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EX-5.1 - EX-5.1 - WESTMORELAND COAL Co | d83262exv5w1.htm |
EX-23.4 - EX-23.4 - WESTMORELAND COAL Co | d83262exv23w4.htm |
EX-21.1 - EX-21.1 - WESTMORELAND COAL Co | d83262exv21w1.htm |
EX-23.3 - EX-23.3 - WESTMORELAND COAL Co | d83262exv23w3.htm |
EX-23.2 - EX-23.2 - WESTMORELAND COAL Co | d83262exv23w2.htm |
Table of Contents
As filed with the Securities and Exchange Commission on June 30, 2011.
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
WESTMORELAND COAL COMPANY
(Exact name of registrant as specified in its charter)
Delaware | 1221 | 23-1128670 | ||
(State or other jurisdiction of | (Primary Standard Industrial | (I.R.S. Employer Identification | ||
incorporation or organization) | Classification Number) | No.) |
2 North Cascade Avenue, 2nd Floor
Colorado Springs, Colorado 80903
Telephone: (719) 442-2600
(Address, including zip code, and telephone number,
including area code, of registrants principal executive offices)
Colorado Springs, Colorado 80903
Telephone: (719) 442-2600
(Address, including zip code, and telephone number,
including area code, of registrants principal executive offices)
Jennifer S. Grafton
General Counsel and Secretary
Westmoreland Coal Company
2 North Cascade Avenue, 2nd Floor
Colorado Springs, Colorado 80903
Telephone: (719) 442-2600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
General Counsel and Secretary
Westmoreland Coal Company
2 North Cascade Avenue, 2nd Floor
Colorado Springs, Colorado 80903
Telephone: (719) 442-2600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With copies to:
John Elofson
Davis Graham & Stubbs LLP
1550 Seventeenth Street, Suite 500
Denver, Colorado 80202
Telephone: (303) 892-9400
John Elofson
Davis Graham & Stubbs LLP
1550 Seventeenth Street, Suite 500
Denver, Colorado 80202
Telephone: (303) 892-9400
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the
effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act, check the following box: þ
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b)
under the Securities Act, please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act,
check the following box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act,
check the following box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
CALCULATION OF REGISTRATION FEE
Proposed maximum | Proposed maximum | |||||||||||||||||||||
Title of each class of | Amount to be | offering price per | aggregate offering | Amount of | ||||||||||||||||||
securities to be registered | registered | share (1) | price (1) | registration fee | ||||||||||||||||||
Common Stock, $2.50 par value |
250,000 | (2) | $ | 17.87 | $ | 4,467,500 | $ | 518.68 | ||||||||||||||
(1) | Estimated solely for the purpose of computing the registration fee. The proposed maximum offering price per share and maximum aggregate offering price for the shares being registered hereby are calculated in accordance with Rule 457(c) under the Securities Act of 1933 (the Act) using the average of the high and low sales price per share of our common stock on June 24, 2011, as reported on the NASDAQ Global Market. | |
(2) | Includes such additional number of shares of common stock, of a currently undeterminable amount, as may from time-to-time become issuable by reason of stock splits, stock dividends and certain other provisions to prevent dilution, which shares of common stock are registered hereunder pursuant to Rule 416 of the Act. |
The registrant hereby amends this registration statement on such date or dates as may be necessary
to delay its effective date until the registrant shall file a further amendment which specifically
states that this registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting pursuant to said Section
8(a), may determine.
Table of Contents
The information in this prospectus is not complete and may be changed. The selling securityholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and neither Westmoreland Coal Company nor the selling securityholders are soliciting offers to buy these securities in any state where the offer or sale is not permitted.
Subject to completion, dated June 30, 2011
WESTMORELAND COAL COMPANY
250,000 Shares of Common Stock, $2.50 par value
This prospectus relates to the resale, from time to time, by selling securityholders of
250,000 shares of Westmoreland Coal Company common stock. Shares of common stock offered by selling
securityholders consist of up to 250,000 shares proposed to be contributed by us to the
Westmoreland Coal Company Retirement Plan Trust from time to time in satisfaction of certain
funding obligations we have to the trust. The selling securityholders received the securities in
transactions exempt from the registration requirements of the Securities Act of 1933, as amended.
The prices at which the selling securityholders may sell the securities will be determined by
prevailing market prices or through privately negotiated transactions and the selling
securityholders will be responsible for any discounts or commissions due to brokers or dealers. We
will not receive proceeds from the sale of the securities. We have agreed to bear the expenses of
registering the securities covered by this prospectus and any prospectus supplements.
The securities are being registered to permit the selling securityholders to sell the
securities from time to time in the public market. The selling securityholders may sell the
securities through ordinary brokerage transactions or through any other means described in the
section titled Plan of Distribution. We do not know when or in what amount the selling
securityholders may offer the securities for sale. The selling securityholders may sell any, all or
none of the securities offered by this prospectus.
Our common stock is listed on NASDAQ Global Market under the symbol WLB. On June 29, 2011,
the last reported sale price of our common stock on the NASDAQ Global Market was $17.83 per share.
Investing in our common stock involves significant risk. See Risk Factors beginning on page
2 for a discussion of certain risks you should consider before buying any securities hereunder.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus and any prospectus supplements. Any representation to the contrary is a criminal
offense.
The date of this prospectus is , 2011.
TABLE OF CONTENTS
We have not authorized any dealer, salesperson or other person to give any information or
to make any representations to you other than the information contained in this prospectus. You
must not rely on any information or representations not contained in this prospectus as if we had
authorized it. The information contained in this prospectus is current only as of the date on the
cover page of this prospectus or any prospectus supplement and may change after that date. We do
not imply that there has been no change in the information contained in this prospectus or in our
affairs since that date by delivering this prospectus. The selling securityholders are not making
an offer of these securities in any state where the offer is not permitted.
This prospectus incorporates important business and financial information about us that
is not included in or delivered with this prospectus. This information is available without charge
to you upon written or oral request. If you would like a copy of any of this information, please
submit your request to Corporate Secretary, Westmoreland Coal Company, 2 North Cascade,
2nd Floor, Colorado Springs, Colorado 80903, or call (719) 442-2600 to make your
request.
Table of Contents
PROSPECTUS SUMMARY
This summary contains basic information about us and the resale of the securities being
offered by the selling securityholders. Because it is a summary, it does not contain all of the
information that you should consider before investing. You should read this entire prospectus
carefully, including the section entitled Risk Factors and our financial statements and the
related notes incorporated by reference in this prospectus, before making an investment decision.
As used in this prospectus, the terms we, our, ours and us may, depending on the context,
refer to Westmoreland Coal Company or to Westmoreland Coal Companys subsidiaries or to
Westmoreland Coal Company and its subsidiaries, taken as a whole.
Our Business
We are an energy company organized as a Delaware corporation in 1910. We mine coal, which is
used to produce electric power, and we own power-generating plants. We own five surface mines
located in the United States, which supply coal to power plants. Several of these power plants are
located adjacent to our mines, and we sell virtually all our coal under multi-year contracts. Due
to the generally longer duration and terms of our contracts, we enjoy relatively stable demand
compared to competitors who sell more of their production on the spot market and under short-term
contracts. We sold 25.2 million tons of coal in 2010. We conduct our mining operations through our
wholly-owned subsidiaries Westmoreland Resources, Inc. (WRI) and Westmoreland Mining LLC (WML).
In addition to our mining operations, we own the Roanoke Valley power plants (ROVA). ROVA
consists of two coal-fired generating units with a total capacity of 230 megawatts. ROVA supplies
power pursuant to long-term contracts to one customer.
For a more comprehensive overview of our business, we refer you to Item 1 and Item 2 of
our Annual Report on Form 10-K for the fiscal year ended December 31, 2010, which are incorporated
by reference herein.
Corporate Information
Our principal executive offices are located at 2 North Cascade Avenue, 2nd Floor,
Colorado Springs, CO 80903. Our telephone number is (719) 442-2600. Our website is
www.westmoreland.com. The contents of our website are not a part of this prospectus.
The Offering
Issuer
|
Westmoreland Coal Company | |
Seller
|
One selling securityholder identified in Selling Securityholders below. We are not selling any of the securities offered under this prospectus or any prospectus supplement. | |
Securities Offered
|
Up to 250,000 shares of common stock, which may be contributed to the Westmoreland Retirement Plan Trust. | |
Use of Proceeds
|
We will not receive any proceeds from the sale by any selling securityholder of the securities offered under this prospectus or any prospectus supplement. See Use of Proceeds. | |
Our Common Stock
|
Our common stock is quoted on NASDAQ Global Market under the symbol WLB. | |
Risk Factors
|
Investing in our securities involves significant risk. See Risk Factors for a discussion of the risks associated with an investment in our securities. |
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RISK FACTORS
Investing in our securities involves risks. You should carefully consider and evaluate all of
the information contained in this prospectus and in the documents incorporated herein by reference
before you decide to purchase our securities. Any of the risks and uncertainties set forth herein
could materially and adversely affect our business, results of operations and financial condition,
which in turn could materially and adversely affect the trading price of our common stock being
offered by this prospectus. As a result, you could lose all or part of your investment. You should
also consider the other important factors that can affect our business discussed below under the
caption Forward-Looking Statements.
Risk Factors Relating to our Operations
Risks associated with being highly leveraged.
Following the issuance of the senior secured notes at the parent level in February 2011 (the
Parent Notes), we had outstanding indebtedness of approximately $305 million. We may incur
additional indebtedness in the future, including indebtedness under our existing revolving credit
facility at WML and/or enter into a parent-level revolver collateralized by the accounts receivable
and inventory of ROVA and the Absaloka Mine. As a result of our significant indebtedness, we are
highly leveraged. Westmorelands leverage position may, among other things:
| limit our ability to obtain additional debt financing in the future for working capital, capital expenditures, acquisitions, or other general corporate purposes; | ||
| require us to dedicate a substantial portion of our cash flow from operations to debt service, reducing the availability of cash flow for other purposes; or | ||
| increase our vulnerability to economic downturns, limit our ability to capitalize on significant business opportunities, and restrict our flexibility to react to changes in market or industry conditions. |
In addition, there can be no assurance that rating agencies will not downgrade the credit
rating on the Parent Notes, which could impede our ability to refinance existing debt or secure new
debt or otherwise increase our future cost of borrowing and could create additional concerns on the
part of our customers, partners, investors and employees about our financial condition and results
of operations.
We may not generate sufficient cash flow at our operating subsidiaries to pay our operating
expenses, meet our debt service costs and pay our heritage and corporate costs.
As a result of significant increases in our operating profits, a decrease in our heritage
health benefit costs and the receipt of proceeds from the Parent Notes, we anticipate that our cash
from operations, cash on hand and available borrowing capacity through the WML revolver and a
potential parent-level revolver will be sufficient to meet our cash requirements for the
foreseeable future. However, our expectations in this regard are subject to numerous uncertainties,
including uncertainties relating to our operating performance and general market conditions. In
addition, our capital needs may be greater than we currently expect if we were to pursue one or
more significant acquisitions.
Our Westmoreland Mining LLC subsidiary, which owns the Rosebud, Jewett, Beulah and Savage
Mines, is subject to a credit facility (the WML Notes) that limits the ability of the subsidiary
to dividend funds to us. Accordingly, WML may not be able to pay dividends to us in the amounts
and in the time required for us to pay our heritage health benefit costs and corporate overhead
expenses. Ultimately, if WMLs operating cash flows are insufficient to support their operations
and provide dividends to us in the amounts and time required to pay our expenses, we would be
required to expend cash on hand or further leverage our operations through a parent-level revolver
to fund our heritage liabilities and corporate overheard and, if necessary, support activities at
our Absaloka Mine. Should we be required to expend cash on hand to fund such activities, such
funds would be unavailable to grow the business through strategic acquisitions or ventures or
support the business through reclamation bonding, capital and reserve acquisition.
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Our debt agreements contain covenant restrictions that may limit our ability to operate our
business.
The agreements governing our Parent Notes and the WML Notes contain covenant restrictions that
limit our ability to operate our business, including restrictions on our ability to:
| incur additional debt or issue guarantees; | ||
| create liens; | ||
| make certain investments; | ||
| enter into transactions with our affiliates; | ||
| sell certain assets; | ||
| redeem capital stock or make other restricted payments; | ||
| declare or pay dividends or make other distributions to stockholders; and | ||
| merge or consolidate with any entity. |
Our ability to comply with these covenants is dependent on our future performance, which will
be subject to many factors, some of which are beyond our control, including prevailing economic
conditions. As a result of these covenants, our ability to respond to changes in business and
economic conditions and to obtain additional financing, if needed, may be significantly restricted,
and we may be prevented from engaging in transactions that might otherwise be beneficial to us. In
addition, our failure to comply with these covenants could result in a default under our debt
agreements, which could permit the holders to accelerate our obligation to repay the debt. If any
of our debt is accelerated, we may not have sufficient funds available to repay the accelerated
debt.
Our dependence on a small group of customers could adversely affect our revenues if such customers
reduce or suspend their coal purchases or if they become unable to pay for our coal.
In 2010, approximately 65% of our total revenues were derived from coal sales to four power
plants: Colstrip Units 3&4 (24% of our 2010 revenues), Limestone Generating Station (16%) and
Colstrip Units 1&2 (13%) and Sherburne County Station (12%). Interruption in the purchases of coal
from our operations by our principal customers could significantly affect our revenues.
Unscheduled maintenance outages at our customers power plants, unseasonably moderate weather,
higher-than-anticipated hydro season that results in our key customers not being dispatched or
increases in the production of alternative clean-energy generation such as wind power could cause
our customers to reduce their purchases. In addition, new environmental regulations could compel
our customer of the Jewett Mine to purchase more compliance coal, reducing or eliminating our sales
to them. Four of our five mines are dedicated to supplying customers located adjacent to or near
the mines, and these mines may have difficulty identifying alternative purchasers of their coal if
their existing customers suspend or terminate their purchases. The reduction in the sale of our
coal would adversely affect our operating results. In addition, if any of our major customers
became unable to pay for contracted amounts of coal, our results of operation and liquidity would
be adversely affected.
Additionally, certain of our long-term contracts are set to expire in the next several years.
Our contracts with the Sherburne County Station are three-year rolling contracts, with one-third of
the tonnage expiring on an annual basis. Our contract with Coyote Station, located adjacent to our
Beulah mine, expires in May 2016. We are currently working with the Coyote Station owners in a
competitive bid process for another long-term supply contract. Our contract with Colstrip Units
3&4 expires in December 2019. Should we be unable to successfully renew any or all of these
expiring contracts, the reduction in the sale of our coal would adversely affect our operating
results and liquidity.
Similarly, interruption in the purchase of power by Dominion could also negatively affect our
revenues. In 2010, the sale of power by ROVA to Dominion accounted for approximately 17% of our
consolidated revenues. Although ROVA supplies power to Dominion under long-term power purchase
agreements, if demand for electricity
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from Dominions customers was materially reduced or if Dominion was to become insolvent or
otherwise unable or unwilling to pay for the power produced by ROVA in a timely manner, it could
have a material adverse effect on our results of operations, financial condition, and liquidity.
If our assumptions regarding our future expenses related to employee benefit plans are incorrect,
then expenditures for these benefits could be materially higher than we have assumed. In addition,
we may have exposure under those plans that extend beyond what our obligations would be with
respect to our own employees.
We provide various postretirement medical benefits, black lung and workers compensation
benefits to current and former employees and their dependents. We calculate the total accumulated
benefit obligations according to guidance provided by GAAP. We estimate the present value of our
postretirement medical, black lung and workers compensation benefit obligations to be $210.9
million, $14.1 million and $10.4 million, respectively, at December 31, 2010. We have estimated
these unfunded obligations based on actuarial assumptions described in the notes to our
consolidated financial statements. If our assumptions do not materialize as expected, cash
expenditures and costs that we incur could be materially higher.
Moreover, regulatory changes could increase our obligations to provide these or additional
benefits. Certain of our subsidiaries participate in defined benefit multi-employer funds
that were established in connection with the Coal Industry Retiree Health Benefit Act of 1992,
or Coal Act, which provides for the funding of health and death benefits for certain UMWA retirees.
Our contributions to these funds totaled $3.1 million for the year ended December 31, 2009 and $3.0
million for the year ended December 31, 2010. Our contributions to these funds could increase as a
result of a shrinking contribution base as a result of the insolvency of other coal
companies that currently contribute to these funds, lower than expected returns on fund assets or
other funding deficiencies.
We could also have obligations under the Tax Relief and Health Care Act of 2006, or 2006 Act.
The 2006 Act authorized up to a maximum of $490 million in federal contributions to pay for certain
benefits, including the healthcare costs under certain funds created by the Coal Act for orphans,
i.e. retirees from companies that subsequently ceased operations, and their dependents. However, if
Congress were to amend or repeal the 2006 Act or if the $490 million authorization were
insufficient to pay for these healthcare costs, we, along with other contributing employers and
certain affiliates, would be responsible for the excess costs.
We also contribute to a multi-employer defined benefit pension plan, the Central Pension Fund
of the Operating Engineers, or Central Pension Fund, on behalf of employee groups at our Rosebud,
Absaloka and Savage mines that are represented by the International Union of Operating Engineers.
The Central Pension Fund is subject to certain funding rules contained in the Pension Protection
Act of 2006, or PPA. Under the PPA, if the Central Pension Plan fails to meet certain minimum
funding requirements, it would be required to adopt a funding improvement plan or rehabilitation
plan. If the Central Pension Fund adopted a funding improvement plan or rehabilitation plan, we
could be required to contribute additional amounts to the fund. As of January 31, 2010, its last
completed fiscal year, the Central Pension Fund reported that it was underfunded. If we were to
partially or completely withdraw from the fund at a time when the Central Pension Fund were
underfunded, we would be liable for a proportionate share the funds unfunded vested benefits, and
this liability could have a material adverse effect on our financial position.
Recent healthcare legislation contains amendments to the Black Lung Benefits Act that could
adversely affect our financial condition and results of operations.
In March 2010, the Patient Protection and Affordable Care Act, or PPACA, was enacted. PPACA
contains an amendment to the Black Lung Benefits Act, or BLBA, that has the effect of reinstating
provisions that were removed from the BLBA in 1981. The amendment provides that eligible miners
can be awarded total disability benefits if they can prove they worked 15 or more years in or
around coal mines and have a totally disabling respiratory impairment. In addition, the amendment
also provides for an automatic survivor benefit to be paid upon the death of a miner with an
awarded federal black lung claim without the requirement to prove that the miners death was due to
black lung disease. Both amendments are retroactive and applicable to claims filed as of January
1, 2005 and have and may continue to result in currently pending claimants being awarded benefits
back to a start date that may be as far back as January 2, 2005. Through the first year of the
amendments effectiveness, we have experienced an increase in black lung claims over similar
periods. However, at a minimum, it takes several months
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to several years for a claim to be awarded or denied and any liability to be determined. In
addition, through the first nine months, we have accepted several survivors claims. Given the
relatively small number of survivors claims and the lack of final adjudication of black lung
claims, we have very limited experience from which to determine the overall effect, if any, this
increase in claims will have on our costs and liability. In addition, we have incomplete
information to determine whether this increase in claims constitutes a one-time spike in claims, or
represents a future trend in black lung claims and eventual awards. We believe these amendments
could give rise to increases in liabilities for claims from prior periods of time for retroactive
costs, an increase in the number of claimants who are awarded benefits resulting in an increase in
future funding requirements and an increase in administrative fees, including legal expenses, as a
result of reviewing and defending an increased number of benefit claims. In addition, while we
periodically perform evaluations of our black lung liability, using assumptions regarding rates of
successful claims, discount factors, benefit increases and mortality rates, among others, the
limited claims experience from the first nine months of amendment effectiveness is insufficient to
determine the potential change in black lung liability due to the application of these new
amendments. If the number or severity of claims increases, or we are required to accrue or pay
additional amounts because the claims prove to be more severe than our current assumptions, our
results of operations and liquidity could be immediately impacted.
Inaccuracies in our estimates of our coal reserves could result in decreased profitability from
lower than expected revenues or higher than expected costs.
Our future performance depends on, among other things, the accuracy of our estimates of our
proven and probable coal reserves. Our reserve estimates are prepared by our engineers and
geologists or by third-party engineering firms and are updated periodically. There are numerous
factors and assumptions inherent in estimating the quantities and qualities of, and costs to mine,
coal reserves, including many factors beyond our control, including the following:
| quality of the coal; | ||
| geological and mining conditions, which may not be fully identified by available exploration data and/or may differ from our experiences in areas where we currently mine; | ||
| the percentage of coal ultimately recoverable; | ||
| the assumed effects of regulation, including the issuance of required permits, taxes, including severance and excise taxes and royalties, and other payments to governmental agencies; | ||
| assumptions concerning the timing for the development of the reserves; and | ||
| assumptions concerning equipment and productivity, future coal prices, operating costs, including for critical supplies such as fuel, tires and explosives, capital expenditures and development and reclamation costs. |
As a result, estimates of the quantities and qualities of economically recoverable coal
attributable to any particular group of properties, classifications of reserves based on risk of
recovery, estimated cost of production, and estimates of future net cash flows expected from these
properties may vary materially due to changes in the above factors and assumptions. Any inaccuracy
in our estimates related to our reserves could result in decreased profitability from lower than
expected revenues and/or higher than expected costs.
If the assumptions underlying our reclamation and mine closure obligations are materially
inaccurate, we could be required to expend greater amounts than anticipated.
The Surface Mining Control and Reclamation Act of 1977, or SMCRA, establishes operational,
reclamation and closure standards for all aspects of surface mining as well as most aspects of deep
mining. We calculated the total estimated reclamation and mine-closing liabilities according to
the guidance provided by Generally Accepted Accounting Principles, or GAAP, and current industry
practice. Estimates of our total reclamation and mine-closing liabilities are based upon permit
requirements and our engineering expertise related to these requirements. If our estimates are
incorrect, we could be required in future periods to spend materially different amounts on
reclamation and mine-closing activities than we currently estimate. Likewise, if our customers,
some of whom are contractually obligated to pay certain reclamation costs, default on the unfunded
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portion of their contractual obligations to pay for reclamation, we could be forced to make
these expenditures ourselves and the cost of reclamation could exceed any amount we might recover
in litigation.
We estimate that our gross reclamation and mine-closing liabilities, which are based upon
projected mine lives, current mine plans, permit requirements and our experience, were $241.6
million (on a present value basis) at December 31, 2010. Of these December 31, 2010 liabilities,
our customers have assumed $95.5 million by contract. In addition, we held final reclamation
deposits, received from customers, of approximately $72.3 million at December 31, 2010 to provide
for these obligations. We estimate that our obligation for final reclamation that was not the
contractual responsibility of others or covered by offsetting reclamation deposits was $73.9
million at December 31, 2010. This $73.9 million must be recovered in the price of coal sold.
Responsibility for the final reclamation amounts may change in certain circumstances.
Although our estimated costs are updated annually, our recorded obligations may prove to be
inadequate due to changes in legislation, standards and the emergence of new restoration
techniques. Furthermore, the expected timing of expenditure could change significantly due to
changes in commodity prices that might curtail the life of an operation. These recorded
obligations could prove insufficient compared to the actual cost of reclamation. Any underestimated
or unidentified close down, restoration and environmental rehabilitation costs could have an
adverse effect on our reputation as well as our asset values, results of operations and liquidity.
If the cost of obtaining new reclamation bonds and renewing existing reclamation bonds continues to
increase or if we are unable to obtain additional bonding capacity, our operating results could be
negatively affected.
Federal and state laws require that we provide bonds to secure our obligations to reclaim
lands used for mining. We must post a bond before we obtain a permit to mine any new area. These
bonds are typically renewable on a yearly basis and have become increasingly expensive. Bonding
companies are requiring that applicants collateralize increasing portions of their obligations to
the bonding company. In 2010, we paid approximately $2.6 million in premiums for reclamation bonds
and were required to use $1.7 million in cash to collateralize 47% of the face amount of the new
bonds obtained in 2010. We anticipate that, as we permit additional areas for our mines in 2011
and 2012, our bonding and collateral requirements will increase significantly. Any capital that we
provide to collateralize our obligations to our bonding companies is not available to support our
other business activities. If the cost of our reclamation bonding premiums and collateral
requirements were to increase, our results of operations could be negatively affected.
Additionally, if we are unable to obtain additional bonding capacity due to cash flow constraints,
we will be unable to begin mining operations in newly permitted areas, which could hamper our
ability to efficiently meet our current customer contract deliveries, expand operations, and
increase revenues.
Our coal mining operations are subject to external conditions that could disrupt operations and
negatively affect our profitability.
Our coal mining operations are all surface mines. These mines are subject to conditions or
events beyond our control that could disrupt operations, affect production, and increase the cost
of mining at particular mines for varying lengths of time. These conditions or events include:
unplanned equipment failures, which could interrupt production and require us to expend significant
sums to repair our equipment, which is integral to the mining of coal; geological conditions such
as variations in the quality of the coal produced from a particular seam, variations in the
thickness of coal seams and variations in the amounts of rock and other natural materials that
overlie the coal that we are mining; and weather conditions. For example, in our recent past, we
have endured: a major blizzard at the Beulah Mine, which interrupted operations; a fire on the
trestle at the Beulah Mine that interrupted rail shipment of our coal; and an unanticipated
replacement of boom suspension cables on one of our draglines that caused a multi-week interruption
of mining. Major disruptions in operations at any of our mines over a lengthy period could
adversely affect the profitability of our mines.
In addition, unplanned outages of draglines and extensions of scheduled outages due to
mechanical failures or other problems occur from time to time and are an inherent risk of our coal
mining business. Unplanned outages typically increase our operation and maintenance expenses and
may reduce our revenues as a result of selling fewer tons of coal. If properly maintained, a
dragline can operate for 40 years or longer. The average age of our draglines is 28 years. The
dragline at our Absaloka Mine was erected in 1980. As our draglines and other major equipment
ages, we may experience unscheduled maintenance outages or increased maintenance costs, which would
adversely
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affect our operating results.
Our operations are vulnerable to natural disasters, operating difficulties and infrastructure
constraints, not all of which are covered by insurance, which could have an impact on its
productivity.
Mining and power operations are vulnerable to natural events, including blizzards,
earthquakes, drought, floods, fire, storms and the possible effects of climate change. Operating
difficulties such as unexpected geological variations could affect the costs and viability of our
operations. Our operations also require reliable roads, rail networks, power sources and power
transmission facilities, water supplies and IT systems to access and conduct operations. The
availability and cost of infrastructure affects our capital expenditures, operating costs, and
planned levels of production and sales. Our insurance does not cover every potential risk
associated with our operations. Adequate coverage at reasonable rates is not always obtainable.
In addition, our insurance may not fully cover our liability or the consequences of any business
interruptions such as equipment failure or labor dispute. The occurrence of a significant event
not fully covered by insurance could have an adverse effect on our business, results of operations,
financial condition and prospects.
Health, safety, environment and other regulations, standards and expectations evolve over time and
unforeseen changes could have an adverse effect on our results of operations and liquidity.
We operate in an industry that is subject to numerous health, safety and environmental laws,
regulations and standards as well as community and stakeholder expectations. We are subject to
extensive governmental regulations in all jurisdictions in which we operate. Operations are
subject to general and specific regulations governing mining and processing, land tenure and use,
environmental requirements (including site-specific environmental licenses, permits and statutory
authorizations), workplace health and safety and taxation. Evolving regulatory standards and
expectations can result in increased litigation and/or increased costs, all of which can have an
adverse effect on our results of operations and liquidity.
Should our Indian Coal Tax Credit transaction be audited by the Internal Revenue Service, or IRS,
and the tax results contemplated thereby disallowed, the financial benefits of the transaction
would be reduced and we may be required to return payments received from a third party investor.
In 2008, WRI entered into a series of transactions with an unaffiliated investor, including
the formation of Absaloka Coal, in order to take advantage of certain available tax credits for the
production of coal on Indian lands and the sale of that coal. We requested and have received a
private letter ruling, or PLR, from the IRS providing that certain requirements for the
availability of the tax credits have been met under the specific scenario described in the PLR.
Even though we have received the PLR, there are certain issues that may be raised by the IRS in a
subsequent audit of tax returns of Absaloka Coal. In the event that a subsequent audit results in
the disqualification of the tax credits or the disallowance of the allocations of the tax credits,
various remedies would minimize the financial benefits of the transaction and we could be required
to return to the investor previously received payments. We pay to the Crow Tribe 33% of the
expected payments we receive from the investor. The Crow Tribe is only required to reimburse us
under very limited circumstances. As a result, in the event that the IRS disallows or disqualifies
the tax credits, we would likely be unable to recoup payments already paid to the Crow Tribe.
Furthermore, the transactions described above will expire in 2012 unless renewed. Renewal
would require, among other things, an amendment to the relevant section of the Internal Revenue
Code. While we expect to seek to renew the transactions if the relevant section of the Internal
Revenue Code is amended, there can be no assurance that we will be successful in doing so or that
the relevant section of the Internal Revenue Code will be amended.
Our future success depends upon our ability to continue acquiring and developing coal reserves that
are economically recoverable and to raise the capital necessary to fund our expansion.
Our recoverable reserves will decline as we produce coal. We have not yet applied for the
permits required or developed the mines necessary to use all of the coal deposits under our mineral
rights, and those permits may not be granted in a timely manner or at all. Furthermore, we may not
be able to mine all of our coal deposits as
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efficiently as we do at our current operations. Our
future success depends upon conducting successful exploration
and development activities and acquiring properties containing economically recoverable coal
deposits. Our current strategy includes increasing our coal reserves through acquisitions of other
mineral rights, leases, or producing properties and continuing to use our existing properties. Our
ability to further expand our operations may be dependent on our ability to obtain sufficient
working capital, either through cash flows generated from operations, or financing activities, or
both. As mines become depleted, replacement reserves may not be available when required or, if
available, may not be capable of being mined at costs comparable to those characteristic of the
depleting mines. These factors could have a material adverse affect on our mining operations and
costs, and our customers ability to use the coal we mine.
Union represented labor creates an increased risk of work stoppages and higher labor costs.
At December 31, 2010, either the International Union of Operating Engineers Local 400 or the
UMWA represented approximately 52% of our total workforce. Our unionized workforce is spread out
amongst four of our surface mines. As a majority of our workforce is unionized, there may be an
increased risk of strikes and other labor disputes, and our ability to alter labor costs is subject
to collective bargaining. In March 2009, during negotiation over a collective bargaining
agreement, our employees at the Rosebud Mine imposed a sixteen-day work stoppage. In April 2009,
we entered into a new four-year agreement with the union and the Rosebud Mine resumed full
operation. The impact on our operations was minimal as we continued to make most of our scheduled
coal deliveries. If our Jewett Mine operations were to become unionized, we could be subject to
additional risk of work stoppages, other labor disputes and higher labor costs, which could
adversely affect the stability of production and our results of operations.
Legislation has been proposed to enact a law allowing workers to choose union representation
solely by signing election cards, which would eliminate the use of secret ballots to elect union
representation. While the impact is uncertain, if this proposal is enacted into law, it will be
administratively easier for unions to unionize coal mines and may lead to more coal mines becoming
unionized.
Our revenues could be affected by unscheduled outages or if scheduled maintenance outages last
longer than anticipated.
Unplanned outages of and extensions of scheduled outages due to mechanical failures or other
problems at our mines, our power plants, or the power plants of our customers occur from
time-to-time and are an inherent risk of our business. Unplanned outages typically increase our
operation and maintenance expenses and may reduce our revenues as a result of selling less tons of
coal or fewer megawatt hours. While we maintain insurance, the proceeds of such insurance may not
be adequate to cover our lost revenues, increased expenses or liquidated damages payments should we
experience equipment breakdown. Any unexpected failure, including failure associated with
breakdowns, forced outages or any unanticipated capital expenditures could have an adverse affect
on our results of operations and liquidity.
The profitability of ROVA could be severely affected beginning in 2014 due to differences in the
termination dates of our coal supply agreements and power purchase agreements.
We entered into a ROVA Coal Supply Agreement for our larger plant on June 21, 1993, and a ROVA
Coal Supply Agreement for our smaller plant on December 1, 1993, which provide for ROVAs coal
needs for a twenty-year period, terminating on May 29, 2014 and June 1, 2015, respectively. We
also entered into power sales agreements with Dominion Virginia Power that provide for the sale of
power for a twenty-five year term through May 29, 2019, for our larger ROVA plant and June 1, 2020,
for the smaller ROVA plant. The coal supply agreements provide for coal at a price per ton that is
significantly less than todays open market price for Central Appalachia coal. Upon the
termination of the coal supply agreements beginning in 2014, we will be required to renegotiate our
current contract or find a substitute supply of coal, more than likely at a cost per ton far
greater than the price we are paying today. However, the power sales agreements do not provide for
a price increase related to an increase in the cost per ton of delivered coal and Dominion Virginia
Powers payment for power after 2014 will not escalate with our increased coal costs. Due to the
change in the economics of ROVA at such time, it is projected that ROVA will begin incurring losses
in 2014 and may be unable to pay its obligations as they become due. Should ROVA renegotiate its
future coal supply contracts prior to 2014 in a manner that results in higher coal prices,
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reduced margins and an inability to pay obligations could be accelerated.
Permitting issues in Central Appalachia could put ROVAs coal supply at risk.
ROVA purchases coal under long-term contracts from coal suppliers with identified reserves
located in Central Appalachia. While our coal supply has been relatively stable since the
inception of the contracts, potential permitting issues pertaining to the reserves identified as
our source of coal in our coal contracts could prove problematic in the coming years. Should
regulatory/legal action prevent our coal supplier from continuing to mine the reserves identified
as our source of coal or to mine other reserves that could be identified as potential sources of
coal, we could be forced to find an alternative source of coal at higher prices. While the cost of
cover for substitute coal should be covered by our coal contracts, we would be forced to initially
incur the higher costs to secure a coal supply to provide for the continued operations at ROVA. In
addition, should issues arise under our coal contracts relating to the cost of cover for substitute
coal, the coal suppliers guarantee or any other issue, we could be forced to incur significant
legal expenses and, potentially, may never recoup our incremental coal or related legal costs.
We face intense competition to attract and retain employees. Further, managing Chief Executive
Officer and key executive succession and retention is critical to our success.
We are dependent on retaining existing employees and attracting additional qualified employees
to meet current and future needs and achieving productivity gains from our investments in
technology. We face intense competition for qualified employees, and there can be no assurance that
we will be able to attract and retain such employees or that such competition among potential
employers will not result in increasing salaries. An inability to retain existing employees or
attract additional employees could have a material adverse effect on our business, cash flows,
financial condition and results of operations.
We would be adversely affected if we fail to adequately plan for succession of our Chief
Executive Officer and senior management or fail to retain key executives. While we have succession
plans in place, these plans do not guarantee that we will not face operational risk upon the exit
of our Chief Executive Officer or members of our senior management.
Risk Factors Relating to the Coal and Power Industries
The recent downturn in the domestic and international financial markets, and the risk of prolonged
global recessionary conditions, could adversely affect our financial condition and results of
operations.
Because we sell substantially all of our coal to electric utilities, our business and results
of operations remain closely linked to demand for electricity. The recent downturn in the domestic
and international financial markets has created economic uncertainty and raised the risk of
prolonged global recessionary conditions. Historically, global demand for basic inputs, including
electricity production, has decreased during periods of economic downturn. If the recent downturn
in the domestic and international financial markets decreases global demand for electricity
production, our financial condition and results of operations could be adversely affected.
Competition in the U.S. coal industry may adversely affect our revenues and results of operations.
Many of our competitors in the domestic coal industry are major coal producers who have
significantly greater financial resources than we do. The intense competition among coal producers
may impact our ability to retain or attract customers and may therefore adversely affect our future
revenues and results of operations. Among other things, competitors could develop new mines that
compete with our mines or build or obtain access to rail lines that would adversely affect the
competitive position of our mines.
Any change in consumption patterns by utilities away from the use of coal could affect our ability
to sell the coal we produce or the prices that we receive.
The domestic electric utility industry currently accounts for approximately 93% of domestic
coal consumption. The amount of coal consumed by the domestic electric utility industry is
affected primarily by the
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overall demand for electricity, environmental and other governmental
regulations, and the price and availability of competing fuels for power plants such as nuclear,
hydro, natural gas and fuel oil as well as alternative sources of energy. A decrease in coal
consumption by the domestic electric utility industry could adversely affect the price of
coal, which could negatively impact our results of operations and liquidity.
Some power plants are fueled by natural gas because of the relatively cheaper construction
costs of such plants compared to coal-fired plants and because natural gas is a cleaner burning
fuel. In addition, some states have adopted or are considering legislation that encourages
domestic electric utilities to switch coal-fired power generation plants to natural gas powered
plants. Passage of these and other state or federal laws or regulations regarding limiting carbon
dioxide emissions could result in fuel switching, from coal to other fuel sources, by purchasers of
our coal. Such laws and regulations could also mandate decreases in carbon dioxide emissions from
coal-fired power plants, impose taxes on carbon emissions or require certain technology to capture
and sequester carbon dioxide from coal-fired power plants. If these or similar measures are
ultimately imposed by federal or state governments or pursuant to international treaty on the coal
industry, our reserves and operating costs may be materially and adversely affected. Similarly,
alternative fuels (non fossil fuels) could become more attractive than coal in order to reduce
carbon emissions, which could result in a reduction in the demand for coal and, therefore, our
revenues.
Increased regulation of greenhouse gas emissions could adversely affect our cost of operations.
Our operations are energy intensive and depend heavily on fossil fuels. There is increasing
regulation of greenhouse gas emissions, progressive introduction of carbon emissions trading
mechanisms and tighter emission reduction targets, in numerous jurisdictions in which we operate.
These are likely to raise energy and production costs to a material degree over the next decade.
Regulation of greenhouse gas emissions in our major customers and suppliers jurisdictions could
also have an adverse effect on the demand for our products.
Extensive government regulations impose significant costs on our mining operations, and future
regulations could increase those costs or limit our ability to produce and sell coal.
The coal mining industry is subject to increasingly strict regulation by federal, state and
local authorities with respect to matters such as:
| limitations on land use; | ||
| employee health and safety; | ||
| mandated benefits for retired coal miners; | ||
| mine permitting and licensing requirements; | ||
| reclamation and restoration of mining properties after mining is completed; | ||
| air quality standards; | ||
| water pollution; | ||
| construction and permitting of facilities required for mining operations, including valley fills and other structures, including those constructed in water bodies and wetlands; | ||
| protection of human health, plant life and wildlife; | ||
| discharge of materials into the environment; and | ||
| effects of mining on groundwater quality and availability. |
The costs, liabilities and requirements associated with these and other regulations may be
costly and time-consuming and may delay commencement or continuation of exploration or production
operations. Failure to comply with these regulations may result in the assessment of
administrative, civil and criminal penalties, the imposition of cleanup and site restoration costs
and liens, the issuance of injunctions to limit or cease operations, the
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suspension or revocation
of permits and other enforcement measures that could have the effect of limiting production from
our operations. We may also incur costs and liabilities resulting from claims for damages to
property or injury to persons arising from our operations. We must compensate employees for
work-related injuries.
If we do not make adequate provision for our workers compensation liabilities, it could harm
our future operating results. If we are pursued for any sanctions, costs and liabilities, our
mining operations and, as a result, our results of operations could be adversely affected.
The possibility exists that new legislation and/or regulations and orders may be adopted that
may materially adversely affect our mining operations, our cost structure and/or our customers
ability to use coal. New legislation or administrative regulations (or new judicial
interpretations or administrative enforcement of existing laws and regulations), including
proposals related to the protection of the environment that would further regulate and tax the coal
industry, may also require us or our customers to change operations significantly or incur
increased costs. These regulations, if proposed and enacted in the future, could have a material
adverse effect on our financial condition and results of operations.
Extensive environmental laws and regulations affect the end-users of coal and could reduce the
demand for coal as a fuel source and cause the volume of our sales to decline. These laws and
regulations could also impose costs on ROVA that it would be unable to pass through to its
customer.
Coal contains impurities, including but not limited to sulfur, mercury, chlorine, carbon and
other elements or compounds, many of which are released into the air when coal is burned. The
emission of these and other substances is extensively regulated at the federal, state and local
level, and these regulations significantly affect our customers ability to use the coal we produce
and, therefore, the demand for that coal. For example, the purchaser of coal produced from the
Jewett Mine blends our lignite with compliance coal from Wyoming. Tightened nitrogen oxide and new
mercury emission standards could result in the customer purchasing an increased blend of the
Wyoming coal in order to reduce emissions. Further, increased market prices for sulfur dioxide
emissions and increased coal ash costs could also favor an increased blend of the lower ash Wyoming
compliance coal. In such a case, the customer has the option to increase its purchases of other
coal and reduce purchases of our coal or terminate our contract. A termination of the contract or
a significant reduction in the amount of our coal that is purchased by the customer could have a
material adverse effect on our results of operation and financial condition.
In addition, greenhouse gas, or GHG, emissions have increasingly become the subject of a large
amount of international, national, state and local attention. Coal-fired power plants can generate
large amounts of carbon emissions. Accordingly, our coal and power operations will likely be
affected by legislation or regulation intended to limit GHGs. For example, the Environmental
Protection Agency, or EPA, has issued a notice of finding and determination that emissions of
carbon dioxide, methane and other GHGs present an endangerment to human health and the environment,
which allows the EPA to begin regulating emissions of GHGs under existing provisions of the federal
Clean Air Act. The EPA has begun to implement GHG-related reporting and permitting rules.
Similarly, the U.S. Congress is considering cap and trade legislation that would establish an
economy-wide cap on emissions of GHGs in the United States and would require most sources of GHG
emissions to obtain GHG emission allowances corresponding to their annual emissions of GHGs. In
addition, coal-fired power plants have become subject to challenge, including the opposition to any
new coal-fired power plants or capacity expansions of existing plants, by environmental groups
seeking to curb the environmental effects of emissions of GHGs.
These developments could have a variety of adverse effects on demand for the coal we produce.
For example, state or federal laws or regulations regarding GHGs could result in fuel switching
from coal to other fuel sources by electricity generators, or require us, or our customers, to
employ expensive technology to capture and sequester carbon dioxide. Political opposition to the
development of new coal-fired power plants, or regulatory uncertainty regarding future emissions
controls, may result in fewer such plants being built, which would limit our ability to grow in the
future.
With respect to ROVA, it may be unable to pass costs associated with GHG-related regulation on
to Dominion Virginia Power under its power purchase agreement even though any imposed carbon tax
would be passed through to ROVA from its coal suppliers under the terms of the applicable coal
supply agreements. Any legislation or regulation that has the effect of imposing costs on ROVA it
is unable to pass through to Dominion Virginia Power would adversely affect our results of
operations and liquidity.
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Risk Factors Relating to our Equity
Provisions of our certificate of incorporation, bylaws, Delaware law and our stockholder rights
plan may have anti-takeover effects that could prevent a change of control of our company that
stockholders may consider favorable, and the market price of our common stock may be lower as a
result.
Provisions in our certificate of incorporation, bylaws and Delaware law could make it more
difficult for a third party to acquire us, even if doing so might be beneficial to our
stockholders. Provisions of our bylaws impose various procedural and other requirements that could
make it more difficult for stockholders to bring about some types of corporate actions such as
electing individuals to the board of directors. In addition, a change of control may be delayed or
deterred as a result of our stockholder rights plan, which was initially adopted by our Board of
Directors in early 1993 and amended and restated in February 2003 and further amended in May 2007
and March 2008. Our ability to issue preferred stock in the future may influence the willingness
of an investor to seek to acquire our company. These provisions could limit the price that some
investors might be willing to pay in the future for shares of our common stock and may have the
effect of delaying or preventing a change in control. Provisions in the indenture governing the
Parent Notes regarding certain change of control events could have a similar effect.
Future sales of our common stock by our major stockholder may depress our share price and influence
our management policies.
Mr. Jeffrey L. Gendell, directly and indirectly through various entities, currently owns
approximately 25% of our common stock. We have granted Mr. Gendell and its various affiliated
entities registration rights with respect to our common stock it holds, which we registered on a
selling stockholder registration statement in May 2009. In 2010, Mr. Gendell and the various
affiliated entities sold approximately 10% of their then ownership of our common stock. Sales of
substantial amounts of our common stock in the public market, or the perception that these sales
may occur, could cause the market price of our common stock to decline. In addition, if Mr.
Gendell or his various affiliated entities were to sell their entire holdings to one person, that
person could have significant influence over our management policies.
Sales of our common stock by the selling securityholders may cause our stock price to decline.
Sales of substantial amounts of our common stock in the public market, or the perception that
these sales may occur, could cause the market price of our common stock to decline. In addition,
the sale of these shares could impair our ability to raise capital through the sale of additional
common or preferred stock. As of June 28, 2011, we had 13,237,483 shares of common stock
outstanding. Upon effectiveness of this registration statement, up to 250,000 outstanding shares
will be registered for resale under this prospectus and will become freely tradable.
The market price of our common stock has experienced volatility and could decline.
Our common stock is listed on the NASDAQ Global Market. Over the last year, the closing price
of our common stock has fluctuated from a low of $7.38 per share to a high of $19.28 per share. Our
share price is likely to be significantly affected by global economic issues, as well as short-term
changes in our financial condition and liquidity. As a result of these factors, the market price
of our common stock at any given point in time might not accurately reflect our long-term value.
Securities class action litigation often has been brought against companies following periods of
volatility in the market price of their securities. We could in the future be the target of
similar litigation. Securities litigation could result in substantial costs and damages and divert
managements attention and resources.
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FORWARD-LOOKING STATEMENTS
Forward-looking statements can be identified by words such as anticipates, intends,
plans, seeks, believes, estimates, expects and similar references to future periods.
Examples of forward-looking statements include, but are not limited to, the percentage of 2011 coal
tons to be under currently-existing contracts in 2019, the estimated life of permitted reserves at
each of our mines, expected tons of coal to be delivered pursuant to specified contracts and
company-wide, the matters discussed in Managements Discussion and Analysis of Financial Condition
and Results of OperationSignificant Anticipated Variances Between 2010 and 2011 and Related
Uncertainties, and statements concerning future cash flows from operations and liquidity.
Forward-looking statements are based on our current expectations and assumptions regarding our
business, the economy and other future conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and changes in circumstances that are
difficult to predict. Our actual results may differ materially from those contemplated by the
forward-looking statements. We therefore caution you against relying on any of these
forward-looking statements. They are statements neither of historical fact nor guarantees or
assurances of future performance. Important factors that could cause actual results to differ
materially from those in the forward-looking statements include political, economic, business,
competitive, market, weather and regulatory conditions and the following:
| changes in our postretirement medical benefit and pension obligations and the impact of the recently enacted healthcare legislation; | |
| changes in our black lung obligations, changes in our experience related to black lung claims, and the impact of the recently enacted healthcare legislation; | |
| our potential inability to expand or continue current coal operations due to limitations in obtaining bonding capacity for new mining permits; | |
| our potential inability to maintain compliance with debt covenant and waiver agreement requirements; | |
| the potential inability of our subsidiaries to pay dividends to us due to restrictions in our debt arrangements, reductions in planned coal deliveries or other business factors; | |
| risks associated with the structure of ROVAs contracts with its lenders, coal suppliers and power purchaser, which could dramatically affect the overall profitability of ROVA; | |
| the effect of Environmental Protection Agency inquiries and regulations on the operations of ROVA; | |
| the effect of prolonged maintenance or unplanned outages at our operations or those of our major power generating customers, including the effects of the dispatch of other forms of power, such as hydro; | |
| future legislation and changes in regulations, governmental policies and taxes, including those aimed at reducing emissions of elements such as mercury, sulfur dioxides, nitrogen oxides, particulate matter or greenhouse gases; and | |
| other factors are described in Risk Factors herein. |
Any forward-looking statements made by us in this prospectus speak only as of the date on which
they are made. Factors or events that could cause our actual results to differ may emerge from
time-to-time, and it is not possible for us to predict all of them. We undertake no obligation to
publicly update any forward-looking statements, whether as a result of new information, future
developments or otherwise, except as may be required by law.
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DESCRIPTION OF CAPITAL STOCK
The following description of our capital stock and provisions of our certificate of
incorporation and bylaws are summaries and are qualified by reference to the certificate of
incorporation and the bylaws. Copies of these documents are exhibits to our registration statement,
of which this prospectus forms a part, and are incorporated by reference into the registration
statement.
Our authorized capital stock consists of 30,000,000 shares of common stock, par value $2.50
per share, and 5,000,000 shares of preferred stock, par value $1.00 per share. As of June 28 2011,
we had 13,237,483 shares of common stock outstanding and approximately 159,960 shares of preferred
stock outstanding. Our common stock is listed on the NASDAQ Global Market under the symbol WLB.
The depositary shares representing fractional interests in our Series A Convertible Exchangeable
Preferred Stock (Series A Preferred Stock) are also listed on the NASDAQ Global Market under the
symbol WLBPZ.
Common Stock
We are authorized to issue one class of common stock. Holders of common stock are entitled to
one vote for each share held on all matters submitted to a vote of stockholders and do not have
cumulative voting rights. Accordingly, holders of a majority of the shares of common stock entitled
to vote in any election of directors may elect all of the directors standing for election by the
holders of our common shares. Holders of common stock are entitled to receive proportionately any
dividends as may be declared by our board of directors, subject to any preferential dividend rights
of outstanding preferred stock.
In the event of our liquidation, dissolution, or winding up, the holders of common stock are
entitled to receive proportionately our net assets available after the payment of all debts and
other liabilities and subject to the prior rights of any outstanding preferred stock. Holders of
common stock have no preemptive, subscription, redemption, or conversion rights. The rights,
preferences, and privileges of holders of common stock are subject to and may be adversely affected
by, the rights of the holders of the Series A Preferred Stock and the shares of any series of
preferred stock that we may designate and issue in the future. All outstanding shares of our common
stock are fully paid and nonassessable and the shares of common stock offered hereby, including
those that are issuable on exercise of the warrant and conversion of the convertible notes and
Series A Preferred Stock, will be fully paid and nonassessable.
Preferred Stock
Series A Preferred Stock
We have designated 575,000 shares of our preferred stock as Series A Preferred Stock. As of
June 28, 2011, there were approximately 159,960 shares of our Series A Preferred Stock issued and
outstanding, represented by 639,840 depositary shares.
Ranking. The Series A Preferred Stock ranks prior to our common stock as to rights to receive
dividends and distributions upon dissolution. Without the vote of the holders of 2/3 of the Series
A Preferred Stock, voting separately as a class, no class or series of capital stock can be created
that ranks equally with or senior to the Series A Preferred Stock as to dividend rights or
liquidation preference.
Dividend rights. The holders of the Series A Preferred Stock are entitled to receive, when,
as, and if declared by our board of directors out of funds legally available therefor, cumulative
cash dividends at the rate of 81/2% per annum per share (equivalent to $2.125 per annum per
depositary share), payable quarterly on April 1, July 1, October 1, and January 1 in each year. In
general, and subject to the Certificate of Designation, dividends not so paid accumulate. At June
28, 2011, there were no accumulated dividends on our Series A Preferred Stock. Unless full
cumulative dividends on the Series A Preferred Stock have been paid or declared in full and sums
set aside for the payment thereof, no dividends (other than dividends in common stock or other
shares of our capital stock ranking junior to the Series A Preferred Stock as to dividends) may be
paid or declared and set aside for the payment or other distribution made upon our common stock,
nor may we redeem, purchase, or otherwise acquire for value
any shares of our common stock. Holders of Series A Preferred Stock are not entitled to any
dividends in excess of
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full cumulative dividends.
Conversion rights. Holders of the Series A Preferred Stock have the right, exercisable at any
time and from time to time, except in the case of Series A Preferred Stock called for redemption or
to be exchanged for exchange debentures, to convert all or any such preferred stock into shares of
our common stock at a conversion price of $14.64 per share of common stock (equivalent to a
conversion ratio of 6.8306 shares of common stock for each share of Series A Preferred Stock
(equivalent to 1.708 shares of common stock for each depositary share), subject to adjustment. In
the case of Series A Preferred Stock called for redemption or exchange, conversion rights will
expire at the close of business on the last business day preceding the redemption date or exchange
date. No fractional shares of common stock will be issued upon conversion and, if the conversion
results in a fractional interest, we will pay an amount in cash equal to the value of such
fractional interest based on the market price of our common stock on the last trading day prior to
the date of conversion. The conversion price is subject to adjustment upon the occurrence of events
specified in the Certificate of Designation, including (i) the issuance of shares of our common
stock as a dividend or distribution on our common stock; (ii) the subdivision or combination of our
outstanding common stock; and (iii) the issuance to substantially all holders of our common stock
of rights or warrants to subscribe for or purchase common stock at a price per share less than the
then current market price per share, as defined in the Certificate of Designation.
Liquidation preference. In the event of any liquidation, dissolution, or winding up of our
affairs, whether voluntary or otherwise, after payment or provision for payment of our debts and
other liabilities, the holders of the Series A Preferred Stock will be entitled to receive, out of
our remaining net assets, $100.00 in cash for each share of the Series A Preferred Stock
(equivalent to $25.00 per depositary share), plus an amount in cash equal to all dividends
accumulated on each such share up to the date fixed for distribution, before any distribution is
made to the holders of our common stock or any other shares of our capital stock ranking (as to any
such distribution) junior to the Series A Preferred Stock. After such payment, holders of Series A
Preferred Stock will not participate further in any distribution of assets.
Optional redemption. Subject to the requirements of Delaware law, we may redeem the Series A
Preferred Stock, in whole or in part, at any time, at the redemption price of $100.00 per share
(equivalent to $25.00 per depositary share) plus accumulated dividends.
Exchange. On any dividend payment date, we may exchange the Series A Preferred Stock, in
whole, for our 81/2% Convertible Subordinated Exchange Debentures due July 1, 2012 (Debentures), at
an exchange rate of $100.00 principal amount of Debentures for each share of Series A Preferred
Stock (equivalent to $25.00 principal amount of Debentures for each depositary share). We may only
make such exchange if there are no accumulated dividends on the depositary shares at that time.
Voting rights. In general, and subject to the Certificate of Designation, the holders of the
Series A Preferred Stock may vote on any matter submitted to our stockholders, and on such matters,
each share of Series A Preferred Stock is entitled to four votes (equivalent to one vote for each
depositary share). However, if we have failed to declare and pay, or set apart for payment, in full
the preferential dividends accumulated on the outstanding Series A Preferred Stock for any six
quarterly dividend payment periods, whether or not consecutive, then the number of directors is
increased by two and the holders of the Series A Preferred Stock, voting separately as a class, are
entitled to elect two members of the board of directors until all accumulated dividends have been
declared and paid or set apart for payment. In addition to the foregoing voting rights, the holders
of Series A Preferred Stock have the voting rights provided under Limitations below and as
required by law.
Limitations. In addition to any other rights provided by applicable law, so long as any
shares of the Series A Preferred Stock are outstanding, we will not, without the affirmative vote,
or the written consent as provided by law, of the holders of at least two-thirds of the outstanding
shares of the Series A Preferred Stock, voting as a class:
| authorize or issue any class or series of, or rights to subscribe to or acquire any security convertible into, capital stock ranking equally with or senior to the Series A Preferred Stock as to payment of dividends, or distribution of assets upon liquidation; or | ||
| change the preferences, rights, or powers with respect to the Series A Preferred Stock so as to affect the |
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Series A Preferred Stock adversely. |
Except as may otherwise be required by applicable law, a class vote or consent is not required (i)
in connection with any increase in the total number of authorized shares of our common stock, or
(ii) in connection with the authorization or increase of any class or series of shares ranking, as
to dividends and distribution of assets upon liquidation, junior to the Series A Preferred Stock.
No such vote or written consent of the holders of the Series A Preferred Stock is required if, at
or prior to the time when the issuance of any such stock ranking prior to the Series A Preferred
Stock is to be made or any such change is to take effect, as the case may be, provision is made for
the redemption of all of the Series A Preferred Stock at the time outstanding.
Preemptive rights. No holder of the Series A Preferred Stock has preemptive rights to
subscribe for or acquire any of our unissued shares or securities convertible into or carrying a
right to subscribe to or acquire our shares.
Series B Junior Participating Preferred Stock
We have designated 300,000 shares of our preferred stock as Series B Junior Participating
Preferred Stock, par value $1.00 per share (Series B Preferred Stock). These shares are issuable
under our stockholder rights plan, which is described in more detail below under Antitakeover
Provisions. No shares of our Series B Preferred Stock are currently issued or outstanding.
Other Series of Preferred Stock
Subject to the limitations described above, under the terms of our certificate of
incorporation, our board of directors is authorized to issue shares of preferred stock, in addition
to the Series A Preferred Stock and the Series B Preferred Stock, in one or more series without
stockholder approval. Our board of directors has the discretion to determine the rights,
preferences, privileges, and restrictions, including voting rights, dividend rights, conversion
rights, redemption privileges, and liquidation preferences of each series of preferred stock.
The purpose of authorizing our board of directors to issue preferred stock and determine its
rights and preferences is to eliminate delays associated with a stockholder vote on specific
issuances. The issuance of preferred stock, while providing flexibility in connection with possible
acquisitions, future financings, and other corporate purposes, could have the effect of making it
more difficult for a third party to acquire, or could discourage a third party from seeking to
acquire, a majority of our outstanding voting stock.
Antitakeover Provisions
We are subject to Section 203 of the General Corporation Law of the State of Delaware. Subject
to certain exceptions, Section 203 prevents a publicly held Delaware corporation from engaging in a
business combination with any interested stockholder for three years following the time that
the person became an interested stockholder, unless, among other exceptions, the interested
stockholder attained such status with the prior approval of our board of directors. A business
combination includes mergers, consolidations, asset sales, and other transactions involving us and
an interested stockholder. In general, an interested stockholder is any entity or person
beneficially owning 15% or more of our outstanding voting stock and any entity or person affiliated
with or controlling or controlled by such entity or person.
Under our bylaws, any vacancy in a directorship elected by the holders of the Series A
Preferred Stock, which we call a Preferred Stock Directorship, shall be filled in the manner
specified in the Certificate of Designation, that is, by holders of Series A Preferred Stock or the
remaining Preferred Stock Director. If any vacancy occurs (other than a vacancy in a Preferred
Stock Directorship) or any new directorship is created by an increase in the authorized number of
directors, that vacancy or newly created directorship may be filled only by a majority vote of the
directors (other than the directors elected by the holders of the Series A Preferred Stock) then in
office, even if less than a quorum. This provision could make it more difficult for a third party
to acquire, or discourage a third party from seeking to acquire, control of our company.
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Our bylaws provide that any action required or permitted to be taken by our stockholders at an
annual meeting or special meeting of stockholders may only be taken if it is properly brought
before such meeting. Our bylaws also provide that, except as otherwise required by law, special
meetings of the stockholders can only be called by our chief executive officer or a majority of our
board of directors. In addition, our bylaws establish an advance notice procedure for stockholder
proposals to be brought before a meeting of stockholders, including proposed nominations of
candidates for election to our board of directors. Stockholders at a meeting may only consider
proposals or nominations specified in the notice of meeting or brought before the meeting by or at
the direction of our board of directors or by a stockholder who has delivered timely written notice
in proper form to our secretary of the stockholders intention to bring such business before the
meeting and provided the information required by our bylaws. These provisions could have the effect
of delaying until the next stockholder meeting stockholder actions that are favored by the holders
of a majority of our outstanding voting securities.
The General Corporation Law of the State of Delaware provides generally that the affirmative
vote of a majority of the shares entitled to vote on any matter is required to amend a
corporations certificate of incorporation, unless a corporations certificate of incorporation
requires a greater percentage. Our charter does not include any greater vote requirements. Our
bylaws may be amended or repealed by our board of directors or by the stockholders.
We currently have in effect a stockholder rights plan, which is governed by the terms and
conditions contained in the Amended and Restated Rights Agreement dated as of February 7, 2003,
between us and Computershare Trust Company, N.A., as rights agent, as amended. The following
summary description of the rights agreement does not purport to be complete and is qualified in its
entirety by reference to the rights agreement, a copy of which is an exhibit to the registration
statement of which this prospectus is a part and is incorporated herein by reference.
Each share of common stock you purchase pursuant to this offering will have associated with it
one preferred stock purchase right. Each preferred stock purchase right entitles the holder to
purchase one one-hundredth of a share of our Series B Preferred Stock at an exercise price of
$50.00, subject to adjustment by our board of directors in certain circumstances. Preferred stock
purchase rights will only be exercisable under limited circumstances specified in the Amended and
Restated Rights Agreement when there has been a distribution of the preferred stock purchase rights
and such rights are no longer redeemable by us.
If any person or group becomes an acquiring person by acquiring beneficial ownership of 20%
or more of the outstanding shares of our common stock, or 20% or more of the shares of our voting
stock, or 20% or more of all of our equity securities, the flip-in provision of the Amended and
Restated Rights Agreement will be triggered and the preferred stock purchase rights will entitle a
holder, other than such acquiring person, any member of such group or any related person (as to
whom such preferred stock purchase rights will be null and void) to acquire a number of additional
shares of our common stock having a market value of twice the exercise price of each preferred
stock purchase right. If we are involved in a merger or other business combination transaction,
each preferred stock purchase right will entitle its holder to purchase, at the rights
then-current exercise price, a number of shares of the acquiring or surviving companys common
stock having a market value at that time of twice the preferred stock purchase rights exercise
price.
Pursuant to amendments to the rights agreement entered into in May 2007 and March 2008,
Tontine will not be deemed to be an acquiring person for purposes of the agreement unless its
beneficial ownership of our securities exceeds a percentage of our outstanding common stock (plus
common stock issuable upon conversion of the convertible notes) that is generally equal to 34.5%.
This partial exemption will not apply to persons who purchase our securities from Tontine,
including purchasers in this offering, who would be limited by the shareholder rights plan in their
ability to purchase more than 19.9% of our outstanding common stock.
The preferred stock purchase rights will expire February 2013 unless such date is extended or
the preferred stock purchase rights are earlier redeemed or exchanged by us. Until a preferred
stock purchase right is exercised, the holder of a right will have no rights as a stockholder with
respect to the shares purchasable upon exercise of the preferred stock purchase right, including
without limitation the right to vote or to receive dividends. The provisions of the Amended and
Restated Rights Agreement, including the exercise price of the preferred stock purchase rights, may
be amended by our board of directors, subject to the limitations contained in that agreement.
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The preferred stock purchase rights have anti-takeover effects. The preferred stock purchase
rights will cause substantial dilution to a person or group that attempts to acquire us in certain
circumstances. Accordingly, the existence of the preferred stock purchase rights may deter certain
acquirers from making takeover proposals or tender offers. However, the preferred stock purchase
rights are not intended to prevent a takeover, but rather are designed to enhance the ability of
our board of directors to negotiate with a potential acquirer on behalf of all of our stockholders.
Limitation of Liability and Indemnification Matters
As permitted by the Delaware General Corporation Law, our certificate of incorporation
contains provisions that limit or eliminate the personal liability of our directors for a breach of
their fiduciary duty of care as a director. The duty of care generally requires that, when acting
on behalf of a corporation, directors exercise an informed business judgment based on all material
information reasonably available to them. Consequently, a director will not be personally liable to
us or our stockholders for monetary damages for breach of fiduciary duty as a director, except for
liability for:
| any breach of the directors duty of loyalty to us or our stockholders; | ||
| any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; | ||
| any act related to unlawful stock repurchases, redemptions or other distributions or payment of dividends; or | ||
| any transaction from which the director derived an improper personal benefit. |
Additionally, as permitted by the Delaware General Corporation Law, our bylaws provide
that:
| we shall indemnify our directors, officers, managers and supervisors to the extent such indemnification is not prohibited by the Delaware General Corporation Law; | ||
| we shall advance expenses to our directors, officers, managers and supervisors in connection with a legal proceeding upon receipt of an undertaking to repay such expenses if it is ultimately determined that such person is not entitled to indemnification; and | ||
| the rights provided in our certificate of incorporation are not exclusive. |
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Computershare, Ltd.
Listing
Our common stock is listed on the NASDAQ Global Market under the symbol WLB.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the securities by the selling
securityholders. All proceeds from the sale of the offered securities will be for the account of
the selling securityholders.
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SELLING SECURITYHOLDERS
The selling securityholders may, from time to time, offer and sell pursuant to this prospectus
and any prospectus supplement any or all of the securities listed opposite their names below. When
we refer to the selling securityholders in this prospectus or any prospectus supplement, we mean
those persons listed in the table below, as well as the pledgees and donees of the selling
securityholders interests.
The table below sets forth the name of the selling securityholder and the securities that the
selling securityholder listed below may offer pursuant to this prospectus and any prospectus
supplement. Only the selling securityholder listed below or their pledgees or donees may offer and
sell securities pursuant to this prospectus and any prospectus supplement. The selling
securityholder may offer for sale pursuant to this prospectus and any prospectus supplement from
time to time any or all of the securities listed below. Accordingly, no estimate can be given as to
the securities that the selling securityholder will hold upon consummation of any such sales. In
addition, the selling securityholder listed in the table below may have sold or transferred, in
transactions exempt from the registration requirements of the Securities Act, some or all of its
securities since the date as of which the information in the table is presented.
Beneficial ownership of the securities by the selling securityholder is determined in
accordance with Rule 13d-3(d) promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended. Unless otherwise noted, each person or group
identified possesses sole voting and investment power with respect to the offered shares.
Securities Being Offered to the Westmoreland Retirement Plan Trust
We plan to contribute up to 250,000 shares of our common stock to our defined benefit pension
plan known as the Westmoreland Coal Company Retirement Plan (the Plan) in partial satisfaction of
cash contributions to the Plan that may be required in the future. The Westmoreland Coal Company
Retirement Plan Trust (the Trust) is the trust formed to hold the assets of the Plan. The Plan
is intended to be tax-qualified under Section 401(a) of the Internal Revenue Code of 1986, as
amended, and the Trust is intended to be exempt from taxation under Section 501(a) of the Internal
Revenue Code of 1986, as amended. The Trust is funded by our contributions held for the sole
benefit of Plan participants and beneficiaries, and to pay proper expenses of Plan administration.
As of June 28, 2011, the Trust owned 19,690 shares of our common stock that may be sold
pursuant to Registration Statement No. 333-158577. Under the terms of the Plan and applicable
requirements of federal law, we may contribute common stock to the Plan having a value of up to 10%
of the fair market value of all Plan assets immediately after the contribution. The exact number
of shares to be contributed will therefore depend upon the market value of our common stock at the
time of the contribution and the total value of all other Plan assets at the time of the
contribution. The Plans assets are required by law to be managed in the best interest of
participants in the Plan and their beneficiaries. The Westmoreland Retirement Benefits
Administrative Committee, a committee of officers and management-level employees of Westmoreland
that is responsible for overseeing the Plan, retained an independent registered investment advisor
to manage, in its sole discretion, the Plans disposition of the contributed shares.
Number of Shares | ||||||||||||||||
Beneficially | Shares Beneficially Owned | |||||||||||||||
Owned Prior to | Shares Offered | After this Offering | ||||||||||||||
Name | this Offering | in this Offering (2) | Number(1) | Percent of Outstanding | ||||||||||||
Westmoreland Retirement Plan Trust |
19,690 | 250,000 | 0 | 0 | ||||||||||||
Total |
19,690 | 250,000 | 0 | 0 |
(1) | For purposes of calculating shares beneficially owned after this offering, it is assumed that the offered shares have been sold pursuant to this offering and the shares owned pursuant to Registration Statement No. 333-158577 have been sold pursuant to that offering. The selling securityholder may have sold, transferred or otherwise disposed of all or a portion of its offered securities since the date on which they provided |
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information regarding their securities in transactions exempt from the registration requirements of the Securities Act. | ||
(2) | The actual number of shares to be contributed to the Plan will be based on the price of our common stock at the date of the contribution, the value of the other assets of the Plan at that date, and the amount required to be contributed to the Plan, all of which are unknown at this time. The Trust will offer for sale all of the shares of common stock we contribute. |
PLAN OF DISTRIBUTION
The selling securityholder may, from time to time, sell any or all of their securities on any
stock exchange, market or trading facility on which the shares are traded or in private
transactions. If the securities are sold through underwriters or broker-dealers, the selling
securityholder will be responsible for underwriting discounts or commissions or agents
commissions. These sales may be at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale, or negotiated prices. The selling
securityholder may use any one or more of the following methods when selling securities:
| any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale; | |
| ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; | |
| block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction; | |
| purchases by a broker-dealer as principal and resale by the broker-dealer for its account; | |
| transactions otherwise than on these exchanges or systems or in the over-the-counter market; | |
| through the writing of options, whether such options are listed on an options exchange or otherwise; | |
| an exchange distribution in accordance with the rules of the applicable exchange; | |
| privately negotiated transactions; | |
| short sales; | |
| broker-dealers may agree with the selling securityholder to sell a specified number of such shares at a stipulated price per share; | |
| a combination of any such methods of sale; and | |
| any other method permitted pursuant to applicable law. |
The selling securityholder may also sell shares under Rule 144 under the Securities Act of
1933, if available, rather than under this prospectus.
The selling securityholder may engage brokers and dealers, and any brokers or dealers may
arrange for other brokers or dealers to participate in effecting sales of the securities. These
brokers, dealers or underwriters may act as principals, or as an agent of any selling
securityholder. Broker-dealers may agree with the selling securityholder to sell a specified number
of the securities at a stipulated price per security. If the broker-dealer is unable to sell
securities acting as agent for the selling securityholder, it may purchase as principal any unsold
securities at the stipulated price. Broker-dealers who acquire securities as principals may
thereafter resell the securities from time to time in transactions in any stock exchange or
automated interdealer quotation system on which the securities are then listed, at prices and on
terms then prevailing at the time of sale, at prices related to the then-current market price or in
negotiated transactions. Broker-dealers may use block transactions and sales to and through
broker-dealers, including transactions of the nature described above.
From time to time, the selling securityholder may pledge, hypothecate or grant a security
interest in some or all of the securities it owns. The pledgees, secured parties or persons to whom
the securities have been hypothecated will, upon foreclosure in the event of default, be deemed to
be selling securityholders. As and when the selling securityholder takes such actions, the number
of securities offered under this prospectus on behalf of such selling securityholder will decrease.
The plan of distribution for that selling securityholders securities will otherwise remain
unchanged. In addition, the selling securityholders may, from time to time, sell the securities
short, and, in those instances, this prospectus may be delivered in connection with the short sales
and the securities offered under this prospectus may be used to cover short sales.
To the extent required under the Securities Act of 1933, the aggregate amount of selling
securityholders
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securities being offered and the terms of the offering, the names of any agents,
brokers, dealers or underwriters and any applicable commission with respect to a particular offer
will be set forth in an accompanying prospectus supplement. Any underwriters, dealers, brokers or
agents participating in the distribution of the securities may receive compensation in the form of
underwriting discounts, concessions, commissions or fees from the selling securityholder and/or
purchasers of selling securityholders securities, for whom they may act (which compensation as to
a particular broker-dealer might be in excess of customary commissions).
The selling securityholder and any underwriters, brokers, dealers or agents that
participate in the distribution of the securities may be deemed to be underwriters within the
meaning of the Securities Act of 1933, and any discounts, concessions, commissions or fees received
by them and any profit on the resale of the securities sold by them may be deemed to be
underwriting discounts and commissions.
The selling securityholder may enter into hedging transactions with broker-dealers and
the broker-dealers may engage in short sales of the securities in the course of hedging the
positions they assume with the selling securityholder, including, without limitation, in connection
with distributions of the securities by those broker-dealers. The selling securityholder may enter
into option or other transactions with broker-dealers that involve the delivery of the securities
offered hereby to the broker-dealers, who may then resell or otherwise transfer those securities.
The selling securityholder may also loan or pledge the securities offered hereby to a broker-dealer
and the broker-dealer may sell the securities offered hereby so loaned or upon a default may sell
or otherwise transfer the pledged securities offered hereby.
The selling securityholder and other persons participating in the sale or distribution of
the securities will be subject to applicable provisions of the Securities Exchange Act of 1934, and
the rules and regulations thereunder, including Regulation M. This regulation may limit the timing
of purchases and sales of any of the securities by the selling securityholder and any other person.
The anti-manipulation rules under the Securities Exchange Act of 1934 may apply to sales of
securities in the market and to the activities of the selling securityholder and their affiliates.
Furthermore, Regulation M may restrict the ability of any person engaged in the distribution of the
securities to engage in market-making activities with respect to the particular securities being
distributed for a period of up to five business days before the distribution. These restrictions
may affect the marketability of the securities and the ability of any person or entity to engage in
market-making activities with respect to the securities.
The securities offered hereby have been issued to the selling securityholder in
transactions exempt from the registration requirements of the Securities Act of 1933. We have
agreed to pay all expenses in connection with this offering, but not including fees, discounts or
commissions to any underwriter or any fees or disbursements of counsel for the selling
securityholder or any underwriter in respect to the securities sold by such selling securityholder.
In the case of the common stock to be sold by the Trust, all sales of shares of common stock
shall be made at the direction and in the sole discretion of an investment manager.
We will not receive any proceeds from sales of any securities by the selling
securityholder.
We cannot assure you that the selling securityholder will sell all or any portion of the
securities offered hereby.
LEGAL MATTERS
The validity of the securities offered by this prospectus will be passed upon by Davis Graham
& Stubbs LLP, Denver, Colorado.
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EXPERTS
Our consolidated financial statements as of December 31, 2010 and 2009, and for the years then
ended, appearing in our Annual Report (Form 10-K) for the year ended December 31, 2010 (including
the schedule appearing therein), and the effectiveness of our internal control over financial
reporting as of December 31, 2010, have been audited by Ernst & Young LLP, independent registered
public accounting firm, as set forth in their reports thereon, included therein, and incorporated
herein by reference. Such consolidated financial statements are incorporated herein by reference in
reliance upon such reports given on the authority of such firm as experts in accounting and
auditing.
Our consolidated financial statements for the year ended December 31, 2008 have been
incorporated by reference herein in reliance upon the reports of KPMG LLP, an independent
registered public accounting firm, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing. The audit report covering the December 31, 2008
consolidated financial statements contain an explanatory paragraph that states that the Company had
suffered recurring losses from operations and had a working capital deficit, and a net capital
deficiency, which raised substantial doubt about our ability to continue as a going concern. The
2008 consolidated financial statements do not include any adjustments that might result from the
outcome of that uncertainty.
Estimates of our coal reserves included in this prospectus were prepared by Norwest
Corporation. The estimates have been included in this prospectus in reliance upon the authority of
Norwest Corporation as experts in such matters.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the reporting and information requirements of the Securities Exchange Act of
1934, as amended, and as a result file periodic reports, proxy statements and other information
with the SEC. These periodic reports, proxy statements and other information will be available for
inspection and copying at the SECs public reference room and the website of the SEC referred to
below, as well as on our website, http://www.westmoreland.com. This reference to our website is an
inactive textual reference only, and is not a hyperlink. The contents of our website are not part
of this prospectus, and you should not consider the contents of our website in making an investment
decision with respect to the securities.
You may read and copy the reports and other information we file with the SEC at the SECs
Public Reference Room at 100 F Street, N.E., Washington D.C. 20549. You may also obtain copies of
this information by mail from the public reference section of the SEC, 100 F Street, N.E.,
Washington, D.C. 20549, at prescribed rates. You may obtain information regarding the operation of
the public reference room by calling 1 (800) SEC-0330. The SEC also maintains a website that
contains reports, proxy statements and other information about issuers, like us, who file
electronically with the SEC. The address of that website is http://www.sec.gov. This reference to
the SECs website is an inactive textual reference only, and is not a hyperlink.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Some of the information that you should consider in deciding whether to invest in the
securities is not included in this prospectus, but rather is incorporated by reference to certain
reports that we have filed with the SEC. This permits us to disclose important information to you
by referring to those documents rather than repeating them in full in the prospectus. The
information incorporated by reference in this prospectus contains important business and financial
information. We incorporate by reference the following documents filed by us with the SEC (other
than, in each case, documents or information deemed to have been furnished and not filed in
accordance with SEC rules):
Commission Filing (File No. 001-11155) | Period Covered or Date of Filing | |
Annual Report on Form 10-K
|
Year ended December 31, 2010 | |
Current Reports on Form 8-K and 8-K/A
|
January 4, 2011; February 10, 2011 (8-K and 8-K/A); February 25, 2011; March 15, 2011; April 7, 2011 (8-K/A); April 20, 2011; May 25, 2011; and June 17, 2011 | |
Quarterly Report on Form 10-Q
|
May 9, 2011 | |
Definitive Proxy Statement on Schedule 14A
|
March 31, 2011 | |
The description of the common stock,
$2.50 par value per share, contained in
our registration statement on Form 8-A
filed with the SEC, including any
amendment or report filed for the purpose
of amending such description.
|
May 22, 1992, March 12, 1999 | |
The description of the Depositary Shares
representing interests in the Series A
Convertible Exchangeable Preferred Stock,
contained in our registration statement
on Form 8-A filed with the SEC, including
any amendment or report filed for the
purpose of amending such description.
|
June 23, 1992, March 12, 1999 | |
The description of the Preferred Stock
Purchase Rights contained in our
registration statement on Form 8-A filed
with the SEC, including any amendment or
report filed for the purpose of amending
such description.
|
February 1, 1993, March 12, 1999, February 7, 2003, May 4, 2007, March 6, 2008 |
We will provide to each person, including any beneficial owner, to whom a prospectus is
delivered, a copy of any or all of the reports or documents that have been incorporated by
reference in this prospectus, other than exhibits to such documents unless such exhibits have been
specifically incorporated by reference thereto. You may request a copy of these reports or
documents, at no cost, by writing or telephoning us at the following address:
Westmoreland Coal Company
2 North Cascade, 2nd Floor
Colorado Springs, CO 80903
Phone: (719) 442-2600
2 North Cascade, 2nd Floor
Colorado Springs, CO 80903
Phone: (719) 442-2600
You should rely only on the information contained in this prospectus and any prospectus
supplement. We have not authorized any other person to provide you with different information. If
anyone provides you with different or inconsistent information, you should not rely on it. We are
not making an offer to sell these securities in any jurisdiction where the offer or sale is not
permitted. You should not assume that the information in this prospectus and any prospectus
supplement is accurate as of any date other than the date on the front of those documents. Our
business, financial condition, results of operations and prospects may have changed since that
date.
The information in this prospectus and any prospectus supplement may not contain all of the
information that may be important to you. You should read the entire prospectus and any prospectus
supplement, as well as the documents incorporated by reference in the prospectus and any prospectus
supplement, before making an investment decision.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be incurred in connection with the sale
and distribution of the securities being registered hereby, all of which will be borne by us
(except any underwriting discounts and commissions and expenses incurred by the selling
securityholder for brokerage, accounting, tax or legal services or any other expenses incurred by
the selling securityholder in disposing of the securities). All amounts shown are estimates except
the SEC registration fee and the NASDAQ Global Market Additional Listing Fee.
Registration FeeSecurities and Exchange Commission |
$ | 518.68 | ||
NASDAQ Global Market Additional Listing Fee |
$ | 5,000 | ||
Legal Fees and Expenses |
$ | 2,500 | ||
Accountants Fees and Expenses |
$ | 5,000 | ||
Total |
$ | 13,018.68 | ||
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102 of the Delaware General Corporation Law allows a corporation to eliminate or limit
the personal liability of directors of a corporation to the corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director, except where the director breached
his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly
violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of
Delaware corporate law or obtained an improper personal benefit. Our Restated Certificate of
Incorporation limits the liability of directors to the extent permitted by Delaware law.
Section 145 of the Delaware General Corporation Law provides that a corporation has the power
to indemnify a director, officer, employee or agent of the corporation and certain other persons
serving at the request of the corporation in related capacities against amounts paid and expenses
incurred in connection with an action or proceeding to which he is or is threatened to be made a
party by reason of such position, if such person shall have acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the corporation, and, in any
criminal proceeding, if such person had no reasonable cause to believe his conduct was unlawful;
provided that, in the case of actions brought by or in the right of the corporation,
indemnification is limited to expenses and no indemnification shall be made with respect to any
matter as to which such person shall have been adjudged to be liable to the corporation unless and
only to the extent that the adjudicating court determines that such indemnification is proper under
the circumstances. Section 145 also permits us to purchase and maintain insurance on behalf of any
person who is or was our director, officer, employee or agent, or is or was serving at our request
as a director, officer, employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of such persons status as such, whether or not we would have
the power to indemnify such person against such liability.
Our bylaws obligate us to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding, either civil,
criminal, administrative or investigative, by reason of the fact that he is or was a director,
officer or supervisor or manager of us or a constituent corporation absorbed in a consolidation or
merger, or while our director, officer or supervisor or manager is or was serving at our request or
at the request of a constituent corporation absorbed in a consolidation or merger, as a director,
officer or supervisor or manager of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such action, suit or
proceeding, whether or not the indemnified liability arises or arose from any threatened, pending
or completed action by or in the right of the corporation to the extent that such person is not
otherwise indemnified and to the extent such indemnification is not prohibited by applicable law.
Our bylaws also obligate us to pay any such persons expenses in advance of the final disposition
of
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any such proceeding, if such person undertakes to repay any amount so advanced if it shall
ultimately be determined that he is not entitled to be indemnified by us.
Under our bylaws, our obligation to indemnify, including the duty to advance expenses, is a
contract between our company and each person entitled to indemnification, and no modification or
repeal of our bylaws may affect, to the detriment of any such person, our obligations in connection
with a claim based on any act or failure to act occurring before such modification or repeal.
Our bylaws also permit us to purchase and maintain insurance, and we have purchased insurance
on behalf of our directors and officers.
Under our bylaws, the rights to indemnification and advance of expenses are not exclusive of
any other right to which an indemnified person may be entitled, and all such rights shall inure to
the benefit of the indemnified person and his or her heirs, executors and administrators.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Tontine Note Purchase Agreement March 2008
On March 4, 2008, we completed the sale of senior secured convertible notes (the Notes) to
Tontine Partners, L.P. and Tontine Capital Partners, L.P. (collectively, the Tontine Purchasers).
The sale was completed pursuant to a Senior Secured Convertible Note Purchase Agreement dated as of
March 4, 2008 (the Note Purchase Agreement) among the Company, the Tontine Purchasers, and
Tontine Capital Associates, L.P., as collateral agent. The Notes initially bore interest at a rate
of 9% per annum, payable in cash or in kind at our option, and were payable in full on March 4,
2013. The Tontine Purchasers were able to convert the Notes into shares of our common stock, par
value $2.50 per share, initially at a conversion price of $10.00 per share. On February 4, 2011,
we repaid all of our borrowings under the Notes. Pursuant to an amendment to the Note Purchase
Agreement, the Tontine Purchasers converted $15,962,541 in principal amount of the Notes into
common stock at a conversion price of $8.50 per share. This conversion, coupled with a cash payment
to redeem the balance of the principal amount outstanding, resulted in full satisfaction of the
Notes. We offered and sold the Notes and the additional Notes paid as interest on the Notes in
reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933,
as amended.
Pension Issuances in 2009, 2010 and 2011
On June 18, June 30 and July 1, 2009, we made contributions totaling 500,000 shares of common
stock to our employee pension plans (the Plans) to satisfy certain funding obligations. The
common stock was valued at 100,000 shares at $9.12, 388,000 shares at $8.10, and 12,000 shares at
$8.17 or approximately $4.1 million in the aggregate. On January 12, 2010, we made a contribution
of 100,000 shares of common stock to the Plans, valued at $10.95 per share or $1,095,000 in the
aggregate. On March 5 and March 8, 2010, we made a contribution of 50,000 shares of common stock
to the Plans, valued at 40,000 shares at $12.84 per share and 10,000 shares at $12.47 per share or
approximately $650,000 in the aggregate. On August 12, 2010, we made a contribution of 100,000
shares of common stock to the Plans, valued at $9.76 per share or $976,000 in the aggregate. On
September 13, 2010, we made a contribution of 225,000 shares of common stock to the Plans, valued
at $10.24 per share or $2,304,000 in the aggregate. On May 18, 2011, we made a contribution of
25,000 shares of common stock to the Plans, valued at $17.97 per share or $449,250 in the
aggregate. The shares of common stock were contributed to the Plans in lieu of cash contributions
in private placement transactions made in reliance upon the exemption from registration provided by
Section 4(2) of the Securities Act of 1933. We will not receive any proceeds from the
contributions.
Senior Secured Note Issuance February 2011
On February 4, 2011, we completed the issuance of $150.0 million in aggregate principal amount
of 10.750% Senior Secured Notes due 2018 (the Senior Notes). The Senior Notes, which were sold
with original issue discount of 5.0%, were issued pursuant to an indenture by and between
Westmoreland Coal Company, Westmoreland Partners, as Co-Issuer, and Wells Fargo Bank, National
Association, as trustee. The Senior Notes mature on February 1, 2018, with interest accruing from
February 4, 2011 and payable semiannually, on February 1 and August 1 of each year, commencing
August 1, 2011. The Senior Notes are our senior secured obligations, rank
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equally in right of payment with all of our existing and future senior obligations, and rank
senior to all of our existing and future indebtedness that is expressly subordinated to the Senior
Notes. The Senior Notes were offered and sold inside the United States only to qualified
institutional buyers in reliance on Rule 144A under the Securities Act of 1933 and to persons
outside the United States in reliance on Regulation S under the Securities Act of 1933.
ITEM 16. EXHIBITS.
Incorporated by Reference | ||||||||||||
Exhibit | Filed | |||||||||||
Number | Exhibit Description | Form | File Number | Exhibit | Filing Date | Herewith | ||||||
3.1 | Restated Certificate of Incorporation |
S-1 | 333-117709 | 3.1 | 7/28/2004 | |||||||
3.2 | Certificate of Correction to the |
8-K | 001-11155 | 3.1 | 10/21/2004 | |||||||
Restated Certificate of
Incorporation |
||||||||||||
3.3 | Certificate of Amendment to the |
8-K | 001-11155 | 3.1 | 9/07/2007 | |||||||
Restated Certificate of
Incorporation |
||||||||||||
3.4 | Certificate of Amendment to the |
8-K | 001-11155 | 3.2 | 9/07/2007 | |||||||
Restated Certificate of
Incorporation |
||||||||||||
3.5 | Amended and Restated Bylaws |
8-K | 001-11155 | 3.1 | 4/11/2008 | |||||||
4.1 | Certificate of Designation of Series |
10-K | 001-11155 | 3(a) | 3/15/1993 | |||||||
A Convertible Exchangeable Preferred
Stock |
||||||||||||
4.2 | Indenture between Westmoreland Coal |
S-1 | 333-117709 | 4.2 | 7/28/2004 | |||||||
Company (WCC) and Fidelity Bank
National Association relating to the
Exchange Debentures |
||||||||||||
4.3 | Form of Exchange Debenture |
S-1 | 333-117709 | 4.3 | 7/28/2004 | |||||||
4.4 | Deposit Agreement among WCC, First |
S-1 | 333-117709 | 4.4 | 7/28/2004 | |||||||
Chicago Trust Company of New York
and the Holders |
||||||||||||
4.5 | Common Stock certificate |
S-2 | 33-1950 | 4(c) | 12/04/1985 | |||||||
4.6 | Preferred Stock certificate |
S-2 | 33-47872 | 4.6 | 5/13/1992 | |||||||
4.7 | Form of Depository Receipt |
S-1 | 333-117709 | 4.5 | 7/28/2004 | |||||||
4.8 | Amended and Restated Rights |
8-K | 001-11155 | 4.1 | 02/07/2003 | |||||||
Agreement, dated 2/07/2003, between
WCC and EquiServe Trust Company |
||||||||||||
4.9 | First Amendment to Amended and |
8-A | 001-11155 | (l) | 05/04/2007 | |||||||
Restated Rights Agreement dated
5/02/ 2007, between WCC and
Computershare Trust Company |
||||||||||||
4.10 | Second Amendment to Amended and |
8-A | 001-11155 | (l) | 03/06/2008 | |||||||
Restated Rights Agreement dated
March 4, 2008, between WCC and
Computershare Trust Company |
||||||||||||
4.11 | Indenture, dated as of 2/04/2011, by |
8-K | 001-11155 | 4.1 | 02/10/2011 | |||||||
and between Westmoreland Coal
Company, Westmoreland Partners and
Wells Fargo Bank, NA, as trustee and
note collateral agent. |
||||||||||||
4.12 | Form of 10.75% Senior Notes due 2018 |
8-K | 001-11155 | 4.2 | 02/10/2011 | |||||||
(included as Exhibit A in Exhibit
4.11). |
||||||||||||
4.13 | Registration Rights Agreement, dated |
8-K | 001-11155 | 4.3 | 02/10/2011 | |||||||
2/04/2011, among Westmoreland Coal
Company and Westmoreland Partners
and Gleacher & Company Securities,
Inc., as initial purchaser |
||||||||||||
4.14 | Pledge and Security Agreement dated |
8-K | 001-11155 | 4.4 | 02/10/2011 | |||||||
as of 2/04/ 2011, by Westmoreland
Coal Company and Westmoreland
Partners in favor of Wells Fargo
Bank, NA, as note collateral agent |
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Incorporated by Reference | ||||||||||||
Exhibit | Filed | |||||||||||
Number | Exhibit Description | Form | File Number | Exhibit | Filing Date | Herewith | ||||||
5.1 | Legal opinion of Davis, Graham & |
X | ||||||||||
Stubbs LLP |
||||||||||||
Other debt instruments are omitted in accordance with Item 601(b)(4)(iii)(A) of Regulation S-K. Copies of such agreements will be furnished to the Securities and Exchange Commission upon request. Exhibits with asterisks indicate management contracts or compensatory plans or arrangements. | ||||||||||||
10.1* | Amended and Restated 2007 Equity |
10-Q | 001-11155 | 10/1 | 11/05/2010 | |||||||
Incentive Plan for Employees and
Non-Employee Directors |
||||||||||||
10.2* | Form of ISO Agreement |
10-Q | 001-11155 | 10.1 | 05/09/2008 | |||||||
10.3* | Form of NQSO Agreement for directors |
10-Q | 001-11155 | 10.2 | 05/09/2008 | |||||||
10.4* | Form of NQSO Agreement for persons |
10-Q | 001-11155 | 10.3 | 05/09/2008 | |||||||
other than directors |
||||||||||||
10.5* | Form of Restricted Stock Agreement for |
10-K | 001-11155 | 10.11 | 03/13/2009 | |||||||
directors with time-based vesting |
||||||||||||
10.6* | Form of Restricted Stock Agreement for |
8-K | 001-11155 | 10.1 | 08/09/2010 | |||||||
directors |
||||||||||||
10.7* | Form of Restricted Stock Agreement for |
8-K | 001-11155 | 10.1 | 07/02/2009 | |||||||
employees |
||||||||||||
10.8* | Form of Restricted Stock Unit Agreement |
8-K | 001-11155 | 10.2 | 08/09/2010 | |||||||
10.9* | Form of Performance-Based Restricted |
10-Q | 001-11155 | 10.1 | 05/09/2011 | |||||||
Stock Unit Agreement |
||||||||||||
10.10* | Severance Policy |
8-K | 001-11155 | 10.2 | 06/23/2010 | |||||||
10.11* | Annual Incentive Plan/ Long-Term |
10-K | 001-11155 | 10.10 | 3/10/2011 | |||||||
Incentive Plan Policy |
||||||||||||
10.12 | Amended Coal Mining Lease between |
10-Q | 0-752 | 10(a) | 05/15/1992 | |||||||
Westmoreland Resources, Inc. (WRI) and
Crow Tribe dated 11/26/1974, as
amended in 1982 |
||||||||||||
10.13 | Amendment to Amended Coal Mining Lease |
10-K | 001-11155 | 10.16 | 03/13/2009 | |||||||
between the Crow Tribe and WRI dated
12/02/1994 |
||||||||||||
10.14 | Exploration and Option to Lease |
10-K/A | 001-11155 | 10.17 | 05/08/2009 | |||||||
Agreement between the Crow Tribe and
WRI dated 2/13/2004 |
||||||||||||
10.15 | Crow Tribal Lands Coal Lease between |
10-K/A | 001-11155 | 10.51 | 05/08/2009 | |||||||
the Crow Tribe and WRI dated 2/13/2004 |
||||||||||||
10.16 | Master Agreement dated 1/04/1999, |
8-K | 001-11155 | 99.2 | 02/04/1999 | |||||||
between WCC and the UMWA |
||||||||||||
10.17 | Third Amendment and Restatement of the |
10-Q | 001-11155 | 10.2 | 11/06/2006 | |||||||
Power Purchase and Operating Agreement
between Westmoreland-LG&E Partners and
Virginia Electric and Power Company
for ROVA I |
||||||||||||
10.18 | Second Amendment and Restatement of |
10-Q | 001-11155 | 10.3 | 11/06/2006 | |||||||
the Power Purchase and Operating
Agreement between Westmoreland-LG&E
Partners and Virginia Electric and
Power Company for ROVA II |
||||||||||||
10.19 | Senior Secured Convertible Note |
8-K | 001-11155 | 10.1 | 03/06/2008 | |||||||
Purchase Agreement dated 3/04/2008
among WCC and Tontine |
||||||||||||
10.20 | Amendment to Senior Secured |
8-K | 001-11155 | 99.1 | 01/14/2011 | |||||||
Convertible Note Purchase Agreement
dated 1/05/2011 |
||||||||||||
10.21 | Registration Rights Agreement dated |
8-K | 001-11155 | 10.2 | 03/06/2008 | |||||||
3/04/2008, among WCC and Tontine |
II-4
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Exhibit | Incorporated by Reference | Filed | ||||||||||
Number | Exhibit Description | Form | File Number | Exhibit | Filing Date | Herewith | ||||||
10.22 | Note Purchase Agreement dated |
8-K | 001-11155 | 10.1 | 06/26/2008 | |||||||
6/26/2008 among Westmoreland
Mining LLC (WML) and
institutional investors |
||||||||||||
10.23 | Continuing Agreement of |
8-K | 001-11155 | 10.2 | 06/26/2008 | |||||||
Guaranty and Suretyship dated
6/26/2008 from various WML
subsidiaries |
||||||||||||
10.24 | Security Agreement dated |
8-K | 001-11155 | 10.3 | 06/26/2008 | |||||||
6/26/2008 among WML and U.S.
Bank NA |
||||||||||||
10.25 | Pledge Agreement dated |
8-K | 001-11155 | 10.4 | 06/26/2008 | |||||||
6/26/2008 among WCC, WML and
U.S. Bank NA, for the benefit
of the noteholders |
||||||||||||
10.26 | Amended and Restated Credit |
8-K | 001-11155 | 10.5 | 06/26/2008 | |||||||
Agreement dated 6/26/2008
among WML and PNC Bank, NA |
||||||||||||
10.27 | Amended and Restated |
8-K | 001-11155 | 10.6 | 06/26/2008 | |||||||
Continuing Agreement of
Guaranty dated 6/26/2008 from
various WML subsidiaries in
favor of PNC Bank, NA |
||||||||||||
10.28 | Amended and Restated Security |
8-K | 001-11155 | 10.7 | 06/26/2008 | |||||||
Agreement dated 6/26/2008
among WML and U.S. Bank NA |
||||||||||||
10.29 | Amended and Restated Pledge |
8-K | 001-11155 | 10.8 | 06/26/2008 | |||||||
Agreement dated 6/26/2008
among WCC, WML and U.S. Bank
NA |
||||||||||||
10.30 | Waiver and Consent |
8-K | 001-11155 | 10.1 | 10/09/2009 | |||||||
10.31 | Waiver and Consent |
8-K | 001-11155 | 10.2 | 10/09/2009 | |||||||
10.32 | Membership Interest Purchase |
8-K | 001-11155 | 10.1 | 10/21/2008 | |||||||
Agreement among WRI, WRI
Partners, Inc., Absaloka Coal,
LLC and Feedstock Investments
IV, LLC dated 10/16/2008 |
||||||||||||
10.33 | Form of Fixed Payment Note |
8-K | 001-11155 | 10.3 | 10/21/2008 | |||||||
10.34 | Form of Contingent Payment Note |
8-K | 001-11155 | 10.4 | 10/21/2008 | |||||||
21.1 | Subsidiaries of WCC |
X | ||||||||||
23.1 | Consent of Davis, Graham & |
X | ||||||||||
Stubbs LLP (included in
Exhibit 5.1) |
||||||||||||
23.2 | Consent of Ernst & Young LLP |
X | ||||||||||
23.3 | Consent of KPMG LLP |
X | ||||||||||
23.4 | Consent of Norwest Corporation |
X | ||||||||||
24 | Power of Attorney (included on |
X | ||||||||||
signature page hereto) |
II-5
Table of Contents
ITEM 17. UNDERTAKINGS.
(a) | The undersigned registrant hereby undertakes: |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; | ||
(ii) | To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective registration statement; | ||
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. | ||
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. | ||
(4) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: |
(i) | Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and | ||
(ii) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to |
II-6
Table of Contents
such effective date. |
(b) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for filing a registration
statement on Form S-1 and has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Colorado Springs, State of Colorado, on
June 30, 2011.
Westmoreland Coal Company |
||||
By: | /s/ Keith E. Alessi | |||
Keith E. Alessi | ||||
President and Chief Executive Officer | ||||
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each individual whose signature appears below
constitutes and appoints Keith E. Alessi and Kevin A. Paprzycki, and each of them, his true and
lawful attorneys-in-fact and agents with full power of substitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement on Form S-1, and to file the same with all exhibits and
schedules thereto and all documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his or their
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the dates indicated.
Signature | Title | Date | ||
/s/ Keith E. Alessi
|
President, Chief Executive Officer (Principal Executive Officer) and Director | June 30, 2011 | ||
/s/ Kevin A. Paprzycki
|
Chief Financial Officer and Treasurer (Principal Financial Officer) | June 30, 2011 | ||
/s/ Russell H. Werner
|
Corporate Controller (Principal Accounting Officer) | June 30, 2011 | ||
/s/ Michael R. DAppolonia
|
Director | June 30, 2011 | ||
/s/ Thomas J. Coffey
|
Director | June 30, 2011 | ||
/s/ Gail E. Hamilton
|
Director | June 30, 2011 | ||
/s/ Richard M. Klingaman
|
Director | June 30, 2011 | ||
/s/ Jan B. Packwood
|
Director | June 30, 2011 | ||
/s/ Robert C. Scharp
|
Director | June 30, 2011 |
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EXHIBIT INDEX
Exhibit | Incorporated by Reference | Filed | ||||||||||||
Number | Exhibit Description | Form | File Number | Exhibit | Filing Date | Herewith | ||||||||
3.1
|
Restated Certificate of Incorporation | S-1 | 333-117709 | 3.1 | 7/28/2004 | |||||||||
3.2
|
Certificate of Correction to the Restated Certificate of Incorporation | 8-K | 001-11155 | 3.1 | 10/21/2004 | |||||||||
3.3
|
Certificate of Amendment to the Restated Certificate of Incorporation | 8-K | 001-11155 | 3.1 | 9/07/2007 | |||||||||
3.4
|
Certificate of Amendment to the Restated Certificate of Incorporation | 8-K | 001-11155 | 3.2 | 9/07/2007 | |||||||||
3.5
|
Amended and Restated Bylaws | 8-K | 001-11155 | 3.1 | 4/11/2008 | |||||||||
4.1
|
Certificate of Designation of Series A Convertible Exchangeable Preferred Stock | 10-K | 001-11155 | 3(a) | 3/15/1993 | |||||||||
4.2
|
Indenture between Westmoreland Coal Company (WCC) and Fidelity Bank National Association relating to the Exchange Debentures | S-1 | 333-117709 | 4.2 | 7/28/2004 | |||||||||
4.3
|
Form of Exchange Debenture | S-1 | 333-117709 | 4.3 | 7/28/2004 | |||||||||
4.4
|
Deposit Agreement among WCC, First Chicago Trust Company of New York and the Holders | S-1 | 333-117709 | 4.4 | 7/28/2004 | |||||||||
4.5
|
Common Stock certificate | S-2 | 33-1950 | 4(c) | 12/04/1985 | |||||||||
4.6
|
Preferred Stock certificate | S-2 | 33-47872 | 4.6 | 5/13/1992 | |||||||||
4.7
|
Form of Depository Receipt | S-1 | 333-117709 | 4.5 | 7/28/2004 | |||||||||
4.8
|
Amended and Restated Rights Agreement, dated 2/07/2003, between WCC and EquiServe Trust Company | 8-K | 001-11155 | 4.1 | 02/07/2003 | |||||||||
4.9
|
First Amendment to Amended and Restated Rights Agreement dated 5/02/ 2007, between WCC and Computershare Trust Company | 8-A | 001-11155 | (l) | 05/04/2007 | |||||||||
4.10
|
Second Amendment to Amended and Restated Rights Agreement dated March 4, 2008, between WCC and Computershare Trust Company | 8-A | 001-11155 | (l) | 03/06/2008 | |||||||||
4.11
|
Indenture, dated as of 2/04/2011, by and between Westmoreland Coal Company, Westmoreland Partners and Wells Fargo Bank, NA, as trustee and note collateral agent. | 8-K | 001-11155 | 4.1 | 02/10/2011 | |||||||||
4.12
|
Form of 10.75% Senior Notes due 2018 (included as Exhibit A in Exhibit 4.11). | 8-K | 001-11155 | 4.2 | 02/10/2011 | |||||||||
4.13
|
Registration Rights Agreement, dated 2/04/2011, among Westmoreland Coal Company and Westmoreland Partners and Gleacher & Company Securities, Inc., as initial purchaser | 8-K | 001-11155 | 4.3 | 02/10/2011 | |||||||||
4.14
|
Pledge and Security Agreement dated as of 2/04/ 2011, by Westmoreland Coal Company and Westmoreland Partners in favor of Wells Fargo Bank, NA, as note collateral agent | 8-K | 001-11155 | 4.4 | 02/10/2011 |
Other debt instruments are omitted in accordance with Item 601(b)(4)(iii)(A) of Regulation S-K. Copies of such agreements
will be furnished to the Securities and Exchange Commission upon request. Exhibits with asterisks indicate management
contracts or compensatory plans or arrangements.
Table of Contents
Exhibit | Incorporated by Reference | Filed | ||||||||||||
Number | Exhibit Description | Form | File Number | Exhibit | Filing Date | Herewith | ||||||||
5.1
|
Legal opinion of Davis, Graham & Stubbs LLP | X | ||||||||||||
10.1*
|
Amended and Restated 2007 Equity Incentive Plan for Employees and Non-Employee Directors | 10-Q | 001-11155 | 10.1 | 11/05/2010 | |||||||||
10.2*
|
Form of ISO Agreement | 10-Q | 001-11155 | 10.1 | 05/09/2008 | |||||||||
10.3*
|
Form of NQSO Agreement for directors | 10-Q | 001-11155 | 10.2 | 05/09/2008 | |||||||||
10.4*
|
Form of NQSO Agreement for persons other than directors | 10-Q | 001-11155 | 10.3 | 05/09/2008 | |||||||||
10.5*
|
Form of Restricted Stock Agreement for directors with time-based vesting | 10-K | 001-11155 | 10.11 | 03/13/2009 | |||||||||
10.6*
|
Form of Restricted Stock Agreement for directors | 8-K | 001-11155 | 10.1 | 08/09/2010 | |||||||||
10.7*
|
Form of Restricted Stock Agreement for employees | 8-K | 001-11155 | 10.1 | 07/02/2009 | |||||||||
10.8*
|
Form of Restricted Stock Unit Agreement | 8-K | 001-11155 | 10.2 | 08/09/2010 | |||||||||
10.9*
|
Form of Performance-Based Restricted Stock Unit Agreement | 10-Q | 001-11155 | 10.1 | 05/09/2011 | |||||||||
10.10*
|
Severance Policy | 8-K | 001-11155 | 10.2 | 06/23/2010 | |||||||||
10.11*
|
Annual Incentive Plan/ Long-Term Incentive Plan Policy |
10-K | 001-11155 | 10.10 | 3/10/2011 | |||||||||
10.12
|
Amended Coal Mining Lease between Westmoreland Resources, Inc. (WRI) and Crow Tribe dated 11/26/1974, as amended in 1982 | 10-Q | 0-752 | 10(a) | 05/15/1992 | |||||||||
10.13
|
Amendment to Amended Coal Mining Lease between the Crow Tribe and WRI dated 12/02/1994 | 10-K | 001-11155 | 10.16 | 03/13/2009 | |||||||||
10.14
|
Exploration and Option to Lease Agreement between the Crow Tribe and WRI dated 2/13/2004 | 10-K/A | 001-11155 | 10.17 | 05/08/2009 | |||||||||
10.15
|
Crow Tribal Lands Coal Lease between the Crow Tribe and WRI dated 2/13/2004 | 10-K/A | 001-11155 | 10.51 | 05/08/2009 | |||||||||
10.16
|
Master Agreement dated 1/04/1999, between WCC and the UMWA | 8-K | 001-11155 | 99.2 | 02/04/1999 | |||||||||
10.17
|
Third Amendment and Restatement of the Power Purchase and Operating Agreement between Westmoreland-LG&E Partners and Virginia Electric and Power Company for ROVA I | 10-Q | 001-11155 | 10.2 | 11/06/2006 | |||||||||
10.18
|
Second Amendment and Restatement of the Power Purchase and Operating Agreement between Westmoreland-LG&E Partners and Virginia Electric and Power Company for ROVA II | 10-Q | 001-11155 | 10.3 | 11/06/2006 | |||||||||
10.19
|
Senior Secured Convertible Note Purchase Agreement dated 3/04/2008 among WCC and Tontine | 8-K | 001-11155 | 10.1 | 03/06/2008 | |||||||||
10.20
|
Amendment to Senior Secured Convertible Note Purchase Agreement dated 1/05/2011 | 8-K | 001-11155 | 99.1 | 01/14/2011 | |||||||||
10.21
|
Registration Rights Agreement dated 3/04/2008, among WCC and Tontine | 8-K | 001-11155 | 10.2 | 03/06/2008 | |||||||||
10.22
|
Note Purchase Agreement dated 6/26/2008 among Westmoreland Mining LLC (WML) and institutional investors | 8-K | 001-11155 | 10.1 | 06/26/2008 |
Table of Contents
Exhibit | Incorporated by Reference | Filed | ||||||||||||
Number | Exhibit Description | Form | File Number | Exhibit | Filing Date | Herewith | ||||||||
10.23
|
Continuing Agreement of Guaranty and Suretyship dated 6/26/2008 from various WML subsidiaries | 8-K | 001-11155 | 10.2 | 06/26/2008 | |||||||||
10.24
|
Security Agreement dated 6/26/2008 among WML and U.S. Bank NA | 8-K | 001-11155 | 10.3 | 06/26/2008 | |||||||||
10.25
|
Pledge Agreement dated 6/26/2008 among WCC, WML and U.S. Bank NA, for the benefit of the noteholders | 8-K | 001-11155 | 10.4 | 06/26/2008 | |||||||||
10.26
|
Amended and Restated Credit Agreement dated 6/26/2008 among WML and PNC Bank, NA | 8-K | 001-11155 | 10.5 | 06/26/2008 | |||||||||
10.27
|
Amended and Restated Continuing Agreement of Guaranty dated 6/26/2008 from various WML subsidiaries in favor of PNC Bank, NA | 8-K | 001-11155 | 10.6 | 06/26/2008 | |||||||||
10.28
|
Amended and Restated Security Agreement dated 6/26/2008 among WML and U.S. Bank NA | 8-K | 001-11155 | 10.7 | 06/26/2008 | |||||||||
10.29
|
Amended and Restated Pledge Agreement dated 6/26/2008 among WCC, WML and U.S. Bank NA | 8-K | 001-11155 | 10.8 | 06/26/2008 | |||||||||
10.30
|
Waiver and Consent | 8-K | 001-11155 | 10.1 | 10/09/2009 | |||||||||
10.31
|
Waiver and Consent | 8-K | 001-11155 | 10.2 | 10/09/2009 | |||||||||
10.32
|
Membership Interest Purchase Agreement among WRI, WRI Partners, Inc., Absaloka Coal, LLC and Feedstock Investments IV, LLC dated 10/16/2008 | 8-K | 001-11155 | 10.1 | 10/21/2008 | |||||||||
10.33
|
Form of Fixed Payment Note | 8-K | 001-11155 | 10.3 | 10/21/2008 | |||||||||
10.34
|
Form of Contingent Payment Note | 8-K | 001-11155 | 10.4 | 10/21/2008 | |||||||||
21.1
|
Subsidiaries of WCC | X | ||||||||||||
23.1
|
Consent of Davis, Graham & Stubbs LLP (included in Exhibit 5.1) | X | ||||||||||||
23.2
|
Consent of Ernst & Young LLP | X | ||||||||||||
23.3
|
Consent of KPMG LLP | X | ||||||||||||
23.4
|
Consent of Norwest Corporation | X | ||||||||||||
24
|
Power of Attorney (included on signature page hereto) | X |