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Exhibit 10.3

2008 BONUS CRITERIA FOR MAXXAM GENERAL COUNSEL
UNDER THE MAXXAM 1994 EXECUTIVE BONUS PLAN

The Section 162(m) Compensation Committee (the “Committee”) of the Board of
Directors of MAXXAM Inc. (the “Company”) has on the 28th day of March 2008,
established the following specific targets, criteria and bonus opportunities for
J. Kent Friedman (“JKF”), Co-Vice Chairman of the Board and General Counsel of
the Company, relating to the 2008 fiscal year (set forth in Part I), under
Sections 3 and 4 of the MAXXAM 1994 Executive Bonus Plan (the “Plan”).  Part II
sets forth bonus opportunities relating to the 2009 fiscal year.  It is
anticipated that additional criteria will be established relating to the 2009
fiscal year at a later date.  All terms not defined herein shall have the
meanings assigned to them in the Plan.  As used herein, the term “earn” shall be
subject to the Committee’s absolute discretion, under Section 4.1 of the Plan,
to reduce the actual bonus payable hereunder as the result of any of the
criteria being achieved.  As used herein, the term “base salary” shall mean
JKF’s base salary from the Company of $510,000.

PART I: BONUS CRITERIA RELATING TO
THE 2007 FISCAL YEAR

A.
Improved 2008 Consolidated Financial Results

JKF will earn a bonus equal to 1% of base salary for each full $1 million in
improvement (representing a decrease in net loss or an increase in net income)
in 2008 Consolidated Financial Results as compared to the 2007 Consolidated
Financial Results, not to exceed $920,000.  The 2008 Consolidated Financial
Results for this purpose shall be deemed to be the amount of net income (or
loss) shown in the Company's earnings release with respect to its 2008
results.  The 2007 Consolidated Financial Results for this purpose shall be
deemed to be the amount of net loss shown in the Company’s audited financial
statements as of December 31, 2007 as the same are published in the Company’s
Annual Report on Form 10-K for 2007.  2007 and 2008 Consolidated Financial
Results shall each exclude (i) the results of forest products operations, and
(ii) any net income arising from the reversal of the Company’s net investment in
The Pacific Lumber Company (“Palco”) and the related tax effects.

B.           Business Development Projects

JKF will earn a bonus for 2008 services, not to exceed an aggregate of 100% of
base salary, based on the following criteria: 33⅓% of base salary for any of the
business development projects described below.  It is believed and intended that
all of the items described below are substantially uncertain on the date
hereof.  Completion of each of the items described below shall be deemed to
constitute a separate business development project so that 33⅓% of base salary
shall be earned as a bonus for each such project completed, subject to the
overall limitation of 100% of base salary for all criteria under this section.

(1)  
The undertaking by the Sam Houston Race Park, Ltd. and/or an affiliate thereof
(“SHRP”) of a new business opportunity wherein a written commitment is made to
invest $5 million or more (in cash or property) in connection with racing and/or
gaming operations.  Satisfaction of this Plan criterion shall be deemed to have
occurred upon the approval or ratification of such undertaking by the applicable
Board and the execution by all parties to such undertaking of a binding written
agreement in respect thereto.

(2)  
The approval by the Texas Legislature of significant gaming legislation.  The
term “significant gaming legislation” means initial enabling legislation for any
or all of the following: (a) off-track betting on horse and/or dog racing which
may be conducted in at least 20 locations in Texas, (b) poker, card or other
games of skill or chance at any racing facilities owned by the Company or a
subsidiary thereof, (c) video lottery, slot machines or similar gaming devices
at any racing facilities owned by the Company or a subsidiary thereof, or (d)
casino gaming (full or partial scale) at any racing facilities owned by the
Company or a subsidiary thereof

(3)  
The receipt, directly, or indirectly through a joint venture or similar
arrangement, by the Company or one of its subsidiaries of a permit, license or
similar approval to conduct gaming as allowed under any significant gaming
legislation approved by the Texas Legislature but which does not apply to any
racing facilities owned by the Company.

C.           Extraordinary Transactions

JKF will earn a bonus of 75% of base salary for completion in 2008 of an
Extraordinary Transaction as such is defined in Section 1.8 of the Plan;
provided that any other items specifically listed under Section B. as a Business
Development Project for 2008 shall not  also be considered an Extraordinary
Transaction under this item.  The maximum bonus that can be earned under this
provision is 225% of base salary.  An Extraordinary Transaction shall be deemed
to have occurred upon the approval or ratification of such transaction(s) by the
applicable Board and the execution by all parties to such transaction(s) of a
binding written agreement in respect thereto.  The term
“Extraordinary  Transaction” shall exclude any disposition of any interest(s) of
the Company in its forest products operations.

D.           Improved 2008 Earnings per Share

JKF will earn a bonus equal to 1% of base salary for each full $0.15 (fifteen
cents) improvement (representing a decrease in net loss per share or an increase
in net income per share) in the Company’s 2008 Earnings per Share as compared to
the Company’s 2007 Earnings per Share, not to exceed $615,000.  The 2008
Earnings per Share for this purpose shall be deemed to be the earnings (or loss)
per common and common equivalent share of the Company as shown in the Company’s
earnings release with respect to its 2008 results.  The 2007 Earnings per Share
for this purpose shall be deemed to be the earnings (or loss) per common and
common equivalent share of the Company as shown in the Company’s audited
financial statements as of December 31, 2007 as the same are published in the
Company’s Annual Report on Form 10-K for 2007.   2007 and 2008 Consolidated
Financial Results shall each exclude (i) the results of forest products
operations, and (ii) any net income arising from the reversal of the Company’s
net investment in Palco and the related tax effects

PART II: BONUS CRITERIA RELATING TO
THE 2009 FISCAL YEAR

A.  
In the event that any of the criteria set forth above under Sections B. and C.
of Part I are satisfied subsequent to December 31, 2008 and prior to
establishment of the 2009 bonus criteria, the corresponding bonus shall be
earned by JKF using the salary in effect during 2009.

[signature page follows]
 

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In witness whereof, the undersigned have affixed their signatures hereto as of
the date shown below.

Dated:                      March 28,
2008                                                    MAXXAM INC. SECTION
162(m)
COMPENSATION COMMITTEE

 /s/ Robert J. Cruikshank
 Robert J. Cruikshank, Chairman

 /s/ Stanley D.
Rosenberg                                                                
 Stanley D. Rosenberg

 /s/ Michael J. Rosenthal
Michael J. Rosenthal

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