Mercer disagrees with Mass Financials recommendations

By Lisa Kerner

Charlotte, N.C., Dec. 18 - Mercer International Inc. responded to Mass Financial Corp.'s most recent letter, its 35th to the company, in which the investor asked Mercer to:

• Reduce executive compensation by 40% and tie any future bonuses to net operating income from pulp production and payable in common shares;

• Hire the most qualified, independent investment bankers;

• Cancel directors' and officers' liability insurance;

• Conduct a special audit of the expenses accounts of senior, operating management and audit committee with a mandate to confirm all expenses are correct;

• Upgrade the audit committee with additional qualified members; and

• Cancel directors' fees and options until profitability on an earning per share basis occurs.

Mass Financial asked for a reply by Dec. 18 outlining "the action the board of directors has decided to take."

Mercer, in its reply, said its governance committee and independent directors disagree with the matters set out in the letter and do not feel it necessary to respond to every point, according to a form 8-K filing with the Securities and Exchange Commission.

Mercer did, however, briefly outline its reasons for disagreeing with the above points.

Mercer asked that in the future, Mass Financial call or offer to meet in person to discuss any further matters.

Seattle-based Mercer is a pulp manufacturing company.

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