2005 BONUS CRITERIA FOR MAXXAM PRESIDENT AND CHIEF FINANCIAL OFFICER UNDER THE MAXXAM 1994 EXECUTIVE BONUS PLAN

Exhibit 10.3

2005 BONUS CRITERIA FOR

MAXXAM PRESIDENT AND CHIEF FINANCIAL 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 2005, established the following specific targets, criteria, and bonus opportunities for Paul N. Schwartz ("PNS"), President and Chief Financial Officer of the Company, relating to the 2005 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 2006 fiscal year. It is anticipated that additional criteria will be established relating to the 2006 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.

PART I: BONUS CRITERIA RELATING TO

THE 2005 FISCAL YEAR

PNS will earn a bonus equal to 1% of his 2005 base salary ($6,000.00) for each full $1 million in improvement (representing a decrease in net loss or an increase in net income) in 2005 Consolidated Financial Results as compared to the 2004 Consolidated Financial Results not to exceed an aggregate of 150% of base salary ($900,000.00). The 2005 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 2005 results. The 2004 Consolidated Financial Results for this purpose shall be deemed to be the amount of net -income (or loss) shown in the Company's audited financial statements as of December 31, 2004 as the same are published in the Company's Annual Report on Form 10-K for 2004.

PNS will earn a bonus for 2005 services, not to exceed an aggregate of 100% of his 2005 base salary ($600,000.00), based on the following criteria: 25% of base salary ($150,000.00) 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 25% of the base salary shall be earned as a bonus for each such project completed, subject to the overall limitation of 100% of 2005 base salary for all criteria under this section.