PROXY STATEMENT
OF WESTMORELAND COAL
Securities and Exchange Commission
Washington D.C. 20549
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Westmoreland Coal Company
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Westmoreland Committee To Enhance Share Value
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The following is added text of a Web Site at freedomforshareholders.com.
It will be contained in the "Concerned Shareholder Letters" section.
Westmoreland Committee to Enhance Share Value
Post Office Box 4004
Merrifield, VA 22116
(703) 641-4612
http://www.freedomforshareholders.com
Enough is enough! Change Westmoreland Coal management!
May 4, 1999
Dear Fellow Westmoreland Shareholder:
You have a rare opportunity to be part of the shareholder movement
that removes the current management of Westmoreland Coal Company.
Management is out of touch with shareholders' anger and interests.
Vote with us for change by casting your BLUE proxy card before
May 12.
Time is running short: If you haven't already done so, call your
broker to vote your BLUE card(s) or fax them to DF King & Co at
(212) 809-0692. Call (800) 628-8538 if you need assistance voting
your shares.
Presiding over bankruptcies has been a good deal for management
* Less than a month out from bankruptcy, Westmoreland's current
Board of Directors approved a round of bonuses for salaried
management and employees totaling $2.6 million in cash plus
outright grants of 95,000 shares of restricted common stock and
additional options to buy 95,000 shares of stock.
* Of the $2.6 million in cash awards, the Board of Directors
authorized for our CEO, President, and Chairman of the Board,
Chris Seglem, a cash bonus 200 percent of his annual salary,
bringing his annual cash compensation alone to more than $1
million. We have been unable to learn from our Company's public
disclosures what, if any, percentage of 95,000 shares and options
for an additional 95,000 shares were authorized for Mr. Seglem.
* Of the 186,016 shares of common stock that Mr. Seglem
beneficially owns in Westmoreland, 183,000 are options to buy
additional shares. The remaining mere 3,016 common shares (and 24
depository shares) that are in his tax-advantaged 401k plan
represent the sum total of Mr. Seglem's investment in
Westmoreland. If the salaried Mr. Seglem is as "confident"
of his "record of achievement" as he says in his Annual Report,
why does he not display that confidence about our Company out in
the market?
* To enable real change, the current Board of Directors (chaired
by Mr. Seglem) who approved bonuses in the wake of bankruptcies
must be replaced. Of the five incumbents on the Board of Directors
representing common stock shareholders, three have reigned at
Westmoreland for more than 20 years.
Shareholders bear the cost of management's failed bankruptcy gamble
* Mr. Seglem and his Board of Directors have dragged us through
a two-year tactical bankruptcy that nearly lost our Company to the
UMWA Funds, incurred $10 million in expenses, and plunged the
value of our shares to record lows. When it was all said and done,
we believe management gained little towards its original objective
of reducing Company obligations to the UMWA Funds. It was all a
costly mistake.
* This is the second time that Mr. Seglem, has taken our 150-
year old, once proud Company into bankruptcy during his six-year
term. Approximately one-third of his time at the helm of our
Company has been spent under the protection of bankruptcy courts.
Perhaps Mr. Seglem, an attorney, feels more comfortable in court
than in the coal business.
* During the latest bankruptcy proceedings, Mr. Seglem's team
nearly lost our Company to its creditors - the UMWA Funds - but
for a legal decision in an unrelated case that fortunately
intervened as precedent and saved our positions as shareholders.
Despite this lucky break, in our opinion, management subsequently
surrendered to the UMWA Funds everything they asked for to concede
to dismissal of the bankruptcy case. Plain and simple, management
bought its way out of bankruptcy:
$$$ Management agreed to pay Coal Act premiums with interest
$$$ Management agreed to pay a staggering $4 million UMWA
expense reimbursement
$$$ Management agreed to a contingent promissory note to pay
the Funds up to an additional $12M
$$$ Management agreed not to exercise its Constitutional right
to seek future redress in thecourts
$$$ Management agreed to liens, pledges, and covenants
that substantially impair our Company
Vote for our slate of new Directors by signing, dating, and
returning a BLUE proxy card
.
* Do you want the value of your shares to increase sooner? Our
plan is to increase the value of your shares, in part, by selling
Westmoreland's remaining Independent Power Projects (IPPs) by the
end of 1999. With the temporary shortage of capacity currently in
the electricity market, our two independent consultants, including
Bodington & Company, have advised us that optimal market
conditions exist now to gain maximum returns on the sale of our
IPPs. Our intention is to negotiate a compromise with the UMWA
for an immediate lump-sum settlement, with remaining proceeds
flowing immediately to common and preferred shareholders.
* Or, take a risky bet on them improving later? Current
management has a different plan, which we think is flawed and not
within their operational ability. According to members of our
Committee who have talked with Westmoreland executives, management
wants to grow the Company's earnings, possibly by acquiring new
enterprises. In his Annual Report, Mr. Seglem states on page 6,
that "it would be irresponsible to say that (we would not move
into new lines of business)." Would you entrust current
management with such risky business ventures?
Do you trust current management with the future of Westmoreland
Coal?
Vote for the Committee's plan which benefits common and preferred
shareholders
In our opinion, based on the advice that consultants Putnam, Hayes
& Bartlett gave to your Equity Committee, if management continues
its current course, our Company's annual cash flow will be minimal
after annual deductions of corporate overhead, payment of
preferred stock dividends, and obligations to the UMWA Funds. And
cash flows will become negative after the first several years. If
current management pursues a strategy of growth through
acquisitions, we think that they will get there the only way they
can: by leveraging our IPPs. So, can we trust their judgement if
they tell us that now is not the prudent time to sell
these assets - when we feel the market tells us otherwise?
* We urge you to look at management's assimilation of the only
acquisition they have launched to-date. In the extremely promising
area of industrial gas turbines (Corona acquisition), management
stumbled badly, resulting in a loss of several million dollars.
* We urge you to examine their operational competence and their
sketchy plans - two years in the making - for the future of our
Company.
* We invite you to read on our web site a history of
management's performance in bankruptcy.
Vote BLUE to elect our Directors to implement our plan FOR
increasing share value!
Fellow shareholders - you may never have this opportunity again.
We are championing the cause of increasing the value of your
shares. Vote now for change in Westmoreland management. Move them
out and let's move on.
Enough is Enough!
Sincerely,
Members
Westmoreland Committee to Enhance Share Value
Visit our web site at http://www.freedomforshareholders.com. We
urge you NOT to sign any white proxy cards sent to you by
Westmoreland management. If you have already done so, you may
cancel that vote by signing, dating, and returning your BLUE
proxy cards(s). Only your latest dated proxy counts. Remember
each account you own must be voted separately.
Join us. Regardless of how many shares you own, your vote is
important to us.
We need your vote.
