Document:

Filed by Bowne Pure Compliance

 

EXHIBIT 10.5*

CONFIDENTIAL TREATMENT REQUESTED BY

EASYLINK SERVICES INTERNATIONAL CORPORATION

UNDER RULE 24b-2

*CONFIDENTIAL TREATMENT

CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO THE RULES AND REGULATIONS OF
THE SECURITIES AND EXCHANGE COMMISSION. “X” HAS BEEN USED TO IDENTIFY INFORMATION WHICH IS SUBJECT
TO A CONFIDENTIAL TREATMENT REQUEST.

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amended and Restated Employment Agreement (the “Agreement”) is entered into on April 1,
2008 (the “Effective Date”) between, EasyLink Services International Corporation (the “Company”)
and Terri Deuel (“Deuel”). This Agreement amends, restates and supersedes the Employment Agreement
(the “Original Agreement”) between the Company and Deuel effective as of December 1, 2007 (the
“Original Effective Date”).

In consideration of the mutual covenants and conditions set forth herein, the parties hereby
agree as follows:

1. Employment. The Company hereby employs Deuel in the capacity of Vice President of Product
Development and Support. Deuel accepts such employment and agrees to perform such services as are
customary to such office and as shall from time to time be assigned to her by the Company’s Chief
Executive Officer. Deuel will perform her duties so as to cause the Business of the Company to be
operated in accordance with an annual operating plan and budget developed jointly by the Board and
the Company and approved by the Board. For purposes of this Agreement, the “Business” of the
Company is to provide business-to-business supply chain data interchange in multiple electronic
formats.

2. Term. The employment hereunder shall be for a period of one year, commencing on the
Original Effective Date and ending on the first anniversary of such date (the “Employment Period”).
Unless either party elects not to extend the term of this Agreement by so notifying the other in
writing at least 30 days prior to the first anniversary of the Original Effective Date and each
anniversary thereafter, the Employment Period shall automatically extend for an additional one year
upon each such anniversary. Deuel’s employment will be on a full-time basis requiring the devotion
of such amount of her productive time as is necessary for the efficient operation of the Business
of the Company.

3. Compensation and Benefits.

3.1 Salary. For the performance of Deuel’s duties hereunder, the Company shall pay Deuel (i)
an annual base salary in the amount as provided on Exhibit A, a copy of which is attached hereto
and incorporated herein by reference, payable in accordance with the Company’s standard payroll
policies, which may be changed from time to time (but in no case less frequently than monthly).

 

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3.2 Annual Cash Incentive. Deuel will receive the opportunity to earn an annual cash incentive
pursuant to the terms of Exhibit A attached hereto (the “Annual Cash Incentive”). The Company
agrees to negotiate in good faith a new Annual Cash Incentive Plan for each year of Deuel’s
employment subsequent to Fiscal 2008. If the Company fails to negotiate a new Cash Incentive Plan
for any year after Fiscal 2008, then the Annual Cash Incentive in effect for the preceding year
will govern. Notwithstanding any of the provisions of this Agreement, the Annual Cash Incentive,
to the extent payable for any fiscal year of the Company, will be paid no later than the
15th day of the third month following the end of the fiscal year of the Company to which
the Annual Cash Incentive relates.

3.3 Benefits. The Company shall provide to Deuel the benefits as described on Exhibit B
attached hereto.

3.4 Reimbursement of Expenses. Deuel shall be entitled to be reimbursed for all actual and
reasonable expenses, including but not limited to, expenses for travel, meals and entertainment,
incurred by Deuel in connection with and reasonably related to the furtherance of the Company’s
Business, per Company travel guidelines in effect from time to time. Subject to the Company travel
guidelines in effect from time to time, the Company will reimburse Deuel for such actual and
reasonable expenses no later than the last day of the calendar year following the calendar year in
which Deuel incurs the reimbursable expense.

3.5 Equity Grants. The parties incorporate the terms of Exhibit A attached hereto regarding
equity grants, provided however, that upon any Change in Control of the Company as defined in
Section 4 of this Agreement or if Deuel’s employment is terminated under Sections 5.1(b), (d)
or (e) of this Agreement, any of Deuel’s equity grants that have not yet vested will vest
immediately.

4. Change of Control. For the purposes of this Agreement, the term “Change of Control” shall
mean a change in the beneficial ownership of the Company’s voting stock pursuant to which:

(a) any “person,” including a “syndicate” or “group” as those terms are used in Section
13(d)(3) of the Securities Exchange Act of 1934, is or becomes the beneficial owner,
directly or indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Company’s then outstanding “Voting Securities,” which is any
security that ordinarily possesses the power to vote in the election of the board of
directors of a corporation without the happening of any precondition or contingency; or

(b) the Company is merged or consolidated with another corporation and immediately
after giving effect to the merger or consolidation less than 40% of the outstanding Voting
Securities of the surviving or resulting entity are then beneficially owned in the aggregate
by either the shareholders of the Company immediately prior to such merger or consolidation,
or, if a record date has been set to determine the shareholders of the Company entitled to
vote on such merger or consolidation, the shareholders of the Company as of such record
date; or

(c) the Company transfers substantially all of its assets to another corporation, other
than a corporation of which the Company owns, directly or indirectly, at least 40% of the
combined voting power of such corporation’s outstanding voting securities.

 

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5. Termination.

5.1 Termination Events. Deuel’s employment hereunder will terminate upon the occurrence of any
of the following events:

(a) Death;

(b) Disability: If Deuel is unable perform the duties assigned to her hereunder for a
continuous period exceeding 90 days by reason of injury, physical or mental illness or other
disability, which condition has been certified by a physician; then, upon written notice to
Deuel or her personal representative setting forth specifically the nature of the disability
and the resulting performance failures and Deuel’s failure to cure the cited performance
failures within ten days of receipt of such notice, the Company may discharge Deuel;

(c) Cause: As used in this Agreement, “Cause” shall mean:

	 	(i)	 	Deuel’s conviction of (or pleading guilty or nolo contendere to) a felony or
any misdemeanor involving dishonesty or moral turpitude; provided, however, that prior
to discharging Deuel for Cause, the Board shall give a written statement of findings to
Deuel setting forth specifically the grounds on which Cause is based, and Deuel shall
have a period of ten days thereafter to respond in writing to the Board’s findings; or

	 	(ii)	 	Deuel’s willful and continued failure to substantially perform her duties with
the Company (other than any failure resulting from illness or disability) that has, or
can reasonably be expected to have, a direct and material adverse monetary effect on
the Company, provided that the Board has tendered written notice to Deuel specifying
the nature of the misconduct or performance deficiency and giving Deuel 20 days to cure
such deficiency. For purposes of this subsection (ii), no act or failure to act on
Deuel’s part shall be considered “willful” if done, or omitted to be done, by Deuel in
good faith and with reasonable belief that Deuel’s action or omission was in the best
interest of the Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to be done, by
the Employee in good faith and in the best interests of the Company; 

(d) Without Cause: The Board may terminate Deuel by issuing at least 30 days’ advance
written notice, subject to the severance provisions set forth below;

(e) By Deuel With Cause: Deuel may terminate her employment due to either (i) a
material default by the Company in the performance of any of its obligations hereunder, or
(ii) an Adverse Change in Duties (as defined below), which default or Adverse Change in
Duties remains unremedied by the Company for a period of 30 days following its receipt of
written notice thereof from Deuel provided, however, that Deuel must provide written notice
to the Company of the condition which would constitute cause for terminating her employment
hereunder within 90 days of the initial existence of the condition, and, assuming such
default or Adverse Change in Duties remains unremedied by the Company after the 30-day
period set forth above, Deuel then must terminate her employment within 12 months of the
initial existence of the condition; or

 

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(f) By Deuel Without Cause: Deuel may terminate her employment for any reason upon the
furnishing of at least 30 days’ advance written notice to the Board.

As used herein, “Adverse Change in Duties” means an action or series of actions taken by the
Company, without Deuel’s prior written consent, that results in:

(1) A material diminution in Deuel’s authority, duties or responsibilities;

(2) A material diminution in Deuel’s base compensation;

(3) A material diminution in the authority, duties or responsibilities of the
supervisor to whom Deuel is required to report;

(4) A material diminution in the budget over which Deuel retains authority; and

(5) A material change in the geographic location of the Company, as located at the time
of this Agreement, at which Deuel performs her duties.

5.2 Effects of Termination.

(a) Upon termination of Deuel’s employment hereunder for any reason, the Company will
promptly (but in no event later than 30 days after termination of engagement) pay Deuel all
compensation owed to Deuel and unpaid through the date of termination (including, without
limitation, salary and employee expense reimbursements).

(b) In addition, if Deuel’s employment is terminated under Sections 5.1 (b), (d)
or (e), the Company shall also pay Deuel an aggregate severance amount equal to 12 months of
Deuel’s then-applicable base monthly salary plus any target Annual Cash Incentive that would
have accrued for the fiscal year in which the termination occurred, which aggregate amount
shall be paid in equal, or as nearly equal as practicable, installments in accordance with
the Company’s then-existing standard payroll policies (including payroll deductions) as if
the payments were being made in equal installments over the following 12 months (no less
frequently than monthly), starting with the first payroll payment date following Deuel’s
termination of employment until the 15th day of the third-month period following
the end of (i) the calendar year or (ii) the fiscal year of the Company, whichever is later,
which includes the termination of Deuel’s employment, at which time all remaining amounts
shall be paid in a single lump sum no later than such 15th day of the third month
following the end of (i) the calendar year or (ii) the fiscal year of the Company, whichever
is later, in which Deuel’s employment terminates, or, if earlier, after all such payments
have been made.

(c) The Company shall have the right to offset against any damages resulting from a
breach by Deuel of Section 5.3 or Section 6 of this Agreement , in which case, such offset
shall be applied in full against the payments remaining to be paid to Deuel, from earliest
to latest, and then to recover any amounts previously paid.

5.3 Restrictive Covenants. Upon termination of Deuel’s employment hereunder for any reason,
Deuel agrees that for the one-year period following the termination of employment, Deuel will not:

 

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(a) directly or indirectly, within a ten-mile radius of Deuel’s office at the Company,
whether for her own account or as an individual, employee, director, consultant or advisor,
or in any other capacity whatsoever, provide services that are substantially similar to the
services she provided to the Company to any person, firm, corporation or other business
enterprise that competes with the Business of the Company, unless she obtains the prior
written consent of the Board;

(b) directly or indirectly encourage or solicit, or attempt to encourage or solicit, on
behalf of any person, firm, corporation or other business enterprise that competes with the
Business of the Company, any individual to leave the Company’s employ for any reason or
interfere in any other manner with the employment relationships at the time existing between
the Company and its current or prospective employees; or

(c) induce or attempt to induce, on behalf of any person, firm, corporation or other
business enterprise that competes with the Business of the Company, any provider, payor,
customer, supplier, distributor, licensee or other business relation of the Company with
whom Deuel dealt at any time during the two-year period preceding her termination of
employment to cease doing business with the Company or in any way interfere with the
existing business relationship between any such customer, supplier, distributor, licensee or
other business relation described above and the Company.

Deuel acknowledges that monetary damages will not be sufficient to compensate the Company for
any economic loss that may be incurred by reason of breach of the foregoing restrictive covenants.
Accordingly, in the event of any such breach, the Company shall, in addition to any remedies
available to the Company at law, be entitled to obtain equitable relief in the form of an
injunction precluding Deuel from continuing to engage in such breach.

In the event that any of the foregoing restrictive covenants are too broad to be enforceable,
the parties request and agree that they may be reduced to such lesser breadth as may be necessary
to make them enforceable. The covenants in this Section 5.3 shall be construed as an agreement
independent of any other agreement between the parties. Deuel agrees that the existence of any
claim or cause of action of Deuel against the Company, whether predicated upon this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of these covenants.

6. Confidentiality. During the term of this Agreement and for 36 months after Deuel’s
termination of employment with the Company, Deuel will continue to be bound by the terms of that
certain Confidentiality Agreement entered into between Deuel and the Company on or about December
1, 2007.

7. General Provisions.

7.1 Assignment. Deuel may not assign or delegate any of her rights or obligations under this
Agreement. The Company may assign its rights and obligations under this Agreement to any successor
to the Company through merger, consolidation, sale or the like.

7.2 Entire Agreement. This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes any and all prior agreements between the
parties relating to such subject matter, including without limitation that certain Employment
Agreement dated December 1, 2007.

 

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7.3 Modifications. This Agreement may be changed or modified only by an agreement in writing
signed by the party against whom enforcement is sought.

7.4 Successors and Assigns. The rights and duties under this Agreement shall inure to the
benefit of, and be binding upon, the parties hereto and their successors and assigns, legal
representatives, heirs, legatees, distributees, assigns and transferees by operation of law,
whether or not any such person or entity shall have become a party to this Agreement and have
agreed in writing to join and be bound by the terms and conditions hereof.

7.5 Governing Law. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Georgia.

7.6 Severability; Partial Invalidity. If any provision of this Agreement or any instrument or
document delivered in connection herewith is held to be illegal, invalid or unenforceable under
present or future laws effective during the term of this Agreement (the “Offending Provision”), the
Offending Provision shall be fully severable; this Agreement shall be construed and enforced as if
the Offending Provision had never comprised a part of this Agreement; and the remaining provisions
of this Agreement shall remain in full force and effect and shall not be affected by the Offending
Provision or by its severance from this Agreement. Furthermore, in lieu of the Offending
Provision, there shall be added automatically as a part of this Agreement a provision as similar in
terms to the Offending Provision as may be possible and be legal, valid and enforceable.

7.7 Further Assurances. The parties will execute such further instruments and take such
further actions as may be reasonably necessary to carry out the intent of this Agreement.

7.8 Notices. Any notices or other communications required or permitted hereunder shall be in
writing and shall be deemed received by the recipient when delivered personally or, if mailed, five
(5) days after the date of deposit in the United States mail, certified or registered, postage
prepaid and addressed, in the case of the Company, to:

6025 The Corners Parkway

Suite 100

Norcross, Georgia 30092

and, in the case of Deuel, to:

2208 Virginia Place

Atlanta, Georgia 30305

or to such other address as either party may later specify by at least ten (10) days’ advance
written notice delivered to the other party in accordance herewith.

7.9 No Waiver. The failure of either party to enforce any provision of this Agreement shall
not be construed as a waiver of that provision, nor prevent that party thereafter from subsequently
enforcing that provision of any other provision of this Agreement.

 

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7.10 Legal Fees and Expenses. In the event of any disputes under this Agreement, each party
shall be responsible for her or its own legal fees and expenses that may be incurred in resolving
such dispute.

7.11 Counterparts. This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the same instrument.

7.12 Omnibus 409A Provision. This Agreement is intended to be exempt from treatment as
deferred compensation under Section 409A of the Internal Revenue Code (the “Code”) and shall be construed and interpreted in
accordance therewith. All rights to payments under this Agreement shall be treated as rights to
receive a series of separate payments to the fullest extent permitted by Section 409A of the Code.
Notwithstanding the preceding, the Company shall not be liable to Deuel or any other person if the
Internal Revenue Service or any court or other authority having jurisdiction over such matter
determines for any reason that any payment under this Agreement is subject to taxes, penalties or
interest as a result of failing to comply with Section 409A of the Code.

Notwithstanding any of the provisions of this Agreement, if Deuel is a “specified employee”
(within the meaning of Section 409A of the Code), and any payments hereunder are not otherwise
exempt from Section 409A of the Code, then, to the extent necessary to comply with Section 409A of
the Code, no payments may be made hereunder before the date which is six months after the date of
Deuel’s “separation from service” within the meaning of Section 409A of the Code or, if earlier the
date of Deuel’s death. Because the amounts payable hereunder will be made in all events no later
than the 15th day of the third month following the end of (i) the calendar year or (ii)
the fiscal year of the Company in which Deuel terminates employment, whichever is later, then all
amounts payable hereunder should be exempt from Section 409A of the Code as a short-term deferral.
Consequently, this “specified employee” six-month delay provision will only be applicable if it is
subsequently determined that the amounts to be paid pursuant to this Agreement are not exempt from
Section 409A of the Code. For purposes hereof, termination of employment shall be read to mean a
“separation from service” within the meaning of Section 409A of the Code where it is reasonably
anticipated that no further services would be performed after such date or that the level of bona
fide services Deuel would perform after that date (whether as an employee or an independent
contractor) would permanently decrease to no more than 20 percent of the average level of bona fide
services performed over the immediately preceding 36-month period.

 

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

	 	 	 	 	 
	 	 	/s/ Terri Deuel
	 	 	 
	 	 	Terri Deuel
	 
	 	 	 	 
	 	 	EasyLink Services International Corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Thomas J. Stallings
	 

	 	 	 	 
	 

	 	 	 	Name: Thomas J. Stallings
	 

	 	 	 	Title: Chief Executive Officer

 

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EXHIBIT A

2008 Compensation Plan

Ms. Terri Deuel, Vice President of Product Development and Support

SALARY

The Company shall pay you a salary of $200,000 annually. The Company, through the
Compensation Committee of the Board of Directors, will review your salary annually and, in its sole
discretion, may increase but not decrease your salary as appropriate, subject to the approval of
the Compensation Committee of the Board of Directors.

ANNUAL CASH INCENTIVE

You shall have the opportunity to earn a cash incentive based on the Company’s and your
personal performance during Fiscal 2008. The Company, through the Compensation Committee of the
Board of Directors, retains the right to adjust your cash incentive plan at any time as business
circumstances or other factors reasonably dictate.

Your targeted annual incentive compensation (“Bonus”) for Fiscal 2008 is $100,000. Payment of
2008 incentive compensation will be at fiscal year end (but no later than as set forth in your
Employment Agreement) and will based on a combination of 25% payout on personal objectives and 75%
payout on Company objectives as noted below:

COMPANY OBJECTIVES

	 	1.	 	Total revenue of $[XXXXXXXX] — half of the executive’s Company Bonus will be
earned if the Company achieves a minimum of $[XXXXXXXX] in total revenue for FY 2008.
Bonus payout starts at 91% of plan and is linear for performance to 100%; thereafter
the executive will be eligible to receive an additional 1% for each additional 10% in
revenue above the plan.

	 	2.	 	Operating income of $[XXXXXXXX] — the other half of the executive’s Company
based performance bonus will be earned if the Company achieves a minimum of $[XXXXXXXX]
in operating income for FY 2008. Bonus payout starts at 91% of plan and is linear for
performance to 100% thereafter the executive will be eligible to receive an additional
1% for each additional 10% in operating income above the plan.

PERSONAL OBJECTIVES

To be determined.

Payment of 2008 Bonus will be at fiscal year end and will be determined by the Compensation
Committee of the Board of Directors prior to the end of Fiscal 2008.

 

 

 

LONG TERM STOCK INCENTIVE

On execution of your Original Agreement, you received a one time grant of 20,000 restricted
shares of the Company’s class A common stock to vest monthly over three years. The restricted stock
grant was granted pursuant to the terms of, and evidenced by, a written agreement entered into
between you and the Company.

 

 

 

EXHIBIT B

Benefits

You will be eligible to participate in benefit plans and/or programs which the Company may
offer to its employees or executives from time to time. Your eligibility for such plans and/or
programs will be determined by the terms of such plans and/or programs. Among the benefits
currently offered by the Company to its employees are medical and dental insurance, a stock option
plan and a 401k plan, which are described below. Please be advised, however, that the Company
reserves the right to amend, modify, or terminate any of its benefits plans and/or programs at any
time in its sole discretion. You will be eligible for three weeks vacation in accordance with the
Company’s accrual policy.

Medical Insurance. Currently, the Company offers its employees medical insurance. The
Company currently contributes a portion of your premium for employee coverage, and you will be
responsible for contributing for additional family coverage through pre-tax payroll deduction.

Dental Insurance. The Company presently offers its employees dental insurance. The
Company currently contributes a portion of your premium for employee coverage, and you will be
responsible for contributing for additional family coverage through pre-tax payroll deduction.

401k Plan. The Company presently offers its employees a 401k plan with a Company match to
be determined annually by the Compensation Committee of the Board of Directors. You may elect to
contribute pre-tax deferrals through payroll deduction pursuant to the terms of the 401k plan.mxm8k0408-exh101.htm

    
      
 Exhibit
10.1

      

      2008
BONUS CRITERIA FOR

      MAXXAM
CHIEF EXECUTIVE OFFICER

      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 Charles E. Hurwitz (“CEH”), Chairman of the Board and Chief
Executive Officer 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 CEH’s
2008 base salary from the Company of $835,000.

      

      PART
I: BONUS CRITERIA RELATING TO

      THE
2008 FISCAL YEAR

      

      
        	
                A.

              	
                Improved
      2008 Consolidated Financial Results

              

      

      

      CEH 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 $1,500,000.  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(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”), including the related tax effects(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”), including the related
tax effects the related tax effects.

      

      B.           Business
Development Projects

      

      CEH will
earn a bonus for 2008 services, not to exceed an aggregate of 100% of base
salary, based on the following criteria: 331⁄3% 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
331⁄3% 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 $10 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
      developmentproject 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 and the execution by all parties to such undertaking
      of a binding written agreement in respect
  thereto.

              

      

      

      
        	
                (2)  

              	
                The
      undertaking by the Company and/or an affiliate thereof of a new business
      opportunity wherein a written commitment is made to invest $10 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 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, gaming or other entertainment operations of SHRP, or any related
      joint venture or other arrangment.  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 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.

              

      

      

      
        	
                (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

      

      CEH 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

      

      CEH 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 $1,000,000.  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.

      

      E.           Achievement
of Divisional/Subsidiary Business Plans

      

      CEH will
earn a bonus equal to 331⁄3% of base salary for achievement of the 2008 business
plan with respect to each of (i) the Company’s real estate operations, (ii) Sam
Houston Race Park, Ltd.’s operations, or (iii) the Company’s corporate
operations.  The maximum bonus under this subsection shall be equal to
100% of base salary.  The 2008 business plan for this purpose shall be
the 2008 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 2008 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
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 CEH using the salary in effect during
  2009.

              

      

      

      
        	
                 
      

              	
                [Signature
      page follows]

              

      

      

      
 

      
        
           

        

        
          
          

        

         

      

      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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