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240.14a-12
MAXXAM INC.
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(Name of Registrant as Specified in Its Charter)
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THE COMMITTEE OF CONCERNED MAXXAM SHAREHOLDERS
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Committee of Concerned Maxxam Shareholders
6008 College Avenue, Suite 10
Oakland, CA 94618
510-658-0702 (tel)/510-658-0732 (fax)
May 12, 1999
Dear Fellow Maxxam Shareholder,
By now you should have received a proxy statement, a BLUE proxy
card and other materials from The Committee of Concerned Maxxam
Shareholders supporting the candidacies of former Senator Howard
Metzenbaum and former Congressman and federal Judge Abner Mikva
for the two slots of Maxxam's board elected by holders of Maxxam
common stock. You may also have received two letters from Maxxam
Inc. dated April 30, 1999 and May 10, 1999 regarding your proxy
vote at the company's annual meeting to be held on Wednesday, May
19th, 1999.
The company's May 10th letter in particular makes a number of
attacks on Committee members and the two nominees. We do not
intend to respond to every particular, but we wanted to give you
some additional information to help you evaluate these charges
when you cast your ballot in this important election.
In its May 10th letter, for example, Maxxam writes: "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." The company also
attacks individual votes Messrs. Metzenbaum and Mikva made during
their combined 28 years of public service in Congress.
The Committee believes that the cited Wall Street Journal and
Chicago Tribune articles do not support the negative conclusions
that Maxxam asks you to draw about the credentials and experience
of these two nominees. But you don't have to take our word for
it. We have attached the two articles, and we invite you to read
them and decide for yourself whether you think the charges are
warranted. (Wall Street Journal, March 23, 1999; Chicago
Tribune, April 9, 1999 -- consent of authors and publications not
sought or obtained)
We also invite you to review the Committee's proxy materials:
They describe Senator Metzenbaum's extensive record of service on
corporate boards, including his active involvement as a Dart
Group board member in the 1998 merger of Dart Group into Richfood
Holdings, which resulted in a 35% premium to Dart shareholders
over the highest stock price during the preceding year. They
also cite Judge Mikva's record of accomplishment as a Member of
Congress, as a judge on the U.S. Court of Appeals for the
District of Columbia Circuit, and as White House Counsel.
As for individual votes they may have cast in Congress, we are
sure that one can find points of disagreement with any Member of
Congress who has cast thousands of votes over the years. On
balance, however, we believe that Messrs. Metzenbaum and Mikva
have the experience and reputation to offer just the sort of
independent voices that we
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believe common shareholders need on the Maxxam board at this
time. And we are not alone in that view. Other shareholders --
including the California Public Employees' Retirement System, the
New York State Common Retirement Fund and the New York City
Employees' Retirement System -- have already announced that they
plan to vote for Messrs. Metzenbaum and Mikva.
Maxxam's May 10th letter also singles out several Committee
members for attack, including the United Steelworkers of America
and the Rose Foundation for Communities and the Environment. In
our view, this is a case of attacking the messenger, not the
message. For example, our proxy materials point out how Kaiser
Aluminum and Chemical Corporation, the operating unit of Kaiser
Aluminum Corporation (where Maxxam controls 63% of the common
stock) locked out 2900 workers represented by the United
Steelworkers of America after the union made an unconditional
return-to-work offer four months ago. We regard this decision as
indicative of the company's tendency to become needlessly
embroiled in controversies, as we describe in more detail in our
proxy materials.
Our proxy materials also explain why the Committee believes that
Maxxam is a company in trouble, and why it believes that Messrs.
Metzenbaum and Mikva should be elected to the company's board to
represent the interests of Maxxam common shareholders. That is
why we urge you to protect your investment by voting for reform
and board independence. If you already mailed in the company's
white proxy card you can change your vote by using the BLUE proxy
card. Sign, date and return the BLUE proxy card today in the
enclosed envelope.
If your shares are held in your own name, you can put the BLUE
proxy card in the envelope. If you lost your BLUE card, you may
call Georgeson & Co. at 1-800-223-2064 and ask to have a new BLUE
card mailed or faxed to you. You can vote by fax by signing and
dating the card and faxing it to Georgeson at 212-440-9009 by May
18th.
If your shares are held in the "street name" of your broker,
bank or other institution, you can vote by returning the BLUE
proxy card you received in the postage-paid envelope. If you
lost your proxy card, if you want to change your vote, or if you
need to get your vote in before the meeting, call your broker
today, and instruct them to vote the BLUE card.
Sincerely,
Jill Ratner Thomas Little David Foster, Director
President Executive Director District 11, United
Steelworkers of America
____________________
The following may be deemed to be "participants" in this
solicitation: The Rose Foundation for Communities and the
Environment, which owns 50 shares of Maxxam common stock; Jill
Ratner and Thomas W. Little, the Rose Foundation's president and
executive director, who own 90 shares of Maxxam common stock as
tenants in common; the United Steelworkers of America, which owns
1002 shares of Maxxam common stock; As You Sow Foundation, which
owns 100 shares of Maxxam common stock; Howard M. Metzenbaum, who
does not own any Maxxam common stock; and Abner J. Mikva, who
owns 50 shares of Maxxam common stock. These participants
(excluding As You Sow Foundation) constitute the members of The
Committee of Concerned Maxxam Shareholders and the two nominees
for director.
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THE WALL STREET JOURNAL / CALIFORNIA (March 23, 1999)
(Consent of author and publication not sought or obtained)
Calpers Seeks New Voices For Maxxam
By Mitchel Benson
Staff Reporter of The Wall Street Journal
The Wall Street Journal via Dow Jones
SACRAMENTO -- California's influential public-employees'
pension fund is throwing its considerable weight behind an effort
to elect two independent directors to the board of Maxxam Inc.
The California Public Employees Retirement System has agreed to
endorse two men, both prominent, veteran Democratic politicians,
running as so-called dissident directors at the Houstonbased
company's annual meeting on May 19.
Calpers is backing: former Sen. Howard Metzenbaum of Ohio, 81;
and Abner Mikva, a 73-year-old former Illinois congressman who
was once a federal appellate judge and former counsel to
President Clinton.
"We're throwing our support behind those two candidates," says
Calpers spokeswoman Pat Macht, "with the intent of adding strong
independence to (Maxxam's) board."
When asked to respond, Maxxam spokesman Bob Irelan said, "We
have no comment. That is our position at this time -- no
comment."
Both Messrs. Metzenbaum and Mikva were recruited by a coalition
that since December has been working to find, nominate and elect
what coalition leaders say would be independent voices for the
five-member Maxxam board. The coalition sought people strong
enough to stand up to Maxxam Chairman and Chief Executive
Charles Hurwitz, while being sympathetic to the concerns of
environmentalists, labor and shareholders.
The leaders of the effort are: Jill Ratner, president of the
Oakland-based Rose Foundation for Communities and the
Environment; Carla Din, a program associate at the Rose
Foundation; and David Foster, a Minnesota-based district
director for the United Steelworkers.
The Rose Foundation is focused on the operations of Maxxam's
subsidiary, Scotia-based Pacific Lumber Co., particularly
following Pacific Lumber's $480 million sale earlier this month
of the 7,500-acre Headwaters Forest in Humboldt County to the
state and federal governments. The sale includes the world's
largest remaining stand of old-growth redwoods.
With that tremendous infusion of cash into Pacific Lumber, says
Ms. Ratner, "it's even more important now ... to have independent
oversight on the board." It's critical, she says, "that someone
is minding the store on behalf of the common shareholders and
making sure that cash is being used to the maximum benefit of
(all) shareholders."
Again, Maxxam's Mr. Irelan had no comment.
Mr. Foster's concern is another unit, Houstonbased Kaiser
Aluminum Corp., which has been ensnared in a labor dispute with
the Steelworkers since September. At the time, 3,000 workers went
on strike at five Kaiser plants, including 2,500 workers at three
plants in Washington state. In mid-January, after negotiations
broke down, Kaiser imposed a lock-out on all the workers.
Kaiser Aluminum took a $50 million charge for the fourth
quarter as a result of the strike. What's more, the union has
filed an unfair-labor-practice complaint with the National Labor
Relations Board, which if successful, could cost Kaiser an
estimated $155 million in back wages and benefits. Mr. Foster
contends worker turnover and injury rates have ballooned at the
five plants affected by the strike and lockout. "The course that
Kaiser and Maxxam management has taken is ruinous to the
company," says Mr. Foster.
Kaiser spokesman Scott Lamb acknowledges that turnover and
"safety-incidence rates" both increased in the early days of the
strike. But since then, turnover has "come down dramatically, to
an acceptable level," and the safety-incidence rates have "come
down steadily," he says. As for the NLRB complaint, Mr. Lamb
says "it has absolutely no merit at all."
Calpers's support is key to the effort. It is not only the
biggest and arguably most influential pension fund on issues of
corporate governance, Calpers also happens to be the third-largest
outside holder of Maxxam common stock, with 229,800
shares -- roughly 3% of the total -- valued at $11.7 million.
"We have long felt that Maxxam's governance structure is not
always aligned with protecting long-term shareowner interests,"
Calpers Chief Executive James Burton wrote in a Feb. 24 letter to
Mr. Metzenbaum, urging him to run.
But in an effort to broaden their base even further -- and
appeal to a greater number of shareholder/voters -- the Rose
Foundation (which holds 140 shares of Maxxam stock) and the
Steelworkers (1,000 shares) have garnered the support of the New
York State Common Retirement Fund (45,700 shares) in Albany,
N.Y.; the New York City Employees' Retirement System (20,300
shares); and a private New York-based value-investment manager
named Alan Kahn.
Mr. Kahn declines to disclose specifically how much Maxxam
stock he or his clients own. He describes himself as a "long-term"
investor in the company whose clients "own a substantial
investment in Maxxam."
The New York state fund and Mr. Kahn have nominated both
Messrs. Metzenbaum and Mikva; the New York City fund has endorsed
Mr. Metzenbaum.
New York state Comptroller H. Carl McCall, sole trustee of New
York state's retirement fund, says Maxxam's board "needs to be
more active in countering the ongoing environmental and labor
concerns that the board has faced ... which could threaten the
company's economic stability."
For their part, Messrs. Metzenbaum and Mikva each say they
would bring that sorely needed independent voice to the board
that could speak for all shareholders.
"The creativity that should be used (by Maxxam) to maximize
profits," says Mr. Mikva, "is instead being used to push around
unions, push around the U.S. government and push around the
environmental groups. That undertaking costs a lot of money and
is not a very successful enterprise."
All involved acknowledge it will be a daunting challenge to
elect the two directors without Mr. Hurwitz's personal blessing.
Through his personal and family trust holdings, Mr. Hurwitz
controls 38% of the company's seven million shares of common
stock.
Even Mr. Metzenbaum, who knows a thing or two about politics
and campaigning, says it's "an extreme long shot" that he'll win
election. "But I've been in other situations before where I just
thought, `You ought to make a statement.'"
In fact, he and others say that even if the coalition is not
successful at the polls, simply running the campaign could spur
change in Maxxam's management and operations.
"Regardless of how difficult this is going to be (to win),"
says Mr. Foster of the Steelworkers, "it's still something worth
involving ourselves in."
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THE CHICAGO TRIBUNE
April 9, 1999 Friday, CHICAGOLAND FINAL EDITION
SECTION: BUSINESS; Pg. 1; ZONE: N
(Consent of author and publication not sought or obtained)
HEADLINE: AFTER STEPPING DOWN, MIKVA STEPS UP TO PLATE
BYLINE: David Greising.
It's tough for politicians to retire gracefully.
Bob Dole could have been president but is now doing Viagra
commercials instead. Ronald Reagan famously went on a lucrative
speaking tour of Japan.
After Bill Clinton retires, we can only hope his urge for
redemption prompts a Jimmy Carter-esque push to win the title of
best ex-president.
Our local officials often end up as lawyer-lobbyists, like former
Sen. Alan J. Dixon, who counts the Peotone Airport push among his
gun-for-hire causes. Or they fade away, as former Sen. Paul Simon
has done by taking up a teaching career.
They could all learn a thing or two from Abner Mikva.
Mikva's a former congressman and a former chief of the federal
appeals court in Washington. He also served 11 months as
Clinton's White House counsel--back before Zippergate threw
things out of proportion and Travelgate still ranked as a major
Clinton scandal.
When Mikva quit the White House in late 1995, he said he was worn
out. "This is my last job," he vowed.
Now Mikva, at age 73, is seeking election again. He's running, in
opposition to management, for the board of Maxxam Inc., a
Houston-based conglomerate with a troubled labor and
environmental record.
He doesn't have much of a resume to run a company like Maxxam.
Controlled by the mercurial Houston businessman Charles Hurwitz,
Maxxam has a complex financial structure, controls strike-ravaged
Kaiser Aluminum and just struck a controversial deal to sell some
of the oldest redwood forests for $480 million to California and
the federal government.
It's a rough-and-tumble company controlled by a rough-'em-up
chief executive. It's got the steelworkers on its case, and
environmental groups protesting its every move. It's at odds with
some of its largest stockholders, such as the California Public
Employees Retirement System and the New York City Employees'
Retirement System.
And Mikva thought Congress was a tough place to do business.
Mikva is stepping into this mess when he could be enjoying a
quiet retirement teaching law and mediating legal disputes. He's
doing it partly as a favor to a longtime friend, former Ohio
Democratic Sen. Howard Metzenbaum, who is on the slate with him.
And he's doing it against outrageously long odds. Hurwitz
controls 38 percent of the vote, so Mikva and Metzenbaum would
need nearly 90 percent of the non-Hurwitz shares to get elected.
A Chicago Bulls four-peat is more likely.
Mikva is not a natural corporate cutthroat. And he's hamstrung by
an obvious unfamiliarity with the details of Maxxam's business.
"I do not like Mr. Hurwitz's method of governing, and I am not
alone," he says, sounding like he's reading from a script. If it
were an audition, he wouldn't get the part.
But the people who have pushed Mikva into this aren't looking for
a longtime businessman. They're not looking for a shareholder
activist. They're not looking for someone who can grab headlines
with outrageous, antagonistic criticism of Hurwitz.
What they're looking for is a fight, and a fighter they can be
proud of.
"There is always an element of kabuki theatre," says shareholder
activist Nell Minow, who owns around 500 Maxxam shares. But it's
worth it because "in every proxy contest, management has to make
concessions."
It's a strange crusade for an old pol to take up: a losing battle
over unfamiliar issues.
But it's better than lobbying, or yapping for pay on the rubber
chicken circuit. And it sure beats cashing in, as Dole has done,
by talking about inadequacies in the bedroom.
As losing battles go, this one's a winner. There are plenty of
fights like this out there. Too bad there aren't many warhorses
willing to take them on.
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