HOUSTON, Texas, May 14, 1999: The MAXXAM Inc. Board of Directors
today issued the following open letter to the Company's stockholders
concerning the most recent correspondence of the "Committee of
Concerned MAXXAM Shareholders":
Dear Stockholder:
MAXXAM encourages you again to vote "FOR" the Company's two
experienced, highly qualified and independent Common Directors
Robert J. Cruikshank and Stanley D. Rosenberg. We've attached their
biographies for your review.
The Company urges you to reject calls from the "Committee of
Concerned Maxxam Shareholders" -- being led by the United
Steelworkers of America (USWA) and the Rose Foundation -- to replace
Messrs. Cruikshank and Rosenberg with their handpicked candidates.
These candidates are two politicians with voting records supportive
of higher taxes, higher energy costs and restrictive trade, and
linked with groups historically opposed to the interests of MAXXAM's
stockholders.
By now you may have heard about a report<FN1> by an organization called
Institutional Stockholder Services (ISS), which is a paid advisor to
certain institutional stockholders. In a press release earlier
today, the Committee failed to note a number of key findings which
take issue with the past activities and intentions of members of the
Committee.
According to ISS, this proxy contest involves the Company's
relationships with a number of groups that include individuals and
organizations whose interests are not aligned with those of
[MAXXAM's] shareholders."
As to the Rose Foundation, ISS also describes the Rose Foundation's
role in "advocating that the company give away substantially
valuable assets of the company" adding, "These actions clearly
define the Rose Foundation's disregard for the interest of the
stockholders".
As to the USWA, ISS says: "Similarly, the interests of the USWA are
not necessarily aligned with those of stockholders."
And if that is still not clear, ISS adds, "The interests of the USWA
and their divergence from other stockholders are best demonstrated
by the motives behind the USWA's recent lawsuit (against the
Headwaters Agreement) . . . The USWA's sudden interest in the
affairs of Palco (Pacific Lumber) is meant to apply pressure on
MAXXAM and thereby increase the bargaining power of the union in its
fight with Kaiser."
Your Board and your management recognize that you, our stockholders,
are looking for performance and stockholder value. ISS cites the
Committee's reference to the NASDAQ and S&P 500 indices, saying
"This comparison is fundamentally flawed . . ."
In fact, your management and Board have been totally focused on
stockholder value, and have just negotiated the landmark $450
million Headwaters Agreement towards that objective.
Of the Headwaters Agreement achieved by your management and the
Board--against the efforts of the self-styled Committee--ISS had
this to say:
"Stockholders must give credit to the company for securing the
agreement, which preserved the old growth redwoods and garnered fair
value for them on behalf of the company and its stockholders."
We believe that the statements in the ISS report discussed above
should guide you to the answers to the following important
questions: Whose agenda will the dissident's slate follow if they
get on your Board--yours or theirs? If the Committee is merely the
messenger--as they referred to themselves in their May 12
stockholder letter--whose message will the dissident Directors carry?
Reject the Committee's hand-picked nominees. Vote "FOR" Robert J.
Cruikshank and Stanley D. Rosenberg as Common Directors.
Sincerely,
The MAXXAM Inc. Board of Directors
EXTREMELY IMPORTANT
* VOTE "FOR" ROBERT J. CRUIKSHANK AND STANLEY D. ROSENBERG AS
COMMON DIRECTORS
* VOTE "FOR" REAPPROVAL OF THE OMNIBUS PLAN.
* VOTE "AGAINST" THE CLASSIFIED BOARD PROPOSAL.
* 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 800-322-2888.
<FN1> Quoted materials in this letter refer to ISS report dated May 13,
1999. No permission has been sought or received to quote from, or
refer to, such report.
<PAGE>
ROBERT J. CRUIKSHANK
RESUME
Robert J. Cruikshank was born in Lake Charles, Louisiana, September
2, 1930. He graduated in 1951 from Rice University with a Bachelor
of Arts Degree in Economics and Accounting. He then severed four
years as an Officer in the United States Air Force beginning in
1952, including serving as resident Auditor reporting directly to
USAF, Washington, D.C.. He completed the Advanced Management
Program at Harvard University in 1982.
Mr. Cruikshank began his career in public accounting in 1951 with
the local firm of Henslee & Hopson. Through a series of mergers,
this firm merged with Haskins & Sells in 1963 and Touche Ross & Co.
In 1989. He was a partner in charge of his firm's Houston office
(including responsibility for San Antonio, Austin, Barton Rouge, and
New Orleans) from 1974 to 1989. He was a member of the firm's board
of directors from 1981 to 1985. Mr. Cruikshank retired from
Deloitte & Touche March 10, 1993, after a forty-two year career in
public accounting.
Mr. Cruikshank is a certified public accountant and has served on
many committees in his profession, including the Texas Society of
CPAs, the AICPA, the national professional organization, and the
Houston Chapter of CPAs. He has also been a visiting lecturer in
accounting at Rice University.
Mr. Cruikshank is active in the following organizations:
* Director, Houston Industries Incorporate, d.b.a., Reliant
Energy, Incorporated
* Director, MAXXAM Inc.
* Director, Kaiser Aluminum Corporation and Kaiser Aluminum and
Chemical Corporation
* Director, Texas Biotechnology Incorporated
* Director, American Residential Services, Inc.
* Trust Manager, Weingarten Realty Investors
* Advisory Director, Compass Bank, Houston
* Advisory Director, Aon Risk Services, Inc.
* Advisory Director, Clark/Bardes, Inc.
* Trustee and Vice President of the Ray C. Fish Foundation
* Member of the Board of Directors of the Texas Medical Center
* Member of the Board of Trustees of the Institute of Religion
* Trustee of the National Jewish Center of Immunology and
Respiratory Medicine
* Member of the Board of Visitors, M.D. Anderson Cancer Center
* Member of the University of Texas, Houston Development Board
* Director (Ex-Officio) of the Houston Livestock Show and Rodeo
* Member (Ex-Officio) of the Accounting Advisory Council at Rice
University, and former Chairman
* Member (Ex-Officio) of the Accounting Advisory Council at the
University of Texas, and former Chairman
* Member of the Rice University Associates
* Founding member of the Forum Club
* Board of Directors of the Houston Area Parkinson's Society
Mr. Cruikshank has also been: Regent and Vice Chairman of The
University of Texas System; Director of the Texas Growth Fund;
Trustee and Past President of Texas Children's Hospital; Trustee and
Past Treasurer of Hermann Hospital; Director and Member of the
Executive Committee of the American Heart Association; member of
the Board of Directors of Central Houston, Inc.; Director
and Member of the Governing Board of the Houston Grand Opera;
Advisory Director of the Houston Symphony Society; Senior
Warden and Treasurer of St. John the Divine Episcopal Church; First
Vice President and Director of River Oaks Country Club; Director and
Treasure of the Houston American Revolution Bicentennial Commission;
Director and Treasurer of the Houston Ballet Foundation; President
and Director of the Post Oak YMCA Family Center; Director of the
Free Market Education Foundation; Co-chairman of Houston Mayor's
Task Force on Drug Abuse; Chairman of Banking Subcommittee for Texas
State Comptroller John Sharp's Electronic Benefits Transfer Program;
Chairman of Harris County statewide fund raiser to re-elect
President George Bush; and statewide fund raising Chairman for the
Jack Rains for Governor campaign.
Mr. Cruikshank received the Gold Heart Award from the American Heart
Association in November 1982 (the Association's highest honor), the
Texas Affiliate's Eisenhower Award, and the Paul Dudley White Award
for Distinguished Service with the Houston Chapter of the American
Heart Association. He also received in 1983 the Distinguished
Public Service Award from the Texas Society of Certified Public
Accountants, which has a membership of approximately 30,000 people.
In May 1993, William Marsh Rice University recognized him as a
Distinguished Alumnus.
While in the USAF, Mr. Cruikshank received the American Spirit Honor
Metal as the outstanding basic trainee and the OCS Distinguished
Graduate Award.
<PAGE>
STANLEY D. ROSENBERG
RESUME
EDUCATION
* University of Texas, B.B.A. - 1953 (with honors) Friars
Texas Cowboy
* University of Texas, LL.B. - 1955 (with honors) Editor, Texas
Law Review
MILITARY
Captain, United States Air Force - 1955-1957
MEMBERSHIP
* San Antonio Bar Association
* State Bar of Texas
* American Bar Association
SENIOR PARTNER - ARTER, HADDEN, ROSENBERG & TUGGEY, San Antonio, Texas
Development of real estate in all its phases, including
representation in eminent domain proceedings and related
specialities involving market values, fee takings, severance damages
and expert testimony. Function not limited to purely legal matters,
but consists of judgment as to location, means and methods of
obtaining interim and permanent financing, evaluation of
architectural plans, preparation and negotiations for acquisition of
sites, as well as with contractors for the construction of
improvements and negotiations as to every phase of real estate. In
addition, negotiations relative to "work outs" and dealings with
various financial institutions, and on behalf of various financial
institutions, in all aspects of financially troubled properties and
with the FDIC, RTC and other governmental agencies.
MISCELLANEOUS
* Committee Chairman - State Bar of Texas Task Force on Title
Companies
* Director, University of Texas Health Science Center
Development Board
* Member of Board of Visitors, University of Texas Law School
* Director - Children's Hospital Foundation, Santa Rosa Hospital
* Past Member Advisory Council - University of Texas Graduate
School of Business
* Past Member Dean's Associates - University of Texas School of
Business Administration
* Past President - University of Texas Dad's Association
* Vice Chairman and Trustee - San Antonio Bar Foundation
* Past President, University of Texas Law School - Law Review
Foundation
* Past Vice-Chairman, Greater San Antonio Chamber of Commerce
and Chairman of various Chamber Committees
* Past Member, Governor's Planning Committee for Bexar County Area
* Past President, Texas Law Review Association
* Past Chairman, Advisory council - St. Mary's University School
of Business Administration
* Co-Chairman, Lutheran Hospital Foundation Fund Drive
* Chairman, Santa Rosa Endowment Fund Campaign
* Member, Chancellor's Council - University of Texas at Austin
* Recipient of distinguished Alumnus of the College of Business,
University of Texas at Austin Administration Award
* Recipient of Brotherhood Award, National Conference of
Christians and Jews for 1986
* Past Chairman, San Antonio Bar Foundation
* Past Member, Texas Bar Association Real Estate Committee
* Littlefield society - University of Texas at Austin
* Chancellor's Council - University of Texas at Austin
* Past Member, President's Associates - University of Texas at
Austin
* Past Member, Business Administration Advisory Council -
University of Texas at Austin
* Past President, Parents Association - University of Texas at
Austin
* Endowment Principal - University of Texas at Austin
* University of Texas Health, San Antonio - Development Board
