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WESTMORELAND COMMITTEE TO ENHANCE SHARE VALUE
2789 HARTLAND ROAD
FALLS CHURCH, VA 22043
(703) 641-4612
DEAR WESTMORELAND DEPOSITARY SHAREHOLDER,
As a fellow shareholder, beneficially owning 80,000 Depositary Shares
in Westmoreland Coal Company, I am writing to you on behalf of a group of
Depositary shareholders who decided to work together to take steps we think are
necessary and helpful in the interests of Westmoreland shareholders.
Our Committee and a number of major fellow Westmoreland Depositary
shareholders who have contacted us firmly believe that the current two
Westmoreland Preferred Stock directors are not doing an adequate job of
representing our interests on the Westmoreland Board. With the recent passing of
another Annual Meeting without any word from the Company regarding the status of
dividends owed to us, we decided to seek your approval, your CONSENT, to remove
these two directors and replace them. Delaware law permits shareholders to take
such action by consent, without a meeting and without a vote, provided we gain
consents covering a majority of shares outstanding.
WE URGE YOU TO GIVE YOUR CONSENT TO REMOVE AND REPLACE THE TWO
PREFERRED DIRECTORS BY SIGNING, DATING, AND RETURNING THE ENCLOSED BLUE CONSENT
TO THE COMMITTEE.
The following points describe the Committee's views on why a shareholder
action to remove and replace our Preferred Stock directors is urgently
necessary:
- THE COMPANY OWES US DIVIDENDS CURRENTLY TOTALING APPROXIMATELY $12.21 PER
DEPOSITARY SHARE. Neither the Chief Executive Officer nor the two current
directors who were elected to represent our interests have addressed
Depositary shareholders' inquiries regarding when we can expect payment
on these arrearages or, alternatively, when we can expect the Company
voluntarily to redeem our shares at a current value of more than $37 per
share.
- The two current Preferred directors have no significant personal
incentive to fight for our interests. According to the Company's recent
proxy statement, ONE OF THE PREFERRED DIRECTORS OWNS ONLY 750 DEPOSITARY
SHARES; THE OTHER OWNS ZERO.
- For the second consecutive year, MANAGEMENT HAS AWARDED EITHER
SUBSTANTIAL CASH BONUSES OR STOCK GRANTS AND STOCK OPTIONS to its
executives and senior staff. Neither Preferred nor Common shareholders
have received anything. Those awards effectively diluted the equity of
other shareholders.
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- The Company made two tender offers (at $19 per share) for Depositary
Shares in 1999, but the COMPANY WAS REQUIRED TO INITIATE THE FIRST TENDER
OFFER under the terms of the Bankruptcy Reorganization Plan. That
provision requiring a tender was successfully inserted into the
Reorganization Plan on behalf of shareholders BY YOUR EQUITY COMMITTEE,
which was co-chaired by a member of our group.
- With significant obligations to Depositary shareholders still
outstanding, management is other-focused on a vague plan to pursue new
acquisitions, as reiterated in a company press release following the
recent annual meeting. The Committee is especially concerned about the
possible risk to shareholders posed by such plans, given its view that
management previously performed poorly in managing implementation of
acquisitions.
The Committee has come to the serious conclusion that THE ONLY WAY TO
SIGNIFICANTLY IMPROVE THE PICTURE FOR THE FINANCIAL INTERESTS OF DEPOSITARY
SHAREHOLDERS IS TO REMOVE THE CURRENT TWO PREFERRED DIRECTORS and replace them
with shareholders with significant Depositary holdings who have the incentive to
fight diligently for a financial resolution on the status of our Depositary
Shares - either by utilizing Company cash on-hand or other means.
YOUR PROMPT CONSENT IS IMPORTANT, no matter how few Depositary Shares you
own. The Committee must receive consents representing a majority of the
outstanding Depositary Shares for this action to enhance our shareholder value
to be successful.
TIME IS OF THE ESSENCE. Should you need assistance with completing your
CONSENT PROMPTLY, please call a member of the Committee or Shellyn McCaffrey at
(703) 739-9398.
Sincerely,
Stephen D. Rosenbaum
July 28, 2000
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WESTMORELAND COMMITTEE TO ENHANCE SHARE VALUE
2789 HARTLAND ROAD
FALLS CHURCH, VA 22043
(703) 641-4612
ADDITIONAL GUIDANCE FOR EXECUTING CONSENTS
TIME SENSITIVE - PLEASE ACT PROMPTLY TO PROVIDE YOUR CONSENT
Should you need additional help in providing your CONSENT or extra consents,
please contact a member of the Committee or Shellyn McCaffrey at (703) 739-9398
or [email protected].
RECORD OWNERS
If you are the record owner (holding a stock certificate) for your Depositary
shares, or any portion of your shares, please sign and date the blue CONSENT for
those shares and return it to the Committee in the enclosed envelope (or if
envelope is missing to the address above) or by fax to (703) 739-5982.
BENEFICIAL OWNERS
If you are a beneficial owner of all, or any portion, of your Depositary Shares
and your shares are held for you by one or more brokerage, bank, or other
institutional holder, please sign and date the enclosed blue CONSENT for those
shares and return the original or a copy to the Committee in the enclosed
envelope (or if envelope is missing to the address above) or by fax to (703)
739-5982.
In addition, it is important that you also send or fax your signed, dated blue
CONSENT or a copy to each brokerage, bank, or other institution holding shares
in your name and instruct the person responsible for your account at each
institution to promptly ensure that the CONSENT is executed by the record owner
of your shares and returned to the Committee. You may want to provide your
representative with a copy of this guidance.
BROKERS AND OTHER INSTITUTIONS
Please inform the Committee of the number of CONSENT solicitation packages you
need to cover all of your customers who are beneficial owners of WLB PRD, cusip
#960878304. After acquiring the dated signatures of beneficial owners, please
promptly manage your customers' consents through the Reorg, Proxy, or Compliance
departments of your head office. The appropriate office should be able to
identify the record owner for your customers' shares and instruct that record
holder to sign and date a CONSENT on behalf of your customer(s).
If your firm (or institution) is a Participant in the Depository Trust Company
("DTC"), the record owner for your customers' shares is likely to be DTC's
nominee, Cede & Co. As record holder, Cede will execute its written CONSENT upon
the request of your firm.
While some firms may already have forms and procedures for dealing with
DTC/Cede, the Committee can provide forms and sample letters that your firm or
institution may use in requesting that DTC/Cede, as holder of record, give its
written CONSENT to this action on behalf of your customers, the beneficial
holders. Please call the Committee at (703) 739-9398 to request these materials.
For additional copies of any materials, please call (703) 739-9398.
