**Exhibit
      10.23**





**STRATUS
      PROPERTIES INC.**


**1996
      STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS**





ARTICLE
      I




PURPOSE
      OF THE PLAN




The
      purpose of the 1996 Stock Option Plan for Non-Employee Directors (the “Plan”) is
      to align more closely the interests of the non-employee directors of Stratus
      Properties Inc. (the “Company”) with that of the Company’s stockholders by
      providing for the automatic grant to such directors of stock options (“Options”)
      to purchase Shares (as hereinafter defined), in accordance with the terms of
      the
      Plan.




ARTICLE
      II




DEFINITIONS




For
      the
      purposes of this Plan, the following terms shall have the meanings
      indicated:




Board :
      The
      Board of Directors of the Company.




Change
      in Control :
      A
      Change in Control shall be deemed to have occurred if either (a) any person,
      or
      any two or more persons acting as a group, and all affiliates of such person
      or
      persons, shall own beneficially more than 20% of the Common Stock outstanding
      (exclusive of shares held in the Company’s treasury or by the Company’s
      Subsidiaries) pursuant to a tender offer, exchange offer or series of purchases
      or other acquisitions, or any combination of those transactions, or (b) there
      shall be a change in the composition of the Board at any time within two years
      after any tender offer, exchange offer, merger, consolidation, sale of assets
      or
      contested election, or any combination of those transactions (a “Transaction”),
      so that (i) the persons who were directors of the Company immediately before
      the
      first such Transaction cease to constitute a majority of the Board of Directors
      of the corporation that shall thereafter be in control of the companies that
      were parties to or otherwise involved in such Transaction, or (ii) the number
      of
      persons who shall thereafter be directors of such corporation shall be fewer
      than two-thirds of the number of directors of the Company immediately prior
      to
      such first Transaction. A Change in Control shall be deemed to take place upon
      the first to occur of the events specified in the foregoing clauses (a) and
      (b).




Code :
      The
      Internal Revenue Code of 1986, as amended from time to time.




Committee :
      A
      committee of the Board designated by the Board to administer the Plan and
      composed of not fewer than two directors, each of whom, to the extent necessary
      to comply with Rule 16b-3 only, is a “non-employee director” within the meaning
      of Rule 16b-3 and, to the extent necessary to comply with Section 162(m) only,
      is an “outside director” under Section 162(m). Until otherwise determined by the
      Board, the Committee shall be the Corporate Personnel Committee of the
      Board.









Eligible
      Director :
      A
      director of the Company who is not an officer or an employee of the Company
      or a
      Subsidiary or an officer or an employee of an entity with which the Company
      has
      contracted to receive management services.




Exchange
      Act :
      The
      Securities Exchange Act of 1934, as amended from time to time.




Fair
      Market Value .
      Except
      as provided below in connection with a cashless exercise, for any purpose
      relevant under the Plan, the fair market value of a Share or any other security
      shall be the closing per Share or security sale price on the Nasdaq Stock Market
      on the date in question or, if there are no reported sales on such date, on
      the
      last preceding date on which any reported sale occurred **.** In
      the
      context of a cashless exercise, the fair market value shall be the price at
      which the Shares are actually sold.




Option
      Cancellation Gain :
      With
      respect to the cancellation of an Option pursuant to Section 3 of Article IV
      hereof, the excess of the Fair Market Value as of the Option Cancellation Date
      (as that term is defined in Section 3 of Article IV hereof) of all the
      outstanding Shares covered by such Option, whether or not then exercisable,
      over
      the purchase price of such Shares under such Option.




Rule
      16b-3 :
      Rule
      16b-3 promulgated by the SEC under the Exchange Act, or any successor rule
      or
      regulation thereto as in effect from time to time.




SEC :
      The
      Securities and Exchange Commission, including the staff thereof, or any
      successor thereto.




Section
      162(m) :
      Section
      162(m) of the Code and all regulations promulgated thereunder as in effect
      from
      time to time.




Shares :
      Shares
      of common stock, par value $0.01 per share, of the Company (including any
      attached Preferred Stock Purchase Rights).




Subsidiary :
      Any
      corporation of which stock representing at least 50% of the ordinary voting
      power is owned, directly or indirectly, by the Company; and any other entity
      of
      which equity securities or interests representing at least 50% of the ordinary
      voting power or 50% of the total value of all classes of equity securities
      or
      interests of such entity are owned, directly or indirectly, by the
      Company.




ARTICLE
      III


ADMINISTRATION
      OF THE PLAN




This
      Plan
      shall be administered by the Board. The Board will interpret this Plan and
      may
      from time to time adopt such rules and regulations for carrying out the terms
      and provisions of this Plan as it may deem best; however, the Board shall have
      no discretion with respect to the selection of directors who receive Options,
      the timing of the grant of Options, the number of Shares subject to any Options
      or the purchase price thereof. Notwithstanding the foregoing, the Committee
      shall have the authority to make all determinations with respect to the
      transferability of Options in accordance with Article VIII hereof. All
      determinations by the Board or the Committee shall be made by the affirmative
      vote of a majority of its respective members, but any




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determination
      reduced to writing and signed by a majority of its respective members shall
      be
      fully as effective as if it had been made by a majority vote at a meeting duly
      called and held. Subject to any applicable provisions of the Company’s By-Laws
      or of this Plan, all determinations by the Board and the Committee pursuant
      to
      the provisions of this Plan, and all related orders or resolutions of the Board
      and the Committee, shall be final, conclusive and binding on all persons,
      including the Company and its stockholders, employees, directors and optionees.
      In the event of any conflict or inconsistency between determinations, orders,
      resolutions, or other actions of the Committee and the Board taken in connection
      with this Plan, the action of the Board shall control.




ARTICLE
      IV


STOCK
      SUBJECT TO THE PLAN




Section
      1.  The
      Shares to be issued or delivered upon exercise of Options shall be made
      available, at the discretion of the Board, either from the authorized but
      unissued Shares of the Company or from Shares reacquired by the Company,
      including Shares purchased by the Company in the open market or otherwise
      obtained; *provided,
      however* ,
      that
      the Company, at the discretion of the Board, may, upon exercise of Options
      granted under this Plan, cause a Subsidiary to deliver Shares held by such
      Subsidiary.




Section
      2.  Subject
      to the provisions of Section 3 of this Article IV, the aggregate number of
      Shares that may be purchased pursuant to Options shall not exceed
      125,000.




Section
      3.  In
      the
      event of any recapitalization, reclassification, stock dividend, stock split,
      combination of shares or other change in the Shares, all limitations on the
      number of Shares provided in this Plan, and the number of Shares subject to
      outstanding Options, shall be equitably adjusted in proportion to the change
      in
      outstanding Shares. In addition, in the event of any such change in the Shares,
      the Committee shall make any other adjustment that it determines to be
      equitable, including without limitation adjustments to the exercise price of
      any
      Option in order to provide participants with the same relative rights before
      and
      after such adjustment.




Section
      4.  In
      the
      event the Company is merged or consolidated into or with another corporation
      in
      a transaction in which the Company is not the survivor, or in the event that
      substantially all of the Company ‘s assets are sold to another entity not
      affiliated with the Company, any holder of an Option, whether or not then
      exercisable, shall be entitled to receive (unless the Company shall take such
      alternative action as may be necessary to preserve the economic benefit of
      the
      Option for the optionee) on the effective date of any such transaction (the
      “Option Cancellation Date”), in cancellation of such Option, an amount in cash
      equal to the Option Cancellation Gain relating thereto, determined as of the
      Option Cancellation Date.




ARTICLE
      V


PURCHASE
      PRICE OF OPTIONED SHARES




The
      purchase price per Share under each Option shall be 100% of the Fair Market
      Value of a Share at the time such Option is granted, but in no case shall such
      price be less than the par value of the Shares subject to such
      Option.




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ARTICLE
      VI


ELIGIBILITY
      OF RECIPIENTS




Options
      will be granted only to individuals who are Eligible Directors at the time
      of
      such grant.




ARTICLE
      VII


GRANT
      OF
      OPTIONS




Section
      1.  Each
      Option shall constitute a nonqualified stock option that is not intended to
      qualify under Section 422 of the Code.




Section
      2.  On
      September 1, 1996, each Eligible Director as of such date shall be granted
      an
      Option to purchase 10,000 Shares, and, on September 1 of each subsequent year,
      each Eligible Director as of each such date shall be granted an Option to
      purchase 2,500 Shares. Each Option shall become exercisable in four equal annual
      installments on each of the first four anniversaries of the date of grant and
      may be exercised by the holder thereof with respect to all or any part of the
      Shares comprising each installment as such holder may elect at any time after
      such installment becomes exercisable but no later than the termination date
      of
      such Option; provided that each Option shall become exercisable in full upon
      a
      Change in Control.




ARTICLE
      VIII


TRANSFERABILITY
      OF OPTIONS




No
      Options granted hereunder may be transferred, pledged, assigned or otherwise
      encumbered by an optionee except:




(a)  by
      will;




(b)  by
      the
      laws of descent and distribution; or




(c)  if
      permitted by the Committee and so provided in the Option or an amendment
      thereto, (i) pursuant to a domestic relations order, as defined in the Code,
      (ii) to Immediate Family Members, (iii) to a partnership in which Immediate
      Family Members, or entities in which Immediate Family Members are the owners,
      members or beneficiaries, as appropriate, are the partners, (iv) to a limited
      liability company in which Immediate Family Members, or entities in which
      Immediate Family Members are the owners, members or beneficiaries, as
      appropriate, are the members, or (v) to a trust for the benefit of Immediate
      Family Members; provided, however, that no more than a *de
      minimus* beneficial interest in a partnership, limited liability company or trust
      described in (iii), (iv) or (v) above may be owned by a person who is not an
      Immediate Family Member or by an entity that is not beneficially owned solely
      by
      Immediate Family Members. “Immediate Family Members” shall be defined as the
      spouse and natural or adopted children or grandchildren of the optionee and
      their spouses.




Any
      attempted assignment, transfer, pledge, hypothecation or other disposition
      of
      Options, or levy of attachment or similar process upon Options not specifically
      permitted herein, shall be null and void and without effect.




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ARTICLE
      IX


EXERCISE
      OF OPTIONS




Section
      1.  Each
      Option shall terminate 10 years after the date on which it was
      granted.




Section
      2.  Except
      in
      cases provided for in Article X hereof, each Option may be exercised by the
      holder thereof only while the optionee to whom such Option was granted is an
      Eligible Director.




Section
      3.  A
      person
      electing to exercise an Option or any portion thereof then exercisable shall
      give written notice to the Company of such election and of the number of Shares
      such person has elected to purchase, and shall at the time of purchase tender
      the full purchase price of such Shares, which tender shall be made in cash
      or
      cash equivalent (which may be such person ‘s personal check) or in Shares
      already owned by such person and held for at least six months (which tender
      may
      be by actual delivery or by attestation) and which Shares shall be valued for
      such purpose on the basis of their Fair Market Value on the date of exercise,
      or
      in any combination thereof. The Company shall have no obligation to deliver
      Shares pursuant to the exercise of any Option, in whole or in part, until such
      payment in full of the purchase price of such Shares is received by the Company.
      No optionee, or legal representative, legatee, distributee, or assignee of
      such
      optionee shall be or be deemed to be a holder of any Shares subject to such
      Option or entitled to any rights of a stockholder of the Company in respect
      of
      any Shares covered by such Option distributable in connection therewith until
      such Shares have been paid for in full and have been issued or delivered by
      the
      Company.




Section
      4.  Each
      Option shall be subject to the requirement that if at any time the Board shall
      be advised by counsel that the listing, registration or qualification of the
      Shares subject to such Option upon any securities exchange or under any state
      or
      federal law, or the consent or approval of any governmental regulatory body,
      is
      necessary or desirable as a condition of, or in connection with, the granting
      of
      such Option or the issue or purchase of Shares thereunder, such Option may
      not
      be exercised in whole or in part unless such listing, registration,
      qualification, consent or approval shall have been effected or obtained free
      from any conditions not reasonably acceptable to such counsel for the
      Board.




Section
      5.  The
      Company may establish appropriate procedures to provide for payment or
      withholding of such income or other taxes as may be required by law to be paid
      or withheld in connection with the exercise of Options, and to ensure that
      the
      Company receives prompt advice concerning the occurrence of any event that
      may
      create, or affect the timing or amount of, any obligation to pay or withhold
      any
      such taxes or that may make available to the Company any tax deduction resulting
      from the occurrence of such event.




ARTICLE
      X


TERMINATION
      OF SERVICE


AS
      AN
      ELIGIBLE DIRECTOR




Section
      1.  If
      and
      when an optionee shall cease to be an Eligible Director for any reason other
      than death or retirement from the Board, all of the Options granted to such
      optionee




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shall
      be
      terminated except that any Option, to the extent then exercisable, may be
      exercised by the holder thereof within three months after such optionee ceases
      to be an Eligible Director, but not later than the termination date of the
      Option.




Section
      2.  If
      and
      when an optionee shall cease to be an Eligible Director by reason of the
      optionee’s retirement from the Board, all of the Options granted to such
      optionee shall be terminated except that any Option, to the extent then
      exercisable or exercisable within one year thereafter, may be exercised by
      the
      holder thereof within three years after such retirement, but not later than
      the
      termination date of the Option.




Section
      3.  Should
      an
      optionee die while serving as an Eligible Director, all the Options granted
      to
      such optionee shall be terminated, except that any Option to the extent
      exercisable by the holder thereof at the time of such death, together with
      the
      unmatured installment (if any) of such Option which at that time is next
      scheduled to become exercisable, may be exercised until the third anniversary
      of
      the date of such death, but not later than the termination date of the Option,
      by the holder thereof, the optionee’s estate, or the person designated in the
      optionee’s last will and testament, as appropriate.




Section
      4.  Should
      an
      optionee die after ceasing to be an Eligible Director, all of the Options
      granted to such optionee shall be terminated, except that any Option, to the
      extent exercisable by the holder thereof at the time of such death, may be
      exercised until the third anniversary of the date the Participant ceased to
      be
      an Eligible Director, but not later than the termination date of the Option,
      by
      the holder thereof, the optionee’s estate, or the person designated in the
      optionee’s last will and testament, as appropriate.




ARTICLE
      XI


AMENDMENTS
      TO PLAN AND OPTIONS




The
      Board
      may at any time terminate or from time to time amend, modify or suspend this
      Plan; provided, however, that no such amendment or modification without the
      approval of the stockholders shall:




(a)  except
      pursuant to Section 3 of Article IV, increase the maximum number (determined
      as
      provided in this Plan) of Shares that may be purchased pursuant to Options,
      either individually on an annual basis or in the aggregate; or




(b)  permit
      the granting of any Option at a purchase price other than 100% of the Fair
      Market Value of the Shares at the time such Option is granted, subject to
      adjustment pursuant to Section 3 of Article IV.




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