May 10, 1999
Dear Stockholder:
MAXXAM's Board of Directors, working with the Boards of its
forest products subsidiaries, played a key role in the
successful completion of the landmark $450 million Headwaters
Agreement. The Headwaters Agreement should create a more
predictable future for Pacific Lumber and its employees while
protecting environmentally sensitive timberlands. Nevertheless,
the United Steelworkers of America and the Rose Foundation, as
part of an effort to advance their own narrow agendas, have
nominated Howard Metzenbaum and Abner Mikva in opposition to the
Company's outstanding Common Directors, Robert J. Cruikshank and
Stanley D. Rosenberg.
In recent media interviews in the Wall Street Journal and
Chicago Tribune, Messrs. Metzenbaum and Mikva displayed, the
Company believes, an alarming lack of knowledge about MAXXAM
(see our previous 4/30/99 letter). 1 Moreover, during their
respective tenures in Congress, Messrs. Mikva and Metzenbaum
voted against the interests of MAXXAM and its Kaiser Aluminum
and Pacific Lumber operations, and, ultimately, you as a MAXXAM
stockholder. Here are some examples:
HIGHER ENERGY COSTS
- In 1977, Messrs. Metzenbaum and Mikva voted for passage of
National Energy Policy Act legislation that, among other
things, mandated that electric utilities with major industrial
plants burn coal rather than oil or natural gas as fuel in
boilers. The bill was estimated by the Senate Energy and
Natural Resources Committee to result in increased aluminum
prices of between four and seven percent. (U.S. Senate
vote # 355, U.S. House of Representatives vote #482)
- In 1983, Howard Metzenbaum supported provisions of legislation
to allow natural gas companies to nullify existing contracts
with a set of corporate natural gas consumers, including Kaiser
Aluminum. Kaiser estimated that nullification of these
contracts could have cost it many millions of dollars. (U.S.
Senate Report 98-205)
HIGHER TAXES
- In 1993, Howard Metzenbaum supported a proposal to impose a BTU
tax that would have substantially increased the price of energy
for aluminum, forest products and other companies. (U.S. Senate
vote #40)
- In 1978, Abner Mikva was only one of 57 members of the House of
Representatives to support the Vanik amendment to H.R. 13511
(Public Law 95-600), the Revenue Act of 1978. The Vanik
amendment would have stripped important reductions in corporate
and individual taxes. (U.S. House of Representatives vote #599)
RESTRICTIVE TRADE
- In 1993, Howard Metzenbaum voted against legislation (H.R. 1876)
extending the authority for the President to negotiate a GATT
agreement to be considered under the fast track rules in the
Congress. The GATT agreement assisted aluminum, forest products
and other companies by lowering overseas tariffs and improving
trade practices to help open foreign markets. (U.S. Senate
vote #192)
HIGHER ENERGY COSTS, HIGHER TAXES, AND RESTRICTIVE TRADE ARE NOT
IN THE INTERESTS OF MAXXAM OR YOU AS A MAXXAM STOCKHOLDER, AND
NEITHER ARE MESSRS. METZENBAUM OR MIKVA.
DO NOT BE MISLED BY THE "COMMITTEE OF CONCERNED MAXXAM
SHAREHOLDERS" AND ITS LEADERS--THE ROSE FOUNDATION AND THE UNITED
STEELWORKERS OF AMERICA. They do not have the best interests
of MAXXAM and its stockholders in mind. They represent narrow
special interest groups who have their own agendas to advance.
Consider these facts:
- The Rose Foundation encouraged, supported, and, in its own words,
"catalyzed" the actions of the FDIC and OTS against MAXXAM. They
now purport to express concern in their stockholder mailings
and proxy materials about these actions they advocated. 1
- The Rose Foundation has sought to freeze the assets of the
Company. In addition, the Rose Foundation's president Jill
Ratner has advised an individual in a lawsuit against the
Company which was recently dismissed by the court on several
different grounds. The Court stated in its opinion that the
plaintiff was "regurgitating politicized half-truths." 1
- The United Steelworkers of America have attacked the landmark
Headwaters Agreement in court, suing the State of California
and Pacific Lumber over its Sustained Yield Plan. The
Headwaters Agreement has been hailed by numerous politicians,
community leaders and editorial boards as being good for the
environment, good for Pacific Lumber and its employees, and
good for the public.
- The United Steelworkers of America have rejected Kaiser Aluminum's
proposals to eliminate artificial work rule restrictions and
realize productivity improvements in exchange for wage and
benefit increases. Moreover, the union has refused to put
Kaiser's offer to a vote of its members.
EXTREMELY IMPORTANT
- ITEM 1: VOTE "FOR" STANLEY D. ROSENBERG AND ROBERT J.
CRUIKSHANK AS COMMON DIRECTORS.
- ITEM 2: VOTE "FOR" REAPPROVAL OF THE 1994 MAXXAM OMNIBUS
EMPLOYEE INCENTIVE PROGRAM.
- ITEM 3: VOTE "AGAINST" THE CLASSIFIED BOARD PROPOSAL.
- ITEM 4: VOTE "AGAINST" THE CUMULATIVE VOTING PROPOSAL.
- COMPLETE, DATE AND SIGN THE WHITE PROXY CARD AS RECOMMENDED IN
THIS LETTER AND RETURN IT IN THE POSTAGE PREPAID ENVELOPE
PROVIDED WITH THE PROXY STATEMENT.
- DO NOT VOTE ANY PROXY CARD YOU MAY RECEIVE FROM ANYONE OTHER
THAN THE COMPANY.
- IF YOUR SHARES ARE HELD WITH A BROKERAGE FIRM, YOUR BROKER
CANNOT VOTE YOUR SHARES UNLESS THEY RECEIVE YOUR SPECIFIC
INSTRUCTIONS. PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR
ACCOUNT WITH YOUR VOTING INSTRUCTIONS.
- IF YOU HAVE ANY QUESTIONS, PLEASE CALL THE COMPANY'S PROXY
SOLICITORS, MACKENZIE PARTNERS, INC. TOLL FREE AT 800-322-2885.
No permission has been sought or received to quote from, or refer
to, published materials cited in this letter.
