2009 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 31st day of March 2009 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 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 CEH’s 2009 base salary from the Company of $835,000.

CEH 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 $1,500,000.  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

CEH 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.