SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
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240.14a-12
MAXXAM INC.
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(Name of Registrant as Specified in Its Charter)
THE COMMITTEE OF CONCERNED MAXXAM SHAREHOLDERS
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(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
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COMMITTEE OF CONCERNED MAXXAM SHAREHOLDERS
PO BOX 20045
OAKLAND, CA 94620-0877
(510) 655-8248 (TEL) 1-877-634-6546 (TOLL FREE) (510) 658-0732
(FAX)
May 5, 2000
Dear Fellow Maxxam Shareholder:
In early 1999, we formed The Committee of Concerned Maxxam
Shareholders because of what we saw as Maxxam's lack of effective
leadership and disappointing performance. More than a year has
passed, yet Maxxam is still a company in trouble. In the year
ending March 31, 2000 Maxxam's stock has lost 43.4% of its value
closing at $28.50. In 1998 Maxxam recorded a net loss of $57.2
million and in 1999 had an operating loss of $51.5 million.
In the accompanying proxy statement, we explain why we believe
Maxxam continues to underperform and why the owners of Maxxam
common stock could increase shareholder value by electing two
independent directors, FORMER U.S. SENATOR PAUL SIMON AND FORMER
FEDERAL JUDGE ABNER MIKVA, and supporting three resolutions
proposing to improve Maxxam's corporate governance.
Please vote for the Committee's recommendations on the BLUE proxy
card. To make sure your vote counts, please sign and date the
BLUE proxy card and return it immediately in the postage-paid
envelope provided. If you have already voted Maxxam's white
proxy card, you can revoke that earlier vote by simply completing
and returning our BLUE proxy card.
FORTUNE magazine (April 17, 2000) ranked Maxxam's board as one of
the six worst in America, pointing to "the company's depressing
performance: The stock is down 50% in the past 12 months." In
two consecutive rankings, BUSINESS WEEK listed Maxxam on its
roster of "The Worst Boards of Directors" in America. The most
recent survey (January 24, 2000) ranked Maxxam's board as the
12th worst and described it as a "small, cozy board dominated by
CEO. Makes repeat showing on worst list." The magazine CORPORATE
BOARD MEMBER (Autumn 1999) named Maxxam's board one of five
"Lollapa-losers." (Consent of publications not sought or
obtained.)
From March 31, 1995 to March 31, 2000, Maxxam's share value has
consistently lagged far behind its industry peers during the
strongest bull run in stock market history. Maxxam's stock has
recently hit a five year low. The graph summarizes Maxxam's
performance since March 31, 1995.
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MAXXAM'S SHARE PERFORMANCE COMPARED
TO THE S&P 500 AND INDUSTRY PEERS
S&P Paper
and
S&P S&P Forest
500 Aluminum Products
Maxxam Index Index Index
<S> <C> <C> <C> <C>
1 Year Return -43.4% 16.5% 56.9% 7.4%
2 Year Return -53.5% 36.0% 58.6% -1.7%
3 Year Return -37.0% 97.9% 55.1% 21.5%
4 Year Return -43.0% 129.2% 66.2% 19.5%
5 Year Return -1.3% 199.3% 122.7% 24.7%
Source: Bloomberg News Service. Notes: Data as of market close,
March 31, 2000. Returns summary takes into account share/index
price return, but does not include dividends issued to
shareholders.
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The Committee members propose former U.S. SENATOR PAUL SIMON and
former FEDERAL JUDGE ABNER MIKVA as its nominees to serve as the
directors chosen by holders of Maxxam common stock. We believe
our candidates have the integrity, leadership and business and
legal experience necessary to make a substantial positive impact
on Maxxam's management and board of directors.
PAUL SIMON is currently the director of the Public
Policy Institute at Southern Illinois University
and a professor of public policy and journalism.
He also serves on the board of directors of the
photograph of Chicago Mercantile Exchange and of Penn-America
Senator Simon Group, Inc. He served two terms as a United States
Senator from Illinois and was also the Lieutenant
Governor of Illinois and a Member of Congress from
that State. He previously built a chain of 13
newspapers throughout southern and central
Illinois.
ABNER MIKVA was elected to five terms as a Member
of Congress from Illinois until his appointment
to the U.S. Court of Appeals for the D.C. Circuit
in 1979, where he served as Chief Judge from 1991-
94. He served as White House Counsel in 1994-95
photograph of and currently works in mediation and arbitration
Judge Mikva for JAMS/Endispute, a dispute resolution firm. He
is also a visiting professor at the College of
Law, University of Illinois and has legal
experience in corporate and securities law.
Members of the Committee of Concerned Maxxam Shareholders are The
Rose Foundation for Communities and the Environment and the
United Steelworkers of America.
THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM (CalPERS), the
third largest institutional investor of Maxxam stock with 229,800
shares of common stock (3.2% of common stock), and the NEW YORK
STATE COMMON RETIREMENT FUND with 45,700 shares of common stock
have independently endorsed Messrs. Simon and Mikva, who were
independently nominated for Maxxam's board by Alan Kahn (of
Kahn Brothers & Company, Inc).
TO ENSURE THAT YOUR VOTE IS COUNTED, PLEASE REVIEW THIS TIME
SENSITIVE INFORMATION AND SEND IN YOUR COMPLETED BLUE PROXY CARD
TODAY. REMEMBER TO SIGN AND DATE THE BLUE PROXY CARD. IF YOU
HAVE ALREADY VOTED MAXXAM'S WHITE PROXY CARD, YOU CAN REVOKE THE
EARLIER VOTE BY SIMPLY COMPLETING AND RETURNING OUR BLUE PROXY
CARD.
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MAXXAM FACES COSTLY COURT CASES AND WHAT WE VIEW AS AVOIDABLE
LABOR AND ENVIRONMENTAL DISPUTES:
-- Litigation filed by the FDIC and the U.S. Office of Thrift
Supervision seeks $821 million in restitution and penalties
based on allegations linking Maxxam and CEO Hurwitz to the
failed United Savings Association of Texas.
-- A labor dispute began on September 30, 1998, when 2,900
workers represented by the United Steelworkers of America
went on strike at five plants run by Maxxam's 63%-owned
Kaiser Aluminum Corporation's operating unit. On January
14, 1999, these workers offered to return to work but were
locked out by the company. Kaiser Aluminum Corporation
has reported a net loss of $54.6 million since the dispute
began.
-- A July 5, 1999, explosion that destroyed much of Kaiser's
Gramercy, Louisiana alumina facility, injured 29 workers and
left six severely injured. Since the labor dispute began,
Kaiser has been operating this facility and four other
plants using replacement workers. The federal Mine Safety
and Health Administration ("MSHA") levied $533,000 in fines
against Kaiser for 21 civil violations, including operating
the plant beyond its limits, lack of worker training and
"management's failure to identify hazardous conditions and
unsafe practices." The fine is the largest ever assessed by
MSHA for a non-fatal accident.
-- According to The Wall Street Journal (3/22/00), MSHA has
launched a criminal investigation to determine whether
"Kaiser operated with criminal disregard for workers'
safety, and whether the company destroyed crucial evidence."
(Consent of publication not sought or obtained.).
-- Maxxam has failed to capitalize on the so-called "Headwaters
Agreement." Under this agreement, the company received an
extraordinary payment of $380 million in cash and property
in 1999, yet the Company posted significant operating
losses. The Agreement has not ended the public
controversy surrounding company timber operations. Maxxam
currently faces seven pending lawsuits related to Pacific
Lumber logging.
INDEPENDENTLY SPONSORED RESOLUTIONS
The Committee supports three shareholder proposals to be voted on
at the 2000 annual meeting. John Harrington and the As You Sow
Foundation have proposed that shareholders approve a resolution
recommending Cumulative Voting for directors. Brent Blackwelder
has proposed Annual Elections of Maxxam's "general directors,"
who are elected by the holders of common and preferred stock,
voting together. In addition, Nell Minow and The Rose Foundation
for Communities and the Environment have proposed that
shareholders approve a resolution recommending that a majority of
board members to be independent. The Committee intends to
support these important shareholder recommendations, and we
encourage you to do the same.
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UNLOCK THE VALUE OF YOUR MAXXAM INVESTMENT
USE THE BLUE PROXY CARD
VOTE FOR MESSRS. SIMON AND MIKVA
APPROVE THE CUMULATIVE VOTING, ANNUAL ELECTION
AND INDEPENDENT BOARD SHAREHOLDER PROPOSALS
If you have any questions about the resolutions or Senator
Simon's and Judge Mikva's plans to increase shareholder value,
please call The Committee of Concerned Maxxam Shareholders
toll free at: 1-888-284-2959.
Sincerely,
/s/ Jill Ratner /s/ David Foster
Jill Ratner David Foster
President Director, District 11
Rose Foundation 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, the Rose Foundation's president, who owns 90 shares of
Maxxam common stock as a tenant in common; the United
Steelworkers of America, which owns 1002 shares of Maxxam common
stock; Paul Simon, who owns 100 shares of Maxxam common stock;
Abner Mikva, who owns 50 shares of Maxxam common stock; the As
You Sow Foundation, which owns 100 shares of Maxxam common stock;
and Dorset Management Corporation, which does not own Maxxam
stock. The Rose Foundation and the United Steelworkers of
America constitute the members of the Committee of Concerned
Maxxam Shareholders and Messrs. Simon and Mikva are the
Committee's two nominees for director.
SEND IN YOUR COMPLETED
BLUE PROXY CARD TODAY.
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