WESTMORELAND COAL CO
DEFN14A, 2000-07-31
BITUMINOUS COAL & LIGNITE MINING
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<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                  SCHEDULE 14A

                     PROXY STATEMENT PURSUANT TO SECTION 14A
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   Filed by a Party other than the Registrant

Check the appropriate box:

[ ]  Preliminary Proxy Statement

[_]  CONFIDENTIAL, FOR USE OF THE COMMISSION
     ONLY (AS PERMITTED BY RULE 14a-6(e)(2))

[X]  Definitive Proxy Statement

[_]  Definitive Additional Materials

[_]  Soliciting Material
     Pursuant to Rule 14a-11(c) or Rule 14a-12


                            WESTMORELAND COAL COMPANY
         - ------------------------------------------------------------
                (Name of Registrant as Specified In Its Charter)


                  WESTMORELAND COMMITTEE TO ENHANCE SHARE VALUE
         - ------------------------------------------------------------
                   (Name of Person(s) Filing Proxy Statement,
                          if other than the Registrant)


Payment of Filing Fee (Check the appropriate box):

[X]  No fee required


         Westmoreland Committee to Enhance Share Value

                              2789-B Hartland Road
                             Falls Church, VA 22043
                                 (703) 641-4612
<PAGE>   2

Dear Fellow Depositary Shareholder:

On behalf of the Westmoreland Committee to Enhance Share Value, I ask for your
consent to remove the present two directors as representatives of the Depositary
Shareholders sitting on Westmoreland Coal Company's Board of Directors and to
replace them with the two persons selected by the Committee.

You will find more details in the accompanying Request For Consents. I invite
you to contact me or other members of the Committee. We look forward to
discussing our Request for Consents with you.

                     Sincerely,

                     /s/ Frank E. Williams, Jr.
                     FRANK E. WILLIAMS, JR.
                     Chairman
<PAGE>   3

                               REQUEST FOR CONSENT
                     of the holders of Depositary Shares of
                            Westmoreland Coal Company

                                  solicited by

                  WESTMORELAND COMMITTEE TO ENHANCE SHARE VALUE

The enclosed Consent to Corporate Action is solicited on behalf of the
Westmoreland Committee to Enhance Share Value. The purpose of our solicitation
is to obtain the consents of the persons holding a majority of the outstanding
Depository Shares to remove the two Preferred Stock directors now sitting on the
board of directors of Westmoreland Coal Company and replace them with the two
persons named later in in this document. The Committee is a direct outgrowth of
the experience of one of its members who served as co-chairman of the Official
Committee of Equity Security Holders in 1998 and 1999 while the Company was
under the jurisdiction of the Federal Bankruptcy Court. Based on that experience
and on observations of subsequent corporate results, the members of the
Committee believe that the present Preferred Stock directors should be replaced.

According to the Company's proxy statement used in connection with the June 2000
annual meeting of stockholders, there were 834,833 Depositary Shares outstanding
on April 10, 2000. The Committee believes that remains as the number now
outstanding. In order for the replacement of directors to become effective,
holders of a majority of those Shares must consent to this action.

It is anticipated that this Request for Consents and Consent to Corporate Action
will be mailed to selected shareholders on or about July 29, 2000.

CONSENT SOLICITATION

The Company offered and sold in an underwritten public offering, utilizing a
Prospectus dated July 1, 1992, two million three hundred thousand Depositary
Shares. After two tender offers by the Company in 1999, the number of Depositary
Shares was reduced to the 834,833 shares now outstanding.

Each Depositary Share represents and is essentially equivalent to one quarter of
a share of the Company's Series A Convertible Exchangeable Preferred Stock. The
Certificate of Designation setting forth the terms of the Preferred

<PAGE>   4

Stock, which has been incorporated into the Company's Certificate of
Incorporation, provides that any Preferred Stock Director may be removed by the
vote of the holders of record of a majority of the outstanding shares of the
Preferred Stock at a meeting called for such purpose. Delaware law provides that
any action which may be taken at a meeting of stockholders may instead be taken
by consent of the stockholders entitled to take such action without a meeting
and without prior notice and without a vote. The law also provides, in effect,
that the consents must be dated, signed and presented to the Company within 60
days after the record date, which has been set by the Company as July 19, 2000.
Pursuant to that law, the Committee is seeking your CONSENT to corporate action
without a meeting. The corporate action to be taken by the Depositary
shareholders is to remove the Preferred share directors and replace them with
the Committee's Preferred share nominees. In order for the consents to be
effective, we must obtain consents covering a majority of the outstanding
Preferred shares on the record date,

                            THE COMMITTEE'S NOMINEES

Information about the Committee's nominees follows. Each nominee has consented
to being named as such and to serve as a Preferred Share director if the
requaired consents are obtained. Neither of the nominees nor any of their
associates has any arrangement or understanding with any person with respect to
future employment with the Company nor with respect to any future transactions
to which the Company or any of its affiliates will be a party. Neither nominee
is, or was within the past year, a party to any contract, arrangements or
understandings with any person with respect to any securities of the Company,
including, but not limited to, joint ventures, loan or option arrangements, puts
or calls, guarantees against loss or guarantees of profit, division of losses or
profits, or the giving or withholding of proxies.

Guy O. Dove, III, age 63, is a Personal Investor, Washington, DC (since 1989).
He also serves as Chairman of Pinnacle Oil Company (exploration and production
of natural gas and oil), with assets mainly in Oklahoma (since 1972).
Previously, Mr. Dove was Partner and Chief Investment Officer, The Clarendon
Group, London, UK, where he was responsible for all facets of investment
management of a $3 billion reinsurance group. Prior positions included: First
Vice President, Schroder Capital Management, Inc., Washington, DC, and Bond
Manager




                                     Page 2
<PAGE>   5

responsible for the National Fixed Income Department, having more than
$100 Million in funds under management; Vice President, Equitable Trust Company,
Baltimore, MD, and Senior Bond Manager in the Pension Fund Department
responsible for fixed income portfolios, managing more than $400 Million in
funds; and Financial Consultant, Federal Energy Administration, Washington, DC
Projects with FEA included evaluating financial problems relating to the
electric utility industry and the impact of financial markets of various policy
options. Trinity College -- BA.

Frank E. Williams, Jr., age 66, is Founder, Chairman, and CEO of Williams &
Beasley Co. (steel erection), Dallas, TX (since 1996). He is also Chairman of
Williams Enterprises of Georgia, Inc. (steel fabrication and erection of
structural steel and miscellaneous iron) and its five subsidiaries, Atlanta, GA
(since 1967). He served as Co-Chairman of the Westmoreland Official Committee of
Equity Security Holders (June 1998 to February 1999). Previously, he was
President, CEO, and Chairman, of Williams Industries, Inc. (construction
services), Falls Church, VA (1961 to 1995). He also served as a Director and
Chairman of the Board, Capital Bank NA, Washington, DC. Georgia Institute of
Technology -- Bachelor of Civil Engineering.

      THE WESTMORELAND COMMITTEE TO ENHANCE SHARE VALUE

     The Committee is an outgrowth of the Official Committee of Equity Security
Holders (the "Equity Committee") that was formed on June 29, 1998, when the
Office of the United States Trustee granted certain shareholders' request to
appoint a committee to represent the rights and interests of common and
preferred shareholders. Following the dismissal of the bankruptcy case, the
Equity Committee was dissolved February 4, 1999. In early March 1999, three of
the former members of the Equity Committee, Frank E. Williams, Jr., Nelson Obus,
and R. Bentley Offutt joined with a fourth shareholder, Guy O. Dove III, to form
the Westmoreland Committee to Enhance Share Value. Messrs. Offutt and Obus have
since resigned as members of the Committee and are not involved in this
solicitation. In July 2000, Dr. Stephen D. Rosenbaum joined with Messrs..
Williams and Dove to constitute the present Committee. More detailed information
about each of the Committee members is set forth below.

Frank E. Williams, Jr., 2789 Hartland Road, Falls Church, VA 22043. His
principal occupation is Chairman of the Board of Williams Enterprises of
Georgia, whose principal business is


                                     Page 3
<PAGE>   6

steel construction and whose address is 1285 Hawthorne Ave., P.O. Box 756,
Smyrna, GA 30081. Mr. Williams beneficially owns, directly and indirectly,
255,400 shares of Common Stock and 19,458 Depository Shares. Mr. Williams owns
no shares of stock of record which he does not also beneficially own. Certain of
the shares set forth as being beneficially owned by Mr. Williams are owned by
his wife, his recently deceased father's estate, a family charitable foundation,
and a family trust. No associates of Mr. Williams, other than the members of the
Committee and the family members, own any of the Company's securities. Of these,
shares have been purchased during the past two years as follows:

<TABLE>
<CAPTION>
      DATE        NUMBER OF SHARES          TYPE OF SECURITY
      ----        ----------------          ----------------

<S>                   <C>                      <C>
July 27, 1998           4,000                   Depositary
October 1, 1998        34,000                   Depositary
May 10, 1999            1,000                   Depositary
August 17, 1999         5,000                     Common
August 19, 1999         1,000                     Common
August 20, 1999           100                     Common
August 23, 1999           800                     Common
August 24, 1999         8,100                     Common
August 26, 1999.       10,000                     Common
August 27, 1999           500                     Common
August 31, 1999         9,000                     Common
</TABLE>

      On September 3, 1998, Mr. Williams sold 15,000 shares of Common Stock. On
April 14, 1999, he sold 23,692 Depositary Shares pursuant to a tender offer made
by the Company.

      Guy O. Dove, III, 10 Jay Street, Middleburg, VA 20118. Mr. Dove's
occupation is Personal Investor and Chairman of the Board of Directors of
Pinnacle Oil Company of the same address, with assets mainly in Oklahoma. Mr.
Dove is the beneficial owner of 220,500 shares of Common Stock and 18,923
Depositary Shares. . He owns no Westmoreland securities of record which he does
not beneficially own. 200,000 shares of Common Stock and 13,023 Depositary
Shares are owned directly by him, and 20,500 shares of Common Stock and 5,900
Depositary Shares are owned by Pinnacle Oil. Purchases by Mr. Dove directly or
through Pinnacle during the last two years are as follows:

                                     Page 4
<PAGE>   7


<TABLE>
<CAPTION>
      DATE        NUMBER OF SHARES          TYPE OF SECURITY
      ----        ----------------          ----------------

<S>                   <C>                    <C>
October 28, 1998       35,000                    Common
November 11, 1998       3,000                    Common
November 12, 1998       1,000                    Common
December 21, 1998      40,000                    Common
January 13, 1999        5,000                    Common
November 13, 1998       2,000                  Depositary
April 14, 1999          1,000                  Depositary
April 15, 1999          3,500                  Depositary
April 28, 1999          1,125                  Depositary
July 2, 1999           10,000                    Common
July 8, 1999            5,000                    Common
July 12, 1999           5,000                    Common
August 2, 1999          6,000                    Common
August 13, 1999         5,000                    Common
January 6, 2000           500                    Common
January 7, 2000         3,900                    Common
January 10, 2000          600                    Common
March 13, 2000          1,500                    Common
March 13, 2000            200                  Depositary
March 16, 2000          2,200                  Depositary
March 31, 2000            900                  Depositary
April 4, 2000           2,000                  Depositary
May 4, 2000               200                  Depositary
May 9, 2000               300                  Depositary

</TABLE>

       As of April 14, 1999, he sold 9,377 Depositary Shares pursuant to the
Company's tender offer for such shares. Other than the associates set forth
above, no associates of Mr. Dove own any Westmoreland securities.

Dr. Stephen D. Rosenbaum, 817 N. Calvert St., Baltimore, MD 31202. Dr. Rosenbaum
is an orthopaedic surgeon practicing under his own name at that address. He is
the direct beneficial owner of 80,000 Depositary shares, of which he purchased
30,000 shares in March 1999 and 17,000 shares in December 1998. He owns no
shares of record which he does not beneficially own. He owns no Common Shares of
the Company, but the 80,000 Depositary Shares are convertible into 136,640
Common Shares. No associates of Dr. Rosenbaum own any Westmoreland securities.


       The Committee as a group directly and indirectly owns 475,900 shares of
Common Stock and 118,481 Depositary Shares. No member of the Committee nor any
of their associates has any arrangement or understanding with any person with
respect to future employment with the Company nor with respect to any




                                     Page 5
<PAGE>   8

future transactions to which the Company or any of its affiliates will be a
party, except, of course, as the members of the Committee itself intend to
implement its plans as outlined in this statement. No member of the Committee
is, or was within the past year, a party to any contract, arrangements or
understandings with any person with respect to any securities of the Company,
including, but not limited to, joint ventures, loan or option arrangements, puts
or calls, guarantees against loss or guarantees of profit, division of losses or
profits, or the giving or withholding of proxies.

       The present Committee, as the Committee is now constituted, has no plans
other than those stated in this document regarding the affairs of the Company.
However, the individual members of the Committee are aware of a filing with
Securities and Exchange Commission by Nelson Obus, a former member of the
Committee, on behalf of Wynnefield Capital, Inc. and affiliated entities. This
filing notes that while those entities ("Reporting Persons") have acquired their
securities in the Company for investment purposes, they may in the future
determine to: (i) acquire additional securities of the Company, thorough
conversion of the Depositary Shares, open market purchases, private agreements
or otherwise, (ii) dispose of all or a portion of the securities of the Company
owned by them, or (iii) consider plans or proposals which would relate to or
result in: (a) the acquisition of any person of additional securities of the
Company; an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or its subsidiaries; (c)
the sale or transfer of a material amount of assets of the Company or its
subsidiaries; (d) any change in the board of directors or management of the
Company, including any plans or proposals to change the number or terms of
directors ore to fill any existing vacancies in the board of directors of the
Company; (e) any material changes in the present capitalization or dividend
policy of the Company; (f) any other material changes in the Company's charter,
by-laws or corporate structure or instruments; any other action whether or not
similar to those enumerated above. The Reporting Persons also reserved the right
to take other actions to influence the management of the Company should they
deem such actions appropriate.

While the members of the Committee have no plans, arrangements or understandings
with Mr. Obus or the affiliated entities, and at this time have not formulated
any such plans, arrangements or understandings as the Committee; depending
heavily on the



                                     Page 6
<PAGE>   9

outcome of this current action to enhance shareholder value, it is possible that
members of the Committee will seek to work with Mr. Obus, or independently
pursue the actions so delineated,

in furtherance of the above-stated goals.

             EXECUTION - REVOCATION OF CONSENTS

All consents should be signed and dated by the record holder of the shares
consenting. Thus, if the share are held of record by a person other than the
beneficial owner, the beneficial owner should instruct the record owner to date
and execute the consent. A Consent may be revoked at any time by delivering a
later dated and signed written revocation or Consent, executed by the record
owner, to the Committee at the address set forth under "How to Contact Us" later
in this document, or to the Corporate Secretary of the Westmoreland Coal
Company, 2 North Cascade Avenue, 14th Floor, Colorado Springs, Colorado 80903,
or at any other address provided by the Committee or the Company. No revocation
or later-dated Consent will affect any action taken pursuant to your Consent
prior to such revocation.

                              SOLICITATION EXPENSES

       In addition to the use of mails, consents will be solicited by members of
the Committee by telephone, telegram, and personal solicitation, for which no
compensation will be paid to those persons. In addition, Ms. Shellyn McCaffrey
will be engaged to help solicit consents at an hourly fee, presently estimated
to total approximately $25,000. Banks, brokerage houses and other custodians,
nominees and fiduciaries may be requested to forward solicitation material to
the beneficial owners of Depositary Shares that such institutions hold of
record. The Committee will reimburse such institutions for their reasonable
out-of-pocket expenses.

       The expense of preparing and mailing this and any other soliciting
material and the total expenditures relating to the solicitation of proxies
(including, without limitation, costs, if any, related to advertising, printing,
fees of attorneys, financial advisors, solicitors, consultants, public
relations, transportation, and litigation) will be borne by the members of the
Committee.

                                     Page 7
<PAGE>   10

       The Committee estimates that its total expenditures relating to the
solicitation of proxies will be approximately $50,000. Total cash expenditures
to-date relating to this solicitation have been approximately $500. It is the
Committee's position that its actions with respect to the solicitation of
consents, if successful, will enhance the value of the Company for the benefit
of its stockholders and therefore presently intends to seek reimbursement from
the Company for its reasonable expenses in connection with this solicitation.
The Committee does not expect that such matter will be submitted to a vote of
security holders, unless required by law.

                                HOW TO CONTACT US
<TABLE>
<CAPTION>
     To contract us:

<S>                  <C>
Frank Williams            (703) 641-4612 (Tel)
                          (703) 641-9082 (Fax)

Guy Dove                  (540) 687-6351 (Tel)
                          (540) 687-6714 (Fax)
                          [email protected] (e-mail)

Shellyn McCaffrey         (703) 739-9398 (Tel)
                          (703)739-5982  (Fax)
                          [email protected]

Mailing Address:      Westmoreland Committee to Enhance Share Value
                      2789-B Hartland Road
                      Falls Church, VA 22043
</TABLE>

                               CONSENT PROCEDURES

       IF YOU OWN AND HOLD DEPOSITARY SHARES REGISTERED IN YOUR OWN NAME, PLEASE
SIGN AND DATE ONE COPY OF THE ENCLOSED CONSENT FORM AND RETURN IT TO THE
COMMITTEE IN THE ENVELOPE PROVIDED.

       IF, HOWEVER, YOU OWN DEPOSITARY SHARES, BUT YOUR STOCK CERTIFICATE IS
HELD FOR YOU BY A BROKERAGE FIRM, BANK, OR OTHER INSTITUTION, IT IS VERY LIKELY
THAT THE STOCK CERTIDCATE IS ACTUALLY IN THE NAME OF SUCH INSTITUTION OR ITS
NOMINEE. IF SO, THAT INSTITUTION WILL EXECUTE A CONSENT FOR YOUR SHARES OF STOCK
ON RECEIPT OF YOUR SPECIFIC INSTRUCTIONS, BUT NOT OTHERWISE. ACCORDINGLY, IF YOU
DO NOT ACTUALLY HOLD THE DEPOSITARY SHARES IN YOUR OWN NAME, PLEASE SIGN AND
DATE ONE COPY OF THE ENCLOSED CONSENT AND RETURN IT TO THE COMMITTEE IN THE
ENVELOPE PROVIDED, AND SIGN AND DATE ONE COPY AND SEND


                                     Page 8
<PAGE>   11

TO THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AT SUCH ENTITY FOR EXECUTION BY THE
REORD OWNER OF YOUR SHARES.

APPENDIX
(Form of Consent)

       CONSENT SOLICITED BY THE WESTMORELAND COMMITTEE
                   TO ENHANCE SHARE VALUE

DEPOSITARY SHARES

CONSENTS WILL BE DELIVERED TO THE DEPOSITARY NO LATER THAN SEPTEMBER 14, 2000.
IF LESS THAN A MAJORITY OF THE OUTSTANDING DEPOSITARY SHARES CONSENT, THE
CONSENTS WILL NOT BE EFFECTIVE

The undersigned holder(s) of outstanding Depositary Shares Each Representing One
Quarter of a Share of Series A Convertible Exchangeable Preferred Stock (the
"Depositary Shares") of Westmoreland Coal Company (the "Company") hereby take
the following corporate action by written consent without a meeting pursuant to
Section 228 of the Delaware General Corporate Law:

RESOLVED, that Messrs. Robert E. Killen and James W. Sight, the two incumbent
directors of the Company elected by the holders of the Depositary Shares, are
hereby removed from office without cause, effective immediately upon delivery of
this Consent to the Company pursuant to said Section 228; and

FURTHER RESOLVED, that Frank E. Williams, Jr. and Guy O. Dove, III are hereby
elected as directors of the Company to fill the vacancies created by the removal
of Messrs. Killian and Sight, to serve until their successors are elected and
qualified.

YOU MAY APPROVE, DISAPPROVE, OR ABSTAIN FROM ACTING UPON, THE ABOVE RESOLUTIONS
BY CHECKING THE APPROPRIATE BOX
APPROVE ( )  DISAPPROVE  ( )   ABSTAIN  ( )

IN THE EVENT NO BOX IS CHECKED, THE RESOLUTIONS WILL BE COUNTED AS CONSENTED TO.

The undersigned hereby instruct(s) and empowers each and every person who or
entity which is the holder of record for the benefit of the Depositary Shares of
which the

                                     Page 9
<PAGE>   12


undersigned (are) is the beneficial owner(s) to date and execute this Consent as
such record holder of those Depositary Shares.

BENEFICIAL OWNER(S)

                         Number of shares

                         -------------------

                         Date:
                              -------------
                         Signature(s)

                         -----------------------------------

                         -----------------------------------

                         -----------------------------------

                            JOINT OWNERS SHOULD EACH SIGN PERSONALLY. If signing
                            as attorney,executor, administrator, trustee, or
                            guardian, please include your full title. Corporate
                            proxies should be signed by an authorized officer.
                            If a partnership, please sign in partnership name by
                            an authorized partner.

RECORD OWNER(S)

                         Number of shares

                         -------------------

                         Date:
                               -------------
                         Signature(s)

                         -----------------------------------

                         -----------------------------------

                         -----------------------------------

                            JOINT OWNERS SHOULD EACH


                                    Page 10
<PAGE>   13


                            SIGN PERSONALLY. If signing as attorney,executor,
                            administrator, trustee, or guardian, please include
                            your full title. Corporate proxies should be signed
                            by an authorized officer. If a partnership, please
                            sign in partnership name by an authorized partner.

                                    Page 11
<PAGE>   14

                  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.



<PAGE>   15

 -     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


                                       2
<PAGE>   16
                  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.





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