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From: Headwaters Update <[EMAIL PROTECTED]>

    H E A D W A T E R S  .  F O R E S T  .  U P D A T E

    Weekly Update 05-24-99
------------------------------------------------------------
    STUNNED MAXXAM MANAGEMENT GETS
    WAKEUP CALL FROM SHAREHOLDERS
    Hundreds descend on shareholders meeting to push alternate slate

Although Maxxam is no stranger to controversial board meetings, this year's
was by far the rowdiest. Environmentalists were joined by 230 United
Steelworkers, most of them holding a single share of Maxxam stock apiece,
who travelled from Spokane and other cities to attempt to change the Maxxam
board that controls Kaiser Aluminum.
    Word is that when Houston hotels heard about the planned rally, they
blackballed the shareholders. Maxxam was forced to move the meeting two
hours north to a country club in a Texas town aptly known as Point Blank.
Although none of the dissidents were able to secure a room at the exclusive
resort, hundreds showed up for the shareholders meeting, including
prominent members of the Democratic Party, environmentalists, attorneys,
national labor leaders, noted environmentalist David Brower, and the mother
of fallen Earth First! activist David "Gypsy" Chain.
    The coalition backed a slate of two independent directors who pledged
to stand up to Maxxam Chairman and Chief Executive Officer Charles Hurwitz
and change how the company treats the environment, labor, and its
shareholders. The two well-known Democrats, former Ohio Senator Howard
Metzenbaum and former
federal judge and White House attorney Abner Mikva received a stunning one
million votes, for an estimated 15 percent of the total tally. The vote far
surpassed the three percent that independent candidates received in 1997,
and represents 25 percent of the shares outside of Hurwitz' control. Speaker
after speaker said the board had "better start listening to shareholders."
    Investment specialist Nell Minow of Lens Investment Management remarked
that this vote is a wake-up call for Maxxam to reform its way of doing
business. "Maxxam's management cannot ignore this important vote for Judge
Mikva and Senator Metzenbaum. The board will have to address shareholder
concerns ranging from questionable leadership and poor performance to the
company's conflict-ridden history."
    Over the past three years, two California-based environmental
foundations, the Rose Foundation for Communities and the Environment and As
You Sow Foundation, have waged shareholder campaigns resulting in
increasing support. As You Sow's Conrad MacKerron summed up their three
year campaign: "We have always maintained that Maxxam can be more
profitable by saving old-growth redwoods than by cutting them down. The
voting results show that a lot of shareholders agree with us."
------------------------------------------------------------
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