Exhibit 10.11
CHANGE IN CONTROL/SEVERANCE AGREEMENT
     THIS AGREEMENT, dated July 15, 2007, is made by and between Guaranty
Financial Group Inc., a Delaware corporation (the “Company”), Temple-Inland
Inc., a Delaware corporation (“Temple-Inland”), and «First_Name» «Last_Name»
(the “Executive”).
     WHEREAS, the Executive currently is employed by and a party to a Change in
Control Agreement (the “Existing CIC Agreement”) with Temple-Inland;
     WHEREAS, Temple-Inland has determined that it is appropriate, desirable and
in the best interests of Temple-Inland and its stockholders to effect (i) a
spinoff to the Temple-Inland stockholders of the stock of the Company, (ii) a
spinoff to the Temple-Inland stockholders of a subsidiary holding
Temple-Inland’s real estate operations, and (iii) a sale of Temple-Inland’s
timberland holdings to an unrelated third party;
     WHEREAS, the Company considers it essential to the best interests of its
stockholders to foster the continued employment of key management personnel
following the effective time of the spinoff of the Company (the “Separation”);
     WHEREAS, effective as of the Separation, the parties intend for the
Existing CIC Agreement to cease to be of any force or effect;
     WHEREAS, the Board recognizes that, as is the case with many publicly held
corporations, the possibility of a Change in Control exists and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its stockholders; and
     WHEREAS, the Board has determined that appropriate steps should be taken
(i) to ensure that the Executive receive the protections afforded under the
Existing CIC Agreement for the two-year period beginning on the date of the
Separation and (ii) thereafter to reinforce and encourage the continued
attention and dedication of members of the Company’s management, including the
Executive, to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a Change in
Control following such two-year period;
     NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the Company, Temple-Inland (solely for purposes of
Section 6.1(C) hereof and the last sentence of Section 2 hereof) and the
Executive hereby agree as follows:
     1. Defined Terms. The definitions of capitalized terms used in this
Agreement are provided in the last Section hereof.
     2. Term of Agreement. The Term of this Agreement shall commence on the date
of the Separation (the “Effective Date”) and shall continue in effect through
the second anniversary of the Effective Date (such two-year period, the “Initial
Term”); provided, however, that commencing on the first anniversary of the
Effective Date, and on each anniversary of the Effective Date thereafter, the
Term shall automatically be extended for one additional year unless, not later
than 90 days prior to each such date, the Company or the Executive shall have
given notice not to extend the Term; and provided, further, that if a Change in
Control shall have occurred during the Term, the Term shall expire no earlier
than 24 months beyond the month in which such Change in Control occurred.
Effective as of the Effective Date, the Existing CIC Agreement shall terminate
and shall cease to be of any further force or effect and the Executive waives
all rights that may have accrued thereunder.
     3. Company’s Covenants Summarized. In order to induce the Executive to
remain in the employ of the Company and in consideration of the Executive’s
covenants set forth in Section 4 hereof, the Company agrees, under the
conditions described herein, to pay the Executive the Severance Payments and the
other payments and benefits described herein. No Severance Payments shall be
payable under this Agreement unless there shall have been a termination of the
Executive’s employment during the Initial Term by the Company without Cause or
by the Executive with Good Reason or unless there shall have been (or, under the
terms of the second sentence of Section 6.1 hereof,

 

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there shall be deemed to have been) a termination of the Executive’s employment
with the Company following and within two years after a Change in Control and
during the Term. This Agreement shall not be construed as creating an express or
implied contract of employment and, except as otherwise agreed in writing
between the Executive and the Company, the Executive shall not have any right to
be retained in the employ of the Company.
     4. The Executive’s Covenants. The Executive agrees that, subject to the
terms and conditions of this Agreement, in the event of a Potential Change in
Control during the Term, the Executive will remain in the employ of the Company
until the earliest of (i) a date which is six months from the date of such
Potential Change of Control, (ii) the date of a Change in Control, (iii) the
date of termination by the Executive of the Executive’s employment for Good
Reason or by reason of death, Disability or Retirement, or (iv) the termination
by the Company of the Executive’s employment for any reason.
     5. Compensation Other Than Severance Payments.
     5.1 During the Initial Term or otherwise following a Change in Control and
during the Term, during any period that the Executive fails to perform the
Executive’s full-time duties with the Company as a result of incapacity due to
physical or mental illness, the Company shall pay the Executive’s full salary to
the Executive at the rate in effect at the commencement of any such period,
together with all compensation and benefits payable to the Executive under the
terms of any compensation or benefit plan, program or arrangement maintained by
the Company during such period (other than any disability plan), until the
Executive’s employment is terminated by the Company for Disability.
     5.2 If the Executive’s employment shall be terminated for any reason during
the Initial Term or otherwise following a Change in Control and during the Term,
the Company shall pay the Executive’s full salary to the Executive through the
Date of Termination at the Executive’s then current salary (determined without
regard to any reduction constituting Good Reason) together with all compensation
and benefits payable to the Executive through the Date of Termination under the
terms of the Company’s compensation and benefit plans, programs or arrangements
as in effect immediately prior to the Date of Termination or, if more favorable
to the Executive, as in effect immediately prior to the first occurrence of an
event or circumstance constituting Good Reason.
     5.3 If the Executive’s employment shall be terminated for any reason during
the Initial Term and otherwise following a Change in Control and during the
Term, the Company shall pay to the Executive the Executive’s normal
post-termination compensation and benefits as such payments become due. Such
post-termination compensation and benefits shall be determined under, and paid
in accordance with, the Company’s retirement, insurance and other compensation
or benefit plans, programs and arrangements as in effect immediately prior to
the Date of Termination or, if more favorable to the Executive, as in effect
immediately prior to the occurrence of the first event or circumstance
constituting Good Reason.
     5.4 For the two-year period commencing immediately following a Change in
Control and during the Initial Term, the Company agrees (A) to provide the
Executive with benefits substantially similar to the material benefits provided
to the Executive under any of the Company’s executive compensation (including
bonus, equity or incentive compensation), pension, savings, life insurance,
medical, health and accident, or disability plans in which the Executive was
participating immediately prior to the Change in Control (or, during the Initial
Term, immediately after the Separation), and to provide the Executive with a
number of vacation days that would be no less favorable to the Executive than
the number determined in accordance with the vacation policy in effect
immediately prior to the Change in Control (or, during the Initial Term,
immediately after the Separation) on the basis of the Executive’s years of
service with the Company, (B) to timely pay to the Executive any portion of the
Executive’s current compensation, or timely pay to the Executive any material
portion of an installment of deferred compensation under any deferred
compensation program of the Company, and (C) not to take any other action that
would directly or indirectly deprive the Executive of any material fringe
benefit enjoyed by the Executive immediately prior to the Change in Control (or,
during the Initial Term, immediately after the Separation), exclusive of any
across the board reductions affecting all similarly situated employees.
     6. Severance Payments.
     6.1 If the Executive’s employment is terminated either during the Initial
Term or otherwise following a Change in Control and within two (2) years after a
Change in Control (provided that such termination of employment

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constitutes a “separation from service” within the meaning of Section 409A of
the Code), in either event other than (A) by the Company for Cause, (B) by
reason of death or Disability, or (C) by the Executive without Good Reason, then
the Company shall pay the Executive the amounts, and provide the Executive the
benefits, described in this Section 6.1 (“Severance Payments”) and Section 6.2,
in addition to any payments and benefits to which the Executive is entitled
under Section 5 hereof. For purposes of this Agreement, the Executive’s
employment shall be deemed to have been terminated following a Change in Control
by the Company without Cause or by the Executive with Good Reason, if (i) the
Executive’s employment is terminated by the Company without Cause prior to a
Change in Control (whether or not a Change in Control ever occurs) and such
termination was at the request or direction of a Person who has entered into an
agreement with the Company the consummation of which would constitute a Change
in Control, or (ii) the Executive terminates his employment for Good Reason
prior to a Change in Control (whether or not a Change in Control ever occurs)
and the circumstance or event which constitutes Good Reason occurs at the
request or direction of such Person. For purposes of any determination regarding
the applicability of the immediately preceding sentence, any position taken by
the Executive shall be presumed to be correct unless the Company establishes to
the Board by clear and convincing evidence that such position is not correct.
     (A) In lieu of any further salary payments to the Executive for periods
subsequent to the Date of Termination, the Company shall pay to the Executive a
lump sum severance payment, in cash, equal to two (2) times the sum of (i) the
Executive’s highest base salary as in effect during the three-year period ending
immediately prior to the Date of Termination (including, if the Date of
Termination occurs within three years after the Effective Date, salary paid in
respect of employment by Temple-Inland or its Affiliates during such three-year
period) and (ii) the Executive’s target annual bonus pursuant to any annual
bonus or incentive plan maintained by the Company in respect of the fiscal year
in which occurs the Date of Termination (or, if higher, the greatest actual
annual bonus in respect of any of the three preceding fiscal years (including as
applicable, with respect to years ending at or before the Effective Date, annual
bonuses paid by Temple-Inland)).
     (B) For the two-year period immediately following the Date of Termination,
the Company shall arrange to provide the Executive and his dependents life,
accidental death and dismemberment, medical and dental benefits substantially
similar to those provided to the Executive and his dependents immediately prior
to the Date of Termination or, if more favorable to the Executive, those
provided to the Executive and his dependents immediately prior to the first
occurrence of an event or circumstance constituting Good Reason, at no greater
cost to the Executive than the cost to the Executive immediately prior to such
date or occurrence; provided, however, that such health and welfare benefits
shall be provided through an arrangement that satisfies the requirements of
Sections 105 and 106 of the Code. To the extent that health and welfare benefits
of the same type are received by or made available to the Executive during the
two-year period following the Executive’s Date of Termination (which such
benefits received by or made available to the Executive shall be reported by the
Executive to the insurance company or other appropriate party in accordance with
any applicable coordination of benefits provisions), the benefits otherwise
receivable by the Executive pursuant to this Section 6.1(B) shall be made
secondary to such benefits; provided, however, that the Company shall reimburse
the Executive for the excess, if any, of the cost of such benefits to the
Executive over such cost immediately prior to the Date of Termination or, if
more favorable to the Executive, the first occurrence of an event or
circumstance constituting Good Reason.
     (C) Vesting shall accelerate and restrictions shall lapse on all unvested
or restricted equity or equity-based awards in respect of either the Company or
Temple-Inland held by the Executive as of the Date of Termination and each stock
option to acquire common stock of the Company or Temple-Inland and each stock
appreciation right in respect of either the Company or Temple-Inland held by the
Executive as of the Date of Termination shall remain exercisable following the
Date of Termination for the full term of such option or stock appreciation
right. The Company also shall cause the subsidiary holding Temple-Inland’s real
estate operations to provide that vesting shall accelerate and restrictions
shall lapse on all unvested or restricted equity or equity-based awards in
respect of such company held by the Executive as of the Date of Termination and
that each stock option to acquire common stock of such company and each stock
appreciation right in respect of such company held by the Executive as of the
Date of Termination shall remain exercisable following the Date of Termination
for the full term of such option or stock appreciation right.

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     (D) For purposes of determining the amount of any benefit payable to the
Executive and the Executive’s right to any benefit otherwise payable under a
Pension Plan, and except to the extent it would result in a duplication of
benefits under Section 6.1(E) hereof, the Executive shall be treated as if he
had accumulated (after the Date of Termination) twenty-four (24) additional
months of service credit thereunder and had been credited during such period
with compensation at the highest rate in effect during the three-year period
ending immediately prior to the Date of Termination.
     (E) In addition to the benefits to which the Executive is entitled under
any defined contribution Pension Plan, the Company shall pay the Executive a
lump sum amount, in cash, equal to the sum of (i) the amount that would have
been contributed thereto or credited thereunder by the Company on the
Executive’s behalf during the two (2) years immediately following the Date of
Termination (but not including as amounts that would have been contributed or
credited an amount equal to the amount of any reduction in base salary, bonus or
other compensation that would have occurred in connection with such contribution
or credit), determined (x) as if the Executive made the maximum permissible
contributions thereto or credits thereunder during such period, (y) as if the
Executive earned compensation during such period at a rate equal to the
Executive’s highest rate of compensation (as defined in the Pension Plan) during
the three-year period ending immediately prior to the Date of Termination, and
(z) without regard to any amendment to the Pension Plan made subsequent to the
Effective Date and on or prior to the Date of Termination, which amendment
adversely affects in any manner the computation of benefits thereunder, and
(ii) the excess, if any, of (x) the Executive’s account balance under the
Pension Plan as of the Date of Termination over (y) the portion of such account
balance that is nonforfeitable under the terms of the Pension Plan.
     (F) Notwithstanding any provision of any annual or long-term incentive plan
(exclusive of equity-based plans) to the contrary, the Company shall pay to the
Executive a lump sum amount, in cash, equal to the sum of (i) any unpaid
incentive compensation which has been allocated or awarded to the Executive for
a completed bonus cycle preceding the Date of Termination under any such plan
and which, as of the Date of Termination, is contingent only upon the continued
employment of the Executive to a subsequent date, and (ii) the aggregate value
of all contingent incentive compensation awards to the Executive for the
uncompleted period under any such plan, calculated as to each such award by
multiplying the award that the Executive would have earned on the last day of
the performance award period, assuming the achievement, at the target level, of
any individual and corporate performance goals established with respect to such
award, multiplied by the fraction obtained by dividing the number of full months
and any fractional portion of a month during such performance award period
through the Date of Termination by the total number of months contained in such
performance award period (or if such fraction is greater than 1/2, multiplied by
one (1)).
     (G) The Company shall reimburse the Executive for expenses incurred for
outplacement services suitable to the Executive’s position for a period of one
(1) year following the Date of Termination (or, if earlier, until the first
acceptance by the Executive of an offer of employment) in an amount not
exceeding 15% of the sum of the Executive’s highest annual base rate of salary
as in effect during the three-year period ending immediately prior to the Date
of Termination (including, if the Date of Termination occurs within three years
after the Effective Date, salary paid in respect of employment by Temple-Inland
or its Affiliates during such three-year period), and the greatest target annual
bonus pursuant to any annual bonus or incentive plan maintained by the Company
in respect of the fiscal year in which occurs the Date of Termination (or, if
higher, the highest actual annual bonus in respect of any of the three preceding
fiscal years (including as applicable, with respect to years ending at or before
the Effective Date, annual bonuses paid by Temple-Inland)), which payment shall
be made as soon as practicable but in any event within thirty (30) business days
following the date of request for reimbursement. Subject to the foregoing, in no
event shall any payment described in this Section 6.1(G) be made after the end
of the calendar year following the calendar year in which the expenses were
incurred.
     (H) For the two-year period immediately following the Date of Termination,
the Company shall provide the Executive with perquisites (such as any use of a
Company provided automobile, club membership fee reimbursements, income tax
preparation and financial advisory services) that were applicable immediately
prior to the Date of Termination or, if more favorable, immediately prior to the
first occurrence of an event or circumstance constituting Good Reason, provided
that in no event shall the amount

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of perquisites to which the Executive is entitled under this Section 6.1(H) for
any taxable year of the Executive affect the amount of perquisites to which the
Executive is entitled under this Section 6.1(H) for any other taxable year.
     6.2 Excise Tax Gross-Up.
     (A) Whether or not the Executive becomes entitled to the Severance
Payments, if any payment or benefit received or to be received by the Executive
in connection with a Change in Control or the termination of the Executive’s
employment (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person whose actions result in a
Change in Control or any Person affiliated with the Company or such Person) (all
such payments and benefits, including the Severance Payments, being hereinafter
called “Total Payments”) will be subject (in whole or part) to the Excise Tax,
then, subject to the provisions of subsection (B) of this Section 6.2, the
Company shall pay to the Executive an additional amount (the “Gross-Up Payment”)
such that the net amount retained by the Executive, after deduction of any
Excise Tax on the Total Payments and any federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up Payment, shall be equal to the
Total Payments.
     (B) In the event that the amount of the Total Payments does not exceed 110%
of the largest amount that would result in no portion of the Total Payments
being subject to the Excise Tax (the “Safe Harbor”), then subsection (A) of this
Section 6.2 shall not apply and the noncash Severance Payments shall first be
reduced (if necessary, to zero), and the cash Severance Payments shall
thereafter be reduced (if necessary, to zero) so that the amount of the Total
Payments is equal to the Safe Harbor; provided, however, that, to the extent
permitted by Section 409A of the Code, the Executive may elect to have the cash
Severance Payments reduced (or eliminated) prior to any reduction of the noncash
Severance Payments.
     (C) For purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax, (i) all of the
Total Payments shall be treated as “parachute payments” within the meaning of
Section 280G(b)(2) of the Code, unless in the opinion of tax counsel (“Tax
Counsel”) reasonably acceptable to the Executive and selected by the accounting
firm which was, immediately prior to the Change in Control, the Company’s
independent auditor (the “Auditor”), such other payments or benefits (in whole
or in part) do not constitute parachute payments, including by reason of
Section 280G(b)(4)(A) of the Code, (ii) all “excess parachute payments” within
the meaning of Section 280G(b)(l) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such excess parachute payments
(in whole or in part) represent reasonable compensation for services actually
rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of
the Base Amount allocable to such reasonable compensation, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by the Auditor in accordance
with the principles of Sections 280G(d)(3) and (4) of the Code. Prior to the
payment date set forth in Section 6.3 hereof, the Company shall provide the
Executive with its calculation of the amounts referred to in this Section 6.2(C)
and such supporting materials as are reasonably necessary for the Executive to
evaluate the Company’s calculations. If the Executive disputes the Company’s
calculations (in whole or in part), the reasonable opinion of Tax Counsel with
respect to the matter in dispute shall prevail.
(D) (I) In the event that (1) amounts are paid to the Executive pursuant to
Section 6.2(A), (2) there is a Final Determination that the Excise Tax is less
than the amount taken into account hereunder in calculating the Gross-Up
Payment, and (3) after giving effect to such Final Determination, the Severance
Payments are to be reduced pursuant to Section 6.2(B), the Executive shall repay
to the Company, within five (5) business days following the date of the Final
Determination, the Gross-Up Payment, the amount of the reduction in the
Severance Payments, plus interest on the amount of such repayments at 120% of
the rate provided in Section 1274(b)(2)(B) of the Code.
     (II) In the event that (1) amounts are paid to the Executive pursuant to
Section 6.2(A), (2) there is a Final Determination that the Excise Tax is less
than the amount taken into account hereunder in calculating the Gross-Up
Payment, and (3) after giving effect to such Final Determination, the Severance
Payments are not to be reduced pursuant to Section 6.2(B), the

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Executive shall repay to the Company, within five (5) business days following
the date of the Final Determination, the portion of the Gross-Up Payment
attributable to such reduction (plus that portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and local income and
employment taxes imposed on the Gross-Up Payment being repaid by the Executive),
to the extent that such repayment results in a reduction in the Excise Tax and a
dollar-for-dollar reduction in the Executive’s taxable income and wages for
purposes of federal, state and local income and employment taxes, plus interest
on the amount of such repayment at 120% of the rate provided in
Section 1274(b)(2)(B) of the Code.
     (III) Except as otherwise provided in clause (IV) below, in the event there
is a Final Determination that the Excise Tax exceeds the amount taken into
account hereunder in determining the Gross-Up Payment (including by reason of
any payment the existence or amount of which cannot be determined at the time of
the Gross-Up Payment), the Company shall pay to the Executive, within five
(5) business days following the date of the Final Determination, the sum of
(1) a Gross-Up Payment in respect of such excess and in respect of any portion
of the Excise Tax with respect to which the Company had not previously made a
Gross-Up Payment, including a Gross-Up Payment in respect of any Excise Tax
attributable to amounts payable under clauses (2) and (3) of this paragraph
(III) (plus any interest, penalties or additions payable by the Executive with
respect to such excess and such portion), (2) if Severance Payments were reduced
pursuant to Section 6.2(B) but after giving effect to such Final Determination,
the Severance Payments should not have been reduced pursuant to Section 6.2(B),
the amount by which the Severance Payments were reduced pursuant to
Section 6.2(B), and (3) interest on such amounts at 120% of the rate provided in
Section 1274(b)(2)(B) of the Code.
     (IV) In the event that (1) Severance Payments were reduced pursuant to
Section 6.2(B) and (2) the aggregate value of Total Payments which are
considered “parachute payments” within the meaning of Section 280G(b)(2) of the
Code is subsequently redetermined in a Final Determination, but such
redetermined value still does not exceed 110% of the Safe Harbor, then, within
five (5) business days following such Final Determination, (x) the Company shall
pay to the Executive the amount (if any) by which the reduced Severance Payments
(after taking the Final Determination into account) exceeds the amount of the
reduced Severance Payments actually paid to the Executive, plus interest on the
amount of such repayment at 120% of the rate provided in Section 1274(b)(2)(B)
of the Code, or (y) the Executive shall pay to the Company the amount (if any)
by which the reduced Severance Payments actually paid to the Executive exceeds
the amount of the reduced Severance Payments (after taking the Final
Determination into account), plus interest on the amount of such repayment at
120% of the rate provided in Section 1274(b)(2)(B) of the Code.
     6.3 The payments provided in subsections (A), (E) and (F) of Section 6.1
hereof shall be made as soon as practicable (but in any event not later than the
fifth day) following the Date of Termination; provided that, to the extent
required to satisfy the provisions of Section 409A(a)(2)(B)(i) of the Code, such
payments shall be made not earlier than but as soon as practicable on or in any
event within five days after (with interest at the 6-month certificate of
deposit rate published in The Wall Street Journal on the Date of Termination (or
if not published on that date, on the next following date when published) or, if
less, the maximum rate that will avoid, if applicable, the imposition of any
additional excise taxes under Section 4999 of the Code (the “409A Interest
Rate”)) the date that is six (6) months after the Date of Termination (the “409A
Payment Date”)). The payments provided in Section 6.2 hereof shall be made on or
as soon as practicable following the day on which the Excise Tax is remitted
(but not later than the end of the taxable year following the year in which the
Excise Tax is incurred). If the amounts of the payments described in the
preceding provisions of this Section 6.3 cannot be finally determined on or
before the date payment is to be made, the Company shall pay to the Executive
(or shall cause the grantor trust described in Section 6.5 to pay to the
Executive) on such day an estimate, as determined in good faith by the Executive
or, in the case of payments under Section 6.2 hereof, in accordance with
Section 6.2 hereof, of the minimum amount of such payments to which the
Executive is clearly entitled and shall pay (or cause to be paid) the remainder
of such payments (together with interest on the unpaid remainder (or on all such
payments to the extent the Company fails to make such payments when due) at 120%
of the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than the 30th day after the date
payment is to be made. In the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such excess shall
constitute a loan by the Company to

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the Executive, payable on the fifth business day after demand by the Company
(together with interest at 120% of the rate provided in Section 1274(b)(2)(B) of
the Code). At the time that payments are made under this Agreement, the Company
shall provide the Executive with a written statement setting forth the manner in
which such payments were calculated and the basis for such calculations
including, without limitation, any opinions or other advice the Company has
received from Tax Counsel, the Auditor or other advisors or consultants (and any
such opinions or advice which are in writing shall be attached to the
statement). To the extent the benefits to be made available under subsections
(B) and (H) of Section 6.1 hereof are not medical expenses within the meaning of
Treas. Reg. § 1.409A-1(b)(9)(v)(B) and are not short-term deferrals within the
meaning of Section 409A of the Code, then to the extent the fair market value of
such benefits during the first six months following the Date of Termination
exceeds two times the lesser of the Executive’s annualized compensation based
upon the Executive’s annual rate of pay for services during the taxable year of
the Executive preceding the year in which the Date of Termination occurs
(adjusted for any increase during that year that was expected to continue
indefinitely had no separation from service occurred) or the maximum amount that
may be taken into account under a qualified plan pursuant to Section 401(a)(17)
of the Code for the year in which the Date of Termination occurs, the Executive
shall pay to the Company, at the time such benefits are provided, the fair
market value of such benefits, and the Company shall reimburse the Executive for
any such payment not later than the fifth day following the expiration of such
six-month period; provided, however, that this requirement for payment by the
Executive and reimbursement by the Company shall apply solely to the extent
required by Section 409A(a)(2)(B)(i) of the Code.
     6.4 The Company also shall pay to the Executive all legal fees and expenses
incurred by the Executive in disputing in good faith any issue hereunder
relating to the termination of the Executive’s employment, in seeking in good
faith to obtain or enforce any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent attributable to the
application of Section 4999 of the Code to any payment or benefit provided
hereunder. Such payments shall be made within five business days after delivery
of the Executive’s written requests for payment accompanied with such evidence
of fees and expenses incurred as the Company reasonably may require (but in no
event shall any such payment be made after the end of the calendar year
following the calendar year in which the expenses were incurred), provided that
no such payment shall be made in respect of fees or expenses incurred by the
Executive after the later of the tenth anniversary of the Date of Termination or
the Executive’s death, and provided further, that, upon the Executive’s
separation from service with the Company, in no event shall any additional such
payments be made prior to the date that is six months after the date of the
Executive’s separation from service to the extent such payment delay is required
under Section 409A(a)(2)(B)(i) of the Code.
     6.5 To the extent that the payment of any amount due under subsections (A),
(E) or (F) of Section 6.1 hereof is delayed by reason of
Section 409A(a)(2)(B)(i) of the Code, the Company shall, on or as soon as
practicable after the Date of Termination, contribute the amounts otherwise
payable pursuant to subsections (A), (E) and (F) of Section 6.1 hereof, together
with six months interest thereon at the 409A Interest Rate (as defined in
Section 6.3 hereof), to a grantor (“rabbi”) trust of which the Executive is the
sole beneficiary (subject to the claims of the Company’s creditors, as required
pursuant to applicable Internal Revenue Service guidance to prevent the
imputation of income to the Executive prior to distribution from the trust),
pursuant to which the amounts payable pursuant to subsections (A), (E) and
(F) of Section 6.1 hereof shall be payable from the trust, together with the
appropriate amount of interest at the 409A Interest Rate (as defined in
Section 6.3 hereof), on or as soon as practicable and in any event within five
days after the Section 409A Payment Date (as defined in Section 6.3 hereof),
provided that to the extent such amount is paid to the Executive by the Company,
the trust shall pay such amount to the Company.
     7. Termination Procedures and Compensation During Dispute.
     7.1. Notice of Termination. During the Initial Term and otherwise after a
Change in Control and during the Term, any purported termination of the
Executive’s employment (other than by reason of death) shall be communicated by
written Notice of Termination from one party hereto to the other party hereto in
accordance with Section 10 hereof. For purposes of this Agreement, a “Notice of
Termination” shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated. For purposes of this
Agreement, any purported termination of the Executive’s employment shall be
presumed to be other than for Cause unless the Notice of Termination includes a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at a meeting of the
Board which was called and held for the purpose of considering such termination
(after reasonable notice to the

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Executive and an opportunity for the Executive, together with the Executive’s
counsel, to be heard before the Board) finding that, in the good faith opinion
of the Board, the Executive was guilty of conduct set forth in clause (i) or
(ii) of the definition of Cause herein, and specifying the particulars thereof
in detail.
     7.2 Date of Termination. “Date of Termination,” with respect to any
purported termination of the Executive’s employment during the Initial Term or
after a Change in Control and during the Term, shall mean (i) if the Executive’s
employment is terminated for Disability, 30 days after Notice of Termination is
given (provided that the Executive shall not have returned to the full-time
performance of the Executive’s duties during such 30 day period), and (ii) if
the Executive’s employment is terminated for any other reason, the date
specified in the Notice of Termination (which, in the case of a termination by
the Company, shall not be less than 30 days (except in the case of a termination
for Cause) and, in the case of a termination by the Executive, shall not be less
than 15 days nor more than 60 days, respectively, from the date such Notice of
Termination is given, provided that, in the case of a termination by the
Executive, the Company may require a Date of Termination earlier than that
specified in the Notice of Termination upon payment to the Executive of the full
amount of base salary that would have been paid to the Executive had the
Executive continued employment between the actual Date of Termination and the
Date of Termination specified in the Notice of Termination).
     7.3 Dispute Concerning Termination. If within 15 days after any Notice of
Termination is given, or, if later, prior to the Date of Termination (as
determined without regard to this Section 7.3), the party receiving such Notice
of Termination notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be extended until the earlier of
(i) the date on which the Term ends or (ii) the date on which the dispute is
finally resolved, either by mutual written agreement of the parties or by a
final judgment, order or decree of an arbitrator or a court of competent
jurisdiction (which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected); provided,
however, that the Date of Termination shall be extended by a notice of dispute
given by the Executive only if such notice is given in good faith and the
Executive pursues the resolution of such dispute with reasonable diligence.
     7.4 Compensation During Dispute. If a purported termination occurs during
the Initial Term or otherwise following a Change in Control and during the Term
and the Date of Termination is extended in accordance with Section 7.3 hereof,
the Company shall continue to pay the Executive the full compensation in effect
when the notice giving rise to the dispute was given (including, but not limited
to, salary) and continue the Executive as a participant in all compensation,
benefit and insurance plans in which the Executive was participating when the
notice giving rise to the dispute was given, until the Date of Termination, as
determined in accordance with Section 7.3 hereof. Amounts paid under this
Section 7.4 are in addition to all other amounts due under this Agreement (other
than those due under Section 5.2 hereof) and shall not be offset against or
reduce any other amounts due under this Agreement.
     8. No Mitigation. The Company agrees that, if the Executive’s employment
with the Company terminates during the Term, the Executive is not required to
seek other employment or to attempt in any way to reduce any amounts payable to
the Executive by the Company pursuant to Section 6 hereof or Section 7.4 hereof.
Further, the amount of any payment or benefit provided for in this Agreement
(other than Section 6.1(B) hereof) shall not be reduced by any compensation
earned by the Executive as the result of employment by another employer, by
retirement benefits, by offset against any amount claimed to be owed by the
Executive to the Company, or otherwise.
     9. Successors; Binding Agreement.
     9.1 The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to be obligated to perform this Agreement
(whether by reason of express assumption by the successor or by operation of
law) in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.
     9.2 This Agreement shall inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive shall
die while any amount would still be payable to the Executive hereunder (other
than amounts which, by their terms, terminate upon the death of the Executive)
if the Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the executors, personal

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representatives or administrators of the Executive’s estate.
     10. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed, if to the
Executive, to the address of the Executive as maintained from time to time on
the payroll system of the Company and, if to the Company, to the address set
forth below, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of address
shall be effective only upon actual receipt:
To the Company:
1300 Mopac Expressway South
Austin, TX 78746
Attention: General Counsel
     11. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or of any lack of compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. This Agreement supersedes any other
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof which have been made by the Executive or
the Company (including without limitation the Existing CIC Agreement); provided,
however, that this Agreement shall supersede any agreement setting forth the
terms and conditions of the Executive’s employment with the Company only in the
event that the Executive’s employment with the Company is terminated during the
Initial Term or otherwise following a Change in Control, in any case by the
Company other than for Cause or by the Executive for Good Reason. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Texas without regard to its principles of conflicts
of law. All references to sections of the Exchange Act or the Code shall be
deemed also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state or local law and any additional withholding to which the
Executive has agreed. The obligations of the Company and the Executive under
this Agreement which by their nature may require either partial or total
performance after the expiration of the Term (including, without limitation,
those under Sections 6 and 7 hereof) shall survive such expiration.
     12. Validity.
     12.1 Any payments made to the Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
Section 1828(k) and FDIC Regulation 12 C.F.R. Part 359, Golden Parachute and
Indemnification Payments.
     12.2 The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
     13. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
     14. Settlement of Disputes. All claims by the Executive for benefits under
this Agreement shall be directed to and determined by the Board and shall be in
writing. Any denial by the Board of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied
upon. The Board shall afford a reasonable opportunity to the Executive for a
review of the decision denying a claim and shall further allow the Executive to
appeal to the Board a decision of the Board within 60 days after notification by
the Board that the Executive’s claim has been denied.
     15. Definitions. For purposes of this Agreement, the following terms shall
have the meanings indicated below:
     (A) “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated
under Section 12 of the

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Exchange Act.
     (B) “Auditor” shall have the meaning set forth in Section 6.2 hereof.
     (C) “Base Amount” shall have the meaning set forth in Section 280G(b)(3) of
the Code.
     (D) “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under
the Exchange Act.
     (E) “Board” shall mean the Board of Directors of the Company.
     (F) “Cause” for termination by the Company of the Executive’s employment
shall mean (i) the willful and continued failure by the Executive to
substantially perform the Executive’s duties with the Company (other than any
such failure resulting from the Executive’s incapacity due to physical or mental
illness or any such actual or anticipated failure after the issuance of a Notice
of Termination for Good Reason by the Executive pursuant to Section 7.1 hereof)
after a written demand for substantial performance is delivered to the Executive
by the Board, which demand specifically identifies the manner in which the Board
believes that the Executive has not substantially performed the Executive’s
duties, or (ii) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company, monetarily or otherwise.
For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure
to act, on the Executive’s part shall be deemed “willful” unless done, or
omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive’s act, or failure to act, was in the best interest of
the Company and (y) in the event of a dispute concerning the application of this
provision, no claim by the Company that Cause exists shall be given effect
unless the Company establishes to the Board by clear and convincing evidence
that Cause exists.
     (G) “Change in Control” shall be deemed to have occurred if the event set
forth in any one of the following paragraphs shall have occurred:
     (I) any Person is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company (not including in the securities beneficially owned
by such Person any securities acquired directly from the Company or its
Affiliates) representing 20% or more of the combined voting power of the
Company’s then outstanding securities, excluding any Person who becomes such a
Beneficial Owner in connection with a transaction described in clauses (a),
(b) or (c) of paragraph (III) below;
     (II) within any twenty-four (24) month period, the following individuals
cease for any reason to constitute a majority of the number of directors then
serving on the Board: individuals who, on the Effective Date, constitute the
Board and any new director (other than a director whose initial assumption of
office is in connection with an actual or threatened election contest, including
but not limited to a consent solicitation, relating to the election of directors
of the Company) whose appointment or election by the Board or nomination for
election by the Company’s shareholders was approved or recommended by a vote of
at least two-thirds (2/3) of the directors then still in office who either were
directors on the date hereof or whose appointment, election or nomination for
election was previously so approved or recommended;
     (III) there is consummated a merger, consolidation of the Company or any
direct or indirect subsidiary of the Company with any other corporation or any
recapitalization of the Company (for purposes of this paragraph (III), a
“Business Event”) unless, immediately following such Business Event (a) the
directors of the Company immediately prior to such Business Event continue to
constitute at least a majority of the board of directors of the Company, the
surviving entity or any parent thereof, (b) the voting securities of the Company
outstanding immediately prior to such Business Event continue to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity or any parent thereof), in combination with the ownership
of any trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any subsidiary of the Company, at least 60% of the
combined voting power of the securities of the Company or such surviving entity
or any parent thereof outstanding immediately after such Business Event, and
(c) in the event of a recapitalization, no Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company or such surviving
entity or any parent thereof (not including in the securities Beneficially Owned
by such Person any securities acquired directly from the Company or its
Affiliates) representing 20% or more of the combined voting power of the then

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outstanding securities of the Company or such surviving entity or any parent
thereof (except to the extent such ownership existed prior to the Business
Event);
     (IV) the shareholders of the Company approve a plan of complete liquidation
or dissolution of the Company;
     (V) there is consummated an agreement for the sale, disposition or
long-term lease by the Company of substantially all of the Company’s assets,
other than (a) such a sale, disposition or lease to an entity, at least 50% of
the combined voting power of the voting securities of which are owned by
shareholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale or disposition or
(b) the distribution directly to the Company’s shareholders (in one distribution
or a series of related distributions) of all of the stock of one or more
subsidiaries of the Company that represent substantially all of the Company’s
assets; or
     (VI) any other event that the Board, in its sole discretion, determines to
be a Change in Control for purposes of this Agreement.
Notwithstanding the foregoing, a “Change in Control” under clauses (I) through
(V) above shall not be deemed to have occurred by virtue of the consummation of
any transaction or series of integrated transactions immediately following which
the record holders of the common stock of the Company immediately prior to such
transaction or series of transactions continue to have substantially the same
proportionate ownership in one or more entities which, singly or together,
immediately following such transaction or series of transactions, own all or
substantially all of the assets of the Company as constituted immediately prior
to such transaction or series of transactions.
     (H) “Code” shall mean the Internal Revenue Code of 1986, as amended from
time to time.
     (I) “Company” shall mean Guaranty Financial Group Inc. and, except in
determining under Section 15(G) hereof whether or not any Change in Control of
the Company has occurred, shall include any successor to its business and/or
assets which assumes and agrees to perform this Agreement by operation of law,
or otherwise.
     (J) “Date of Termination” shall have the meaning set forth in Section 7.2
hereof.
     (K) “Disability” shall be deemed the reason for the termination by the
Company of the Executive’s employment, if, as a result of the Executive’s
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive’s duties with the Company
for a period of six consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and, within 30 days after such
Notice of Termination is given, the Executive shall not have returned to the
full-time performance of the Executive’s duties.
     (L) “Effective Date” shall have the meaning set forth in Section 2 hereof.
     (M) “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended from time to time.
     (N) “Excise Tax” shall mean any excise tax imposed under Section 4999 of
the Code.
     (O) “Executive” shall mean the individual named in the first paragraph of
this Agreement.
     (P) “Existing CIC Agreement” shall have the meaning set forth in the
recitals hereof.
     (Q) “Final Determination” means a final determination by the Internal
Revenue Service or, if such determination is appealed, a final determination by
any court of competent jurisdiction.
     (R) “Good Reason” for termination by the Executive of the Executive’s
employment shall mean the occurrence (without the Executive’s express written
consent) during the Initial Term (treating all references in paragraphs
(I) through (IV) below to the period “immediately prior to the Change in
Control” as references to “immediately after the Separation”), after any Change
in Control, or prior to a Change in Control under the

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circumstances described in clauses (i) and (ii) of the second sentence of
Section 6.1 hereof (treating all references in paragraphs (I) through (IV) below
to a “Change in Control” as references to a “Potential Change in Control”), of
any one of the following acts by the Company, or failures by the Company to act,
unless such act or failure to act is corrected prior to the Date of Termination
specified in the Notice of Termination given in respect thereof:
     (I) a material reduction in the Executive’s authority, duties or
responsibilities, which for purposes of this Agreement shall include only the
assignment to the Executive of any duties substantially inconsistent with the
Executive’s status as a senior executive officer of the Company or a material
adverse alteration in the nature or status of the Executive’s responsibilities
from those in effect immediately prior to the Change in Control (including, as
applicable and without limitation, the Executive ceasing to be an executive
officer of a public company);
     (II) a material diminution in base salary as in effect immediately prior to
the Change in Control;
     (III) a material change in the geographic location at which the Executive
must perform services, which for purposes of this Agreement shall include only
the relocation of the Executive’s principal place of employment to a location
more than fifty (50) miles distant from the Company’s headquarters immediately
prior to the Change in Control or the Company’s requiring the Executive to be
based anywhere other than such principal place of employment (or permitted
relocation thereof) except for reasonably required travel on the Company’s
business; or
     (IV) any other action or inaction that constitutes a material breach of
Section 5.4 or 9.1 of this Agreement.
The Executive’s right to terminate the Executive’s employment for Good Reason
shall not be affected by the Executive’s incapacity due to physical or mental
illness. The Executive’s continued employment shall not constitute consent to,
or a waiver of rights with respect to, any act or failure to act constituting
Good Reason hereunder, provided that the Executive may not assert Good Reason in
respect of any act or failure to act otherwise constituting Good Reason
hereunder unless asserted in a Notice of Termination given in respect thereof
within 90 days following the date of the first occurrence of such act or failure
to act. Notwithstanding the foregoing provisions of this definition of “Good
Reason,” the events described on Exhibit A hereto do not constitute “Good
Reason” for the termination of the Executive’s employment. For purposes of any
determination regarding the existence of Good Reason, any claim by the Executive
that Good Reason exists shall be presumed to be correct unless the Company
establishes to the Board by clear and convincing evidence that Good Reason does
not exist.
     (S) “Gross-Up Payment” shall have the meaning set forth in Section 6.2
hereof.
     (T) “Initial Term” shall have the meaning set forth in Section 2 hereof.
     (U) “Notice of Termination” shall have the meaning set forth in Section 7.1
hereof.
     (V) “Pension Plan” shall mean any nonqualified, supplemental or excess
benefit pension plan maintained by the Company and any other plan or agreement
entered into between the Executive and the Company which is designed to provide
the Executive with supplemental retirement benefits, and any nonqualified,
supplemental or excess defined contribution plan maintained by the Company and
any other defined contribution plan or agreement entered into between the
Executive and the Company.
     (W) “Person” shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) the Company or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its Affiliates, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.
     (X) “Potential Change in Control” shall be deemed to have occurred if the
event set forth in any one of

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the following paragraphs shall have occurred:
     (I) the Company enters into an agreement, the consummation of which would
result in the occurrence of a Change in Control;
     (II) the Company or any Person publicly announces an intention to take or
to consider taking actions which, if consummated, would constitute a Change in
Control;
     (III) any Person becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 20% or more of either the then
outstanding shares of common stock of the Company or the combined voting power
of the Company’s then outstanding securities (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Company or its Affiliates); or
     (IV) the Board adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.
     (Y) “Retirement” shall be deemed the reason for the termination by the
Executive of the Executive’s employment if such employment is terminated in
accordance with the Company’s retirement policy, including early retirement,
generally applicable to its salaried employees.
     (Z) “Separation” shall have the meaning set forth in the recitals hereof.
     (AA) “Severance Payments” shall have the meaning set forth in Section 6.1
hereof.
     (BB) “Tax Counsel” shall have the meaning set forth in Section 6.2 hereof.
     (CC) “Temple-Inland” has the meaning set forth in the introduction of this
Agreement.
     (DD) “Term” shall mean the period of time described in Section 2 hereof
(including any extension, continuation or termination described therein).
     (EE) “Total Payments” shall mean those payments so described in Section 6.2
hereof.

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     IN WITNESS WHEREOF, the parties have duly executed this Agreement to be
effective as of the Effective Date.

            GUARANTY FINANCIAL GROUP INC.
            By:   Kenneth R. Dubuque      Title:   President and CEO       
TEMPLE-INLAND INC.
            By:   Leslie K. O’Neal      Title:   Vice President and Secretary   
    EXECUTIVE

            «First_Name» «Last_Name»                

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EXHIBIT A
PERMITTED EVENTS
For the avoidance of doubt, Good Reason shall not include any direct or indirect
consequence of the establishment of any of the following compensation and
benefit arrangements of the Company as of the Separation (including by virtue of
the fact that such compensation and benefit arrangements may differ from those
in effect at Temple-Inland before the Separation):
     1. Base salary
     2. Annual bonus and other short-term incentive benefits
     3. Savings plan (including 401(k) and supplemental plan benefits)
     4. Retirement benefits (including supplemental plan benefits)
     5. Health and other welfare benefits
     6. Long-term incentive plan benefits
For the avoidance of doubt, the Executive also may not assert Good Reason by
reason of the nature of the Executive’s position and duties at the time of the
Separation (including any changes from the Executive’s position and duties
before the Separation). The Executive also may not assert Good Reason by reason
of any relocation of the Company’s headquarters within the Austin, Texas
metropolitan area during the Initial Term.

15