exv10w37






Exhibit 10.37




Temple-Inland Inc.

2010 Tier I Bonus Plan



Temple-Inland is committed to two key objectives: (1) maximizing ROI, and (2) profitably growing
our business. We focus on maximizing ROI because we fundamentally believe there is a direct
correlation between ROI and shareholder value. We define ROI as operating income divided by
beginning of year investment, subject to certain specified adjustments. We are focused on growing
our business because we have demonstrated our ability to drive ROI and believe we can create
additional value for shareholders through disciplined growth focused on ROI.



The Temple-Inland annual incentive plan is a cash bonus incentive plan designed to reward executive
officers for maximizing ROI, profitably growing our business, and promoting a high performance
culture focused on the values expressed in our Vision/Mission/Values Statement.



Performance Measure. The plan measures performance over the fiscal year. For the CEO
and other “covered employees” under Code Section 162(m), a maximum bonus of 250% of target is
payable for achievement of positive ROI or an ROI ranking higher than the 4th quartile
of the peer group, although the Committee retains discretion to pay less than the maximum bonus.



Size of Bonus Payment. Bonus payment amounts are subject to reduction by the Committee in
accordance with the following schedule: 200% of Target payable if ROI is 14%, 180% of Target
payable if ROI is 13%, 160% of Target payable if ROI is 12%, 140% of Target payable if ROI is 11%,
120% of Target payable if ROI is 10%, 100% of Target payable if ROI is 9%, 89% of Target payable if
ROI is 8%, 78% of Target payable if ROI is 7%, 67% of Target payable if ROI is 6%, 56% of Target
payable if ROI is 5%, 50% of Target payable if ROI is 4.5%, 40% of Target payable if ROI is 4%, 30%
of Target payable if ROI is 3%, 20% of Target payable if ROI is 2%, and 10% of Target payable if
ROI is 1%. The Committee may exercise discretion to reduce the maximum bonus by less than the
amount called for by the above schedule based upon the satisfactory achievement of other goals
focused on contributing to the profitable growth of the business, lowering costs for the business,
or promoting a high performance culture focused on the Company’s values as set forth in its
Vision/Mission/Values Statement. In no event shall the total annual bonus payments for any
executive exceed 250% of the executive’s target bonus. If ROI is not positive or the Company does
not achieve an ROI ranking higher than the 4th quartile of the peer group, then no bonus
payment will be made to Section 162(m) “covered employees.” The Committee may in its discretion
pay less than the maximum bonus for any reason, regardless of ROI performance.



Target Bonuses. For 2010, individual bonus targets for Tier I executives are 100% of base
salary (as of the date hereof), except for the CEO and President who are at 125% of base salary (as
of the date hereof). The target set for the CEO, President and other named executives is based on
competitive market practices and designed to reward the executive for achieving our objectives of
maximizing ROI and profitably growing our business.



Administration. For purposes of determining positive ROI, ROI for Temple-Inland means
total segment operating income, less general and administrative expenses and share-based
compensation and long term incentive compensation not included in segments, divided by beginning of
year total assets less certain assets (assets held for sale, municipal bonds related to capital
leases, financial assets of special purpose entities, discontinued operations, and
acquisitions/divestitures on a weighted average basis) and current liabilities (excluding current
portion of long-term debt). For purposes of determining ROI ranking, ROI means operating income,
adjusted for Significant Unusual Items, divided by beginning of year total assets, excluding
certain assets (assets held for sale, municipal bonds related to capital leases, financial assets
of special purpose entities, discontinued operations, and acquisitions/divestitures on a weighted
average basis), less current liabilities, excluding current portion of long-term debt. “Peer Group”
means Abitibi-Bowater, Appleton Papers Inc., Boise Inc., Canfor Corporation, Caraustar Industries,
Inc.,















 







Cascades Inc., Catalyst Paper Corporation, Domtar Inc., Glatfelter (P.H.) Company, Graphic
Packaging, International Paper Company, MeadWestvaco Corporation, Mercer International Inc., Neenah
Paper Inc., Newark Group (The) Inc., NewPage Corp., Packaging Corporation of America, Rock-Tenn
Company, Smurfit-Stone Container Corporation, Temple-Inland Inc., Verso Paper, Wausau Paper Corp.,
and West Fraser Timber Co.; provided, however, that a company will be removed from the Peer Group
if for any year during the Performance Measurement Period (a) it ceases to be required to file
either a Form 10-K or Form 40-F, or (b) less than 80% of its total revenues (as reported in Form
10-K or in the case of a Canadian company that does not file a Form 10-K, the Canadian company’s
Form 40-F) are from either (i) paper manufacturing/conversion or (ii) lumber and panels.
Significant Unusual Items are income items reported in the Form 10-K or Form 40-F that represent
the recognition of income from multiple years’ activities in the current year (for example, gain on
the sale or disposition of an asset, and refunds, rebates, settlements, and credits that represent
recognition of income from multiple years’ activities). An item will be included as a Significant
Unusual Item only if it exceeds $1 million.



For purposes of determining size of bonus payment for segment executives, ROI for a segment
(applicable to segment executives) means segment operating income less an allocation of general and
administrative expenses not included in segments equal to: 15% to the Building Products segment and
60% to the Corrugated Packaging segment. The level of ROI performance necessary for paying the
threshold, target and maximum levels is established at the beginning of each year by the Committee
and is not subject to adjustment by management. The Committee must certify achievement of
performance criteria prior to payment and the executive must be employed by the Company on the date
of such certification to be entitled to receive a bonus payment. The Committee retains the
discretion to pay less than the maximum bonus.



Bonus awards constitute “Performance Awards” under the Temple Inland Inc. Incentive Plan (the
“Incentive Plan”). Pursuant to the terms of the Incentive Plan, the maximum cash amount payable to
any employee pursuant to all Performance Awards granted to an employee during a calendar year may
not exceed the annual dollar limit specified in the Incentive Plan.





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