SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ x ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
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)
THE COMMITTEE OF CONCERNED MAXXAM SHAREHOLDERS
- -----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:________________________________________________________
(2) Aggregate number of securities to which transaction
applies:________________________________________________________
(3) Per unit price or other underlying value of transaction
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):____________________________________________________
(4) Proposed maximum aggregate value of transaction:______
(5) Total fee paid:_______________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount previously paid:_______________________________
(2) Form, Schedule or Registration Statement No.:_________
(3) Filing Party:_________________________________________
(4) Date Filed:___________________________________________
<PAGE>
PROXY STATEMENT
OF
THE COMMITTEE OF CONCERNED MAXXAM SHAREHOLDERS
IN CONNECTION WITH
A SHAREHOLDER SOLICITATION REGARDING
THE ELECTION OF TWO INDEPENDENT COMMON DIRECTORS
AND
TWO SHAREHOLDER PROPOSALS RECOMMENDING THAT MAXXAM INC.
(1) PERMIT CUMULATIVE VOTING IN THE ELECTION OF COMMON DIRECTORS
AND
(2) DECLASSIFY ITS BOARD OF DIRECTORS SO THAT
GENERAL DIRECTORS ARE ELECTED ANNUALLY
April __, 1999
The Committee of Concerned Maxxam Shareholders (the
"Committee") furnishes 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 at __ A.M. on Wednesday, May 19, 1999, at
_________________________________, Houston, Texas or at any
postponement or rescheduling thereof. Copies of the Proxy
Statement and form of proxy are being mailed by the Committee to
shareholders on or about April __, 1999.
1
<PAGE>
Dear Fellow Maxxam Shareholder:
The Committee of Concerned Maxxam Shareholders is seeking
your support because the Committee believes that Maxxam is a
company in trouble.
Maxxam reported net losses of $57.2 million in 1998. For
the last five years, Maxxam's stock price has lagged significant
ly behind S&P and NASDAQ indices and, in the Committee's view,
has failed to consolidate any substantial long-term increase in
value. In December 1997 BUSINESS WEEK ranked Maxxam's board of
directors tenth on its list of "The Worst Boards of Directors,"
explaining that Maxxam has a tiny board with little business
experience that was dominated by the CEO (consent of author not
obtained).
The Committee believes that concentration of control in the
hands of Maxxam CEO Charles Hurwitz and a small number of
Maxxam's preferred stockholders may result in policies that
depress the value of common stock and threaten Maxxam's long-term
financial success. The Committee also believes that any
resolution of Maxxam's many problems will require the
participation of truly independent "Common Directors" -- the
directors elected solely by holders of Maxxam common stock -- who
are committed to representing the long-term interests of Maxxam
common stockholders and to increasing the value of Maxxam common
stock.
To this end, the Committee proposes the following:
1. Electing Howard M. Metzenbaum and Abner J. Mikva, both
independent nominees, to serve on Maxxam's board as the two
directors chosen by the holders of common stock.
Howard M. Metzenbaum was a co-founder and former chairman of
the board of American Parking Company of America, which merged
with International Telephone and Telegraph Corp. and became ITT
Consumer Services Corp. He is a former chairman of the latter
company as well as of ComCorp Communications Corp., the newspaper
group, and he served on the board of Dart Group and other
corporations. He also served three terms as a United States
Senator from Ohio.
Abner J. Mikva is currently a visiting professor at the
College of Law at the University of Illinois. He was previously
Counsel to the President of the United States, Chief Judge of the
United States Court of Appeals for the District of Columbia
Circuit and a Member of Congress from Illinois.
2. Adopting two shareholder proposals:
(a) a resolution requesting that the board of directors
provide for cumulative voting in the election of Common Directors
(the "Cumulative Voting Proposal"); and
2
<PAGE>
(b) a resolution requesting that the board of directors
provide for the annual election of
the "General Directors," i.e., those directors who are elected by
the holders of Maxxam common stock and preferred stock, voting
together (the "Declassified Board Proposal").
The members of the Committee of Concerned Maxxam
Shareholders include the Rose Foundation for Communities and the
Environment (the "Rose Foundation"); the United Steelworkers of
America ("USWA"); and Jill Ratner and Thomas Little. For further
discussion of the Committee and its members, see the
"Solicitation" section below.
The Committee urges 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 BLUE proxy card,
shareholders will be able to vote on the nomination of Howard M.
Metzenbaum and Abner J. Mikva to serve as the two Common
Directors, to be elected by the holders of common shares in lieu
of the two individuals nominated by the Company. Shareholders
will also be able to vote on the Cumulative Voting Proposal and
the Declassified Board Proposal.
PLEASE SIGN, DATE AND RETURN TODAY THE ENCLOSED BLUE PROXY
CARD TO:
GEORGESON & COMPANY INC.
Wall Street Plaza
30th Floor
88 Pine Street
New York, N.Y. 10005
VOTING RIGHTS
The Company's board of directors has fixed the close of
business on ________, 1999 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 Common Directors.
3
<PAGE>
ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation current
ly 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 outstand
ing, 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) that number of direc
tors (rounded up to the nearest whole number) to be in office
subsequent to such annual meeting.
The Committee's members have nominated Howard M. Metzenbaum
and Abner J. Mikva to serve on the board of directors of Maxxam
Inc. as the Common Directors to be chosen by the holders of
common stock, because the Committee members believe that Maxxam
needs effective independent voices at this time. Messrs.
Metzenbaum and Mikva were also nominated by the New York State
Common Retirement Fund, which beneficially owns 45,700 shares of
Maxxam common stock, and Alan Kahn, who beneficially owns 50
shares of Maxxam common stock, although neither of these
nominators is a "participant" in the present solicitation under
Item 4 of Reg. 240.101 promulgated pursuant to the Securities
Exchange Act of 1934, as amended. Both nominees have consented
to serve if elected.
The Committee believes that Messrs. Metzenbaum and Mikva
would be the type of independent, effective directors that Maxxam
needs now more than ever. Committee members have nominated them
because of their experience, judgment and integrity, as well as
their commitment to protecting shareholder interests and increas
ing shareholder value.
Howard M. Metzenbaum was co-founder and chairman of the
board of directors of Airport Parking Company of American
("APCOA"), which merged with International Telephone and Tele
graph Corp. and became ITT Consumer Services Corp. He served as
chairman of the board of the latter company, as well as chairman
of the board of ComCorp Communications Corp., the newspaper
group. In addition, he has served on the board of directors of
Dart Group, Inc., Shoppers Warehouse, Trak Auto, Society National
Bank and Capital National Bank. From 1977 until 1995, he served
as a United States Senator from Ohio. He previously served in
the Ohio legislature from 1943 to 1950. Senator Metzenbaum, 81,
is retired, and his address is 398 Oaks Club House Drive, Pompano
Beach, Florida. He does not currently own Maxxam stock.
Abner J. Mikva has a broad range of experience as a lawyer,
an elected representative, a judge and a mediator. He served
five consecutive terms in the Illinois legislature and then
served as a Member of Congress from 1969 to 1973 and again from
1975 until 1979, when he was appointed to be a judge of the
United States Court of Appeals for the District of Columbia
4
<PAGE>
Circuit. He served on that court until 1994, including service
as Chief Judge from 1991 to 1994. He then served as Counsel to
the President of the United States from October 1, 1994 until
November 1, 1995. Judge Mikva, 73, is currently a visiting
professor at the College of Law of the University of Illinois and
a senior fellow at the Institute of Government and Public Affairs
at that University. He also engages in arbitration ad mediation
with JAMS/Endispute, a national dispute resolution firm. His
address is 815 Van Buren Street, Suite 525 (MC-191), Chicago,
Illinois 60607. He is beneficial owner of 50 shares of Maxxam
common stock, purchased on March 17, 1999 and held in street
name.
For the reasons stated more fully in the following section,
the Committee believes that Messrs. Metzenbaum and Mikva should
be chosen by the holders of common stock as our Common Directors
in lieu of Stanley D. Rosenberg and Robert J. Cruikshank, the
nominees presented in the Company's Proxy Statement for these two
positions. The Company's 1999 Proxy Statement (incorporated
herein by reference) sets forth the names and ages of these
nominees and any nominee for General Director 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 outstand
ing shares owned by each nominee. Information is also provided
concerning the committees of the board of directors.
REASONS FOR ELECTING INDEPENDENT DIRECTORS
The Committee believes that Senator Metzenbaum and Judge
Mikva offer precisely the kind of experience and judgment that
holders of Maxxam common stock need to enhance the value of their
Maxxam investment. Senator Metzenbaum has extensive experience
as a businessman and corporate director. Most recently, during
his service on the Dart Group board in 1997 and 1998, he was
actively involved in facilitating a merger that allowed share
holders to realize approximately $160 per share, representing a
premium of over 35% above the highest price in the preceding
year. Dart Group trustee Richard Stone credited Mr. Metzenbaum
and his entrepreneurial skills as playing a key role in
negotiating the best price for shareholders. Similarly, Judge
Mikva has a broad range of experience as a lawyer, elected
representative, judge and mediator, with high-level service in
all three branches of the federal government. The Committee
believes that this experience would be very helpful at a company
that has been surrounded by controversy for years on various
fronts.
The Committee also believes that electing these independent
candidates is important, given the critical juncture at which
Maxxam finds itself today. Maxxam recently received an
extraordinary payment of $380 million in cash and property under
an agreement with the United States and the State of California
that will lead to preservation of certain ancient redwood groves
in the Headwaters Forest area of northern California, which area
is owned by Pacific Lumber Company, a Maxxam subsidiary. The
California legislature has authorized a further expenditure
5
<PAGE>
of $80 million for additional Pacific Lumber properties in the
Headwaters area and has allocated an additional $20 million
toward purchase of even more property contingent upon the
availability of private matching funds.
This infusion of new cash and assets into the Company
provides important opportunities for Maxxam and its shareholders,
but the Committee questions whether, based on past experience,
the current board will use these resources to maximize
shareholder value.
Specifically, allegations of fiduciary lapses have surround
ed Maxxam's CEO and Chairman, Charles Hurwitz. In April 1997 the
Delaware Court of Chancery ruled in a case brought by minority
Maxxam shareholders that Mr. Hurwitz had engaged in self-dealing
in connection with loans that were unfair to the Company.
Following this finding of liability, the case was settled for
approximately $20 million, the plaintiffs having sought $27
million. In its April 1997 ruling for the shareholder plaintiffs
on liability issues, the Delaware Court found that the defen
dants, including Mr. Hurwitz, had failed to show the fairness of
a 1987 loan that Maxxam made to Mr. Hurwitz's private business
trust. The Court also ruled that defendants had failed to
demonstrate the fairness of a 1991 transaction in which Mr.
Hurwitz's trust sold to Maxxam the underlying collateral, and
Maxxam then forgave the loan (In re: Maxxam Inc./Federated
Development Shareholders Litigation).
In addition, Maxxam faces potential liabilities in two
separate legal proceedings based on the failure and subsequent
$1.6 billion bailout of United Savings Association of Texas, a
savings and loan association that Maxxam is alleged to have
controlled.
Mr. Hurwitz is currently defending a $250,000,000 lawsuit
brought by the Federal Deposit Insurance Corporation ("FDIC"),
which alleges that Mr. Hurwitz breached his fiduciary duties in
connection with United Savings Association of Texas, in which
both Maxxam and Mr. Hurwitz held substantial interests. Among
other things, the FDIC charges 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 the United States District Court for the
Southern District of Texas). According to Maxxam's filings with
the Securities and Exchange Commission, Maxxam may have to
indemnify Mr. Hurwitz for any or all restitution ordered or
penalties imposed in this action. No determination as to the
merits of this case has been made at this time, and a final judg
ment will be made in a court of law.
Maxxam and Mr. Hurwitz are also respondents in an action
brought by the Office of Thrift Supervision ("OTS"), an agency of
the United States Department of the Treasury, seeking restitution
for at least $500,000,000 in losses plus $839,000 in penalties.
Maxxam has agreed to indemnify Mr. Hurwitz and several other
respondents in this action, which could result in significant
exposure for restitution and penalties. That case is being
litigated before an administrative law judge. No determination
as to the merits of this case has been made at this
6
<PAGE>
time, and a final judgment will be determined in an appropriate
administrative proceeding (In the Matter of United Savings
Association of Texas).
These suits and related litigation have already been costly
to the Company, which has paid approximately $40,000,000 in
litigation expenses, including Mr. Hurwitz's expenses.
Apart from these controversies, the Committee believes that
recent events also call into question the quality of Maxxam's
management decisions and the board's oversight of management.
In 1997 and 1998 the California Department of Forestry and
Fire Prevention ("CDF") suspended the timber operator license of
Maxxam's Pacific Lumber subsidiary twice in a twelve month
period, based on 128 cited violations of state forest practice
rules. The most recent license suspension lasted six months.
No other major timber company in California has ever been
cited for so many violations in such a limited time or had its
operating license suspended, revoked or withheld. Because of
these repeated violations, Pacific Lumber faces increased regula
tory scrutiny, which the Committee believes will significantly
increase the difficulties and costs associated with environmental
compliance and other aspects of timber operations.
In addition, Maxxam's Kaiser Aluminum Corporation subsidiary
("Kaiser"), 63% of whose outstanding common stock is held by
Maxxam, is embroiled in a serious labor dispute, the longest in
Kaiser's history, and the Committee believes that this dispute
and the associated costs were completely avoidable. As is
discussed more fully in the "Solicitation" section below, workers
represented by the USWA, a participant in this solicitation, went
on strike in September 1998 at five plants operated by Kaiser
Aluminum & Chemical Corporation ("KACC"), which is wholly owned
by Kaiser. In January 1999, the USWA made an unconditional
return-to-work offer that KACC refused, and KACC locked out its
workforce at these five plants. KACC reported losses of $50
million in the fourth quarter of 1998 owing to the strike, and
Kaiser reported a net loss of $38.9 million in that quarter. In
addition, serious accident rates and worker compensation claims
increased at KACC since the strike began. According to the
Occupational Health and Safety Administration ("OSHA") safety
logs, serious workplace injuries increased 138 percent in the
fourth quarter of 1998 over the average at KACC during the first
three quarters of 1998 prior to the labor dispute.
In addition, both Kaiser and Pacific Lumber have experienced
tragic fatalities that the Committee believes could have been
prevented. In October 1997, a 33 year old Kaiser mechanic died
when he was crushed beneath the bucket of a front-end loader he
was repairing. The Washington State Department of Labor and
Industries found Kaiser at fault in the incident, cited Kaiser
for five safety violations, and fined it $35,000. In September
1998, a Pacific Lumber
7
<PAGE>
employee logged a tree into a group of protesters, killing a 24
year old man. Attorneys for the young man's family have publicly
announced that they expect the logging incident to be the subject
of a lawsuit seeking damages.
In the Committee's view, this history does not suggest that
Maxxam is a well-managed company whose affairs are overseen by a
capable, independent board of directors. The Committee believes
that the current problems justify the step of electing truly
independent directors, even if those candidates do not have the
current management's support. The Committee does not believe
that the current board of directors can be relied upon to
exercise the sort of effective oversight that is needed to
adequately protect the interests of Maxxam's holders of common
stock.
THE COMMITTEE THEREFORE ASKS THE HOLDERS OF MAXXAM COMMON
STOCK TO VOTE FOR HOWARD M. METZENBAUM AND ABNER J. MIKVA TO
SERVE ON THE BOARD OF DIRECTORS.
THE CUMULATIVE VOTING PROPOSAL
The Committee further urges that the shareholders of Maxxam
Inc. adopt the following resolution (which is accompanied by the
proponents' "Supporting Statement"), which is sponsored by the
Rose Foundation for Communities and the Environment, As You Sow
Foundation, Nell Minow, John Harrington, Brent Blackwelder, Jill
Ratner and Thomas Little:
"RESOLVED: The shareholders request that the board of
directors take steps to provide for cumulative voting in
the election of those directors elected by holders of
common stock. Cumulative voting means that each holder of
common stock may cast as many votes as equal the number of
shares held, multiplied by the number of common directors
to be elected. A shareholder may cast all such cumulated
votes for a single candidate or split votes between
multiple candidates, as that shareholder sees fit."
SUPPORTING STATEMENT
Cumulative voting allows a significant group of
stockholders to elect a director or directors of its choice
-- safeguarding minority shareholder interests and bringing
independent perspectives to Board decisions.
In our view, cumulative voting for Maxxam's Common
Directors is needed because Maxxam's two-tier stock
structure, with preferred stock outvoting common stock 10-
to-1, allows Maxxam's CEO and his affiliates to effectively
8
<PAGE>
control Board elections and policy based on majority
holding of preferred stock.
We believe that Maxxam suffers from excessive CEO
control of Board affairs. In December 1997, BUSINESS WEEK
named Maxxam's Board the 10th worst in America, citing CEO
domination. We believe that subsequent events demonstrate
an increasing need for a minority shareholder voice on the
Board.
-- Maxxam reported net losses of more than $30 million
in the first nine months of 1998 -- $3.86 per share.
-- Twice in 12 months, California suspended the
operating license of Maxxam's Pacific Lumber Company
division, citing serious violations of state forestry laws.
-- Company forestry practices, including extensive
old-growth logging and clearcutting, attract expensive
litigation and public criticism. Large timber companies
like MacMillan Bloedel are moving away from these practices.
Thirteen Fortune 500 companies have pledged to forgo using
old-growth wood products.
-- In October 1998 the federal government rested its
case seeking $500,000,000 restitution from CEO Hurwitz,
Maxxam and others, relating to the failure of a savings and
loan Maxxam allegedly controlled. We believe management has
failed to aggressively pursue opportunities to settle this
case using forest lands with low commercial, but high
environmental value. Maxxam has paid $40,000,000 in this
and related litigation, including all of CEO Hurwitz'
expenses.
-- Maxxam has been embroiled in a major labor dispute
resulting in a costly (and, we believe, avoidable) strike
against the Kaiser Aluminum division, the longest in
Kaiser's history.
-- Serious accidents and worker compensation claims
have skyrocketed at Kaiser -- from an average of 4 serious
injuries per month at the Mead, Washington plant in 1997 to
29 in two weeks in October 1998.
Safeguard your investment. Vote FOR cumulative voting.
* * *
The Committee believes that since this proposal was submitted to
Maxxam in December 1998,
9
<PAGE>
additional reasons to support this proposal have developed.
Specifically--
-- Maxxam has continued to lose money, reporting a net loss
for the year ending December 31, 1998 of $57.2 million.
-- Maxxam's Pacific Lumber subsidiary remained without a
timber operator's license for an additional three months. The
California Department of Forestry and Fire Prevention had sus
pended Pacific Lumber's license based on 128 cited violations of
state forestry rules. Due to more recent violations, Pacific
Lumber faces increased regulatory scrutiny, which the Committee
believes significantly increases the difficulties and costs
associated with environmental compliance and other aspects of
timber operations.
THE COMMITTEE OF CONCERNED MAXXAM SHAREHOLDERS RECOMMENDS A
VOTE FOR THE CUMULATIVE VOTING PROPOSAL.
THE DECLASSIFIED BOARD PROPOSAL
The Committee further seeks your support for the following
proposal, which has been submitted by the California Public
Employees' Retirement System ("CalPERS") and which is accompanied
by the "Supporting Statement" submitted by CalPERS to Maxxam for
inclusion in the Company's proxy materials:
"RESOLVED: Maxxam, Inc. shareholder request that the
Board of Directors change the election of all directors who
are elected by the holders of common and preferred stock
voting together ("General Directors"), by providing that, at
future Board elections, such new directors be elected
annually and not for staggered terms. This declassification
of General Directors shall not affect the separate election
of Common Directors as provided in the Articles of
Incorporation and shall be phased in in a manner that does
not affect the unexpired terms of Directors previously
elected."
SUPPORTING STATEMENT
Is accountability by the Board of Directors important
to shareholders? As a trust fund with more than 1 million
participants, and as the owner of approximately 229,800
shares of the Company's common stock, the California Public
Employees' Retirement System ("CalPERS") thinks
accountability is of paramount importance. That is why we
are sponsoring this proposal which, if passed, would
encourage the board to reorganize itself so that each
General Director stands before the shareholders for re-
election each year. We hope to
10
<PAGE>
eliminate the Company's so-called "classified board,"
whereby the General Directors are divided into three
classes, each serving a three-year term.
Under the current structure, shareholders can only vote on
one-third of the board at any given time.
By classifying itself, a board insulates its members
from immediate challenge. Insularity may have made sense in
the past (e.g., during the takeover frenzy of the 1980s).
But now, we believe that insularity works primarily to
hamper accountability. A classified board can prevent
shareholders from mounting a successful opposition to the
entire board, because only one-third of the directors are up
for election in any given year. By way of contrast, a
declassified board would mean that each General Director
would stand for election each year.
CalPERS believes that corporate governance procedures
and practices, and the level of accountability they impose,
are closely related to financial performance. It is
intuitive that, when directors are accountable for their
actions, they perform better.
At the 1998 Maxxam annual meeting, more than 14% of the
votes cast supported the above resolution calling for annual
election of the General Directors. This represented nearly
half of all the votes cast by shareholders not directly
affiliated with the Company's CEO. We hope for even greater
support this year as we continue to focus the Company on its
responsibilities to all of its shareholders.
If the Board acts on our proposal, shareholders would
have the opportunity to register their views at each annual
meeting on performance of the board as a whole, and of each
director as an individual.
CalPERS urges you to join us in VOTING TO DE-STAGGER
the terms of election, as a powerful tool for management
incentive and accountability. We urge your support FOR this
proposal."
* * *
THE COMMITTEE OF CONCERNED MAXXAM SHAREHOLDERS RECOMMENDS A
VOTE FOR THE DECLASSIFIED BOARD PROPOSAL.
11
<PAGE>
VOTING PROCEDURES
The Company's proxy statement and proxy card include the
Cumulative Voting Proposal and the Declassified Board Proposal,
but not the names of Howard M. Metzenbaum and Abner J. Mikva, our
nominees for Common Director.
Even if you have already returned a proxy to the Company
using the Company's proxy card, you can still cast your vote for
Senator Metzenbaum or Judge Mikva or both, and for either or both
of the two shareholder proposals described herein, by signing and
returning the enclosed BLUE proxy card. See the discussion in
"Revocation Rights" below.
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 re
quired 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. Adop
tion of the Cumulative Voting Proposal and the Declassified Board
Proposal will require the affirmative vote of a majority of the
votes present, in person or by proxy. The Cumulative Voting
Proposal and the Declassified Board Proposal are 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 enclosed BLUE proxy card,
as more fully described below, the Committee will vote FOR Mr.
Metzenbaum and FOR Mr. Mikva to serve as the Common Directors
chosen by the holders of common stock; we will also vote FOR the
Cumulative Voting Proposal and FOR the Declassified Board
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. Metzenbaum,
Mr. Mikva or both as Common Directors, or you may withhold
authority to vote for the election of Mr. Metzenbaum, Mr. Mikva
or both by marking the proper box or boxes on the BLUE Annual
Meeting proxy card. It will not be possible to vote for the
election of any person who has been nominated by the Company to
serve as a General Director to be chosen by holders of common
stock and preferred stock, voting together, by using the BLUE
Annual Meeting card. As required by SEC Regulation 240.14a-
4(d)(iv), the Committee hereby states 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
12
<PAGE>
FOR THE ELECTION OF MR. METZENBAUM AND MR. MIKVA AS COMMON
DIRECTORS, AS WELL AS FOR THE CUMULATIVE VOTING PROPOSAL AND THE
DECLASSIFIED BOARD 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 to 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) 267-3702.
The Committee will keep the content of all cards it receives
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 the Rose Founda
tion, 6008 College Avenue, Suite 10, Oakland, California 94618,
which owns 50 shares of Maxxam common stock; the Rose Founda
tion's President, Jill Ratner, and its Executive Director, Thomas
W. Little, who own 90 shares of Maxxam common stock as tenants in
common; Rose Foundation staff, including Carla Din; and the
United Steelworkers of America, 5 Gateway Center, Pittsburgh,
Pennsylvania 15222, which owns 1000 shares of Maxxam common
stock, and its staff, including David Foster, Scott Adams, John
Duray and Jon Youngdahl.
Proxies will be sought by mail, facsimile, telephone and
personal interview. The Rose Foundation and USWA will bear the
cost of this solicitation, expected to be $120,000, and to date
they have expended approximately $12,500. The Committee has
retained Georgeson & Company Inc. to assist in the distribution
and solicitation of proxies at a cost of approximately $25,000
plus expenses. The Committee will not seek reimbursement from
the Company for the costs of the solicitation.
The Rose Foundation has engaged in advocacy and public
education efforts seeking to preserve the Headwaters Forest area.
The Rose Foundation and its Headwaters Acquisition and Restora
tion 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
13
<PAGE>
should decide to make any such properties available and should a
willing buyer be found. To date, the Rose Foundation and its
Headwaters Acquisition and Restoration Trust have received
$5,496.60 in cash plus a $5 million pledge that could be used for
that purpose. The Rose Foundation does not plan to acquire any
such properties on its own behalf, nor is the Rose Foundation
acting on behalf of any potential buyer and would not directly
benefit from any such acquisition. In addition, Jill Ratner, the
Rose Foundation's president, provided legal advice to Robert
Martel, the relator in a False Claims Act suit naming Maxxam as a
defendant which was dismissed, although Ms. Ratner did not appear
as an attorney in that or any other litigation adverse to the
Company.
The USWA is a collective-bargaining representative of
employees at, inter alia, steel and aluminum mills located
throughout the United States, including employees of Kaiser
Aluminum & Chemical Corporation ("KACC"), which is wholly owned
by Kaiser Aluminum Corporation, 63 percent of whose outstanding
common stock is owned by Maxxam.
The USWA is currently involved in a labor dispute with KACC
involving five of its plants: the Trentwood Plant in Spokane,
Washington; the Mead Plant in Spokane, Washington; the Gramercy
Plant in Gramercy, Louisiana; the Newark Plant in Newark, Ohio;
and the Tacoma Plant in Tacoma, Washington. On September 30,
1998, approximately 3000 workers represented by the USWA at these
plants went on strike; KACC continued to operate these plants
since that date using replacement employees. On January 13,
1999, the USWA made an unconditional return-to-work offer. On
January 14, 1999, KACC refused that offer, locked out its
workforce at these five plants, and chose to continue operating
with replacement employees. Negotiations are scheduled to resume
during the first week of April 1999. On October 14, 1998, the
USWA filed an unfair labor practices charge with the National
Labor Relations Board ("NLRB"), alleging that KACC had violated
its duty to bargain, had bargained in bad faith, and
discriminated against workers for going on strike. In addition,
the USWA has alleged that the January 14, 1999 lockout is
unlawful. The General Counsel of the NLRB has not yet decided
whether to file a complaint against KACC. If the General Counsel
does decide to file a complaint, such a complaint could allege
that KACC engaged in an illegal lockout. That contention, if
established, could result in gross back pay liability of up to $3
million per week from January 14, 1999. KACC estimates that it
lost $50 million during the fourth quarter of 1998 as a result of
the strike.
RECORD DATE/SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE
OFFICERS/EXECUTIVE COMPENSATION/ELECTION OF DIRECTORS
Information on these subjects appear in the Company's proxy
statement.
SHAREHOLDER PROPOSALS FOR 2000 MEETING
14
<PAGE>
Shareholders owning over $2,000 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
appears in the Company's proxy statement.
PLEASE VOTE FOR HOWARD M. METZENBAUM AND ABNER J. MIKVA,
AND FOR THE CUMULATIVE VOTING AND
DECLASSIFIED BOARD PROPOSALS.
Sincerely,
The Committee of Concerned
Maxxam Shareholders
For Additional Information
Please Call Our Proxy Solicitor,
Georgeson & Company Inc.
Toll Free (800) 223-2064
or
Committee of Concerned Maxxam Shareholders
Jill Ratner/Thomas W. Little
Collect (510) 658-0702
15
<PAGE>
MAXXAM INC.
1999 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED BY
THE COMMITTEE OF CONCERNED MAXXAM SHAREHOLDERS
The undersigned shareholder of Maxxam Inc. hereby appoints each
of Jill Ratner and Thomas W. Little, with full power of
substitution, for and in the name below, all shares of common
stock of Maxxam Inc. that the undersigned is entitled to vote if
personally present at the 1999 Annual Meeting of Shareholders of
Maxxam Inc., to be held on May 19, 1999 at
________________________ Houston, Texas at __:__ A.M. (local
time) or at any adjournment, postponement or rescheduling
thereof. The undersigned hereby revokes any previous proxies
with respect to the matters covered by this Proxy.
THE COMMITTEE OF CONCERNED MAXXAM SHAREHOLDERS RECOMMENDS A VOTE
FOR HOWARD M. METZENBAUM AND ABNER J. MIKVA AND FOR ITEM _ (THE
CUMULATIVE VOTING PROPOSAL) AND FOR ITEM _ (THE DECLASSIFIED
BOARD PROPOSAL).
Item _: Election of Directors
The Committee of Concerned Maxxam Shareholders intend
to use this proxy to vote for Howard M. Metzenbaum
and Abner J. Mikva, whom they have nominated to
serve as the two Directors to be elected by holders
of shares of common stock (the "Common Directors"). By
using this card, you will not be able to vote for the
Company's two nominees for Common Director
(Stanley D. Rosenberg and Robert J. Cruikshank) or any
Company nominee to be elected by holders of the common
and preferred stock, voting together. You should refer
to the proxy statement and form of proxy
distributed by the Company for the background,
qualifications and other information concerning the
Company's nominees.
Item _: To act upon a stockholder proposal, if presented at the
meeting, by the Rose Foundation for Communities and the
Environment, As You Sow Foundation,
Nell Minow, John Harrington, Brent Blackwelder, Jill
and Thomas Little requesting that the board of
directors take steps to provide for cumulative
voting in the election of those directors elected by
holders of common stock.
Item _: To act upon a stockholder proposal, if presented at the
meeting, by the California Public Employees'
Retirement System, requesting that the board of
directors take steps to declassify the board and to
provide for the annual election of all General
Directors elected by the holders of common and
preferred stock voting together.
16
<PAGE>
/x/ PLEASE MARK VOTES AS IN THIS EXAMPLE
The Committee of Concerned Maxxam Shareholders recommend a vote
FOR Howard M. Metzenbaum and Abner J. Mikva, FOR Item _ and FOR
Item _.
1. Election of Directors
(a) Howard M. Metzenbaum (for term expiring in 2000)
/ / FOR nominee listed / / WITHHOLD AUTHORITY
to vote for nominee
(b) Abner J. Mikva (for term expiring in 2000)
/ / FOR nominee listed / / WITHHOLD AUTHORITY
to vote for nominee
_. Proposed resolution submitted by the Rose Foundation for
Communities and the Environment, As You Sow Foundation, Nell
Minow, John Harrington, Brent Blackwelder, Jill and Thomas Little
requesting that the board of directors take steps to provide for
cumulative voting in the election of the Common Directors, who
are elected by holders of common stock.
FOR / / AGAINST / / ABSTAIN / /
_. Proposed resolution submitted by the California Public
Employees' Retirement System, requesting that the board of
directors take steps to declassify the board and to provide for
the annual election of all General Directors elected by the
holders of common and preferred stock voting together.
FOR / / AGAINST / / ABSTAIN / /
WHERE NO VOTING INSTRUCTIONS ARE GIVEN, THE SHARES REPRESENTED BY
THIS PROXY WILL BE VOTED FOR HOWARD M. METZENBAUM AND ABNER J.
MIKVA, FOR ITEM _ AND FOR ITEM _.
IN THEIR DISCRETION THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT, POSTPONEMENT OR RESCHEDULING THEREOF, HEREBY
17
<PAGE>
REVOKING ANY PROXY OR PROXIES HERETOFORE GIVEN BY THE
UNDERSIGNED.
This Proxy, when properly executed, will be voted in the manner
marked herein by the undersigned shareholder. Securities and
Exchange Commission reg. 240.14a-4(d)(iv) requires the following
statement on this card: There is no assurance that the
registrant's nominees will serve if elected with any of the
soliciting party's nominees.
(place mailing label here)
Please date and sign this proxy exactly as your name appears
hereon:
Dated:________________________, 1999
__________________________ _______________________________
(Signature) (Signature, if held jointly)
_______________________________
(Title)
When shares are held by joint tenants, both should sign. When
signing as attorney-in-fact, executor, administrator, trustee,
guardian, corporate officer or partner, please give full title as
such. If a corporation, please sign in corporate name by
President or other authorized officer. If a partnership, please
sign in partnership name by authorized person.
To vote in accordance with the recommendation of The Committee of
Concerned Maxxam Shareholders, just sign and date this proxy. No
boxes need to be checked.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN
THE ENCLOSED ENVELOPE PROVIDED.
18
<PAGE>
