DEFA14A 1 a2114385zdefa14a.htm DEFA14A
LOGO   Mercer International Inc.

Safe Harbor Statement

        The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this presentation contains statements that are forward-looking, such as statements relating to results of operations and financial condition and business development activities, as well as capital spending and financing sources. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of Mercer. For more information regarding these risks and uncertainties, review Mercer's filings with the Securities and Exchange Commission.

        July 8, 2003

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The Issues

•
What is the Motive Behind the Dissident Proxy?

•
Independent Directors Should Not Receive Third Party Remuneration

•
Mercer is at a Critical Stage of Corporate Development

•
Mercer has High Quality Assets

•
Extensive Misleading Statements by Greenlight

•
Corporate Governance Initiatives

•
Mercer Nominees

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What Is The Motive?

•
Greenlight Have Refused Two New Independent Directors Unless They Have SOLE Veto Powers

•
Greenlight's Nominees Have No:

•
Corporate experience

•
Pulp & paper experience

•
International or European experience

•
Board-level experience at a company as complex as Mercer

•
Greenlight's Nominees are Well Compensated in Cash and Stock Options by Greenlight

4

What Is The Motive? (Continued)

•
One of the Greenlight Nominees Violated U.S. Federal Securities Laws Relating to Proxy Solicitation

•
Greenlight Has Not Presented an Alternative Refinancing Plan

•
Is there a plan to impose onerous financing by Greenlight?

5

Third Party Remuneration of Independent Directors

•
Raises the Question of Ultimate Loyalty

•
Mercer or Greenlight

•
Amount of Remuneration is Substantial

•
Guy Adams — $75,000 cash, 325,000 options

•
Saul Diamond — $100,000 cash, 50,000 options

•
Both Receive 100% Indemnification from Greenlight

6

Mercer: A Critical Time in Development

•
Refinancing of Bridge Loans

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€53 million maturing in October 2003

•
Refinancing put on hold due to Greenlight actions

•
Stendal Pulp Mill Project is in Mid-Construction

•
Any default on Bridge loans will trigger cross-defaults on Stendal and other debt

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Quality of Mercer Assets

•
The High Quality of Mercer's Assets are Obvious and Acknowledged by Greenlight

•
Quality will be further enhanced at completion of Stendal Project

•
To be Discussed in "Mercer's Current Status and Corporate Achievements"

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Extensive Misleading Statements By Greenlight

•
Greenlight: Mercer reshuffled Board terms.

•
Fact: Only Class III Trustees being elected.

•
Greenlight: Babington Ltd. solely controlled by Mr. Lee.

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Fact: Babington Ltd. is a wholly owned subsidiary of Mercer.

•
Greenlight: Mr. Lee is conflicted through his MFC Merchant Bank Directorship.

•
Fact: Mr. Lee is a non-executive director with no participation in operations.

•
Greenlight: Management is responsible for poor financial results and stock performance.

•
Fact: The Company has had solid financial results and stock performance relative to its peers.

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Corporate Governance Initiatives

•
Appointment of Deloitte & Touche, LLP

•
Voluntary Adoption of Code of Business Conduct & Ethics Prior to SEC mandate

•
Adoption of New Audit Committee Charter

•
Listing on Toronto Stock Exchange

•
Engagement of Leading North American Investment Bank for Refinancing

•
Expansion of Board of Trustees by Two Independent Qualified Trustees

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Mercer's Slate: Provides Added Value

•
Per Gundersby

•
30+ Years' Experience in European Pulp and Paper

•
Extensive Career at Jaako Poyry

•
Stendal project director

•
Michel Arnulphy

•
Trustee since 1995

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Extensive knowledge of Mercer International

•
Proven experience with Rosenthal conversion

 — Our nominees contribute relevant experience
that will benefit all shareholders. — 

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Where We Are

Mercer's Current Status and Corporate Achievements

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Commitment To Building Shareholder Value

•
Key features of our corporate strategy include:

 
    
   Overview
    
   Example

Creating Value
 
X
 
Focus operations in grades of products
where we can effectively compete
 
-->
-->
 
NBSK Pulp
Specialty Papers

Stakeholder Approach
 
X
 
Leverage synergistic relationships with:
management & employees; customers &
suppliers; communities & the
environment; and government bodies
 
-->


-->
 
Government
guarantees and
grants
Environmental
compliance

Pursuing Growth
 
X
 
Acquire under-performing assets and
implement turn-arounds / restructurings
to create shareholder value
 
-->
-->
 
Dresden Papier
23% CAGR in
production capacity
post Stendal

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Rosenthal: An Unparalleled Success

In 1999, conversion of Rosenthal Mill to kraft pulp
production created unique asset

approximately €361 million invested (€101 million from grants)

fastest ever start-up of an NBSK facility

capacity increased from 160,000 tonnes to 300,000 tonnes

Strong cost position (€312/tonne*)

lowest quartile from a global delivered cost perspective		   GRAPHIC
    Rosenthal Mill

        *2002 cash production costs

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Commitment to Building Shareholder Value

•
Greenlight Does Not Challenge Our Strategic Plan

•
They Note That We Have Valuable Assets

•
These Assets Exist Because of Current Management and The Board of Trustees

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The Stendal Project

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€1 billion "greenfield" project is the largest industrial project investment in Eastern Germany

•
capacity of 552,000 t/a

•
production of saleable pulp scheduled for Q3, 2004

•
Makes Mercer one of the world's leading NBSK pulp producers

•
Strong cost position (approx. €293/tonne*)

•
Proximity to Rosenthal allows for operating synergies

•
Triple total current NBSK pulp production

        *Forecast 2005 cash production cost

PHOTO

Stendal Mill

Sources of Funding:
   (MM)
Equity   €100
Grants   €274
Project debt   €637
Other   €26
   
Total   €1,037
   

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Stendal Project: A Critical Time

•
Stendal Project — Key to continued strategic development

•
Massive, complex and time consuming project that requires in-depth experience and cohesive teamwork

•
Rosenthal Conversion — Proves expertise of Management and current Board of Trustees

•
Refinancing — Key to Stendal Project

•
Completion is critical

•
Potential default on Bridge Loans if not completed

•
Other refinancing alternatives less attractive

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Stendal Project: A Critical Time

    •
    Now Is Not The Time To Experiment  

•
Election of Two Unqualified Nominees Could Negatively Impact Stendal Project and Refinancing

•
Lack of valid experience

•
No knowledge of pulp and paper industry

•
No experience in European marketplace

•
Potential dissention within the Board of Trustees

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Proven Performance vs. Peers

        EBITDA per Tonne

GRAPHIC

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Share Price Performance of Comparable Pulp Companies

         GRAPHIC

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Our Position

        A Vote For Mercer's Slate of Trustees is a Vote For:

•
Qualified, Seasoned Industry Veterans That Will Provide Value

•
An Efficient, Cohesive Board

•
The Continued Evolution of Our Company

•
Corporate Governance

•
Enhanced Value For ALL Shareholders

        VOTE THE WHITE CARD

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