, results of operations or prospects of Temple-Inland or any of its affiliates that, in IP’s reasonable judgment, is or may be materially adverse to Temple-Inland or any of its affiliates, or IP becomes aware of any facts that, in its reasonable judgment, have or may have material adverse significance with respect to either the value of Temple-Inland or any of its affiliates or the value of the Temple-Inland Common Shares to IP or any of its affiliates; or

•  there occurs:

•  any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market;

•  any change in the general political, market, economic or financial conditions in the United States or abroad that, in IP’s reasonable judgment, could have a material adverse effect on the business, assets, liabilities, financial condition, capitalization, operations, results of operations or prospects of Temple-Inland and its subsidiaries, taken as a whole;

•  the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States;

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•  any material adverse change (or development or threatened development involving a prospective material adverse change) in United States dollars or any other currency exchange rates or a suspension of, or a limitation on, the markets therefor;

•  the commencement of a war, armed hostilities or other international or national calamity directly or indirectly involving the United States or any attack on, outbreak or act of terrorism involving the United States;

•  any limitation (whether or not mandatory) by any governmental authority or agency on, or any other event that, in IP’s reasonable judgment, may adversely affect, the extension of credit by banks or other financial institutions; or

•  in the case of any of the foregoing existing as of the close of business on July 11, 2011, a material acceleration or worsening thereof; or

•  the occurrence of any of the following:

•  a tender or exchange offer for some or all of the Temple-Inland Common Shares has been publicly proposed to be made or has been made by another person (including Temple-Inland or any of its subsidiaries or affiliates), or has been publicly disclosed, or IP otherwise learns that any person or “group” (as defined in Section 13(d)(3) of the Exchange Act) has acquired or proposes to acquire beneficial ownership of more than 5 percent of any class or series of capital stock of Temple-Inland (including the Temple-Inland Common Shares), through the acquisition of stock, the formation of a group or otherwise, or is granted any option, right or warrant, conditional or otherwise, to acquire beneficial ownership of more than 5 percent of any class or series of capital stock of Temple-Inland (including the Temple-Inland Common Shares) other than acquisitions for bona fide arbitrage purposes only and other than as disclosed in a Schedule 13D or 13G on file with the SEC on July 11, 2011;

•  any such person or group which, prior to July 11, 2011, had filed such a Schedule with the SEC has acquired or proposes to acquire beneficial ownership of additional shares of any class or series of capital stock of Temple-Inland, through the acquisition of stock, the formation of a group or otherwise, constituting 1 percent or more of any such class or series, or is granted any option, right or warrant, conditional or otherwise, to acquire beneficial ownership of additional shares of any class or series of capital stock of Temple-Inland constituting 1 percent or more of any such class or series;

•  any person or group has entered into a definitive agreement or an agreement in principle or made a proposal with respect to a tender or exchange offer or a merger, consolidation or other business combination with or involving Temple-Inland; or

•  any person has filed a Notification and Report Form under the HSR Act or made a public announcement reflecting an intent to acquire Temple-Inland or any assets or securities of Temple-Inland; or

•  Temple-Inland or any of its subsidiaries has:

•  split, combined or otherwise changed, or authorized or proposed the split, combination or other change of, the Temple-Inland Common Shares or its capitalization;

•  acquired or otherwise caused a reduction in the number of, or authorized or proposed the acquisition or other reduction in the number of, outstanding Temple-Inland Common Shares or other securities;

•  issued or sold, or authorized or proposed the issuance or sale of, any additional Temple-Inland Common Shares, shares of any other class or series of capital stock, other voting securities or any securities convertible into, or options, rights or warrants, conditional or otherwise, to acquire, any of the foregoing (other than the issuance of Temple-Inland Common Shares pursuant to and in accordance with the terms in effect on July 11, 2011, of employee stock options outstanding prior to such date), or any other securities or rights in respect of, in lieu of, or in substitution or exchange for any shares of its capital stock;

A-3

•  permitted the issuance or sale of any shares of any class of capital stock or other securities of any subsidiary of Temple-Inland;

•  declared, paid or proposed to declare or pay any dividend (other than regular quarterly dividends of $0.13 or less per Share with record and payment dates consistent with Temple-Inland’s past practice) or other distribution on any shares of capital stock of Temple-Inland (other than a distribution of the Rights certificates or a redemption of the Rights in accordance with the Rights Agreement as publicly disclosed to be in effect prior to the date of the Offer);

•  altered or proposed to alter any material term of any outstanding security, issued or sold, or authorized or proposed the issuance or sale of, any debt securities or otherwise incurred or authorized or proposed the incurrence of any debt other than in the ordinary course of business (other than to amend the Rights Agreement to make the Rights inapplicable to the Offer and the Second-Step Merger described in the Schedule TO);

•  authorized, recommended, proposed or announced its intent to enter into or entered into an agreement with respect to or effected any merger, consolidation, liquidation, dissolution, business combination, acquisition of assets, disposition of assets or relinquishment of any material contract or other right of Temple-Inland or any of its subsidiaries or any comparable event not in the ordinary course of business;

•  authorized, recommended, proposed or announced its intent to enter into or entered into any agreement or arrangement with any person or group that, in IP’s reasonable judgment, has or may have material adverse significance with respect to either the value of Temple-Inland or any of its subsidiaries or affiliates or the value of the Temple-Inland Common Shares to IP or any of its subsidiaries or affiliates;

•  adopted, entered into or amended any employment, severance, change of control, retention or other similar agreement, arrangement or plan with or for the benefit of any of its officers, directors, employees or consultants or made grants or awards thereunder, in each case other than in the ordinary course of business or adopted, entered into or amended any such agreements, arrangements or plans so as to provide for increased benefits to officers, directors, employees or consultants as a result of or in connection with the making of the Offer, the acceptance for payment of or payment for some of or all the Temple-Inland Common Shares by IP or its consummation of any merger or other similar business combination involving Temple-Inland (including, in each case, in combination with any other event such as termination of employment or service);

•  except as may be required by law, taken any action to terminate or amend or materially increase liability under any employee benefit plan (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974) of Temple-Inland or any of its subsidiaries, or IP shall have become aware of any such action which was not previously announced;

•  transferred into escrow (or other similar arrangement) any amounts required to fund any existing benefit, employment, severance, change of control or other similar agreement, in each case other than in the ordinary course of business; or

•  amended, or authorized or proposed any amendment to, its certificate of incorporation or bylaws (or other similar constituent documents) or IP becomes aware that Temple-Inland or any of its subsidiaries shall have amended, or authorized or proposed any amendment to, the certificate of incorporation or bylaws of Temple-Inland (or other similar constituent documents) which has not been previously disclosed (in each case, other than to amend the Rights Agreement to make the Rights inapplicable to the Offer and the Second-Step Merger described in the Schedule TO); or

•  IP becomes aware:

•  that any material contractual right of Temple-Inland or any of its subsidiaries has been impaired or otherwise adversely affected or that any material amount of indebtedness of Temple-Inland or any of its subsidiaries, other than Temple-Inland’s revolving credit agreement dated as of June 25, 2010 with

A-4

Bank of America, N.A. and the other lenders party thereto, has been accelerated or has otherwise become due or become subject to acceleration prior to its stated due date, in each case with or without notice or the lapse of time or both, as a result of or in connection with the Offer or the consummation by IP or any of its subsidiaries or affiliates of a merger or other similar business combination involving Temple-Inland; or

•  of any covenant, term or condition in any instrument or agreement of Temple-Inland or any of its subsidiaries that, in IP’s reasonable judgment, has or may have material adverse significance with respect to either the value of Temple-Inland or any of its affiliates or the value of the Temple-Inland Common Shares to IP or any of its affiliates (including any event of default that may ensue as a result of or in connection with the Offer, the acceptance for payment of or payment for some or all of the Temple-Inland Common Shares by IP or its consummation of a merger or other similar business combination involving Temple-Inland); or

•  IP or any of its affiliates enters into a definitive agreement or announces an agreement in principle with Temple-Inland providing for a merger or other similar business combination with Temple-Inland or any of its subsidiaries or the purchase of securities or assets of Temple-Inland or any of its subsidiaries, or IP and Temple-Inland reach any other agreement or understanding pursuant to which it is agreed that the Offer will be terminated; or

•  Temple-Inland or any of its subsidiaries shall have:

•  granted to any person proposing a merger or other business combination with or involving Temple-Inland or any of its subsidiaries or the purchase of securities or assets of Temple-Inland or any of its subsidiaries any type of option, warrant or right which, in IP’s reasonable judgment, constitutes a “lock-up” device (including a right to acquire or receive any Temple-Inland Common Shares or other securities, assets or business of Temple-Inland or any of its subsidiaries); or

•  paid or agreed to pay any cash or other consideration to any party in connection with or in any way related to any such business combination or purchase; or

•  any required approval, permit, authorization, extension, action or non-action, waiver or consent of any governmental authority or agency shall not have been obtained on terms satisfactory to IP and IP Sub or any waiting period or extension thereof imposed by any government or governmental authority or agency with respect to the Offer shall not have expired.

The Schedule TO states that the foregoing conditions are for the sole benefit of IP, IP Sub and their affiliates and may be asserted by IP or IP Sub in their sole discretion regardless of the circumstances giving rise to any such conditions in whole or in part at any applicable time or from time to time prior to the expiration of the Offer, except that the conditions relating to receipt of any approvals from any governmental authority may be asserted at any time prior to the acceptance for payment of Temple-Inland Common Shares, and all conditions may be waived by them in their sole discretion in whole or in part at any applicable time or from time to time, in each case subject to the applicable rules and regulations of the SEC, that IP expressly reserves the right to waive any of the conditions to the Offer and to make any change in the terms of or conditions to the Offer, subject to the Offer remaining open for a minimum period of time following any such waiver or change as required by the rules and regulations of the SEC, that IP’s failure at any time to exercise its rights under any of the foregoing conditions shall not be deemed a waiver of any such right, that the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances, and that each such right shall be deemed an ongoing right which may be asserted at any time or from time to time.

A-5

ANNEX B

PERSONAL AND CONFIDENTIAL

July 16, 2011

Board of Directors

Temple-Inland Inc.

1300 South MoPac Expressway South

Austin, Texas 78746

Lady and Gentlemen:

You have requested our opinion as to the adequacy from a financial point of view to the holders (other than the Offeror (as defined below) and any of its affiliates) of the outstanding shares of common stock, par value $1.00 per share (the “Shares”), of Temple-Inland Inc. (the “Company”) of the $30.60 per Share in cash (the “Consideration”) proposed to be paid to such holders in the Offer (as defined below). The terms of the offer to purchase (the “Offer to Purchase”) and related letter of transmittal (which, together with the Offer to Purchase, constitutes the “Offer”) contained in the Tender Offer Statement on Schedule TO filed by International Paper Company (“Parent”) and Metal Acquisition Inc., a wholly-owned subsidiary of Parent (the “Offeror”), with the Securities and Exchange Commission on July 12, 2011 (the “Schedule TO”), provide for an offer for all of the Shares pursuant to which, subject to the satisfaction of certain conditions set forth in the Offer, the Offeror will pay the Consideration for each Share accepted. We note that the Offer to Purchase provides that, following consummation of the Offer, the Offeror intends to consummate a merger with the Company (the “Merger” and, together with the Offer, the “Transactions”) in which all remaining public stockholders of the Company would receive the highest price paid per Share pursuant to the Offer, without interest.

Goldman, Sachs & Co. and its affiliates are engaged in investment banking and financial advisory services, commercial banking, securities trading, investment management, principal investment, financial planning, benefits counseling, risk management, hedging, financing, brokerage activities and other financial and non-financial activities and services for various persons and entities. In the ordinary course of these activities and services, Goldman, Sachs & Co. and its affiliates may at any time make or hold long or short positions and investments, as well as actively trade or effect transactions, in the equity, debt and other securities (or related derivative securities) and financial instruments (including bank loans and other obligations) of third parties, the Company, Parent and any of their respective affiliates or any currency or commodity that may be involved in the Transactions for their own account and for the accounts of their customers. We have acted as financial advisor to the Company in connection with its consideration of the Offer and other matters pursuant to our engagement by the Company. We have received a fee and expect to receive additional fees for our services in connection with our engagement, including advisory fees that will be payable whether or not the Offer is consummated. The Company has agreed to reimburse our expenses arising, and indemnify us against certain liabilities that may arise, out of our engagement. We may in the future provide investment banking services to the Company, Parent and their respective affiliates for which our Investment Banking Division may receive compensation.

In connection with this opinion, we have reviewed, among other things, the Schedule TO, including the Offer to Purchase and related letter of transmittal contained therein; the Solicitation/Recommendation Statement of the Company to be filed on Schedule 14D-9 with the Securities and Exchange Commission on July 18, 2011, in the form approved by you on the date of this opinion; annual reports to stockholders and Annual Reports on Form 10-K of the Company for the five fiscal years ended January 1, 2011; annual reports to stockholders and Annual Reports on Form 10-K of the Parent for the five fiscal years ended December 31, 2010; certain interim reports to stockholders and Quarterly Reports on Form 10-Q of the Company and Parent; certain other communications from the Company and Parent to their respective stockholders; certain publicly available research analyst reports for the Company and Parent; and certain internal financial analyses and forecasts for the Company prepared by its management, as approved for our use by the Company (the “Forecasts”). We have also held discussions with members of the senior management of the Company regarding their assessment of the

B-1

Board of Directors

Temple-Inland Inc.

July 16, 2011

Page 

strategic rationale of Parent for, and the potential benefits for Parent of, the Transactions and the past and current business operations, financial condition and future prospects of the Company. In addition, we have reviewed the reported price and trading activity for the Shares, compared certain financial and stock market information for the Company and Parent with similar information for certain other companies the securities of which are publicly traded, reviewed the financial terms of certain recent business combinations in the corrugated and paper packaging industries specifically and in other industries generally; and performed such other studies and analyses, and considered such other factors, as we deemed appropriate.

For purposes of rendering this opinion, we have relied upon and assumed, without assuming any responsibility for independent verification, the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by, us; and we do not assume any responsibility for any such information. In that regard, we have assumed with your consent that the Forecasts have been reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of the Company. We have not made an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of the Company, Parent or any of their respective subsidiaries and we have not been furnished with any such evaluation or appraisal.

Our opinion does not address the relative merits of the Transactions as compared to any strategic alternatives that may be available to the Company; nor does it address any legal, regulatory, tax or accounting matters. This opinion addresses only the adequacy from a financial point of view, as of the date hereof, of the Consideration proposed to be paid to the holders of Shares (other than the Offeror and any of its affiliates) pursuant to the Offer. We do not express any view on, and our opinion does not address, the fairness, from a financial point of view, of the Consideration or any other term or aspect of the Transactions. In addition, we do not express any view on, and our opinion does not address, the adequacy or fairness of the Consideration or any other term or aspect of the Transactions to, or any consideration received in connection therewith by, the Offeror and any of its affiliates, the holders of any other class of securities, creditors, or other constituencies of the Company; nor as to the adequacy or fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of the Company, or class of such persons in connection with the Transactions, whether relative to the Consideration proposed to be paid to the holders of Shares pursuant to the Offer or otherwise. We are not expressing any opinion as to the prices at which the Shares will trade at any time. Our opinion is necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to us as of, the date hereof and we assume no responsibility for updating, revising or reaffirming this opinion based on circumstances, developments or events occurring after the date hereof. Our advisory services and the opinion expressed herein are provided for the information and assistance of the Board of Directors of the Company in connection with its consideration of the Offer and such opinion does not constitute a recommendation as to whether or not any holder of Shares should tender such Shares in connection with the Offer or any other matter. This opinion has been approved by a fairness committee of Goldman, Sachs & Co.

Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Consideration proposed to be paid to the holders of Shares (other than the Offeror and any of its affiliates) pursuant to the Offer is inadequate from a financial point of view to such holders.

Very truly yours,

/s/  Goldman, Sachs & Co.

(GOLDMAN, SACHS & CO.)

B-2

EXHIBIT INDEX

(a)(1)	—	Press release issued by Temple-Inland Inc., dated June 6, 2011 (incorporated by reference to Exhibit 99.1 of Temple-Inland’s Current Report on Form 8-K filed on June 6, 2011)
(a)(2)	—	Investor presentation materials, dated June 6, 2011 (incorporated by reference to Exhibit 99.2 of Temple-Inland’s Current Report on Form 8-K filed on June 6, 2011)
(a)(3)	—	Press release issued by Temple-Inland Inc., dated June 7, 2011 (incorporated by reference to Exhibit 99.1 of Temple-Inland’s Current Report on Form 8-K filed on June 7, 2011)
(a)(4)	—	Letter from Mr. John V. Faraci to Mr. Doyle R. Simons, dated May 19, 2011
(a)(5)	—	Letter from Mr. John V. Faraci to Mr. Doyle R. Simons, dated May 27, 2011
(a)(6)		Letter from Mr. Doyle R. Simons to Mr. John V. Faraci, dated June 4, 2011
(a)(7)	—	Letter from Mr. John V. Faraci to Mr. Doyle R. Simons, dated June 6, 2011
(a)(8)	—	Press release issued by Temple-Inland Inc., dated July 11, 2011 (incorporated by reference to the Schedule 14D-9/C filed by Temple-Inland on July 11, 2011)
(a)(9)	—	Memo to Employees and Employee FAQ, dated July 11, 2011 (incorporated by reference to the Schedule 14D-9/C filed by Temple-Inland on July 13, 2011)
(a)(10)	—	Press release issued by Temple-Inland Inc., dated July 18, 2011
(a)(11)	—	Letter to Stockholders of Temple-Inland Inc., dated July 18, 2011
(a)(12)	—	Memo to Employees, dated July 18, 2011
(e)(1)	—	Excerpts from the Temple-Inland Definitive Proxy Statement on Schedule 14A, dated and filed with the SEC on March 23, 2011
(e)(2)	—	Temple-Inland Inc. 1997 Stock Option Plan (incorporated by reference to the Company’s Definitive Proxy Statement in connection with the Annual Meeting of Shareholders held May 2, 1997, and filed with the Commission on March 17, 1997), as amended May 7, 1999 (incorporated by reference to the Company’s Definitive Proxy Statement in connection with the Annual Meeting of Shareholders held May 7, 1999, and filed with the Commission on March 26, 1999)
(e)(3)	—	First amendment to Temple-Inland Inc. 1997 Stock Option Plan (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended September 30, 2006, and filed with the Commission on November 7, 2006)
(e)(4)	—	Temple-Inland Inc. 2001 Stock Incentive Plan (incorporated by reference to the Company’s Definitive Proxy Statement in connection with the Annual Meeting of Shareholders held May 4, 2001, and filed with the Commission on March 23, 2001)
(e)(5)	—	First amendment to Temple-Inland Inc. 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended September 30, 2006, and filed with the Commission on November 7, 2006)
(e)(6)	—	Temple-Inland Inc. 2003 Stock Incentive Plan (incorporated by reference to Appendix A of the Company’s Definitive Proxy Statement dated March 31, 2003, and prepared in connection with the Annual Meeting of Stockholders held May 2, 2003)
(e)(7)	—	First amendment to Temple-Inland Inc. 2003 Stock Incentive Plan (incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q for the quarter ended September 30, 2006, and filed with the Commission on November 7, 2006)
(e)(8)	—	Temple-Inland Inc. 2008 Incentive Plan (incorporated by reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the year ended December 29, 2007, and filed with the Commission on February 27, 2008)
(e)(9)	—	Temple-Inland Inc. 2010 Incentive Plan (incorporated by reference to Exhibit 10.36 to the Company’s Form 10-K for the year ended January 2, 2010, and filed with the Commission on February 23, 2010)
(e)(10)	—	First Amendment to the Temple-Inland Inc. 2010 Incentive Plan (incorporated by reference to Exhibit 10.40 to the Company’s Form 10-K for the year ended January 1, 2011, and filed with the Commission on February 22, 2011)

EX-99.A.4

Exhibit (a)(4)

John V. Faraci	6400 POPLAR AVENUE
Chairman and Chief Executive Officer	MEMPHIS, TN 38197 USA
	T 901 419 7150
	F 901 419 4633
	john.faraci@ipaper.com

May 19, 2011

CONFIDENTIAL

Mr. Doyle R. Simons
Chairman & CEO
Temple-Inland Inc.
1300 South Mopac Expressway
Austin, TX 78746

Dear Doyle:

Thank you for returning my call yesterday. I look forward to meeting with you next Thursday in Austin. As I said on the phone, I’m sending this letter to summarize International Paper’s offer to acquire Temple-Inland and the strong rationale behind it. As discussed, IP is prepared to acquire all of the outstanding common stock of Temple-Inland for $30.60 per share in cash, or a total of $4.2 billion, including the assumption of Temple-Inland’s debt. Our strong preference is to reach a mutually beneficial, negotiated transaction promptly.

Our offer represents a 30% premium to Temple-Inland’s closing share price yesterday, which is also very close to the average closing price of $23.40 for the past 30 days, and almost a 20% premium to its 52-week high.

We believe the combination of IP and Temple-Inland creates an exceptionally compelling opportunity to create value for both of our companies’ stockholders. Temple-Inland’s stockholders will benefit from immediate liquidity at a price and premium fully reflecting Temple-Inland’s value. Furthermore, the significant premium we have proposed reflects our view that we can realize substantial cost savings from combining our businesses, particularly in operations, freight, logistics, selling expense and overhead. Our proposed price shares a meaningful amount of these synergies with Temple-Inland stockholders, while ensuring a fair return for our own stockholders.

Our offer price is based solely on publicly available information. As part of a private negotiation, we would conduct limited due diligence that we expect would take about five days. Our areas of focus would be segment P&L’s so we can confirm potential cost savings and capital expenditure requirements.

As I mentioned, we have carefully reviewed the regulatory implications of this combination and are confident that we will receive all required approvals. We are willing to discuss appropriate contractual provisions that will reflect our commitment to completing the transaction.

Mr. Doyle R. Simons
May 19, 2011
Page 2

We have obtained financing commitments in an amount sufficient to consummate this transaction. In addition, we have met with the rating agencies and believe we would remain investment grade with no change in outlook.

International Paper’s board of directors fully supports and is committed to this proposal. In addition, we believe your stockholders will embrace this acquisition as a unique opportunity to realize certainty of value today and a premium price that your stock might otherwise take years to reach, if ever, as a stand-alone company.

I look forward to our meeting next week to discuss IP’s proposal and next steps.

Sincerely yours,

/s/ John V. Faraci

John V. Faraci

EX-99.A.5

Exhibit (a)(5)

John V. Faraci	6400 POPLAR AVENUE
Chairman and Chief Executive Officer	MEMPHIS TN 38197 USA
	T 901 419 7150
	F 901 419 4633
	john.faraci@ipaper.com

May 27, 2011

PERSONAL & CONFIDENTIAL

Mr. Doyle R. Simons
Chairman & CEO
Temple-Inland Inc.
1300 South Mopac Expressway
Austin, TX 78746

Dear Doyle:

Thanks for meeting me yesterday and reviewing our materials. As you can see, we believe our $30.60 all-cash proposal provides compelling value for Nickel’s shareholders. I hope that your Board of Directors sees it the same way and I look forward to hearing back from you no later than Saturday, June 4th, which is the 10 days we discussed. Timing and speed are important. If the situation changes and we conclude that we are unable to wait for your response on June 4th, we’ll let you know.

The critical issue here is the certainty of receiving a significant immediate cash premium for Nickel shareholders versus waiting years for a recovery in building products, and hoping that the industrial packaging business will maintain or improve during that same period of time. Your stock price would have to reach almost $43 per share in three years to equal the present value of our offer today, as shown on page 5 of our Discussion Materials. That is not likely.

Our proposal represents almost a 20% premium to the highest share price Nickel has seen since it became an independent company as shown on page 4 of the Discussion Materials (which happens to be the current 52-week high), more than a 33% premium to the current price, and a price well above other relevant data points. More specifically, the premium we are offering is in excess of the 27% premium paid by Rock-Tenn to Smurfit Stone and above the 29% average premium of all cash transactions in the sector. Furthermore, the implied multiple of 2011E EBITDA of 9.2x (including $385 million timber monetization liability, or 8.5x excluding) is well above that paid by us to Weyerhaeuser of 6.3x (which was an asset deal and had significant tax advantages which are not available here) and also well above that paid by Rock-Tenn to Smurfit Stone of 6.lx, giving full credit for the quality of Nickel’s assets compared to those of SSCC. All of these comparable transactions are outlined on page 6 of the Discussion Materials.

You have done a good job of developing Nickel over the past 4 years. However, not only does our proposal provide your shareholders the certainty of realizing the future benefits that you may or may not be able to deliver to them through a cyclical housing recovery and operational improvements, it more importantly pays them for much of the very significant synergies of a combination that are not achievable on a standalone basis — and it gives it to them immediately in cash. We hope that your Board will evaluate all of these considerations when it meets next week.

In closing, we prefer to effect this transaction on a friendly basis and look forward to your response within the timeframe we discussed. But my Board has thoroughly reviewed this matter and we are resolute in our interest. If a friendly agreement is not possible, we intend to take our proposal directly to your shareholders. I look forward to hearing back from you soon about next steps in making this combination happen quickly and on a friendly basis.

Very truly yours,

/s/ John V. Faraci

EX-99.A.6

Exhibit (a)(6)

	Doyle R. Simons
	Chairman and Chief Executive Officer

June 4, 2011

Mr. John V. Faraci
Chairman and CEO
International Paper
6400 Poplar Avenue
Memphis, TN 38197

Dear John:

          The Board of Directors of Temple-Inland has received your letters dated May 19 and May 27, 2011 containing IP’s proposal to acquire all of the outstanding shares of Temple-Inland for $30.60 per share in cash. The Board has also considered the additional information you provided me at our meeting held at your request on May 26. Earlier today, the Temple-Inland Board of Directors convened and carefully reviewed your company’s proposal with the assistance of its financial advisor, Goldman, Sachs & Co., and its legal counsel, Wachtell, Lipton, Rosen & Katz. After thorough consideration, it is the unanimous view of the Temple-Inland Board of Directors that your unsolicited proposal grossly undervalues Temple-Inland and its future prospects. Accordingly, the Temple-Inland Board unanimously rejects IP’s proposal of $30.60 per share.

          Since we launched the “new” Temple-Inland in January 2008, we have delivered superior results to our stockholders compared with our corrugated packaging peers (including IP), building products peers, and the S&P 500. Since that time, our total returns to stockholders of 22% greatly exceed the 5% total return that IP has achieved. Through our proven ability to execute our strategy focused on maximizing return on investment (ROI) and profitably growing our business, the Board believes the Company will continue to provide superior results for our stockholders.

          A key part of our strategy is to maximize ROI, because we believe ROI is fundamental to driving stockholder value. In corrugated packaging, we generated record ROI of 16.5% in 2009 and 2010 and are positioned to generate significantly higher levels of ROI in 2011 and beyond due to fundamental changes in the industry and benefits from our box plant transformation. Indeed, we are now achieving the highest returns on assets in the corrugated packaging industry. Despite the worst housing markets since the Great Depression, our low-cost building products operation has continued to generate positive cash flow throughout the downturn and is positioned to generate very high levels of return for our stockholders when housing markets recover. As the economic recovery continues and the benefits from our strategy continue to be realized, it is the stockholders of Temple-Inland who should benefit from our company’s very strong prospects, not the stockholders of IP.

     1300 S. MoPac Expy., 3rd Floor Austin, Texas 78746 512.434.3737 Fax 512.434.3750

Mr. John V. Faraci
June 4, 2011
Page 2

          We take issue with a number of claims in the materials you have provided to us. You have overstated our net debt by $91 million (which was $737 million as of March 31, 2011, rather than the $828 million stated in your proposal) and the net present value of our timber finance liability by at least $200 million. More significantly, the “comparable” transactions you cite are simply not comparable — those transactions involved troubled or struggling companies or operations rather than a company such as Temple-Inland with its industry-leading returns, high-quality assets and low-cost structure. Further, the retrospective focus of these “comparables” does not take account of the profound changes that are occurring in the corrugated packaging industry, which have led to reduced pricing volatility, higher average prices and widely-held expectations that these positive industry trends will continue.

          Your own public statements acknowledge the changes in the industry and make clear that “looking back at history” is not the correct way to understand the corrugated packaging industry’s future. If, as you so clearly state, the past is not prologue for your company, neither is it for ours. We believe that it is for this reason that your letter of May 27 insistently says “Timing and speed are important,” and you have threatened us with a hostile bid if we do not respond by your deadline. The speed that is “important” to you underscores an opportunistic attempt to deprive our stockholders of the value in their company that we believe will become increasingly evident as the benefits of profound change in the corrugated packaging industry, Box Plant Transformation II and our extremely low-cost building products business accrue to the benefit of our stockholders. Finally, the “certain” value you refer to overlooks the serious regulatory issues of your proposal, an attempt to forcibly combine the #1 and #3 participants in the corrugated packaging industry with the result that your company would have an approximate 40% share of industry capacity, nearly double the next largest competitor.

          Our Board of Directors, our management team and our employees are dedicated to creating value for all of our stockholders, which we expect to do by continuing to effectively execute on our strategic plan.

Sincerely,

/s/ Doyle R. Simons

Doyle R. Simons

EX-99.A.7

Exhibit (a)(7)

John V. Faraci	INTERNATIONAL PAPER
Chairman and Chief Executive Officer	6400 POPLAR AVENUE
	MEMPHIS, TN 38197 USA
	T 901 419 7150
	F 901 419 4633
	john.faraci@ipaper.com

June 6, 2011

PERSONAL & CONFIDENTIAL

Mr. Doyle R. Simons
Chairman & CEO
Temple-Inland, Inc.
1300 South Mopac Expressway
Austin, TX 78746

Dear Doyle:

International Paper is very disappointed by your Board’s rejection of our proposal to acquire Temple-Inland for $30.60 per share in cash, which represents a 44% premium to your market price at noon EDT today ($21.21). We continue to believe that our proposal represents a highly attractive offer for Temple-Inland and fairly rewards your shareholders for potential future operational and cyclical improvement as well as the potential synergies in a combination of our two businesses. Given the complete lack of interest expressed by your Board’s unanimous rejection of our proposal, we are compelled to take our offer directly to your shareholders.

Following our initial proposal communicated by telephone on May 17th and our face-to-face discussion on May 26th, we did not receive a substantive response until June 4th — almost three weeks after our initial contact. We believe your refusal to engage in discussions with us reflects an unrealistic view of the outlook for your portfolio of businesses, especially given the slow growth of the packaging industry and the low likelihood of a meaningful rebound in building products for at least the next several years.

The Temple-Inland recovery program referenced in your letter, including your focus on ROI, Box Plant Transformation I & II, the current industry dynamics and the cost structure of your building products operation, are already, in our judgment, fully reflected in your share price. Our ability to provide a cash offer at more than a 40% premium to market reflects not only the quality and fundamentals of your existing business, but also a very substantial portion of the significant cost savings that would result from the combination of the businesses and that are not otherwise available to you — and it gives all of that value to your shareholders immediately in cash, while ensuring a fair return for our own stockholders. After all, based on the information available in the public domain, the highest analyst forecast for your share price in the next 12-18 months is $29 per share.

Our offer is also at a price well above other relevant data points. Based on analyst consensus estimates, the offer multiple of 9.2x 2011E EBITDA (including $385 million timber monetization liability as well as $828 million of net debt including minority interest, both of which we believe are correct) is materially above that paid by us to Weyerhaeuser for their

corrugated packaging business and that paid by Rock-Tenn to Smurfit-Stone. As the two most recent transactions in this sector, we disagree with your characterization that these two transactions are not comparable to our proposal. In fact, our valuation fully accounts for the fundamental differences between your company and these two other companies as reflected by the very significant premium in our proposal.

It is important to underscore that since January 2008 your return to shareholders, including reinvested dividends, has been only 6% per year. In that context, our proposal allows your shareholders to realize today, in cash, all of the potential future benefits that you may, or may not, deliver through cyclical and operational improvement.

This is the right time for you and the Temple-Inland Board to reconsider our proposed transaction. The economic recovery is slow. This in turn implies a slow recovery in packaging markets and box demand. In addition, the continued difficult housing market conditions mean that it is highly unlikely that your building products segment will be able to deliver significant earnings improvement, at least for the next few years. It would be in the best interests of Temple-Inland and your customers, employees, shareholders and other constituents for you to accept our proposal in a mutually beneficial negotiated transaction.

Your characterization of the regulatory issues in your letter is incorrect. We have studied these issues very thoroughly with the assistance of outside, independent experts. We believe we can obtain all required approvals, and we would be able to demonstrate this to you if you simply agreed to engage with us. We have also suggested repeatedly that a simple confirmatory due diligence process would lead to achieving the best price for your shareholders. We could complete our confirmatory due diligence and finalize the terms of a transaction in a few days.

In order to move forward quickly, we have retained Evercore Partners and UBS Investment Bank as our financial advisors and Debevoise & Plimpton as our legal advisor, which, alongside our senior management, have already completed extensive analysis and due diligence based on publicly available information. We have also obtained a debt financing commitment from UBS Investment Bank in an amount sufficient to consummate this transaction.

International Paper is committed to a transaction with Temple-Inland. Given the substantial value represented by our offer and the unique benefits of a transaction with us, we are confident that Temple-Inland’s shareholders will support our proposal. We have taken the step of making this letter public to explain directly to your shareholders our proposal, our actions and our commitment. Your refusal to engage with us will only further delay the ability of your shareholders to receive the substantial value represented by our all-cash offer.

We are ready to meet with you and your team immediately to discuss next steps toward achieving a friendly, negotiated transaction.

Yours sincerely,

/s/ John V. Faraci

EX-99.A.10

Exhibit (a)(10)

NEWS

RELEASE___________________________

CONTACT: Chris Mathis
                     (512) 434-3766

TEMPLE-INLAND BOARD OF DIRECTORS UNANIMOUSLY REJECTS
INTERNATIONAL PAPER’S UNSOLICITED TENDER OFFER

Board of Directors Unanimously Determines that IP’s Offer Grossly Undervalues Temple-
Inland and Urges Stockholders Not to Tender Shares Pursuant to IP’s Offer

          AUSTIN, TX — July 18, 2011 — Temple-Inland Inc. (NYSE: TIN) today announced that its Board of Directors, after careful consideration with its independent financial and legal advisors, voted unanimously to reject the unsolicited tender offer from International Paper Company (NYSE: IP) (“IP”) to acquire all outstanding common shares of Temple-Inland at a price of $30.60 per share in cash. The Board unanimously determined that the offer grossly undervalues Temple-Inland and is not in the best interests of Temple-Inland’s stockholders. The Board unanimously recommends that Temple-Inland stockholders not tender their shares into IP’s offer.

          The basis for the Board’s recommendation with respect to IP’s tender offer is set forth in Temple-Inland’s Schedule 14D-9, filed today with the Securities and Exchange Commission (“SEC”), a copy of which is available at www.sec.gov and on Temple-Inland’s website at www.templeinland.com.

          “Since we launched the ‘new’ Temple-Inland in January 2008, we have delivered superior results to our stockholders compared with our corrugated packaging peers, building products peers, and the S&P 500. The Temple-Inland Board is unanimous in its belief that the offer grossly undervalues Temple-Inland and its prospects, including its position as the return on asset leader in the corrugated packaging industry, expected benefits from box plant transformation, its low-cost building products operation, and its strategic place within the industry as the third largest producer of corrugated packaging in North America,” said Doyle R. Simons, Chairman and Chief Executive Officer of Temple-Inland.

          As fully outlined in Temple-Inland’s Schedule 14D-9, Temple-Inland’s Board recommends that Temple-Inland stockholders not tender their shares into IP’s offer because:

• International Paper’s unsolicited offer grossly undervalues Temple-Inland and its future prospects:

o The Board believes Temple-Inland’s accelerating growth of earnings and return on investment will result in superior value to Temple-Inland’s stockholders as compared to the price being offered by IP.

o IP overstates Temple-Inland’s net debt. The Company’s net debt at the end of first quarter 2011 was $737 million, not $828 million as IP calculated for purposes of pricing its offer.

o IP wrongly characterizes Temple-Inland’s timber financing transaction as a liability rather than an asset. IP appears to have considered only one aspect of the transaction, the present value of the settlement of the tax on the deferred gain, and ignored the remaining positive components (including alternative minimum tax credits) of the transaction, which together result in a net benefit.

o IP’s offer fails to appropriately compensate Temple-Inland stockholders for the very significant synergies that IP would realize and the extraordinary level of earnings accretion that would result if an IP/Temple-Inland transaction were to occur.

o IP seeks to compare its offer price to valuation metrics from so-called “precedent” transactions that involved underperforming assets of other companies that are not comparable to Temple-Inland and its industry-leading returns, high-quality assets and low-cost structure.

o IP’s offer does not appropriately reflect the fundamental changes and improved focus in the corrugated packaging industry. These fundamental changes and improved industry focus are expected to be beneficial to Temple-Inland, which, as a result of its strong position in the corrugated packaging industry and its low-cost operations, is well positioned to continue to achieve improving results.

o Temple-Inland is the largest remaining independent, publicly-held industry participant whose acquisition would fundamentally transform the industry, and IP’s offer does not appropriately compensate Temple-Inland’s stockholders for that strategic value.

• The timing of International Paper’s unsolicited proposal is extremely opportunistic and disadvantageous to Temple-Inland stockholders:

o Housing markets are at historically low levels, temporarily depressing the value of our building products operations. IP is attempting to take advantage of our stockholders by moving to grab Temple-Inland at a bargain price at a time when there is little or no market value being ascribed to building products.

o As IP itself has consistently highlighted to the investment community, corrugated packaging demand remains below prerecession levels, but is expected to recover in the near future as the economy continues to improve. IP is attempting by its offer to acquire Temple-Inland before corrugated packaging demand returns to prerecession levels and pricing further improves.

o We estimate that $90 million of the annual cost savings from our Box Plant Transformation II project are still to be realized — our stockholders, not IP’s, deserve to receive the benefit of the significant capital we have invested in this project.

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o IP initially publicized its proposal to acquire Temple-Inland during a period of market weakness in order to claim an inflated “premium”.

• The potential acquisition is subject to regulatory and other uncertainty:

o IP is proposing a combination of the largest and third largest producers of corrugated packaging in North America.

o Given the regulatory uncertainty and the significant conditionality of IP’s offer, there is considerable uncertainty regarding the offer and the timing of Temple-Inland stockholders receiving the “certain” value that IP claims to be offering.

          As noted above, the Company’s Schedule 14D-9 is available on the SEC’s website, www.sec.gov. In addition, the Schedule 14D-9 and other materials related to IP’s unsolicited proposal are available in the “Investor Relations” section of the Company’s website at www.templeinland.com. The Company urges stockholders to read the Schedule 14D-9 carefully and in its entirety.

          Goldman, Sachs & Co. is acting as financial advisor to Temple-Inland, and Wachtell, Lipton, Rosen & Katz is acting as Temple-Inland’s legal counsel.

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 7 mills and 58 converting facilities. 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.

Additional Information

          This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. In response to the tender offer commenced by Metal Acquisition Inc., a wholly-owned subsidiary of IP, Temple-Inland has filed a solicitation/ recommendation statement on Schedule 14D-9 with the U.S. Securities and Exchange Commission (“SEC”). STOCKHOLDERS OF TEMPLE-INLAND ARE URGED TO READ THESE AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Stockholders may obtain free copies of these documents and other documents filed with the SEC by Temple-Inland through the web site maintained by the SEC at www.sec.gov. Also, materials related to IP’s unsolicited offer are available in the “Investor Relations” section of the Company’s website at www.templeinland.com.

          In addition, Temple-Inland may file a proxy statement with the SEC. Any definitive proxy statement will be mailed to stockholders of Temple-Inland. STOCKHOLDERS OF TEMPLE-INLAND ARE URGED TO READ THESE AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY

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BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders will be able to obtain free copies of these documents (when available) and other documents filed with the SEC by Temple-Inland through the web site maintained by the SEC at www.sec.gov and in the “Investor Relations” section of the Company’s website at www.templeinland.com.

Certain Information Regarding Participants

          Temple-Inland and certain of its directors and executive officers may be deemed to be participants under the rules of the SEC. Stockholders may obtain information regarding the names, affiliations, and interests of Temple-Inland’s directors and executive officers in Temple-Inland’s Annual Report on Form 10-K for the year ended January 1, 2011, which was filed with the SEC on February 22, 2011, and its proxy statement for the 2011 Annual Meeting, which was filed with the SEC on March 23, 2011. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the interests of these participants in any proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will also be included in any proxy statement and other relevant materials to be filed with the SEC if and when they become available.

Cautionary Statement on Forward-Looking Statements

          Forward-looking statements are made throughout this release. These forward-looking statements are sometimes identified by the use of terms and phrases such as “believe,” “should,” “would,” “expect,” “project,” “estimate,” “anticipate,” “intend,” “plan,” “will,” “can,” “may,” or similar expressions elsewhere in this release. All forward-looking statements are subject to a number of important factors, risks, uncertainties, and assumptions that could cause actual results to differ materially from those described in any forward-looking statements. These factors and risks include, but are not limited to, future events relating to IP’s unsolicited offer, general economic conditions, demand for new housing, accuracy of certain accounting assumptions, changes in actual or forecasted cash flows, competitive pressures, future sales volume, significant increases in the costs of certain commodities, timely implementation of price increases, successful execution of cost saving strategies, changes in tax laws, integration risks associated with recent acquisitions, changes in weighted average shares for diluted EPS, increases in transportation costs, and other financial, operational, and legal risks and uncertainties detailed from time to time in Temple-Inland’s cautionary statements contained in its filings with the SEC. Temple-Inland disclaims and does not undertake any obligation to update or revise any forward-looking statement in this release except as required by law. Temple-Inland notes that forward-looking statements made in connection with a tender offer are not subject to the safe harbors created by the Private Securities Litigation Reform Act of 1995. Temple-Inland is not waiving any other defenses that may be available under applicable law.

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EX-99.A.11

Exhibit (a)(11)

Doyle R. Simons
Chairman and Chief Executive Officer

July 18, 2011

YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU
REJECT INTERNATIONAL PAPER’S OFFER AND NOT TENDER YOUR SHARES

Dear Fellow Temple-Inland Stockholder:

On July 12, 2011, a wholly owned subsidiary of International Paper Company (“IP”), commenced an unsolicited tender offer to acquire your Temple-Inland shares for $30.60 each.

After careful consideration, including a thorough review of IP’s offer with our independent financial and legal advisors, Temple-Inland’s Board of Directors unanimously determined that IP’s offer is not in the best interests of Temple-Inland stockholders. Your Board unanimously recommends that Temple-Inland stockholders not tender their shares into IP’s offer.

In reaching its recommendation, your Board considered, among other things, that:

• IP’s unsolicited offer grossly undervalues Temple-Inland and its future prospects. The Board believes Temple-Inland’s accelerating growth of earnings and return on investment will result in superior value to Temple-Inland stockholders as compared to the price being offered by IP. In addition, IP’s offer fails to appropriately compensate Temple-Inland stockholders: for the very significant synergies and extraordinary level of earnings accretion for IP that would result from an acquisition of Temple-Inland; for the fundamental positive changes that are occurring in the corrugated packaging industry; and for Temple-Inland’s strategic position as the largest remaining independent, publicly-held industry participant. Instead, in its pricing of the offer, IP has overstated Temple-Inland’s net debt and has wrongly characterized Temple-Inland’s timber financing transaction as a liability rather than an asset by ignoring certain positive aspects of the transaction. Further, IP has claimed certain transactions in the industry to be comparable even though such transactions involved underperforming assets, in contrast to Temple-Inland with its industry-leading returns, high-quality assets and low-cost structure.

• The timing of IP’s unsolicited proposal is extremely opportunistic and disadvantageous to Temple-Inland stockholders. Housing markets are at historically low levels, temporarily depressing the value of Temple-Inland’s building products operations, with the result that little or no market value is currently being ascribed to these operations. By pursuing an unsolicited acquisition now, IP is attempting to acquire Temple-Inland before an estimated $90 million of benefits from Box Plant Transformation II are realized (but after the funds for this project have largely been invested) and before corrugated packaging demand returns to prerecession levels and pricing further improves. Further, IP initially publicized its proposal to acquire Temple-Inland during a period of market weakness in order to claim an inflated “premium”.

1300 S. MoPac Expy., 3rd Floor      Austin, Texas 78746      512.434.3737      Fax 512.434.3750

• The potential acquisition is subject to regulatory and other uncertainty. IP’s proposed combination of the largest and third largest producers of corrugated packaging in North America entails regulatory uncertainty and its offer is subject to numerous significant conditions. As a result, there is considerable uncertainty regarding the offer and the timing of Temple-Inland stockholders receiving the “certain” value that IP claims to be offering.

A complete discussion of these and the other significant factors contributing to the Board of Directors’ recommendation is included in the enclosed Schedule 14D-9. We urge you to read the Schedule 14D-9 carefully and in its entirety so that you will be fully informed. The Schedule 14D-9 is available on the SEC’s website, www.sec.gov. In addition, the Schedule 14D-9 and other materials related to International Paper’s unsolicited proposal is available in the “Investor Relations” section of the Company’s website at www.templeinland.com. If you have any questions concerning Temple-Inland’s Schedule 14D-9 or need additional copies of Temple-Inland’s publicly-filed materials, please contact D.F. King & Co., Inc. at (800) 431-9633 (Toll-Free).

We appreciate your support.

Sincerely,

/s/ Doyle R. Simons

Doyle R. Simons

Chairman and Chief Executive Officer

EX-99.A.12

Exhibit (a)(12)

To:	All Temple-Inland Employees
From:	Doyle Simons
Date:	July 18, 2011
Subject:	Update on Temple-Inland’s Board of Directors Rejection of IP’s Unsolicited Tender Offer

Today, in a filing with the Securities and Exchange Commission, Temple-Inland’s Board of Directors formally responded to the unsolicited tender offer by International Paper and described the factors that led to the Board’s unanimous decision to reject that offer.

The Board unanimously determined that IP’s offer to acquire all outstanding common shares of Temple-Inland at $30.60 per share in cash grossly undervalues Temple-Inland and is not in the best interests of Temple-Inland’s stockholders. In addition, the Board rejected IP’s tender offer because the timing of the unsolicited proposal is extremely opportunistic and disadvantageous to Temple-Inland stockholders, and the potential acquisition is subject to regulatory and other uncertainty.

The Board stated that it unanimously recommends that Temple-Inland stockholders not tender their shares into International Paper’s offer. A complete discussion of the factors contributing to the Board’s recommendation is included in Temple-Inland’s Schedule 14D-9 filing, which is available through our Investor Relations section of our website.

As many of you are aware, since we launched the ‘new’ Temple-Inland in January 2008, we have delivered superior results to our stockholders compared with our corrugated packaging peers, building products peers, and the S&P 500. Our Board is unanimous in its belief that the offer grossly undervalues Temple-Inland and its prospects, including its position as the ROA leader in the corrugated packaging industry, expected benefits from box plant transformation, its low-cost building products operation, and its strategic place within the industry as the third largest producer of corrugated packaging in North America.

International Paper’s tender offer is set to expire at 5:00 p.m., August 9, 2011, but it can be extended by International Paper. As we communicated to you when the unsolicited proposal first became public in June, we cannot predict what next steps International Paper may take. Temple-Inland will also continue to receive interest from the media and others outside our company. Please remember to refer any media inquiries you receive to Brad Johnston (512/434-8053).

It is important that we not be distracted by the speculation and what we may read in the press. What is important is that we continue to perform well. That means reaffirming our commitment

to “Being the Best” by staying focused on our respective jobs, serving our customers, and continuing to improve our performance so that we can deliver outstanding results.

Thank you for being part of our team and for your continued hard work on behalf of Temple-Inland. We will continue to update you if there are further significant developments related to the process.

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 7 mills and 58 converting facilities. 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.

Additional Information

     This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. In response to the tender offer commenced by Metal Acquisition Inc., a wholly-owned subsidiary of International Paper Company, Temple-Inland has filed a solicitation/ recommendation statement on Schedule 14D-9 with the U.S. Securities and Exchange Commission (“SEC”). STOCKHOLDERS OF TEMPLE-INLAND ARE URGED TO READ THESE AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Stockholders may obtain free copies of these documents and other documents filed with the SEC by Temple-Inland through the web site maintained by the SEC at www.sec.gov. Also, materials related to IP’s unsolicited offer are available in the “Investor Relations” section of the Company’s website at www.templeinland.com.

     In addition, Temple-Inland may file a proxy statement with the SEC. Any definitive proxy statement will be mailed to stockholders of Temple-Inland. STOCKHOLDERS OF TEMPLE-INLAND ARE URGED TO READ THESE AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders will be able to obtain free copies of these documents (when available) and other documents filed with the SEC by Temple-Inland through the web site maintained by the SEC at www.sec.gov and in the “Investor Relations” section of the Company’s website at www.templeinland.com.

Certain Information Regarding Participants

     Temple-Inland and certain of its directors and executive officers may be deemed to be participants under the rules of the SEC. Stockholders may obtain information regarding the names, affiliations, and interests of Temple-Inland’s directors and executive officers in Temple-Inland’s Annual Report on Form 10-K for the year ended January 1, 2011, which was filed with the SEC on February 22, 2011, and its proxy statement for the 2011 Annual Meeting, which was

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filed with the SEC on March 23, 2011. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the interests of these participants in any proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will also be included in any proxy statement and other relevant materials to be filed with the SEC if and when they become available.

Cautionary Statement on Forward-Looking Statements

     Forward-looking statements are made throughout this communication. These forward-looking statements are sometimes identified by the use of terms and phrases such as “believe,” “should,” “would,” “expect,” “project,” “estimate,” “anticipate,” “intend,” “plan,” “will,” “can,” “may,” or similar expressions elsewhere in this communication. All forward-looking statements are subject to a number of important factors, risks, uncertainties, and assumptions that could cause actual results to differ materially from those described in any forward-looking statements. These factors and risks include, but are not limited to, future events relating to IP’s unsolicited offer, general economic conditions, demand for new housing, accuracy of certain accounting assumptions, changes in actual or forecasted cash flows, competitive pressures, future sales volume, significant increases in the costs of certain commodities, timely implementation of price increases, successful execution of cost saving strategies, changes in tax laws, integration risks associated with recent acquisitions, changes in weighted average shares for diluted EPS, increases in transportation costs, and other financial, operational, and legal risks and uncertainties detailed from time to time in Temple-Inland’s cautionary statements contained in its filings with the SEC. Temple-Inland disclaims and does not undertake any obligation to update or revise any forward-looking statement in this communication except as required by law. Temple-Inland notes that forward-looking statements made in connection with a tender offer are not subject to the safe harbors created by the Private Securities Litigation Reform Act of 1995. Temple-Inland is not waiving any other defenses that may be available under applicable law.

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EX-99.E.1

Exhibit (e)(1)

Excerpts from the Temple-Inland Definitive Proxy Statement on Schedule 14A

Excerpts from Temple-Inland Inc. Definitive Proxy Statement on Schedule 14A relating to the 2011 Annual Meeting of Stockholders as filed with the Securities and Exchange Commission on March 23, 2011.

VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS

Security Ownership of Certain Beneficial Owners:

     The name, address and stock ownership of each person or group of persons known by us to own beneficially more than five percent (5%) of the outstanding shares of our common stock as of March 10, 2011 follows:

Name and Address of	Amount and Nature of		Percent of
Beneficial Owner	Beneficial Ownership		Class(1)(2)
BlackRock, Inc.		7,734,003		7.17	%
40 East 52nd Street
New York, NY 10022

(1)	There were 108,290,457 shares of common stock outstanding on March 10, 2011.
(2)	Based solely on information reported on an Amended Schedule 13G/A filed with the SEC on February 9, 2011.

Security Ownership of Management:

     The following table sets forth information regarding the beneficial ownership of our common stock as of March 10, 2011 by:

• each of our directors and nominees for director, including our Chairman and Chief Executive Officer and our President and Chief Operating Officer,

• our Chief Financial Officer and our three most highly compensated executive officers other than the CEO and CFO, and

• all directors and executive officers as a group.

     We determined beneficial ownership as reported in the table in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (which we will refer to in this Proxy Statement as the Exchange Act). Unless otherwise indicated, beneficial ownership includes both sole voting and sole dispositive power. Even though SEC rules require reporting of all the shares listed in the table, the directors and executive officers may not claim beneficial ownership of some of these shares. For example, a director or executive officer might not claim ownership of shares owned by a relative. Unless otherwise indicated, the table does not include any shares that may be held by pension and profit-sharing plans of the corporations or endowment funds of educational and charitable institutions for which various directors and officers serve as directors or trustees.

SECURITY OWNERSHIP OF MANAGEMENT
	Beneficial Ownership(1)					Additional Ownership(2)
						Shares Issuable on
	Amount and			Beneficial		Stock Options		Restricted Stock		Restricted Stock
	Nature of			Ownership		Exercisable		Units and		Units Deferred and		Total Beneficial
	Beneficial			Percent		More than 60 Days		Performance Stock		Payable upon		and Additional
Beneficial Owner	Ownership			of Class		After Record Date		Units(3)		Retirement(4)		Ownership
Directors:
Cassandra C. Carr		22,000	(1)		*						81,267		103,267
E. Linn Draper Jr.		20,000	(1)		*						94,181		114,181
Larry R. Faulkner		20,200	(1)		*						75,378		95,578
Jeffrey M. Heller		20,000	(1)		*						101,830		121,830
J. Patrick Maley III		535,464	(1)		*		300,611		462,093				1,298,168
W. Allen Reed		8,000	(1)		*						101,744		109,744
Doyle R. Simons		633,973	(1)		*		375,763		577,616				1,587,352
Richard M. Smith		30,000	(1)		*						69,395		99,395
Arthur Temple III		792,448	(1)(5)		*						96,250		888,698
R. A. Walker		16,000	(1)		*		4,000				35,050		55,050

*	Percentage is less than 1% of Temple-Inland common stock outstanding
(1)	Includes the following number of shares of common stock issuable upon the exercise of options exercisable within a period of 60 days from March 10, 2011:

Directors	Options
Former Director:
Donald M. Carlton		12,000	(1)	*				64,272	76,272
Named Executive Officers:
Randall D. Levy		425,953	(1)	*		165,362	256,681		847,996
Larry C. Norton		140,913	(1)	*		132,956	206,806		480,675
Dennis J. Vesci		194,149	(1)	*		130,804	203,240	10,426	538,619
All Directors and Executive Officers as a Group:
21 persons		3,719,199	(1)(5)	3.2	%	1,566,675	2,412,906	729,793	8,428,573
Cassandra C. Carr		20,000
E. Linn Draper Jr.		—
Larry R. Faulkner		20,000
Jeffrey M. Heller		20,000
J. Patrick Maley III		437,009
W. Allen Reed		6,000
Doyle R. Simons		517,862
Richard M. Smith		20,000
Arthur Temple III		12,000
R. A. Walker		16,000
Former Director:
Donald M. Carlton		10,000
Named Executive Officers:
Randall D. Levy		329,791
Larry C. Norton		130,173
Dennis J. Vesci		170,253
All Directors and Executive Officers as a Group:
Number of Persons  21		2,390,701

(2)	The items included in “Additional Ownership” are not included in the SEC’s definition of “Beneficial Ownership.”
(3)	Restricted stock units and performance stock units vest on the third anniversary from the date of grant if performance criteria are met. Units will be settled in stock or in cash based on the stock price as set forth in the award agreements.
(4)	Restricted stock units deferred through 2005 are payable in shares of common stock at retirement. Restricted stock units deferred in 2006 and later are payable in cash based on the stock price at retirement.
(5)	Includes 2,000 shares owned by certain relatives of Mr. Temple. SEC rules consider these shares to be beneficially owned, but Mr. Temple disclaims any beneficial interest in such shares. These 2,000 shares are the only shares owned by relatives included in the total number of shares owned by all directors and officers as a group (21 persons). Also includes 134,460 shares held in a trust over which Mr. Temple is trustee. Mr. Temple has a future income interest with respect to 67,230 of these shares and a remainder interest with respect to 67,230 of these shares. Also includes 20,166 shares held by various trusts and custodial accounts, with respect to which Mr. Temple has sole voting and dispositive power. Mr. Temple disclaims any beneficial ownership with respect to these 20,166 shares. Includes 157,380 shares held in a trust for Mr. Temple with respect to which he has a present income interest and is also a co-trustee. Does not include 2,565,252 shares of common stock held by the T.L.L. Temple Foundation, a charitable trust, of which Mr. Temple is Chairman of the Board of Trustees. Mr. Temple shares voting and dispositive power of the shares held by the foundation. Mr. Temple disclaims any beneficial ownership with respect to such shares.

Compliance with Section 16(a) of the Exchange Act:

     We have not identified any person who failed to file on a timely basis reports required by Section 16(a) of the Exchange Act during the most recent fiscal year or prior fiscal years. For this purpose, we only reviewed Forms 3 and 4, and any amendments to these forms, as well as written representations supplied to us in lieu of Forms 5 under the SEC’s Section 16 rules for the most recent fiscal year.

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TRANSACTIONS WITH RELATED PERSONS

     There were no material transactions with related persons during 2010.

     We maintain a written policy enumerating procedures for the review, approval or ratification, or rejection of any related party transaction. A related party, for purposes of our policy means:

• any person who is, or at any time since the beginning of our last fiscal year was, a director or executive officer or a nominee for director or executive officer,

• any person known to be the beneficial owner of more than 5% of our common stock, and

• any immediate family member of the foregoing persons.

     Under the related party transaction policy, any transaction, arrangement or relationship between us and a related party must be reviewed by the Nominating and Governance Committee, except that the following transactions, arrangements or relationships are pre-approved under the policy:

• compensation arrangements required to be reported under the director or executive compensation sections of the proxy statement,

• business expense reimbursements,

• transactions with an entity in which the related party owns less than 10% of the other entity, as a director only or is not an executive officer, and

• indebtedness for transactions in the ordinary course of business.

     There are no transactions required to be reported above since the beginning of our fiscal year where the related party policies and procedures did not require review, approval or ratification or where the policies and procedures were not followed.

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DIRECTOR COMPENSATION

     Our director compensation program is designed to recognize the time commitment and preparations required for directors to fulfill their responsibilities. Our program also aligns director compensation with stockholder returns. Alignment with stockholders is emphasized through stock ownership requirements and an annual restricted stock unit grant.

2010 Director Fee Schedule
Annual Retainer Fee	$	70,000	Covers 5 board meetings and 5 meetings for each committee per year
Meeting Fee	$	2,500	Each additional meeting in excess of 5 board meetings and 5 meetings for each committee per year
Lead Director Annual Retainer Fee	$	20,000
Audit Committee Chairman Annual Retainer Fee	$	20,000
Other Committee Chairman Annual Retainer Fee	$	12,500
Committee Member Annual Retainer Fee	$	7,500
Stock Option Grant		20,000	Upon initial election to the board
Annual Restricted Stock Unit Grant	$	90,000	Payment deferred until retirement
Matching Gift to Charity	Up to $3,000		Funded by the Temple-Inland Foundation

     Initial Stock Option Grant: Directors receive a grant of 20,000 options at the time of their initial election to the board. Options are granted at fair market value on the grant date, which is the date of the board meeting at which the director is elected. The options vest in three installments: 8,000 shares on the first anniversary, 8,000 shares on the second anniversary, and 4,000 shares on the third anniversary of the date of election. The option term is ten years. We do not have any program, plan or practice to time option grants to our directors in coordination with the release of material non-public information. We do not set the grant date of stock option grants to new directors in coordination with the release of material non-public information. We do not time our release of material non-public information for the purpose of affecting the value of director compensation.

     Stock Ownership Guidelines: Directors are required to hold Temple-Inland stock valued at five times their annual retainer fee under the board’s stock ownership guidelines within five years of their election to the board. This stock ownership policy is contained in our Corporate Governance Guidelines. Shares of stock owned by the directors and their immediate family members count toward this requirement. Restricted stock units also count toward this requirement. All our independent directors currently meet these ownership requirements.

     Restricted Stock Units: To encourage economic alignment with stockholders, approximately one-half of the annual director compensation is paid in the form of restricted stock units deferred until retirement. Each quarter, one quarter of the annual grant ($22,500) is allocated to the directors’ accounts. The number of restricted stock units is determined by dividing the quarterly amount by the fair market value of Temple-Inland’s stock on the date deferred. Dividend equivalents are credited on the restricted stock units equal to the amount of dividends Temple-Inland pays on its common stock. Dividend equivalents are paid to the directors in cash. At retirement, the director will receive stock for fees deferred through 2005 and cash for fees deferred beginning in 2006 in payment of the restricted stock units. Cash payments will be based on the fair market value of the stock on the payment date. Fair market value in all cases is equal to the closing price of Temple-Inland stock on the NYSE on the applicable date. The director does not get any payment until retirement. Payment may be taken in a lump sum or in up to fifteen annual installments. Directors may retire at any time, but must retire by the annual meeting following their 72nd birthday.

     Fee Deferral Plan: Fees may be taken in cash or may be deferred until retirement. Deferred fees accrue interest payable at retirement equal to 120% of the quarterly applicable federal long-term rate published by the IRS.

     Frozen Retirement Plan: There is no retirement plan for directors except for a plan that was discontinued in 2000. Under that plan, the following directors will receive at retirement $35,000 per year for the following number of years as a retirement benefit: Mr. Reed — 1 year and Mr. Temple — 17 years. Retirement benefits will be paid to the surviving spouse if the director does not live to receive the full payment, and terminate if the spouse does not live to receive the remaining payment. This plan was discontinued in 2000 and no additional accruals are made under this plan.

     Change in Control Provision: The directors’ restricted stock units, fee deferral plan and the frozen directors’ retirement plan contain provisions for accelerating payment in the event the director’s service terminates due to a change in control, along with a gross-up provision in the event the director is required to pay excise tax on the accelerated payment.

     Charitable Contributions: Directors are eligible for the Temple-Inland Foundation’s matching gifts program, which matches donations made by employees and directors in 2010 on a 1-for-1 basis up to a maximum match of $3,000.

     Insurance and Indemnification: Directors are covered under our business travel accident insurance policy for $100,000 while traveling on our business. Directors are also covered under our director and officer liability insurance policies for claims alleged in connection with their service as a director. We have entered into indemnification agreements with each of our outside directors agreeing to indemnify them to the fullest extent permitted by law for claims alleged in connection with their service as a director.

     2010 Director Compensation: Messrs. Simons and Maley receive no compensation for their services as directors other than their employee pay. We computed the value of fees earned by our non-employee directors using SEC rules which require us to calculate the value of the restricted stock units acquired through deferral of fees using the stock price on the date the fees are earned. However, directors do not receive any payment of the deferred fees until they retire. At retirement, a director receives actual shares of common stock and cash equal in value to the restricted stock units held in his or her account. The value of the shares and cash to be paid at the time the director retires may be different than

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the value of restricted stock units awarded at the time the fee is earned. The following table shows the compensation our directors received for 2010:

			2010 DIRECTOR COMPENSATION
Director	Fees Earned or				All Other
Current Directors:	Paid in Cash(1)		Stock Awards(2)		Compensation(3)		Total
Cassandra C. Carr	$	80,031	$	89,969			$	170,000
E. Linn Draper Jr.	$	112,531	$	89,969	$	6,000	$	208,500
Larry R. Faulkner	$	83,781	$	89,969			$	173,750
Jeffrey M. Heller	$	100,031	$	89,969			$	190,000
W. Allen Reed	$	77,531	$	89,969			$	167,500
Richard M. Smith	$	80,031	$	89,969	$	6,000	$	176,000
Arthur Temple III	$	77,531	$	89,969	$	6,000	$	173,500
R. A. Walker	$	77,531	$	89,969			$	167,500
Former Director:
Donald M. Carlton	$	45,014	$	44,986	$	31,000	$	121,000

(1)

Dr. Draper and Mr. Heller deferred all fees, and their fees will be paid following retirement.

(2)

Includes the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification™ (FAS ASC Topic 718 — Stock Compensation ), applying the same valuation model and assumptions used for financial reporting purposes as outlined in Note 11 to our consolidated financial statements contained in our 2010 Annual Report, disregarding the estimate of forfeitures related to service-based vesting conditions. The fees shown in Stock Awards consist of fees that were earned in 2010 but deferred until retirement. At year-end 2010, the directors held the following aggregate number of deferred restricted stock units:

Director	Deferred Restricted
Current Directors	Stock Units
Cassandra C. Carr		80,345
E. Linn Draper Jr.		93,259
Larry R. Faulkner		74,456
Jeffrey M. Heller		100,908
W. Allen Reed		100,822
Richard M. Smith		68,473
Arthur Temple III		95,328
R. A. Walker		34,128
Former Director
Donald M. Carlton		64,272

     At fiscal year end, the directors held the following aggregate number of stock options:

Director
Current Directors	Stock Options
Cassandra C. Carr		20,000
E. Linn Draper Jr.		—
Larry R. Faulkner		20,000
Jeffrey M. Heller		20,000
W. Allen Reed		6,000
Richard M. Smith		20,000
Arthur Temple III		12,000
R. A. Walker		20,000
Former Director
Donald M. Carlton		10,000

	Expiration dates for these options range from 2012 through 2020. To see option exercise prices, vesting dates, and terms for each director’s options, you may look at his or her latest Form 4 under Investor Relations, SEC Filings, on our website at www.templeinland.com.
(3)	The amounts in All Other Compensation consist of matching charitable donations of $6,000 made by the Temple-Inland Foundation (for grants made in 2009 when the match amount was $6,000), and a $25,000 charitable contribution to honor Dr. Carlton on his retirement.

Selection of Nominees:

     Our Nominating and Governance Committee selects nominees on the basis of recognized achievements and their ability to bring various skills and experience to the deliberations of the board, as described in more detail in the Corporate Governance Guidelines. Non-employee director nominees must be independent as defined in the listing standards of the NYSE and SEC regulations. Nominees must not have a prohibited conflict of interest with our business or ownership. Priority will be given to individuals with outstanding business experience who have served, or may serve, as the chief executive officer of a company.

     Our Nominating and Governance Committee considers director candidates recommended by the directors. After reviewing a potential director’s qualifications, a suitable candidate will be invited to meet with the CEO, Lead Director, Chair of the Nominating and Governance

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Committee, and full board to determine further interest. As set forth in our Governance Guidelines, diversity is one of the factors considered by our board in evaluating nominees for director. We implement this policy by seeking recommendations from our current directors of persons who fulfill our requirements and who have diverse characteristics. Although we are pleased with the effectiveness of our selection of candidates with diverse skills, backgrounds, ages, and other characteristics, the board is committed to identifying candidates with diverse race and gender.

     Our Nominating and Governance Committee will also consider director candidates recommended by stockholders who are entitled to vote for the election of directors at the stockholders’ meeting. In considering candidates submitted by stockholders, the Nominating and Governance Committee will take into consideration the needs of the board and the qualifications of the candidate. Under our corporate governance guidelines, the Nominating and Governance Committee may establish procedures, from time to time, regarding stockholder submission of candidates. A stockholder’s director candidate recommendation must include the following information:

• the name and address of the stockholder making the recommendation and evidence of his or her beneficial ownership of Temple-Inland common stock, including the number of shares and period of ownership, and

• the name of the candidate, the candidate’s résumé or a listing of his or her qualifications to be a director of the Company and the person’s consent to be named as a director if selected by the Nominating and Governance Committee and nominated by the board.

     We may require a stockholder-recommended candidate to furnish such other information as may reasonably be required by us to determine the eligibility of the proposed nominee to serve as a director.

     In addition, stockholders may also nominate director candidates by following the procedures described in the Company’s Bylaws. For information regarding the deadlines and procedures for director nominations by stockholders, please see “Date for Receipt of Stockholder Proposals and Nominations.”

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EXECUTIVE COMPENSATION — COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary:

     During 2010, the Compensation Committee continued to review and improve our executive compensation programs to ensure that we provide appropriate incentives and rewards based upon our pay-for-performance objectives of maximizing ROI and profitably growing our business. The executive compensation programs in place during 2010 operated as intended as evidenced by our continued improvement in ROI since we launched the new Temple-Inland in January 2008.

     To further strengthen our pay-for-performance culture and improve our compensation governance practices, in 2010 the Committee:

• increased the performance/time vested ratio of our long-term incentives to 60%/40%,

• adopted a hedging policy, and

• expanded our clawback policy.

     A summary of our compensation governance practices is on page 29.

     Our compensation program includes an appropriate balance of short-term and long-term performance periods, significant stock ownership, vesting schedules that extend beyond retirement, and strong governance controls. In combination, we believe that these elements tie our executive compensation to our sustained long-term performance. The Compensation Committee has reviewed compensation policies and practices applicable to our executives and employees and concluded that they are unlikely to create any material risks to the Company. As we move forward, the Compensation Committee will continue to monitor trends and developments to ensure that we provide appropriate incentives to drive performance and attract and retain top executive talent to serve the best interests of our stockholders.

Our compensation philosophy:

     Our two key objectives are to maximize ROI and profitably grow our business. Our compensation program is designed to attract and retain executives, and appropriately motivate and reward them for maximizing ROI and profitably growing our business. It is also designed to be transparent, easy to explain and easy to understand.

     We are focused on maximizing ROI because we fundamentally believe there is direct correlation between ROI and stockholder value. We will look for opportunities to profitably grow our business because we can create additional value for stockholders through disciplined growth focused on ROI. We believe accomplishing these objectives creates value for our stockholders.

Our compensation program and pay mix:

     The primary elements of our compensation program are:

Compensation Elements	Primary Purpose	Performance Measure	Measurement Period
Salary	Attract and retain	Annual evaluation	1 Year
Annual Incentive Bonus	Motivate and reward performance	ROI and profitable growth/lower cost	1 Year
Long-term Incentives
RSUs	Motivate and reward performance	Time vested with minimum ROI threshold	3 Years
PSUs	Motivate and reward performance	ROI vs. Peers; no payout if in bottom half	3 Years
Options	Motivate and reward performance	Stock price	10 Years
Retirement Benefits	Attract and retain; reward performance	Formula includes salary & bonus	Career
Change in Control Agreements	Attract and retain	None	None

     Our Compensation Committee determines total compensation and the mix of elements based on competitive data, our philosophy, and their best judgment. Year to year, the exact allocation between elements may vary and we do not use specific formulas to determine the weighting of each element of compensation, but the overall mix is strongly weighted to pay-for-performance with a long-term focus in accordance with our philosophy.

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     We believe a significant portion of executive compensation should be performance based, and performance-based pay generally averages about 80% of our senior executives’ annual compensation, as shown below for our CEO:

     Incentive bonus awards reward performance based primarily on consolidated ROI for corporate executives and segment ROI for segment executives, along with other achievements such as lowering cost and profitable growth. Long-term incentives reward performance utilizing absolute ROI, relative ROI versus peer group, and stock price as performance measures. Both annual incentive awards and long-term incentive awards are designed to align the executives’ interests with our business strategy and motivate performance to maximize ROI and profitably grow our business.

     We believe a majority of our pay should have a long-term focus. Our pay mix emphasizes our long-term pay-for-performance philosophy by providing above average value opportunity through our long-term incentive compensation program for above average performance. Our restricted stock units and performance stock units have a minimum 3-year vesting cycle and our options vest ratably over 4 years with a 10-year exercise period. When executives retire, RSUs and PSUs are paid out in the 2 years following retirement only if performance criteria are met over the full cycle of the award. The 3 executives in our special SERP have a 15-year vesting period.

How each element of compensation is determined:

     Our Compensation Committee uses an independent compensation consultant, Aon Hewitt. The Committee conducts an annual review of Aon Hewitt’s engagement, independence, and fees, and has concluded that Aon Hewitt is independent. Aon Hewitt helps develop a representative comparative group, gathers annual peer group market information, and assists in the valuation of our incentive awards at the date of grant. The Committee evaluates each element of compensation independently to determine whether it is competitive within our industry, or within the market as a whole. The Compensation Committee also reviews a tally sheet that shows all elements of compensation for each named executive officer. The entire board is also furnished with tally sheets for the named executive officers, and makes all decisions concerning the CEO’s pay.

     In 2010 the group of comparative companies in Aon Hewitt’s market survey consisted of: AbitibiBowater Inc., Appleton Papers Inc., Ball Corporation, Boise Inc., Domtar Corp, Georgia Pacific Corporation, PH Glatfelter Co, Graphic Packaging Holding Co, International Paper Company, Martin Marietta Materials, Inc., MeadWestvaco Corp, Mercer International Inc., Neenah Paper Inc., Owens Corning, Packaging Corp of America, Pactiv Corporation, PPG Industries, Inc., Rock-Tenn Co., Rohm & Haas, Smurfit Stone Container Corp, Sonoco Products Company, Trinity Industries, USG Corporation, Verso Paper Holdings LLC, Vulcan Materials Company, Wausau Paper Corp., and Weyerhaeuser Company. Our peer group and Aon Hewitt’s comparative group overlap but are not identical due to practical considerations related to the availability of financial data versus compensation data. At the request of the Compensation Committee, Aon Hewitt uses data from these companies to establish the relationship between revenues and compensation from which a market value of pay can be calculated for a specific revenue size, using a statistical technique known as regression analysis, which adjusts for size disparities among companies.

Salaries:

     Salaries are reviewed annually and are paid in cash. In making its discretionary salary decisions, the Compensation Committee emphasizes the executive’s experience, responsibilities, and performance, along with relative rank to other executives for internal pay equity. No specific formula is applied to determine the weight of each factor and no specific targets are applied. The Compensation Committee has historically followed a policy of using annual incentive awards rather than base salary to reward outstanding performance.

2010 Salary Review

     Our named executive officers did not receive a salary increase in 2010. Although surveys indicate base salaries for most of our named executive officers were generally below the mid-ranges of the applicable comparative companies, we chose to forgo salary increases for the third consecutive year in 2010.

Annual incentive bonus awards:

     Annual incentive bonus awards are paid in cash under a stockholder-approved plan based on (i) overall ROI for corporate executives and segment ROI (adjusted downward for overhead) for segment executives, and (ii) other achievements such as lowering cost and profitable growth. For IRS Section 162(m) purposes, a potential maximum annual incentive award of 250% of target is payable under the plan for positive ROI. For the CEO and President, target is 125% of salary. For all other executives, target is 100% of salary. The Compensation Committee retains the discretion to reduce the size of any annual incentive award. The level of ROI performance necessary for paying the threshold, target and maximum levels is set by the Compensation Committee annually and is not subject to adjustment by management. The following schedule was used by the Compensation Committee in making its payment determinations for 2010:

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	Threshold			Target			Maximum
ROI		1	%		9.0	%		14.0	%
Annual Incentive Award expressed as a % of Target		10	%		100	%		200	%

     In addition to ROI, the Compensation Committee may also consider other achievements such as lowering cost, profitable growth, and promoting a high performance culture focused on our values set forth in our Vision/Mission/Values statement. Payments for other achievements will not exceed 100% of target. Altogether, the bonus paid under the plan for both ROI and other achievements will not exceed 250% of the target annual incentive award.

2010 Annual Incentive Bonus Awards

In 2010, our ROI was 8.2%, up from 7% in 2009 and 4.5% in 2008, resulting in a payment of 91.2% of target for our corporate executives. ROI for our Corrugated Packaging segment, adjusted downward for overhead, was 14.4%, resulting in the maximum payout of 200% of target for our Corrugated Packaging executives, Messrs. Norton and Vesci, as provided for in the plan. In determining the 2010 incentive bonus awards for Messrs. Simons and Maley, the Committee also considered other achievements, including record Corrugated Packaging ROI, completion of Box Plant Transformation I (46% ROI), 6% growth in high value, local box sales, improvement in Building Products EBITDA despite difficult markets, growth in market share for lumber, gypsum, particleboard, and MDF, lower general and administrative costs, and record safety and environmental performance. Based on these achievements, the Compensation Committee awarded Mr. Simons a payment of $760,800, and Mr. Maley a payment of $737,500.

Long-term incentive awards:

     Our stock awards further our long-term pay-for-performance philosophy by providing above average value opportunity for above average performance and all awards contain a performance component. Stock awards are dependent on stock price to provide value and therefore provide strong alignment with stockholders’ interests. Our restricted stock unit awards have threshold ROI criteria to maintain their deductibility under IRS Section 162(m). Performance stock units have a high threshold of ROI performance against the peer group for vesting, which reflects our philosophy that ROI drives stockholder value. The exact allocation among types of awards is determined by the Committee each year in its discretion to achieve a mix of compensation payable in cash and in stock. Using its discretion, the Compensation Committee determines stock awards for each executive in consultation with Aon Hewitt after reviewing competitive market data for similar executives at other companies inside and outside the paper and forest products industries, as well as relative rank to other executives for internal pay equity. In any given year, the weighting among options, restricted stock units, and performance stock units may vary based on availability of shares or other factors, but all of these awards have downside equity performance risk for the executive. In addition to rewarding performance and encouraging long-term focus, long-term incentive awards also help retain executives because they contain forfeiture provisions if the executive terminates employment other than for retirement, death, disability, or change in control. RSUs and PSUs are paid out in the years following retirement only if performance criteria is met over the full 3-year cycle of the award. Our stock awards have the following terms:

Non-qualified Options	Options are granted at fair market value on the date of grant, become exercisable 25% each year over four years, provide for accelerated vesting upon retirement, disability, death, or if there is a change in control, and expire in ten (10) years. Income tax withholding may be paid with exercised shares. The exercise price is the closing price of Temple-Inland stock on the NYSE on the grant date.
Restricted Stock Units	Restricted stock units vest on the third anniversary from the date of grant if Temple-Inland has either (i) an ROI of at least one percent (annualized) over the three-year award period or (ii) an ROI over the award period that falls within the top three quartiles as compared to the peer group. RSUs are settled in stock or cash depending on the terms of the awards when granted at a value based on the closing price of Temple-Inland stock on the NYSE on the vesting date. RSUs provide for accelerated vesting upon disability, death, or if there is a change in control of Temple-Inland, or continued vesting at retirement. Dividends are only paid if the underlying awards are earned to further align interest with stockholders and provide a retention device.
Performance Stock Units	Performance stock units are restricted stock units that vest 0%, 75%, or 100% on the third anniversary from the date of grant depending on our ROI during the three years beginning in the year of the grant compared to the peer group ROI. If performance is in the top quartile, then there is a 100% payment and if in the second quartile, then there is a 75% payment. No payment is made if performance is below the top half compared to the peer group, reflecting our strong commitment to pay-for-performance and our belief that ROI drives stockholder value. PSUs provide for accelerated vesting upon disability, death or if there is a change in control, or continued vesting at retirement. All grants are payable in cash. Dividends are only paid if the underlying awards are earned to further align interest with stockholders and provide a retention device.
Grant Practices	Our longstanding practice is to make annual grants each year at the February board meeting which are valued at the closing price of our common stock on the NYSE on the grant date. Executives do not have any role in choosing the price of their options or other stock awards. We do not “back date,” “spring load” or reprice options or other stock awards. The full independent board approves awards to the CEO and ratifies awards granted by the Compensation Committee to other executives. On occasion, newly hired high-level employees may be granted awards by the Compensation Committee in connection with the start of their employment other than at the February board meeting and an initial grant may be made above usual annual levels. We do not have any program, plan or practice to time option grants or other stock awards in coordination with the release of material non-public information nor do we time the release of material non-public information for the purpose of affecting the value of executive compensation. Gains from exercising stock options and the vested value of long-term incentive awards are not considered in setting other benefits such as life insurance, disability benefits, or retirement benefits.

9 

2010 Annual LTI Awards

• To further strengthen our pay-for-performance culture, the Committee increased the performance/time vested mix of our long term incentives from 50%/50% to 60%/40% in 2010 as follows:

• 30% options

• 30% performance stock units

• 40% restricted stock units

• In 2009 we issued fixed value awards in place of restricted stock units to minimize potential volatility in our stock based compensation expense when the stock price recovered, as well as to provide a stable retention value for executives. The fixed value awards had the same term and performance criteria as our restricted stock units. In 2010, the Committee returned to granting restricted stock units at our February meeting in accordance with our longstanding belief that RSUs are aligned with stockholder value. The value of the 2009 awards and 2010 awards is approximately the same, but the two types of awards are reported differently under SEC rules. See the Important Note to the Summary Compensation Table for further information.

• We amended our stock plan to formally recognize our policy that time-vested full value awards payable in stock have a minimum vesting period of not less than three (3) years and performance-based full value awards payable in stock have a minimum vesting period of not less than one (1) year.

Stock Ownership Guidelines:

     To encourage stockholder alignment, executives must meet minimum stock ownership guidelines. Our named executive officers hold in excess of the required amounts:

		Required
Named Executive		Multiple of
Officer	Position	Salary
Doyle R. Simons	Chief Executive Officer		5
J. Patrick Maley III	President and Chief Operating Officer		3
Randall D. Levy	Chief Financial Officer		3
Larry C. Norton	Group Vice President		3
Dennis J. Vesci	Group Vice President		3

     Shares owned by the executive and their immediate family members count toward the ownership guidelines. RSUs and PSUs also count toward the total. Options do not count until they are exercised. Executives have five years from hiring or pay increases to meet the guidelines. Our executive officers are required to hold 100% of the net shares acquired through the exercise of options until they meet our ownership guidelines. The Compensation Committee maintains discretion to reduce or eliminate future long-term incentive awards for an executive who is not making adequate progress toward meeting the stock ownership guidelines or does not retain the required level of net shares acquired through the exercise of options.

Retirement and other Benefits:

     We participate in industry compensation surveys to determine whether our benefits remain competitive and also receive feedback from potential employees we are recruiting. Our named executive officers receive the same health and welfare and tax-qualified retirement and 401(k) savings benefits as other salaried employees. Health and welfare benefits are reviewed annually with assistance from a benefits consultant. Retirement and 401(k) benefits have a long-term focus, and are therefore reviewed with assistance from a benefits consultant less frequently. The Compensation Committee and the board had multiple discussions over a period of several years about whether to continue our defined benefit retirement plan or to change to a defined contribution plan. Following a review of paper industry trade association data and data provided by our actuary, and extensive analysis by our human resources, finance and accounting departments, the board in 2007 approved a continuation of our defined benefit retirement plan with a simpler formula for new hires. We believe a defined benefit plan offers a competitive advantage in recruiting new executives and is no more costly than a defined contribution plan. Our SERP is a valuable incentive to attract executives. It is also a valuable retention tool for existing executives who must meet service criteria to qualify for the plan.

     Our named executive officers are provided minimal perquisites, consisting of reasonable club dues, a $5 million personal liability umbrella insurance policy, and limited personal use of our corporate aircraft for which the officers are taxed according to IRS regulations.

Employment and Severance Agreements:

     Occasionally we sign a letter agreement with a new executive upon hiring which generally does not cover more than the first year’s pay and annual incentive award. Except for Mr. Simons, none of our other named executive officers has an employment agreement. We entered into the agreement with Mr. Simons in 2007 upon his election as CEO, after careful study and review of Aon Hewitt data concerning terms applicable to CEOs in the general marketplace. During the term of the agreement, Mr. Simons will receive a base salary which may not be reduced below its level at the time the agreement was initially entered into ($780,000) or any increase subsequently granted. He will be eligible for a performance-based annual cash incentive award, employee benefits, equity (long-term incentive plan) grants, and other perquisites. Other perquisites consist

10 

of use of the Temple-Inland aircraft (subject to imputation of income under IRS regulations) and umbrella insurance, all on terms substantially no less favorable than in effect prior to the effective date of the agreement. The performance-based annual incentive award program is entirely within the discretion of the Compensation Committee, except that it shall be substantially no less favorable than the program in effect prior to the effective date of the agreement. If Mr. Simons dies or becomes disabled, he or his estate will receive a benefit equal to his salary and target annual incentive award for the portion of the year in which his death or disability occurred. Under his agreement, Mr. Simons receives no severance and forfeits any unvested long-term incentives if he voluntarily terminates or is terminated for cause. If we terminate his employment without cause, Mr. Simons agrees not to compete in our industry for two years and not to recruit our executives, which we think is critical given our success in executing our strategy and the quality of our management team. We think it is only fair to pay him under that circumstance because he is not allowed to work, and to vest the long-term incentives that he would otherwise forfeit. We added performance criteria to these awards in 2009 to preserve our tax deduction for this compensation under Section 162(m). The term of Mr. Simons’s agreement is three years, but it is automatically extended by one year on each anniversary unless notice of nonrenewal is given at least one year in advance of such anniversary date. We believe this agreement is a valuable retention tool with covenants that protect the Company.

     We do not have a plan or policy to provide severance benefits to executives whose employment terminates. Generally speaking, severance is a matter that is individually negotiated with the executive and the amount depends on the circumstances of his or her departure.

     Change in control agreements are reviewed periodically with the assistance of the Board’s Compensation Consultant if any major program changes are contemplated. In our opinion, these agreements are necessary to recruit new executives in our industry, which has experienced ongoing consolidation. Change in control agreements also serve as a retention device and all of the named executive officers hold change in control agreements. During a potential change in control, we do not want executives leaving to pursue other employment out of concern for the security of their jobs. The agreements contain a double “trigger,” meaning that severance is payable only if an executive’s employment is terminated within two years following a change in control event. Termination of employment is deemed to occur if the executive terminates employment for a “good reason” such as a substantial reduction in the executive’s base salary or failure to provide benefits substantially similar to the material benefits enjoyed by the executive immediately prior to the change in control. The change in control provisions contain a double trigger requirement of a change in control event plus a termination of employment because they provide for severance payments. Our stock plan agreements provide for accelerated vesting of stock awards the executive has already received, not for additional payments. These agreements require a single trigger, the change in control event. This protects the executive because it provides him or her with an opportunity to vote any vested restricted shares and exercise and vote the option shares as a stockholder, and generally performance criteria would no longer be relevant due to changes in the businesses following any consolidation. The existence of these accelerated vesting provisions provides a valuable recruitment and retention tool.

Compensation Administration and Governance:

     Our governance practices divide responsibility for compensation oversight into three levels:

Stockholders:	Stockholders approve all stock incentive plans. We do not have any stock plans that are not stockholder-approved.
Board:	The full independent board evaluates CEO performance and approves CEO pay, approves succession plans, and reviews tally sheets for the named executive officers. The inside directors, Mr. Simons and Mr. Maley, do not participate in discussions of their pay.
	The Compensation Committee, composed entirely of independent, outside directors:

• establishes and administers compensation programs and philosophies.

• approves employment agreements, salaries, annual incentive bonus awards, long-term incentive awards, retirement formulas, and all other compensation paid to executive officers.

• approves all change in control agreements.

• approves bonus pools for non-executive employees.

• reviews an annual compensation risk assessment.

Management: The CEO and Senior Vice President/Corporate Secretary serve as liaisons with the Compensation Committee and oversee administration of actions approved by the Compensation Committee. Management also approves all compensation programs relative to non-executive employees.

2010 Governance Actions

In 2010, we made the following changes to our governance practices:

• We expanded our “clawback” policy that allows the Board to recoup unearned compensation in the event of a material restatement of our financial statements. This policy is broader than the policy contained in the SEC’s regulations.

• We adopted a policy prohibiting named executive officers and directors from entering into transactions that are designed to hedge or offset any decrease in the market value of Company stock.

     We have a strong commitment to governance and utilize meaningful controls in our compensation programs, including:

• Tally sheets: Tally sheets for each of the named executive officers are reviewed by the Compensation Committee and the board for compensation each year. These tally sheets list the executive’s salary, proposed annual incentive award and stock awards, and the 401(k) matching contribution, retirement, health and welfare benefits.

• CEO Evaluation and Pay by Independent Directors: The independent members of the board complete an evaluation of the CEO each year, which is compiled confidentially by Aon Hewitt and provided to the Compensation Committee. Factors evaluated include

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	ROI, profitable growth of our business, lowering costs and other financial and non-financial performance measures and objectives, including leadership, ethics, strategic planning, financial results, succession planning, human resources/EEO, communications, external relations, and board relations. The Compensation Committee discusses CEO pay in executive session and reports its recommendations to the independent members of the board. The independent members of the board approve all actions related to the CEO’s compensation.
•	Risk Assessment: Each year, we perform a risk assessment of our executive and employee compensation programs as part of our annual enterprise risk management process. Senior officers analyze whether our compensation philosophy is aligned with our strategic goals, whether our compensation policies and programs contain any metrics, provisions, or features that incentivize risk, and the existence of controls and safeguards that prevent or mitigate risk. This risk assessment is reviewed with the Compensation Committee.
•	Independent Consultant: The Compensation Committee engaged Aon Hewitt as its compensation consultant independently, and not through a management recommendation. Aon Hewitt provides annual market and other specific information on executive pay and also attends Compensation Committee meetings on request of the committee. The Compensation Committee periodically meets in executive session with Aon Hewitt. Aon Hewitt also serves as consultant to the Nominating and Governance Committee on director compensation. The Compensation Committee annually assesses the independence of its consultant. With the Compensation Committee’s approval, Aon Hewitt also prepares the change in control calculations for disclosure in the proxy statement and models the number of shares to be requested for new stock plans. Hewitt merged with Aon in 2010. In 2010, Hewitt was the Committee’s compensation consultant and did not perform any additional services for the Company. Prior to Hewitt’s merger with Aon, Aon performed a small amount of work for the Company, which was discontinued following the merger.
•	Policy on “clawback” of compensation: Clawback provisions are included in all awards under our 2010 Incentive Plan. Under the clawback provision, the board may require an employee to repay the portion of any annual incentive awards and long-term incentive awards that was not earned due to a restatement of our financial statements. If the employee’s fraud or misconduct was a significant contributing factor to the restatement, all outstanding long-term incentive awards may be cancelled. If an executive leaves under circumstances that call into question whether any compensation amounts paid to him or her were validly earned, we would pursue any legal rights we deemed appropriate under the circumstances.
•	Hedging Policy: Named Executives and Directors are prohibited from entering into transactions that are designed to hedge or offset any decrease in the market value of our stock.

Accounting and Tax Considerations:

     For accounting purposes, salaries, annual incentive awards, the fair value of stock-based compensation and other benefits are charged to expense as earned. For tax purposes, salaries, annual incentive awards and other benefits are taken as a tax deduction when paid to the executive or contributed to a tax-qualified retirement plan subject to the IRS Section 162(m) limitation described above. For tax purposes, stock-based compensation awards are generally taken as a tax deduction when the award is vested or exercised by the executive. Our policy is to obtain the maximum possible tax deduction for compensation paid to executive officers, but we may forego all or some portion of a deduction to conform to our compensation goals and objectives. Except for amounts that are not material, all compensation paid in 2010 should qualify for a deduction under IRS Section 162(m).

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EXECUTIVE COMPENSATION TABLES

Summary Compensation:

IMPORTANT NOTE ON STOCK AWARD VALUATIONS

     In 2009, Temple-Inland, our peers, and the market in general experienced depressed valuations due to the severe downturn in the economy and distressed financial markets. To mitigate the number of shares that would be required to approximate a value consistent with prior grants and the impact a recovery in our share price would have on our stock-based compensation expense, we adjusted the mix and terms of our long-term incentive grant for 2009 by granting fewer options and by granting cash performance units in place of restricted stock units. Pursuant to SEC rules, the cash performance units are not reported in the Summary Compensation Table until they are paid, making a comparison of year over year total long-term incentive awards difficult. The table below compares the CEO’s awards for the two years on a consistent basis.

							Cash		Long Term
	Stock		Stock		Option		Performance		Incentive Total
	Price		Awards		Awards		Units*		Value
2010 Award	$	19.56	$	3,039,281	$	1,150,447			$	4,189,728
2009 Award	$	5.64	$	1,612,002	$	682,138	$	1,577,500	$	3,871,640

* Not reportable in the Summary Compensation Table under SEC Rules. See footnote 2 to the Summary Compensation Table for further information on stock award values.

     The following table summarizes all compensation earned in the last three years by our Chairman and CEO, our Chief Financial Officer, and the three other most highly compensated executive officers who were serving as executive officers at year-end 2010.

2010 SUMMARY COMPENSATION TABLE
											Change in Pension
											Value and
											Nonqualified
									Non-Equity		Deferred
					Stock		Option		Incentive Plan		Compensation		All Other
Named Executive Officer	Year		Salary(1)		Awards(2)		Awards(2)(3)		Compensation		Earnings(4)		Compensation(5)		Total
Doyle R. Simons		2010	$	780,000	$	3,039,281	$	1,150,447	$	1,650,000	$	1,573,109	$	16,421	$	8,209,258
Chairman and CEO		2009	$	810,000	$	1,612,002	$	682,138	$	1,401,125	$	1,092,114	$	18,792	$	5,616,171
		2008	$	774,538	$	1,432,685	$	642,041	$	487,500	$	970,848	$	18,118	$	4,325,730
J. Patrick Maley III		2010	$	625,000	$	2,431,431	$	920,354	$	1,450,000	$	1,344,970	$	42,071	$	6,813,826
President and COO		2009	$	649,039	$	1,289,603	$	545,711	$	1,250,000	$	1,180,704	$	27,388	$	4,942,445
		2008	$	621,926	$	1,146,152	$	513,633	$	700,000	$	904,977	$	26,576	$	3,913,264
Randall D. Levy		2010	$	425,000	$	1,388,138	$	525,445	$	387,600	$	334,925	$	12,112	$	3,073,220
Chief Financial Officer		2009	$	441,346	$	736,257	$	311,556	$	331,500	$	590,930	$	12,333	$	2,423,922
		2008	$	425,000	$	711,867	$	281,047	$	212,500	$	856,694	$	15,500	$	2,502,608
Larry C. Norton		2010	$	374,999	$	1,118,418	$	423,347	$	750,000	$	127,121	$	19,829	$	2,813,714
Group Vice President		2009	$	389,422	$	593,198	$	251,017	$	700,000	$	81,004	$	14,166	$	2,028,807
		2008	$	372,115	$	586,190	$	223,775	$	375,000	$	58,493	$	11,000	$	1,626,573
Dennis J. Vesci		2010	$	350,000	$	1,099,117	$	416,042	$	700,000	$	1,234,052	$	36,081	$	3,835,292
Group Vice President		2009	$	363,461	$	582,979	$	246,694	$	700,000	$	884,505	$	26,884	$	2,804,523
		2008	$	347,106	$	569,712	$	221,282	$	350,000	$	564,716	$	31,958	$	2,084,774

(1)	The named executive officers did not receive any salary increases in 2009 or 2010. Because we operate under a 52/53 week fiscal calendar, actual pay received varies based on the number of biweekly pay periods occurring in the year. Annual rates of pay for Messrs. Simons, Maley, Levy, Norton and Vesci in 2010 were $780,000, $625,000, $425,000, $375,000 and $350,000, the same as in 2009.
(2)	The value of the stock awards was determined in accordance with FAS ASC Topic 718 and assumes maximum pay-out in stock or in cash based on the stock price at the time of vesting. In 2010, the Committee awarded our named executive officers long term incentive awards at our February meeting in accordance with our longstanding practice. The Committee’s compensation consultant estimated these grants to approximate the same value as our 2009 awards. SEC reporting requirements, however, result in a greater value being reported in the Summary Compensation Table for the 2010 awards compared with the 2009 awards. The closing price on the February 5, 2010 date of grant was $16.71, which was used by the Committee in determining value and the option exercise price. Certain of these grants were subject to stockholder approval of a new plan, which was received on May 7, 2010 when the closing price was $19.56. SEC rules require the $19.56 price to be used in the Summary Compensation Table for any awards subject to stockholder approval. The fact that our stock price increased 17% after the date of grant, as well as the fact noted above that 2009 cash performance units are not reported in this table until they are paid out, results in the 2010 awards being reported at a greater value than the 2009 awards.
(3)	The grant date fair value of stock options for the named executive officers was determined in accordance with FAS ASC Topic 718. Fair value of the option awards was determined using the Black-Scholes-Merton option pricing model. The following table lists the per share fair values by grant date for our named executive officers:

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	Estimated Fair		Expected			Expected			Risk-Free
	Value Per Share of		Dividend			Stock Price			Interest			Expected Life
Grant Date	Options Granted		Yield			Volatility			Rate			of Option
2/5/2010	$	10.16		3.2	%		64.8	%		3.4	%		8
2/6/2009	$	2.49		3.2	%		56.6	%		2.7	%		8
2/1/2008	$	2.42		2.1	%		28.2	%		3.6	%		10

(4)	Represents the 2010 change in the actuarial present value of accumulated pension benefits. We do not have a deferred compensation program.
(5)	All Other Compensation for 2010 includes:

			Personal				Umbrella
	401(k)		Use of		Club		Liability		Charitable
Named Executive Officer	Match(a)		Aircraft(b)		Dues(c)		Insurance		Contributions		Other(d)
Doyle R. Simons(c)	$	11,025			$	1,809	$	587	$	3,000
J. Patrick Maley III(d)	$	11,025	$	21,459			$	587			$	9,000
Randall D. Levy	$	11,025					$	587	$	500
Larry C. Norton(d)	$	11,025	$	7,017			$	587			$	1,200
Dennis J. Vesci	$	11,025	$	19,527	$	4,942	$	587

(a)	For each dollar that an employee contributes to his or her 401(k) savings account, we contribute a match of $1 up to 3% of the employee’s compensation. For each $1 that an employee contributes of his or her next 3% of pay, we contribute 50 cents. The match vests after 2 years of employment.
(b)	Incremental cost of personal use of aircraft includes fuel costs, engine maintenance expenses, crew expenses, ground fees, and other miscellaneous expenses such as meals.
(c)	Mr. Simons holds a membership to a dinner club for use in hosting business functions.
(d)	Other for Mr. Maley and Mr. Norton is for personal use of our facilities.

Grants of Plan-Based Awards:

     The following table summarizes grants of plan-based compensation awards made in 2010 to the named executive officers:

													Estimated Future Payouts
							Estimated Future Payouts						Under
							Under Non-Equity						Equity Incentive Plan
							Incentive Plan Awards(1)						Awards(2)(3)
																	All Other
																	Option
																	Awards:		Exercise		Grant Date
																	Number of		or Base		Fair Value
																	Securities		Price of		of Stock
															Target/		Underlying		Option		and Option
					Board		Threshold				Maximum		Threshold		Maximum		Options(2)(4)		Awards(2)(4)		Awards(2)(4)
Name			Grant Date(4)		Approval Date		($)		Target ($)		($)		(#)		(#)		(#)		($/Sh)		($)
Doyle R. Simons
	(5	)		5/7/2010		2/5/2010	$	97,500	$	975,000	$	2,437,500				87,695		113,233	$	16.71	$	4,189,728
	(6	)		5/7/2010		2/5/2010								59,424		79,232
J. Patrick Maley III
	(5	)		5/7/2010		2/5/2010	$	78,125	$	781,250	$	1,953,125				70,156		90,586	$	16.71	$	3,351,785
	(6	)		5/7/2010		2/5/2010								47,540		63,386
Randall D. Levy
	(5	)		5/7/2010		2/5/2010	$	42,500	$	425,000	$	1,062,500				40,053		51,717	$	16.71	$	1,913,582
	(6	)		5/7/2010		2/5/2010								27,141		36,188
Larry C. Norton
	(5	)		5/7/2010		2/5/2010	$	37,500	$	375,000	$	937,500				32,271		41,668	$	16.71	$	1,541,765
	(6	)		5/7/2010		2/5/2010								21,867		29,156
Dennis J. Vesci
	(5	)		5/7/2010		2/5/2010	$	35,000	$	350,000	$	875,000				31,714		40,949	$	16.71	$	1,515,159
	(6	)		5/7/2010		2/5/2010								21,490		28,653

(1)	Threshold is 10% of target annual incentive award payable if ROI is 1%. Target bonus is 125% of salary for CEO and COO for ROI of 9%, 100% of salary for all others. Maximum is 200% of target for ROI of 14%. An additional amount may be paid for achievement of growth and value objectives pre-approved by the Compensation Committee; however, a maximum payout for both the ROI component and the other achievements component may not exceed 250% of target.
(2)	Our long-term incentive plan provides for equitable adjustment in the event of stock splits or other equity restructurings. Awardees generally receive the same adjustment stockholders receive.
(3)	ROI, for purposes of our long-term incentive performance criteria, is defined and calculated as set forth in Item 7 of our 2010 Form 10-K. RSU and PSU awards contain performance criteria that uses a peer group. We chose our peer group by including the companies that compete with us for capital from equity and debt investors. Within the S&P Paper & Forest Products group, we excluded any companies

14 

	that are not SEC registrants, because their financial data is not publicly available. We also excluded timber companies, because we sold our timberlands, and single product building products companies because they do not principally manufacture paper. Our peer group consists of North American papermakers/converters, some of whom also manufacture some building products or make some grade of paper and manufacture a portfolio of building products, as follows: AbitibiBowater Inc.; Appleton Papers Inc.; Boise Inc.; Canfor Corporation; Cascades Inc.; Catalyst Paper; Domtar Corporation; P.H. Glatfelter; Graphic Packaging Holding Co.; International Paper Company; MeadWestvaco Corporation; Mercer International Inc.; Neenah Paper Corp.; NewPage Corp.; Packaging Corporation of America; Rock-Tenn Co.; Smurfit-Stone Container Corporation; Verso Paper Corp.; Wausau Paper Corporation; and West Fraser Timber Co. Ltd. The Compensation Committee will periodically adjust the peer group to reflect mergers, consolidations, and similar restructurings.
(4)	Options granted February 5, 2010 to purchase our common stock. The exercise price is the $16.71 closing price of Temple-Inland stock on the NYSE on February 5, 2010, the date the options were granted by the Committee. These grants were subject to stockholder approval of a new plan, which was approved by the stockholders on May 7, 2010 when the closing price of Temple-Inland stock was $19.56. FAS rules consider the “grant date” to be the date when all conditions to grant are met, and therefore the “grant date value” is shown as the value on the date when stockholders approved the new plan. All grants to the named executive officers provide for accelerated vesting upon retirement, disability, death, or if there is a change in control. Withholding taxes may be paid with exercised shares. No general or freestanding stock appreciation rights (SARs) were granted. All options awarded to the executives become exercisable in 25% increments on February 5 in years 2011, 2012, 2013, and 2014, and have a ten-year term expiring February 5, 2020.
(5)	The performance goal for the 2010 RSUs is Temple-Inland having either (i) an ROI of at least one percent (annualized) over the three-year award period or (ii) an ROI over the award period that falls within the top three quartiles as compared to the Company’s peer group. The RSUs are payable in shares of stock. Dividends on the RSUs are accrued and payable only if the underlying awards are paid. ROI means operating income (as currently shown on the Company’s income statement, or the reported equivalent in the event of any change in reporting), excluding significant unusual items (currently reported as other operating income (expense) not allocated to segments, or the reported equivalent in the event of any change in reporting) divided by beginning of year investment defined as the Company’s total assets (or the reported equivalent in the event of any change in reporting), less certain assets (assets held for sale, municipal bonds related to capital leases included in other assets and acquisitions/divestitures) and certain liabilities (current liabilities, excluding current portion of long-term debt). ROI, for purposes of our long-term incentive performance criteria is defined and calculated as set forth in Item 7 of our 2010 Form 10-K. RSUs provide for continued vesting after retirement if performance criteria are achieved, or accelerated vesting upon death, disability, or a change of control.
(6)	The PSUs are restricted stock units that vest 100%, 75%, or 0% on the third anniversary from the date of grant depending on our ROI during the three years beginning in the year of the grant compared to the peer group ROI. If performance is in the top quartile, there is a 100% payment and if performance is in the second quartile, there is a 75% payment. No payment is made if performance is below the top half compared to the peer group. PSUs provide for continued vesting after retirement if performance criteria are achieved, or accelerated vesting upon death, disability, or a change of control. The 2010 PSUs are payable in cash. Dividends on PSUs are accrued and payable only if the underlying awards are paid.

Outstanding Equity Awards At Year-End 2010:

     The following table summarizes stock-based compensation awards outstanding at year-end 2010 for the named executive officers.

2010 Outstanding Equity Awards — Temple Inland Inc.

	Option Awards								Stock Awards
										Equity Incentive
									Equity	Plan Awards:
									Incentive	Market or
									Plan Awards:	Payout
									Number of	Value of
									Unearned	Unearned
	Number of Securities								Shares, Units or	Shares, Units or
	Underlying Unexercised								Other Rights	Other Rights that
	Options				Option		Option		that Have not	Have not
	Exercisable		Unexercisable		Exercise		Expiration		Vested(1)(2)(3)	Vested(1)(2)(3)	Vesting
Name	(#)		(#)		Price ($)		Date		(#)	($)	Date
Doyle R. Simons Chairman & CEO
		20,000			$	10.56		02/01/12			Vested
		20,000			$	6.92		02/07/13			Vested
		16,000			$	11.96		02/06/14			Vested
		32,000			$	16.14		02/04/15			Vested
		32,800			$	21.55		02/03/16			Vested
		24,600			$	24.34		02/02/17			Vested
				8,200	$	24.34		02/02/17				02/02/11
		132,653			$	19.50		02/01/18			Vested
				66,326	$	19.50		02/01/18				02/01/11
				66,327	$	19.50		02/01/18				02/01/12
		68,487			$	5.64		02/06/19			Vested
				68,488	$	5.64		02/06/19				02/06/11
				68,488	$	5.64		02/06/19				02/06/12
				68,488	$	5.64		02/06/19				02/06/13
				28,308	$	16.71		02/05/20				02/05/11
				28,308	$	16.71		02/05/20				02/05/12

15 

2010 Outstanding Equity Awards — Temple Inland Inc.

	Option Awards								Stock Awards
											Equity Incentive
									Equity		Plan Awards:
									Incentive		Market or
									Plan Awards:		Payout
									Number of		Value of
									Unearned		Unearned
	Number of Securities								Shares, Units or		Shares, Units or
	Underlying Unexercised								Other Rights		Other Rights that
	Options				Option		Option		that Have not		Have not
	Exercisable		Unexercisable		Exercise		Expiration		Vested(1)(2)(3)		Vested(1)(2)(3)		Vesting
Name	(#)		(#)		Price ($)		Date		(#)		($)		Date
				28,308	$	16.71		02/05/20						02/05/13
				28,309	$	16.71		02/05/20						02/05/14
								2/1/2011		73,471	$	1,560,524		02/01/11
								2/6/2012		285,816	$	6,070,732		02/06/12
								2/5/2013		87,695	$	1,862,642		02/05/13
								2/5/2013		79,232	$	1,682,888		02/05/13
Totals		346,540		459,550						526,214	$	11,176,786
J. Patrick Maley III President & CEO
		30,000			$	7.56		05/07/13					Vested
		18,000			$	11.96		02/06/14					Vested
		32,000			$	16.14		02/04/15					Vested
		32,800			$	21.55		02/03/16					Vested
		24,600			$	24.34		02/02/17					Vested
				8,200	$	24.34		02/02/17						02/02/11
		106,122			$	19.50		02/01/18					Vested
				53,061	$	19.50		02/01/18						02/01/11
				53,062	$	19.50		02/01/18						02/01/12
		54,790			$	5.64		02/06/19					Vested
				54,790	$	5.64		02/06/19						02/06/11
				54,790	$	5.64		02/06/19						02/06/12
				54,791	$	5.64		02/06/19						02/06/13
				22,646	$	16.71		02/05/20						02/05/11
				22,647	$	16.71		02/05/20						02/05/12
				22,646	$	16.71		02/05/20						02/05/13
				22,647	$	16.71		02/05/20						02/05/14
								2/1/2011		58,777	$	1,248,423		02/01/11
								2/6/2012		228,653	$	4,856,590		02/06/12
								2/5/2013		70,156	$	1,490,113		02/05/13
								2/5/2013		63,386	$	1,346,319		02/05/13
Totals		298,312		369,280						420,972	$	8,941,445
Randall D. Levy Chief Financial Officer
		40,000			$	10.56		02/01/12					Vested
		30,000			$	6.92		02/07/13					Vested
		24,000			$	11.96		02/06/14					Vested
		24,000			$	16.14		02/04/15					Vested
		24,600			$	21.55		02/03/16					Vested
		18,450			$	24.34		02/02/17					Vested
				6,150	$	24.34		02/02/17						02/02/11
		58,067			$	19.50		02/01/18					Vested
				29,034	$	19.50		02/01/18						02/01/11
				29,034	$	19.50		02/01/18						02/01/12
		31,280			$	5.64		02/06/19					Vested
				31,281	$	5.64		02/06/19						02/06/11
				31,281	$	5.64		02/06/19						02/06/12
				31,281	$	5.64		02/06/19						02/06/13
				12,929	$	16.71		02/05/20						02/05/11
				12,929	$	16.71		02/05/20						02/05/12
				12,929	$	16.71		02/05/20						02/05/13
				12,930	$	16.71		02/05/20						02/05/14
								2/1/2011		36,506	$	775,387		02/01/11
								2/6/2012		130,542	$	2,772,712		02/06/12
								2/5/2013		40,053	$	850,726		02/05/13
								2/5/2013		36,188	$	768,633		02/05/13
Totals		250,397		209,778						243,289	$	5,167,458

16 

2010 Outstanding Equity Awards — Temple Inland Inc.

									Stock Awards
											Equity Incentive
											Plan Awards:
									Equity Incentive		Market or
									Plan Awards:		Payout
									Number of		Value of
	Option Awards								Unearned		Unearned
	Number of Securities								Shares, Units or		Shares, Units or
	Underlying Unexercised								Other Rights		Other Rights that
	Options				Option		Option		that Have not		Have not
	Exercisable		Unexercisable		Exercise		Expiration		Vested(1)(2)(3)		Vested(1)(2)(3)		Vesting
Name	(#)		(#)		Price ($)		Date		(#)		($)		Date
Larry C. Norton Group VP-Paperboard
		46,234			$	19.50		02/01/18					Vested
				23,117	$	19.50		02/01/18						02/01/11
				23,118	$	19.50		02/01/18						02/01/12
		25,202			$	5.64		02/06/19					Vested
				25,203	$	5.64		02/06/19						02/06/11
				25,202	$	5.64		02/06/19						02/06/12
				25,203	$	5.64		02/06/19						02/03/13
				10,417	$	16.71		02/05/20						02/05/11
				10,417	$	16.71		02/05/20						02/05/12
				10,417	$	16.71		02/05/20						02/05/13
				10,417	$	16.71		02/05/20						02/05/14
								2/1/2011		30,061	$	638,496		02/01/11
								2/6/2012		105,177	$	2,233,959		02/06/12
								2/5/2013		32,271	$	685,436		02/05/13
								2/5/2013		29,156	$	619,273		02/04/14
Totals		71,436		163,511						196,665	$	4,177,164
Dennis J. Vesci(2)(4) Group VP-Corrugated
		5,000			$	16.14		02/04/15					Vested
		18,450			$	21.55		02/03/16					Vested
		13,837			$	24.34		02/02/17					Vested
				4,613	$	24.34		02/02/17						02/02/11
		45,719			$	19.50		02/01/18					Vested
				22,860	$	19.50		02/01/18						02/01/11
				22,860	$	19.50		02/01/18						02/01/12
		24,768			$	5.64		02/06/19					Vested
				24,769	$	5.64		02/06/19						02/06/11
				24,768	$	5.64		02/06/19						02/06/12
				24,769	$	5.64		02/06/19						02/06/13
				10,237	$	16.71		02/05/20						02/05/11
				10,237	$	16.71		02/05/20						02/05/12
				10,237	$	16.71		02/05/20						02/05/13
				10,238	$	16.71		02/05/20						02/05/14
								2/1/2011		29,216	$	620,548		02/01/11
								2/6/2012		103,365	$	2,195,473		02/06/12
								2/5/2013		31,714	$	673,605		02/05/13
								2/5/2013		28,653	$	608,590		02/05/13
Totals		107,774		165,588						192,948	$	4,098,216

(1)	Value based on the closing market price of our common stock on December 31, 2010, the last trading day prior to our year-end date of January 1, 2011, of $21.24. RSUs and PSUs vest three years after the date of grant only if minimum performance criteria are met. Market value shown assumes all performance criteria are met and the maximum value is paid.
(2)	In addition to the above Outstanding Equity Awards, Mr. Vesci holds the following restricted stock units pursuant to his participation in a deferred annual incentive award program:

Date Deferred	RSUs Payable in Shares		RSUs Payable in Cash
02/15/2001		1,217		398
02/01/2002		656		214
02/07/2003		1,920		627
02/04/2005		234		76
02/02/2007		656		214
02/01/2008				5,829
Total		4,683		7,358

17 

2010 Outstanding Equity Awards — Forestar Group Inc.

									Stock Awards
									Equity		Equity
									Incentive Plan		Incentive
									Awards:		Plan Awards:
									Number of		Market or
									Unearned		Payout Value
	Option Awards								Shares,		of Unearned
	Number of Securities								Units or Other		Shares, Units or
	Underlying Unexercised								Rights that		Other Rights
	Options				Option		Option		Have not		that Have not
	Exercisable		Unexercisable		Exercise		Expiration		Vested(1)(2)(3)		Vested(1)(2)(3)		Vesting
Name	(#)		(#)		Price ($)		Date		(#)		($)		Date
Doyle R. Simons
		6,666			$	11.76		02/02/11					Vested
		6,666			$	13.26		02/01/12					Vested
		6,666			$	8.68		02/07/13					Vested
		5,333			$	15.02		02/06/14					Vested
		10,666			$	20.26		02/04/15					Vested
		10,933			$	27.06		02/03/16					Vested
		8,200			$	30.56		02/02/17					Vested
				2,733	$	30.56		02/02/17						02/02/11
Totals		55,130		2,733						0	$	0
J. Patrick Maley III
		10,000			$	9.49		05/07/13					Vested
		6,000			$	15.02		02/06/14					Vested
		10,666			$	20.26		02/04/15					Vested
		10,933			$	27.06		02/03/16					Vested
		8,200			$	30.56		02/02/17					Vested
				2,733	$	30.56		02/02/17						02/02/11
Totals		45,799		2,733						0	$	0
Randall D. Levy
		10,000			$	11.76		02/02/11					Vested
		13,333			$	13.26		02/01/12					Vested
		10,000			$	8.68		02/07/13					Vested
		8,000			$	15.02		02/06/14					Vested
		8,000			$	20.26		02/04/15					Vested
		8,200			$	27.06		02/03/16					Vested
		6,150			$	30.56		02/02/17					Vested
				2,050	$	30.56		02/02/17						02/02/11
Totals		63,683		2,050						0	$	0
Larry C. Norton
Totals		0		0						0	$	0
Dennis J. Vesci
		500			$	13.26		02/01/12					Vested
		1,000			$	8.68		02/07/13					Vested
		1,666			$	15.02		02/06/14					Vested
		1,666			$	20.26		02/04/15					Vested
		6,150			$	27.06		02/03/16					Vested
		4,612			$	30.56		02/02/17					Vested
				1,538	$	30.56		02/02/17						02/02/11
Totals		15,594		1,538						0	$	0

(4) In addition to the above Outstanding Equity Awards with Forestar, Mr. Vesci holds the following restricted stock units shares pursuant to his participation in a deferred annual incentive award program:

Date Deferred	RSUs Payable in Shares		RSUs Payable in Cash
02/15/2001		406		133
02/01/2002		219		72
02/07/2003		78		25
02/04/2005		218		71
02/02/2007		640		208
Total		1,561		509

18 

Option Exercises And Stock Vested Fiscal Year-End 2010:

     The following table summarizes stock-based compensation awards exercised and RSUs vested during 2010 for our named executive officers.

2010 Option Exercises and Stock Vested

	Option Awards				Stock Awards
	Number of Shares		Value Realized on		Number of Shares		Value Realized on
Executive Officer	Acquired on Exercise		Exercise		Acquired on Vesting		Vesting(1)
Doyle R. Simons		20,000	$	230,400		—	$	2,372,339
J. Patrick Maley III		—		—		—	$	2,070,913
Randall D. Levy		30,000	$	345,900		—	$	605,627
Larry C. Norton		—		—		—	$	1,055,002
Dennis J. Vesci		9,500	$	100,535		—	$	494,387

(1) Stock Awards Value Realized consists of 2007 Temple-Inland and Forestar RSUs that met their respective minimum 1% ROI criteria and were settled in cash for which no shares were transferred. The payment for the Temple-Inland and Forestar RSUs was based on the number of units set forth below:

	Temple-Inland		Forestar
Executive Officer	Cash-Settled RSUs		Cash-Settled RSUs
Doyle R. Simons		85,000		28,332
J. Patrick Maley III		75,000		24,999
Randall D. Levy		24,500		8,166
Larry C. Norton		35,000		11,666
Dennis J. Vesci		20,000		6,666

Equity Compensation Plan Information:

     The following table sets forth information as of the end of 2010 related to compensation plans under which our shares may be issued:

					Number of Securities
					Remaining Available for
					Future Issuance
	Number of Securities		Weighted Average		Under Equity Compensation
	to be Issued		Exercise Price of		Plans (Excluding Securities
	Upon Exercise of		Outstanding		to be Issued Upon Exercise of
	Outstanding Options,		Options, Warrants		Outstanding Options, Warrants
Plan Category	Warrants and Rights(1)		and Rights		and Rights)
Equity compensation plans approved by security holders		8,361,407	$	14.66		2,854,100
Equity compensation plans not approved by security holders	None			N/A	None
Total		8,361,407	$	14.66		2,854,100

(1) Includes (a) 7,853,917 options outstanding, of which 7,416,105 relate to our employees and have a weighted average term of 6 years and 437,812 relate to employees of spun-off entities Guaranty Financial Group Inc. and Forestar Group Inc., and have a weighted average term of 5 years; (b) 369,201 restricted shares outstanding that relate to our employees; (c) 125,870 shares payable to directors for deferred fees; and (d) 12,419 stock-settled restricted stock units that relate to deferred bonuses and deferred vested restricted shares that could not be paid out until after retirement due to Code Section 162(m) policy.

Pension Benefits:

     The following table summarizes the actuarial present value of the accumulated benefits under our qualified pension and SERP plan at December 31, 2010 for the named executive officers:

2010 PENSION BENEFITS TABLE
				Present Value of
		Number of Years		Accumulated
Named Executive	Plan Name	- Credited Service		Benefit(1)
Doyle R. Simons	Temple-Inland Retirement Plan		18.33	$	306,949
	Temple-Inland SERP			$	5,196,035
J. Patrick Maley III	Temple-Inland Retirement Plan		7.58	$	140,932
	Temple-Inland SERP			$	5,788,736
Randall D. Levy(2)	Temple-Inland Retirement Plan		21.42	$	599,668
	Temple-Inland SERP			$	5,422,058
Larry C. Norton	Temple-Inland Retirement Plan		3.58	$	67,391
	Temple-Inland SERP			$	234,393
Dennis J. Vesci(2)	Temple-Inland Retirement Plan		35.42	$	1,135,151
	Temple-Inland SERP			$	3,141,042

19 

(1)

Present value of the accumulated benefit under the tax-qualified defined benefit plan is based on present value at normal retirement date using disclosure assumptions (5.28% interest and the 1994 Group Annuity Mortality Table for males and females) discounted based on disclosure interest rate to December 31, 2010. Present value of the accumulated benefit under the nonqualified supplemental executive retirement plan (SERP) is based on present value at normal retirement date using lump sum assumptions (4.31% interest and Applicable Mortality Table under IRC Section 417(e)(3) (2010 PPA Unisex Mortality)) discounted based on disclosure interest rate to December 31, 2010. Retirement benefits under the tax-qualified defined benefit plan and the nonqualified supplemental executive retirement plan (SERP) are calculated using final average compensation based on the higher of (a) the highest five (5) of the employee’s last ten (10) years of service or (b) the highest 60 consecutive months out of the last 120 months. Final average compensation normally includes salaries and annual incentive awards, but the board can designate a payment as ineligible under the plan. Final average compensation excludes other forms of compensation such as dividends, severance pay, relocation, long-term disability, stock options, restricted stock units, and performance stock units. The formula for normal retirement is (1) the greater of (a) .95% of final average compensation plus .65% of final average compensation in excess of Social Security covered compensation as determined using a 35 year average of SS maximum wage bases during year of termination multiplied by years of service up to 35 years and .8% of final average compensation multiplied by years of service over 35 years or (b) 1% X final average compensation X years of service + .65% X final average compensation in excess of Social Security covered compensation as determined using a 35 year average of Social Security maximum wage bases to a participant’s Social Security normal retirement age X years of service up to 35 years. For example, assume an employee has a final average pay of $1 million and has worked for 40 years. His pension is determined as the greater of the following two formulas: [((.0095 x $1,000,000) + (.0065 x ($1,000,000 — $48,816))) x 35] + (.008 x $1,000,000 x 5) = $588,894 (annual life only benefit) or [(.01 x 1,000,000 x 40) + (.0065 x ($1,000,000 — $56,484) X 35))] = $614,650 (annual life only benefit). Thus, the greater of two formulas is $614,650. Five years of service or attainment of age 65 is required to vest in the retirement benefit. Normal retirement age is 65. Benefits are reduced for early retirement. Lump sum distributions for benefits with a present value greater than $10,000 are not permitted under the qualified plan. Benefits are paid in the form of a monthly annuity for the life of the executive and his or her spouse or other contingent annuitant depending on the option the executive selects. The amount of the monthly benefit is affected by the age or life expectancy of the employee and spouse and how much will be paid to the survivor if the employee dies based on the payment election selected by the employee. However, the total value of the benefit does not vary. For example, assume Employee A and Employee B each have accrued benefits with a total value of $100,000. Employee A is age 65 and Employee B is 55. Employee A will receive a larger monthly benefit than Employee B because Employee B is younger and has a longer life expectancy, so his or her payments are spread over a longer time. The nonqualified plan or SERP is paid as a lump sum distribution. The SERP pays any retirement benefits that cannot be paid under the qualified plan due to IRS limits and also provides a benefit formula for designated executives. The Internal Revenue Code limits the amount of compensation that can be used in calculations under a tax-qualified defined benefit retirement plan. In 2010, this limit was $245,000. As a result, any retirement benefits that cannot be paid under our tax-qualified defined benefit plan due to these limitations are paid under a SERP, which is not a tax-qualified plan. The SERP also provides unreduced retirement at age 60 with 15 years of service for designated executives, including Mr. Levy, Mr. Maley, and Mr. Simons. Under this plan, the designated executive’s retirement benefits from all retirement plans will be at least equal to 50% of the executive’s final average compensation for the highest five years out of the last ten years of employment. Benefits are reduced for early retirement, which may be taken at age 55 with 15 years of service, by 5% for each year prior to age 60. In 2010, the plan was amended to clarify that benefits are not reduced for mortality or death if the executive continues working beyond the normal retirement age of 60. Benefits will be paid in a lump sum amount. Nonqualified plan lump sums are calculated in any given year using the prior November monthly average market yield on U.S. Treasury Securities at 30-year constant maturity. For retirements in 2010, the November 2009 rate of 4.31% would apply. This supplemental plan is unfunded and contains a provision for acceleration of payment in the event of a change in control. The SERP is a valuable incentive to attract executives who are leaving career-based retirement plans at other companies. It is also a valuable retention tool for existing executives who must meet service criteria to qualify for the plan. Mr. Levy formerly participated in a defined contribution plan and related SERP when he worked for our former financial services segment and received a distribution of his financial services benefit. The amount in the table above has been reduced to reflect the offset for the benefit he already received. Extra years of credited service are granted only under our change in control agreements with executive officers and our CEO employment agreement but not for any other reason.

(2)

Early retirement may be taken at age 55 or later if the employee has five years of service, but benefits are reduced for each year prior to age 62 by factors ranging from 3% to 6% based on years of service. Under the SERP, a designated executive can retire with a reduction of benefits of 5% per year for each year before age 60 if he has attained age 55 and has 15 years of service. Mr. Levy formerly participated in a defined contribution plan and related SERP when he worked for our former financial services segment and received a distribution of his financial services benefit. The amount in the table below has been reduced to reflect the offset for the benefit he already received. The table below lists the executives who are eligible for early retirement and estimated payment assuming each retired on December 31, 2010:

	Monthly Payment		Lump Sum Payment
Executive Officer	Under Qualified Plan		Under SERP
Randall D. Levy	$	3,822	$	5,455,811
Dennis J. Vesci	$	8,513	$	3,452,734

Nonqualified Deferred Compensation:

We do not have a deferred compensation plan.

Potential Payments Upon Termination or Change in Control:

Under our stock awards, an employee whose employment terminates has different vesting rights depending on the reason for termination:

20

	Vested Option Exercise	Treatment of Unvested
Termination	Period	Options, RSUs, and PSUs
Voluntary or Involuntary Termination of Employment	3 months	Forfeited
Death	12 months	Immediately Vest
Disability	36 months	Immediately Vest
Retirement	Until Expiration of Option	Options vest immediately; RSUs and PSUs vest when performance achieved
Change in Control	Until Expiration of Option	Immediately Vest

     Mr. Simons’s employment agreement and change in control agreements with each of the other named executive officers provide for three years’ pay and benefits in the event employment is terminated following defined change in control events. These events include:

• any person or entity acquiring or becoming beneficial owner, as defined in SEC regulations, of 20% or more of the combined voting power of our securities;

• the pre-event directors ceasing to constitute a majority of our directors within any 24-month period;

• consummation of a merger, consolidation, or recapitalization (unless the directors continue to represent a majority of the directors on the board, at least 60% of the pre-event ownership survives, and, in the event of a recapitalization, no person owns 25% or more of the voting power of the securities);

• the stockholders approve liquidation or dissolution;

• consummation of an agreement to sell, lease, or dispose of substantially all the assets of Temple-Inland; or

• any other event that the board determines to be a change in control.

     Messrs. Maley, Norton, Vesci and Levy have legacy agreements that also define consummation of a sale of our corrugated packaging operations as a change in control, and Mr. Levy’s legacy agreement also defines consummation of a sale of our forest products operations as a change in control.

     Under the change in control provisions the executives will receive:

• the amount of any annual incentive award that has been allocated or awarded for a completed annual bonus cycle and their current year annual incentive award (pro-rated if the termination is before the end of the first six months in the year or full annual incentive award if during the second half of the year) based on achievement of target performance (or, for executives other than the CEO, if higher, projected actual performance);

• lump sum severance equal to three times their current salary and three times target annual incentive award, or if higher, the salary or target annual incentive award (Mr. Simons receives the higher of actual salary or annual incentive award) in any of the last three years;

• health and welfare benefits provided through third party insurance for three years at no greater cost than currently paid;

• acceleration of vesting of all options, restricted shares, restricted stock units, and performance stock units (maximum amount);

• credit for three additional years’ service in the pension plan at the highest pay over the last three years;

• lump sum payment of all nonqualified pension and deferred compensation;

• lump sum payment equal to three years’ match on 401(k) plan;

• any retiree medical or life insurance benefits to which the executive is entitled or would have been entitled within 3 years of termination;

• reimbursement for outplacement services not to exceed 15% of base salary and, for executives other than the CEO, 15% of target annual incentive award; and

• three years’ continuation of perquisites.

     The change in control provisions for the named executive officers also contain gross-up provisions in the event the officer is required to pay excise tax on these amounts. The gross-up will only be paid if the change in control payments exceed 110% of the amount that would not be subject to excise tax. Otherwise, payments are reduced to the maximum amount that will not trigger the excise tax. If an executive loses his or her job following a change in control event that meets certain IRS criteria, the executive must pay an additional 20% excise tax simply for collecting the pay that is due. The gross up makes the executive whole by paying the 20% tax amount. It does not pay the executive’s normal income taxes. The gross up provisions will not be offered to any new executives on or after November 7, 2008.

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     For pension benefits payable upon retirement, see Pension Benefits Table. The following table summarizes the estimated value to each of the named executive officers of payments triggered by different termination events assuming such events occurred at year-end 2010.

					Potential Payments Upon Termination or Change in Control
			Estimated
			Target Annual		Value of Stock		Value of								Excise Tax &
			Incentive		Options		Performance				Health &				Gross-Up/
			Award		that		Stock that		Retirement		Welfare				(Required		Aggregate
Executive	Severance(1)		Payment (1)		Vest		Vests(2)		Benefit		Benefits		Outplacement		Forfeiture)		Payments
Doyle R. Simons Change in Control(3)	$	6,583,63	$	975,000	$	3,949,000	$	15,254,285	$	2,117,422	$	26,198	$	117,000	$	10,846,684	$	39,869,228
Death(4)	$	1,755,000			$	3,949,000	$	15,254,285									$	20,958,285
Disability (4)	$	1,755,000			$	3,949,000	$	15,254,285									$	20,958,285
Termination Without Cause(5)	$	4,389,093	$	975,000	$	3,949,000	$	15,254,285	$	1,707,080	$	17,802	$	117,000			$	26,409,260
Termination For Cause(6)																	$	0
J. Patrick Maley III Change in Control(3)	$	4,253,587	$	781,250	$	3,159,196	$	12,203,445	$	1,697,060	$	18,034	$	210,938	$	8,075,944	$	30,399,454
Death(4)					$	3,159,196	$	12,203,445									$	15,362,641
Disability (4)					$	3,159,196	$	12,203,445									$	15,362,641
Termination Without Cause(5) Termination For Cause(6)																	$ $	0 0
Randall D. Levy Change in Control(3)	$	2,584,837	$	425,000			$	5,112,571	$	1,251,420	$	24,392	$	127,500	$	3,635,873	$	13,161,593
Death(4)							$	5,112,571									$	5,112,571
Disability (4)							$	5,112,571									$	5,112,571
Termination Without Cause(5) Termination For Cause(6)																	$ $	0 0
Larry C. Norton Change in Control(3)	$	2,284,837	$	375,000	$	1,448,690	$	5,757,665	$	371,745	$	17,269	$	112,500	$	3,792,097	$	14,159,803
Death(4)					$	1,448,690	$	5,757,665									$	7,206,355
Disability (4)					$	1,448,690	$	5,757,665									$	7,206,355
Termination Without Cause(5) Termination For Cause(6)																	$ $	0 0
Dennis J. Vesci Change in Control(3)	$	2,149,663	$	350,000			$	5,048,168	$	2,210,978	$	16,946	$	105,000	$	4,196,763	$	14,077,518
Death(4)							$	5,048,168									$	5,048,168
Disability (4)							$	5,048,168									$	5,048,168
Termination Without Cause(5) Termination For Cause(6)																	$ $	0 0

(1)	Assumes a target annual incentive award based on 9% ROI.
(2)	Assumes performance criteria are met, where applicable.
(3)	Assumes a target annual incentive award based on 9% ROI. Also includes 3X 401(k) match for each executive of $11,025 and 3X perks of $2,396 for Mr. Simons. Assumes for illustration only that the IRS considers the entire payment to be a “parachute payment” subject to a 20% excise tax. Any compensation not deemed to be a “parachute payment” will reduce the amount of excise tax and gross-up payable.
(4)	In return for a release of all claims, Mr. Simons’s employment agreement provides a lump sum benefit in the year of his termination of employment due to death or disability equal to his base salary and target annual incentive award multiplied by a fraction, the numerator of which is the number of days during the applicable performance period for which Mr. Simons was employed and the denominator of which is the number of days in such performance period. For illustration purposes only, the full year benefit is shown. Except for Mr. Simons’s employment agreement, on termination of employment by death or disability, executives receive no payment other than through life insurance or disability insurance purchased by the executive and available to salaried employees generally.
(5)	Termination without a change in control not for cause or by executive for good reason. Generally speaking, severance is a matter that is individually negotiated with the executive and the amount depends on the circumstances of his or her departure. Mr. Simons, our CEO, is the only executive who has an employment agreement with pre-established severance benefits, other than the change in control agreements. In return for the post-employment benefits, Mr. Simons agreed not to compete with our Company for two years after his departure.
(6)	Termination without a change in control for cause or by executive without good reason. We do not have a plan or policy to provide severance benefits to executives whose employment terminates for cause.

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