Mercer disagrees with Mass Financial's recommendations

By Lisa Kerner

Charlotte, N.C., Jan. 17 - Mercer International Inc. responded to Mass Financial Corp.'s Dec. 18 letter, once again disagreeing with the recommendations made by Mass Financial.

Mercer said its board has always maintained an open dialogue with all shareholders and that the company is "fully committed to advancing its business."

In addition, Mercer cited its board's "highly experienced" members and their meaningful share positions.

"The company believes that it has the right strategic plan and that it is well positioned to achieve these goals and deliver superior shareholder value over the medium and long-term. Additionally, the company's board has and is always prepared to consider bona fide value-enhancing proposals," a company news release stated.

In its Dec. 18 letter, Mass Financial 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 management, operating management and the 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 earnings per share basis occurs.

Seattle-based Mercer is a pulp manufacturing company.

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