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
<PAGE>
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
THREE SHAREHOLDER PROPOSALS RECOMMENDING THAT MAXXAM INC.
(1) PERMIT CUMULATIVE VOTING IN THE ELECTION OF COMMON DIRECTORS,
(2) DECLASSIFY ITS BOARD OF DIRECTORS SO THAT
GENERAL DIRECTORS ARE ELECTED ANNUALLY
AND
(3) PROVIDE THAT A MAJORITY OF ALL BOARD MEMBERS
ARE INDEPENDENT OF MAXXAM MANAGEMENT
__________, 2000
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 8:30 A.M. on Wednesday, May 24, 2000, at
The Power Center, 12401 South Post Oak, 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 ___________, 2000.
Members of the Committee are The Rose Foundation for
Communities and the Environment (the "Rose Foundation") and the
United Steelworkers of America ("USWA"). They, along with Abner
J. Mikva and Paul Simon, the independent candidates for Common
Director, may be deemed participants in this solicitation, and
they collectively hold 0.016% of the common stock and 0.008% of
the common and preferred stock, aggregated together for voting
purposes (see "Solicitation" and "Voting Rights" below).
PRELIMINARY PROXY MATERIALS 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. In
1999, Maxxam posted an operating loss of $51.5 million and would
have shown an overall net loss for a second straight year, but
for a one-time $239.8 million gain on the sale of Headwaters
Timberlands, as well as a pre-tax $85 million gain on insurance
proceeds collected following the 1999 explosion of an alumina
production facility operated by Kaiser Aluminum Corp. ("Kaiser"),
a Maxxam subsidiary.
Maxxam's stock price dropped 43% over the year ending March
31, 2000, during which period the S&P 500 index rose 16.5%. Over
the past year Maxxam also underperformed its industry peers.
This 43% decline compares unfavorably with a 56.9% increase in
the S&P aluminum index, a 7.4% increase in the S&P paper and
forest products index and a 6.7% percent decline in the S&L real
estate investment trust ("REIT") index over the same period.
Poor performance has been a problem for more than the past
year. The table below summarizes Maxxam's performance over the
last one, two, three, four and five years, compared with the
performance of the S&P 500; the S&P aluminum index (Kaiser
Aluminum Corp., Maxxam's 63%-owned subsidiary, accounted for 88
percent of revenues in 1999); the S&P paper and forest products
index (Maxxam's forest products subsidiaries, Pacific Lumber Co.
and Britt Lumber Co., accounted for eight percent of 1999
revenues); and the S&P REIT index (Maxxam's real estate
operations accounted for 2% of 1999 revenues), which index began
in 1997.
<TABLE>
<CAPTION>
Maxxam Share Performance Compared to the S&P 500 and Industry
Peers
S&P Paper
and
S&P S&P Forest S&P
500 Aluminum Products REIT
Maxxam Index Index Index Index
<S> <C> <C> <C> <C> <C>
1 Year Return -43.4% 16.5% 56.9% 7.4% -6.7%
2 Year Return -53.5% 36.0% 58.6% -1.7% -32.8%
3 Year Return -37.0% 97.9% 55.1% 21.5% -25.0%
4 Year Return -43.0% 129.2% 66.2% 19.5% n.a.
5 Year Return -1.3% 199.3% 122.7% 24.7% n.a.
PRELIMINARY PROXY MATERIALS 2
<PAGE>
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.
</TABLE>
Thus, a $10,000 investment in Maxxam on March 31, 1995 would
have been worth $9870 on March 31, 2000. A comparable investment
(exclusive of dividends) in the S&P 500, the S&P aluminum index,
and the S&P paper and forest products fund would have been worth
$29,929, $22,272 and $12,470, respectively.
In two consecutive rankings, Business Week listed Maxxam on
its roster of "The Worst Boards of Directors" in America. In its
December 8, 1997 issue, Maxxam's board was voted the 10th worst
and called a "tiny board with little business experience
dominated by CEO" Charles Hurwitz. In its January 24, 2000
issue, Maxxam's board was ranked the 12th worst and described 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 authors and publications not sought or 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"
- -- those directors elected solely by the 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 Abner J. Mikva and Paul Simon, both independent
nominees, to serve on Maxxam's board as two of the three
directors chosen by the holders of common stock.
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.
Paul Simon is currently 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 Chicago Mercantile Exchange and of Penn-
America 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 in southern and central Illinois.
PRELIMINARY PROXY MATERIALS 3
<PAGE>
2. Adopting three 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");
(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"); and
(c) a resolution requesting that the board of directors take
steps to provide that a majority of all board members shall be
independent of the Company (the "Independent Board Proposal").
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 Abner J.
Mikva and Paul Simon to serve as two of the three Common
Directors, to be elected by the holders of common shares in lieu
of two of the three individuals nominated by the Company.
Shareholders will also be able to use the BLUE card to vote on
the Cumulative Voting Proposal, the Declassified Board Proposal,
and the Independent 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 March 31, 2000 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 three Common Directors.
PRELIMINARY PROXY MATERIALS 4
<PAGE>
PRIOR SOLICITATIONS BY CERTAIN COMMITTEE MEMBERS
In 1999, the Committee conducted an independent proxy
solicitation on behalf of Mr. Mikva and another candidate and in
favor of resolutions similar to the Cumulative Voting and
Declassified Board Proposals being offered this year. In
addition the Rose Foundation (a Committee member), along with
Jill Ratner, its president, and Thomas W. Little, its executive
director, were sponsors of a cumulative voting resolution similar
to the one submitted this year by the As You Sow Foundation and
John C. Harrington, who were also sponsors of that 1999
resolution. In 1998, Ms. Ratner and Mr. Little, along with the
California Public Employees Retirement System ("CalPERS") and the
As You Sow Foundation, sponsored the Declassified Board Proposal
that Brent Blackwelder has submitted for consideration by the
shareholders this year. In 1997, Ms. Ratner, Mr. Little, and the
As You Sow Foundation conducted an independent proxy solicitation
on behalf of two other independent candidates for Common
Director, as well as a shareholder resolution asking the Company
to sell or trade its properties within the 60,000 acre Headwater
Forest area in northern California to a government agency or
conservation organization for appropriate consideration.
ELECTION OF DIRECTORS (ITEM 1)
The Company's Restated Certificate of Incorporation
currently 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 outstanding, 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 directors (rounded up to the nearest whole
number) to be in office subsequent to such annual meeting.
In March 2000 the Company increased the size of the board of
directors from five members to seven. As newly configured, the
board of directors will have four General Directors, two of whom
will be elected this year to multi-year terms, and three Common
Directors, who will be elected annually.
The Committee's members have nominated Abner J. Mikva and
Paul Simon to serve on the board of directors of Maxxam Inc. as
two of the three 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. Mikva and Simon were also nominated by investment advisor
Alan Russell Kahn, although Mr. Kahn is not a participant in
the present solicitation within the meaning of Item 4 of Reg.
240.101 promulgated pursuant to the Securities and Exchange Act
of 1934, as amended. Both nominees have consented to serve if
elected.
The Committee believes that Messrs. Mikva and Simon 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
PRELIMINARY PROXY MATERIALS 5
<PAGE>
shareholder interests and increasing shareholder value, as we
explain more fully in the following section.
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
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, 74, 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 and 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, 2000 and held in street
name.
Paul Simon served in the United States Senate from 1985 to
1997, where his committee assignments included the Budget and
Judiciary Committees. Prior to his election to the Senate, Mr.
Simon served ten years in the United States House of
Representatives, one term as Lieutenant Governor of the State of
Illinois and fourteen years in the Illinois legislature.
Senator Simon currently serves on the board of Penn-America
Insurance and also serves on the board of the Chicago
Mercantile Exchange. He has extensive experience in the
publishing industry, where he began his career as an editor and
publisher and built a chain of 13 newspapers throughout
southern and central Illinois before selling the chain in 1966.
Senator Simon, 71, is the founder and director of the Public
Policy Institute at Southern Illinois University, and a professor
of public policy and journalism. His address is 1231
Lincoln Drive, Southern Illinois University, Carbondale, Illinois
62901. He is the beneficial owner of 100 shares of Maxxam, Inc.
stock, purchased March 20, 2000 and held in street name.
For the reasons stated more fully in the following section,
the Committee believes that Messrs. Mikva and Simon should be
chosen by the holders of common stock as our Common Directors in
lieu of any of the three nominees presented in the Company's
Proxy Statement for these three positions (Robert J. Cruikshank,
Stanley D. Rosenberg and Michael J. Rosenthal). The Company's
2000 Proxy Statement (incorporated herein by reference) sets
forth the names and ages of these nominees for Common Director
and of J. Kent Friedman and Ezra J. Levin, the board's nominees
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 outstanding 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 Judge Mikva and Senator Simon
offer precisely the kind of experience and judgment that holders
of Maxxam common stock need to enhance the value of their
PRELIMINARY PROXY MATERIALS 6
<PAGE>
Maxxam investment. 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. Senator Simon had a successful career in business
before devoting himself to public service, and he currently
serves on the board of directors of the Chicago Mercantile
Exchange and Penn-American Group, Inc., a company
traded on the New York Stock Exchange with its primary operations
in insurance. 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 past year has seen the following events:
On July 5, 1999, an explosion destroyed much of Kaiser's
Gramercy, Louisiana alumina facility, injuring 29 workers and
leaving six severely injured, including one who is now blind.
The explosion covered workers in boiling lye and showered
the surrounding community with asbestos, lye and red mud. Kaiser
had been operating this plant and four other plants using
replacement workers after it decided to lock out 2900 workers
represented by the USWA in January 1999.
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 and to initiate actions to
correct these conditions and practices." The fine is
the largest ever assessed by MSHA for a non-fatal accident.
The Wall Street Journal reported in March 2000 that MSHA has
launched a probe into whether the company should be charged with
criminal violations as a result of the explosion.
Owing to the extensive damage to the facility, Kaiser
expects production to remain completely curtailed until some
partial production begins in the third quarter of 2000. Full
production is not expected to resume until the first quarter of
2001 at the earliest.
Since Kaiser's labor dispute began, Kaiser's Mead plant in
Spokane, Washington has been fined $169,200 by the state of
Washington's Department of Ecology for violations of state air
emission and water quality laws.
Maxxam's Pacific Lumber subsidiary remains a focus of
controversy and litigation:
-- Three pending lawsuits claim that Company logging
operations have damaged neighboring property and
property values; these suits seek unspecified monetary
damages, and ask the court to enjoin certain future
timber operations of the Company.
-- A wrongful death suit, filed in September, 1999, seeks
unspecified damages based on allegations that Pacific
Lumber's conduct and policies led to an incident in
which an employee killed a young man by felling a
tree on top of him.
-- The Sierra Club and the Environmental Protection
Information Center ("EPIC") have sued to block logging
on a piece of Company property that is surrounded
on three sides by the newly created Headwaters Reserve,
alleging the modifications
PRELIMINARY PROXY MATERIALS 7
<PAGE>
in the plan did not receive
appropriate environmental review.
-- On March 31, 1999, EPIC and Sierra Club sued to stop
implementation of the Pacific Lumber Sustained Yield
Plan ("SYP"), the Company's comprehensive plan for
logging operations over the next 120 years, claiming
that the plan violates both California's Environmental
Quality Act and Endangered Species Act.
-- Also on March 31, 1999, Don Kegley and the United
Steelworkers of America, filed a separate lawsuit
challenging the SYP on the grounds that it fails to
provide for sustained timber production and harvesting
over time. Additional information on this action is
is supplied below in the "Solicitation" section of this
proxy statement.
-- EPIC and Sierra Club have also filed a Notice of Intent
to Sue challenging the Company's Habitat Conservation
Plan, on the grounds that it does not meet the
requirements of the federal Endangered Species Act.
No determination has been made at this time as to the merits
of any of these cases, and in each instance a final judgment will
be determined in a court of law.
The Committee also believes that electing these independent
candidates is important, given the Company's failure over the
past year to capitalize on the so-called "Headwaters Agreement."
Under this Agreement, into which the Company entered on March 3,
1999, Maxxam received an extraordinary payment of $380 million in
cash and property from the United States and the State of
California, as payment for the sale of 5,600 acres of forest land
owned by Pacific Lumber Company in northern California. But
despite Maxxam's recognition of a $239 million gain in the
Headwaters transaction, shareholders have seen relatively little
benefit from the Headwaters Agreement. The Company reported
significant operating losses and a relatively small amount
of net income, and, approximately one year after consummation of
the Headwaters Agreement, Maxxam stock price is where it was five
years ago.
Similar opportunities may come along in the near future.
The California legislature has authorized an expenditure of
$79.7 million for additional Pacific Lumber properties in the
Headwaters area of northern California, and the legislature has
allocated an additional $20 million towards the purchase of even
more property. The Committee questions whether, based on the
experience to date, the board would use those resources to
maximize shareholder value.
Unfortunately, Maxxam's problems go back for more than just
the past year, and some long-standing issues that were unresolved
last year are still unresolved.
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.
Maxxam and Charles Hurwitz, the Company's Chief Executive
Officer and Chairman of the
PRELIMINARY PROXY MATERIALS 8
<PAGE>
Board, are respondents in an action brought by the Office of
Thrift Supervision ("OTS"), an agency of the United States
Department of the Treasury, seeking $821,000,000 in restitution.
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, who is expected to
rule later this year. No determination as to the merits of this
case has been made at this time, and a final judgment will be
determined in an appropriate administrative proceeding (In the
Matter of United Savings Association of Texas).
In addition, Mr. Hurwitz is currently defending a 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). The suit, which originally sought
damages in excess of $250,000,000, now seeks unspecified damages
relating to any amounts that OTS does not collect in the suit
described above from the Company or from Federated Development
Company, a New York business trust of which Mr. Hurwitz is
Chairman of the Board and CEO. 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
judgment will be made in a court of law.
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.
These are not isolated incidents, for allegations of
fiduciary lapses have surrounded Maxxam's CEO and Chairman, Mr.
Hurwitz in other litigation as well. 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 not found fair 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
defendants, 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 the 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).
There remains as well the fact that Maxxam's Kaiser Aluminum
Corp. subsidiary is embroiled in a serious labor dispute,
the longest in Kaiser's history. The Committee believes that
this dispute and the associated costs were avoidable.
On September 30, 1998, approximately 2900 workers
represented by the USWA, a participant in this solicitation, went
on strike at five plants operated by Kaiser Aluminum & Chemical
Corporation ("KACC"), which is wholly owned by Kaiser. The
strike began upon the expiration of the existing contract
on that date, with the USWA protesting what it viewed as
unfair labor practices by the Company, and with the parties
unable to resolve differences on various issues,
PRELIMINARY PROXY MATERIALS 9
<PAGE>
including job
security and pensions. 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. On July 16, 1999 the Oakland
Regional Office of the General Counsel of the NLRB dismissed the
above charge. On September 23, 1999, the USWA
appealed the Oakland Office's dismissal to the General Counsel's
Office of Appeals, and KACC and the USWA await the decision of
that office. If the NLRB General Counsel's Office of
Appeals reverses the dismissal of the Oakland Regional Office on
grounds that include allegations that the lockout is unlawful,
the potential gross back pay liability could be as much as $3
million per week from January 14, 1999.
KACC continued to operate these plants since October 1,
199 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. KACC has explained its refusal to accept the USWA
return-to-work offer on the ground that KACC is acting "in
support of its bargaining position," and KACC officials have
expressed concern that such a return to work would be under the
terms of the expired contract and that in the absence of a new
contract that contained a "no strike" agreement, KACC might be
susceptible to a strike. Kaiser Aluminum, which produced
88.4% of Maxxam's 1999 revenues and accounted for approximately
71.5% of its total assets as of December 31, 1999, reported a net
loss of $54.1 million for 1999 and a net loss of $38.9 million
for the 4th quarter of 1998.
Negotiations regarding the labor dispute resumed in April
1999 and are still continuing. According to KACC, they have
been "constructive," and both parties "have agreed to continue
meeting on a regular basis to work toward a settlement," although
no collective bargaining agreement has been reached.
* * *
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 ABNER J. MIKVA AND PAUL SIMON TO SERVE ON THE BOARD
OF DIRECTORS.
THE CUMULATIVE VOTING PROPOSAL (ITEM 2)
The Committee further urges that the shareholders of Maxxam
Inc.
PRELIMINARY PROXY MATERIALS 10
<PAGE>
adopt the following resolution (which is accompanied by the
proponents' "Supporting Statement"), which is sponsored by the
As You Sow Foundation and John C. Harrington:
"RESOLVED: The shareholders request that the board of
directors take steps to provide for cumulative voting in the
election of those directors elected solely 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."
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 allows
preferred stock to outvote common stock ten to one. Maxxam's
CEO and affiliates control nearly all preferred stock and
approximately 37% of common stock, giving the CEO almost complete
control of Board elections and policy.
We believe that Maxxam suffers from excessive CEO control of
Board affairs. This year, Corporate Board Member magazine
identified Maxxam's Board as one of the five worst in America.
We believe subsequent events demonstrate increasing need for
a minority shareholder voice on the Board. We believe subsequent
events demonstrate increasing need for a minority shareholder
voice on the Board.
Maxxam has shown operating losses for some time, with a 1998
net loss of $57.2 million, or $8.17 per share. We believe
only the recent consummation of the Headwater Agreement allowed
the company to report net profits in the first nine months of
1999.
This gain, moreover, may be short-lived. In 2000 the U.S.
Treasury Office of Thrift Supervision Director is expected to
issue an order on approximately $820 million in federal claims
against Maxxam, CEO Hurwitz and a Hurwitz business trust.
Maxxam is indemnifying Mr. Hurwitz in this case and has paid $40
million in this and related litigation, including Mr. Hurwitz'
expenses.
In our view, company operating practices continue to be
mired in needless controversy and expensive litigation.
Inability to secure regulatory approval for timber harvest plans
ha adversely affected the company's forest products segment and
reduced net sales. Meanwhile, the Headwaters Agreements are
being challenged in court as allowing too much logging.
The Company's Kaiser Aluminum division remains troubled. An
expensive, and we believe avoidable, labor dispute began in
September 1998. Since then, Washington State fined Kaiser
$250,000 for air pollution violations. In July 1999
Kaiser's Gramercy, Louisiana plant exploded, injuring employees
and showering caustic debris on the surrounding area. Numerous
property
PRELIMINARY PROXY MATERIALS 11
<PAGE>
claims have been filed. The Gramercy plant remains closed, with
civil and/or criminal fines and penalties possible.
In light of these significant challenges facing the company,
we believe Maxxam's minority shareholders need cumulative voting
to protect their interests and give them a voice. Last year's
cumulative voting resolution received nearly 14% of the vote.
Safeguard your investment. Vote FOR cumulative voting.
* * *
THE COMMITTEE OF CONCERNED MAXXAM SHAREHOLDERS
RECOMMENDS A VOTE FOR THE CUMULATIVE VOTING PROPOSAL.
THE DECLASSIFIED BOARD PROPOSAL (ITEM 3)
The Committee further seeks your support for the following
proposal, which has been submitted by Brent Blackwelder and is
accompanied by the "Supporting Statement" submitted by Mr.
Blackwelder to Maxxam for inclusion in the Company's proxy
materials:
"RESOLVED: Maxxam, Inc. shareholders 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
This proposal encourages the board to reorganize itself so
that each General Director would stand before the shareholders
for re-election annually. Currently, shareholders can only vote
on one-third of the board at any given time.
We believe that corporate governance procedures and
practices, and the level of accountability they impose, are
closely related to financial performance. In our view, when
directors are accountable for their actions yearly, they and the
company perform better.
We believe that shareholders deserve a greater level of
accountability given Maxxam's disappointing financial
performance, and what we perceive as its poor stewardship of
critical natural and human resources. For example,
-- According to Institutional Shareholder Services,
"There is no dispute that [Maxxam's] performance has
been poor for many years relative to its peers."
Seven out of the ten S&P 1500 Paper & Forest Products
Companies and two-thirds of the S&P 1500 Aluminum
companies outperformed Maxxam in the five year period
ending December 21, 1999. Recently, Maxxam trailed
the S&P 1500 Aluminum and Paper & Forest Products
Sector Scorecards for the one and two-year periods ending
December 21, 1999.
PRELIMINARY PROXY MATERIALS 12
<PAGE>
-- We believe that Maxxam's environmental, health and
safety practices continue to attract legal action
and public criticism, and contribute to lagging
financial performance. Maxxam's 1999 third quarter
10-Q mentions four forestry-related lawsuits, 96,000
pending asbestos claims, and 30 lawsuits stemming from
the explosion of Kaiser's Gramercy, Louisiana alumina
refinery.
-- We believe that Kaiser's troubled labor relations have
serious ramifications for its operating costs.
Currently, the Company buys discount power from
Bonneville Power Authority, which is reviewing its
rates. Washington Governor Locke has endorsed
withholding power discounts from companies with
environmental, labor or community problems. At
full rates, power costs could increase 50%, and
could seriously reduce Kaiser's competitiveness.
In light of such events, we believe that our Company's
leadership is in urgent need of greater accountability. Board
classification insulates its directors from immediate challenge.
We believe that requiring all directors to stand for election
every year is one of the best ways to hold the board and
individual directors accountable.
At the 1999 Maxxam annual meeting, approximately half of the
shares not owned or controlled by CEO Hurwitz and/or his
affiliates voted in support of annual election of the General
Directors. This year, we urge you to join us in VOTING
TO DECLASSIFY the terms of election, as a powerful tool for
management incentive and accountability.
* * *
THE COMMITTEE OF CONCERNED MAXXAM SHAREHOLDERS
RECOMMENDS A VOTE FOR THE DECLASSIFIED BOARD PROPOSAL.
THE INDEPENDENT BOARD PROPOSAL (ITEM 4)
The Committee further seeks your support for the following
proposal, which has been submitted by the Rose Foundation for
Communities and the Environment, a participant in this
solicitation, and Nell Minow. The resolution is accompanied by
the "Supporting Statement" submitted by the Rose Foundation and
Ms. Minow for inclusion in the Company's proxy materials:
"RESOLVED: the shareholders request the board of directors
take steps to provide that a majority of all board members shall
be 'independent.'
"For purposes of this resolution, an independent director
is one who:
-- has not been employed by Maxxam or an affiliate in an
executive capacity for the past five years;
-- is not a member of a firm that is one of Maxxam's paid
advisors or consultants;
-- is not employed by a significant Maxxam customer or
supplier;
-- does not have personal services contracts with Maxxam or
an affiliate;
-- is not employed by a non-profit entity that receives
significant contributions from Maxxam;
PRELIMINARY PROXY MATERIALS 13
<PAGE>
-- is not a relative of an executive of Maxxam or an
affiliate;
-- is not part of an interlocking directorate in which the
CEO or other executive officer of Maxxam serves on the
board of another corporation that employs that director;
and
-- does not have any personal, financial and/or
professional relationships with the CEO or other
executive officer that could interfere with the exercise
of independent judgment by such director."
SUPPORTING STATEMENT
This proposal seeks to establish a level of independence
that we believe will permit clear and objective decision making
in the best long term interest of all shareholders.
Two of Maxxam's five directors are company insiders; a third
has long been associated with CEO Hurwitz as his attorney and
trustee of Hurwitz' personal business trust. Maxxam thus falls
far short of the level of independence proposed.
In our view, board dominance by insiders and people having
other significant management ties can raise questions about
whether a board is giving priority to management's interest at
the shareholders' expense. According to a committee of the
Business Roundtable, an association of leading corporate CEOs:
"Boards of Directors at large publicly held
corporations should be composed predominately of
independent directors who do not hold management
responsibilities within the corporation... In order to
underscore their independence, non-management directors
should not be dependent on the companies on whose
boards they serve."
Maxxam's stock trails the S&P Aluminum and S&P Paper and
Forest Products Indices for one and two-year periods ending
December 21, 1999. Maxxam lost $57,200,000 in 1998, reporting
operating losses of $56,900,000 in the first three quarters of
1999. The company will likely avoid a net loss in 1999 only
because of the Headwaters sale. We believe an independent board
could better evaluate and deal with factors contributing to these
losses, which may include ongoing labor and environmental
controversies.
An independent board is also important at this time, as an
administrative law judge is currently reviewing a suit brought by
the federal government seeking $820,000,000 from Maxxam and
Maxxam's CEO for the failure of a savings and loan Maxxam
allegedly controlled. We believe an independent board could
best consider how to deal with this serious matter, including
exploring settlement options that may be in the best interests of
all Maxxam shareholders.
Please vote FOR this resolution.
* * *
The Committee recommends a vote FOR the Independent Director
Resolution. If anything, recent developments have underscored
the need for an independent board at this Company.
On January 24, 2000, Business Week Magazine, for the second
time in just over two years, identified Maxxam's board as among
the 25 worst in the nation, describing it as a "small, cozy
PRELIMINARY PROXY MATERIALS 14
<PAGE>
board, dominated by CEO." (Consent of publication not sought
or obtained) Maxxam's Board currently is composed of the
following individuals:
-- Mr. Charles E. Hurwitz is Chief Executive Officer and a
controlling shareholder of Maxxam.
-- Mr. Paul N. Schwartz, Maxxam's President, is also Chief
Financial Officer, and Chief Operating Officer of Maxxam.
-- Mr. Ezra G. Levin has acted as CEO Hurwitz' attorney for
more than 25 years and was trustee of his personal business
trust until 1995.
-- Mr. Stanley D. Rosenberg has been Mr. Hurwitz's business
associate and attorney for 25 years. Although Mr. Rosenberg has
served on the Maxxam's board since 1981 he recently stated under
oath that he did not clearly understand the ownership structure
of Maxxam's two major subsidiaries, Pacific Lumber Company
and Kaiser Aluminum, although Kaiser's sales constituted 88% of
Maxxam's revenues in 1998 and 1999.
-- Mr. Robert J. Cruikshank, has served seven one year terms
on Maxxam's board, each time nominated by a committee without
independent members.
In March 2000, the Company proposed expanding the size of
the board to seven members and nominated the two following
individuals to serve in addition to the five incumbents named
above:
-- J. Kent Friedman, who has served as Maxxam's General
Counsel since December 1999 after previously serving as the
Company's outside counsel.
-- Michael J. Rosenthal, Chairman and President of M.J.
Rosenthal and Associates, Inc., an investment company.
We believe that adding the two new board members proposed by
the Company would not give the board the independence needed to
address Maxxam's financial problems and to overcome the legal and
regulatory challenges facing the Company.
VOTING PROCEDURES
The Company's proxy statement and proxy card include the
Cumulative Voting Proposal, the Declassified Board Proposal and
the Independent Board Proposal, but not the names of Abner J.
Mikva and Paul Simon, 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
Judge Mikva or Senator Simon 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
required to constitute a quorum for the transaction of business
at the Annual Meeting. Under applicable Delaware law,
abstentions and broker non-votes (i.e., shares held in street
name as to which the broker, bank or other nominee has no
discretionary power to vote on a particular matter, has
PRELIMINARY PROXY MATERIALS 15
<PAGE>
received no instructions from the persons entitled to vote such
shares and has appropriately advised the Company that it lacks
voting authority) are counted for purposes of determining the
presence or absence of a quorum for the transaction of business.
A plurality of the votes present, in person or by proxy, is
necessary for the election of directors. With regard to the
election of directors, votes may be cast in favor or withheld;
votes that are withheld or broker non-votes will be excluded
entirely from the vote and will have no effect on the outcome.
Abstentions may not be specified in the election of directors.
A stockholder may, with respect to each other matter
specified in the notice of the meeting, including the Cumulative
Voting Proposal, the Declassified Board Proposal and the
Independent Board Proposal, (I) vote "FOR," (ii) vote "AGAINST"
or (iii) "ABSTAIN" from voting. An affirmative vote of a
majority of the shares present in person or by proxy and entitled
to vote at the annual meeting is required for approval of the
other matters presented, including the Cumulative Voting
Proposal, the Declassified Board Proposal and the Independent
Board Proposal. Shares represented by proxies that are marked
"ABSTAIN" on such matters and proxies relating to broker non-
votes will be counted as shares present for purposes of
determining the presence of a quorum. Such shares, however, will
not be treated as shares voting and therefore will not affect the
outcome of the vote on matters such as the Cumulative Voting
Proposal, the Declassified Board Proposal and the Independent
Board Proposal. The Cumulative Voting Proposal, the Declassified
Board Proposal and the Independent Board Proposal are advisory in
nature and cannot be implemented without board approval.
Unless otherwise directed on the enclosed BLUE proxy card,
as more fully described below, the Committee will vote FOR Mr.
Mikva and FOR Mr. Simon to serve as two of the Common Directors
chosen by the holders of common stock (Item 1); we will also vote
FOR the Cumulative Voting Proposal (Item 2); FOR the Declassified
Board Proposal (Item 3) and FOR the Independent Board Proposal
(Item 4) 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. Mikva, Mr.
Simon, or both as Common Directors, or you may withhold
authority to vote for the election of Mr. Mikva, Mr. Simon, or
both by marking the proper box or boxes on the BLUE Annual
Meeting proxy card. It will not be possible to vote on the
election of J. Kent Friedman or Ezra J. Levin, who have been
nominated by the board of directors to serve as General
Directors to be chosen by holders of common stock and preferred
stock, voting together, by using the BLUE Annual Meeting card.
Nor will it be possible use the BLUE Annual Meeting proxy card to
vote on the election of Robert J. Cruikshank, Stanley D.
Rosenberg or Michael J. Rosenthal, who have been nominated by the
board of directors to serve as Common Directors to be chosen by
holders of common stock. 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
FOR THE ELECTION OF MR. MIKVA AND MR. SIMON AS COMMON
DIRECTORS (ITEM 1), AS WELL AS FOR THE
PRELIMINARY PROXY MATERIALS 16
<PAGE>
CUMULATIVE VOTING PROPOSAL (ITEM 2), THE DECLASSIFIED BOARD
PROPOSAL (ITEM 3) AND THE INDEPENDENT BOARD PROPOSAL (ITEM 4),
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 Bernard L. Birkel, and
Maxxam's offices are located at 5847 San Felipe, Suite 2600,
Houston, Texas 77057, 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
Foundation, 6008 College Avenue, Suite 10, Oakland, California
94618; its President, Jill Ratner, and Executive Director,
Thomas W. Little, who own 90 shares of Maxxam common stock as
tenants in common; Rose Foundation staff, including Carla Din and
Karla James; the United Steelworkers of America, 5 Gateway
Center, Pittsburgh, Pennsylvania 15222, which owns 1002 shares of
Maxxam common stock (two shares purchased on December 14, 1998
and 1000 shares purchased on March 3, 1999); USWA staff,
including David Foster and Scott Adams; the Committee's two
nominees, Judge Mikva, who owns 50 shares (purchased on March 17,
2000, and Senator Simon, who owns 100 shares (purchased on March
20, 2000; and David M. Knott, who does not own any shares.
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 $_______, and to date
they have expended approximately $25,000. 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
in northern California, which is owned by Pacific Lumber Company,
a Maxxam subsidiary, and which contains several thousands of
acres of old-growth redwood trees. In March 1999, Maxxam,
the United States and the State of California reached final
agreement on the so-called "Headwaters Agreement," under which
Maxxam received an extraordinary payment of $380 million in cash
and property in return for the sale of 5600 acres of redwoods,
including 3000 acres of old-growth redwoods. An additional 1984
acres will be acquired in the future, and a Habitat Conservation
Plan approved by the U.S. Department of the Interior establishes
conditions under which Pacific Lumber can log on 210,000 acres of
nearby land.
The Rose Foundation and its Headwaters Acquisition and
Restoration Trust have solicited
PRELIMINARY PROXY MATERIALS 17
<PAGE>
contributions that would be used towards purchasing areas of the
Headwaters Forest that are not acquired by the federal government
or the State of California, in the event that Maxxam 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 $5,679.37 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.
For several years, the Rose Foundation has advocated
settlement of pending claims in which the U.S. Treasury Office of
Thrift Supervision (OTS) and the Federal Deposit Insurance
Corporation (FDIC) are seeking approximately $820 million in
restitution, damages and penalties from the Company in connection
with the failure of United Savings Association of Texas, a
savings and loan in which the Company held a significant interest
and which the Office of Thrift Supervision alleges the Company
controlled. (see "Reasons for Electing Independent Directors"
above). The Rose Foundation has urged the company to offer,
and urged the federal agencies to accept, certain Company forest
property on which logging is now significantly restricted by
agreements between the Company and state and federal regulatory
agencies. In an effort to enhance FDIC's and OTS's willingness to
consider this kind of settlement, which the Rose Foundation
believes to be in the best interest of the Company, the Rose
Foundation is currently seeking Congressional enactment of
legislation which would clearly authorize FDIC to transfer such
property to a sister federal agency if the parties were able to
agree upon a property settlement of this kind.
In September 1996, before any agreement on the Headwaters
Forest area had been reached, and at a time when Pacific Lumber
had announced plans to log old-growth forest lands in the
Headwaters area, the Rose Foundation urged the U.S. Office of
Thrift Supervision to issue a temporary cease-and-desist order in
OTS's pending case against Maxxam, Mr. Hurwitz and others (see
"Reasons for Electing Independent Directors" above). The Rose
Foundation recommended this action as a way to prevent these
assets from being liquidated, a step that would have reduced the
value of those properties to conservation-oriented buyers,
including government agencies. OTS did not seek such an order.
Had such an order been imposed, all significant Company financial
transactions and any liquidation of significant assets would have
required approval of a court or monitor. Later that month,
Maxxam, the United States and the State of California announced
an agreement in principle on the Headwaters area, which was
finalized as the Headwaters Agreement in March 1999. The Rose
Foundation did not renew its proposal for a cease-and-desist
order after the September 1996 agreement. In addition, Jill
Ratner, the Rose Foundation's President, provided legal advice to
Robert Martel, the "relator" or plaintiff 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;
PRELIMINARY PROXY MATERIALS 18
<PAGE>
the Newark Plant in Newark, Ohio; and the Tacoma Plant
in Tacoma, Washington, where 2900 USWA members were locked
out by management in January 1999. The details of that dispute
are described more fully above ("Reasons for Electing Independent
Directors").
Independently of this matter, the USWA and one of its
members filed a complaint in California state court on March 31,
1999 against the California Department of Forestry and Fire
Protection, challenging one aspect of the Headwaters Agreement,
which was described earlier in this section. In particular, the
USWA suit seeks to prohibit the CDF from approving any Timber
Harvesting Plan that relies in any manner upon a Sustained Yield
Plan (the "Plan") that was proposed by Pacific Lumber Co. and its
subsidiaries, Scotia Pacific Lumber LLC and Salmon Creek
Corporation, and approved by CDF on March 1, 1999 as part of the
Headwaters Agreement. Specifically, the complaint alleges that
the approved Plan authorizes an unsustainable high harvest of
timber in the short term, without consideration of the long-term
impact of such harvest levels on the economic vitality and
employment in the region. The complaint alleges that this result
violates California state law, which is said to require "maximum
sustained production of high-quality timber products while giving
consideration to regional economic vitality and employment at
planned harvest levels during the planning process." No final
determination has been made about the allegations in this suit.
The USWA has identified Pepsi Bottling Group, Anheuser
Busch, Boeing and Daws Better Built in consumer alert initiatives
designed to dissuade the above companies from purchasing Kaiser
metal. Pepsi and Anheuser Busch have ceased purchasing Kaiser
metal.
The USWA supports passage of the Extended Unemployment
Benefits Bill in the state of Washington that would provide a 30
week extension of unemployment coverage to workers who have been
locked out of their jobs in that state. Under the bill passed by
the State Senate, a company locking out workers would pay the
cost of benefits.
The Bonneville Power Administration ("BPA") is considering
whether to implement a "Good Corporate Citizen Clause" when
awarding subscription power sale contracts to direct service
industries ("DSI"). The USWA supports the implementation of the
clause, as have public officials, including Washington Governor
Gary Locke. Kaiser operates aluminum smelters and has
benefitted from discounted power from the BPA as a DSI. To
qualify for below market power, the clause would require DSIs to
observe basic standards of conduct as embodied in federal, state
and local laws, regulations, and orders. Kaiser might not
qualify for discounted power if the BPA should adopt this
measure.
RECORD DATE/SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE
OFFICERS/EXECUTIVE COMPENSATION/ELECTION OF DIRECTORS
Information on these subjects appears in the Company's proxy
statement.
SHAREHOLDER PROPOSALS FOR 2001 MEETING
PRELIMINARY PROXY MATERIALS 19
<PAGE>
Proposals that shareholders intend to present at the 2001
annual meeting of stockholders (other than those submitted for
inclusion in the Company's proxy material pursuant to Rule 14a-8
of the Proxy Rules of the SEC) must be received by the Company no
earlier than ___________, 2001, and no later than ________, 2001
to be presented at the meeting. Proposals from shareholders
owning over $2,000 in stock for over one year that are submitted
under Rule 14a-8 for inclusion in the Company's proxy materials
must be received by the Company by ___________, 200_. Any such
stockholder proposals must be sent to the Company's Secretary at
its executive offices at 5847 San Felipe, Suite 2600, Houston,
Texas 77057.
PLEASE VOTE FOR ABNER J. MIKVA AND PAUL SIMON AND FOR THE
CUMULATIVE VOTING PROPOSAL, THE DECLASSIFIED BOARD PROPOSAL, AND
THE INDEPENDENT BOARD PROPOSAL.
Sincerely,
The Committee of Concerned
Maxxam Shareholders
For Additional Information Please Call
Georgeson & Company Inc.
Toll Free (800) 223-2064
or
Committee of Concerned Maxxam Shareholders
Scott Adams
Collect (510) 655-8248
PRELIMINARY PROXY MATERIALS 20
<PAGE>
MAXXAM INC.
2000 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 Scott Adams and Jill Ratner, 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 2000 Annual Meeting of Shareholders of
Maxxam Inc., to be held on May 24, 2000 at The Power Center,
12401 South Post Oak, Houston, Texas at 8:30 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 ABNER J. MIKVA AND PAUL SIMON (ITEM 1), FOR ITEM 2 (THE
CUMULATIVE VOTING PROPOSAL), FOR ITEM 3 (THE DECLASSIFIED BOARD
PROPOSAL) AND FOR ITEM 4 (THE INDEPENDENT BOARD PROPOSAL).
Item 1: Election of Directors
The Committee of Concerned Maxxam Shareholders intend
to use this proxy to vote for Abner J. Mikva and Paul
Simon, whom they have nominated to serve as two of the
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 any of the
the Company's three nominees for Common Director
(Robert J. Cruikshank, Stanley D. Rosenberg and
Michael J. Rosenthal), or on the election of J. Kent
Friedman and Ezra J. Levin, the Company's two nominees
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 2: To act upon a stockholder proposal, if presented at
the meeting, by As You Sow Foundation and John
Harrington 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 3: To act upon a stockholder proposal, if presented at
the meeting, by Brent Blackwelder, President of
Friends of the Earth, 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.
Item 4: To act upon a stockholder proposal, if presented at
the meeting, by the Rose Foundation for Communities
and the Environment and Nell Minow, requesting that
the board of directors take steps to provide that a
majority of all board members shall be "independent."
/x/ PLEASE MARK VOTES AS IN THIS EXAMPLE
The Committee of Concerned Maxxam Shareholders recommends a vote
FOR Abner J. Mikva and Paul Simon on Item 1, FOR Item 2, FOR Item
3 and FOR Item 4.
1. Election of Directors
Abner J. Mikva (for term expiring in 2001)
Paul Simon (for term expiring in 2001)
/ / For / / Withhold / / For both except
_______________________________________________
For both nominees except as noted above
2. Proposed resolution submitted by As You Sow Foundation
and John Harrington, 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.
For / / Against/ / Abstain / /
3. Proposed resolution submitted by Brent Blackwelder,
President of Friends of the Earth, 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 / /
4. Proposed resolution submitted by the Rose Foundation for
Communities and the Environment and Nell Minow requesting that
the board of directors take steps to provide that a majority of
all board members shall be "independent."
For / / Against / / Abstain / /
WHERE NO VOTING INSTRUCTIONS ARE GIVEN, THE SHARES REPRESENTED BY
THIS PROXY WILL BE VOTED FOR ABNER J. MIKVA AND PAUL SIMON ON
ITEM 1, FOR ITEM 2, FOR ITEM 3 AND FOR ITEM 4.
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
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:________________________, 2000
____________________________ _______________________________
(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.
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