**STRATUS
      PROPERTIES INC.**





**RESTRICTED
      STOCK UNIT AGREEMENT**


**UNDER
      THE 2002 STOCK INCENTIVE PLAN**





AGREEMENT
      dated as of ______________, 20__ (the “Grant Date”), between Stratus Properties
      Inc., a Delaware corporation (the “Company”), and ______________ (the
“Participant”).




1.  (a) Pursuant
      to the Stratus Properties Inc. 2002 Stock Incentive Plan (the “Plan”), the
      Participant is hereby granted effective the Grant Date ___________ restricted
      stock units (“Restricted Stock Units” or “RSUs”) on the terms and conditions set
      forth in this Agreement and in the Plan.




(b)  Defined
      terms not otherwise defined herein shall have the meanings set forth in Section
      2 of the Plan.




(c)  Subject
      to the terms, conditions, and restrictions set forth in the Plan and herein,
      each RSU granted hereunder represents the right to receive from the Company,
      on
      the respective scheduled vesting date for such RSU set forth in Section 2(a)
      of
      this Agreement or on such earlier date as provided in Section 2(b) of this
      Agreement or Section 5(b) of this Agreement (the “Vesting Date”), one share (a
“Share”) of Common Stock of the Company (“Common Stock”), free of any
      restrictions, all amounts notionally credited to the Participant’s Dividend
      Equivalent Account (as defined in Section 4 of this Agreement) with respect
      to
      such RSU, and all securities and property comprising all Property Distributions
      (as defined in Section 4 of this Agreement) deposited in such Dividend
      Equivalent Account with respect to such RSU.




(d)  As
      soon
      as practicable after the Vesting Date (but no later than 2 1⁄2 months from such
      date) for any RSUs granted hereunder, the Participant shall receive from the
      Company the number of Shares to which the vested RSUs relate, free of any
      restrictions, a cash payment for all amounts notionally credited to the
      Participant’s Dividend Equivalent Account with respect to such vested RSUs, and
      all securities and property comprising all Property Distributions deposited
      in
      such Dividend Equivalent Account with respect to such vested RSUs.




2.  (a) The
      RSUs
      granted hereunder are in consideration of the services to be performed by the
      Participant during the service periods indicated below and shall vest in
      installments as follows:




Scheduled
      Vesting Date  Service
      Period   Number
      of RSUs












(b)  Notwithstanding
      Section 2(a) of this Agreement, at such time as there shall be a Change in
      Control of the Company, all unvested RSUs shall be accelerated and shall
      immediately vest.




(c)  Until
      the
      respective Vesting Date for an RSU granted hereunder, such RSU, all amounts
      notionally credited in any Dividend Equivalent Account related to such RSU,
      and
      all securities or property comprising all Property Distributions deposited
      in
      such Dividend Equivalent Account related to such RSU shall be subject to
      forfeiture as provided in Section 6 of this Agreement.




3.  Except
      as
      provided in Section 4 of this Agreement, an RSU shall not entitle the
      Participant to any incidents of ownership (including, without limitation,
      dividend and voting rights) in any Share until the RSU shall vest and the
      Participant shall be issued the Share to which such RSU relates nor in any
      securities or property comprising any Property Distribution deposited in a
      Dividend Equivalent Account related to such RSU until such RSU
      vests.




4.  From
      and
      after the Grant Date of an RSU until the issuance of the Share payable in
      respect of such RSU, the Participant shall be credited, as of the payment date
      therefor, with (i) the amount of any cash dividends and (ii) the amount equal
      to
      the Fair Market Value of any Shares, Subsidiary securities, other securities,
      or
      other property distributed or distributable in respect of one share of Common
      Stock to which the Participant would have been entitled had the Participant
      been
      a record holder of one share of Common Stock at all times from the Grant Date
      to
      such issuance date (a “Property Distribution”). All such credits shall be made
      notionally to a dividend equivalent account (a “Dividend Equivalent Account”)
      established for the Participant with respect to all RSUs granted hereunder
      with
      the same Vesting Date. All credits to a Dividend Equivalent Account for the
      Participant shall be notionally increased by the Account Rate (as hereinafter
      defined), compounded quarterly, from and after the applicable date of credit
      until paid in accordance with the provisions of this Agreement. The “Account
      Rate” shall be the prime commercial lending rate announced from time to time by
      JPMorgan Chase Bank, N.A. or by another major national bank headquartered in
      New
      York, New York designated by the Committee. The Committee may, in its
      discretion, deposit in the Participant’s Dividend Equivalent Account the
      securities or property comprising any Property Distribution in lieu of crediting
      such Dividend Equivalent Account with the Fair Market Value
      thereof.




5.  (a) Except
      as
      set forth in Section 5(b) of this Agreement, all unvested RSUs provided for
      in
      this Agreement, all amounts credited to the Participant’s Dividend Equivalent
      Accounts with respect to such RSUs, and all securities and property comprising
      Property Distributions deposited in such Dividend Equivalent Accounts with
      respect to such RSUs shall immediately be forfeited on the Participant’s
      Termination Date. In the event of a sale by the Company of its equity interest
      in a Subsidiary following which such entity is no longer a Subsidiary of the
      Company, persons who continue to be employed by such entity following such
      sale
      shall cease to be Eligible Individuals for purposes of the Plan and this
      Agreement.




(b)  Notwithstanding
      the foregoing, if the Participant ceases to be an Eligible Individual by reason
      of the Participant’s death, Disability, or Retirement, all the unvested RSUs
      granted hereunder, all amounts credited to the Participant’s Dividend Equivalent
      Accounts with respect to such RSUs, and all securities and property comprising
      Property Distributions




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deposited
      in such Dividend Equivalent Accounts with respect to such RSUs shall vest as
      of
      the Participant’s Termination Date. In the event that the Participant ceases to
      be an Eligible Individual by reason of the Participant’s Termination by his
      employer or principal without Cause, the Committee or any person to whom the
      Committee has delegated authority may, in its or his sole discretion, determine
      that all or any portion of the unvested RSUs granted hereunder, all amounts
      credited to the Participant’s Dividend Equivalent Accounts with respect to such
      RSUs, and all securities and property comprising Property Distributions
      deposited in such Dividend Equivalent Accounts with respect to such RSUs shall
      vest as of the Participant’s Termination Date. In the event vesting is
      accelerated pursuant to this Section 5(b) and the Participant is a Key Employee,
      a distribution of Shares issuable to the Participant, all amounts notionally
      credited to the Participant’s Dividend Equivalent Account, and all securities
      and property comprising all Property Distributions deposited in such Dividend
      Equivalent Account due the Participant upon the vesting of the RSUs shall not
      occur until six months after the Termination Date, unless the Participant’s
      Termination is due to death or Disability.




6.  The
      RSUs
      granted hereunder, any amounts notionally credited in the Participant’s Dividend
      Equivalent Accounts, and any securities and property comprising Property
      Distributions deposited in such Dividend Equivalent Accounts are not
      transferable by the Participant otherwise than by will or by the laws of descent
      and distribution or pursuant to a domestic relations order, as defined in the
      Code.




7.  All
      notices hereunder shall be in writing and, if to the Company, shall be delivered
      personally to the Secretary of the Company or mailed to its principal office,
      1615 Poydras Street, New Orleans, Louisiana 70112, addressed to the attention
      of
      the Secretary; and, if to the Participant, shall be delivered personally or
      mailed to the Participant at the address on file with the Company. Such
      addresses may be changed at any time by notice from one party to the
      other.




8.  This
      Agreement is subject to the provisions of the Plan. The Plan may at any time
      be
      amended by the Board, except that any such amendment of the Plan that would
      materially impair the rights of the Participant hereunder may not be made
      without the Participant’s consent. The Committee may amend this Agreement at any
      time in any manner that is not inconsistent with the terms of the Plan and
      that
      will not result in the application of Section 409A(a)(1) of the Code.
      Notwithstanding the foregoing, no such amendment may materially impair the
      rights of the Participant hereunder without the Participant’s consent. Except as
      set forth above, any applicable determinations, orders, resolutions or other
      actions of the Committee shall be final, conclusive and binding on the Company
      and the Participant.




9.  The
      Participant is required to satisfy any obligation in respect of withholding
      or
      other payroll taxes resulting from the vesting of any RSU granted hereunder
      or
      the payment of any securities, cash, or property hereunder, in accordance with
      procedures established by the Committee, as a condition to receiving any
      securities, cash payments, or property resulting from the vesting of any RSU
      or
      otherwise.




10.  Nothing
      in this Agreement shall confer upon the Participant any right to continue in
      the
      employ of the Company or any of its Subsidiaries, or to interfere in any way
      with the right




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of
      the
      Company or any of its Subsidiaries to terminate the Participant’s employment
      relationship with the Company or any of its Subsidiaries at any
      time.




11.  As
      used
      in this Agreement, the following terms shall have the meanings set forth
      below.




(a)  “Cause”
      shall mean any of the following: (i) the commission by the Participant of an
      illegal act (other than traffic violations or misdemeanors punishable solely
      by
      the payment of a fine), (ii) the engagement of the Participant in dishonest
      or
      unethical conduct, as determined by the Committee or its designee, (iii) the
      commission by the Participant of any fraud, theft, embezzlement, or
      misappropriation of funds, (iv) the failure of the Participant to carry out
      a
      directive of his superior, employer or principal, or (v) the breach of the
      Participant of the terms of his engagement.




(b)  “Change
      in Control” shall mean a change in the ownership of the Company, a change in the
      effective control of the Company or a change in the ownership of a substantial
      portion of the assets of the Company as provided under Section 409A of the
      Code,
      as amended from time to time, and any related implementing regulations or
      guidance.




(c)  “Disability”
      shall have occurred if the Participant is (i) unable to engage in any
      substantial gainful activity by reason of any medically determinable physical
      or
      mental impairment which can be expected to result in death or can be expected
      to
      last for a continuous period of not less than 12 months, or (ii) by reason
      of
      any medically determinable physical or mental impairment which can be expected
      to result in death or can be expected to last for a continuous period of not
      less than 12 months, receiving income replacement benefits for a period of
      not
      less than 3 months under an accident and health plan covering employees of
      the
      Participant’s employer.




(d)  “Fair
      Market Value” shall, with respect to a share of Common Stock, a Subsidiary
      security, or any other security, have the meaning set forth in the Stratus
      Properties Inc. 2002 Stock Incentive Plan Policies of the Committee, and, with
      respect to any other property, mean the value thereof determined by the board
      of
      directors of the Company in connection with declaring the dividend or
      distribution thereof.




(e)  “Key
      Employee” shall mean any employee who meets the definition of “key employee” as
      defined in Section 416(i) of the Code.




(f)  “Retirement”
      shall mean early, normal or deferred retirement of the Participant under a
      tax
      qualified retirement plan of the Company or any other cessation of the provision
      of services to the Company or a Subsidiary by the Participant that is deemed
      by
      the Committee or its designee to constitute a retirement.




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IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      day,
      month, and year first above written.





STRATUS
      PROPERTIES INC.








By:  ____________________________________








____________________________________


(Participant)





____________________________________


(Street
      Address)





____________________________________


(City)
      (State) (Zip Code)




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