Document:

mxm0408-exh102.htm

    
  

    Exhibit
10.2

    

    2008
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 28th day of
March 2008 established the following specific targets, criteria, and bonus
opportunities for Shawn M. Hurwitz (“SMH”), Co-Vice Chairman  of the
Board and President 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 SMH’s
2008 base salary from the Company of $525,000.

    

    PART
I: BONUS CRITERIA RELATING TO

    THE
2008 FISCAL YEAR

    

    
      	
              A.

            	
              Improved
      2008 Consolidated Financial Results

            

    

    

    SMH 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 $945,000.  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  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

    

    SMH 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 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 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 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 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

    

    SMH 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

    

    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 2008 Earnings per Share as compared to the
Company’s 2007 Earnings per Share, not to exceed $630,000.  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

    

    SMH will
earn a bonus equal to 50% of base salary for achievement of the 2008 business
plan with respect to each of (i) the Company’s real estate operations, and (ii)
Sam Houston Race Park, Ltd.’s 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 SMH 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. Rosenthalmxm0408-exh103.htm

    
 

    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: 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 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]

     

    
 

    
      
         

      

      
        
        

      

       

    

    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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