Committee of Concerned Maxxam Shareholders – ‘DEFC14A’ on 5/9/00 re: Maxxam Inc

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Definitive Proxy Solicitation Material — Contested Solicitation   —   Schedule 14A
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Document/Exhibit                   Description                      Pages   Size 

 1: DEFC14A     Definitive Proxy Solicitation Material --             29±   101K 
                          Contested Solicitation                                 

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DEFC14A
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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:                                                      

[   ]  Preliminary Proxy Statement                                              

[   ]  Confidential, for Use of the Commission Only (as permitted               
by Rule 14a-6(e)(2)                                                             

[ X ]  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                      
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:___________________________________________           

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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              

                                     May 9, 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 May 9, 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).                        

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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.                                                                        

                                                                [Download Table]



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     

                                                                 
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.      

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.                                                    

     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."  FORTUNE magazine, in its April 17, 2000 issue      
placed Maxxam on its list of the six worst boards, citing the    
Company's "depressing performance" and poor corporate governance 
practices.  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                                  

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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.               

     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:                                                   

                    COMMITTEE OF CONCERNED MAXXAM SHAREHOLDERS   
                    c/o Ellen Philip Associates                  
                    P.O. Box 1997                                
                    New York, N.Y.   10117-0024                  

                          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 6,913,951 shares of common stock (the "common      
stock") and the 668.510 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.                     

                                 3                               

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         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"),       
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 Headwaters 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.       

      The Company currently has two categories of director:      
General Directors, who are elected by the holders of common stock
and preferred stock, voting together, and who are elected to     
three year terms, and Common Directors, who are elected solely by
the holders of common stock to one year terms.                   

      Until recently, the board of directors had five members,   
consisting of three General Directors, one of whom is elected    
each year to a three-year term, and two Common Directors, both of
whom are elected annually to one-year terms.  In March 2000 the  
Company increased the size of the board of directors from five   
members to seven so that henceforth there will be four General   
Directors and three Common Directors.  All five incumbents remain
in office, and the Company has nominated one additional General  
Director and one additional Common Director for election by the  
shareholders.  The shareholders are thus being asked this year to
elect two General Directors (one incumbent and one new nominee)  
to serve until 2003, as well as three Common Directors (two      
incumbents and one new nominee) to serve until 2001.   As newly  
configured, a majority of the board of directors will be elected 
each year (three Common Directors plus one or two General        
Directors).                                                      

     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 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                 

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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 
thirteen 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 on 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 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                                    

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explosion (permission of publication and author neither sought   
nor obtained).                                                   

     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 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 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.                                  

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     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 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.  (For an additional discussion of this   
litigation, see "Solicitation" below.)                           

     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, 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.  On April  
26, 2000 the NLRB General Counsel's Office of Appeals reversed   
that dismissal in part and directed the Oakland Regional Office  
to prepare a complaint charging KACC with violating the National 
Labor Relations Act as a result of the lockout.  A determination 
by the NLRB that the lockout is unlawful could subject KACC to   
potential gross back pay liability of as much as $3 million per  
week from January 14, 1999.  No adjudication of liability has    
been made, and a final decision will be made by the NLRB, which  
could be appealed to court.                                      
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      KACC continued to operate these plants since October 1,    
1998 using replacement employees.  On January 13, 1999, the USWA 
made an unconditional offer to return to work.  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 notes too that in April 2000 the trustees    
of the California Public Employees' Retirement System            
("CalPERS"), which owns approximately 3.2% of Maxxam common      
stock, announced that it voted to support the election of Judge  
Mikva and Senator Simon to the Maxxam board.  CalPERS is not a   
member of the Committee and is not a participant in this         
solicitation. In addition the New York State Common Retirement   
Fund has endorsed Judge Mikva and Senator Simon; the Fund is not 
a Committee member or a participant in this solicitation.        

                          *     *     *                          

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. adopt the following resolution (which is accompanied 
by the proponents' "Supporting Statement"), which is sponsored by
the As You Sow Foundation, a participant in this solicitation,   
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                       

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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.   

     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 
has 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 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 notes that Maxxam's proxy materials term     
"misleading" the statement in the proponents' Supporting         
Statement that the Company has shown operating losses "for some  
time."  The Company states that it "has had operating income in  
every year other than one since 1994."  In response the Committee
would note that the Company suffered net losses in four out of   
the seven years between 1992 and 1998 and would have shown an    
overall net loss for 1999 but for the one-time $239.8 million    
gain on sale of Headwaters Timberlands, as well as a pre-tax $85 
million gain on insurance proceeds following the 1999 explosion  
at a Kaiser plant in Louisiana, as discussed above.              

          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."                                             

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                      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.                           

  -- 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 notes that a classified board may prevent    
the occurrence of certain transactions, including acquisitions,  
that may be in the best interest of shareholders.  Also, there is
no assurance that elimination of the staggered board would       
produce greater management incentive or improve operating        
results.  Moreover, even if all directors were to be elected     
annually, the Company has adopted pursuant to Delaware law an    
anti-takeover "rights agreement" of the sort commonly known as a 
"poison pill."  Rights agreements seek to deter takeover attempts
by making them expensive to execute, thus inducing a would-be    
acquirer to negotiate with the board.                            

         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:        

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     "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;                      
  -- 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
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 and his law firm acted as counsel for     
various corporate enterprises associated with CEO Hurwitz for    
more than 25 years, and Mr. Levin was trustee of CEO Hurwitz'    
personal business trust from 1974 to 1995.                       
  -- Mr. Stanley D. Rosenberg has been Mr. Hurwitz's business    
associate and attorney for 25 years.  Although                   

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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 any or all of the  
three 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 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                                                            

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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 to 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 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, who owns 90 shares of Maxxam  
common stock as tenant in common with Rose Foundation Executive  
Director Thomas W. Little; 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); As You Sow Foundation, which owns 100 shares purchased
in 1996, and Michael Passoff; and Dorset Management Corp., which 
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 $50,000, 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.  The Headwaters Forest area   
encompasses slightly more than 50,000 acres of company property, 
or roughly one quarter of the forest land currently owned by     
Pacific Lumber.  (This estimate is derived from Pacific Lumber's 
statement in its 1998 Habitat Conservation Plan, prepared        

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prior to consummation of the Headwaters Agreement, that it owns  
61,000 acres in the Headwaters Forest area and excludes the 7400 
Headwaters Forest Reserve now owned by the Federal Government    
pursuant to that Agreement.)  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 acresc         
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 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 ("USAT"),
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, a settlement    
built around approximately 10,000 to 20,000 acres in the         
Headwaters Forest area 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 1993, four years after the FDIC gave notice of its      
belief that it had a claim growing out of the 1988 USAT collapse,
and after the media had reported a proposal to have the FDIC     
accept certain Pacific Lumber forest lands in the Headwaters     
Forest area to resolve potential FDIC claims related to USAT, the
Rose Foundation undertook an analysis of such a "debt for nature"
swap to resolve the potential FDIC claims.  In 1994 the Rose     
Foundation shared its written and oral analysis with the FDIC and
urged the FDIC to seek in litigation the transfer of certain     
property in the Headwaters Forest area to resolve USAT-related   
claims.  The Rose Foundation also encouraged others to write the 
FDIC urging similar action.  The FDIC filed its pending action   
against Mr. Hurwitz in August 1995.                              

       In October 1994 OTS began its own investigation of the    
USAT failure and filed the currently pending action against      
Maxxam, Mr. Hurwitz and others in December 1995.  At various     
times in 1995 the Rose Foundation, in written and oral           
communications with federal officials, urged exploration of a    
global settlement of FDIC claims and any potential OTS claims    
involving a Headwaters Forest property transfer.  The Rose       
Foundation did not contact the OTS directly until after the OTS  
case had been filed in December 1995.  It is possible that the   
Rose Foundation's advocacy of a proposed property transfer to    
resolve USAT-related claims may have contributed to either or    
both of the FDIC and OTS actions being brought against           
Maxxam and/or Mr. Hurwitz.                                       

      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, it could have had a materially   
adverse impact on the Company, in that 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 Headwa-               

                                 14                              

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ters 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 as frivolous, with attorneys' fees assessed against Mr.
Martel, based on the Court's determination that Mr. Martel lacked
standing as a False Claims Act relator, although Ms. Ratner did  
not appear as an attorney in that or any other litigation adverse
to the Company.                                                  

       In June 1995 the Rose Foundation contacted the United     
States Fish and Wildlife Service expressing concerns about the   
possible impacts of logging operations in the Blanton Creek and  
Yager Creek watersheds on Company property in the Headwaters     
Forest area and encouraging the Service to ensure that Pacific   
Lumber Co. complies with federal and state laws protecting       
endangered species.  The Rose Foundation testified at public     
hearings on the scope and preparation of environmental           
documentation required under the National Environmental Policy   
Act, the Endangered Species Act and state environmental statutes 
in connection with the Headwaters sale, encouraging relevant     
agencies, including the Fish and Wildlife Service, to consider   
the comparative impacts of a variety of forest management        
approaches, and encouraging relevant agencies to require         
documentation of the infeasibility of rejected environmentally   
preferable alternatives. In addition, at several points starting 
in 1995 the Rose Foundation wrote letters to the Service in an   
effort to seek support for settlement of USAT-related claims in a
way that preserves old-growth timber in the Headwaters Forest    
area.                                                            

     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;  
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,                                                      

                                 15                              

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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              

      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 later than January 1, 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 January 1, 2001.  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              
             Committee of Concerned Maxxam Shareholders          
                           Scott Adams                           
                     Toll Free (877) 634-6546                    
                                or                               
                      Collect (510) 655-8248                     

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                           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.                                  

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
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		3/31/99		7		16			10-K405,  10-Q,  8-K
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		9/30/98		8					10-Q
		12/8/97		3
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		3/31/95		3					10-Q
		10/1/94		6
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