pre14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant þ
Filed by a
party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to § 240.14a-12 |
Temple-Inland
Inc.
(Name of Registrant as Specified In Its
Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies: |
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined): |
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Proposed maximum aggregate value of transaction: |
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Total fee paid: |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule and the date of its filing. |
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Amount Previously Paid: |
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Form, Schedule or Registration Statement No. |
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Date Filed: |
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Notice of Annual Meeting
of Stockholders
and
Proxy Statement
1300
MoPac Expressway South
Austin, Texas 78746
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
To Be Held Friday, May 4,
2007
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To Temple-Inland Stockholders: |
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When and Where the Annual Meeting of Stockholders Will be
Held |
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The 2007 annual meeting of our stockholders will be held at our
offices located at 303 South Temple Drive, Diboll, Texas 75941,
on Friday, May 4, 2007, at 9:00 a.m. local time. |
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Purposes of the Meeting |
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The meeting will be held for the following purposes: |
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1. To elect four (4) directors to our Board of
Directors. These four directors will serve as directors until
their terms expire or, if later, until replacement directors are
elected who meet all necessary qualifications.
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2. To amend Article III, Section 2 of our By-laws
to provide that directors will be elected by the majority vote
of our stockholders.
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3. To amend Article V of our Certificate of
Incorporation to eliminate certain supermajority vote
requirements.
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4. To amend Article VI, Section 3 of our
Certificate of Incorporation to provide that directors appointed
to fill vacancies or newly created directorships will be subject
to election at the next annual meeting.
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5. To ratify the Audit Committees appointment of
Ernst & Young LLP as our independent registered public
accounting firm for the year 2007.
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6. To transact any other business that is properly raised
for discussion at the annual meeting or any later meeting if the
annual meeting is adjourned or postponed.
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Who Can Attend and Vote |
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The Board of Directors has fixed the close of business on
March 27, 2007 as the record date for determining who is a
stockholder entitled to receive notices about the annual meeting
and to vote at the annual meeting or any later meeting if the
annual meeting is adjourned or postponed. Only stockholders who
own stock on the record date are entitled to receive notices
about the annual meeting and to vote at the annual meeting. |
If you need help in voting your shares, please call D. F.
King & Co., Inc., our proxy solicitation firm, at
(800) 714-3312.
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April 4, 2007
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Leslie K. ONeal
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Austin, Texas
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Secretary
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You are invited to attend the meeting in person. Whether or
not you plan to attend, please mark your vote on the enclosed
proxy card, sign it, date it, and return it by mail or vote by
telephone or on the internet. By voting before the meeting, your
vote will be counted and we will know there are enough
stockholders voting to hold a meeting. If you want to change
your vote at the meeting, you may ask us to return your proxy at
the meeting by following the instructions in Voting
Information Your Voting Instructions.
Table of
Contents
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D-1
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iii
1300 MoPac Expressway South
Austin, Texas 78746
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
How we
will ask for your vote
Our Board of Directors seeks your proxy for use in voting at our
2007 annual meeting of stockholders to be held on Friday,
May 4, 2007, and at any later meeting if the annual meeting
is adjourned or postponed. This proxy statement and proxy card
were mailed beginning on April 4, 2007 to all holders of
our common stock entitled to vote at the annual meeting.
We have enclosed with this proxy statement our 2006 Annual
Report to Stockholders, which includes audited financial
statements. The Annual Report does not constitute any part of
the material for the solicitation of proxies.
Purpose
of the Meeting
At the annual meeting, the stockholders will be asked to vote on
the following proposals:
Proposal No. 1: To elect four
(4) directors to our Board of Directors. These four
directors will serve as directors until their terms expire or,
if later, until replacement directors are elected who meet all
necessary qualifications.
Proposal No. 2: To amend
Article III, Section 2 of our By-laws to provide that
directors will be elected by the majority vote of our
stockholders.
Proposal No. 3: To amend
Article V of our Certificate of Incorporation to eliminate
certain supermajority vote requirements.
Proposal No. 4: To amend
Article VI, Section 3 of our Certificate of
Incorporation to provide that directors appointed to fill
vacancies or newly created directorships will be subject to
election at the next annual meeting.
Proposal No. 5: To ratify the Audit
Committees appointment of Ernst & Young LLP as
independent registered public accounting firm for the year 2007.
Your
Voting Instructions
The proxy card is designed to permit each stockholder entitled
to vote at the annual meeting to:
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vote for or withhold voting for any or all nominees for election
as director,
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vote for or against or to abstain from voting on
proposals 2, 3, 4, and 5, and
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grant discretion to the proxies to vote with respect to any
other proposal brought before the annual meeting.
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The telephone and internet voting instructions serve the same
purpose as the proxy card. When your proxy card or telephone or
internet vote specifies a choice with respect to a voting
matter, the proxies will vote your shares as you have specified.
If you do not specify a voting choice on your proxy card, the
proxies will vote your stock:
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FOR the election of the director nominees under the caption
Election of Directors.
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FOR the approval of the amendment to our By-laws to provide for
a majority vote standard for the election of our directors.
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FOR the approval of the amendment to our Certificate of
Incorporation to eliminate certain supermajority vote
requirements.
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FOR the approval of the amendment to our Certificate of
Incorporation to provide that directors appointed to fill
vacancies or newly created directorships will be subject to
election at the next annual meeting.
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FOR ratification of the selection of Ernst & Young LLP
as independent registered public accounting firm for the year
2007.
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Voting your proxy will not affect your right to attend the
annual meeting and vote in person.
How you
can revoke your vote
You have the right to revoke your proxy by:
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giving written notice of revocation to our Corporate Secretary
at our principal executive offices at any time before the vote
is closed; or
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signing and delivering a later-dated proxy; or
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attending the annual meeting and voting in person.
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We must receive your notice of revocation or later dated proxy
at or prior to the annual meeting for it to be effective.
Record
Date
On March 27, 2007, the record date for determining which
stockholders are entitled to vote at this annual meeting, there
were shares
of common stock issued and outstanding and entitled to vote at
the annual meeting. No other class of stock is entitled to vote.
Quorum
and Voting
The presence at the annual meeting, in person or by proxy, of
the holders
of shares
(a majority of the number of shares of common stock issued and
outstanding and entitled to vote as of the record date) is
required to constitute a quorum to transact business. Proxies
marked abstain will be counted in determining the
presence of a quorum. Broker non-votes are shares
held by brokers or nominees for which voting instructions have
not been received from the beneficial owners or the persons
entitled to vote those shares and the broker or nominee does not
have discretionary voting power under rules applicable to
broker-dealers. Each of the proposals to be voted on at the
annual meeting is an item on which brokerage firms may vote in
their discretion on behalf of their clients, even if such
clients have not furnished voting instructions. Accordingly,
there will be no broker non-votes on any of the proposals to be
presented at the annual meeting. In deciding all matters that
come before the annual meeting, each holder of common stock as
of the record date is entitled to one vote per share of common
stock.
Required
Votes
Election of the director nominees named in
Proposal No. 1 requires the affirmative vote of a
plurality of the total number of votes cast at the annual
meeting by the holders of shares of common stock. Votes may be
cast in favor of or withheld with respect to all of the director
nominees, or any of them. Abstentions, will not be counted as
having been voted and will have no effect on the outcome on the
vote on the election of directors, except to the extent the
failure to vote for a nominee results in another nominee
receiving a larger number of votes. Stockholders may not
cumulate votes in the election of directors.
The affirmative vote of a majority of the votes cast by
stockholders entitled to vote at the annual meeting, voting
together as a single class, is necessary for the approval of
stockholder Proposal Nos. 2 and 5.
2
Abstentions will not be counted as having been voted and will
have no effect on the outcome on the votes for
Proposal Nos. 2 and 5. The affirmative vote of at
least 80 percent of all outstanding shares of common stock
is required for approval of Proposal Nos. 3 and 4. Failures
to vote and abstentions will have the same effect as a vote
against Proposal Nos. 3 and 4.
Confidential
Voting Policy
We have adopted a confidential voting policy which provides that
stockholder proxies, ballots, and voting tabulations that
identify your vote will not be disclosed to our directors,
officers, or employees. There are a few exceptions to this
policy, such as when you make a comment on your proxy vote or
when we must determine the legality of a vote.
VOTING
SECURITIES AND PRINCIPAL STOCKHOLDERS
Security
Ownership of Certain Beneficial Owners
The name, address and stock ownership of each person or group of
persons known by us to own beneficially more than five percent
(5%) of the outstanding shares of our common stock as of
March 27, 2007 follows.
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Amount and Nature of
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Percent of
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Name and Address of Beneficial Owner
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Beneficial Ownership
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Class(1)
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Franklin Mutual Advisers, LLC
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10,010,013
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(2)
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9.4
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101 John F. Kennedy Parkway
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Short Hills, NJ 07078
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Carl C. Icahn, et al
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7,201,939
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6.73
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c/o Icahn Associates Corp.
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767 Fifth Avenue,
47th Floor
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New York, New York 10153
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State Street Bank and Trust Company
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6,410,408
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(4)
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5.99
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%
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225 Franklin Street
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Boston, Massachusetts 02110
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Institutional Capital LLC
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5,916,803
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(5)
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5.5
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%
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225 West Wacker Drive,
Suite 2400
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Chicago, Illinois 60606
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There
were shares
of common stock outstanding on March 27, 2007. |
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Based on a statement on Schedule 13G dated
February 15, 2006 and Amendment No. 1 dated
January 19, 2007, filed with the SEC, Franklin Mutual
Advisers, LLC, in its capacity as investment advisor, may be
deemed beneficial owner of these shares, which are owned by
numerous investment advisory clients. |
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Based on a statement on Schedule 13D dated January 22,
2007, filed with the SEC, the Reporting Persons (as hereafter
defined) are High River Limited Partnership, a Delaware limited
partnership, Hopper Investments LLC, a Delaware limited
liability company, Barberry Corp., a Delaware corporation ,
Icahn Partners Master Fund LP, a Cayman Islands exempted
limited partnership, Icahn Offshore LP, a Delaware limited
partnership, CCI Offshore Corp., a Delaware corporation, Icahn
Partners LP, a Delaware limited partnership, Icahn Onshore LP, a
Delaware limited partnership, CCI Onshore Corp., a Delaware
corporation, and Carl C. Icahn, a citizen of the United States
of America (collectively, the Reporting Persons),
may be deemed to beneficially own, in the aggregate,
7,201,939 shares, representing 6.73%. |
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Based on a statement on Schedule 13G dated May 4, 2006
and February 12, 2007, filed with the SEC, State Street
Bank and Trust Company in its capacity as investment advisor,
may be deemed beneficial owner of these shares, which are owned
by numerous investment advisory clients. |
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Based on a statement on Schedule 13G dated
February 13, 2007, filed with the SEC, Institutional
Capital LLC in its capacity as investment advisor, may be deemed
beneficial owner of these shares, which are owned by numerous
investment advisory clients. |
3
Security
Ownership of Management
The following table sets forth information regarding the
beneficial ownership of our common stock as of March 27,
2007 by:
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each of our directors and nominees for director, including our
Chief Executive Officer
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our Chief Financial Officer and our three most highly
compensated executive officers other than our CEO and
CFO, and
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all directors and executive officers as a group.
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We determined beneficial ownership as reported in the table in
accordance with
Rule 13d-3
under the Securities Exchange Act of 1934, as amended (which we
will refer to in this Proxy Statement as the Exchange Act).
Unless otherwise indicated, beneficial ownership includes both
sole voting and sole dispositive power. Even though SEC rules
require reporting of all the shares listed in the table, the
directors and executive officers do not claim beneficial
ownership of all of these shares. For example, a director or
executive officer might not claim ownership of shares owned by a
relative. Unless otherwise indicated, the table does not include
any shares that may be held by pension and profit-sharing plans
of the corporations or endowment funds of educational and
charitable institutions for which various directors and officers
serve as directors or trustees.
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Beneficial Ownership
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Additional Ownership (7)
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Shares
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Issuable on
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Exercise of
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Phantom
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Total
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Amount and
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Beneficial
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Options
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Performance
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Restricted
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Shares
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Total
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Beneficial
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Nature of
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Ownership
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on or
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Stock
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Stock
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Deferred and
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Additional
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and Additional
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Beneficial
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Percent
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after May 27,
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Units
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Units
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Payable Upon
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Ownership
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Ownership
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Beneficial Owner
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Ownership(1)
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of Class
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2007
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(8)
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(8)
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Retirement
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(d + e + f + g)
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(b + h)
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(a)
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(b)
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(c)
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(d)
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(e)
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(f)
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(g)
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(h)
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(i)
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Directors:
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Afsaneh M. Beschloss
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20,000
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(1)
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*
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0
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0
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0
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30,396
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30,396
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50,396
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Donald M. Carlton
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22,000
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(1)
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*
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0
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0
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0
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30,170
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30,170
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52,170
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Cassandra C. Carr
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18,000
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(1)
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*
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4,000
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0
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0
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21,898
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25,898
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43,898
|
|
E. Linn Draper, Jr.
|
|
|
20,000
|
(1)
|
|
|
*
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
20,488
|
|
|
|
20,488
|
|
|
|
40,488
|
|
Larry R. Faulkner
|
|
|
8,200
|
(1)
|
|
|
*
|
|
|
|
12,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
14,693
|
|
|
|
26,693
|
|
|
|
34,893
|
|
James T. Hackett
|
|
|
24,200
|
(1)
|
|
|
*
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
53,086
|
|
|
|
53,086
|
|
|
|
77,286
|
|
Jeffrey M. Heller
|
|
|
20,000
|
(1)
|
|
|
*
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
24,398
|
|
|
|
24,398
|
|
|
|
44,398
|
|
Kenneth M. Jastrow, II
|
|
|
1,216,423
|
(1)(2)(5)
|
|
|
*
|
|
|
|
151,875
|
|
|
|
292,500
|
|
|
|
52,500
|
|
|
|
157,272
|
|
|
|
654,147
|
|
|
|
1,870,570
|
|
James A. Johnson
|
|
|
41,600
|
(1)
|
|
|
*
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
42,369
|
|
|
|
42,369
|
|
|
|
83,969
|
|
W. Allen Reed
|
|
|
13,000
|
(1)
|
|
|
*
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
46,565
|
|
|
|
46,565
|
|
|
|
59,565
|
|
Richard M. Smith
|
|
|
0
|
(1)
|
|
|
|
|
|
|
20,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
6,586
|
|
|
|
26,586
|
|
|
|
26,586
|
|
Arthur Temple III
|
|
|
791,538
|
(1)(3)(4)(5)
|
|
|
*
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
40,144
|
|
|
|
40,144
|
|
|
|
831,682
|
|
Larry E. Temple
|
|
|
21,000
|
(1)
|
|
|
*
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
47,117
|
|
|
|
47,117
|
|
|
|
68,117
|
|
Executives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randall D. Levy
|
|
|
257,411
|
(1)(2)
|
|
|
*
|
|
|
|
61,050
|
|
|
|
38,000
|
|
|
|
19,500
|
|
|
|
10,857
|
|
|
|
129,407
|
|
|
|
386,818
|
|
J. Patrick Maley III
|
|
|
97,602
|
(1)(2)
|
|
|
*
|
|
|
|
77,900
|
|
|
|
54,500
|
|
|
|
26,700
|
|
|
|
8,686
|
|
|
|
167,786
|
|
|
|
265,388
|
|
Doyle R. Simons
|
|
|
153,774
|
(1)(2)
|
|
|
*
|
|
|
|
77,400
|
|
|
|
54,500
|
|
|
|
26,700
|
|
|
|
6,514
|
|
|
|
165,114
|
|
|
|
318,888
|
|
Jack C. Sweeny
|
|
|
205,429
|
(1)(2)
|
|
|
*
|
|
|
|
59,550
|
|
|
|
38,000
|
|
|
|
19,500
|
|
|
|
8,685
|
|
|
|
125,735
|
|
|
|
331,164
|
|
Group:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All directors and executive
officers (27 persons) as a group
|
|
|
3,543,200
|
(1)(2)(4)(5)(6)
|
|
|
|
%
|
|
|
777,122
|
|
|
|
694,250
|
|
|
|
257,500
|
|
|
|
743,561
|
|
|
|
2,472,433
|
|
|
|
6,015,633
|
|
|
|
|
* |
|
Less than one percent based upon a total
of shares
of common stock issued and outstanding on March 27, 2007. |
|
(1) |
|
Includes the following number of shares of common stock issuable
upon the exercise of options exercisable within a period of
60 days from March 27, 2007:
Ms. Beschloss-20,000; Dr. Carlton-20,000;
Ms. Carr- |
4
|
|
|
|
|
16,000; Dr. Draper-20,000; Dr. Faulkner-8,000;
Mr. Hackett-24,000; Mr. Heller-20,000;
Mr. Jastrow-959,313; Mr. Johnson-36,000;
Mr. Levy 182,150; Mr. Maley-67,700;
Mr. Reed-13,000; Mr. Simons 118,200;
Mr. Smith 0; Mr. Sweeny-121,650;
Mr. Temple III-22,000; Mr. L. Temple-4,000; and all
directors and executive officers (27 persons) as a group
2,092,916. |
|
(2) |
|
Includes shares held by trustees under Temple-Inland 401(k)
plans for Messrs. Jastrow 8,374,
Levy 2,566, Maley 373,
Simons 4,601, and Sweeny 11,468, and
shares held for all directors and executive officers (27
persons) as a group 47,812. SEC rules consider these
shares to be beneficially owned. |
|
(3) |
|
Includes 2,000 shares owned by certain relatives of
Mr. Temple III. SEC rules consider these shares to be
beneficially owned, but Mr. Temple III disclaims any
beneficial interest in such shares. |
|
(4) |
|
Includes 134,460 shares held in a trust over which
Mr. Temple III is trustee. Mr. Temple III
has a future income interest with respect to 67,230 of these
shares and a remainder interest with respect to 67,230 of these
shares. Also includes 20,166 shares held by various trusts
and custodial accounts, with respect to which
Mr. Temple III has sole voting and dispositive power.
Mr. Temple III disclaims any beneficial ownership with
respect to these 20,166 shares. Includes
157,380 shares held in a trust for Mr. Temple III
with respect to which he has a present income interest and is
also a co-trustee. Does not include 2,521,252 shares of
common stock held by the T.L.L. Temple Foundation, a charitable
trust, of which Mr. Temple III is Chairman of the
Board of Trustees. Mr. Temple III shares voting and
dispositive power. Mr. Temple III disclaims any
beneficial ownership with respect to such shares. |
|
(5) |
|
Includes the following number of shares pledged as security:
Mr. Jastrow pledged 71,312 shares as security for a
loan to secure a revolving line of credit against which no
amounts were outstanding as of March 27, 2007.
Mr. Temple III pledged 455,532 shares as security for
a loan to secure a revolving line of credit against which he may
borrow from time to time. |
|
(6) |
|
Includes 5,964 shares owned by relatives of all directors
and executive officers (27 persons) as a group. SEC rules
consider these shares to be beneficially owned, but the
individuals disclaim any beneficial interest in such shares. |
|
(7) |
|
Additional Ownership is not included in the
SECs definition of Beneficial Ownership.
Phantom shares deferred through 2005 are payable in shares of
common stock at retirement. Phantom shares deferred in 2006 and
later are payable in cash based on the stock price at retirement. |
|
(8) |
|
Restricted stock units vest on the third anniversary from the
date of grant if minimum Return on Investment (or ROI) criteria
are met and will be settled in cash. Performance stock units are
restricted stock units that vest 0%, 75%, or 100% on the third
anniversary from the date of grant depending on our ROI during
the three years beginning in the year of the grant compared to
peer group ROI. If performance is in the top quartile, then
there is a 100% payment and if in the second quartile, then
there is a 75% payment. No payment is made if performance is
below the top half compared to the peer group. Performance stock
units also provide for accelerated or continued vesting upon
retirement, death or if there is a change in control. If ROI
criteria are met, these performance stock units will be settled
in cash. |
Section 16(a)
Beneficial Ownership Reporting Compliance
We have not identified any person who failed to file on a timely
basis reports required by Section 16(a) of the Exchange Act
during the most recent fiscal year or prior fiscal years. For
this purpose, we only reviewed Forms 3, 4, and 5,
amendments to these forms, and written representations supplied
to us in lieu of Form 5 under the SECs
Section 16 rules for the most recent fiscal year.
5
ELECTION
OF DIRECTORS
Our By-laws specify that the Board of Directors will establish
by vote how many directors will serve on the Board. The By-laws
also provide that the directors will be divided into three
classes, which will as nearly as possible be equal in size. The
Board of Directors has set the number of directors at thirteen
(13), with two classes of four (4) directors each and one
class of five (5) directors.
Directors are elected by a plurality of the votes cast by the
stockholders at a meeting at which a quorum is present.
Plurality means that the individuals who receive the largest
number of votes cast are elected as directors up to the maximum
number of directors to be chosen at the meeting. Consequently,
any shares not voted (whether by abstention, broker non-votes or
otherwise) have no impact in the election of directors.
Nominees
Unless you specify otherwise on your proxy, the persons named in
such proxy intend to vote for the election of the nominees
listed below to serve as directors.
Directors will serve for a term of three (3) years, or
until their replacements are duly elected and meet all
requirements. All nominees are presently serving as directors.
After review of their qualifications, the Nominating and
Governance Committee recommended them as nominees to the full
Board, and the full Board subsequently voted unanimously to
recommend them to the stockholders as nominees. We did not pay a
fee to any third party to identify or evaluate or to assist in
identifying or evaluating potential nominees.
Nominees
for Director to be Elected at the 2007 Annual Meeting of
Stockholders
|
|
|
Name and Year First Elected Director
|
|
Principal Occupation and Other Information
|
|
Donald M. Carlton
2003
|
|
Dr. Carlton, 69, former President
and Chief Executive Officer of Radian International LLC, an
Austin, Texas based engineering and technology firm.
Dr. Carlton held these positions from January 1996 until
his retirement in December 1998. Dr. Carlton also
serves as a director of National Instruments Corp. and American
Electric Power Company, Inc.
|
E. Linn Draper, Jr.
2004
|
|
Dr. Draper, 65, served as Chairman
of the Board of American Electric Power, Company Inc. from April
1993 until his retirement in February 2004 and also served as
President and CEO from April 1993 until December 31, 2003.
Dr. Draper also served as President of Ohio Valley Electric
Corporation and Indiana-Kentucky Electric Corporation from 2002
until March 4, 2004. Dr. Draper is a director of
Northwestern Corporation, Alpha Natural Resources, Alliance Data
Systems, and TransCanada Corporation.
|
Kenneth M. Jastrow, II
1998
|
|
Chairman and Chief Executive
Officer of Temple-Inland. Mr. Jastrow, 60, was elected to
his current office effective January 1, 2000. He served as
Group Vice President Financial Services from April
1995 until February 1998, as President and Chief Operating
Officer from February 1998 until December 1999, and as Chief
Financial Officer from November 1991 until December 1999.
Mr. Jastrow is also a director of MGIC Investment
Corporation and KB Home. Mr. Jastrow currently serves
as acting lead director of KB Home.
|
James A. Johnson
2000
|
|
Vice Chairman of Perseus LLC, a
merchant bank and private equity fund management firm.
Mr. Johnson, 63, served as Chairman and Chief Executive
Officer of Johnson Capital Partners until March 2001, as
Chairman of the Executive Committee of the Board of Fannie Mae
in December 1999 and as Chairman and Chief Executive Officer of
Fannie Mae from February 1991 through December 1998. He is also
a director of Target Corporation, The Goldman Sachs Group, Inc.,
KB Home, and UnitedHealth Group.
|
Each of the nominees has consented to being named in the proxy
statement and to serve if elected. If any nominee becomes
unavailable to serve, however, the persons named in the enclosed
form of proxy intend to vote the shares represented by the proxy
for the election of such other person or persons as may be
nominated or designated by management, unless they are directed
by the proxy to do otherwise.
6
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF
MESSRS. CARLTON, DRAPER, JASTROW AND JOHNSON AS DIRECTORS OF
TEMPLE-INLAND.
Continuing
Directors
The following information is provided with respect to directors
who will continue to serve as directors until the expiration of
their terms.
Directors
to Serve Until the 2008 Annual Meeting of Stockholders
|
|
|
Name and Year First Elected Director
|
|
Principal Occupation and Other Information
|
|
Afsaneh M. Beschloss
2002
|
|
Ms. Beschloss, 51, serves as
President and Chief Executive Officer of The Rock Creek Group,
formerly Carlyle Asset Management Group, a position she has held
since May 2001. Ms. Beschloss served as Director of
Investments and Chief Investment Officer of the World Bank from
September 1996 to February 1999, and as Treasurer from February
1999 until May 2001. Prior to that position, she served as
Senior Manager for Derivatives and Structured Products and
Director and Chief Investment Officer of the World Banks
Investment Management Department. Prior to joining the World
Bank, Ms. Beschloss worked for J.P. Morgan. Ms.
Beschloss also serves on the board of AMB Property Corporation.
|
Larry R. Faulkner
2005
|
|
Dr. Faulkner, 62, has served as
President of the Houston Endowment, Inc. since February 2006.
The Houston Endowment is one of the largest private foundations
in Texas. Dr. Faulkner served as the President of The
University of Texas from April 1998 until January 2006. He
served as Provost and Vice Chancellor for Academic Affairs, Dean
of the College of Liberal Arts and Sciences, and Head of the
Department of Chemistry at the University of Illinois at
Urbana-Champaign. Dr. Faulkner serves on the boards of the
Sandia Corporation and the Lyndon Baines Johnson Foundation.
Dr. Faulkner also serves on the Board of
Temple-Inlands Guaranty Bank and is a member of
Guarantys audit committee.
|
Jeffrey M. Heller
2004
|
|
Mr. Heller, 67, has served as Vice
Chairman of Electronic Data Systems, Inc. (EDS) since October
2006. Mr. Heller rejoined EDS in March 2003 after a brief
retirement, served as President and Chief Operating Officer
until October 2005, and as President until October 2006.
Mr. Heller previously served as Vice Chairman of EDS from
November 2000 until retirement in February 2002. Mr. Heller
is also a director of EDS and Mutual of Omaha.
|
W. Allen Reed
2000
|
|
Mr. Reed, 60, retired as Chairman
of General Motors Asset Management Corporation in April 2006.
Mr. Reed served as President and Chief Executive Officer
from July 1994 until December 31, 2005. He also served as
Chairman and CEO of the GM Trust Bank and as a Corporate Vice
President of General Motors Corporation until December 31,
2005. He is a director of Legg Mason, Inc. and Morgan Stanley
Mutual Funds. Mr. Reed is also Senior Advisor to AEA
Holdings, a private equity and alternative investments firm.
|
7
Directors
to Serve Until the 2009 Annual Meeting of Stockholders
|
|
|
Name and Year First Elected Director
|
|
Principal Occupation and Other Information
|
|
Cassandra C. Carr
2004
|
|
Ms. Carr, 62, is Senior Advisor,
Public Strategies, Inc. (since April 2002). Public Strategies,
Inc. is a strategic consulting and communications firm which
manages campaigns around issues affecting businesses.
Ms. Carr was Senior Executive Vice President, External
Affairs, SBC Communications, Inc., San Antonio, TX
(telecommunications) (October 1998 March 2002) and
Senior Vice President, Human Resources (May 1994-September
1998). Ms. Carr is also a director of YRC Worldwide Inc.
|
James T. Hackett
2000
|
|
Mr. Hackett, 53, is Chairman,
President and Chief Executive Officer of Anadarko Petroleum
Corporation since January 2006 and has served as President and
Chief Executive Officer since December 2003. Mr. Hackett
was President and Chief Operating Officer of Devon Energy
Corporation from April 2003 until December 2003.
Mr. Hackett was Chairman (from January 2000), President and
Chief Executive Officer (from March 1999) of Ocean Energy, Inc.,
an independent oil and gas exploration and production company,
until its merger with Devon Energy Corporation in April 2003.
Mr. Hackett is also a director of Anadarko Petroleum
Corporation and Fluor Corporation.
|
Richard M. Smith
2006
|
|
Mr. Smith, 61, is Chairman and
Editor-in-Chief
of Newsweek. Prior to becoming Chairman in March 1998, he served
as President from 1991 until 1998. Mr. Smith was Chairman
of the Magazine Publishers of America (MPA) from 1996 to 1997
and the founding chairman of the MPAs New Media Committee.
He is also a former board member of the American Society of
Magazine Editors.
|
Arthur Temple III
1983
|
|
Mr. Temple III, 65, is
Chairman of the Board of First Bank & Trust, East Texas
(FB&T), a position he has held since March 1992. FB&T is
a locally owned community bank headquartered in Diboll, Texas.
FB&T is owned by Diboll Bancshares, Inc., a locally-owned
bank holding company. Since November 2000,
Mr. Temple III has also served as Chairman of the
T.L.L. Temple Foundation, a charitable foundation.
Mr. Temple III served as Chairman of the Board of
Exeter Investment Company from 1975 to early 1982 and from March
1986 until June 2002. From 1973 until 1980
Mr. Temple III served as a member of the Texas
legislature and from January 1981 until March 1986 he served as
a member and Chairman of the Railroad Commission of Texas, which
regulates mineral resources in Texas. Mr. Temple III
also serves on the Board and as a member of the Loan Committee,
Audit Committee, and Executive Committee of Temple-Inlands
Guaranty Bank.
|
Larry E. Temple
1991
|
|
Mr. Temple, 71, is an attorney and
during the last five years has been in private practice. He has
served as Chairman of the Texas Select Committee on Higher
Education, as Chairman of the Texas Higher Education
Coordinating Board, and as a member of the Texas Guaranteed
Student Loan Corporation. Mr. Temple has also served
on several boards of the University of Texas and is a member of
the Board and President of the Lyndon B. Johnson Foundation.
Mr. Temple formerly served as Special Counsel to President
Lyndon B. Johnson and as an Executive Assistant to Texas
Governor John Connally. Mr. Temple also serves on the Board
of Temple-Inlands Guaranty Bank and is Chairman of
Guarantys audit Committee.
|
How
Nominees Are Selected
Our Nominating and Governance Committee selects nominees on the
basis of recognized achievements and their ability to bring
various skills and experience to the deliberations of the Board,
as described in more detail in the Corporate Governance
Guidelines available on our website at
www.templeinland.com. Nominees
8
must be independent as defined in the listing standards of the
NYSE. Nominees must not have a prohibited conflict of interest
with our business or ownership, including any regulatory
conflicts due to our ownership of banking and financial services
operations. Priority will be given to individuals with
outstanding business experience and who currently serve or have
served as the chief executive officer of a company.
Our Nominating and Governance Committee considers director
candidates recommended by the directors. After reviewing a
potential directors qualifications, a suitable candidate
will be invited to meet with the CEO and full board to determine
if the candidate is a good fit with the rest of the Board.
Our Nominating and Governance Committee considers director
candidates recommended by stockholders who are entitled to vote
for the election of directors at the stockholders meeting
and comply with the notice procedures described below. Pursuant
to our By-laws, notice of a stockholders intent to
nominate a candidate for the Board of Directors must contain
certain specified information regarding the nominating
stockholder and the nominee. Each notice must include the
following information about the nominee:
|
|
|
|
|
the name, age, business address and, if known, residence address,
|
|
|
|
the principal occupation or employment,
|
|
|
|
the number of shares of Temple-Inland beneficially
owned, and
|
|
|
|
any other information that must be disclosed about nominees in
proxy solicitations pursuant to Regulation 14A under the
Exchange Act (including the nominees written consent to be
named as a nominee and to serve as a director if elected).
|
Each notice must also include the following information about
the nominating stockholder:
|
|
|
|
|
the name and address, as they appear in our records, and
|
|
|
|
the class and number of shares of Temple-Inland beneficially
owned.
|
We may require any proposed nominee to furnish such other
information as may reasonably be required by us to determine the
eligibility of the proposed nominee to serve as a director.
Our Corporate Secretary must receive this information not less
than 75 days nor more than 100 days prior to the
anniversary date of the immediately preceding annual meeting of
stockholders. In the case of an annual meeting called for a date
more than 50 days prior to such anniversary date or in the
case of a special meeting of stockholders, the information must
be received not later than the close of business on the
10th day
following the date on which notice of such annual meeting or
special meeting is first mailed to stockholders or made public,
whichever occurs first. On the last page, we have included the
dates applicable to the next annual meeting of stockholders.
Certain
Relationships and Related Transactions; Director
Independence
Director
Independence
The Board of Directors has determined that the following
Directors meet its independence standards, which are set forth
in the Corporate Governance Guidelines on our website at
www.templeinland.com: Afsaneh M. Beschloss, Donald
M. Carlton, Cassandra C. Carr, E. Linn Draper, Jr., Larry
R. Faulkner, James T. Hackett, Jeffrey M. Heller, James A.
Johnson, W. Allen Reed, Richard M. Smith, Arthur
Temple III, and Larry E. Temple. Mr. Jastrow, our
Chairman, does not meet the independence standards because he is
an employee and our CEO. The Board defines independence as
meeting the requirements to be considered independent directors
as defined under the current rules of the New York Stock
Exchange. The Board has established the following additional
guidelines to assist it in determining director independence:
1. If not otherwise prohibited by the rules of the NYSE,
any commercial or charitable relationship that is not required
to be reported in the proxy statement to stockholders will not
be considered a material relationship that would impair a
directors independence.
9
2. To serve as a member of any committee of the Board, the
director must meet any additional requirements of independence
set forth in the committees charter or applicable law.
There were no material transactions or relationships between
Temple-Inland and any director during 2006. In making its
determination that all directors except Mr. Jastrow are
independent, the Board considered all transactions with
companies on which its directors are executive officers, but did
not consider these transactions to be material because in each
case they were less than 2% of our or the other companys
consolidated gross revenues.
In addition, the Board has considered that, from time to time,
Guaranty Bank or one of its subsidiaries may make mortgage loans
and/or
provide home equity lines of credit to our directors, executive
officers, or their immediate families. These mortgage loans
and/or home
equity lines of credit:
|
|
|
|
|
are made in the ordinary course of business,
|
|
|
|
are made on substantially the same terms, including interest
rates and collateral requirements, as those prevailing at the
time for comparable transactions with persons not related to
us, and
|
|
|
|
do not involve more than the normal risk of collectibility or
present other unfavorable features.
|
We may sell these mortgage loans
and/or home
equity lines of credit into the secondary market in the ordinary
course of business.
Mr. Arthur Temple III is a director of
Contractors Supplies, Inc., and members of
Mr. Temples immediate family own approximately 11% of
its outstanding capital stock. During 2006, in the ordinary
course of business, subsidiaries of the Company sold building
materials, lumber, and fiberboard to Contractors.
Mr. Temple III is also a director, officer, and
662/3%
stockholder of Demco Manufacturing Company. During 2006, in the
ordinary course of business, Demco performed machinery repair
services for subsidiaries of the Company. Mr. Temple III is
an 8% partner in three partnerships, Diboll Leasing Company,
DLCO, and DLCO I Ltd. that own and lease rail cars. During 2006,
in the ordinary course of business, subsidiaries of the Company
participated in transactions with DLCO and DLCO I Ltd. for rail
car repairs, rail car rental, and management fees. The Board
considered these transactions, but felt that they did not affect
Mr. Temple IIIs independence because he does not
have a direct or indirect material interest in these
transactions and they do not exceed the greater of
$1 million or 2% of either companys consolidated
gross revenues.
Mr. W. Allen Reed retired as Chairman of General Motors
Asset Management Corporation, or GMAM, in April 2006. The Board
has considered that, from time to time, Guaranty Bank or one of
its subsidiaries participated in syndicated financing
transactions with General Motors Asset Management Corporation or
an affiliate of GMAM.
The Board considered the fact that the Company has mineral
interests that are leased by Anadarko Petroleum Corporation,
whose CEO is James T. Hackett, or an affiliate of Anadarko, but
felt that it did not affect his independence because he does not
have a direct or indirect material interest in these
transactions and they do not exceed the greater of
$1 million or 2% of either companys consolidated
gross revenues.
There is no family relationship between any of the nominees,
continuing directors and executive officers of Temple-Inland.
Arthur Temple III and Larry E. Temple are not
related.
Related
Transactions
We maintain a written policy and procedures for the review,
approval, or ratification of any related party transactions that
we are required to report under this section of the proxy
statement. A related party, for purposes of our policy, means
(i) any person who is, or at any time since the beginning
of our last fiscal year was, a director or executive officer or
a nominee for director, (ii) any person known to be the
beneficial owner of more than 5% of our common stock, and
(iii) any immediate family member of the foregoing persons.
10
Under the related party transaction policy, any transaction,
arrangement or relationship between us and a related party must
be reviewed by the Nominating and Governance Committee, except
that the following transactions, arrangements or relationships
are pre-approved under the policy:
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compensation arrangements required to be reported under the
Director Compensation section of the proxy statement,
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compensation arrangements required to be reported under the
Executive Compensation section of the proxy statement,
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business expense reimbursements,
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personal bank accounts held at our Guaranty Bank subsidiary,
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mortgage loans made by Guaranty Bank or one of its affiliates in
the ordinary course of business,
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transactions with an entity in which the related party owns less
than 10% of the other entity,
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transactions with an entity in which the related party is a
director only,
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transactions with an entity in which the related party is not an
executive officer, and
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indebtedness for transactions in the ordinary course of business.
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We will only enter into transactions with related parties if
they are in the best interest of the Company. The Nominating and
Governance Committee will also consider whether the transaction
is entered into on an arms length basis, whether it conforms to
our Standards of Business Conduct and Ethics, and whether it
impacts a directors independence under applicable stock
exchange rules. A director is not allowed to approve or vote on
a related party transaction involving him/herself or his or her
family members.
Leslie K. ONeal is our Vice President and Secretary. Her
spouse was employed by a subsidiary of Temple-Inland prior to
the time that she became an executive officer and he retired
last year. His compensation for 2006 was $52,910 salary and
$102,518 in retirement benefits. This transaction was not
reviewed under our related party transaction policy because the
relationship was disclosed to the Board each year under our
Standards of Business Conduct and Ethics, the Compensation
Committee and Board approved the retirement plan in which he
participates, and Ms. ONeal did not participate in
any decisions affecting her spouses compensation or
employment, all of which were considered adequate controls.
We did not identify any transactions where the related party
policies and procedures did not require review, approval or
ratification or where the policies and procedures were not
followed.
Committees
of the Board of Directors
The Board performs a number of its functions through committees.
All members and the chairman of our Audit Committee, Management
Development and Executive Compensation Committee, and Nominating
and Governance Committee are independent directors under the
NYSE listing standards. Each committees charter expressly
provides that the committee has the sole discretion to retain,
compensate, and terminate its advisors. Current copies of the
charters of our Audit Committee, Management Development and
Executive Compensation Committee, and the Nominating and
Governance Committee are available on our website at
www.templeinland.com.
A description of the functions of the Board committees and the
members serving on these committees follows:
Audit
Committee
The Audit Committee assists the Board in its oversight of:
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the integrity of our financial statements,
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compliance with legal and regulatory requirements,
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11
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the adequacy of our internal control over financial
reporting, and
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the independence and performance of our internal auditors and
independent registered public accountants.
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The Audit Committee has the sole authority to retain,
compensate, and terminate the independent registered public
accounting firm. The Board of Directors has determined that
there is at least one audit committee financial expert serving
on the Audit Committee, James T. Hackett, who is an independent
director. In addition, the Board of Directors has determined, in
its business judgment, that all members of the Audit Committee
are financially literate and independent as defined in the NYSE
corporate governance standards. The members of the Audit
Committee are Mr. Hackett (Chairman), Ms. Beschloss,
Dr. Carlton, Ms. Carr, Dr. Faulkner,
Mr. Heller, Mr. Smith, and Mr. L. Temple. During
2006, the Audit Committee met nine (9) times.
Management
Development and Executive Compensation Committee
The Management Development and Executive Compensation Committee
(which we will refer to in this Proxy Statement as the
Compensation Committee) is responsible for:
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over-seeing management succession and development plans;
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ensuring that a proper system of short- and long-term
compensation is in place to provide performance-oriented
incentives to management;
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approving the salaries and bonuses of officers;
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making recommendations concerning retirement plans and other
employee benefit programs; and
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over-seeing stock incentive plans.
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The Vice President and Secretary, Executive Vice President, and
Chief Executive Officer recommend executive compensation amounts
and programs to the Compensation Committee. Hewitt Associates
LLC, a compensation consultant, is engaged by the Compensation
Committee to provide market data regarding executive
compensation and advice about proposed compensation programs and
amounts. The Compensation Committee obtains specific data from
Hewitt Associates on an annual basis and at other times upon
request. The Compensation Committee also invites a Hewitt
Associates representative to attend meetings of the committee
from time to time. The Compensation Committee meets with the
Hewitt Associates representative in executive session
periodically. Once the full Board approves any compensation
recommendations of the Compensation Committee, administration of
the compensation programs is delegated to the Vice President and
Secretary.
The members of the Compensation Committee are Mr. Johnson
(Chairman), Ms. Carr, Dr. Draper, Mr. Hackett,
and Mr. Heller, all of whom are independent as defined in
the NYSE corporate governance standards. During 2006, the
Compensation Committee met four (4) times.
Compensation
Committee Interlocks and Insider Participation
There are no Compensation Committee interlocks among the members
of the Board and no member of the Compensation Committee has a
transaction reported under Certain Relationships and Related
Transactions.
Nominating
and Governance Committee
The Nominating and Governance Committee:
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periodically reviews the structure of the Board to assure that
the proper skills and experience are represented on the Board,
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recommends nominees to serve on the Board of Directors,
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reviews potential conflicts of prospective Board members,
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recommends the size of the Board,
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12
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recommends the membership of the committees,
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reviews corporate governance issues,
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reviews stockholder proposals,
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reviews outside directorships in other publicly held companies
by senior officers of Temple-Inland,
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acts in an advisory capacity to the Board of Directors regarding
activities that relate to matters of public policy and the
environment, issues of social and public concern, and
significant legislative, regulatory and social trends, and
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recommends director compensation to the full Board.
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The Vice President and Secretary, Executive Vice President, and
Chief Executive Officer recommend director compensation amounts
and programs to the Nominating and Governance Committee. Hewitt
Associates LLC, a compensation consultant, is engaged by the
Nominating and Governance Committee to provide market data
regarding director compensation and advice about proposed
director compensation programs and amounts. The Nominating and
Governance Committee obtains specific data from Hewitt
Associates on an annual basis and at other times upon request.
The Nominating and Governance Committee also invites a Hewitt
Associates representative to attend meetings of the committee
from time to time. The Nominating and Governance Committee meets
with the Hewitt Associates representative in executive session
periodically. Once the full Board approves any director
compensation recommendations of the Nominating and Governance
Committee, administration of the compensation programs is
delegated to the Vice President and Secretary.
The members of the Nominating and Governance Committee are
Mr. Reed (Chairman), Ms. Beschloss, Dr. Carlton,
Dr. Faulkner, Mr. Smith, Mr. Temple III, and
Mr. L. Temple, all of whom are independent as such term is
defined in the NYSE corporate governance standards. During 2006,
the Nominating and Governance Committee met four (4) times.
Executive
Committee
The Executive Committee may exercise all the authority of the
Board of Directors in the management of the business and affairs
of the Company except:
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matters related to the composition of the Board,
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changes in the By-laws, and
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certain other significant corporate matters.
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The members of the Executive Committee are the Chairman of the
Board, who serves as Chairman of the Executive Committee, and
the Chairman of each standing committee of the Board:
Mr. Jastrow, Mr. Hackett, Mr. Johnson, and
Mr. Reed. During 2006, the Executive Committee did not meet.
Board
Meetings
During 2006, the Board of Directors met four (4) times.
Each director attended at least 75% of the aggregate of the
total number of meetings of the Board of Directors and the total
number of meetings held by all committees of the Board on which
he or she served. Health permitting, all Board members are
expected to attend our annual meeting of stockholders. In 2006,
all Board members attended the annual meeting of stockholders,
except Ms. Beschloss. The Board holds regularly scheduled
executive sessions of the Board with only non-management
directors present. A session with only independent directors was
held in conjunction with each of the four (4) regularly
scheduled Board meetings in 2006. The Chairmen of the Audit,
Compensation, and Nominating and Governance Committees serve as
presiding director to lead non-management executive sessions of
the Board on a two-year rotation cycle.
13
Communication
with Directors
Stockholders and other interested parties may communicate with
non-management directors by forwarding their written comments to
an independent third party that has agreed to forward the
comments to the presiding director with a copy to our General
Counsel. As of the date of this proxy statement, such
independent third party is The Network and such comments may be
sent to:
The Network
333 Research Court
Norcross, GA 30092
Attention: Call Center Temple-Inland
Alternatively, interested parties may send an email to The
Network at www.tnwinc.com/webreport.
The current presiding director is James T. Hackett. Any changes
in the presiding director or the independent third party for
purposes of communicating with the presiding director after
publication of this proxy statement will be posted on our
website at www.templeinland.com.
Director
Compensation
The Director compensation program is designed in recognition of
the time commitment and preparations required for Directors to
fulfill their responsibilities and to better align Director
compensation with stockholder returns. Alignment with
stockholders is emphasized through stock ownership requirements,
an annual phantom stock grant, and the ability to receive
phantom shares in lieu of fees. The Director Retirement Plan
that previously existed was frozen in 2000. The current program
consists of the following compensation components:
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a stock option grant upon initial election to the Board,
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annual retainer fees,
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meeting fees,
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an annual phantom stock grant, and
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contributions to charitable institutions.
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No cash compensation was paid to the Directors in 2006. To
further align the interest of the Board with stockholders, we
offer a phantom stock match of 133% if Directors agree to defer
all or a portion of their fees until they retire from Board
service. In 2006 all of the Directors elected to defer their
fees until retirement.
14
Our director fee schedule is as follows:
Director
Fee Schedule
Temple-Inland
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Annual Retainer Fee
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$50,000
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Audit Chairman Annual Retainer Fee
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$20,000
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Audit Committee Member Retainer Fee
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$ 5,000
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Other Committee Chairman Annual
Retainer Fee
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$12,500
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Board Meeting Fee
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$ 3,500
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$ 1,500
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Committee Meeting Fee
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$ 2,500 if not in conjunction
with a Board meeting
|
Stock Option Grant
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20,000 options upon initial
election
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Annual Phantom Stock
Grant Payment Deferred Until Retirement
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2,000 shares
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Match for Deferring Fees in lieu
of Cash Payment Deferred Until Retirement
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133%
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Charitable Contribution (by the
Temple-Inland Foundation)
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$ 5,000
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Matching Gift to Charity (by the
Temple-Inland Foundation)
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Up to $6,000
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Guaranty
Bank
(Guaranty Bank is a subsidiary of Temple-Inland that has outside
directors on its board.
Three of the Temple-Inland directors also serve on the Guaranty
Bank board.
The following fees are paid in cash by Guaranty.)
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Annual Retainer Fee
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$
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60,000
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Audit Chairman Annual Retainer Fee
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$
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12,000
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Loan Committee Annual
Retainer Fee
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$
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12,000
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Executive Committee Annual
Retainer Fee
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$
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12,000
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Compensation Committee Annual
Retainer Fee
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$
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6,000
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Special Meeting Fee
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$
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500
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Charitable Contribution
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$
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2,500
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Directors may retire at any time, but must retire by the annual
meeting following their 72nd birthday. Directors are
reimbursed for expenses incurred in attending Board and
committee meetings, including those for travel, food and lodging.
Directors receive a grant of 20,000 options at the time of their
initial election to the Board. Options are granted at fair
market value on the grant date, which is the date of the board
meeting at which the director is elected. The option vests in 3
installments: 8,000 shares on the first anniversary,
8,000 shares on the second anniversary, and
4,000 shares on the third anniversary of the date of
election. The option term is ten years. We do not have any
program, plan or practice to time option grants to our directors
in coordination with the release of material non-public
information. We do not set the grant date of stock option grants
to new directors in coordination with the release of material
non-public information. We do not time our release of material
nonpublic information for the purpose of affecting the value of
director compensation.
We have computed the value of our director compensation program
as shown in the following chart in accordance with SEC
requirements. The fair value of restricted stock, performance
stock units, and stock options was determined in accordance with
Statement of Financial Accounting Standards No. 123(R).
Fair value of the option awards was determined using the
Black-Scholes-Merton option pricing model.
15
Assumptions used in the SFAS 123(R) calculation are
described in Note 6 Share-Based Compensation to
the Consolidated Financial Statements contained in our 2006
Form 10-K.
SFAS 123(R) requires us to calculate the value of the
phantom shares acquired through deferral of fees and match using
the stock price on the date the fees are earned. However,
directors do not receive any payment until they retire. At
retirement, a director receives actual shares of common stock
and cash equal in value to the phantom stock shares held in his
or her account. The value of the shares and cash received on the
date the director retires may be different than the value of
phantom shares received at the time the fee is earned.
Mr. Jastrow receives no compensation for his service as a
director other than his employee pay.
DIRECTOR
COMPENSATION FOR FISCAL YEAR 2006
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Change in Pension
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Value and
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Nonqualified
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Fees Earned or
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Non-Equity
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Deferred
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Paid in Cash ($)
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Stock Awards
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Option Awards
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Incentive Plan
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Compensation
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All other
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Name
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(1)
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($)(3)
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($)(2)
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Compensation ($)
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Earnings ($)
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Compensation ($)(4)
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Total ($)
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(a)
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(b)
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(c)
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(d)
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(e)
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(f)
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(g)
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(h)
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Afsaneh M. Beschloss
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0
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$
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295,110
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0
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0
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0
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0
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$
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295,110
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Donald M.Carlton
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0
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$
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310,255
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0
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0
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0
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$
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11,000
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$
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321,255
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Cassandra C. Carr
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0
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$
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310,255
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0
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0
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0
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$
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5,000
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$
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315,255
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E. Linn Draper, Jr.
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0
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$
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255,500
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0
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0
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0
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$
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5,000
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$
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260,500
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Larry R. Faulkner
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$
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72,000
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$
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304,430
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0
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0
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0
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$
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7,500
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$
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383,930
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James T. Hackett
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0
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$
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365,010
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0
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0
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0
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$
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5,000
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$
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370,010
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Jeffrey M. Heller
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0
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$
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310,255
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0
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0
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0
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$
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5,000
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$
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315,255
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James A. Johnson
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0
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$
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296,275
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0
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0
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0
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$
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11,000
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$
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307,275
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W. Allen Reed
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0
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$
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296,275
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0
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0
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0
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$
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5,000
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$
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301,275
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Richard M. Smith
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0
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$
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62,708
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$
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195,400
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0
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0
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0
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$
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258,108
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Arthur Temple III
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$
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96,000
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$
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255,500
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0
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0
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0
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$
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13,500
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$
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365,000
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Larry E. Temple
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$
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84,000
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$
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310,255
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0
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0
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0
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$
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13,500
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$
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407,755
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(1) |
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The cash fees shown in the table above were paid by Guaranty
Bank to the directors who serve on its board. Temple-Inland paid
no cash fees in 2006. The fees shown in column (c) consist
of fees that were earned in 2006 but deferred until retirement.
The deferred fees earn a match of 133% and are converted into
phantom shares. The chart below shows the fees, match, and
resulting phantom shares credited to each directors
account, along with the directors normal retirement date: |
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Fees Earned and Deferred Until Retirement
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Total Deferred
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Fees/Stock
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Awards
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($)
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(b + c + d + e + f)
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Value on
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Grant Date of
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Converted
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|
|
|
|
|
|
|
|
Fees
|
|
|
into Phantom
|
|
|
|
|
|
|
|
|
|
Committee
|
|
|
Board and
|
|
|
|
|
|
Annual
|
|
|
Deferred
|
|
|
Shares Payable
|
|
|
Normal
|
|
|
|
Board
|
|
|
Retainer
|
|
|
Committee
|
|
|
|
|
|
Phantom Stock
|
|
|
Until
|
|
|
Upon
|
|
|
Retirement
|
|
Name
|
|
Retainer
|
|
|
Fees
|
|
|
Meeting Fees
|
|
|
Match
|
|
|
Grant
|
|
|
Retirement
|
|
|
Retirement
|
|
|
Date
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
Afsaneh M. Beschloss
|
|
$
|
50,000
|
|
|
$
|
5,000
|
|
|
$
|
32,000
|
|
|
$
|
115,710
|
|
|
$
|
92,400
|
|
|
$
|
295,110
|
|
|
|
= 6,525
|
|
|
|
2028
|
|
Donald M.Carlton
|
|
$
|
50,000
|
|
|
$
|
5,000
|
|
|
$
|
38,500
|
|
|
$
|
124,355
|
|
|
$
|
92,400
|
|
|
$
|
310,255
|
|
|
|
= 6,827
|
|
|
|
2010
|
|
Cassandra C. Carr
|
|
$
|
50,000
|
|
|
$
|
5,000
|
|
|
$
|
38,500
|
|
|
$
|
124,355
|
|
|
$
|
92,400
|
|
|
$
|
310,255
|
|
|
|
= 6,829
|
|
|
|
2017
|
|
E. Linn Draper, Jr.
|
|
$
|
50,000
|
|
|
|
0
|
|
|
$
|
20,000
|
|
|
$
|
93,100
|
|
|
$
|
92,400
|
|
|
$
|
255,500
|
|
|
|
= 5,593
|
|
|
|
2014
|
|
Larry R. Faulkner
|
|
$
|
50,000
|
|
|
$
|
5,000
|
|
|
$
|
36,000
|
|
|
$
|
121,030
|
|
|
$
|
92,400
|
|
|
$
|
304,430
|
|
|
|
= 6,696
|
|
|
|
2016
|
|
James T. Hackett
|
|
$
|
50,000
|
|
|
$
|
25,000
|
|
|
$
|
42,000
|
|
|
$
|
155,610
|
|
|
$
|
92,400
|
|
|
$
|
365,010
|
|
|
|
= 8,013
|
|
|
|
2026
|
|
Jeffrey M. Heller
|
|
$
|
50,000
|
|
|
$
|
5,000
|
|
|
$
|
38,500
|
|
|
$
|
124,355
|
|
|
$
|
92,400
|
|
|
$
|
310,255
|
|
|
|
= 6,827
|
|
|
|
2012
|
|
James A. Johnson
|
|
$
|
50,000
|
|
|
$
|
12,500
|
|
|
$
|
25,000
|
|
|
$
|
116,375
|
|
|
$
|
92,400
|
|
|
$
|
296,275
|
|
|
|
= 6,477
|
|
|
|
2016
|
|
W. Allen Reed
|
|
$
|
50,000
|
|
|
$
|
12,500
|
|
|
$
|
25,000
|
|
|
$
|
116,375
|
|
|
$
|
92,400
|
|
|
$
|
296,275
|
|
|
|
= 6,475
|
|
|
|
2019
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned and Deferred Until Retirement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees/Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b + c + d + e + f)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value on
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant Date of
|
|
|
Converted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees
|
|
|
into Phantom
|
|
|
|
|
|
|
|
|
|
Committee
|
|
|
Board and
|
|
|
|
|
|
Annual
|
|
|
Deferred
|
|
|
Shares Payable
|
|
|
Normal
|
|
|
|
Board
|
|
|
Retainer
|
|
|
Committee
|
|
|
|
|
|
Phantom Stock
|
|
|
Until
|
|
|
Upon
|
|
|
Retirement
|
|
Name
|
|
Retainer
|
|
|
Fees
|
|
|
Meeting Fees
|
|
|
Match
|
|
|
Grant
|
|
|
Retirement
|
|
|
Retirement
|
|
|
Date
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
Richard M. Smith
|
|
$
|
12,500
|
|
|
$
|
1,250
|
|
|
$
|
5,000
|
|
|
$
|
24,938
|
|
|
$
|
19,020
|
|
|
$
|
62,708
|
|
|
|
= 1,647
|
|
|
|
2018
|
|
Arthur Temple III
|
|
$
|
50,000
|
|
|
|
0
|
|
|
$
|
20,000
|
|
|
$
|
93,100
|
|
|
$
|
92,400
|
|
|
$
|
255,500
|
|
|
|
= 5,594
|
|
|
|
2014
|
|
Larry E. Temple
|
|
$
|
50,000
|
|
|
$
|
5,000
|
|
|
$
|
38,500
|
|
|
$
|
124,355
|
|
|
$
|
92,400
|
|
|
$
|
310,255
|
|
|
|
= 6,827
|
|
|
|
2008
|
|
At fiscal year end 2006, the directors held the following
aggregate number of phantom shares in the Fee Deferral Plan:
Ms. Beschloss 25,467;
Dr. Carlton 25,240; Ms. Carr
16,969; Dr. Draper 15,971;
Dr. Faulker 9,764;
Mr. Hackett 47,470;
Mr. Heller 19,467;
Mr. Johnson 37,279;
Mr. Reed 41,475;
Mr. Smith 1,657;
Mr. Temple III 35,626; and
Mr. L. Temple 42,188.
For additional information see the section entitled Fee
Deferral Plan.
|
|
|
(2) |
|
At fiscal year end 2006, the directors held the following
aggregate number of stock options:
Ms. Beschloss 20,000;
Dr. Carlton 20,000; Ms. Carr
20,000; Dr. Draper 20,000;
Dr. Faulkner 20,000;
Mr. Hackett 24,000; Mr. Heller
20,000; Mr. Johnson 36,000;
Mr. Reed 13,000; Mr. Smith
20,000; Mr. Temple III 22,000; and Mr. L.
Temple 4,000. Expiration dates for these options
range from 2009 through 2017. Until 2003, directors could take
options with
15-year
terms in lieu of their annual retainer fee, which is why some
directors have more than 20,000 options outstanding. To see
option exercise prices, vesting dates, and terms for each
directors options, you may look at his or her latest
Form 4 under Investor Relations, SEC Filings, on our
website at www.templeinland.com. |
|
(3) |
|
We have computed the value of our director compensation program
as shown in the chart in accordance with SEC requirements. We
calculated the aggregate grant date fair value of options in
accordance with Financial Accounting Standards Board Statement
of Financial Accounting Standards No. 123(R). Option awards
in column (d) are valued using a Black-Scholes-Merton option
pricing value of $9.77. Assumptions used in the SFAS 123(R)
calculation are described in
Note 6 Share-Based Compensation to the
Consolidated Financial Statements contained in our 2006
Form 10-K.
SFAS 123(R) requires us to calculate the value of the
phantom shares acquired through deferral of fees and match using
the stock price on the date the fees are earned. The grant date
fair value is shown in the Fee Deferral Plan chart. |
|
(4) |
|
Amounts include charitable donations made on behalf of directors
and matching charitable donations. |
Stock
Ownership Guidelines
Directors are required to hold Temple-Inland stock valued at
five times their annual retainer fee under the Boards
stock ownership guidelines. This stock ownership policy is
contained in our Corporate Governance Guidelines, which are
available on our website at www.templeinland.com.
Shares of stock owned by the directors and their immediate
family members count toward this requirement. Phantom shares
also count toward this requirement. All directors meet the stock
ownership requirements, except for Mr. Smith, who has five
years from his November 2006 election to comply with the
ownership guidelines.
Fee
Deferral Plan
Directors may participate in a fee deferral plan that encourages
stock ownership by granting a match of 133% in the form of
phantom stock units on amounts deferred until retirement. The
number of phantom stock units is determined by dividing the
deferred amount by the fair market value of Temple-Inlands
stock on the date deferred.
17
Dividend equivalents are credited on the phantom stock equal to
the amount of dividends Temple-Inland pays on stock. The
dividend equivalents are reinvested in more shares of phantom
stock. At retirement, the director will receive stock for fees
deferred through 2005 and cash for fees deferred beginning in
2006 in payment of the phantom stock units. Cash payments will
be based on the fair market value of the stock on the payment
date. Fair market value in all cases is equal to the closing
price of Temple-Inland stock on the NYSE on the applicable date.
Payment may be taken in a lump sum or in up to 15 annual
installments.
If a director chooses cash payment on a current basis instead of
deferring their fees, they do not receive a match. The annual
phantom stock grant is not matched, but does earn dividend
equivalents that are reinvested until retirement.
For example, suppose a director defers the following fees in
2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Price on
|
|
|
|
|
|
Assuming
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date
|
|
|
|
|
|
Stock Price
|
|
|
Assuming Stock
|
|
|
|
Value
|
|
|
|
|
|
Annual
|
|
|
Total
|
|
|
Earned
|
|
|
Number
|
|
|
of $40 on
|
|
|
Price of $50 on
|
|
|
|
on Date
|
|
|
133%
|
|
|
Phantom
|
|
|
Value on
|
|
|
(Grant Date
|
|
|
of Phantom
|
|
|
Retirement Date,
|
|
|
Retirement Date,
|
|
Type of Fee
|
|
Earned
|
|
|
Match
|
|
|
Stock Grant
|
|
|
Date Earned
|
|
|
Fair Value)
|
|
|
Shares
|
|
|
Director Receives
|
|
|
Director Receives
|
|
|
Annual Board Retainer
|
|
$
|
50,000
|
|
|
$
|
66,500
|
|
|
|
|
|
|
$
|
116,500
|
|
|
$
|
46.20
|
|
|
|
2,522
|
|
|
|
|
|
|
|
|
|
Annual Audit Committee Retainer
|
|
$
|
5,000
|
|
|
$
|
6,650
|
|
|
|
|
|
|
$
|
11,650
|
|
|
$
|
46.20
|
|
|
|
252
|
|
|
|
|
|
|
|
|
|
Annual Phantom Stock Award
|
|
|
|
|
|
|
|
|
|
$
|
92,400
|
|
|
$
|
92,400
|
|
|
$
|
46.20
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
Board & Committee Meeting
Fees February
|
|
$
|
9,000
|
|
|
$
|
11,970
|
|
|
|
|
|
|
$
|
20,970
|
|
|
$
|
46.20
|
|
|
|
454
|
|
|
|
|
|
|
|
|
|
Board & Committee Meeting
Fees May
|
|
$
|
11,500
|
|
|
$
|
15,295
|
|
|
|
|
|
|
$
|
26,795
|
|
|
$
|
47.18
|
|
|
|
568
|
|
|
|
|
|
|
|
|
|
Board & Committee Meeting
Fees August
|
|
$
|
9,000
|
|
|
$
|
11,970
|
|
|
|
|
|
|
$
|
20,970
|
|
|
$
|
43.57
|
|
|
|
481
|
|
|
|
|
|
|
|
|
|
Board & Committee Meeting
Fees November
|
|
$
|
9,000
|
|
|
$
|
11,970
|
|
|
|
|
|
|
$
|
20,970
|
|
|
$
|
38.04
|
|
|
|
551
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
93,500
|
|
|
$
|
124,355
|
|
|
$
|
92,400
|
|
|
$
|
310,255
|
|
|
|
|
|
|
|
6,828
|
|
|
$
|
273,120
|
|
|
$
|
341,400
|
|
The director does not get any payment until retirement.
Frozen
Retirement Plan
Directors may retire at any time, but must retire by the annual
meeting following their 72nd birthday. There is no
retirement plan for directors except for a plan that was frozen
in 2000. Under that plan, the following directors will receive
at retirement $35,000 per year for the following number of
years as a retirement benefit: Mr. Johnson
1 year; Mr. Reed 1 year;
Mr. Temple III 17 years; and
Mr. L. Temple 10 years. Retirement
benefits will be paid to the surviving spouse if the director
does not live to receive the full payment, and terminate if the
spouse does not live to receive the remaining payment. This plan
was discontinued in 2000 and no additional accruals will be made
under this plan.
Change in
Control Provision
Both the directors fee deferral plan and the frozen
directors retirement plan contain provisions for
accelerating payment in the event the directors service
terminates due to a change in control, along with a
gross-up
provision in the event the director is required to pay excise
tax on the accelerated payment.
18
Charitable
Contributions
In 2006, the Temple-Inland Foundation, a tax-exempt foundation
funded by contributions from Temple-Inland, made a $5,000
donation to a charity or educational institution chosen by each
director. Directors are also eligible for the Foundations
matching gifts program, which matches donations made by
employees and directors
3-for-1 for
the first $1,000;
2-for-1 for
the next $1,000; and
1-for-1 for
the next $1,000, for total possible matching donations of up to
$6,000 per person. Dr. Faulkner,
Mr. Temple III and Mr. L. Temple also serve on
the Guaranty Bank board. In 2006, Guaranty Bank made a $2,500
donation to a charity or educational institution chosen by each
of its directors.
Insurance
and Indemnification
Directors are covered under our business travel accident
insurance policy for $100,000 while traveling on our business.
Directors are also covered under our director and officer
liability insurance policies for claims alleged in connection
with their service as a director. We have entered into
indemnification agreements with each of our directors agreeing
to indemnify them to the fullest extent permitted by law for
claims alleged in connection with their service as a director.
19
EXECUTIVE
COMPENSATION
What
is our executive compensation
philosophy?
Our executive compensation philosophy is that a
significant part of our executives compensation is
tied to our performance. This helps motivate our executives to
drive performance. Our key objective is to maximize long-term
stockholder value by maximizing return on investment (ROI).
Companies able to generate ROI that exceeds their cost of
capital create value for stockholders. Your Board of Directors
and your management team are committed to a focused strategy and
execution of strategic initiatives to maximize ROI.
Our strategy and execution continue to deliver results. The
charts below show (a) our ROI over the last 4 years
compared with a weighted industry peer group and (b) our
total shareholder return over the last 4 years compared
with an industry peer group and the S&P 500:
ROI
versus Weighted Peer Group ROI*
* Weighted
by company investment
Comparison of 4 Year Cumulative Total Return
Assumes Initial Investment of $100
20
Peer
Group Includes:
Abitibi-Consolidated Inc.
Bowater Inc.
Caraustar Industries Inc.
Domtar Inc.
International Paper Co.
Longview Fibre Co.
MeadWestvaco Corporation
Packaging Corp. of America
Smurfit-Stone Container Corp.
Weyerhaeuser Co.
The peer group consists of companies that compete with us in the
paper and forest products industry. We periodically adjust the
peer group to reflect mergers, consolidations, and similar
restructurings. In computing ROI, we define ROI as operating
income, adjusted for significant unusual items divided by parent
company total assets, less certain assets and certain current
liabilities. In computing the weighted peer group ROI, we use
the definition above and sum the adjusted operating income for
the peers divided by the sum of the adjusted total assets for
the peers.
What are
our governance practices regarding compensation?
Our governance practices divide responsibility for compensation
oversight into 3 levels:
|
|
|
Stockholders:
|
|
Stockholders approve all stock
incentive plans. We do not have any stock plans that are not
stockholder-approved.
|
Board
and
Compensation
Committee:
|
|
The Compensation Committee
composed entirely of independent, outside directors establishes
and administers compensation programs and philosophies. The
Compensation Committee ensures that stockholder approved plans
are administered in accordance with good governance practices
and stockholder intent. The Compensation Committee is
responsible for approval of salaries, bonuses and long-term
incentive compensation paid to executive officers, bonus pools
for non-executive employees, retirement formulas for executive
officers, deferred compensation plans, and employment and change
in control agreements. The full Board reviews tally sheets for
the CEO and his direct reports, evaluates CEO performance,
approves succession plans, and acts on recommendations of the
Compensation Committee.
|
Management:
|
|
Management approves health and
welfare programs for all employees, divides bonus pool amounts
approved by the Compensation Committee into individual employee
bonuses, approves any retirement plan changes and formulas other
than those for executive officers, and administers all employee
benefit and incentive plans on a
day-to-day
basis. Within management, the CEO, Executive Vice President, and
Vice President and Secretary serve as liaisons with the
Compensation Committee.
|
What are
our stock option governance practices?
Our policy for setting the timing of stock option grants does
not allow executives to have any role in choosing the price of
their options or other stock awards. We do not back
date, spring load or reprice options or other
stock awards. Our general practice is to make annual grants each
year at the February board meeting. The Compensation Committee
approves awards, including the specific number of shares granted
to specific individuals, which are ratified by the full Board
and valued at the closing price of our common stock
21
on the NYSE on the Board meeting date. On occasion, newly hired
high-level employees may be granted awards by the Compensation
Committee in connection with the start of their employment other
than at the February board meeting. Any such grants are ratified
by the full Board and are priced at the closing price of our
common stock on the NYSE on the date of the Board meeting at
which the award is approved. We do not have any program, plan or
practice to time option grants or other stock awards in
coordination with the release of material non-public information
nor do we time the release of material nonpublic information for
the purpose of affecting the value of executive compensation.
What are
the objectives of our executive compensation program?
Our executive compensation program is designed to attract,
retain, and motivate key executives to maximize ROI and
performance. We provide a competitive compensation package,
including:
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Cash compensation: salaries and ROI based
performance bonuses
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Stock awards: options, ROI based restricted
stock, and ROI based performance stock units
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Retirement benefits: tax-qualified and
nonqualified supplemental executive retirement benefits
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Health and welfare benefits
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Change in control agreements
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Cash bonuses are considered on an annual basis based on overall
and segment ROI. Stock awards reward long-term performance and
align our executives interests with stockholders by
encouraging stock ownership. Both cash bonuses and long-term
stock awards are designed to align the executives
interests with our business strategy and motivate performance to
maximize ROI. Stock awards also help retain executives because
they contain forfeiture provisions if the executive terminates
employment other than for retirement, death or disability.
Retirement and health and welfare benefits help to retain
executives. We designed retirement formulas to reward long-term
service. Change in control agreements help ensure that our
executives continue to work in the best interest of our
stockholders and help alleviate concerns during any potential
change in control situations that might otherwise lead the
executives to work somewhere else.
Why do
some reports show our compensation as high, low, or
average?
Because our pay is heavily performance-driven, we believe you
should examine all of the factors used in any analysis. We have
no control over the companies selected by others for comparison
purposes. The peer group we use consists of companies that
compete with us in the paper and forest products industry and is
the same or similar peer group used by many analysts covering
the paper and forest products industry. In reviewing reports,
you should always look to see which companies are selected for
comparison purposes. In some cases, reports may use companies
for comparison purposes that do not produce the same types of
products or compete in the same industries as us. In other
cases, the comparator companies may be much larger or smaller
than us, or have much higher debt or a different capital
structure.
Does the
Compensation Committee use a compensation consultant?
Yes. The Compensation Committee currently uses Hewitt Associates
LLC (Hewitt) as its compensation consultant. Hewitt provides
annual market and other specific information on executive pay
and also attends Compensation Committee meetings on request of
the Committee. The Compensation Committee periodically meets in
executive session with Hewitt. Hewitt also serves as consultant
to the Nominating and Governance Committee on director
compensation.
With the Compensation Committees approval, Temple-Inland
retains Hewitt to prepare the change in control calculations for
disclosure in the proxy statement and to model the number of
shares to be requested for new stock plans. From time to time in
the past, Hewitt occasionally performed limited assignments for
Temple-Inland regarding non-executive employees on a
non-exclusive basis along with other compensation consultants.
Different representatives of Hewitt performed these assignments
who do not report to the Hewitt
22
representative who works with the Compensation Committee. Hewitt
was not retained for any such assignments in 2006.
Do we use
tally sheets?
Yes, tally sheets for each of the named executive officers are
reviewed by the Compensation Committee and the full Board for
compensation each year. These tally sheets list the
executives salary, proposed bonus and stock awards, and
the 401(k) matching contribution, retirement, health and welfare
benefits. In addition, the Compensation Committee and Board
review a wealth accumulation chart with respect to the CEO.
What is
our policy on Internal Revenue Code
Section 162(m)?
Our policy is to obtain the maximum possible tax deduction for
compensation paid to executive officers, but we may forego all
or some portion of a deduction to conform to our compensation
goals and objectives. Our Compensation Committee adopted a
policy requiring the deferral of any compensation that exceeds
$1 million for the named executives. This is the maximum
permissible deduction under Section 162(m) of the Internal
Revenue Code (without regard to certain exceptions for
performance based and certain other types of compensation). Pay
is deferred and paid at a later date when the maximum deduction
under Section 162(m) may be taken. Except for amounts that
are not material, all compensation paid in 2006 should qualify
for a deduction under Section 162(m). In 2006, our
Compensation Committee revised the policy to waive mandatory
deferral of pay related to vesting of restricted stock units
(except for the CEO) and payment of dividends on restricted
stock and performance stock units.
What is
the accounting and tax treatment of each form of
compensation?
For accounting purposes, salaries, bonuses, the fair value of
stock based compensation and other benefits are charged to
expense as earned. For tax purposes, salaries, bonuses and other
benefits are taken as a tax deduction when paid to the executive
or contributed to a tax-qualified retirement plan subject to the
Section 162(m) limitation described above. For tax
purposes, stock based compensation awards are generally taken as
a tax deduction when the award is vested or exercised by the
executive.
What are
the roles of executive officers in determining
compensation?
Our Compensation Committee which is composed entirely of
independent, outside directors establishes and administers
compensation programs and philosophies. Our Vice President and
Secretary, Executive Vice President, and Chief Executive Officer
work closely with the Compensation Committee and recommend
executive compensation amounts, except that the CEO does not
participate in discussions regarding his own compensation. These
executives consult with the other executive officers about
compensation amounts for executives and other employees who
report to them. The Compensation Committee has final approval of
all compensation amounts or formulas applicable to benefit plans
in which executive officers participate.
The Compensation Committee establishes, administers, and
approves bonus programs for non-executive employees and approves
the aggregate amount of bonus pools for each business segment.
Each executive officer recommends individual bonus amounts for
employees under his or her direction, and the Executive Vice
President or Group Vice President in charge of the applicable
business segment approves the individual amounts.
The Compensation Committee approves all stock award recipients
and the amount of each award. No executive is involved in
setting the exercise price of the awards.
The Compensation Committee has delegated to the Chief Executive
Officer the responsibility for approving health and welfare
programs for all employees. Executive officers participate in
the same health and welfare programs as other salaried
employees. Our benefit programs require executives who earn more
to pay more for their benefits.
The Compensation Committee has also delegated to certain of our
executive officers the responsibility to maintain the tax
qualification status of the retirement and 401(k) plans, to
approve retirement and 401(k) plan
23
provisions and formulas applicable to employees who are not
executive officers, and to oversee the administration of all of
the plans.
In addition, an investment committee, whose members are
executive officers, oversees the investment of retirement plan
assets and 401(k) plan fund choices. The investment committee
reports annually to the Board.
How is
the CEOs performance evaluated? Who determines CEO
pay?
The full Board completes an evaluation of the CEO each year,
which is compiled confidentially by Hewitt and provided to the
Compensation Committee. Factors evaluated include ROI and other
financial and non-financial performance measures and objectives,
including leadership, strategic planning, financial results,
succession planning, human resources/EEO, communications,
external relations, ethics, and board relations.
The Compensation Committee and full Board determine CEO pay with
assistance from Hewitt. The Compensation Committee discusses CEO
pay in executive session and reports its recommendations to the
Board. The Board approves all actions with respect to the
CEOs compensation.
How is
each element of compensation determined? How do we allocate
between each type of compensation, such as long-term or
short-term incentives, or cash and non-cash compensation? How
does each compensation element fit into our overall compensation
objectives and affect decisions regarding other
elements?
Generally speaking, each element of compensation is evaluated
independently to determine whether it is competitive within the
industries with which we compete, or within the market as a
whole. Each element of compensation is described in more detail
in the following pages.
Certain types of pay that have very long-term goals, such as
retirement, are monitored for competitiveness annually but the
formula is rarely changed. Only salary and bonus are taken into
account for retirement formula purposes.
Other types of pay, such as salary, short-term incentives, and
long-term incentives, are monitored for competitiveness
annually. Individual amounts granted under these programs may
vary from year to year based on competitive practices
and/or stock
prices, but the overall programs are changed less frequently.
Once a year, the Compensation Committee views a tally sheet that
shows all elements of pay as a total. The Compensation Committee
and board also view the charts shown in the proxy statement
during the same meeting in which annual compensation decisions
are made. Although the Compensation Committee has not
established specific preset allocation formulas to determine the
proportion of each type of pay in relation to other types of
pay, it generally tries to maintain a balance between the
different types of pay:
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Type of Pay
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Performance Measure
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Measurement Period
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Bonus
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ROI
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1 Year
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Restricted stock units
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Time vested with minimum ROI
threshold
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3 Years
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Performance stock units
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ROI vs. Peers
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3 Years
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Options
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Stock price
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10 Years
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Salary & Health Benefits
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Continued service subject to
annual evaluation
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1 Year
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Retirement & 401(k)
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Continued service subject to
annual evaluation. Except for designated officers with
15 years service, amount of retirement benefit is
dependent on salary and bonuses, which are based on ROI
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Career
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24
Year to year, the allocation may vary, but the overall mix is
strongly weighted to pay for performance. For the CEO, the 2006
mixture was weighted as follows:
In keeping with our focus on performance, Mr. Jastrow
was awarded only performance stock units for his long-term
incentive compensation in 2007; he was not awarded any options
or restricted stock units. In addition, the mix of long term
incentive awards for other senior executives was weighted more
toward performance stock units. Performance stock units may be
paid at 100% if top quartile performance is achieved or 75% if
second quartile performance is achieved. No payment will be made
if performance is not in the top two quartiles compared with our
peer group.
How are
salaries determined?
Salaries are maintained at competitive levels considering the
performance and longevity of the employees service. To
ensure that our compensation remains competitive, the
Compensation Committee from time to time reviews information
from independent surveys of comparative companies. Since the
market for executive talent extends beyond any particular
industry, the survey data include both companies in the industry
as well as companies outside the industry. For example, in 2006
the group of comparative companies included Bemis Company, Inc.,
Boise Cascade Corporation, International Paper Company, Martin
Marietta Materials, Inc., MeadWestvaco Corporation, Owens
Corning, Packaging Corporation of America, Pactiv Corporation,
Potlatch Corporation, PPG Industries, Inc., Rohm and Haas
Company, Smurfit-Stone Container Corporation, Sonoco Products
Company, Texas Industries, Inc., Trinity Industries, Inc.,
Vulcan Materials Company, and Weyerhaeuser Company. At the
request of the Compensation Committee, Hewitt uses data from
these companies to establish the relationship between revenues
and compensation from which a market value of pay can be
calculated for a specific revenue size, using a statistical
technique known as regression analysis. Surveys that indicate
base salaries for most of our named executive officers were
generally in the mid-ranges of the applicable comparative
companies. Salaries are reviewed periodically and were increased
in 2006 to remain competitive to the mid-range and to reflect
changes in individual officers responsibilities. In making
its salary decisions, the Compensation Committee places its
emphasis on the particular executives experience,
responsibilities, and performance. No specific formula is
applied to determine the weight of each factor. The Compensation
Committee has historically followed a policy of using incentive
bonus awards rather than base salary to reward outstanding
performance.
How are
bonuses determined?
Bonuses are based largely on the ROI of the group or business
segment in which the individual is a key employee. For
administrative officers, such as the CEO, CFO and Executive Vice
President, bonuses are based on our consolidated ROI. The
employees personal performance and the degree to which the
employees actions have laid the groundwork for future
earnings and ROI are also factors considered by the Compensation
Committee. ROI performance of the business segment is given
greater weight than other business accomplishments in
determining bonus payments. The types and relative importance of
specific financial and other business factors vary among the
executives depending on their positions and the particular
operations or functions for which they are responsible. For
example, executives may be given a bonus for accomplishing
specific objectives or projects, including successful completion
of acquisitions, divestitures, or restructurings.
Under a stockholder-approved plan designed to qualify for an
exemption under Internal Revenue Code Section 162(m), the
Compensation Committee established a potential maximum bonus
award to the Chief Executive Officer for 2006 equal to the cash
value of 172,500 phantom shares and a potential maximum bonus
award to each other named executive officer equal to the cash
value of 150,000 phantom shares. Under the
25
bonus formulas, each of the executive officers was eligible to
receive a bonus payment if performance met pre-established ROI
or earnings criteria. The Compensation Committee has designed a
program that provides for acceleration of bonuses to the extent
we exceed estimated cost of capital. No bonus is paid unless a
certain threshold is met, then bonuses are paid at a straight
line progression until cost of capital is reached. To the extent
cost of capital is reached, there is an acceleration
factor higher bonuses are possible after cost of
capital is achieved. The Compensation Committee retained
discretion to pay less than the amount indicated by the bonus
formula. The Compensation Committee reviewed actual ROI and
earnings after the end of the year and determined in its
business judgment the size of each executives actual award.
How are
the amounts of stock awards determined?
We grant 3 types of stock awards to executive officers:
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Options
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Restricted stock units
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Performance stock units
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A dollar value is established for the stock awards in
consultation with Hewitt after reviewing competitive market data
for similar executives at other companies inside and outside the
paper and forest products industries. This dollar value may be
at or above the mid-range of what other companies may offer in
any given year.
Restricted stock units contain a minimum ROI threshold.
Performance stock units are awarded in addition to the other
stock awards. Performance stock units are only paid if our ROI
performance is in the top half compared to our peer companies as
listed under the ROI table. No performance stock units are paid
if performance is below the top half compared to the peer group.
The Compensation Committee also considers previous grants,
tenure, and responsibilities of the executive. In the case of a
new key executive, or an executive assuming new
responsibilities, an initial grant may be made above targeted
levels.
26
What are
the material terms of the stock awards?
The stock awards have the following terms:
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Options:
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Options are granted at fair market
value on the date of the grant, become exercisable ratably over
four years, provide for accelerated or continued vesting upon
retirement, death or if there is a change in control, and expire
in ten (10) years. Income tax withholding may be paid with
exercised shares. For 2006 and prior awards, the exercise price
for stock options was based on the average of the high and low
sales price for Temple-Inland common stock on the New York Stock
Exchange on the grant date. Going forward, the exercise price
will be the closing price on the NYSE on the grant date. See
What are our stock option governance practices? for more
information on option practices.
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Restricted stock
units:
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Restricted stock units vest on the
third anniversary from the date of grant if minimum ROI criteria
are met and may be settled in cash or common stock as determined
on the date of grant. Restricted stock units provide for
accelerated or continued vesting upon retirement, death or if
there is a change in control of Temple-Inland. All grants prior
to 2006 are payable in stock. All grants from 2006 forward are
payable in cash.
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Performance stock
units:
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Performance stock units are
restricted stock units that vest 0%, 75%, or 100% on the third
anniversary from the date of grant depending on our ROI during
the three years beginning in the year of the grant compared to
the peer group ROI. If performance is in the top quartile, then
there is a 100% payment and if in the second quartile, then
there is a 75% payment. No payment is made if performance is
below the top half compared to the peer group. Performance stock
units also provide for accelerated or continued vesting upon
retirement, death or if there is a change in control. All grants
prior to 2005 are payable in stock. All grants from 2005 forward
are payable in cash. The Compensation Committee retains
discretion to reduce awards, to adjust for excess leverage, or
to adjust the peer group due to changes in the group.
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In 2006, our Stock Incentive Plan and all outstanding awards
were amended to provide for equitable adjustment in the event of
stock splits or other equity restructurings. Awardees generally
will receive the same adjustment stockholders receive.
Previously, such adjustments were discretionary, but in practice
were always made to keep employees whole.
Do we pay
dividends on restricted stock units? If so, why?
Yes. Our Compensation Committee has approved and the Board has
ratified the payment of regular quarterly dividends on
restricted stock units equivalent to dividends paid on our
common stock. These units are treated by us as owned by the
executive on the grant date and are subject to forfeiture if the
executive leaves before the vesting period is over or minimum
ROI criteria is not met. Therefore, the executive receives the
benefit of dividends until such time as he or she forfeits the
stock units. In that way, the executive is treated as though he
or she is a stockholder (though without voting rights), which
aligns his or her interest to our stockholders. It is also a
retention incentive, because executives will have to weigh the
possibility of losing the dividends if they do not stay through
the vesting period.
Do we
also pay dividends on performance stock units?
Regular quarterly dividends are not paid on performance stock
units granted in 2007 or later. For performance stock units
granted before 2007, Regular quarterly dividends are paid on the
targeted number of shares.
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Do
executives have to meet stock ownership guidelines?
Yes. To further align executives financial interests with
those of our stockholders, the Compensation Committee adopted
minimum stock ownership guidelines for these executives:
Value of
Ownership of Stock as a Multiple of Annual Salary
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Multiple of
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Position
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Salary
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Chief Executive Officer
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5x
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Other Named Executive Officers
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3x
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Shares owned by the executive and his or her immediate family
members count toward the ownership guidelines. Shares held in
the 401(k) plan, restricted stock and performance stock units
also count toward the total.
The named executive officers all meet the stock ownership
guidelines.
Are there
mandatory holding periods for stock acquired through exercise of
options?
Yes. Executive officers identified in our Annual Report on
Form 10-K
(i.e., our Section 16 officers) are required to hold
100 percent of the net shares acquired through the exercise
of options in Temple-Inland stock until they meet our ownership
guidelines. The Compensation Committee maintains discretion to
reduce or eliminate future long-term incentive awards for an
executive who is not making adequate progress toward meeting the
stock ownership guidelines or does not retain the required level
of net shares acquired through the exercise of options in
Temple-Inland stock.
Are gains
from prior stock awards considered in setting other benefits
such as retirement?
No. Gains from exercising stock options, the vested value of
restricted stock units or performance stock units, or dividends
on restricted stock units or performance stock units are not
considered in setting other benefits such as life insurance,
disability benefits, or retirement benefits.
Do we
have a deferred compensation plan?
Yes. Executive officers may defer all or part of their bonus
under our phantom stock arrangement. There is no above-market or
preferential earnings on deferred compensation. The executive
must decide to defer in the year prior to the year in which he
or she earns the bonus. For example, by the end of 2006, an
executive could decide to defer the bonus he or she might earn
working in 2007. The 2007 bonus is otherwise actually determined
in February 2008.
When a bonus is approved, the dollar amount of the bonus is
divided by the fair market value of our common stock on the NYSE
on the board meeting date when the bonus is approved. For
example, suppose an executive defers $24,000 of his bonus under
the plan. On the date of the Board meeting, the fair market
value of the stock is $40. We make a book entry of 600 phantom
shares to the phantom account ($24,000
¸ $40 = 600 shares).
We also pay a match on the deferred compensation equal to 2% of
the amount deferred multiplied by the number of years of
deferral. The maximum match is 20%. A match is vested if the
executive has worked for Temple-Inland for 3 years. There
is a minimum deferral period of 5 years. In the above
example, if the executive deferred a bonus for 5 years, he
or she would have a match of 2% X 5 years =10% X
600 shares= 60 shares.
During the 5 year deferral, the 660 shares in the
phantom stock account earn dividends equal to the dividends paid
on our stock. The dividends are used to purchase more shares of
phantom stock.
In 5 years, we would pay the executive (either in cash or
actual stock depending on the time of the deferral)
660 shares of stock plus any shares earned as dividends.
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Phantom shares do not confer any voting rights.
As noted above, executives can also be required to defer part of
their salary or bonus to the extent it exceeds $1 million.
Executives were awarded bonuses under a stockholder-approved
plan with performance-based criteria that exempted the bonuses
from the $1 million deduction limitation. During 2006, none
of the executives deferred their salary or bonuses. Several
executives continued to earn dividends on amounts that were
deferred in previous years, which are included in the Summary
Compensation Table set out below. Executives may also defer any
restricted stock or performance stock units that vest.
Mr. Jastrow has deferred receipt of previously granted
restricted stock and performance stock units until retirement.
Do we
provide retirement benefits to executives?
Yes. The named executive officers receive the same tax-qualified
retirement benefits as other salaried employees within their
business segments. All of the named executives participate in a
defined benefit plan.
Can
executives retire early?
Yes. Early retirement may be taken at age 55 or later if
the employee has five years of service, but benefits are reduced
for each year prior to age 62 by factors ranging from 3% to
6% based on years of service. Under the Supplemental Executive
Retirement Plan (described below), a designated executive can
retire with actuarial reduction of benefits of 5% per year
for each year before age 60 if he has attained age 55
and has 20 years of service. The table below lists the
executives who are eligible for early retirement and the
projected monthly payment in the form of a joint and 50%
survivor annuity assuming each retired on January 1, 2007:
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Executive
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Jastrow
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$
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59,679
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Levy
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$
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6,937
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Sweeny
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$
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22,578
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Instead of the monthly amount listed above, Mr. Jastrow
could receive payment in the form of a $6,793 joint and 50%
survivor annuity for his tax-qualified benefit and a lump sum of
$9,234,892 for his nonqualified benefit.
Do we
offer a Supplemental Executive Retirement Plan (SERP)?
Yes. The Internal Revenue Code limits the amount of compensation
that can be used in calculations under a tax-qualified defined
benefit retirement plan. In 2006, this limit was $220,000. As a
result, any retirement benefits that cannot be paid under our
tax-qualified defined benefit plan due to these limitations are
paid under a SERP, which is not a tax qualified plan. The SERP
also provides unreduced retirement at age 60 with
15 years of service for designated executives, including
Mr. Jastrow, Mr. Levy, Mr. Maley, and
Mr. Simons. Under this plan, the designated
executives retirement benefits from all retirement plans
will be at least equal to 50% of the executives final
average compensation for the highest five years out of the last
ten years of employment. Benefits are reduced for early
retirement, which may be taken at age 55 with 20 years
of service, by 5% for each year prior to age 60. Benefits
may be taken by designated executives in a lump sum amount or a
monthly annuity amount. The lump sum is calculated based on the
30-year
Treasury rate set in the previous November. This supplemental
plan is unfunded and contains a provision for acceleration of
payment in the event of a change in control. The SERP is a
valuable incentive to attract executives who are leaving
career-based retirement plans at other companies. It is also a
valuable retention tool for existing executives who must meet
service criteria to qualify for the plan. Mr. Levy formerly
participated in a defined contribution plan and SERP when he
worked for the Financial Services segment. His balance under the
defined contribution plan and SERP will offset any amount he
receives under the defined benefit plan and SERP.
Do we
grant extra years of credited service under our retirement
plan?
No. Extra years of credited service are granted only under our
change in control agreements with executive officers and our CEO
employment agreement but not for any other reason.
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Do
executives participate in 401(k) plans?
Yes. We offer 401(k) plans to all of our salaried and non-union
hourly employees. For each dollar that an employee contributes
to his or her 401(k) savings account, we contribute a match of
$1 up to 3% of the employees compensation. For each $1
that an employee contributes of his or her next 3% of pay, we
contribute 50 cents. There is a maximum match of $4,000 each
year. The match is vested 34% after 1 year of employment,
67% after 2 years, and fully vested after 3 years of
employment.
Do we
offer health and welfare benefits?
Yes. We offer the same health and welfare benefits to all
salaried employees. These benefits include medical benefits,
dental benefits, vision benefits, life insurance, salary
continuation for short-term disability, long-term disability
insurance, accidental death and dismemberment insurance,
dependent care spending account, health care spending account,
health savings account, and other similar benefits. Because
these benefits are offered to a broad class of employees, the
cost is not required by SEC rules to be included in the Summary
Compensation Table set out below. The named executive officers
generally pay more for their medical benefits than other
employees who receive less compensation. Executives and other
salaried employees may participate in a post-retirement health
plan that provides access to health coverage. We pay a one-time
contribution equal to $600 per year of service up to 2004
under a frozen plan for this coverage. Once the employee
exhausts this contribution, he or she must pay the full cost for
coverage.
Do we
offer any severance benefits for executives whose employment
terminates?
No, we do not have a plan or policy to provide severance
benefits to executives whose employment terminates. Generally
speaking, severance is a matter that is individually negotiated
with the executive and the amount depends on the circumstances
of his or her departure. The CEO is the only executive who has
an employment agreement with pre-established severance benefits,
other than the change in control agreements discussed below. In
return for the post-employment benefits, the CEO agreed not to
compete with our company for two years after his departure.
Do we
have a policy on clawback of compensation?
If an executive leaves under circumstances that call into
question whether any compensation amounts paid to him or her
were validly earned, we would pursue any legal rights we deemed
appropriate under the circumstances.
Do we
offer Change In Control Agreements?
Yes. During a potential change in control, we do not want
executives leaving to pursue other employment out of concern for
the security of their jobs or being unable to concentrate on
their work. To enable executives to focus on the best interest
of our stockholders, we offer change in control agreements that
provide severance benefits to executives whose employment
terminates as a result of a change in control. Except for
long-term incentive compensation and for the CEOs
agreement, all agreements require a double trigger
of both a change in control and a termination of employment
before any benefits are paid. Vesting of long-term incentive
compensation is accelerated when there is a change in control
event. The CEO agreement provides for a limited window of time
during which the CEO can leave the organization with full
benefits following a change in control.
30
Compensation
of Named Executives
SUMMARY
COMPENSATION TABLE FOR YEAR 2006
The following table summarizes all compensation earned in 2006
by our Chief Executive Officer, our Chief Financial Officer, and
the three most highly compensated executive officers other than
our Chief Executive Officer and our Chief Financial Officer who
were serving as executive officers at year-end 2006:
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|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
Earnings
|
|
|
Compensation
|
|
|
Total
|
|
Name and Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)
|
|
|
($)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
|
Kenneth M. Jastrow, II
|
|
|
2006
|
|
|
$
|
959,143
|
|
|
|
0
|
|
|
$
|
4,994,136
|
|
|
$
|
1,827,600
|
|
|
$
|
3,200,000
|
|
|
$
|
1,382,491
|
|
|
$
|
10,000
|
|
|
$
|
12,373,370
|
|
Chairman and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randall D. Levy
|
|
|
2006
|
|
|
$
|
422,115
|
|
|
|
0
|
|
|
$
|
873,020
|
|
|
$
|
443,853
|
|
|
$
|
850,000
|
|
|
$
|
410,695
|
|
|
$
|
9,300
|
|
|
$
|
3,008,983
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Doyle R. Simons
|
|
|
2006
|
|
|
$
|
416,346
|
|
|
|
0
|
|
|
$
|
987,755
|
|
|
$
|
237,997
|
|
|
$
|
1,200,000
|
|
|
$
|
106,159
|
|
|
$
|
9,900
|
|
|
$
|
2,958,157
|
|
Executive Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Patrick Maley III
|
|
|
2006
|
|
|
$
|
422,115
|
|
|
|
0
|
|
|
$
|
1,166,024
|
|
|
$
|
279,102
|
|
|
$
|
1,000,000
|
|
|
$
|
129,231
|
|
|
$
|
6,350
|
|
|
$
|
3,001,822
|
|
Executive Vice President, Paper
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jack C. Sweeny
|
|
|
2006
|
|
|
$
|
397,115
|
|
|
|
0
|
|
|
$
|
815,822
|
|
|
$
|
416,863
|
|
|
$
|
1,470,000
|
|
|
$
|
682,741
|
|
|
$
|
21,186
|
|
|
$
|
3,762,527
|
|
Group Vice President, Forest
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The fair value of restricted stock, performance stock units, and
stock options was determined in accordance with Statement of
Financial Accounting Standards No. 123(R). Fair value of
the option awards was determined using the Black-Scholes-Merton
option pricing model. The table above assumes maximum pay-out of
performance stock units. If performance stock units do not meet
the threshold criteria for payment, the amounts in column
(e) above would be reduced by the following amounts:
Mr. Jastrow $3,349,500; Mr. Levy
$577,500; Mr. Simons $808,500;
Mr. Maley $808,500; and
Mr. Sweeny $577,500. The following table lists
the fair values by grant date. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expected
|
|
|
|
|
|
|
|
|
|
Estimated Fair
|
|
|
Expected
|
|
|
Stock
|
|
|
Risk-Free
|
|
|
Expected
|
|
|
|
Value of
|
|
|
Dividend
|
|
|
Price
|
|
|
Interest
|
|
|
Life of
|
|
Grant Date
|
|
Options Granted
|
|
|
Yield
|
|
|
Volatility
|
|
|
Rate
|
|
|
Option
|
|
|
2/7/2003
|
|
$
|
5.81
|
|
|
|
2.5%
|
|
|
|
29.3%
|
|
|
|
2.9%
|
|
|
|
8
|
|
5/7/2003
|
|
$
|
6.60
|
|
|
|
2.5%
|
|
|
|
29.3%
|
|
|
|
3.9%
|
|
|
|
8
|
|
2/6/2004
|
|
$
|
8.31
|
|
|
|
2.9%
|
|
|
|
28.8%
|
|
|
|
4.2%
|
|
|
|
8
|
|
2/4/2005
|
|
$
|
11.13
|
|
|
|
2.3%
|
|
|
|
28.2%
|
|
|
|
4.1%
|
|
|
|
8
|
|
2/3/2006
|
|
$
|
11.53
|
|
|
|
2.4%
|
|
|
|
25.1%
|
|
|
|
4.4%
|
|
|
|
6
|
|
|
|
|
(2) |
|
Represents the change in the actuarial present value of
accumulated benefits from September 30, 2005 to
September 30, 2006. There were no above-market or
preferential earnings on deferred compensation. |
|
(3) |
|
Includes $4,000 401(k) match and match for charitable
contributions for each officer. Each officer is eligible for one
or more perquisites. Mr. Sweenys amount includes
incremental cost for personal use of Temple-Inland aircraft,
country club dues, 401(k) match, umbrella liability insurance,
and match for charitable contributions. |
Employment
Agreements
Except for Mr. Jastrow, none of our other named executive
officers has an employment agreement with the Company.
31
Pursuant to a study initiated in February 2004 and discussions
initiated by the Board of Directors in August 2004, we executed
an employment agreement with Mr. Jastrow on
February 11, 2005. The agreement has a three-year term, but
is automatically extended by one year on the first anniversary
of the effective date and each anniversary thereafter unless
notice of nonrenewal is given at least one year in advance of
such anniversary date.
During the term of the agreement, Mr. Jastrow will receive
a base salary, which may not be reduced below its level at the
time the agreement was entered into ($925,000) or any increase
subsequently granted. He will be eligible for a
performance-based annual cash bonus, employee benefits, equity
(long-term incentive plan) grants, and other perquisites. Other
perquisites consist of use of the Temple-Inland aircraft
(subject to imputation of income under IRS regulations) and
umbrella insurance, all on terms substantially no less favorable
than in effect prior to the effective date of the agreement.
There are no parameters on the performance-based annual cash
bonus, such as a maximum amount, and it is entirely within the
discretion of the Compensation Committee except that it shall be
substantially no less favorable than the bonus program in effect
prior to the effective date of the agreement.
STOCK-BASED
COMPENSATION
Additional information about stock-based compensation awards
granted and vested in 2006 and awards outstanding at year-end
2006 follows.
The following table summarizes grants of stock-based
compensation awards made during 2006 to the named executive
officers.
GRANTS OF
PLAN-BASED AWARDS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Awards:
|
|
|
Exercise
|
|
|
Grant
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
|
Estimated Future Payouts Under
|
|
|
Number of
|
|
|
Number of
|
|
|
or Base
|
|
|
Date Fair
|
|
|
|
|
|
|
Non-Equity Incentive Plan
|
|
|
Equity
|
|
|
Shares of
|
|
|
Securities
|
|
|
Price of
|
|
|
Value of
|
|
|
|
|
|
|
Awards
|
|
|
Incentive Plan Awards(1)
|
|
|
Stock or
|
|
|
Underlying
|
|
|
Option
|
|
|
Stock and
|
|
|
|
Grant
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Units
|
|
|
Options
|
|
|
Awards
|
|
|
Option
|
|
Name
|
|
Date
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
#
|
|
|
#
|
|
|
#
|
|
|
(#)
|
|
|
(#)(2)
|
|
|
($/Sh)(3)
|
|
|
Awards
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
|
(k)
|
|
|
(l)
|
|
|
Jastrow
|
|
|
02/03/2006
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
106,875
|
|
|
|
125,000
|
|
|
|
125,000
|
|
|
|
0
|
|
|
|
102,500
|
|
|
$
|
46.20
|
|
|
$
|
6,956,825
|
|
Levy
|
|
|
02/03/2006
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
19,875
|
|
|
|
23,000
|
|
|
|
23,000
|
|
|
|
0
|
|
|
|
24,600
|
|
|
$
|
46.20
|
|
|
$
|
1,346,238
|
|
Simons
|
|
|
02/03/2006
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
27,825
|
|
|
|
32,200
|
|
|
|
32,200
|
|
|
|
0
|
|
|
|
32,800
|
|
|
$
|
46.20
|
|
|
$
|
1,865,824
|
|
Maley
|
|
|
02/03/2006
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
27,825
|
|
|
|
32,200
|
|
|
|
32,200
|
|
|
|
0
|
|
|
|
32,800
|
|
|
$
|
46.20
|
|
|
$
|
1,865,824
|
|
Sweeny
|
|
|
02/03/2006
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
19,875
|
|
|
|
23,000
|
|
|
|
23,000
|
|
|
|
0
|
|
|
|
24,600
|
|
|
$
|
46.20
|
|
|
$
|
1,346,238
|
|
|
|
|
(1) |
|
The dollar value is calculated by multiplying the number of
shares awarded by the average of the high and low NYSE sales
price of unrestricted stock on the date of grant. The amount
shown for each officer includes restricted stock units that are
vested if minimum ROI criteria are met (1% ROI over fiscal years
2006, 2007, and 2008): Mr. Jastrow 52,500;
Mr. Levy 10,500; Mr. Simons
14,700; Mr. Maley 14,700; and
Mr. Sweeny 10,500. It also includes
performance-based restricted stock units (Performance Stock
Units): Mr. Jastrow 72,500;
Mr. Levy 12,500; Mr. Simons
17,500; Mr. Maley 17,500; and
Mr. Sweeny 12,500. Performance stock units will
vest 0%, 75%, or 100% depending upon the Companys
achievement of certain ROI performance criteria during the
3-year
vesting period (fiscal years 2006, 2007 and 2008, the Award
Period) as compared with its peer group. No payment shall be
made unless the Companys average ROI ranking as compared
to the peer group over the Award Period is in the first or
second quartile of ROI rankings. If the Companys average
ROI over the Award Period places it within the first quartile,
up to 100% of the Performance Stock Units may be paid. If the
Companys average ROI over the Award Period places it
within the second quartile, up to 75% of the Performance Stock
Units may be paid. The Compensation Committee retains discretion
to reduce the size of the award, but not to increase it. All
payments will be made in the form of one share of common stock
for each stock unit. The restricted stock units were granted on
February 3, 2006 with a potential vesting date of |
32
|
|
|
|
|
February 3, 2009. Cash compensation will be paid equal to
the amount of regular quarterly dividends these shares would
otherwise earn. |
|
(2) |
|
Options to purchase our common stock. Exercise prices have never
been repriced. Withholding taxes may be paid with exercised
shares. No general or freestanding stock appreciation rights
(SARs) were granted. All grants to the named executive officers
under the Stock Incentive Plan include a provision for
acceleration of vesting in certain change of control situations.
All options awarded to the executives become exercisable in 25%
increments on
02/03/2007,
02/03/2008,
02/03/2009,
and
02/03/2010
and have a ten year term expiring
02/03/2016. |
|
(3) |
|
Valued by averaging the high and the low sales prices of our
stock on the NYSE on the Board meeting date when the grants were
approved. The closing price on such date was $45.79. |
33
OUTSTANDING
EQUITY AWARDS AT YEAR-END 2006
The following table summarizes stock-based compensation awards
outstanding at year-end 2006 for the named executive officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plans:
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Unearned
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
Shares,
|
|
|
Unearned
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Number of
|
|
|
Shares or
|
|
|
Units or
|
|
|
Shares,
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Units of
|
|
|
Other
|
|
|
Units or
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Stock
|
|
|
Rights
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Stock That
|
|
|
that
|
|
|
that
|
|
|
Rights
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Have not
|
|
|
have not
|
|
|
have not
|
|
|
that Have
|
|
|
|
|
|
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Not Vested
|
|
|
Grant
|
|
|
Vesting
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Price ($)
|
|
|
Date
|
|
|
(#)(1)
|
|
|
($)(1)
|
|
|
(#)(1)
|
|
|
($)(1)
|
|
|
Date
|
|
|
Date
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
|
(k)
|
|
|
Jastrow
|
|
|
28,000
|
|
|
|
0
|
|
|
$
|
27.75
|
|
|
|
02/06/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/06/1998
|
|
|
|
Vested
|
|
|
|
|
74,688
|
|
|
|
0
|
|
|
$
|
32.47
|
|
|
|
05/01/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/01/1998
|
|
|
|
Vested
|
|
|
|
|
96,000
|
|
|
|
0
|
|
|
$
|
37.64
|
|
|
|
05/07/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/07/1999
|
|
|
|
Vested
|
|
|
|
|
200,000
|
|
|
|
0
|
|
|
$
|
27.64
|
|
|
|
02/04/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2000
|
|
|
|
Vested
|
|
|
|
|
200,000
|
|
|
|
0
|
|
|
$
|
25.65
|
|
|
|
02/02/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/02/2001
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,000
|
|
|
$
|
966,630
|
|
|
|
|
|
|
|
|
|
|
|
02/02/2001
|
|
|
|
02/02/2007
|
|
|
|
|
100,000
|
|
|
|
0
|
|
|
$
|
27.66
|
|
|
|
02/01/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/2002
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,000
|
|
|
$
|
966,630
|
|
|
|
|
|
|
|
|
|
|
|
02/01/2002
|
|
|
|
02/01/2008
|
|
|
|
|
82,500
|
|
|
|
|
|
|
$
|
21.51
|
|
|
|
02/07/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/07/2003
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
27,500
|
|
|
$
|
21.51
|
|
|
|
02/07/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/07/2003
|
|
|
|
02/07/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,000
|
|
|
$
|
1,472,960
|
|
|
|
|
|
|
|
|
|
|
|
02/07/2003
|
|
|
|
02/07/2009
|
|
|
|
|
50,000
|
|
|
|
|
|
|
$
|
30.02
|
|
|
|
02/06/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
25,000
|
|
|
$
|
30.02
|
|
|
|
02/06/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
02/06/2007
|
|
|
|
|
|
|
|
|
25,000
|
|
|
$
|
30.02
|
|
|
|
02/06/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
02/06/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
$
|
2,301,500
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
02/06/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,000
|
|
|
$
|
3,222,100
|
|
|
|
02/06/2004
|
|
|
|
02/06/2007
|
|
|
|
|
25,000
|
|
|
|
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
25,000
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2007
|
|
|
|
|
|
|
|
|
25,000
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2008
|
|
|
|
|
|
|
|
|
25,000
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
$
|
2,301,500
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,000
|
|
|
$
|
3,222,100
|
|
|
|
02/04/2005
|
|
|
|
02/04/2008
|
|
|
|
|
0
|
|
|
|
25,625
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2007
|
|
|
|
|
|
|
|
|
25,625
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2008
|
|
|
|
|
|
|
|
|
25,625
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2009
|
|
|
|
|
|
|
|
|
25,625
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52,500
|
|
|
$
|
2,416,575
|
|
|
|
02/03/2006
|
|
|
|
02/03/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,500
|
|
|
$
|
3,337,175
|
|
|
|
02/03/2006
|
|
|
|
02/03/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
856,188
|
|
|
|
255,000
|
|
|
|
|
|
|
|
|
|
|
|
174,000
|
|
|
$
|
8,009,220
|
|
|
|
265,000
|
|
|
$
|
12,197,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plans:
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Unearned
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
Shares,
|
|
|
Unearned
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Number of
|
|
|
Shares or
|
|
|
Units or
|
|
|
Shares,
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Units of
|
|
|
Other
|
|
|
Units or
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Stock
|
|
|
Rights
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Stock That
|
|
|
that
|
|
|
that
|
|
|
Rights
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Have not
|
|
|
have not
|
|
|
have not
|
|
|
that Have
|
|
|
|
|
|
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Not Vested
|
|
|
Grant
|
|
|
Vesting
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Price ($)
|
|
|
Date
|
|
|
(#)(1)
|
|
|
($)(1)
|
|
|
(#)(1)
|
|
|
($)(1)
|
|
|
Date
|
|
|
Date
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
|
(k)
|
|
|
Levy
|
|
|
10,000
|
|
|
|
0
|
|
|
$
|
29.63
|
|
|
|
02/05/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/05/1999
|
|
|
|
Vested
|
|
|
|
|
36,000
|
|
|
|
0
|
|
|
$
|
27.64
|
|
|
|
02/04/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2000
|
|
|
|
Vested
|
|
|
|
|
30,000
|
|
|
|
0
|
|
|
$
|
25.65
|
|
|
|
02/02/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/02/2001
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
$
|
138,090
|
|
|
|
|
|
|
|
|
|
|
|
02/02/2001
|
|
|
|
02/02/2007
|
|
|
|
|
40,000
|
|
|
|
0
|
|
|
$
|
27.66
|
|
|
|
02/01/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/2002
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
$
|
138,090
|
|
|
|
|
|
|
|
|
|
|
|
02/01/2002
|
|
|
|
02/01/2008
|
|
|
|
|
22,500
|
|
|
|
|
|
|
$
|
21.51
|
|
|
|
02/07/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/07/2003
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
7,500
|
|
|
$
|
21.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/07/2003
|
|
|
|
02/07/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
$
|
460,300
|
|
|
|
|
|
|
|
|
|
|
|
02/07/2003
|
|
|
|
02/07/2009
|
|
|
|
|
12,000
|
|
|
|
|
|
|
$
|
30.02
|
|
|
|
02/06/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
6,000
|
|
|
$
|
30.02
|
|
|
|
02/06/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
02/06/2007
|
|
|
|
|
|
|
|
|
6,000
|
|
|
$
|
30.02
|
|
|
|
02/06/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
02/06/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
$
|
460,300
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
02/06/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
$
|
460,300
|
|
|
|
02/06/2004
|
|
|
|
02/06/2007
|
|
|
|
|
6,000
|
|
|
|
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
6,000
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2007
|
|
|
|
|
|
|
|
|
6,000
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2008
|
|
|
|
|
|
|
|
|
6,000
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
$
|
460,300
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
$
|
460,300
|
|
|
|
02/04/2005
|
|
|
|
02/04/2008
|
|
|
|
|
0
|
|
|
|
6,150
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2007
|
|
|
|
|
|
|
|
|
6,150
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2008
|
|
|
|
|
|
|
|
|
6,150
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2009
|
|
|
|
|
|
|
|
|
6,150
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,500
|
|
|
$
|
483,315
|
|
|
|
02/03/2006
|
|
|
|
02/03/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
$
|
575,375
|
|
|
|
02/03/2006
|
|
|
|
02/03/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
156,500
|
|
|
|
62,100
|
|
|
|
|
|
|
|
|
|
|
|
36,000
|
|
|
$
|
1,657,080
|
|
|
|
43,000
|
|
|
$
|
1,979,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plans:
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Unearned
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
Shares,
|
|
|
Unearned
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Number of
|
|
|
Shares or
|
|
|
Units or
|
|
|
Shares,
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Units of
|
|
|
Other
|
|
|
Units or
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Stock
|
|
|
Rights
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Stock That
|
|
|
that
|
|
|
that
|
|
|
Rights
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Have not
|
|
|
have not
|
|
|
have not
|
|
|
that Have
|
|
|
|
|
|
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Not Vested
|
|
|
Grant
|
|
|
Vesting
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Price ($)
|
|
|
Date
|
|
|
(#)(1)
|
|
|
($)(1)
|
|
|
(#)(1)
|
|
|
($)(1)
|
|
|
Date
|
|
|
Date
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
|
(k)
|
|
|
Simons
|
|
|
6,000
|
|
|
|
|
|
|
$
|
27.75
|
|
|
|
02/06/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/06/1998
|
|
|
|
Vested
|
|
|
|
|
6,000
|
|
|
|
|
|
|
$
|
29.63
|
|
|
|
02/05/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/05/1999
|
|
|
|
Vested
|
|
|
|
|
10,000
|
|
|
|
|
|
|
$
|
27.64
|
|
|
|
02/04/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2000
|
|
|
|
Vested
|
|
|
|
|
20,000
|
|
|
|
|
|
|
$
|
25.65
|
|
|
|
02/02/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/02/2001
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
$
|
46,030
|
|
|
|
|
|
|
|
|
|
|
|
02/02/2001
|
|
|
|
02/02/2007
|
|
|
|
|
20,000
|
|
|
|
|
|
|
$
|
27.66
|
|
|
|
02/01/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/2002
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
$
|
46,030
|
|
|
|
|
|
|
|
|
|
|
|
02/01/2002
|
|
|
|
02/01/2008
|
|
|
|
|
15,000
|
|
|
|
|
|
|
$
|
21.51
|
|
|
|
02/07/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/07/2003
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
5,000
|
|
|
$
|
21.51
|
|
|
|
02/07/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/07/2003
|
|
|
|
02/07/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
$
|
184,120
|
|
|
|
|
|
|
|
|
|
|
|
02/07/2003
|
|
|
|
02/07/2009
|
|
|
|
|
8,000
|
|
|
|
|
|
|
$
|
30.02
|
|
|
|
02/06/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
4,000
|
|
|
$
|
30.02
|
|
|
|
02/06/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
02/06/2007
|
|
|
|
|
|
|
|
|
4,000
|
|
|
$
|
30.02
|
|
|
|
02/06/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
02/06/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000
|
|
|
$
|
276,180
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
02/06/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000
|
|
|
$
|
276,180
|
|
|
|
02/06/2004
|
|
|
|
02/06/2007
|
|
|
|
|
8,000
|
|
|
|
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
8,000
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2007
|
|
|
|
|
|
|
|
|
8,000
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2008
|
|
|
|
|
|
|
|
|
8,000
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,000
|
|
|
$
|
644,420
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,000
|
|
|
$
|
644,420
|
|
|
|
02/04/2005
|
|
|
|
02/04/2008
|
|
|
|
|
|
|
|
|
8,200
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2007
|
|
|
|
|
|
|
|
|
8,200
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2008
|
|
|
|
|
|
|
|
|
8,200
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2009
|
|
|
|
|
|
|
|
|
8,200
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,700
|
|
|
$
|
676,641
|
|
|
|
02/03/2006
|
|
|
|
02/03/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,500
|
|
|
$
|
805,525
|
|
|
|
02/03/2006
|
|
|
|
02/03/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
93,000
|
|
|
|
69,800
|
|
|
|
|
|
|
|
|
|
|
|
26,000
|
|
|
$
|
1,196,780
|
|
|
|
52,200
|
|
|
$
|
2,402,766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plans:
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Unearned
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
Shares,
|
|
|
Unearned
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Number of
|
|
|
Shares or
|
|
|
Units or
|
|
|
Shares,
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Units of
|
|
|
Other
|
|
|
Units or
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Stock
|
|
|
Rights
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Stock That
|
|
|
that
|
|
|
that
|
|
|
Rights
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Have not
|
|
|
have not
|
|
|
have not
|
|
|
that Have
|
|
|
|
|
|
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Not Vested
|
|
|
Grant
|
|
|
Vesting
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Price ($)
|
|
|
Date
|
|
|
(#)(1)
|
|
|
($)(1)
|
|
|
(#)(1)
|
|
|
($)(1)
|
|
|
Date
|
|
|
Date
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
|
(k)
|
|
|
Maley
|
|
|
20,000
|
|
|
|
|
|
|
$
|
22.60
|
|
|
|
05/07/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/07/2003
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
10,000
|
|
|
$
|
22.60
|
|
|
|
05/07/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/07/2003
|
|
|
|
05/07/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
$
|
460,300
|
|
|
|
|
|
|
|
|
|
|
|
05/07/2003
|
|
|
|
05/07/2009
|
|
|
|
|
9,000
|
|
|
|
|
|
|
$
|
30.02
|
|
|
|
02/06/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
4,500
|
|
|
$
|
30.02
|
|
|
|
02/06/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
02/06/2007
|
|
|
|
|
|
|
|
|
4,500
|
|
|
$
|
30.02
|
|
|
|
02/06/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
02/06/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
$
|
368,240
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
02/06/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
$
|
368,240
|
|
|
|
02/06/2004
|
|
|
|
02/06/2007
|
|
|
|
|
8,000
|
|
|
|
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
8,000
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2007
|
|
|
|
|
|
|
|
|
8,000
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2008
|
|
|
|
|
|
|
|
|
8,000
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,000
|
|
|
$
|
644,420
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,000
|
|
|
$
|
644,420
|
|
|
|
02/04/2005
|
|
|
|
02/04/2008
|
|
|
|
|
|
|
|
|
8,200
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2007
|
|
|
|
|
|
|
|
|
8,200
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2008
|
|
|
|
|
|
|
|
|
8,200
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2009
|
|
|
|
|
|
|
|
|
8,200
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,700
|
|
|
$
|
676,641
|
|
|
|
02/03/2006
|
|
|
|
02/03/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,500
|
|
|
$
|
805,525
|
|
|
|
02/03/2006
|
|
|
|
02/03/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
37,000
|
|
|
|
75,800
|
|
|
|
|
|
|
|
|
|
|
|
32,000
|
|
|
$
|
1,472,960
|
|
|
|
54,200
|
|
|
$
|
2,494,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plans:
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Unearned
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
Shares,
|
|
|
Unearned
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Number of
|
|
|
Shares or
|
|
|
Units or
|
|
|
Shares,
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Units of
|
|
|
Other
|
|
|
Units or
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Stock
|
|
|
Rights
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Stock That
|
|
|
that
|
|
|
that
|
|
|
Rights
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Have not
|
|
|
have not
|
|
|
have not
|
|
|
that Have
|
|
|
|
|
|
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Not Vested
|
|
|
Grant
|
|
|
Vesting
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Price ($)
|
|
|
Date
|
|
|
(#)(1)
|
|
|
($)(1)
|
|
|
(#)(1)
|
|
|
($)(1)
|
|
|
Date
|
|
|
Date
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
|
(k)
|
|
|
Sweeny
|
|
|
30,000
|
|
|
|
0
|
|
|
$
|
25.65
|
|
|
|
02/02/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/02/2001
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000
|
|
|
$
|
92,060
|
|
|
|
|
|
|
|
|
|
|
|
02/02/2001
|
|
|
|
02/02/2007
|
|
|
|
|
40,000
|
|
|
|
0
|
|
|
$
|
27.66
|
|
|
|
02/01/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/2002
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
$
|
138,090
|
|
|
|
|
|
|
|
|
|
|
|
02/01/2002
|
|
|
|
02/01/2008
|
|
|
|
|
15,000
|
|
|
|
|
|
|
$
|
21.51
|
|
|
|
02/07/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/07/2003
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
5,000
|
|
|
$
|
21.51
|
|
|
|
02/07/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/07/2003
|
|
|
|
02/07/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
$
|
322,210
|
|
|
|
|
|
|
|
|
|
|
|
02/07/2003
|
|
|
|
02/07/2009
|
|
|
|
|
9,000
|
|
|
|
|
|
|
$
|
30.02
|
|
|
|
02/06/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
4,500
|
|
|
$
|
30.02
|
|
|
|
02/06/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
02/06/2007
|
|
|
|
|
|
|
|
|
4,500
|
|
|
$
|
30.02
|
|
|
|
02/06/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
02/06/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
$
|
368,240
|
|
|
|
|
|
|
|
|
|
|
|
02/06/2004
|
|
|
|
02/06/2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
$
|
368,240
|
|
|
|
02/06/2004
|
|
|
|
02/06/2007
|
|
|
|
|
6,000
|
|
|
|
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
Vested
|
|
|
|
|
|
|
|
|
6,000
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2007
|
|
|
|
|
|
|
|
|
6,000
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2008
|
|
|
|
|
|
|
|
|
6,000
|
|
|
$
|
37.07
|
|
|
|
02/04/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
$
|
460,300
|
|
|
|
|
|
|
|
|
|
|
|
02/04/2005
|
|
|
|
02/04/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
$
|
460,300
|
|
|
|
02/04/2005
|
|
|
|
02/04/2008
|
|
|
|
|
|
|
|
|
6,150
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2007
|
|
|
|
|
|
|
|
|
6,150
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2008
|
|
|
|
|
|
|
|
|
6,150
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2009
|
|
|
|
|
|
|
|
|
6,150
|
|
|
$
|
46.20
|
|
|
|
02/03/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/03/2006
|
|
|
|
02/03/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,500
|
|
|
$
|
483,315
|
|
|
|
02/03/2006
|
|
|
|
02/03/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
$
|
575,375
|
|
|
|
02/03/2006
|
|
|
|
02/03/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
100,000
|
|
|
|
56,600
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
$
|
1,380,900
|
|
|
|
41,000
|
|
|
$
|
1,887,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Value based on the closing market price of our common stock on
December 29, 2006 of $46.03. Restricted stock shares
awarded prior to 2006 vest three years after the date of grant.
Restricted stock units awarded in 2006 vest three years after
the date of grant if minimum ROI criteria are met. Performance
stock units vest three years after the date of grant and are
subject to satisfaction of performance criteria. Market value
shown assumes all performance criteria are met and the maximum
value is paid. Mr. Jastrow has deferred all of his
restricted stock units and performance stock units. He will not
receive any shares or cash until he retires. The stock price at
the time he is paid will determine the value he receives. |
38
OPTION
EXERCISES AND STOCK VESTED YEAR 2006
The following table summarizes stock-based compensation awards
exercised or vested during 2006 by the named executive officers.
No restricted shares or performance shares vested in 2006. The
shares shown in columns (d) and (e) below are dividends earned
on phantom stock.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of Shares
|
|
|
Value Realized on
|
|
|
Number of Shares
|
|
|
Value Realized on
|
|
|
|
Acquired on
|
|
|
Exercise
|
|
|
Acquired on Vesting
|
|
|
Vesting
|
|
Name
|
|
Exercise (#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
Jastrow
|
|
|
24,960
|
|
|
$
|
483,974
|
|
|
|
4,867
|
|
|
$
|
207,699
|
|
Levy
|
|
|
0
|
|
|
|
0
|
|
|
|
502
|
|
|
$
|
21,406
|
|
Simons
|
|
|
9,170
|
|
|
$
|
183,465
|
|
|
|
300
|
|
|
$
|
12,844
|
|
Maley
|
|
|
0
|
|
|
|
0
|
|
|
|
401
|
|
|
$
|
17,125
|
|
Sweeny
|
|
|
33,000
|
|
|
$
|
452,290
|
|
|
|
402
|
|
|
$
|
17,125
|
|
Equity
Compensation Plan Information
The following table sets forth information as of the end of
2006, with respect to compensation plans under which our common
stock may be issued:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
|
Number of
|
|
|
|
|
|
Remaining Available
|
|
|
|
Securities to be
|
|
|
|
|
|
for Future Issuance
|
|
|
|
Issued Upon
|
|
|
Weighted-Average
|
|
|
Under Equity
|
|
|
|
Exercise of
|
|
|
Exercise Price of
|
|
|
Compensation Plans
|
|
|
|
Outstanding
|
|
|
Outstanding
|
|
|
(Excluding Securities
|
|
|
|
Options, Warrants
|
|
|
Options, Warrants
|
|
|
Reflected in
|
|
Plan Category
|
|
and Rights *
|
|
|
and Rights
|
|
|
Column(a))
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
Equity compensation plans approved
by security holders
|
|
|
7,092,676
|
|
|
$
|
31.94
|
|
|
|
1,884,277
|
|
Equity compensation plans not
approved by security holders
|
|
|
None
|
|
|
|
None
|
|
|
|
None
|
|
Total
|
|
|
7,092,676
|
|
|
$
|
31.94
|
|
|
|
1,884,277
|
|
|
|
|
* |
|
Amount includes 1,081,004 phantom shares payable in stock. |
39
Pension
Benefits
The following table summarizes the actuarial present value of
the accumulated benefits under our pension plans at year-end
2006 for the named executive officers:
PENSION
BENEFITS YEAR 2006 (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Present Value of
|
|
|
|
|
|
|
|
|
Number of Years
|
|
|
Accumulated
|
|
|
Payments During
|
|
|
|
|
|
Credited Service
|
|
|
Benefit
|
|
|
Last Fiscal Year
|
|
Name
|
|
Plan Name
|
|
(#)
|
|
|
($)
|
|
|
($)
|
|
(a)
|
|
(b)
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
Jastrow
|
|
Temple-Inland Retirement Plan
|
|
|
28
|
|
|
$
|
590,460
|
|
|
|
0
|
|
|
|
Temple-Inland Supplemental
Executive Retirement Plan
|
|
|
28
|
|
|
$
|
7,780,490
|
|
|
|
0
|
|
Levy
|
|
Temple-Inland Retirement Plan
|
|
|
17.5
|
|
|
$
|
169,406
|
|
|
|
0
|
|
|
|
Temple-Inland Supplemental
Executive Retirement Plan
|
|
|
17.5
|
|
|
$
|
3,131,401
|
|
|
|
0
|
|
Simons
|
|
Temple-Inland Retirement Plan
|
|
|
15
|
|
|
$
|
111,957
|
|
|
|
0
|
|
|
|
Temple-Inland Supplemental
Executive Retirement Plan
|
|
|
15
|
|
|
$
|
373,470
|
|
|
|
0
|
|
Maley
|
|
Temple-Inland Retirement Plan
|
|
|
3.5
|
|
|
$
|
31,070
|
|
|
|
0
|
|
|
|
Temple-Inland Supplemental
Executive Retirement Plan
|
|
|
3.5
|
|
|
$
|
321,378
|
|
|
|
0
|
|
Sweeny
|
|
Temple-Inland Retirement Plan
|
|
|
36
|
|
|
$
|
776,706
|
|
|
|
0
|
|
|
|
Temple-Inland Supplemental
Executive Retirement Plan
|
|
|
36
|
|
|
$
|
2,347,042
|
|
|
|
0
|
|
|
|
|
(1) |
|
Retirement benefits under the tax qualified defined benefit plan
and the nonqualified supplemental executive retirement plan
(SERP) are calculated using final average compensation based on
the highest five (5) of the employees last ten
(10) years of service. Final average compensation normally
includes salaries and bonuses, but the Board can designate a
payment as ineligible under the plan. Final average compensation
excludes other forms of compensation such as dividends,
severance pay, relocation, long-term disability, stock options,
restricted stock units, and performance stock units. The formula
for normal retirement is .95% of final average compensation plus
.65% of final average compensation in excess of Social Security
covered compensation multiplied by years of service up to
35 years and .8% of final average compensation multiplied
by years of service over 35 years. For example, assume an
employee has a final average pay of $1 million and has
worked for 40 years. His pension is determined as follows:
[((.0095 x $1,000,000) + (.0065 x ($1,000,000
$48,816))) x 35] + (.008 x $1,000,000 x 5) = $588,894
(annual life only benefit). Five years of service or attainment
of age 65 is required to vest in the retirement benefit.
Normal retirement age is 65, but benefits are generally not
reduced for retirement at age 62 if the executive has
20 years of vesting service. Lump sum distributions for
benefits with a present value greater than $10,000 are not
permitted under the qualified plan. Benefits are paid in the
form of a monthly annuity for the life of the executive and his
or her spouse or other contingent annuitant depending on the
option the executive selects. The amount of the monthly benefit
is affected by the age or life expectancy of the employee and
spouse and how much will be paid to the survivor if the employee
dies based on the payment election selected by the employee.
However, the total value of the benefit does not vary. For
example, assume Employee A and Employee B each have accrued
benefits with a total value of $100,000. Employee A is
age 65 and Employee B is 55. Employee A will receive a
larger monthly benefit than Employee B because Employee B is
younger and has a longer life expectancy, so his or her payments
are spread over a longer time. The nonqualified plan or SERP
allows lump sum distributions for designated executives. The
SERP pays any retirement benefits that cannot be paid under the
qualified plan due to IRS limits and also provides a benefit
formula for designated executives described under Do We Offer
a Supplemental Executive |
40
|
|
|
|
|
Retirement Plan (SERP)? Mr. Jastrow, Mr. Levy,
and Mr. Sweeny are eligible for early retirement. See
Can Executives Retire Early? |
|
|
|
|
|
Mr. Levy formerly participated in a defined contribution
plan when he worked for the Financial Services segment. His
balance under the defined contribution plan will offset any
amount he receives under the defined benefit plan and SERP. |
Deferred
Compensation
NONQUALIFIED
DEFERRED COMPENSATION YEAR 2006
The following table summarizes deferred compensation for the
year 2006 for the named executive officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
|
Contributions in
|
|
|
Contributions in
|
|
|
Earnings
|
|
|
Withdrawals/
|
|
|
Balance
|
|
Name
|
|
Last FY ($)
|
|
|
Last FY ($)
|
|
|
in Last FY ($)(1)
|
|
|
Distributions ($)
|
|
|
at Last FYE ($)(2)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
Jastrow
|
|
|
0
|
|
|
|
0
|
|
|
$
|
90,696
|
|
|
|
0
|
|
|
$
|
4,174,737
|
|
Levy
|
|
|
0
|
|
|
|
0
|
|
|
$
|
3,904
|
|
|
|
0
|
|
|
$
|
175,461
|
|
Simons
|
|
|
0
|
|
|
|
0
|
|
|
$
|
1,028
|
|
|
|
0
|
|
|
$
|
47,318
|
|
Maley
|
|
|
0
|
|
|
|
0
|
|
|
$
|
1,371
|
|
|
|
0
|
|
|
$
|
63,107
|
|
Sweeny
|
|
|
0
|
|
|
|
0
|
|
|
$
|
1,370
|
|
|
|
0
|
|
|
$
|
63,061
|
|
|
|
|
(1) |
|
All earnings for Mr. Jastrow, Mr. Simons,
Mr. Maley, and Mr. Sweeny and $1,713 of
Mr. Levys earnings were dividend equivalent units
credited under the phantom stock plan equal to the amount of
dividends that would be earned on these units if they were
common stock. This is the same dividend rate paid to our
stockholders of $.25 per share per quarter in 2006 and is
not preferential. Earnings on Mr. Levys frozen
defined contribution retirement plan account of $2,191 for 2006
were based on the rate earned under Vanguards
Intermediate-Term Treasury Fund, the same fund used in the
underlying tax-qualified defined contribution plan.
Mr. Levy does not participate in setting this rate which
was selected by us when we set up the plan. In 2006, the
earnings rate for this fund was 3.14%. The defined contribution
retirement account is distributed in cash at age 65 or
earlier if the executive retires and requests it. |
|
(2) |
|
In the aggregate balance column, $1,918,917 of
Mr. Jastrows balance was previously reported as
compensation in the Summary Compensation Table for previous
years. None of the amounts in the other columns was previously
reported. |
Payments
on Change In Control or Termination
ESTIMATED
CHANGE IN CONTROL OR TERMINATION BENEFITS AT YEAR-END
2006
The following table summarizes the estimated value of payments
to each of the named executive officers assuming different
termination events occurred at year-end 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
Stock
|
|
|
Value of
|
|
|
Performance
|
|
|
|
|
|
|
|
|
Outplacement
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
|
Options
|
|
|
Restricted
|
|
|
Stock
|
|
|
|
|
|
|
|
|
&Office/
|
|
|
Excise
|
|
|
|
|
|
|
|
|
|
Bonus
|
|
|
That
|
|
|
Stock That
|
|
|
That
|
|
|
Retirement
|
|
|
Welfare
|
|
|
Support
|
|
|
Tax &
|
|
|
Aggregate
|
|
|
|
Severance
|
|
|
Payment
|
|
|
Vest
|
|
|
Vests
|
|
|
Vests(3)
|
|
|
Benefits
|
|
|
Benefits
|
|
|
Staff
|
|
|
Gross-Up
|
|
|
Payments
|
|
|
Kenneth M.
Jastrow II
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change In Control(4)
|
|
$
|
8,696,151
|
|
|
$
|
3,200,000
|
|
|
$
|
2,146,800
|
|
|
$
|
5,937,870
|
|
|
$
|
6,559,275
|
|
|
$
|
12,357,111
|
|
|
$
|
208,567
|
|
|
$
|
1,229,251
|
|
|
$
|
10,664,019
|
|
|
$
|
50,999,044
|
|
Retirement(5)
|
|
$
|
|
|
|
$
|
3,200,000
|
|
|
$
|
2,146,800
|
|
|
$
|
3,521,295
|
|
|
$
|
3,222,100
|
|
|
$
|
8,370,950
|
|
|
$
|
205,040
|
|
|
$
|
800,000
|
|
|
$
|
|
|
|
$
|
21,466,185
|
|
Death
|
|
$
|
962,000
|
|
|
$
|
3,200,000
|
|
|
$
|
2,146,800
|
|
|
$
|
5,937,870
|
|
|
$
|
6,559,275
|
|
|
$
|
4,387,121
|
|
|
$
|
205,040
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
24,198,106
|
|
Disability
|
|
$
|
962,000
|
|
|
$
|
3,200,000
|
|
|
$
|
2,146,800
|
|
|
$
|
5,937,870
|
|
|
$
|
6,559,275
|
|
|
$
|
8,370,950
|
|
|
$
|
205,040
|
|
|
$
|
800,000
|
|
|
$
|
|
|
|
$
|
28,181,935
|
|
Termination(1)
|
|
$
|
962,000
|
|
|
$
|
3,200,000
|
|
|
$
|
2,146,800
|
|
|
$
|
5,937,870
|
|
|
$
|
6,559,275
|
|
|
$
|
12,357,111
|
|
|
$
|
208,567
|
|
|
$
|
1,229,251
|
|
|
$
|
|
|
|
$
|
32,600,874
|
|
Termination(2)
|
|
$
|
|
|
|
$
|
3,200,000
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
8,370,950
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
11,570,950
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
Stock
|
|
|
Value of
|
|
|
Performance
|
|
|
|
|
|
|
|
|
Outplacement
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
|
Options
|
|
|
Restricted
|
|
|
Stock
|
|
|
|
|
|
|
|
|
&Office/
|
|
|
Excise
|
|
|
|
|
|
|
|
|
|
Bonus
|
|
|
That
|
|
|
Stock That
|
|
|
That
|
|
|
Retirement
|
|
|
Welfare
|
|
|
Support
|
|
|
Tax &
|
|
|
Aggregate
|
|
|
|
Severance
|
|
|
Payment
|
|
|
Vest
|
|
|
Vests
|
|
|
Vests(3)
|
|
|
Benefits
|
|
|
Benefits
|
|
|
Staff
|
|
|
Gross-Up
|
|
|
Payments
|
|
|
Randall D. Levy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change In Control(4)
|
|
$
|
3,537,150
|
|
|
$
|
850,000
|
|
|
$
|
537,300
|
|
|
$
|
1,242,810
|
|
|
$
|
1,035,675
|
|
|
$
|
4,500,290
|
|
|
$
|
57,814
|
|
|
$
|
176,250
|
|
|
$
|
2,978,258
|
|
|
$
|
14,915,547
|
|
Retirement(6)
|
|
$
|
|
|
|
$
|
850,000
|
|
|
$
|
537,300
|
|
|
$
|
759,495
|
|
|
$
|
460,300
|
|
|
$
|
3,300,807
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
5,907,902
|
|
Death
|
|
$
|
|
|
|
$
|
850,000
|
|
|
$
|
537,300
|
|
|
$
|
1,242,810
|
|
|
$
|
1,035,675
|
|
|
$
|
599,908
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
4,265,693
|
|
Disability
|
|
$
|
|
|
|
$
|
850,000
|
|
|
$
|
537,300
|
|
|
$
|
1,242,810
|
|
|
$
|
1,035,675
|
|
|
$
|
3,300,807
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
6,966,592
|
|
Voluntary Termination
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
3,300,807
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
3,300,807
|
|
Involuntary Termination
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
3,300,807
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
3,300,807
|
|
Doyle R. Simons
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change In Control(4)
|
|
$
|
3,830,631
|
|
|
$
|
1,200,000
|
|
|
$
|
465,720
|
|
|
$
|
1,873,421
|
|
|
$
|
1,726,125
|
|
|
$
|
1,018,264
|
|
|
$
|
51,779
|
|
|
$
|
189,641
|
|
|
$
|
3,371,233
|
|
|
$
|
13,726,814
|
|
Retirement(6)
|
|
$
|
|
|
|
$
|
1,200,000
|
|
|
$
|
465,720
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
485,427
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
2,151,147
|
|
Death
|
|
$
|
|
|
|
$
|
1,200,000
|
|
|
$
|
465,720
|
|
|
$
|
1,873,421
|
|
|
$
|
1,726,125
|
|
|
$
|
229,868
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
5,495,134
|
|
Disability
|
|
$
|
|
|
|
$
|
1,200,000
|
|
|
$
|
465,720
|
|
|
$
|
1,873,421
|
|
|
$
|
1,726,125
|
|
|
$
|
485,427
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
5,750,693
|
|
Voluntary Termination
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
485,427
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
485,427
|
|
Involuntary Termination
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
485,427
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
485,427
|
|
John Patrick
Maley III
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change In Control(4)
|
|
$
|
4,313,553
|
|
|
$
|
1,000,000
|
|
|
$
|
593,430
|
|
|
$
|
2,149,601
|
|
|
$
|
1,818,185
|
|
|
$
|
918,003
|
|
|
$
|
51,779
|
|
|
$
|
213,750
|
|
|
$
|
3,678,817
|
|
|
$
|
14,737,118
|
|
Retirement(6)
|
|
$
|
|
|
|
$
|
1,000,000
|
|
|
$
|
593,430
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,593,430
|
|
Death
|
|
$
|
|
|
|
$
|
1,000,000
|
|
|
$
|
593,430
|
|
|
$
|
2,149,601
|
|
|
$
|
1,818,185
|
|
|
$
|
79,355
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
5,640,571
|
|
Disability
|
|
$
|
|
|
|
$
|
1,000,000
|
|
|
$
|
593,430
|
|
|
$
|
2,149,601
|
|
|
$
|
1,818,185
|
|
|
$
|
352,448
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
5,913,664
|
|
Voluntary Termination
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Involuntary Termination
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Jack C. Sweeny
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change In Control(4)
|
|
$
|
2,260,944
|
|
|
$
|
1,470,000
|
|
|
$
|
427,970
|
|
|
$
|
1,135,407
|
|
|
$
|
1,004,989
|
|
|
$
|
5,923,068
|
|
|
$
|
39,150
|
|
|
$
|
110,175
|
|
|
$
|
2,910,701
|
|
|
$
|
15,282,404
|
|
Retirement(6)
|
|
$
|
|
|
|
$
|
1,470,000
|
|
|
$
|
427,970
|
|
|
$
|
652,092
|
|
|
$
|
429,614
|
|
|
$
|
3,123,748
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
6,103,424
|
|
Death
|
|
$
|
|
|
|
$
|
1,470,000
|
|
|
$
|
427,970
|
|
|
$
|
1,135,407
|
|
|
$
|
1,004,989
|
|
|
$
|
2,352,592
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
6,390,958
|
|
Disability
|
|
$
|
|
|
|
$
|
1,470,000
|
|
|
$
|
427,970
|
|
|
$
|
1,135,407
|
|
|
$
|
1,004,989
|
|
|
$
|
3,123,748
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
7,162,114
|
|
Voluntary Termination
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
3,123,748
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
3,123,748
|
|
Involuntary Termination
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
3,123,748
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
3,123,748
|
|
|
|
|
(1) |
|
Termination without a change in control by Temple-Inland not for
cause or by executive for good reason |
|
(2) |
|
Termination without a change in control by Temple-Inland for
cause or by executive without good reason |
|
(3) |
|
Except in the case of change in control, assumes performance
criteria are ultimately met. |
|
(4) |
|
Assumes a target bonus based on 12.5% ROI. Assumes for
illustration only that the IRS considers the whole payment to be
a parachute payment subject to a 20% excise tax. Any
compensation not deemed to be a parachute payment
will reduce the amount of excise tax and
gross-up
payable. |
|
(5) |
|
Payable in a lump sum. |
|
(6) |
|
Payable in a series of monthly installments. See early
retirement section for monthly amounts. |
Payments
on Change In Control
In the event of a potential change in control of Temple-Inland,
it is vitally important that executives be able to continue
working in the best interest of our stockholders. For that
reason, we enter into change in control agreements with key
executives. We also have change in control provisions in our
stockholder-approved Stock Incentive Plan.
Each of the five (5) executive officers named above entered
into a change in control agreement that provides for three
(3) years pay and benefits in the event his
employment is terminated following defined change in control
events. These events include:
|
|
|
|
|
any person or entity acquiring or becoming beneficial owner as
defined in SEC regulations of 25% or more of the combined voting
power of our securities;
|
|
|
|
the pre-event directors ceasing to constitute a majority of our
directors within any
24-month
period;
|
42
|
|
|
|
|
consummation of a merger, consolidation, or recapitalization
(unless the directors continue to represent a majority of the
directors on the board, at least 60% of the pre-event ownership
survives, and, in the event of a recapitalization, no person
owns 25% or more of the voting power of the securities);
|
|
|
|
the stockholders approve liquidation or dissolution;
|
|
|
|
consummation of an agreement to sell, lease, or dispose of
(a) substantially all the assets of Temple-Inland,
(b) its corrugated packaging operations, (c) its
forest products operations (not included in
Mr. Maleys agreement) or (d) Guaranty Bank (not
included in Mr. Maleys or Mr. Sweenys
agreement); or
|
|
|
|
any other event that the Board determines to be a change in
control.
|
Our Stock Incentive Plan uses similar change in control events
including:
|
|
|
|
|
acquisition of 20% voting power through a tender or exchange
offer;
|
|
|
|
Board or stockholders approve consolidation or merger;
|
|
|
|
Board or stockholders approve liquidation or dissolution; or
|
|
|
|
Board or stockholders approve sale, lease, exchange or transfer
of substantially all assets.
|
Under the change in control agreements, payments are triggered
by two events, a change in control plus a termination of
employment (with one exception noted below with respect to
Mr. Jastrow). Termination of employment includes both
involuntary termination and voluntary termination by the
executive for good reason. Good reason includes assignment of
duties substantially inconsistent with the executives
status as a senior executive officer, substantial reduction in
base salary, relocation of place of employment more than
50 miles, failure to pay compensation, or failure to
provide benefits or a reduction in benefits. The change in
control agreements contain a double trigger requirement of a
change in control event plus a termination of employment because
they provide for severance payments. The Stock Incentive Plan
provides for accelerated vesting of stock awards the executive
has already received, not for additional payments. The Stock
Incentive Plan requires a single trigger, the change in control
event. In other words, if there is a change in control event,
the accelerated vesting of stock-based compensation will occur
whether or not the executives employment is terminated.
This further protects the executive because it provides him or
her with an opportunity to vote the vested restricted shares and
exercise and vote the option shares as a stockholder.
Under the change in control agreements and Stock Incentive Plan,
the executives will receive:
|
|
|
|
|
their current year bonus pro rated if the termination is before
the end of the first 6 months in the year; full bonus if
during the second half of the year
|
|
|
|
lump sum severance equal to 3 times their current salary and 3x
target bonus, or if higher, the salary or target bonus in any of
the last 3 years,
|
|
|
|
health and welfare benefits provided through third party
insurance for 3 years at no greater cost than currently paid
|
|
|
|
acceleration of vesting of all options
|
|
|
|
acceleration of vesting of all restricted shares and restricted
stock units
|
|
|
|
acceleration of vesting of all performance stock units (maximum
amount)
|
|
|
|
credit for 3 additional years service in the pension plan
at the highest pay over the last 3 years
|
|
|
|
lump sum payment of all nonqualified pension and deferred
compensation
|
|
|
|
lump sum payment equal to 3 years match on 401(k) plan
|
|
|
|
any retiree medical benefits to which the executive is entitled
|
|
|
|
reimbursement for outplacement services not to exceed 15% of
base salary and target bonus
|
43
|
|
|
|
|
3 years continuation of perquisites
|
The change in control agreements also contain
gross-up
provisions in the event the officer is required to pay excise
tax on these amounts. The gross up will only be paid if the
change in control payments exceed 110% of the amount that would
not be subject to excise tax otherwise, payments are reduced to
the maximum amount that will not trigger the excise tax. The
amount of severance and benefits was determined based on
competitive market practices for executives at this level.
Executives at this level generally require a longer timeframe to
find comparable jobs because there are fewer jobs at this level
in the market. The executives often have a large percentage of
their personal wealth dependent on the status of our company,
given the requirement to hold a multiple of their salary in
stock and the fact that a large part of their compensation is
stock-based.
In exchange for the promise of this compensation and benefits,
the executive agrees to continue working during any potential
change in control event until the earliest of 6 months from
the potential change in control event, until the date of the
change in control event, or until the executive is terminated or
terminates employment for good reason.
If a change in control occurs, the Board would consider
appropriate factors in setting the target bonus.
Mr. Jastrows change in control agreement was amended
on February 11, 2005 to conform to the terms of his
employment agreement. Under his agreement, if Mr. Jastrow
gives us notice during the thirty (30) day period beginning
six (6) months after a change in control that he no longer
wishes to be employed, he will receive the same severance
payments and benefits as if we had terminated his employment
without cause.
If there is a change in control event payment of
Mr. Jastrows deferred compensation of $1,918,917
would be accelerated.
Payments
on Termination (other than upon Change in Control)
Except for Mr. Jastrow, none of the other named executive
officers has an employment contract or an agreement providing
for severance payments in the event of termination of employment
other than in a change in control event. Under the Stock
Incentive Plan, an employee whose employment terminates has
3 months to exercise any options that are exercisable. All
other options and all restricted stock units and performance
stock units are forfeited. The employee retains any dividends
earned prior to termination.
Following the termination of his employment for any reason other
than for cause, Mr. Jastrow and his spouse will continue to
receive medical and dental benefits. Mr. Jastrow will also
continue to have an office and secretarial support until the
earlier of attainment of age 70 or his death, (with an
annual expected value of $80,000). The expected annual value of
the medical and dental benefit is $18,296. If
Mr. Jastrows employment is terminated without cause
or by Mr. Jastrow for good reason (including failure to be
reelected to the board, required relocation, or failure to pay
compensation and benefits), he will be entitled to three
years salary and bonus in a lump sum, and benefits
coverage for three years. If Mr. Jastrows employment
is terminated by reason of his death or disability, he or his
estate will receive a benefit equal to his salary and target
bonus for the portion of the year in which his death or
disability occurred. If Mr. Jastrows employment is
terminated following a change in control, the change in control
agreement will apply instead of the employment agreement,
generally except with respect to medical and dental benefits. In
return for the benefits described above, Mr. Jastrow agreed
not to compete with us for two years following termination of
employment, unless termination was other than for cause.
Termination
by Death, Disability or Retirement
Except for Mr. Jastrows agreement described above, on
termination of employment by death or disability, executives
receive no payment other than through life insurance or
disability insurance purchased by the executive and available to
salaried employees generally. Under the Stock Incentive Plan,
all options immediately vest upon death or total disability and
can be exercised for 12 months (death) or 36 months
(disability). Restricted stock units and performance stock units
vest immediately, but performance stock units are only paid if
performance criteria are met.
44
At year-end 2006, Mr. Jastrow, Mr. Levy, and
Mr. Sweeny were eligible for early retirement. In addition
to the pension benefits described elsewhere in this proxy, if
they retired early they would each receive a pro-rated vesting
of their restricted stock units as follows: Mr. Jastrow:
97,500 restricted stock units; Mr. Levy: 19,500 restricted
stock units; and Mr. Sweeny: 15,833 restricted stock units.
A pro-rated portion of their performance stock units would vest,
but only if the performance criteria are met: Mr. Jastrow:
70,000 performance stock units; Mr. Levy: 10,000
performance stock units; and Mr. Sweeny: 8,667 performance
stock units.
At year-end 2006, none of the named executive officers was
eligible for normal retirement. At such time as they meet the
age and service requirements for an unreduced benefit under the
Temple-Inland Supplemental Executive Retirement Plan, the
designated executives restricted stock units and
performance stock units would vest 100% upon retirement, but
performance stock units are still subject to meeting the
performance criteria.
COMPENSATION
MATTERS
REPORT OF
THE COMPENSATION COMMITTEE
The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis with management and, based
on this review and discussion, recommended that it be included
in our Annual Report on
Form 10-K
for the year 2006 and in this proxy statement.
James A. Johnson, Chairman
Cassandra C. Carr
E. Linn Draper, Jr.
James T. Hackett
Jeffrey M. Heller
PROPOSAL TO
AMEND BY-LAWS TO APPROVE MAJORITY VOTING
FOR DIRECTOR ELECTIONS
In its continuing review of corporate governance matters, our
Board of Directors has amended Article III, Sections 2
and 12 of our By-laws to change the voting standard in
uncontested elections of directors from a plurality to a
majority of votes cast in the election. A majority of the votes
cast means that the number of shares voted for a
director must exceed the number of votes cast
against that director. The vote standard will
continue to be a plurality of votes cast in elections in which
(i) the Secretary receives a notice that a stockholder has
nominated a person for election to the Board in compliance with
the advance notice requirements for stockholder nominees for
director set forth in the By-laws and (ii) such nomination
has not been withdrawn by such stockholder on or prior to the
seventh day preceding the date we first mail our notice of
meeting to the stockholders. The text of the amendments is set
forth in Appendix A.
In addition, the Board has adopted a Corporate Governance Policy
on Majority Voting. This Policy sets forth the procedures that
will apply in the event that a director does not receive the
required vote for election. In summary, prior to each annual
meeting of stockholders, director nominees will submit an
irrevocable resignation contingent on that nominee failing to
receive the required vote for election and the Board accepting
the resignation. If such a nominee fails to receive the required
vote for election, the Nominating and Governance Committee will
make a recommendation to the Board on whether to accept or
reject the resignation. The Board will act on the
Committees recommendation and publicly disclose its
decision and the rationale behind it within 90 days from
the date of the certification of the election results. The
unsuccessful incumbent will not participate in the Committee or
Boards decision. If the failure of a nominee to be elected
at the annual meeting results in a vacancy on the Board, that
vacancy can be filled by action of the Board. The Policy also
provides that the Board shall nominate for election or
re-election as directors only candidates who agree to tender
irrevocable resignations that will be effective upon
(i) the failure to receive the required vote at the next
annual meeting at which they are nominated for re-election and
(ii) Board acceptance of such resignation. In addition,
under the Policy the Board shall fill director vacancies and new
directorships only
45
with candidates who agree to tender the same form of resignation
tendered by other directors. The text of the Policy is set forth
in Appendix A.
The Board is authorized to amend our By-laws without a vote by
the stockholders. Regardless, the Board has determined that it
is desirable to request ratification by our stockholders of this
amendment to the By-laws. The amendment includes a provision
that the By-law voting standard in director elections can only
be further amended with the approval of the stockholders. If our
stockholders do not ratify the amendment, the Board does not
intend to take any action to repeal or alter the amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
RATIFICATION OF THE AMENDMENT TO THE BYLAWS TO PROVIDE FOR
MAJORITY VOTING IN UNCONTESTED ELECTIONS OF DIRECTORS.
PROPOSAL TO
APPROVE AMENDMENT TO CERTIFICATE OF INCORPORATION TO PROVIDE
THAT DIRECTORS APPOINTED TO FILL VACANCIES OR NEWLY CREATED
DIRECTORSHIPS WILL BE SUBJECT TO ELECTION AT THE NEXT ANNUAL
MEETING
Our Board of Directors is divided into three classes. The
classified board structure provides for continuity of direction
and preservation of skill. Our Certificate of Incorporation
(Article VI, Section 3) and our By-laws
(Article III, Section 14) currently provide that
directors appointed to fill vacancies or newly created
directorships will hold office for the full term of the class of
directors in which the vacancy occurred or in which the new
directorship was created and until such directors
successor is elected and qualified. The Board of Directors, in
its continuing review of corporate governance matters, and after
careful consideration and upon recommendation by the Nominating
and Governance Committee, has concluded that while it is
advisable and in the best interests of the Company and its
stockholders to maintain a classified board structure, directors
appointed to fill vacancies or newly created directorships
should be elected at the next annual meeting of stockholders
following their appointment.
The Board of Directors has adopted resolutions approving and
declaring the advisability of the proposed amendment to our
Certificate of Incorporation. The Board of Directors has already
approved an amendment to our By-laws that, upon approval of this
proposal, would amend the substantially identical provision in
our By-laws in order to make the By-laws consistent with the
proposed amendment to the Certificate of Incorporation. The
proposed amendment to the Certificate of Incorporation and the
analogous amendment to the By-Laws are set forth in Appendixes B
and D, respectively, with deletions indicated by strikeout and
additions indicated by underline. If this proposal is approved
by our stockholders, the proposed amendment to the Certificate
of Incorporation will be effected by the filing of an Amended
and Restated Certificate of Incorporation with the Secretary of
State of the State of Delaware promptly after this annual
meeting.
In accordance with the provisions of Article IX of our
Certificate of Incorporation, the affirmative vote of at least
80 percent of all outstanding shares of common stock is
required for approval of this proposed amendment to
Article VI, Section 3 of our Certificate of
Incorporation. Shares not present in person or represented by
proxy at the meeting and shares voting abstain will
have the same effect as a vote against this proposal. Therefore,
it is important that you vote your shares either in person at
the meeting or by proxy.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO
REQUIRE DIRECTORS APPOINTED TO FILL VACANCIES OR NEWLY CREATED
DIRECTORSHIPS BE ELECTED AT THE NEXT ANNUAL MEETING OF
STOCKHOLDERS FOLLOWING THEIR APPOINTMENT.
PROPOSAL TO
APPROVE AMENDMENTS TO CERTIFICATE OF INCORPORATION TO ELIMINATE
CERTAIN SUPERMAJORITY VOTE REQUIREMENTS
The Board of Directors, in its continuing review of corporate
governance matters, and after careful consideration and upon
recommendation by the Nominating and Governance Committee, has
concluded that it is advisable and in the best interests of the
Company and its stockholders to remove the supermajority vote
46
requirement for certain transactions, which is sometimes
referred to as a fair price provision (explained
below), contained in our Certificate of Incorporation, as
amended.
Some supermajority vote provisions, such as the fair
price provision in our Certificate of Incorporation, are
intended to encourage a person making an unsolicited bid for a
company to negotiate with the Board of Directors to reach terms
that are fair and in the best interests of all stockholders.
Many investors and others, however, view these provisions as
inconsistent with principles of good corporate governance. While
these measures can be beneficial, the Board recognizes there are
also compelling arguments for having a lower threshold for
stockholder votes. The requirement of a supermajority vote can
limit the ability of stockholders to effect change by
essentially providing a veto to a large minority stockholder or
group of stockholders. In addition, a lower threshold for
stockholder votes can increase stockholders ability to
participate effectively in corporate governance.
Article V of our Certificate of Incorporation currently
requires the affirmative vote of at least 80 percent of the
outstanding shares of common stock to approve certain business
combinations, including certain mergers, consolidations,
security issuances, reclassifications, recapitalizations,
liquidations, dissolutions or sales, leases, exchanges,
mortgages, pledges, or transfers of a specified portion of
assets, involving us or any subsidiary and the beneficial owner
of more than 10 percent of our outstanding voting stock (a
related person), unless either (i) the business
combination is approved by a majority of the directors who are
not affiliated with the related person and who were directors
before the related person became a related person (the
continuing directors), or (ii) the stockholders
receive a fair price for their holdings and other
procedural requirements are met. Article IX includes a
requirement that Article V can only be amended, altered, or
repealed with the affirmative vote of the holders of at least
80 percent of all of the then outstanding shares of voting
stock, voting together as a single class.
If Article V is eliminated, Temple-Inland would continue to
be subject to Section 203 of the Delaware General
Corporation Law. Under Delaware law, the holders of only a
majority of outstanding voting stock generally would be required
to approve the business combinations described above, subject to
the following exception. If the transaction constitutes a
business combination within the meaning of
Section 203 involving a person owning 15 percent or
more of our voting stock (referred to as an interested
stockholder), then the transaction could not be completed
for a period of three years after the time the person became an
interested stockholder, unless (i) the Board of Directors
approved either the business combination or the transaction that
resulted in the person becoming an interested stockholder prior
to such business combination or transaction; (ii) upon
consummation of the transaction that resulted in the person
becoming an interested stockholder, that person owned at least
85 percent of our outstanding voting stock (excluding
shares owned by persons who are directors and officers of the
Company and shares owned by certain of our employee benefit
plans); or (iii) the business combination was approved by
the Board and by the affirmative vote of at least two-thirds of
our outstanding voting stock not owned by the interested
stockholder.
The Board of Directors has adopted resolutions approving and
declaring the advisability of the proposed amendment to our
Certificate of Incorporation to eliminate the supermajority vote
requirement for certain transactions, also known as the
fair price provision. If this proposal is approved
by our stockholders, Article V of the Certificate of
Incorporation would be deleted in its entirety as set forth in
Appendix C, with deletions indicated by strikeout and additions
indicated by underline. If approved, the proposed amendment will
be effected by the filing of an Amended and Restated Certificate
of Incorporation with the Secretary of State of the State of
Delaware promptly after this annual meeting.
The affirmative vote of at least 80 percent of all
outstanding shares of common stock is required for approval of
this proposal. Shares not present in person or represented by
proxy at the meeting and shares voting abstain will
have the same effect as a vote against this proposal. Therefore,
it is important that you vote your shares either in person at
the meeting or by proxy.
47
THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO
ELIMINATE
THE SUPERMAJORITY VOTE REQUIREMENT FOR CERTAIN TRANSACTIONS,
ALSO KNOWN AS THE FAIR PRICE PROVISION.
AUDIT
MATTERS
REPORT OF
THE AUDIT COMMITTEE
The Audit Committee assists the Board of Directors in its
oversight of the integrity of the financial statements;
compliance with legal and regulatory requirements; the adequacy
of internal control over financial reporting; and the
independence, qualifications, and performance of the independent
registered public accounting firm and the internal auditors. Our
duties and responsibilities are more fully described in our
charter, which is available on Temple-Inlands web site
www.templeinland.com.
Management is responsible for the financial statements, the
effectiveness of internal control over financial reporting, and
compliance with legal and regulatory requirements. The
independent registered public accounting firm, Ernst &
Young LLP, is responsible for auditing the financial statements
and the effectiveness of internal control over financial
reporting and expressing its opinion on the conformity of the
financial statements with generally accepted accounting
principles and the effectiveness of internal control over
financial reporting. The internal auditors are responsible for
evaluating the effectiveness of processes and related controls
on behalf of management.
In fulfilling our oversight responsibilities, we met nine
(9) times during 2006 with the independent registered
public accounting firm, the Vice President of Internal Audit,
and management. At four of the meetings, we also met in
executive session without management present. During the course
of these meetings, we reviewed and discussed with management and
with Ernst & Young LLP the audited financial statements
for the year 2006. We also reviewed and discussed the
effectiveness of internal control over financial reporting, the
audit plans and results, and the matters required to be
discussed with Ernst & Young LLP by Statement of
Auditing Standards No. 61, Communications with Audit
Committees, as amended. In addition, we reviewed the written
disclosures and letter from Ernst & Young LLP required
by Independence Standard Board Standard No. 1, as amended,
and have discussed with Ernst & Young their
independence.
Based on this, we recommended to the Board of Directors that the
audited financial statements be included in the Annual Report on
Form 10-K
for the year ended December 30, 2006, for filing with the
Securities and Exchange Commission. In addition, we reported to
the Board of Directors that, subject to ratification by the
stockholders, we selected Ernst & Young LLP as
Temple-Inlands independent registered public accounting
firm for the year 2007.
|
|
|
Chairman:
|
|
James T. Hackett
|
Members:
|
|
Afsaneh M. Beschloss
|
|
|
Donald M. Carlton
|
|
|
Cassandra C. Carr
|
|
|
Larry R. Faulkner
|
|
|
Jeffrey M. Heller
|
|
|
Richard M. Smith
|
|
|
Larry E. Temple
|
PROPOSAL TO
RATIFY THE SELECTION OF ERNST & YOUNG LLP
AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has selected Ernst & Young LLP as
the independent registered public accounting firm to audit our
consolidated financial statements for 2007. Ernst &
Young LLP currently serves as our independent registered public
accounting firm.
Fees paid to Ernst & Young LLP for the last two years
were:
48
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
|
2005
|
|
|
|
(In thousands)
|
|
|
Audit Fees(1)
|
|
$
|
3,054
|
|
|
$
|
3,154
|
|
Audit-Related Fees(2)
|
|
|
362
|
|
|
|
321
|
|
Tax Fees(3)
|
|
|
36
|
|
|
|
84
|
|
All Other Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
3,452
|
|
|
$
|
3,559
|
|
|
|
|
(1) |
|
Audit fees include the annual audit and quarterly reviews of our
financial statements, annual statutory audits of foreign
subsidiaries financial statements, consultation on new
accounting standards and current transactions, and normal
assistance with annual and periodic filings of our financial
statements with the Securities and Exchange Commission. |
|
(2) |
|
Audit-related fees include audits of our employee benefit plans,
consultation on the application of proposed accounting
standards, and consultation on accounting for proposed
transactions. |
|
(3) |
|
Tax fees include assistance in the preparation of our federal,
state, and foreign income and franchise tax returns and in the
periodic examinations thereof by regulatory authorities and
consultation on the tax treatment for transactions. |
All services provided by the independent registered public
accounting firm must be pre-approved by the Audit Committee.
Under the pre-approval policy, the Audit Committee pre-approves
by type and amount the services expected to be provided by the
independent registered public accounting firm during the coming
year. This pre-approval is done annually and is documented as an
exhibit to the minutes of the Audit Committee meeting. The types
of services the Audit Committee pre-approves annually are the
audit, audit-related, and certain tax services described above.
A pre-approval subcommittee consisting of the Chairman of the
Audit Committee and one other member of the Audit Committee may
grant approvals between Audit Committee meetings for services
not approved as part of the annual approval process. Such
approvals must be reported to the full Audit Committee at its
next meeting. Pre-approval is not required for non-audit
services that were not recognized as non-audit services at the
time of engagement, if the aggregate amount of such services
does not exceed the lesser of $100,000 or 5% of the total amount
of revenues paid to the independent registered public accounting
firm during that fiscal year and such services are promptly
brought to the attention of and approved by the Audit Committee
prior to completion of the current years audit. During
2006, no services were approved pursuant to this exception.
In addition, the Audit Committee must separately pre-approve any
significant changes in scope or fees for any approved service.
No pre-approval authority is delegated to management. Quarterly,
the committee reviews the specific services that have been
provided and the related fees.
Representatives of Ernst & Young LLP will be present at
the annual meeting with the opportunity to make a statement if
they desire to do so and will be available to respond to
appropriate questions from stockholders.
Stockholder ratification is not required for the selection of
Ernst & Young LLP, because the Audit Committee has the
responsibility for selecting our independent registered public
accounting firm. The selection, however, is being submitted for
ratification by the stockholders at the annual meeting. No
determination has been made as to what action the Audit
Committee would take if stockholders do not ratify the selection.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
RATIFICATION OF ERNST & YOUNG LLP AS INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING
DECEMBER 29, 2007.
49
OTHER
MATTERS
Other
Business to be Presented
Our Board of Directors knows of no other business that may
properly be, or that is likely to be, brought before the annual
meeting. If, however, any other business should properly be
presented to the Annual Meeting, the persons named in the
accompanying proxy will vote the proxy as in their discretion
they may deem appropriate.
DATE FOR
RECEIPT OF STOCKHOLDER PROPOSALS
Pursuant to
Rule 14a-8
under the Securities Exchange Act of 1934, as amended,
stockholders may present proper proposals for inclusion in our
proxy statement and for consideration at our annual meeting of
stockholders by submitting their proposals to us in a timely
manner. To be included for the 2008 annual meeting, stockholder
proposals must be received by us by December 6, 2007 and
must comply with the requirements of
Rule 14a-8.
Our By-laws contain an advance notice procedure with regard to
items of business to be brought before an annual meeting of
stockholders by a stockholder. These procedures require that
notice be made in writing to our Secretary. The notice must be
received at our executive offices not less than 75 days nor
more than 100 days prior to the anniversary date of the
immediately preceding annual meeting of stockholders. In the
case of an annual meeting called for a date more than
50 days prior to the anniversary date, notice must be
received not later than the close of business on the
10th day following the date on which notice of the annual
meeting is first mailed to stockholders or made public,
whichever occurs first. Stockholder proposals submitted outside
the processes of
Rule 14a-8
will be considered untimely if they are submitted before
January 25, 2008 or after February 19, 2008. Our
By-laws require that the notice of the proposal contain certain
information concerning the proposing stockholder and the
proposal. Our By-laws also contain an advance notice procedure
for the nomination of candidates for election to the Board of
Directors by stockholders. For a brief description of the
nomination procedures, see How Nominees Are Selected. A
copy of the By-laws advance notice provision may be obtained,
without charge, upon written request to our Secretary at 1300
South MoPac, Austin, Texas 78746.
Solicitation
of Proxies
We have retained D.F. King & Co., Inc., a professional
proxy solicitation firm, to assist in the solicitation of
proxies. D.F. Kings employees and our directors, officers
and employees, who have not yet been chosen, may solicit the
return of proxies by personal interview, mail, electronic mail,
facsimile, telecopy, telegram, telephone, and internet. We may
also issue press releases asking for your vote or post letters
or notices to you on our website, www.templeinland.com.
Our officers and employees will not receive additional
compensation, but will be reimbursed for
out-of-pocket
expenses. D.F. King will be reimbursed for its expenses in
soliciting proxies and, in addition, will receive a proxy
solicitation fee not to exceed $19,000. D.F. King expects that
approximately 75 of its employees will assist in the
solicitation. We will request brokerage houses and other
custodians, nominees and fiduciaries to forward solicitation
material to the beneficial owners of stock. We will pay for all
costs of solicitation.
Voting
Questions or Assistance
If you have any questions or require assistance with the voting
process, please contact:
D. F. King & Co., Inc.
48 Wall Street
New York, New York 10005
(800) 714-3312
This Proxy Statement is being sent to you by the Temple-Inland
Board of Directors.
Leslie K. ONeal
Secretary
Austin, Texas
April 4, 2007
50
Appendix
A
Article III, Section 2 of Bylaws
Section 2. Number,
Qualification and Election.
(a) Number. Except as otherwise
fixed by or pursuant to the provisions of Article IV of the
Certificate of Incorporation of the Company relating to the
rights of the holders of any class or series of stock having
preference over the Common Stock as to dividends or upon
liquidation, the number of the directors of the Company shall be
as specified from time to time by vote of a majority of the
entire Board of Directors, but not less than three.
(b) Division into Classes. The
directors, other than those who may be elected by the holders of
shares of any class or series of stock having a preference over
the Common Stock of the Company as to dividends or upon
liquidation pursuant to the terms of Article IV of the
Certificate of Incorporation or any resolution or resolutions
providing for the issue of such shares adopted by the Board of
Directors, shall be classified, with respect to the time for
which they severally hold office, into three classes. The number
of directors at any time constituting the entire Board of
Directors shall as nearly as possible be divided equally among
the three classes in such manner as shall be determined by the
Board of Directors in its sole discretion, with each class to
hold office until its successors are elected. At each annual
meeting of the stockholders of the Company the successors of the
class of directors whose term expires at that meeting shall be
elected to hold office for a term expiring at the annual meeting
of stockholders held in the third year following the year of
their election.
Subject to the rights of the holders of any class or series of
stock having a preference over the Common Stock of the Company
as to dividends or upon liquidation, at each annual meeting of
the stockholders, there shall be elected the directors of the
class the term of office of which shall then expire.
(c) Election. Except as provided
in Section 14 of this Article, a nominee for director shall
be elected if the votes cast for such nominees election
exceed the votes cast against such nominees election;
provided, however, that the directors shall be elected by a
plurality of the votes cast at any meeting of stockholders for
which (i) the Secretary of the Company receives a notice
that a stockholder has nominated a person for election to the
Board of Directors in compliance with the advance notice
requirements for stockholder nominees for director set forth in
Section 11 of Article II of these By-laws and
(ii) such nomination has not been withdrawn by such
stockholder on or prior to the seventh day preceding the date
the Company first mails its notice of meeting for such meeting
to the stockholders.
Article III,
Section 12 of By-laws
Section 12.
Resignations. Any director may resign
at any time upon notice given in writing or by electronic
transmission to the Chairman of the Board or to the Secretary. A
resignation is effective when the resignation is delivered
unless the resignation specifies (a) a later effective date
or (b) an effective date determined upon the happening of
an event or events (including but not limited to a failure to
receive a majority of the votes cast in an election and the
acceptance of the resignation by the Board of Directors).
Article XI
of By-laws
(insert at the end of the first sentence)
; provided, however, that any amendment or repeal of, or the
adoption of any By-law inconsistent with, Section 2(c) of
Article III of these By-laws shall also require the
approval of the stockholders of the Company.
Corporate
Governance Policy on Majority Voting
Prior to each annual meeting of stockholders, director nominees
will submit an irrevocable resignation contingent on that
nominee failing to receive the required vote for election at the
annual meeting and the Board accepting the resignation. If such
a nominee fails to receive the required vote for election, the
A-1
Nominating and Governance Committee will consider the tendered
resignation and recommend to the Board acceptance or rejection
of the tendered resignation. Within 90 days following the
date of the stockholders meeting at which the election
occurred, the Board, acting on the recommendation of the
Nominating and Governance Committee, shall decide whether to
accept or reject the tendered resignation. In their
deliberations, both the Nominating and Governance Committee and
the Board may consider any factors deemed relevant by the
members of the Nominating and Governance Committee and the
Board. The Board will also consider a range of possible
alternatives concerning the tendered resignation as the Board
deems appropriate including, without limitation, acceptance of
the resignation, rejection of the resignation or rejection of
the resignation coupled with a commitment to seek to address and
cure the underlying reasons reasonably believed by the Board to
have resulted in such director failing to receive the required
number of votes for re-election. Absent a compelling reason to
reject the resignation, the Board shall accept the resignation.
Following the Boards decision, the Company, within four
(4) business days after such decision is made, will
publicly disclose in a
Form 8-K
filed with the Securities and Exchange Commission the
Boards decision whether to accept the resignation as
tendered, together with a full explanation of the process by
which the decision was reached and, if applicable, the
Boards compelling reason or reasons for rejecting the
tendered resignation. To the extent that one or more
directors resignations are accepted by the Board, the
Board will also decide whether to fill such vacancy or vacancies
or to reduce the size of the Board.
No nominee who does not receive the required votes for election
shall participate in the Nominating and Governance Committee or
the Boards deliberations or determination with respect to
accepting or rejecting his or her resignation as a director. If
a majority of the members of the Nominating and Governance
Committee or the Board fail to receive the required number of
votes for re-election, then an ad hoc committee comprised of the
independent directors then serving on the Board who were elected
(the Ad Hoc Committee) shall serve in place of the
Board and perform the Boards duties for purposes of this
Policy. Notwithstanding the foregoing, if there are fewer than
three directors eligible to serve on an Ad Hoc Committee, then
all of the independent members of the Board (other than the
individual director whose resignation is being considered) will
make the determination to accept or reject an individual
tendered resignation.
The Board shall nominate for election or re-election as
directors only candidates who agree to tender irrevocable
resignations that will be effective upon (i) the failure to
receive the required vote at the next annual meeting at which
they are nominated for election and (ii) Board acceptance
of such resignation. In addition, the Board shall fill director
vacancies and new directorships only with candidates who agree
to tender the same form of resignation tendered by other
directors in accordance with this Policy.
A-2
Appendix
B
Article III, Section 14 of Bylaws
Vacancies. Subject to the rights of the
holders of any class or series of stock having a preference over
the Common Stock of the Company as to dividends or upon
liquidation, any vacancies on the Board of Directors resulting
from death, resignation, removal or other cause, shall only be
filled by the affirmative vote of a majority of the remaining
directors then in office, even though less than a quorum of the
Board of Directors, or by a sole remaining director, and newly
created directorships resulting from any increase in the number
of directors shall be filled by the Board of Directors, or if
not so filled, by the stockholders at the next annual meeting
thereof or at a special meeting called for that purpose in
accordance with Section 3 of Article II of these
By-laws. Any director elected in accordance with the preceding
sentence of this Section 14 shall be appointed to
hold office for the remainder of the full term
of the class of directors in which the new directorship was
created or the vacancy occurred and shall hold office
until the next annual meeting of stockholders or
until such directors successor shall have been elected
and qualified.
B-1
Appendix
C
Article V of the Certification of Incorporation
[Repealed]The vote of stockholders of the
Corporation required to approve Business Combinations (as
hereinafter defined) shall be as set forth in this
Article V.
Section 1. In
addition to any affirmative vote required by law or by this
Certificate of Incorporation or any resolution or resolutions of
the Board of Directors adopted pursuant to Article IV of
this Certificate of Incorporation, and except as otherwise
expressly provided in Section 3 of this
Article V:
(a) any merger or consolidation of the Corporation
with (i) any Interested Stockholder or (ii) any other
corporation (whether or not itself an Interested Stockholder)
which is, or after such merger or consolidation would be, an
Affiliate or Associate of an Interested
Stockholder; or
(b) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series of
transactions) to or with any Interested Stockholder or any
Affiliate or Associate of any Interested Stockholder of
(i) all or substantially all the assets of the Corporation
or (ii) assets of the Corporation or any of its
Subsidiaries representing in the aggregate more than 75% of the
total value of the assets of the Corporation and its
consolidated Subsidiaries as reflected on the most recent
consolidated balance sheet of the Corporation and its
consolidated Subsidiaries prepared in accordance with generally
accepted accounting principles then in effect; or
(c) (i) any sale, lease, exchange, mortgage,
pledge, transfer or other disposition (in one transaction or a
series of transactions) to or with any Interested Stockholder or
any Affiliate or Associate of any Interested Stockholder of any
assets of the Corporation or of any Subsidiary having an
aggregate Fair Market Value of $100,000,000 or more, but less
than the amount referred to in clause (ii) of
paragraph (b) of this Section 1, or (ii) any
merger or consolidation of any Subsidiary of the Corporation
having assets with an aggregate Fair Market Value of
$100,000,000 or more in a transaction not covered by
paragraph (b) of this Section 1 with (x) any
Interested Stockholder or (y) any other corporation
(whether or not itself an Interested Stockholder) which is, or
after such merger or consolidation would be, an Affiliate or
Associate of an Interested Stockholder; or
(d) the issuance or transfer by the Corporation or
any Subsidiary (in one transaction or a series of transactions)
to any Interested Stockholder or any Affiliate or Associate of
any Interested Stockholder of any securities of the Corporation
or any Subsidiary in exchange for cash, securities or other
property (or a combination thereof) having an aggregate Fair
Market Value of $100,000,000 or more, other than the issuance of
securities upon the conversion of convertible securities of the
Corporation or any Subsidiary which were not acquired by such
Interested Stockholder or such Affiliate or Associate from the
Corporation or a Subsidiary; or
(e) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by or on
behalf of any Interested Stockholder or any Affiliate or
Associate of any Interested Stockholder; or
(f) any reclassification of securities (including
any reverse stock split) or recapitalization of the Corporation,
or any merger or consolidation of the Corporation with any of
its Subsidiaries, or any other transaction (whether or not with
or into or otherwise involving any Interested Stockholder),
which in any such case has the effect, directly or indirectly,
of increasing the proportionate share of the outstanding shares
of any class or series of stock or securities convertible into
stock of the Corporation or any Subsidiary which is directly or
indirectly beneficially owned by any Interested Stockholder or
any Affiliate or Associate of any Interested
Stockholder;
shall not be consummated without (i) the
affirmative vote of the holders of at least 80% of the combined
voting power of the then outstanding shares of stock of all
classes and series of the Corporation entitled to vote generally
in the election of directors (Voting Stock) and
(ii) the affirmative vote of a majority of the combined
voting power of the then outstanding shares of Voting Stock held
by Disinterested Stockholders, in each case voting together as a
single class. Such affirmative vote shall be required
notwithstanding the fact
C-1
that no vote may be required, or that a lesser
percentage may be specified, by law or by this Certificate of
Incorporation or any resolution or resolutions of the Board of
Directors adopted pursuant to Article IV of this
Certificate of Incorporation or in any agreement with any
national securities exchange or otherwise.
Section 2. The
term Business Combination as used in this
Article V shall mean any transaction which is referred to
in any one or more of paragraphs (a) through
(f) of Section 1 of this Article V.
Section 3. The
provisions of Section 1 of this Article V shall not be
applicable to any particular Business Combination, and such
Business Combination shall require only such affirmative vote as
is required by law and any other provision of this Certificate
of Incorporation and any resolution or resolutions of the Board
of Directors adopted pursuant to Article IV of this
Certificate of Incorporation, if all the conditions specified in
any of the following paragraphs (a), (b), (c) or
(d) are met:
(a) (i) such Business Combination shall have
been approved by a majority of the Disinterested Directors and
(ii) the Interested Stockholder involved in such Business
Combination (x) acquired such status as an Interested
Stockholder in a manner substantially consistent with an
agreement or memorandum of understanding approved by the Board
of Directors prior to the time such Interested Stockholder
became an Interested Stockholder and (y) has complied with
all requirements imposed by such agreement or memorandum of
understanding; or
(b) in the case of any Business Combination
described in paragraph (a) or (f) of
Section 1 of this Article V, (i) such Business
Combination shall have been approved by a majority of the
Disinterested Directors, (ii) such Business Combination
shall not have resulted, directly or indirectly, in an increase
of more than 10% in the total amount of shares of any class or
series of stock or securities convertible into stock of the
Corporation or any Subsidiary which was directly or indirectly
beneficially owned by any Interested Stockholder and all
Affiliates and Associates of such Interested Stockholder at the
time of the approval of such Business Combination by a majority
of the Disinterested Directors, and (iii) such Business
Combination shall not have been consummated within a period of
two years after the consummation of any other Business
Combination described in paragraphs (a), (b), (c), (d),
(e) or (f) or Section 1 of this Article V
(whether or not such other Business Combination shall have been
approved by a majority of the Disinterested Directors) which had
the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class or
series of stock or securities convertible into stock of the
Corporation or any Subsidiary which was directly or indirectly
beneficially owned by such Interested Stockholder or any
Affiliate or Associate of such Interested
Stockholder; or
(c) in the case of any Business Combination
described in paragraph (c) or (d) of
Section 1 of this Article V, such Business Combination
shall have been approved by a majority of the Disinterested
Directors; or
(d) all of the six conditions specified in the
following clauses (i) through (vi) shall have been
met:
(i) the transaction constituting the Business
Combination shall provide for a consideration to be received by
holders of Common Stock in exchange for all their shares of
Common Stock, and the aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the Business
Combination of any consideration other than cash to be received
per share by holders of Common Stock in such Business
Combination shall be at least equal to the highest of the
following:
(A) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and
soliciting dealers fees) paid in order to acquire any
shares of Common Stock beneficially owned by the Interested
Stockholder which were acquired (i) within the two-year
period immediately prior to the Announcement Date or
(ii) in the transaction in which it became an Interested
Stockholder, whichever is higher; and
(B) the Fair Market Value per share of Common Stock
on the Announcement Date or on the Determination Date, whichever
is higher; and
(ii) if the transaction constituting the Business
Combination shall provide for a consideration to be received by
holders of any class or series of outstanding Voting Stock other
than Common Stock,
C-2
the aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the Business
Combination of any consideration other than cash to be received
per share by holders of shares of such Voting Stock shall be at
least equal to the highest of the following (it being intended
that the requirements of this clause (d) (ii) shall be
required to be met with respect to every class and series of
such outstanding Voting Stock, whether or not the Interested
Stockholder beneficially owns any shares of a particular class
or series of Voting Stock):
(A) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and
soliciting dealers fees) paid in order to acquire any
shares of such class or series of Voting Stock beneficially
owned by the Interested Stockholder which were acquired
(i) within the two-year period immediately prior to the
Announcement Date or (ii) in the transaction in which it
became an Interested Stockholder, whichever is higher;
(B) (if applicable) the highest preferential amount
per share to which the holders of shares of such class or series
of Voting Stock are entitled in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation; and
(C) the Fair Market Value per share of such class
or series of Voting Stock on the Announcement Date or on the
Determination Date, whichever is higher; and
(iii) the consideration to be received by holders
of a particular class or series of outstanding Voting Stock
(including Common Stock) shall be in cash or in the same form as
was previously paid in order to acquire shares of such class or
series of Voting Stock which are beneficially owned by the
Interested Stockholder and, if the Interested Stockholder
beneficially owns shares of any class or series of Voting Stock
which were acquired with varying forms of consideration, the
form of consideration to be received by holders of such class or
series of Voting Stock shall be either cash or the form used to
acquire the largest number of shares of such class or series of
Voting Stock beneficially owned by it; and
(iv) after such Interested Stockholder has become
an Interested Stockholder and prior to the consummation of such
Business Combination:
(A) except as approved by a majority of the
Disinterested Directors, there shall have been no failure to
declare and pay at the regular dates therefor the full amount of
any dividends (whether or not cumulative) payable on the
Preferred Stock or any class or series of Stock having a
preference over the Common Stock as to dividends or upon
liquidation;
(B) there shall have been (x) no reduction in
the annual rate of dividends paid on the Common Stock (except as
necessary to reflect any subdivision of the Common Stock),
except as approved by a majority of the Disinterested Directors,
and (y) an increase in such annual rate of dividends (as
necessary to prevent any such reduction) in the event of any
reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction
which has the effect of reducing the number of outstanding
shares of the Common Stock, unless the failure so to increase
such annual rate is approved by a majority of the Disinterested
Directors; and
(C) such Interested Stockholder shall not have
become the beneficial owner of any additional shares of Voting
Stock except as part of the transaction in which it became an
Interested Stockholder; and
(v) after such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder shall not
have received the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance provided by
the Corporation, whether in anticipation of or in connection
with such Business Combination or otherwise; and
(vi) a proxy or information statement describing
the proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934 and the
rules and
C-3
regulations thereunder (or any subsequent provisions
replacing such Act, rules or regulations) shall be mailed to
public stockholders of the Corporation at least 30 days
prior to the consummation of such Business Combination (whether
or not such proxy or information statement is required to be
mailed pursuant to such Act or subsequent provisions).
Section 4. For
the purposes of this Article V:
(a) A person shall mean any individual,
firm, corporation, partnership, trust or other entity.
(b) Interested Stockholder shall mean
any person (other than the Corporation or any Subsidiary) who or
which:
(1) is the beneficial owner, directly or
indirectly, of 20% or more of the combined voting power of the
then outstanding shares of Voting Stock; or
(2) is an Affiliate of the Corporation and at any
time within the two-year period immediately prior to the date in
question was the beneficial owner, directly or indirectly, of
20% or more of the combined voting power of the then outstanding
shares of Voting Stock; or
(3) is an assignee of or has otherwise succeeded to
the beneficial ownership of any shares of Voting Stock which
were at any time within the two-year period immediately prior to
the date in question beneficially owned by any Interested
Stockholder, if such assignment or succession shall have
occurred in the course of a transaction or series of
transactions not involving a public offering within the meaning
of the Securities Act of 1933.
(c) Disinterested Stockholder shall
mean a stockholder of the Corporation who is not an Interested
Stockholder or an Affiliate or an Associate of an Interested
Stockholder.
(d) A person shall be a beneficial
owner of any Voting Stock:
(1) which such person or any of its Affiliates or
Associates beneficially owns, directly or
indirectly; or
(2) which such person or any of its Affiliates or
Associates has (a) the right to acquire (whether such right
is exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or upon
the exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (b) the right to vote or to
direct the vote pursuant to any agreement, arrangement or
understanding; or
(3) which are beneficially owned, directly or
indirectly, by any other person with which such person or any of
its Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of Voting Stock.
(e) For the purposes of determining whether a
person is an Interested Stockholder pursuant to
paragraph (b) of this Section 4, the number of
shares of Voting Sock deemed to be outstanding shall include
shares deemed owned by such person through application of
paragraph (d) of this Section 4 but shall not
include any other shares of Voting Stock which may be issuable
to other persons pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion rights, exchange
rights, warrants or options, or otherwise.
(f) Affiliate and Associate
shall have the respective meanings ascribed to such terms in
Rule 12b-2
of the General Rules and Regulations under the Securities
Exchange Act of 1934, as in effect on January 1,
1983.
(g) Subsidiary shall have the meaning
set forth in Section 5 of Article IV of this
Certificate of Incorporation; provided, however, that for
the purposes of the definition of Interested Stockholder set
forth in paragraph (b) of this Section 4, the
term Subsidiary shall mean only a corporation of
which a majority of each class of equity security is owned by
the Corporation, by a Subsidiary or by the Corporation and one
or more Subsidiaries.
C-4
(h) Disinterested Director means any
member of the Board of Directors of the Corporation who is
unaffiliated with, and not a nominee of, the Interested
Stockholder and was a member of the Board of Directors prior to
the time that the Interested Stockholder became an Interested
Stockholder, and any successor of a Disinterested Director who
is unaffiliated with, and not a nominee of, the Interested
Stockholder and who is recommended to succeed a Disinterested
Director by a majority of Disinterested Directors then on the
Board of Directors.
(i) Fair Market Value means:
(1) in the case of stock, the highest closing sale price
during the
30-day
period immediately preceding the date in question of a share of
such stock on the New York Stock Exchange Composite Tape, or, if
such stock is not quoted on the Composite Tape, on the New York
Stock Exchange, or if such stock is not listed on such Exchange,
on the principal United States securities exchange registered
under the Securities Exchange Act of 1934 on which such stock is
listed, or, if such stock is not listed on any such exchange,
the highest closing sales price or bid quotation with respect to
a share of such stock during the
30-day
period preceding the date in question on the National
Association of Securities Dealers, Inc. Automated Quotations
System or any system then in use, or, if no such quotations are
available, the fair market value on the date in question of a
share of such stock as determined by a majority of the
Disinterested Directors in good faith; and (2) in the case
of stock of any class or series which is not traded on any
registered securities exchange or in the
over-the-counter
market or in the case of property other than cash or stock, the
fair market value of such stock or property, as the case may be,
on the date in question is determined by a majority of the
Disinterested Directors in good faith.
(j) Announcement Date means the date of
first public announcement of the proposed Business
Combination.
(k) Determination Date means the date
on which the Interested Stockholder became an Interested
Stockholder.
Section 5. A
majority of the Disinterested Directors of the Corporation shall
have the power and duty to determine, on the basis of
information known to them after reasonable inquiry, all facts
necessary to determine compliance with this Article V,
including, without limitation, (a) whether a person is an
Interested Stockholder, (b) the number of shares of Voting
Stock beneficially owned by any person, (c) whether a
person is an Affiliate or Associate of another person,
(d) whether the requirements of Section 3 of this
Article V have been met with respect to any Business
Combination, and (e) whether the assets which are the
subject of any Business Combination have, or the consideration
to be received for the issuance or transfer of securities by the
Corporation or any Subsidiary in any Business Combination has,
(i) an aggregate Fair Market Value of $100,000,000 or more
or (ii) represent in the aggregate more than 75% of the
total value of the assets of the Corporation and its
consolidated Subsidiaries as reflected on the most recent
consolidated balance sheet of the Corporation and its
consolidated Subsidiaries prepared in accordance with generally
accepted accounting principles then in effect; and the good
faith determination of a majority of the Disinterested Directors
on such matters shall be conclusive and binding for all purposes
of this Article V.
Section 6. Nothing
contained in this Article V shall be construed to relieve
any Interested Stockholder from any fiduciary obligation imposed
by law.
C-5
Appendix
D
Article VI, Section 3 of the Certification of
Incorporation
Section 3. Except
as otherwise provided for or fixed by or pursuant to the
provisions of Article IV hereof relating to the rights of
the holders of any class or series of stock having a preference
over the Common Stock as to dividends or upon liquidation, newly
created directorships resulting from any increase in the number
of directors may be filled by the Board of Directors, or as
otherwise provided in the By-Laws, and any vacancies on the
Board of Directors resulting from death, resignation, removal or
other cause shall only be filled by the affirmative vote of a
majority of the remaining directors then in office, even though
less than a quorum of the Board of Directors, or by a sole
remaining director, or as otherwise provided in the By-laws. Any
director elected in accordance with the preceding sentence of
this Section 3 shall hold office for the remainder
of the full term of be appointed to the
class of directors in which the new directorship was created or
the vacancy occurred and shall hold office until the next
annual meeting of stockholders or until such
directors successor shall have been elected and
qualified, or as otherwise provided in the
By-laws.
D-1
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000004 |
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000000000.000000 ext 000000000.000000 ext |
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000000000.000000 ext 000000000.000000 ext |
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000000000.000000 ext 000000000.000000 ext
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MR A SAMPLE
DESIGNATION (IF ANY)
ADD 1
ADD 2
ADD 3
ADD 4
ADD 5
ADD 6
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Electronic Voting Instructions
You can vote by Internet or telephone!
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the two voting
methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by
1:00 a.m., Central Time, on May 4, 2007. |
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Vote by Internet
Log on to the Internet and go to
www.investorvote.com
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Follow the steps outlined on the secured website. |
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Vote by telephone
Call toll free 1-800-652-VOTE (8683) within the United
States, Canada & Puerto Rico any time on a touch tone
telephone. There is NO CHARGE to you for the call. |
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Using a black ink pen, mark your votes with an X as shown in
this example. Please do not write outside the designated areas. |
x |
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Follow the instructions provided by the recorded message. |
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Annual Meeting Proxy Card |
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C0123456789
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6
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION,
DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. 6
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A |
Proposals |
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The Directors of Temple-Inland Inc. recommend voting FOR proposals 1, 2, 3, 4 and 5. |
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1. |
To elect four (4) directors to the Board of Directors. These four directors will serve as directors until their terms expire or, if later, until replacement directors are elected who meet all necessary qualifications.
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+ |
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For
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Withhold
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For
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Withhold
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For
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Withhold |
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01 Donald M. Carlton
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o
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02 E. Linn Draper, Jr.
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03 Kenneth M. Jastrow, II
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04 James A. Johnson
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For
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Against
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Abstain
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For
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Against
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Abstain |
2. To amend Article III, Section 2 of our By-laws to provide that directors will be elected by the majority vote of our stockholders.
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o
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o
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3. To amend Article V of our Certificate of Incorporation to eliminate certain supermajority vote requirements.
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4. To amend Article VI, Section 3 of our Certificate of Incorporation to provide that
directors appointed to fill vacancies or newly created directorships will be subject to election at the next annual meeting.
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o
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o
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o
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5. To ratify the Audit Committee's
appointment of Ernst & Young LLP as independent registered public accounting firm for the year 2007.
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Change of Address
Please print new address below.
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Comments Please print your comments below.
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C |
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Authorized Signatures This Section must be completed for your vote to be counted. Date and Sign Below. |
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Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.
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Date (mm/dd/yyyy) Please print date below. |
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Signature 1 Please keep signature within the box. |
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Signature 2 Please keep signature within the box. |
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/
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n
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C 1234567890
1 U P X
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J N T
0 1 2 5 7 2 1
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MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE
140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND
MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND
MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND
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6
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION,
DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. 6
Proxy Temple-Inland Inc.
This Proxy is Solicited on Behalf of the Board of Directors
for the Annual Meeting on May 4, 2007
The undersigned hereby acknowledges receipt of the notice of the Annual Meeting of Stockholders
and proxy statement each dated April 4, 2007 and does hereby appoint Kenneth M. Jastrow, II, J.
Bradley Johnston and Doyle R. Simons and each of them as Proxies, each with the power to appoint
his substitute and hereby authorizes each of them to represent and vote, as designated below, all
the shares of Common Stock, par value $1.00 per share, of Temple-Inland Inc. held of record by the
undersigned on March 27, 2007 at the annual meeting of stockholders to be held on Friday, May 4, 2007,
and any adjournment(s) thereof.
YOUR VOTE IS IMPORTANT
Regardless of whether you plan to attend the Annual Meeting of Stockholders, you can be sure your shares
are represented at the meeting by promptly returning your proxy in the enclosed envelope.
In their discretion, the Proxies are authorized to vote upon such other business as may properly
come before the meeting.
(Items to be voted appear on reverse side.)