SCHEDULE 14A INFORMATION
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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)
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Rose Foundation
As You Sow Foundation
6008 College Ave, Ste. 10
Oakland, CA 94618
(510) 658-0702
A MESSAGE TO MAXXAM INC.
COMMON STOCK SHAREHOLDERS
May 5, 1997
<Accompanying photo with text "You Are Here" cannot be reprinted>
Dear MAXXAM, INC. Shareholder:
We write to ask you to VOTE FOR TWO PROPOSALS ON THE BLUE
CARD AT MAXXAM INC.'s May 22nd, 1997 Annual Meeting of
Shareholders. Proposal # 1 is a slate of independent common stock
Directors. Proposal # 2 urges the Company to become a willing
seller
of its troubled Headwaters Forest area properties.
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COMMON STOCK HOLDERS NEED
STRONG INDEPENDENT DIRECTORS
VOTE FOR PROPOSAL #1
THE INDEPENDENT COMMON STOCK DIRECTORS
We believe that common stock shareholders could be receiving
getter returns on their MAXXAM Inc. investment. MAXXAM INC.
posted a $7.3 million loss in 1992, over $600 million in losses
in 1993, and over $122 million in losses in 1994. Although
MAXXAM INC. posted net income of $57.5 million in 1995 and $22.9
million in 1996, in the final quarter, 1996, our Company lost
money again -- $5.1 million in just 3 months.
In a lawsuit seeking damages in excess of $250 million from
MAXXAM president and CEO Charles Hurwitz, the FDIC alleges that
Mr. Hurwitz engaged in a "pattern of deceptive financial reporting
and balance sheet manipulation." (FDIC v. Hurwitz,
filed August 2, 1995 in the U.S. District Court, Texas).
While no determination as to the merits of the litigation
has been made, and the final judgment will be determined by a
court of law, our Company faces additional $100s of millions,
possibly billions, in potential liability in two other legal
actions based on MAXXAM and CEO Charles Hurwitz' alleged role in
the failure of the savings and loan, United Savings Association
of Texas. The federal Office of Thrift Supervision has filed at
least $500 million dollars in claims. A related false claims
suit has also been filed with potential exposure of $4 billion.
Last month, Mr. Hurwitz was found by a Delaware court to
have engaged in self-dealing in connection with loans that were
unfair to our Company. Although actual damages have not yet been
awarded, the plaintiffs -- MAXXAM INC. shareholders -- are
seeking $27 million. (In re: MAXXAM Inc./Federated Development
Shareholders Litigation: Delaware Court of Chancery, 1997)
Common shareholders need strong Board representation to
protect our investment. Under the provisions of MAXXAM INC.'s
Certificate of Incorporation, two of our Directors are elected by
common stock holders only. Both Judge Newsom and Mr. Baum are
committed to protecting the interests of MAXXAM INC. common
stockholders.
VOTE FOR OUR INDEPENDENT DIRECTOR NOMINEES
WILLIAM A. NEWSOM is a retired Associate Justice of the
California Court of Appeal. 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 MA and JD degrees from Stanford U.
RICHARD D. BAUM is President and Chief Executive Officer of Care
West Insurance Co., and Trustee of the San Francisco Culinary,
Bartenders and Service Employees Pension Trust Fund. He has
served as Chief Deputy Insurance Commissioner for the State of
California; Trustee of Executive Life Insurance Co.; and Senior
V.P. for Administration of Amfac, Inc. He holds an M.A. from the
State University of New York at Albany and a J.D. from Geo.
Washington U.
COMMON STOCKHOLDERS CAN VOTE FOR
THESE INDEPENDENT DIRECTORS ONLY ON THE BLUE CARD
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VOTE FOR PROPOSAL #2:
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.
COMMON STOCK HOLDERS DON'T NEED
THE HEADWATERS PROBLEM
MAXXAM INC. purchased approximately 200,000 acres of redwood
timber holdings in Northern California 10 years ago. For the
past decade, some of these timberlands have been a source of
expensive litigation, regulatory scrutiny, and negative public
relations. We believe the Headwaters Forest controversy can
waste Company resources, depress stock values, reduce access to
credit, and threaten MAXXAM INC.'s long-term success.
On February 10, 1996, the California Public Employee
Retirement System, MAXXAM INC.'s second largest institutional
investor with 318,400 shares, warned management not to log the
company's old-growth holdings or it would risk being "perceived
as a pariah (in the market), unable to easily raise new capital
when needed."
Our proposal asks management to consider the sale of the six
groves and surrounding areas which have been the focal point of
all the problems. These Headwaters Forest area holdings consist
of less than 1/3 of our total timberlands in Northern California.
Under this proposal, our company could still conduct commercial
timber operations on the remaining 70%.
Why should MAXXAM sell these Headwaters Forest properties?
Over the past decade, MAXXAM INC.'s Headwaters Forest area
holdings have triggered 14 lawsuits, countless protests and a
recent boycott of old-growth redwood lumber. In 1995, logging
operations in one of Headwaters Forest area's six old-growth
groves were blocked by federal court order -- costing $1,110,344
in plaintiffs' attorneys' fees above and beyond fees paid
directly by MAXXAM INC. 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 September, 1996, MAXXAM INC. entered into (but has not
yet consummated) an agreement with the federal government and
State of California to sell 5,625 acres of the Headwaters Forest
area. We support this limited deal as a first step. But the
deal provides no assurances of regulatory approval to log the
balance of our Company's holdings. The deal will not stop the
parade of environmental lawsuits, nor does it address the
potential savings and loan liabilities which are the focus of
$750 million in federal government claims
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against our Company and CEO Charles Hurwitz, and an additional
$1.6 billion in private claims filed in federal court.
Despite this provisional agreement, the Company's credit
rating has deteriorated. On October 24, 1996, Standard and
Poor's lowered its rating on certain MAXXAM bonds further below
investment grade from B+ to B, citing obstacles facing the
pending government land swap for part of the Headwaters Forest
area in their rationale.
We recognize that even if this proposal is adopted, there
can be no assurance that a purchaser will be willing to acquire
the Headwaters Forest area. Nonetheless, in our view, MAXXAM can
settle all of its potential financial liabilities in the pending
savings and loan-related cases by transferring portions of the
Headwaters Forest area to the government agencies asserting the
claims. Some people call this a debt-for-nature settlement. No
government agency has agreed to this type of settlement, and
there can be no assurance that they will in the future. However,
the FDIC has said publicly that it would be willing to consider a
debt-for-nature settlement of its $250 million in claims. While
the Company could lose the ability to realize logging income from
these properties, we believe that the risk of an adverse judgment
outweighs these concerns. We believe a debt-for-nature
settlement is in the shareholders' best interest, as it could
resolve hundreds of millions, if not billions of dollars in
potential liabilities facing MAXXAM INC.
VOTE FOR PROPOSALS #1 and #2.
VOTE THE BLUE PROXY CARD TO PROTECT THE VALUE OF YOUR
SHARES. The BLUE card is the only card where you can cast your
vote for the independent common stock directors! AND REMEMBER,
ONLY YOUR LATEST DATED PROXY COUNTS.
We hope to contact you soon to request your support and
answer any question you might have about our proposals. Of
course, please feel free to call us at (510) 658-0702. Thank you
for your consideration.
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 Rose Foundation for Communities and
Foundation the Environment
The following may be deemed to be participants in this
solicitation: As You Sow Foundation, owner of 100 shares of
Maxxam Inc. common stock, the Rose Foundation for Communities and
the Environment, which does not own any Maxxam Inc. stock, and
Jill Ratner and Thomas W. Little, president and executive
director, respectively, of the Rose Foundation, who own 50 shares
of Maxxam Inc. stock as tenants in common.
For Additional Information
Please do not hesitate to call our Proxy Solicitor
Garland Associates, Inc.,@ (800) 455-6034
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