XXXXXXX COAL HOLDING COMPANY
00 XXXXXX XXXX
XXXXXXXX XXXXXXX, XX 00000
August 5, 1998
Dear Stockholders:
We are pleased to inform you that our Company has entered into an Agreement
and Plan of Merger, dated as of August 3, 1998 (the "Merger Agreement"), with
AEI Resources, Inc. ("Parent") and Xxxxxxx Acquisition Corporation, a
wholly-owned subsidiary of Parent ("Purchaser"). Pursuant to the Merger
Agreement, Purchaser has today commenced a cash tender offer (the "Offer") to
purchase all of the outstanding common stock, $.01 par value (the "Shares"), of
the Company at a purchase price of $21.25 per Share, net to the stockholder in
cash. Following the successful consummation of the Offer, Purchaser will be
merged with and into the Company (the "Merger") and the Company will become a
wholly-owned subsidiary of Parent.
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY DETERMINED THAT THE OFFER AND THE
MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND ITS
STOCKHOLDERS, HAS APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, AND RECOMMENDS THAT
ALL HOLDERS OF SHARES ACCEPT THE OFFER.
In arriving at its recommendation, the Board of Directors gave careful
consideration to the factors described in the attached Schedule 14D-9 that is
being filed today with the Securities and Exchange Commission, including, among
other things, the opinion dated August 3, 1998 of Credit Suisse First Boston
Corporation, the Company's financial advisor, to the effect that, as of such
date and based upon and subject to certain matters stated in such opinion, the
$21.25 per Share cash consideration to be received by holders of Shares (other
than Parent and its affiliates) in the Offer and the Merger was fair, from a
financial point of view, to such holders.
Certain stockholders and directors of the Company owning approximately 33%
of the Shares on a fully diluted basis have agreed to tender their Shares.
In addition to the attached Schedule 14D-9, enclosed is the Offer to
Purchase dated August 5, 1998 together with related materials, including a
Letter of Transmittal, to be used for tendering your Shares pursuant to the
Offer. These documents state the terms and conditions of the Offer and the
subsequent Merger, provide detailed information about the transactions and
include instructions as to how to tender your Shares. We urge you to read these
documents carefully in making your decision with respect to tendering your
Shares pursuant to the Offer.
Very truly yours,
/s/ Xxxxx X. Xxxx
Xxxxx X. Xxxx
PRESIDENT AND CHIEF EXECUTIVE OFFICER
