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TEMPLE-INLAND INC.
NONQUALIFIED STOCK OPTION AGREEMENT
  1.
    
    Grant of Option. Pursuant to, and subject to the terms and conditions set forth in
the Plan, Temple-Inland hereby irrevocably grants to the Employee, as a matter of separate
agreement and not in lieu of salary or any other compensation for services, the option to
purchase all or any part of the above stated number of shares of the Common Stock at the above
stated price on the terms and conditions herein set forth (the Option). The Option is a
Nonstatutory Stock Option and is not intended to qualify as an incentive stock option under
Section 422 of the Internal Revenue Code of 1986, as amended (the Code).
 2.
    
    Governing Documents. This Agreement and the award hereunder is subject to all the
restrictions, terms and provisions of the Temple-Inland Inc. 2008 Incentive Plan (the Plan)
and of the Temple-Inland Inc. Stock Option Terms and Conditions dated February 1, 2008 (the
Terms and Conditions; and together with the Plan, the Plan Documents) which are herein
incorporated by reference and to the terms of which the Employee hereby agrees. Capitalized
terms used in this Agreement that are not defined herein shall have the meaning set forth in
the Plan Documents.
 3.
    
    Exercise of Option. The Option shall become exercisable in installments on and after
each Date Exercisable as stated above. The Option may be exercised in whole, at any time,
or in part, from time to time, as to all or any of the shares as to which the Option is then
exercisable under the Option (provided that the Option may not be exercised as to less than
the lesser of 100 shares or the number of shares as to which the Option is then exercisable).
The term of the Option shall commence on the Date of Grant and shall expire on the Expiration
Date stated above or such earlier date as is prescribed in the Plan Documents. Except as
otherwise provided in the Plan Documents, the Option shall not be exercisable unless the
Employee shall, at the time of exercise, be an employee of Temple-Inland or one of its
Affiliates. The Option may be exercised only upon notice to Temple-Inland and payment of the
Exercise Price and tax withholding in the manner set forth in the Plan Documents.
 4.
    
    No Stockholder Rights. The Employee shall have none of the rights of a stockholder
with respect to the shares of Common Stock subject to the Option until such shares shall have
been transferred to the Employee upon the exercise of the Option.
 5.
    
    Employment Requirement. The Employee agrees that the Employee will remain in the
employ of Temple-Inland or of an Affiliate for a period ending on one year from the date
hereof and that the Employee will, during such employment, devote his or her time, energy and
skill to the service of Temple-Inland or such Affiliate and the promotion of its interests,
subject to vacations, sick leave and other absences in accordance with the regular policies of
Temple-Inland or such Affiliate. Notwithstanding the foregoing, if the Employee has been
granted one or more options under the Plan or the Temple-Inland Inc. 2003 Stock Incentive
Plan, the period of time during which the Employee shall be obligated to remain in the employ
of Temple-Inland or of an Affiliate hereunder and under the terms of such other option
agreement or agreements shall run concurrently and not consecutively. Such employment shall
be at the pleasure of Temple-Inland or such Affiliate and shall be at such compensation as
Temple-Inland or such Affiliate shall determine from time to time. Upon termination of the
Employees employment (voluntary or involuntary, with or without cause) within the one (1)
year period described above without the
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6.
    
    Arbitration. The Employee and Temple-Inland agree that this Agreement arises out
of, and is inseparable from, the Employees employment with Temple-Inland or any of its
Affiliates. The Employee and Temple-Inland further agree to final and binding arbitration as
the exclusive forum for resolution of any dispute of any nature whatsoever, whether initiated
by the Employee or Temple-Inland, arising out of, related to, or connected with Employees
employment with, or termination by, Temple-Inland or any of its Affiliates. This includes,
without limitation, any dispute arising out of the application, interpretation,
enforcement, or claimed breach of this Agreement. The only exceptions to the scope of this
arbitration provision are claims arising under any written agreement between the Employee and
Temple-Inland or its Affiliate that expressly provides that such claimsare not subject
to binding arbitration. Arbitration under this provision shall be conducted
under the employment dispute rules and procedures of either the American Arbitration
Association or of JAMS/Endispute, according to the preference of the party initiating such
arbitration. Appeal from, or confirmation of, any arbitration award under this paragraph
may be made to any court of competent jurisdiction under standards applicable to appeal or
confirmation of arbitration awards under the Federal Arbitration Act. This arbitration
provision and related proceedings shall be subject to and governed by the Federal Arbitration
Act.
 7.
    
    Stockholder Approval. The Option granted hereby is granted subject to approval of
the Plan at Temple-Inlands first annual stockholders meeting following the date of this
Agreement, and if the Plan is not so approved by Temple-Inlands stockholders at such
stockholders meeting, the Option shall be immediately cancelled and shall be void ab
initio.
 8.
    
    Miscellaneous. The Committee may from time to time modify or amend this Agreement
in accordance with the provisions of the Plan Documents. This Agreement shall be binding
upon and inure to the benefit of Temple-Inland and its successors and assigns and shall be
binding upon and inure to the benefit of the Employee and his or her legatees, distributees
and personal representatives. By signing this Agreement, the Employee acknowledges and
expressly agrees that the Employee has read the Agreement and the Plan Documents and agrees
to their terms. This Agreement may be executed by Temple-Inland and the Employee by means of
electronic or digital signatures, which shall have the same force and effect as manual
signatures. The Employee acknowledges and agrees that clicking I Accept on the Companys
online grant acceptance screen has the effect of affixing the Employees electronic signature
to this Agreement. This Agreement shall be governed by and construed in accord with federal
law, where applicable, and otherwise with the laws of the State of Texas.
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TEMPLE-INLAND INC.
STOCK OPTION TERMS AND CONDITIONS
FEBRUARY 1, 2008
 1. Definitions :
 a.
    
    Change in Control:
 i.
    
    A change in control shall be deemed to have occurred if the
event set forth in any one of the following paragraphs shall have occurred:
 (1)
    
    any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of Temple-Inland (not including
in the securities beneficially owned by such Person any securities
acquired directly from Temple-Inland or its Affiliates) representing
20% or more of the combined voting power of Temple-Inlands then
outstanding securities, excluding any Person who becomes such a
Beneficial Owner in connection with a transaction described in clauses
(a), (b) or (c) of paragraph (3) below;(2)
    
    within any twenty-four (24) month period, the
following individuals cease for any reason to constitute a majority of
the number of directors then serving on the Board: individuals who, on
the Effective Date, constitute the Board and any new director (other
than a director whose initial assumption of office is in connection
with an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of
directors of Temple-Inland) whose appointment or election by the Board
or nomination for election by Temple-Inlands shareholders was approved
or recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on the date hereof or
whose appointment, election or nomination for election was previously
so approved or recommended;(3)
    
    there is consummated a merger, consolidation of
Temple-Inland or any direct or indirect subsidiary of Temple-Inland
with any other corporation or any recapitalization of Temple-Inland
(for purposes of this paragraph (III), a Business Event) unless,
immediately following such Business Event (a) the directors of
Temple-Inland immediately prior to such Business Event continue to
constitute at least a majority of the board of directors of
Temple-Inland, the surviving entity or any parent thereof, (b) the
voting securities of Temple-Inland 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 Temple-Inland or any subsidiary of
Temple-Inland, at least 60% of the combined voting power of the
securities of Temple-Inland 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 Temple-Inland or such
surviving entity or any parent thereof (not including in the securities
Beneficially Owned by such Person any securities acquired directly from
Temple-Inland or its Affiliates) representing 20% or more of the
combined voting power of the then outstanding securities of
Temple-Inland or such surviving entity or any
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parent thereof (except to the extent such ownership existed prior to
the Business Event);(4)
    
    the shareholders of Temple-Inland approve a
plan of complete liquidation or dissolution of Temple-Inland;(5)
    
    there is consummated an agreement for the sale,
disposition or long-term lease by Temple-Inland of substantially all of
Temple-Inland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 Temple-Inland
in substantially the same proportions as their ownership of
Temple-Inland immediately prior to such sale or disposition or (b) the
distribution directly to Temple-Inlands shareholders (in one
distribution or a series of related distributions) of all of the stock
of one or more subsidiaries of Temple-Inland that represent
substantially all of Temple-Inlands assets; or(6)
    
    any other event that the Board, in its sole
discretion, determines to be a Change in Control for purposes of this
Agreement.Notwithstanding the foregoing, a Change in Control under clauses
(1) through (5) above shall not be deemed to have occurred by virtue
of the consummation of any transaction or series of integrated
transactions immediately following which the record holders of the
common stock of Temple-Inland 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
Temple-Inland as constituted immediately prior to such transaction or
series of transactions.
 ii.
    
    For purposes of this definition of Change in Control:
 (1)
    
    Affiliate shall have the meaning set forth in
Rule 12b-2 promulgated under Section 12 of the Exchange Act.(2)
    
    Beneficial Owner shall have the meaning set
forth in Rule 13d-3 under the Exchange Act.(3)
    
    Effective Date means the Date of Grant of the
applicable Option.(4)
    
    Exchange Act shall mean the Securities
Exchange Act of 1934, as amended from time to time.(5)
    
    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)
Temple-Inland or any of its subsidiaries, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of
Temple-Inland 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 Temple-Inland in substantially the same proportions as
their ownership of stock of Temple-Inland.
 b.
    
    Disability: means Termination of Service due to a Participants
becoming disabled (within the meaning of Section 409A of the Code).
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c.
    
    Exercise Price: means the Exercise Price, as defined in the Plan.d.
    
    Group: means Temple-Inland and its Affiliates.e.
    
    Participant: means any Eligible Employee who has been granted an
Option, or any transferee of an Option by reason of the death of the Eligible Employee
or pursuant to the requirements of applicable law.f.
    
    Plan: means the Temple-Inland Inc. 2008 Incentive Plan.g.
    
    Retirement: means a Participants Termination of Service after either
(i) attaining age 65 or (ii) attaining age 55 and completing at least five years of
service with Temple-Inland or any of its Affiliates.h.
    
    Temple-Inland: means Temple-Inland Inc. and any successor.i.
    
    Termination of Service: means the Eligible Employees termination of
employment by the Group for any reason.
 Capitalized terms used herein but not defined herein shall have the meaning assigned to such
terms in the Plan.2.
    
    Acceptance of Option Agreement: An Option shall be immediately cancelled and expire
if the applicable Option Agreement is not accepted (in such manner as may be specified by
Temple-Inland) by a Participant (or his or her agent or attorney) and delivered to
Temple-Inland (in such manner as may be specified by Temple-Inland) within 60 days after the
Grant Date of the Option (unless an extension of such deadline for extenuating circumstances
is approved by a Vice President of Temple-Inland).
 3.
    
    Exercise of Options:a.
    
    Temple-Inland shall not be required to deliver certificates or instruments for
shares with respect to which an Option is exercised until the exercise price for the
shares of Common Stock being purchased has been paid in full, except as provided in
paragraph 3.d. hereof.b.
    
    In order to exercise an Option, notice must be provided to Temple-Inland in
such form as may be specified by Temple-Inland. Such notice shall state that the
Participant elects to exercise a specified Option, the number of shares of Common Stock
in respect of which it is being exercised, and the manner of payment of the exercise
price of the Option.c.
    
    Except as provided in paragraph 3.d. hereof, the notice shall be accompanied by
payment of the full exercise price of the Option with respect to the number of shares
being purchased. The Exercise Price shall be paid in cash, by irrevocable instructions
to a broker to deliver promptly to Temple-Inland cash equal to the Exercise Price of
the Option, or unless otherwise provided in the applicable Option Agreement, in whole
shares of Common Stock held by the Participant for such period, if any, as may be
specified by the Committee, or partly in cash and partly in such Common Stock. Cash
payments shall be made by certified or bank cashiers check, or by the wire transfer of
immediately available funds, in each case payable to the order of Temple-Inland (or
such other person or entity as may be specified by Temple-Inland). Payments of the
Exercise Price of an Option that are made in the form of Common Stock (which shall be
valued at Fair Market Value) may be made by (i) delivery of stock certificates in
negotiable form with an issue date indicating the Common Stock has been held by the
Participant for such period, if any, as may be specified by the Committee, or (ii)
unless otherwise determined by the Committee, delivery of the Participants
representation that on the
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d.
    
    Unless otherwise prohibited by the Committee, and in accordance with such rules
as the Committee may prescribe, a Participant may surrender to Temple-Inland an Option
(or a portion thereof) that has become exercisable and receive upon such surrender,
without any payment to Temple-Inland (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) and the provisions of paragraph 3.c. hereof
shall not apply.e.
    
    Except as provided in paragraph 5 hereof, no Option may be exercised at any
time unless the holder thereof is then an Employee of the Group.
 4.
    
    Withholding:Temple-Inlands obligation to deliver shares of Common Stock upon the
exercise of an Option shall be subject to the satisfaction of applicable federal, state and
local tax withholding requirements. Unless otherwise prohibited by the Committee, and in
accordance with rules prescribed by the Committee, each Participant may satisfy any such
withholding tax obligation by any of the following means or by a combination of such means:
(a) tendering a cash payment; (b) authorizing Temple-Inland to withhold shares of Common Stock
from the shares otherwise issuable to the Participant as the result of the exercise of an
Option, or (c) delivering to Temple-Inland unencumbered shares of Common Stock held by the
Participant for such period, if any, as may be specified by the Committee. Shares of Common
Stock that are withheld or delivered to satisfy applicable withholding taxes shall be valued
at their Fair Market Value on the date the withholding tax obligation arises. Only the
required statutory minimum tax may be withheld; excess tax withholding is not allowed.
 5.
    
    Termination of Employment:In the event of the Termination of Service of a
Participant to whom an Option has been granted, the Option may, subject to the provisions of
paragraph 3 hereof, be exercised as follows:
 Vested Option Exercise
    
    Treatment of UnvestedTermination
    
    Period
    
    OptionsDeath
    
    12 months
    
    Immediately VestDisability
    
    36 months
    
    Immediately VestRetirement
    
    Until Expiration of Option
    
    Immediately VestOther Termination of
Service
    
    3 months
    
    Forfeited
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Notwithstanding the foregoing, in no event may an Option be exercised after expiration of
its stated term. Options granted under the Plan to Eligible Employees shall not be affected
by any change of employment so long as the Participant continues to be an employee of the
Group. An Agreement may contain such provisions as the Committee may approve with respect
to the effect of approved leaves of absence for employees.6.
    
    Adjustments upon Changes in Capitalization:Notwithstanding any other provisions of
the Plan, in the event of any change in the outstanding Common Stock by reason of any stock
dividend, split-up, spin-off, recapitalization, reclassification, combination or exchange of
shares, merger, consolidation or liquidation and the like, the Committee shall provide for a
substitution for or adjustment in (i) the number and class of shares subject to outstanding
Options, and (ii) the exercise prices of outstanding Options. The Committees determinations
with regard to the adjustments or substitutions provided for by this paragraph shall be
conclusive. The Committee may at any time, in its sole discretion, make such amendments to
the terms of Option Agreements as it deems necessary or appropriate to reflect any adjustments
or substitutions made under the Plan or pursuant to this paragraph. With respect to such
options and/or other awards, if any, that may have been granted to the Participant under the
Temple-Inland Inc. 2003 Stock Incentive Plan prior to the date hereof, the Participant (a)
acknowledges and agrees that pursuant to memoranda dated August 9, 2007, November 14, 2007,
and January 11, 2008, the Participant has been advised of certain changes and adjustments made
by the Committee to such options and other awards (including changes and adjustments relating
to Temple-Inlands spin-off of Guaranty Financial Group Inc. and Forestar Real Estate Group
Inc., and such options and other awards change in control and retirement provisions), (b)
acknowledges and agrees to such changes and adjustments, and (c) acknowledges and agrees that
with respect to such options, if any, the Temple-Inland Inc. Stock Option Terms and Conditions
document dated November 2, 2007 (the November 2, 2007 Option Terms and Conditions) and
included in the prospectus dated January 1, 2008 for the Temple-Inland Inc. 2003 Stock
Incentive Plan supersedes and replaces the previously in effect Temple Inland Inc. Standard
Terms and Conditions document to the extent provided in the November 2, 2007 Option Terms and
Conditions.7.
    
    Change in Control:Notwithstanding any contrary waiting period, installment period
or other limitation or restriction in any Option Agreement or in the Plan, each outstanding
Option granted under the Plan shall become exercisable in full for the aggregate number of
shares covered thereby, in the event of a Change in Control. Any provision of the Plan
Documents or any Option Agreement to the contrary notwithstanding, in the event of a merger or
consolidation to which Temple-Inland 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 any Option, and may, in its discretion, cause any Option to be
canceled in consideration of a payment equal to the product of (a) the number of shares of
Common Stock that the Option covers (and has not previously been exercised) and (b) the
excess, if any, of the Fair Market Value of a share of Common Stock as of the date of
cancellation over the Exercise Price of the Option.8.
    
    Nonalienation of Benefits: Except as required by applicable law, no right or benefit
under the Plan or any Option shall be subject to anticipation, alienation, sale, assignment,
hypothecation, pledge, exchange, transfer, encumbrance or charge, and any attempt to
anticipate, alienate, sell, assign, hypothecate, transfer, pledge, exchange, transfer,
encumber or charge the same shall be void. No right or benefit under the Plan or any Option
shall in any manner be liable for or subject to the debts, contracts, liabilities or torts of
the person entitled to such benefit. If any Participant shall become bankrupt or attempt to
anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or
charge any right or benefit under the Plan or any Option, then such right or benefit shall, in
the discretion of the Committee, cease and terminate, and in such
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event, the Committee in its discretion may hold or apply the same or any part thereof for
the benefit of the Participant or his beneficiary, spouse, children or other dependents, or
any of them, in such manner and in such proportion as the Committee may deem proper.9.
    
    No Right to Continued Employment; No Additional Rights: Nothing contained in the
Plan or in any Option Agreement shall confer on any Participant any right to continue in the
employ of Temple-Inland or any of its Affiliates or interfere in any way with the right of
Temple-Inland or an Affiliate to terminate the employment of a Participant at any time, with
or without cause, notwithstanding the possibility that the number of shares of Common Stock
purchasable by such person under his or her Option (or Options) may thereby be reduced or
eliminated. Nothing in the Plan Documents or any Option Agreement shall be construed to give
any employee of Temple-Inland or any Affiliate any right to receive an award of Options or as
evidence of any agreement or understanding, express or implied, that Temple-Inland or any
Affiliate will employ the Participant in any particular position or at any particular rate of
remuneration, or for any particular period of time.10.
    
    Exclusion from Pension, Profit-Sharing and Other Benefit Computations:By acceptance
of an Option award under the Plan, a Participant shall be deemed to have agreed that any
compensation arising from the Option constitutes special incentive compensation that shall not
be taken into account as salary, pay, compensation or bonus in determining the amount
of any payment under any pension, retirement or profit-sharing plan of Temple-Inland or any
Affiliate. In addition, each Participant shall be deemed to have agreed that neither the
award, vesting, nor exercise of an Option shall be taken into account in determining the
amount of any life insurance coverage or short or long-term disability coverage provided by
Temple-Inland or any Affiliate.
 11.
    
    Applicability: This Terms and Conditions shall apply to all Options to which the
Committee designates it as applying, and the Committee may designate it as applying to an
Option in whole or in part in its discretion.
 12.
    
    Plan Controls:In the event of any conflict between the Plan and the terms of an
Option Agreement or the Terms and Conditions, the Plan shall govern.
 8