exv10w36








Exhibit 10.36




TEMPLE-INLAND INC.

2010 INCENTIVE PLAN




     1. Definitions. In the Plan, except where the context otherwise indicates, the
following definitions shall apply:



          1.1. “Affiliate” means a corporation, partnership, business trust, limited liability company,
or other form of business organization at least a majority of the total combined voting power of
all classes of stock or other equity interests of which is owned by the Company, either directly or
indirectly, and any other entity designated by the Committee in which the Company has a significant
interest.




          1.2. “Agreement” means an agreement or other document evidencing an Award. An Agreement may
be in written or such other form as the Committee may specify in its discretion, and the Committee
may, but need not, require a Participant to sign an Agreement.




          1.3. “Award” means a grant of an Option, Restricted Stock, a Restricted Stock Unit, a
Performance Award, or an Other Stock-Based Award.




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




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




          1.6. “Committee” means the Management Development and Executive Compensation Committee of the
Board or such other committee(s), subcommittee(s) or person(s) the Board appoints to administer the
Plan or to make and/or administer specific Awards hereunder. If no such appointment is in effect
at any time, “Committee” shall mean the Board. Notwithstanding the foregoing, “Committee” means
the Board for purposes of granting Awards to members of the Board who are not Employees, and
administering the Plan with respect to those Awards, unless the Board determines otherwise.




          1.7. “Common Stock” means the Company’s common stock, par value $1.00 per share.




          1.8. “Company” means Temple-Inland Inc. and any successor thereto.




          1.9. “Date of Exercise” means the date on which the Company receives notice of the exercise of
an Option in accordance with Section 7.




          1.10. “Date of Grant” means the date on which an Award is granted under the Plan.




2010 Incentive Plan



 









 





          1.11. “Eligible Person” means any person who is (a) an Employee, (b) a member of the Board or
the board of directors of an Affiliate, or (c) a consultant or independent contractor to the
Company or an Affiliate.




          1.12. “Employee” means any person who the Committee determines to be an employee of the
Company or an Affiliate.




          1.13. “Exercise Price” means the price per Share at which an Option may be exercised.




          1.14. “Fair Market Value” means, unless otherwise determined by the Committee, the closing
price of a share of Common Stock on the New York Stock Exchange (“NYSE”) as of the relevant date.




          1.15. “Incentive Stock Option” means an Option that the Committee designates as an incentive
stock option under Section 422 of the Code.




          1.16. “Nonqualified Stock Option” means an Option that is not an Incentive Stock Option.




          1.17. “Option” means an option to purchase Shares granted pursuant to Section 6.




          1.18. “Option Period” means the period during which an Option may be exercised.




          1.19. “Other Stock-Based Award” means an Award granted pursuant to Section 11.




          1.20. “Participant” means an Eligible Person who has been granted an Award.




          1.21. “Performance Award” means a performance award granted pursuant to Section 10.




          1.22. “Performance Goals” means performance goals that the Committee establishes, which may be
based on satisfactory internal or external audits, achievement of balance sheet or income statement
objectives, cash flow, customer satisfaction metrics and achievement of customer satisfaction
goals, dividend payments, earnings (including before or after taxes, interest, depreciation, and
amortization), earnings growth, earnings per share; economic value added, expenses (including plant
costs and sales, general and administrative expenses), improvement of financial ratings, internal
rate of return, market share, net asset value, net income, net operating gross margin, net
operating profit after taxes (“NOPAT”), net sales growth, NOPAT growth, operating income, operating
margin, comparisons to the performance of other companies, pro forma income, regulatory compliance,
return measures (including return on assets, designated assets, capital, committed capital, net
capital employed, equity, sales, or stockholder equity, and return versus the Company’s cost of
capital), revenues, sales, stock price (including




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growth measures and total stockholder return), comparison to stock market indices,
implementation or completion of one or more projects or transactions (including mergers,
acquisitions, dispositions, and restructurings), working capital, or any other objective goals that
the Committee establishes. Performance Goals may be absolute in their terms or measured against or
in relationship to other companies comparably, similarly or otherwise situated. Performance Goals
may be particular to an Eligible Person or the department, branch, Affiliate, or division in which
the Eligible Person works, or may be based on the performance of the Company, one or more
Affiliates, or the Company and one or more Affiliates, and may cover such period as the Committee
may specify.




          1.23. “Plan” means this Temple-Inland Inc. 2010 Incentive Plan, as amended from time to time.




          1.24. “Restricted Stock” means Shares granted pursuant to Section 8.




          1.25. “Restricted Stock Units” means an Award providing for the contingent grant of Shares (or
the cash equivalent thereof) pursuant to Section 9.




          1.26. “Section 422 Employee” means an Employee who is employed by the Company or a “parent
corporation” or “subsidiary corporation” (each as defined in Sections 424(e) and (f) of the Code)
with respect to the Company, including a “parent corporation” or “subsidiary corporation” that
becomes such after adoption of the Plan.




          1.27. “Share” means a share of Common Stock.




          1.28. “Ten-Percent Stockholder” means a Section 422 Employee who (applying the rules of
Section 424(d) of the Code) owns stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or a “parent corporation” or “subsidiary
corporation” (each as defined in Sections 424(e) and (f) of the Code) with respect to the Company.




          1.29. Unless the context expressly requires the contrary, references in the Plan to (a) the
term “Section” refers to the sections of the Plan, and (b) the word “including” means “including
(without limitation).”




     2. Purpose. The Plan is intended to assist the Company and its Affiliates in
attracting and retaining Eligible Persons of outstanding ability and to promote the alignment of
their interests with those of the stockholders of the Company.



     3. Administration. The Committee shall administer the Plan and shall have plenary
authority, in its discretion, to grant Awards to Eligible Persons, subject to the provisions of the
Plan. The Committee shall have plenary authority and discretion, subject to the provisions of the
Plan, to determine the Eligible Persons to whom it grants Awards, the terms (which terms need not
be identical) of all Awards, including without limitation, the Exercise Price of Options, the time
or times at which Awards are granted, the number of Shares covered by Awards, whether an Option
shall be an Incentive Stock Option or a Nonqualified Stock Option, any exceptions to
nontransferability, any Performance Goals applicable to Awards, any provisions relating to vesting,
and the



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periods during which Options may be exercised and Restricted Stock shall be subject to
restrictions. In making these determinations, the Committee may take into account the nature of
the services rendered or to be rendered by Award recipients, their present and potential
contributions to the success of the Company and its Affiliates, and such other factors as the
Committee in its discretion shall deem relevant. Subject to the provisions of the Plan, the
Committee shall have plenary authority to interpret the Plan and Agreements, prescribe, amend and
rescind rules and regulations relating to them, and make all other determinations deemed necessary
or advisable for the administration of the Plan and Awards granted hereunder. The determinations
of the Committee on the matters referred to in this Section 3 shall be binding and final. The
Committee may delegate its authority under this Section 3 and the terms of the Plan to such extent
it deems desirable and is consistent with the requirements of applicable law.




     4. Eligibility. Awards may be granted only to Eligible Persons, provided that (a)
Incentive Stock Options may be granted only to Eligible Persons who are Section 422 Employees; and
(b) Options may be granted only to persons with respect to whom Shares constitute stock of the
service recipient (within the meaning of Section 409A of the Code and the applicable Treasury
Regulations thereunder).



     5. Stock Subject to Plan.



          5.1. Subject to adjustment as provided in Section 13, the maximum number of Shares that may be
issued pursuant to Awards (including Incentive Stock Options) under the Plan is 4,000,000 Shares.
Shares issued under the Plan may, in whole or in part, be authorized but unissued Shares or Shares
that shall have been, or may be, reacquired by the Company in the open market, in private
transactions, or otherwise. The number of Shares authorized for issuance under the Plan shall be
decreased by 1.4 Shares for each Share issued pursuant to Awards that are not Options (any Awards
payable in Shares that are not Options being “Full Value Awards”).




          5.2. Subject to adjustment as provided in Section 13, the maximum number of Shares with
respect to which an Employee may be granted Awards under the Plan (whether settled in Shares or the
cash equivalent thereof) during any calendar year is 1,000,000. The maximum number of Shares with
respect to which an Employee has been granted Awards shall be determined in accordance with Section
162(m) of the Code.




          5.3. If an Option expires or terminates for any reason without having been fully exercised, if
shares of Restricted Stock are forfeited, or if Shares covered by an Award are not issued or are
forfeited, the unissued or forfeited Shares that had been subject to the Award shall be available
for the grant of additional Awards; provided, however, that: (a) in the case of Full Value Awards,
the number of Shares that again become available for the grant of Awards under the Plan shall
reflect the last sentence of Section 5.1, so that, by way of example, if 100 shares of Restricted
Stock are forfeited, 140 Shares shall again be available for the grant of Awards, subject to the
last sentence of Section 5.1; (b) in the case of Shares that are withheld (or delivered) to pay
withholding taxes, no such withheld (or delivered) Shares shall be available for the grant of
Awards hereunder; (c) in the case of the surrender of all or a portion of an Option pursuant to




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Section 6.4 hereof, the excess of the number of Shares as to which the Option is surrendered
over the number of Shares issued to the Participant in consideration for such surrender shall not
be available for the grant of Awards hereunder; and (d) in the case of delivery of Shares pursuant
to Section 7.2 hereof as payment of the Exercise Price, no such Shares shall be available for the
grant of Awards hereunder.




     6. Options.



          6.1. Options granted under the Plan shall be either Incentive Stock Options or Nonqualified
Stock Options, as designated by the Committee. Each Option granted under the Plan shall be a
Nonqualified Stock Option unless expressly identified as an Incentive Stock Option, and each Option
shall be evidenced by an Agreement that specifies the terms and conditions of the Option. Options
shall be subject to the terms and conditions set forth in this Section 6 and such other terms and
conditions not inconsistent with the Plan as the Committee may specify. The Committee, in its
discretion, may condition the grant or vesting of an Option upon the achievement of one or more
specified Performance Goals.




          6.2. The Exercise Price of an Option granted under the Plan shall not be less than 100% of the
Fair Market Value of a Share on the Date of Grant. Notwithstanding the foregoing, in the case of
an Incentive Stock Option granted to an Employee who, on the Date of Grant is a Ten-Percent
Shareholder, the Exercise Price shall not be less than 110% of the Fair Market Value of a Share on
the Date of Grant.




          6.3. The Committee shall determine the Option Period for an Option, which shall be
specifically set forth in the Agreement, provided that an Option shall not be exercisable after ten
years (five years in the case of an Incentive Stock Option granted to an Employee who on the Date
of Grant is a Ten-Percent Stockholder) from its Date of Grant.




          6.4. To the extent authorized by the Committee, and in accordance with such rules as the
Committee may prescribe, a Participant may surrender to the Company an Option (or a portion
thereof) that has become exercisable and receive upon such surrender, without any payment to the
Company (other than required tax withholding amounts) that number of Shares (equal to the highest
whole number of Shares) having an aggregate Fair Market Value as of the date of surrender equal to
that number of Shares subject to the Option (or portion thereof) being surrendered multiplied by an
amount equal to the excess of (i) the Fair Market Value on the date of surrender over (ii) the
Exercise Price, plus an amount of cash equal to the fair market value of any fractional Share to
which the Participant would be entitled but for the parenthetical above relating to the issuance of
a whole number of Shares. Any such surrender shall be treated as the exercise of the Option (or
portion thereof).




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     7. Exercise of Options.



          7.1. Subject to the terms of the applicable Agreement, an Option may be exercised, in whole or
in part, by delivering to the Company a notice of the exercise, in such form as the Committee may
prescribe, accompanied by (a) full payment for the Shares with respect to which the Option is
exercised or (b) to the extent provided in the applicable Agreement, irrevocable instructions to a
broker to deliver promptly to the Company cash equal to the exercise price of the Option.




          7.2. To the extent provided in the applicable Agreement or otherwise authorized by the
Committee, payment may be made by delivery (including constructive delivery) of Shares (provided
that such Shares, if acquired pursuant to an Option or other Award granted hereunder or under any
other compensation plan maintained by the Company or any Affiliate, have been held by the
Participant for such period, if any, as the Committee may specify) valued at Fair Market Value on
the Date of Exercise or surrender of the Option (or portion thereof) as provided in Section 6.4.




     8. Restricted Stock Awards. Each grant of Restricted Stock under the Plan shall be
subject to an Agreement specifying the terms and conditions of the Award. Restricted Stock granted
under the Plan shall consist of Shares that are restricted as to transfer, subject to forfeiture,
and subject to such other terms and conditions as the Committee may specify. Such terms and
conditions may provide, in the discretion of the Committee, for the lapse of such transfer
restrictions or forfeiture provisions to be contingent upon the achievement of one or more
specified Performance Goals.



     9. Restricted Stock Unit Awards. Each grant of Restricted Stock Units under the Plan
shall be evidenced by an Agreement that (a) provides for the issuance of Shares (or the cash
equivalent thereof) to a Participant at such time(s) as the Committee may specify and (b) contains
such other terms and conditions as the Committee may specify, including, terms that condition the
issuance or vesting of Restricted Stock Unit Awards upon the achievement of one or more specified
Performance Goals.



     10. Performance Awards. Each Performance Award granted under the Plan shall be
evidenced by an Agreement that (a) provides for the payment of cash or issuance of Shares to a
Participant contingent upon the attainment of one or more specified Performance Goals over such
period as the Committee may specify, and (b) contains such other terms and conditions as the
Committee may specify. If the terms of a Performance Award provide for payment in the form of
Shares, for purposes of Section 5.2, the Performance Award shall be deemed to cover a number of
Shares equal to the maximum number of Shares that may be issued upon payment of the Award. The
maximum cash amount payable to any Employee pursuant to all Performance Awards granted to an
Employee during a calendar year shall not exceed $10 million. The Committee may, in its
discretion, grant Performance Awards pursuant to which the amount and payment of the Award is
determined by reference to a percentage of a bonus or incentive pool that applies to more than one
Participant, and the amount of the bonus or incentive pool may,



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in the discretion of the Committee, be either fixed in amount or determined based upon the
achievement of one or more Performance Goals.




     11. Other Stock-Based Awards. The Committee may in its discretion grant stock-based
awards (including awards based on dividends) of a type other than those otherwise provided for in
the Plan, including the issuance or offer for sale of unrestricted Shares (“Other Stock-Based
Awards”). Other Stock-Based Awards shall cover such number of Shares and have such terms and
conditions as the Committee shall determine, including terms that condition the payment or vesting
the Other Stock-Based Award upon the achievement of one or more Performance Goals.



     12. Dividends and Dividend Equivalents. The terms of an Award, other than an Option,
may provide a Participant with the right, subject to such terms and conditions as the Committee may
specify, to receive dividend payments or dividend equivalent payments with respect to Shares
covered by such Award, which payments (a) may be either made currently or credited to an account
established for the Participant, (b) contingent upon the achievement of one or more Performance
Goals, and (c) may be settled in cash or Shares, as determined by the Committee; provided, however,
that in no event shall any dividends or dividend equivalents be paid out with respect to any
unvested performance Awards.



     13. Capital Events and Adjustments.



          13.1. In the event of any change in the outstanding Common Stock by reason of any stock
dividend, stock split, reverse stock split, spin-off, split-off, recapitalization,
reclassification, combination or exchange of shares, merger, consolidation, liquidation or the
like, the Committee shall provide for a substitution for or adjustment in: (a) the number and class
of securities subject to outstanding Awards or the type of consideration to be received upon the
exercise or vesting of outstanding Awards, (b) the Exercise Price of Options, (c) the aggregate
number and class of Shares for which Awards thereafter may be granted under the Plan, and (d) the
maximum number of Shares with respect to which an Employee may be granted Awards during any
calendar year.




          13.2. Any provision of the Plan or any Agreement to the contrary notwithstanding, in the event
of a merger or consolidation to which the Company is a party, the Committee shall take such
actions, if any, as it deems necessary or appropriate to prevent the enlargement or diminishment of
Participants’ rights under the Plan and Awards granted hereunder, and may, in its discretion, cause
any Award granted hereunder to be canceled in consideration of a cash payment equal to the fair
value of the canceled Award, as determined by the Committee in its discretion. The fair value of
an Option shall be deemed to be equal to the product of (a) the number of Shares the Option covers
(and has not previously been exercised) and (b) the excess, if any, of the Fair Market Value of a
Share as of the date of cancellation over the Exercise Price of the Option.




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     14. Change in Control.



          14.1. The Committee may in its discretion grant Awards that include terms and conditions
relating to the effect of a Change in Control (which shall have the meaning set forth in Section
14.2).




          14.2. For purposes of this Plan, a “Change in Control” shall be deemed to have occurred if the
event set forth in any one of the following paragraphs shall have occurred:




               (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 date of the Award, 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 of the Award 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



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of the then outstanding securities of the Company or such
surviving entity or any parent thereof (except to the extent such ownership existed prior to
the Business Event);




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



               (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.


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.




          14.3. For purposes of Section 14.2:




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



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



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



     “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and
used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company
or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.



     15. Termination or Amendment. The Board may amend or terminate the Plan in any
respect at any time; provided, however, that after the stockholders of the Company have approved
the Plan, the Board shall not amend or terminate the Plan without approval of (a) the Company’s
stockholders to the extent applicable law or regulations or



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the requirements of the principal exchange or interdealer quotation system on which the Common
Stock is listed or quoted, if any, requires stockholder approval of the amendment or termination,
and (b) each affected Participant if the amendment or termination would adversely affect the
Participant’s rights or obligations under any Award granted prior to the date of the amendment or
termination.




     16. Modification, Substitution of Awards. Subject to the terms and conditions of the Plan,
the Committee may modify the terms of any outstanding Awards; provided, however, that (a) no
modification of an Award shall, without the consent of the Participant, alter or impair any of the
Participant’s rights or obligations under such Award, and (b) subject to Section 13, in no event
may an Option be (i) modified to reduce the Exercise Price of the Option or (ii) cancelled or
surrendered in consideration for cash, other Awards, or the grant of a new Option with a lower
Exercise Price.



     17. Foreign Employees. Without amendment of the Plan, the Committee may grant Awards
to Eligible Persons who are subject to the laws of foreign countries or jurisdictions on such terms
and conditions different from those specified in the Plan as may in the judgement of the Committee
be necessary or desirable to foster and promote achievement of the purposes of the Plan. The
Committee may make such modifications, amendments, procedures, sub-plans and the like as may be
necessary or advisable to comply with provisions of laws of other countries or jurisdictions in
which the Company or any Affiliate operates or has employees.



     18. Stockholder Approval. The Plan, and any amendments hereto requiring stockholder
approval pursuant to Section 14 are subject to approval by vote of the stockholders of the Company
at the next annual or special meeting of stockholders following adoption by the Board.



     19. Withholding. The Company’s obligation to issue or deliver Shares or pay any
amount pursuant to the terms of any Award granted hereunder shall be subject to satisfaction of
applicable federal, state, local, and foreign tax withholding requirements. To the extent
authorized by the Committee, and in accordance with such rules as the Committee may prescribe, a
Participant may satisfy any withholding tax requirements by one or any combination of the following
means: (a) tendering a cash payment, (b) authorizing the Company to withhold Shares otherwise
issuable to the Participant, or (c) delivering to the Company already-owned and unencumbered
Shares.



     20. Term of Plan. Unless sooner terminated by the Board pursuant to Section 14, the
Plan shall terminate on the date that is ten years after the earlier of the date that the Plan is
adopted by the Board or approved by the Company’s stockholders, and no Awards may be granted or
awarded after such date. The termination of the Plan shall not affect the validity of any Award
outstanding on the date of termination.



     21. Indemnification of Committee. In addition to such other rights of indemnification
as they may have as members of the Board or Committee, the Company shall indemnify members of the
Committee against all reasonable expenses, including attorneys’ fees, actually and reasonably
incurred in connection with the defense of any



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action, suit or proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in connection with the
Plan or any Award granted hereunder, and against all amounts reasonably paid by them in settlement
thereof or paid by them in satisfaction of a judgment in any such action, suit or proceeding, if
such members acted in good faith and in a manner which they believed to be in, and not opposed to,
the best interests of the Company.




     22. General Provisions.



          22.1. The establishment of the Plan shall not confer upon any Eligible Person any legal or
equitable right against the Company, any Affiliate or the Committee, except as expressly provided
in the Plan. Participation in the Plan shall not give an Eligible Person any right to be retained
in the service of the Company or any Affiliate.




          22.2. Neither the adoption of the Plan nor its submission to the Company’s stockholders shall
be taken to impose any limitations on the powers of the Company or its Affiliates to issue, grant
or assume options, warrants, rights, restricted stock or other awards otherwise than under the
Plan, or to adopt other stock option, restricted stock, or other plans, or to impose any
requirement of stockholder approval upon the same.




          22.3. The interests of any Eligible Person under the Plan and/or any Award granted hereunder
are not subject to the claims of creditors and may not, in any way, be transferred, assigned,
alienated or encumbered except to the extent provided in an Agreement.




          22.4. The Plan shall be governed, construed and administered in accordance with the laws of
the State of Texas without giving effect to the conflict of laws principles.




          22.5. The Committee may require each person acquiring Shares pursuant to Awards granted
hereunder to represent to and agree with the Company in writing that such person is acquiring the
Shares without a view to distribution thereof. The certificates for such Shares may include any
legend which the Committee deems appropriate to reflect any restrictions on transfer. All
certificates for Shares issued pursuant to the Plan shall be subject to such stock transfer orders
and other restrictions as the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon which the Common
Stock is then listed or interdealer quotation system upon which the Common Stock is then quoted,
and any applicable federal or state securities laws. The Committee may place a legend or legends
on any such certificates to make appropriate reference to such restrictions.




          22.6. The Company shall not be required to issue any certificate or certificates for Shares
with respect to Awards granted under the Plan, or record any person as a holder of record of
Shares, without obtaining, to the complete satisfaction of




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the Committee, the approval of all regulatory bodies the Committee deems necessary, and
without complying to the Board’s or Committee’s complete satisfaction, with all rules and
regulations under federal, state or local law the Committee deems applicable.




          22.7. To the extent that the Plan provides for issuance of stock certificates to reflect the
issuance of Shares, the issuance may be effected on a noncertificated basis, to the extent not
prohibited by applicable law or the rules of any stock exchange or automated dealer quotation
system on which the Shares are traded. No fractional Shares shall be issued or delivered pursuant
to the Plan or any Award. The Committee shall determine whether cash, other Awards, or other
property shall be issued or paid in lieu of any fractional Shares or whether any fractional Shares
or any rights thereto shall be forfeited or otherwise eliminated.





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