Exhibit 10.3

2009 BONUS CRITERIA FOR MAXXAM PRESIDENT
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 31st day of March 2009
established the following specific targets, criteria, and bonus opportunities
for Shawn M. Hurwitz (“SMH”), President of the Company, relating to the 2009
fiscal year (set forth in Part I), under Sections 3 and 4 of the MAXXAM
Executive Bonus Plan (amended and restated 2008), as amended by an Amendment
thereto dated March 31, 2009 (the “Plan”).  Part II sets forth bonus
opportunities relating to the 2010 fiscal year.  It is anticipated that
additional criteria will be established relating to the 2010 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 SMH’s 2009 base
salary from the Company of $525,000.

PART I:  BONUS CRITERIA RELATING TO THE 2009 FISCAL YEAR

A.
Improved 2009 Consolidated Financial Results

SMH will earn a bonus equal to 1% of base salary for each full $1.0 million in
improvement (representing a decrease in net loss or an increase in net income)
in 2009 Consolidated Financial Results as compared to the 2008 Consolidated
Financial Results, not to exceed $945,000.  2009 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 2009 results (excluding
amounts related to the Company’s net investment in The Pacific Lumber Company
(“Palco”) and the related tax effects).  2008 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, 2008 as same are published in
the Company’s Annual Report on Form 10-K for 2008  (excluding (i) amounts
related to the Company’s net investment in Palco and the related tax effects,
(ii) the $10 million gain by the Company in December 2008 from the FDIC
sanctions motion, and (iii) the December 2008 insurance recoveries by Sam
Houston Race Park, Ltd. (SHRP”) in respect of Hurricane Ike).

B.             Business Development Projects

SMH will earn a bonus for 2009 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 Palmas del Mar Properties, Inc. and/or an affiliate thereof
(“Palmas”) of a new business opportunity wherein a written commitment is made to
invest $5 million or more (in cash or property) in connection with tourism
operations in Puerto Rico.  For purposes of this Plan criterion, the undertaking
of a condominium or other land development project in conjunction with a hotel
project shall be considered separate undertakings resulting in separate business
development projects.  Satisfaction of this Plan criterion shall be deemed to
have occurred upon the approval or ratification of such undertaking by the
applicable Board of Directors or comparable governing body (“Board”) and the
execution by all parties to such undertaking of a binding written agreement in
respect thereto.

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2009 SMH Section 162(m)
Bonus Criteria

 
(2)
The undertaking by the Company and/or an affiliate thereof of a new business
opportunity wherein a written commitment is made to invest $5 million or more
(in cash or property) in connection with a new real estate operation or
development.  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.

 
(3)
The undertaking by SHRP  and/or an affiliate thereof of a new business
opportunity wherein a written commitment is made to invest $2.5 million or more
(in cash or property) in connection with racing, gaming or other entertainment
operations of SHRP, or any related joint venture or other
arrangement.  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.

 
(4)
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 or in respect of any racing facilities or licenses 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.

 
(5)
The receipt, directly, or indirectly through a joint venture or other
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

SMH will earn a bonus of 75% of base salary for completion in 2009 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 2009 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 2009 Earnings per Share

SMH 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 2009 Earnings per Share as compared to
the Company’s 2008 Earnings per Share, not to exceed $630,000.  2009 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 2009 results (excluding amounts related to
the Company’s net investment in The Pacific Lumber Company (“Palco”) and the
related tax effects).   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 audited financial statements as of December
31, 2008 as same are published in the Company’s Annual Report on Form 10-K for
2008 (excluding (i) amounts related to the Company’s net investment in Palco and
the related tax effects, (ii) the $10 million gain by the Company in December
2008 from the FDIC sanctions motion, and (iii) the December 2008 insurance
recoveries by SHRP in respect of Hurricane Ike).

 
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2009 SMH Section 162(m)
Bonus Criteria

E.             Improved Consolidated Liquidity Position

SMH will earn a bonus equal to 1% of base salary for each full $1.0 million
improvement in the Company’s consolidated liquidity position for the year ended
December 31, 2009 as compared to the Company’s consolidated liquidity position
for the year ended December 31, 2008, not to exceed $630,000.  Such improvement,
if any, in the Company’s consolidated liquidity position shall be equal to the
sum of (i) the increase (decrease) in the Company’s consolidated cash and cash
equivalents for the year ended December 31, 2009 as compared to the year ended
December 31, 2008, and (ii) the increase (decrease) in available borrowing
capacity under the credit facilities of the Company and its consolidated
subsidiaries (“consolidated borrowing capacity”) as of December 31, 2009 as
compared to consolidated borrowing capacity as of December 31, 2008.

F.             Achievement of Divisional/Subsidiary Business Plans

SMH will earn a bonus equal to 50% of base salary for achievement of the 2009
business plan with respect to each of (i) the Company’s real estate operations,
or (ii) SHRP’s operations.  The maximum bonus under this subsection shall be
equal to 100% of base salary.  The 2009 business plan for this purpose shall be
the 2009 business plan as approved by the Company’s Board or the Board of the
applicable entities within the business unit.  Achievement of the business plan
for the respective business unit shall be deemed to occur if the actual 2009
before-tax net income or loss computed in accordance with generally accepted
accounting principles in the United States for the unit is equal to or better
than (i.e., a higher net income or lower net loss) the before-tax net income or
loss as provided for in the applicable business plan.

PART II: BONUS CRITERIA RELATING TO THE 2010 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, 2009 and prior to establishment
of the 2010 bonus criteria, the corresponding bonus shall be earned by SMH using
his 2010 base salary.

 
[Signature page follows]

 
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2009 SMH Section 162(m)
Bonus Criteria

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

Dated:     March 31, 2009
 
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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