Document:

MAXXAM INC.
                           RESTRICTED STOCK AGREEMENT

                  Restricted Stock Agreement (the "Agreement") effective as of
December 13, 1999, between MAXXAM Inc., a Delaware corporation (the "Company"),
and Charles E. Hurwitz (the "Participant").

                  The Company maintains the MAXXAM 1994 Omnibus Employee
Incentive Plan (the "Plan"), which is incorporated into and forms a part of this
Agreement, and the Participant has been selected by the 162(m) Compensation
Committee (the "Committee") of the Board of Directors (the "Board") of the
Company to receive a Restricted Stock award (the "Award") based on the
Participant's performance.

                  The Award shall be subject to the terms and conditions of the
Plan and those set forth below, including the continued employment of the
Participant with the Company.

                  In consideration of the Award, the Participant is willing to
accept the Award provided in this Agreement and is willing to abide by the
obligations imposed under this Agreement and the Plan.

                  In consideration of the premises and the mutual agreements set
forth below, the parties hereto agree as follows:

1. Grant of Award. The Company hereby grants to the Participant a total of
256,808 shares of common stock, par value $.50 per share, of the Company (the
"Stock"), subject to the restrictions described below. This Award is made as of
the date first set forth above (the "Grant Date"). Within 90 days of the Grant
Date, a stock certificate representing the number of shares of Stock awarded to
the Participant pursuant to this Agreement shall be delivered to the
Participant.

2. Lapse of Restricted Period. The period during which the Stock is subject to
forfeiture and restrictions on transferability, each as described herein (the
"Restricted Period"), shall commence on the Grant Date and shall lapse with
respect to the Stock on the earlier of: (a) the 15th anniversary of the Grant
Date, (b) the death of the Participant or (c) the permanent and total disability
of the Participant. The Restricted Period shall not lapse under any other
circumstances, including upon a change in control of the Company or the sale,
lease, transfer, conveyance or other disposition, in one or a series of related
transactions, of all or substantially all of the assets of the Company or the
merger, consolidation, reorganization, liquidation or dissolution of the
Company.

3. Rights as a Shareholder. Except for the restrictions set forth herein, the
Participant shall have all the rights of a shareholder with respect to Stock,
including, without limitation, the right to vote the Stock.

4. Nontransferability. No shares of the Stock may be assigned, sold,
transferred, pledged, hypothecated or otherwise encumbered by the Participant
during the Restricted Period, except as hereinafter provided.

5. Restrictive Legend. Any certificate issued to the Participant in respect of
shares of the Stock shall be registered in the name of the Participant and shall
bear the following (or similar) legend:

                  "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE "CONTROL"
SECURITIES BECAUSE OF THE POSITION THE HOLDER HAS WITH THE COMPANY AS AN
AFFILIATE. AS SUCH, THEY MAY NOT BE OFFERED OR SOLD, AND NO TRANSFER OF THEM MAY
BE MADE, UNLESS (1) THEY ARE SOLD IN COMPLIANCE WITH RULE 144 OF THE SECURITIES
ACT OF 1933, AS AMENDED, OR (2) THE HOLDER IS NO LONGER AN AFFILIATE OF THE
COMPANY. FURTHER, THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
IS RESTRICTED UNDER THE TERMS OF THE MAXXAM 1994 OMNIBUS EMPLOYEE INCENTIVE
PLAN. A COPY OF SUCH PLAN WILL BE FURNISHED TO THE HOLDER HEREOF WITHOUT CHARGE
UPON WRITTEN REQUEST TO THE CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS OR
REGISTERED OFFICE."

6. Death, Disability or Termination of Employment. If the Participant ceases to
be in the employ of the Company at any time during the Restricted Period by
reason of death or permanent disability, the Restricted Period covering all
shares of the Stock shall immediately lapse. If the Participant ceases to be in
the employ of the Company at any time during the Restricted Period for any
reason other than his death or permanent disability, all shares of the Stock
shall revert back to the Company, effective on the date of such termination.

7. Issuance of New Certificates. Upon the lapse of the Restricted Period with
respect to any shares of the Stock, such shares shall no longer be subject to
the restrictions imposed under this Agreement, and the Company shall issue or
have issued new share certificates without the legend described in Section 5 of
this Agreement in exchange for those previously issued.

8. Taxes. The Company is authorized to withhold from any payment relating to the
Stock, or any other payment to the Participant, amounts of withholding and other
taxes due in connection with any transaction involving the Stock, and to take
such other action as the Committee may deem advisable to enable the Company and
the Participant to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to the Stock. This authority shall include
authority to withhold or receive shares of stock of the Company or other
property, including cash, from the Participant and to make cash payments in
respect thereof in satisfaction of the Participant's tax obligations.

9. Adjustments. The Stock shall be subject to the same adjustment, if any,
accorded to all other outstanding shares of Company common stock in the event of
(i) any change in the total number of shares of Company common stock outstanding
or the number or kind of securities into which such shares of Company common
stock have been converted, (ii) any reorganization or change in the Company's
capital structure, or (iii) any other transaction or event having an effect
similar to the foregoing.

10. No Right to Continued Status as Employee. No provision in this Agreement
shall be construed (i) to confer upon the Participant the right to remain in the
employ of the Company or (ii) to interfere in any way with the right and
authority of the Company, either to increase or decrease the compensation of the
Participant at any time or to terminate any employment, service or other
relationship between the Company and the Participant.

11. Compliance with Legal and Exchange Requirements. Notwithstanding any other
provision of this Agreement, the Company shall not be required to deliver any
shares of Stock or Company common stock under this Agreement if the delivery of
such shares would constitute a violation by the Participant or by the Company of
any provision of any law or regulation of any governmental authority, including,
without limitation, any federal or state securities laws or regulations.
Notwithstanding any other provision of this Agreement, if at any time the
Company shall determine, in its sole discretion, that the listing, registration
or qualification of any shares of the Stock or Company common stock upon any
securities exchange or under any state or federal law, or the consent or
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the delivery of shares of stock hereunder,
the Stock shall not vest in whole or in part unless the listing, registration,
qualification, consent or approval has been effected or obtained free of any
conditions not acceptable to the Company. Specifically with respect to the
Securities Act of 1933, as amended (the "Act"), unless a registration statement
under the Act is in effect with respect to the shares of Stock covered by this
Agreement, the Company shall not be required to deliver such shares of Stock
unless the Company has received evidence satisfactory to it that the Participant
may acquire the shares of Stock pursuant to an exemption from registration under
the Act. These determinations by the Company shall be final, binding and
conclusive. Notwithstanding any other provision of this Agreement, as to any
jurisdiction that expressly imposes the requirement that the Stock shall not
vest unless and until registered or subject to an available exemption from
registration, the vesting of the Stock (under circumstances in which the laws of
the jurisdiction apply) shall be deemed conditional upon the effectiveness of
the registration or the availability of the exemption.

12. Participant Bound by Plan. Notwithstanding anything in this Agreement to the
contrary, the terms of this Agreement shall be subject to the terms of the Plan,
a copy of which may be obtained by the Participant from the office of the
Secretary of the Company. Any term defined in the Plan shall have the same
meaning in this Agreement. In the event of any conflict between the provisions
of this Agreement and the Plan, the provisions of the Plan shall control.

13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
conflict of laws principles thereof.

14. Administration. The authority to manage and control the operation and
administration of this Agreement shall be vested in the members of the Committee
as of the Grant Date, and only such members shall have the power and authority,
in their sole discretion, to waive or eliminate any of the restrictions to which
the Stock is subject. Any interpretation of this Agreement by such Committee
members and any decision made by them with respect to the Agreement is final and
binding. Should either of the members of the Committee as of the Grant Date
(singly or jointly) cease to be a member of the Committee at any time during the
Restricted Period, such members shall continue to manage and control the
operation and administration of this Agreement. Further, should only one of such
members of the Committee as of the Grant Date survive or be solely competent to
manage or administer this Agreement during the Restricted Period, such surviving
competent member shall solely continue to manage and administer this Agreement.
Notwithstanding anything to the contrary provided for in this Agreement, in the
event that both such Committee members shall be unwilling or unable to act as
set forth in this Section 14, no elimination of any of the restrictions to which
the Stock is subject shall be valid without the affirmative vote of the holders
of a majority of the shares of voting stock of the Company held by persons other
than holders that are affiliates of the Participant. The term "affiliates" shall
have the meaning set forth in Rule 12b-2 of the Securities Exchange Act of 1934,
as amended.

15. Benefits. This Agreement shall be binding upon and inure to the benefit of
the parties hereto. This Agreement is for the sole benefit of the parties hereto
and not for the benefit of any other party.

16. Severability. If any provision of this Agreement shall be determined to be
illegal and unenforceable by any court of law, such provision shall be enforced
to the maximum extent possible and the remaining provisions shall be severable
and enforceable in accordance with their terms.

17. Amendments. No modification, amendment or waiver or any provision of this
Agreement shall be effective unless it is in writing and signed by the parties
hereto.

18. Counterparts. This Agreement may be executed in counterparts, each of which
shall constitute one and the same instrument.

19. Entire Agreement. This Agreement and all determinations, decisions, actions
and interpretations of the Committee pursuant hereto, constitute the entire
agreement between the parties hereto with respect to the Award, and supercede
all prior oral or written agreements, commitments or understandings.

         IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed as of March 1, 2000, to be effective as of December 13, 1999.

                                   MAXXAM INC.

                                   By:  /s/ Bernard L. Birkel
                                        -----------------------------
                                        Name:  Bernard L. Birkel
                                        Title:  Secretary

/s/ Charles E. Hurwitz
------------------------------------
Charles E. HurwitzTHIS AMENDMENT TO CREDIT AGREEMENT (this "Amendment") dated as of
January 31, 2000, is entered into by and among THE PACIFIC LUMBER COMPANY (the
"Borrower") and BANK OF AMERICA, N.A. (the "Bank").

                                    RECITALS

     A. The Borrower and the Bank are parties to an Amended and Restated Credit
Agreement dated as of December 18, 1998 (the "Credit Agreement") pursuant to
which the Bank has extended certain credit facilities to the Borrower.

     B. The Borrower has requested that the Bank agree to certain amendments of
the Credit Agreement.

     C. The Bank is willing to amend the Credit Agreement, subject to the terms
and conditions of this Amendment.

         NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby agree as follows:

          1. Defined Terms. Unless otherwise defined herein, capitalized terms
used herein shall have the meanings, if any, assigned to them in the Credit
Agreement.

          2. Amendments to Credit Agreement.

               (a) Section 1.01 of the Credit Agreement shall be amended by
inserting therein, immediately following the definition of "Scheduled Payments"
the following new definition:

          "Scotia Pacific Indenture" means the Indenture, dated as of July 20,
     1998, as amended and in effect on January 24, 2000, between Scotia Pacific
     Company LLC and State Street Bank and Trust Company.

               (b) Section 7.02 of the Credit Agreement shall be amended by (i)
deleting the word "and" at the end of clause (g) thereof, (ii) relettering
clause (h) thereof as clause (i), and (iii) inserting therein the following new
clause (h):

          (h) Dispositions of assets in the Scheduled Amortization Reserve
     Account (as such term is defined in the Scotia-Pacific Indenture); and

               (c) Section 7.04 of the Credit Agreement shall be amended by (i)
deleting the word "and" at the end of clause (f) thereof, (ii) relettering
clause (g) thereof as clause (i) and (iii) inserting therein the following new
clauses (g) and (h):

          (g) Investments to the extent that such Investments are funded by
     Salmon Creek Proceeds promptly after receipt of such proceeds by the
     Company;

          (h) Investments of funds in the Scheduled Amortization Reserve Account
     in SAR Eligible Investments (as such term is defined in the Scotia Pacific
     Indenture); and

               (d) Section 7.06(b) of the Credit Agreement shall be amended by
(i) deleting the word "or" at the end of clause (vi) thereof, (ii) deleting the
period at the end of clause (vii) thereof and replacing the same with the words
", or" and (iii) inserting therein the following new clause (viii):

          (vii) Investments permitted by clause (g) of Section 7.04.

          3. Representations and Warranties. The Borrower hereby represents and
warrants, as of the date hereof, as follows:

               (a) No Default or Event of Default has occurred and is
continuing.

               (b) The execution, delivery and performance by the Borrower of
this Amendment has been duly authorized by all necessary corporate and other
action and does not and will not require any registration with, consent or
approval of, notice to or action by, any person (including any governmental
agency) in order to be effective and enforceable. The Credit Agreement as
amended by this Amendment constitutes the legal, valid and binding obligations
of the Borrower, enforceable against it in accordance with its respective terms,
without defense, counterclaim or offset, except as enforceability may be limited
by applicable bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally or by equitable principles related to
enforceability.

               (c) All representations and warranties of the Borrower contained
in Article V of the Credit Agreement are true and correct (except to the extent
such representations and warranties expressly refer to an earlier date, in which
case they are true and correct as of such earlier date).

               (d) The Borrower is entering into this Amendment on the basis of
its own investigation and for its own reasons, without reliance upon the Bank or
any other Person.

          4.  Reservation of Rights. The Borrower acknowledges and agrees that
the execution and delivery by the Bank of this Amendment, shall not be deemed to
create a course of dealing or otherwise obligate the Bank to forbear or execute
similar agreements under the same or similar circumstances in the future.

          5.  Miscellaneous.

               (a) Except as herein expressly amended, all terms, covenants and
provisions of the Credit Agreement are and shall remain in full force and effect
and all references therein to such Credit Agreement shall henceforth refer to
the Credit Agreement as amended by this Amendment. This Amendment shall be
deemed incorporated into, and a part of, the Credit Agreement.

               (b) This Amendment shall be binding upon and inure to the benefit
of the parties hereto and thereto and their respective successors and assigns.
No third party beneficiaries are intended in connection with this Amendment.

               (c) This Amendment shall be governed by and construed in
accordance with the law of the State of California (without regard to principles
of conflicts of laws).

               (d) This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all such counterparts together
shall constitute but one and the same instrument.

               (e) This Amendment, together with the Credit Agreement, contains
the entire and exclusive agreement of the parties hereto with reference to the
matters discussed herein and therein. This Amendment supersedes all prior drafts
and communications with respect thereto. This Amendment may not be amended
except in accordance with the provisions of Section 9.01 of the Credit
Agreement.

               (f) If any term or provision of this Amendment shall be deemed
prohibited by or invalid under any applicable law, such provision shall be
invalidated without affecting the remaining provisions of this Amendment or the
Credit Agreement, respectively.

               (g) Borrower covenants to pay to or reimburse the Bank, upon
demand, for all costs and expenses (including allocated costs of in-house
counsel) incurred in connection with the development, preparation, negotiation,
execution and delivery of this Amendment, including without limitation
appraisal, audit, search and filing fees incurred in connection therewith.

          IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Amendment as of the date first above written.

                                   THE PACIFIC LUMBER COMPANY

                                   By:      /s/ Gary L. Clark
                                   Title:   Vice President - Finance
                                            and Administration

                                   BANK OF AMERICA, N.A.

                                   By:     /s/ Michael J. Balok
                                   Title:  Managing Director

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