This excerpt taken from the MXM 8-K filed Apr 5, 2007.
Item 1.01. Entry Into a Material Definitive Agreement.
On March 30, 2007, the Registrant's Section 162(m) Compensation Committee (the "Section 162(m) Committee") adopted the 2007 bonus criteria (the "2007 Bonus Criteria") under the MAXXAM 1994 Executive Bonus Plan (the "Executive Plan") for eligible participants. For 2007, these persons are Charles E. Hurwitz, the Registrant's Chairman, President and Chief Executive Officer, and J. Kent Friedman, the Registrant's Co-Vice Chairman and General Counsel. Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to a public company for any compensation over $1.0 million paid to the chief executive officer and the four other most highly compensated officers of such company. Performance-based compensation is not subject to the deduction limit if certain requirements are met. The Executive Plan is designed to permit the award of bonuses meeting these requirements.
The 2007 Bonus Criteria in respect of Mr. Hurwitz were based upon improved consolidated financial results, the undertaking by the Registrant's consolidated business units of specified business opportunities, certain favorable developments in respect of the Registrant's racing operations, completion of an Extraordinary Transaction (as defined in the Executive Plan), improved earnings per share, and achievement by the Registrant's consolidated business and corporate segments of their 2007 business plans. Mr. Hurwitz earns various specified amounts if such criteria are satisfied, subject to exercise by the Section 162(m) Committee of its "negative discretion" (the absolute discretion of the 162(m) Committee to reduce the actual bonus payable as the result of any of the criteria being achieved). The 2007 Bonus Criteria for Mr. Friedman were based upon similar categories, although certain categories were narrowed or eliminated entirely to reflect his specific duties. Awards to Mr. Friedman are also subject to the negative discretion of the 162(m) Committee. This description is qualified in its entirety by the actual provisions of the 2007 Bonus Criteria for Messrs. Hurwitz and Friedman, copies of which are attached hereto as Exhibits 10.1 and 10.2, respectively, and incorporated herein by reference.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.