SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Check the appropriate box:
[ X ] Preliminary Proxy Statement
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by Rule 14a-6(e)(2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S)
240.14a-12
MAXXAM INC.
(Name of Registrant as Specified in Its Charter)
AS YOU SOW FOUNDATION, JILL RATNER, THOMAS W. LITTLE
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required
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6(i)(1) and 0-11.
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applies:________________________________________________________
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applies:________________________________________________________
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computed pursuant to Exchange Act Rule 0-11 (Set forth the amount
on which the filing fee is calculated and state how it was
determined):____________________________________________________
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REVISED PRELIMINARY COPY
As You Sow Foundation Rose Foundation for Communities
330 19th Street, Box 71 and the Environment
Oakland, California 94612 6008 College Avenue, Suite 10
Oakland, California 94618
A Message to Fellow MAXXAM Corporation Shareholders
<Accompanying photo with text You Are Here cannot be reprinted>
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PROXY STATEMENT
OF
AS YOU SOW FOUNDATION, JILL RATNER
AND THOMAS W. LITTLE IN CONNECTION WITH
A SHAREHOLDER SOLICITATION REGARDING THE
ELECTION OF TWO INDEPENDENT COMMON DIRECTORS
AND
A PROPOSAL THAT MAXXAM INC. BECOME A
WILLING SELLER OF ITS HEADWATER FOREST
April __, 1997
As You Sow Foundation, Jill Ratner and Thomas W. Little
(the "Proponents") furnish this Proxy Statement in connection
with the solicitation of proxies for use at the Annual Meeting
(the "Annual Meeting") of Shareholders of MAXXAM Inc. ("MAXXAM"
or the "Company") to be held on _______, May __, 1997, __:__ a.m.
at [The Houstonian Hotel & Conference Center, 1111 North Post Oak
Lane, Houston, Texas] or at any adjournment thereof. Copies of
the Proxy Statement and form of proxy are being mailed by the
Proponents to shareholders on or about April __, 1997.
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Dear Fellow MAXXAM Shareholder:
We believe that long-standing controversies regarding
Headwaters Forest and MAXXAM's forest management policies depress
the value of the shareholders' investment, severely impair
MAXXAM"s ability to conduct business, threaten MAXXAM's long-term
financial success and are, therefore, of profound concern to all
of us as shareholders.
We believe that resolution of the Headwaters Forest
controversy and other pressing Company matters require the
participation of truly independent Common Directors, committed to
representing the long term interests of MAXXAM's common stock
holders and to increasing shareholder value.
To this end, we propose the following:
1. Electing William A. Newsom and Richard D. Baum, both
independent nominees, to serve on our Board as directors chosen
by the holders of Common Stock. Mr. Newsom is president of
Newsom Associates, trust administrator of the Gordon Getty Family
Trust, and a retired Associate Justice of the California Court of
Appeal. Mr. Baum is president and chief executive officer of
Care West Insurance Co. and was chief deputy insurance
commissioner of the State of California and trustee of Executive
Life Insurance Co. in rehabilitation and liquidation.
2. Adopting the following resolution (the "Willing
Seller Proposal"):
RESOLVED: The shareholders request that MAXXAM
become a "willing seller" of its Headwaters Forest
properties, seeking to sell or trade all Company
properties within the 60,000 acre Headwaters Forest
area in northern California, to a government agency
or conservation organization, for appropriate
consideration, which may include relief from potential
financial liabilities related to pending litigation
(sometimes called debt-for-nature), in a manner
consistent with sound tax planning.
We urge all shareholders to attend the meeting in
person. If you are unable to attend in person and wish to have
your shares voted, please sign and date the enclosed blue proxy
card, and return it in the postpaid envelope as promptly as
possible. By returning the enclosed proxy, shareholders will be
able to vote on [the shareholder resolution described
above]/[all matters described in Management's proxy statement,
including the election of [all but two] of the [total number of]
nominees proposed by the Company.
PLEASE SIGN, DATE AND RETURN TODAY THE ENCLOSED BLUE
PROXY CARD TO:
ROSE FOUNDATION FOR COMMUNITIES AND THE ENVIRONMENT
6008 College Avenue, Suite 10
Oakland, California 94618
VOTING RIGHTS
The Company's Board of Directors has fixed the close of
business on March __, 1997 as the record date for determining the
shareholders of the Company entitled to notice of and to vote at
the Annual Meeting and any adjournment thereof. Only holders of
record of the __________ shares of Common Stock (the "Common
Stock") and the _______ shares of Class A $.05 Non-Cumulative
Participating Convertible Preferred Stock (the "Preferred Stock")
are entitled to vote at the Annual Meeting. Each share of Common
Stock is entitled to one vote, and each share of Preferred Stock
is entitled to ten votes on such matters as may properly come
before the Annual Meeting or any adjournments thereof. The
holders of Common Stock, voting separately as a class, will also
be entitled to elect two members of the Company's Board of
Directors (the "Common Directors").
ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation
currently provides for three classes of directors having
staggered terms of office, with directors of each class to be
elected by the holders of the Company's Common Stock and
Preferred Stock, voting together as a single class, for terms of
three years and until their respective successors have been duly
elected and qualified. The Company's Restated Certificate of
Incorporation also provides that so long as any shares of the
Preferred Stock are outstanding, the holders of Common Stock,
voting as a class separately from the holders of any other class
or series of stock, shall be entitled to elect, for terms of one
year, at each annual meeting, the greater of (i) two directors,
or (ii) directors (rounded up to the nearest whole number) to be
in office subsequent to such annual meeting.
We have nominated William A. Newsom and Richard D. Baum
to serve on the Board of Directors of MAXXAM Inc. as the
directors chosen by the holders of Common Stock, because we
believe that MAXXAM needs effective independent voices at this
time. We believe that Messrs. Newsom and Baum are such
independent candidates, who are not affiliated with (and do not
have the support of) MAXXAM Management or the Board of Directors.
We have nominated them because of their experience and judgment,
as well as their commitment to increasing shareholder value.
William A. Newsom, age 63, is a retired Associate
Justice of the California Court of Appeal and president of Newsom
Associates, 3717 Buchanan Street, Second Floor, San Francisco,
California 94123. He is also trust administrator of the Gordon
Getty Family Trust, a trustee of Ronald Family Trust A, and a
director of the Conservation Corporation, Johannesburg, South
Africa. He holds a Master of Arts degree and Juris Doctor
degree from Stanford University and is the beneficial owner of
100 shares of MAXXAM Inc. Common Stock, purchased on March 17,
1997 and held in street name.
Richard D. Baum, age 50, is president and chief
executive officer of Care West Insurance Company, 4020 Sierra
College Boulevard, Rocklin, California 95677, and a trustee of
the San Francisco Culinary, Bartenders and Service Employees
Pension Trust Fund, Welfare Fund, Education Fund and Legal Fund.
He has served as chief deputy insurance commissioner for the
State of California and senior vice president for Administration
of Amfac, Inc., supervising transition activities in connection
with merger of Amfac, Inc. into JMB Realty Corporation. He
holds a Master of Arts degree from the State University of New
York at Albany and the degree of Juris Doctor from George
Washington University, Washington, DC. Mr. Baum is the
beneficial owner of 50 shares of MAXXAM Inc. Common Stock,
purchased on March 17, 1997 and held in street name.
Pages ___-___ of Management's 1997 Proxy Statement
(incorporated herein by reference) set forth the names and ages
of the other nominees and describes the principal business
experience of each, as well as the year each first held Company
office and/or served as a director, the number of shares each
beneficially owns, and the percentage of outstanding shares owned
by each nominee. Information is also provided concerning the
committees of the Board.
Messrs. Newsom and Baum should be chosen by the holders
of Common Stock as our Common Directors in lieu of the nominees
presented in the Company's Proxy Statement for these two
positions. For the reasons set forth more fully below, we
believe that our Company is at a critical juncture and that the
holders of Common Stock need independent, effective voices on
the Board of Directors and that Messrs. Newsom and Baum are well
suited to the task of enhancing shareholder value.
We therefore ask the holders of MAXXAM Common Stock to
vote FOR William A. Newsom and FOR Richard D. Baum to serve on
the Board of Directors.
PROPOSAL OFFERED BY THE PROPONENTS
We further propose that the shareholders of MAXXAM Inc.
adopt the following resolution:
"RESOLVED: The shareholders request that MAXXAM
become a "willing seller" of its Headwaters Forest
properties, seeking to sell or trade all Company
properties within the 60,000 acre Headwaters Forest
area in northern California, to a government agency
or conservation organization, for appropriate
consideration, which may include relief from potential
financial liabilities related to pending litigation
(sometimes called debt-for-nature), in a manner
consistent with sound tax planning."
The 60,000 acres known as the greater Headwaters Forest,
owned by MAXXAM subsidiary Pacific Lumber, contain the last
substantial stands of ancient redwood in private hands anywhere
in the world. For more than a decade, Headwaters' cathedral-like
groves have attracted nationwide conservationist concern and
action.
The United States Fish and Wildlife Service has
designated approximately 33,000 acres on Company lands in
Headwaters Forest as critical habitat for the marbled murrelet, a
federally listed threatened seabird. Coho salmon spawn in
streams throughout the greater Headwaters Forest; National Marine
Fisheries Service is considering listing these salmon stocks as
threatened; other California Coho were listed in October 1996.
This listing may have a substantial impact on the commercial
value of these holdings.
Management of Headwaters Forest has been a source of
conflict, protest and litigation since the Company acquired
Pacific Lumber in 1985. Since 1988, environmentalists have
brought 14 separate state and federal lawsuits challenging
Pacific Lumber plans to log old-growth habitat. In 1995, logging
operations in one of Headwaters Forest's six old-growth groves
were blocked by federal court order after protracted litigation,
costing $1,110,344 in plaintiffs' attorneys' fees above and
beyond fees paid directly by MAXXAM and its subsidiary, Pacific
Lumber. Although the Company persisted in litigating this
costly case all the way to the U.S. Supreme Court, the injunction
still stands, rendering commercial value of this prime grove
highly uncertain.
In February 1997, plans to log within the 60,000 acre
greater Headwaters Forest sparked a nationwide boycott of
old-growth redwood.
State and federal laws already restrict the Company's
ability to log in this area and limit its ability to maximize
financial return from the greater Headwaters Forest. The Company
has sued both governments alleging taking of property without
just compensation. However, the outcome of these lawsuits is
hard to predict.
On September 28, 1996, the Company agreed to stay those
lawsuits and trade two of the Headwaters six ancient groves to
the Federal Government in exchange for other property, but many
factors threaten this agreement, including uncertainty that the
government will approve Company logging plans for the rest of the
60,000 acre Headwaters area, and the near certainty that any plan
for logging in any of Headwaters' ancient groves will be
challenged in court.
These uncertainties may depress Company bond ratings. On
October 24,1996, Standard and Poor's lowered its rating on
certain Company bonds from B+ to B. According to press reports,
relevant factors included obstacles facing the pending government
land swap for part of Headwaters Forest.
Conservationists and government officials have expressed
interest in preserving and protecting all six ancient groves of
Headwaters Forest and other areas within the 60,000 acres. We
believe that selling or trading all 60,000 acres of the
Headwaters Forest is a necessary step in developing a plan for
the Company's long-term sustainable production of high-quality
timber with a minimum of regulatory uncertainty and public
controversy.
We believe that it is time for the Company to end the
damaging Headwaters Forest controversy by selling or trading all
60,000 acres of Headwaters Forest to a Government agency or non-
profit conservation organization for appropriate consideration.
That consideration may include cash as well as property trades
and should be structured to be consistent with sound tax
planning.
An additional form of consideration suggested by many
conservationists is sometimes called a debt-for-nature
settlement, in which the Federal Government would take title to
some portion of Headwaters Forest in exchange for relief from
potential financial liabilities related to pending litigation.
MAXXAM faces potential liabilities in three separate legal
proceedings based on the failure and $1.6 billion bailout of
United Savings Association of Texas, an institution MAXXAM is
alleged to have controlled.
-- An action by the United States Office of Thrift
Supervision (OTS) seeks restitution for $485,000,000 in losses
plus $839,000 in penalties. MAXXAM is a Respondent in this
action and has agreed to indemnify several other Respondents,
including Company president and CEO Charles Hurwitz, with
significant resulting exposure for restitution and penalties.
Chillingly, the Office of Thrift Supervision can issue
pre-judgment asset preservation orders freezing MAXXAM's assets,
rendering credit difficult to obtain and inhibiting daily
operations.
-- The Federal Deposit Insurance Corporation (FDIC)
filed a separate action seeking $250,000,000 in damages from
MAXXAM president and Chief Executive Officer Charles Hurwitz,
which MAXXAM may be forced to indemnify. Among other things, the
FDIC alleges that Mr. Hurwitz "engaged in a pattern of deceptive
financial reporting and balance sheet manipulation." Complaint,
FDIC v. Hurwitz, paragraph 16, filed August 2, 1995 in United
States District Court for the Southern District of Texas).
-- A related False Claims Act lawsuit has been filed
against MAXXAM for Treasury losses related to the United States
Savings Association of Texas bailout in which treble damages may
be awarded, raising potential liability in that suit to more than
$4 billion.
The FDIC and False Claims Act Relator have said they
will consider settling claims for some portion of Company forest
land within the 60,000 acre Headwaters Forest. OTS also may be
willing to settle its financial claims in this manner. MAXXAM
may also gain tax benefits by donating part of Headwaters Forest
to a Government agency or non-profit conservation organization in
conjunction with settlement of these claims. We believe
independent director participation in oversight of these
negotiations is vital to ensure that the best interests of the
shareholders are protected.
We believe that a debt-for-nature settlement of the
Company's potential savings-and-loan-related liabilities, as part
of a comprehensive package of consideration for Headwaters
Forest, can protect the Company from significant potential
liability while putting an end to the long-standing Headwaters
Forest controversy and its profound negative impacts on the
Company.
PLEASE VOTE "FOR" THIS PROPOSAL THAT MAXXAM BECOME A
WILLING SELLER OF ITS HEADWATERS FOREST.
VOTING PROCEDURES
We have asked the Company to include in its proxy
statement and proxy card the names of Messrs. Newsom and Baum,
our nominees for Common Director, as well as the Willing Seller
Proposal. To date, however, we have received no response to
this request. Thus, we intend to circulate our own proxy card
once management releases the information necessary for us to
prepare such a card (names of nominees for election, etc.). That
card will be accompanied by a revised proxy statement.
The presence, in person or by proxy, of the holders of
shares of the Company's capital stock entitled to cast a majority
of the votes entitled to be cast at the Annual Meeting is
required to constitute a quorum for the transaction of business
at the Annual Meeting. A plurality of the votes present, in
person or by proxy, is necessary for the election of directors.
Adoption of the Willing Seller Proposal will require the
affirmative vote of a majority of the votes present, in person or
by proxy. The Willing Seller Proposal is advisory in nature and
cannot be implemented without Board approval. Under Delaware
law, abstentions and broker non-votes will have no effect on the
outcome of elections of directors. Abstentions and broker non-
votes are counted for the purposes of determining the presence or
absence of a quorum for the transaction of business. Broker non-
votes will be excluded from the number of shares present and
entitled to vote thereon.
Unless otherwise directed on the proxy card, as more
fully described below, we will vote FOR Mr. Newsom and FOR Mr.
Baum to serve as the Common Directors chosen by the holders of
Common Stock. We will also vote FOR the other nominees to the
Board of Directors, except for those candidates for Common
Director nominated by the Company (collectively the "Non-Common
Director Nominees"). We will also vote FOR the Willing Seller
Proposal described herein.
The accompanying blue Annual Meeting proxy card will be
voted at the Annual Meeting in accordance with your instructions
on the card. You may vote FOR the election of Mr. Newsom, Mr.
Baum and each of the Non-Common Director Nominees as Directors of
the Company, or you may withhold authority to vote for the
election of Mr. Newsom, Mr. Baum and all the Non-Common Director
Nominees by marking the proper box on the blue Annual Meeting
proxy card. You may also withhold your vote from Mr. Newsom, Mr.
Baum and/or any one or more of the Non-Common Director Nominees
by writing the name of such nominee(s) in the space provided on
the blue Annual Meeting proxy card. As required by Reg. Sec.
240.14a-4(d)(iv) of the Proxy Rules, we hereby state that there
is no assurance that the registrant's nominees will serve if
elected with any of the soliciting parties' nominees. However,
we have no reason to believe that they will not serve. IF NO
MARKING IS MADE, YOU WILL BE DEEMED TO HAVE GIVEN A DIRECTION TO
VOTE THE SHARES REPRESENTED BY THE BLUE PROXY CARD FOR THE
ELECTION OF MR. NEWSOM AND MR. BAUM AND ALL THE NON-COMMON
DIRECTOR NOMINEES, AS WELL AS FOR THE WILLING SELLER PROPOSAL,
PROVIDED THAT YOU HAVE SIGNED AND DATED THE PROXY CARD.
REVOCATION RIGHTS
You may revoke a proxy vote any time before the tally by (1)
executing a later proxy card, (2) appearing at the meeting to
vote, or (3) delivering to the proxy holder or the Company's
secretary written notice of revocation prior to the date of the
meeting. The Company"s secretary is Byron L. Wade, and MAXXAM"s
offices are located at 5847 San Felipe, Suite 2600, Houston,
Texas 77057. The mailing address is P.O. Box 572887, Houston,
Texas 77257-2887, telephone (713) 975-7600, fax (713) 267-3703.
We will keep the content of all cards we receive
confidential from everyone except those working directly with us
and our staff until the annual meeting, at which time our cards
must be presented to the company"s tabulator in order to be
counted.
SOLICITATION
The participants in this solicitation are As You Sow
Foundation, which owns 100 shares of MAXXAM Common Stock, and its
staff, as well as The Rose Foundation for Communities & the
Environment (the "Rose Foundation") and its staff. The Rose
Foundation is not an owner of any stock, although its President,
Jill Ratner, and its Executive Director, Thomas W. Little, own 50
shares of MAXXAM Common Stock as tenants in common. In addition,
Ms. Ratner owns 50 shares in her own name. Proxies will be
sought by mail, facsimile, telephone and personal interview. The
Rose Foundation will bear the cost of this solicitation, expected
to be $7000. Both As You Sow Foundation and the Rose Foundation
have engaged in advocacy and public education efforts seeking to
preserve the Headwaters Forest area. The Rose Foundation and its
Headwaters Acquisition and Restoration Trust have solicited
contributions that would be used towards purchasing areas of the
Headwaters Forest that are not acquired by the federal
government, in the event that MAXXAM should decide to make any
such properties available. The Rose Foundation does not plan to
acquire any such properties on its own behalf.
RECORD DATE/SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE
OFFICERS/EXECUTIVE COMPENSATION/ELECTION OF DIRECTORS
Information on these subjects will be contained in
management's upcoming proxy statement.
SHAREHOLDER PROPOSALS FOR 1998 MEETING
Shareholders owning over $1,000 in stock for over one year
have the right to have a proposal included in management's proxy
statement. The deadline to submit such proposals to the Company
is probably December 22, 1997. The exact date will appear in
management;s upcoming statement.
PLEASE VOTE "FOR" THIS PROPOSAL THAT MAXXAM BECOME A WILLING
SELLER OF ITS HEADWATERS FOREST.
Sincerely,
/s/ Conrad MacKerron /s/ Jill Ratner /s/ Thomas W. Little
Conrad MacKerron Jill Ratner Thomas W. Little
Executive Director President Executive Director
As You Sow Foundation Rose Foundation for Communities
and the Environment
