XXXXXXX COAL HOLDING COMPANY
00 XXXXXX XXXX
XXXXXXXX XXXXXXX, XX 00000
August 5, 1998
Dear Shareholders:
We are please 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 Corp., 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 shareholder 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 AND TENDER THEIR SHARES PURSUANT TO THE
OFFER AND APPROVE AND ADOPT THE MERGER AGREEMENT AND THE MERGER.
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 of Credit Suisse First Boston Corporation, the
Company's financial advisor, that the consideration to be received by
stockholders in the Offer and the subsequent Merger pursuant to the Merger
Agreement is fair, from a financial point of view, to such stockholders.
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,
Xxxxx X. Xxxx
PRESIDENT AND CHIEF EXECUTIVE OFFICER
