ARCH COAL, INC. SC TO-I/A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
(Amendment No. 3)
Arch Coal, Inc.
(Name of Subject Company (Issuer) and Filing Person (Offeror))
5% Perpetual Cumulative Convertible Preferred Stock
(Liquidation Preference $50.00 Per Share)
(Title of Class of Securities)
039380 20 9
(CUSIP Number of Class of Securities)
Robert G. Jones
Vice President Law, General Counsel and Secretary
Arch Coal, Inc.
One CityPlace Drive, Suite 300
St. Louis, Missouri 61341
(314) 994-2700
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Filing Persons)
with a copy to:
Ronald D. West
Kirkpatrick & Lockhart Nicholson Graham LLP
Henry W. Oliver Building
535 Smithfield Street
Pittsburgh, Pennsylvania 15222-2312
(412) 355-6500
DRAFT: 12/16/05
CALCULATION OF FILING FEE:
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Transaction Valuation(1)
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Amount of Filing Fee |
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$10,062,246
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$1,076.66 |
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(1) Estimated solely for the purpose of calculating the registration fee based on the product
of (i) $75.15, which is the average of high and low prices per share of Arch Coal, Inc.s Common
Stock, $.01 par value, as reported on the New York Stock Exchange on November 29, 2005, and (ii)
134,522 shares of Arch Coal, Inc.s Common Stock, which represents the maximum number of shares of
Arch Coal, Inc.s Common Stock that may be issued as the premium pursuant to the conversion offer
upon the conversion of up to 2,874,926 of Arch Coals 5% Perpetual Cumulative Convertible Preferred
Stock (Liquidation Preference $50.00 Per Share) validly tendered and accepted for conversion in the
conversion offer.]
þ Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and
identify the filing with which the offsetting fee was previously paid. Identify the previous
filing by registration statement number, or the Form or Schedule and the date of its filing.
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Amount Previously Paid:
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$1,076.66 |
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Form or Registration No.:
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Schedule TO |
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Filing Party:
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Arch Coal, Inc. |
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Date Filed:
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December 1, 2005 |
o Check the box if the filing relates solely to preliminary communications made before
the commencement of a tender offer.
Check the appropriate box(es) below to designate any transactions to which the statement
relates:
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o third-party tender offer subject to Rule 14d-1. |
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þ issuer tender offer subject to Rule 13e-4. |
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o going-private transaction subject to Rule 13e-3. |
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o amendment to Schedule 13D under Rule 13d-2. |
Check the following box if the filing is a final amendment reporting the results of the tender
offer: o
i
This Amendment No. 3 (this Amendment No. 3) to the Tender Offer Statement on Schedule TO
filed with the Securities and Exchange Commission (the SEC) on December 1, 2005 (the Schedule
TO), as amended by Amendment No. 1 to the Schedule TO (Amendment No. 1) filed with the SEC on
December 5, 2005 and Amendment No. 2 to the Schedule TO (Amendment No. 2), relates to an offer by
Arch Coal, Inc., a Delaware corporation (the Company), to deliver a premium, payable in shares of
the Companys Common Stock, $.01 par value (Common Stock), for each share of the Companys 5%
Perpetual Cumulative Convertible Preferred Stock (Liquidation Preference $50.00 Per Share)
(Preferred Stock) validly tendered and accepted for conversion (the Conversion Offer) pursuant
to the terms and subject to the conditions described in the conversion offer prospectus, dated
November 30, 2005 (the Offering Circular), the Offering Circular Supplement, dated December 5,
2005 (the First Offering Circular Supplement), the Second Offering Circular Supplement, dated
December 13, 2005 (the Second Offering Circular Supplement), the Third Offering Circular
Supplement, dated December 16, 2005 and the accompanying letter of transmittal. The Offering
Circular, the First Offering Circular Supplement, the Second Offering Circular Supplement, the
Third Offering Circular Supplement and the accompanying letter of transmittal are exhibits
(a)(1)(A), (a)(1)(B), (a)(1)(C), (a)(1)(D) and (a)(1)(E), respectively, hereto.
The information set forth in the Offering Circular, the First Offering Circular Supplement,
the Second Offering Circular Supplement, the Third Offering Circular Supplement and the
accompanying letter of transmittal is hereby expressly incorporated herein by reference in response
to all items required by Schedule TO. This Amendment No. 2 amends Items 4, 10, 11 and 12 of the
Schedule TO. In addition, to the extent that this Amendment No. 3 contains information not
contained in the Offering Circular, the information herein amends the Offering Circular.
Item 4. Terms of the Transaction.
(a) The information set forth under the captions Summary The Conversion Offer, Questions
and Answers about the Conversion Offer, The Conversion Offer, Comparison of Rights of Holders
of Our Preferred Stock and Holders of Our Common Stock, Description of Capital Stock and
Material United States Federal Income Tax Consequences in the Offering Circular, as well as the
information set forth in the First Offering Circular Supplement, the Second Offering Circular
Supplement, the Third Offering Circular Supplement and the related letter of transmittal is
incorporated herein by reference.
(b) No shares of Preferred Stock are owned by any officer, director or affiliate of the
Company, and therefore no such persons will participate in the Conversion Offer.
Item 10. Financial Statements.
(a) The information set forth under the captions Where You Can Find More Information and
Selected Consolidated Financial and Operating Data in the Offering Circular and the information
set forth in the Third Offering Circular Supplement is incorporated herein by reference. The
information set forth under (i) Item 8, Financial Statements and Supplementary
2
Data, in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2004 and
(ii) Item 1, Financial Statements, in the Companys Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 2005 is incorporated herein by reference and can also be accessed
electronically on the Securities and Exchange Commissions website at http://www.sec.gov.
(b) Not applicable.
Item 11. Additional Information.
(a) To the Companys knowledge, there are no governmental or federal or state regulatory
approvals required for the consummation of the Conversion Offer, other than with applicable
securities laws.
(b) The information set forth in the Offering Circular, the First Offering Circular Supplement, the
Second Offering Circular Supplement, the Third Offering Circular Supplement and the accompanying
letter of transmittal is incorporated herein by reference.
Item 12. Exhibits.
The following are attached as exhibits to this Schedule TO:
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(a)(1)(A)
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Offering Circular, dated November 30, 2005 (incorporated herein
by reference to Exhibit (a)(1)(A) to the Schedule TO). |
(a)(1)(B)
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Offering Circular Supplement, dated December 5, 2005
(incorporated herein by reference to Exhibit (a)(1)(B) to
Amendment No. 1 to the Schedule TO). |
(a)(1)(C)
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Second Offering Circular Supplement, dated December 13, 2005
(incorporated by reference to Exhibit (a)(1)(C) to Amendment No.
2 to the Schedule TO). |
(a)(1)(D)
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Third Offering Circular Supplement, dated December 16, 2005. |
(a)(1)(E)
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Form of Letter of Transmittal (incorporated herein by reference
to Exhibit (a)(1)(B) to the Schedule TO). |
(a)(1)(F)
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Form of Letter to DTC Participants. |
(a)(1)(G)
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Form of Letter to Clients for use by brokers, dealers,
commercial banks, trust companies and other nominees. |
(a)(2)
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Not applicable. |
(a)(3)
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Not applicable. |
(a)(4)
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Not applicable. |
(a)(5)(1)
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Press Release, dated December 1, 2005 (incorporated herein by
reference to Exhibit (a)(5) to the Schedule TO). |
(a)(5)(2)
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Press Release, dated
December 16, 2005 (incorporated herein by reference to Exhibit
99.1 to the Current Report on Form 8-K filed by the Company on
December 16, 2005). |
(b)
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Not applicable. |
(d)
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Form of Rights Agreement, dated March 3, 2000 (incorporated
herein by reference to Exhibit 1 to the Companys Registration
Statement on Form 8-A filed on March 9, 2000). |
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(g)
(h)
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Not applicable.
Not applicable. |
4
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify that the information
set forth in this statement is true, complete and correct.
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Arch Coal, Inc.
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By: |
/s/ Robert J. Messey
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Name: |
Robert J. Messey |
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Title: |
Senior Vice President and Chief Financial Officer |
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Dated: December 16, 2005
5
EX-99(A)(1)(D)
Exhibit (a)(1)(D)
THIRD OFFERING CIRCULAR SUPPLEMENT
Arch Coal, Inc.
Offer to Pay a Premium Upon the Conversion
of up to an Aggregate of 2,874,926 Shares of Its
5% Perpetual Cumulative Convertible Preferred Stock
(Liquidation Preference $50.00 Per Share) to Common Stock
CUSIP No. 039380 20 9
ISIN No. US0393802097
This third offering circular supplement relates to the offer by
Arch Coal, Inc., a Delaware corporation (the
Company), to pay a premium to holders of any and all
of its outstanding 5% Perpetual Cumulative Convertible Preferred
Stock (Liquidation Preference $50.00 Per Share) (Preferred
Stock) who elect to convert their shares of Preferred
Stock to the Companys Common Stock, $.01 par value
(Common Stock), in accordance with the terms of the
Preferred Stock and upon the terms and subject to the conditions
set forth in the Companys offering circular, dated
November 30, 2005 (the Offering Circular), the
offering circular supplement, dated December 5, 2005 (the
First Offering Circular Supplement), the offering
circular supplement, dated December 13, 2005 (the
Second Offering Circular Supplement) and in the
accompanying letter of transmittal. This third offering circular
supplement further updates the Offering Circular, the First
Offering Circular Supplement, the Second Offering Circular
Supplement and should be read in conjunction with the Offering
Circular, the First Offering Circular Supplement and the Second
Offering Circular Supplement.
The Company has determined to change the formula set forth in
the First Offering Circular for calculating the number of shares
that will be paid as a premium in the conversion offer for each
share of Preferred Stock validly tendered and accepted for
conversion and to extend the conversion offer. As changed, the
premium offered in the conversion offer is an amount of shares
of our Common Stock valued at $3.50, as determined by dividing
(i) $3.50 by (ii) the volume-weighted average of the
reported sales prices on the New York Stock Exchange of our
Common Stock during the 10 trading days ending at the close of
the second trading day prior to the expiration of the conversion
offer (including any extension), per share of Preferred Stock
validly tendered and accepted for conversion. As extended, the
conversion offer will expire at 12:00 midnight, New York City
time, on December 30, 2005, unless extended or earlier
terminated. Other than this change to the formula used to
determine the number of shares of Common Stock that you will
receive as a premium if you participate in the conversion offer
and the extension of the conversion offer, the terms and
conditions set forth in the Offering Circular, the First
Offering Circular Supplement and the Second Offering Circular
Supplement remain in effect. As indicated in the Second Offering
Circular Supplement, holders of Preferred Stock who wish to
request an estimate of the number of shares of Common Stock that
would constitute the premium paid in the conversion offer, per
share of Preferred Stock validly tendered and accepted for
conversion, assuming that the conversion offer expired at
midnight on the date prior to the date of inquiry, may request
such information from American Stock Transfer & Trust
Company, the information agent with respect to the conversion
offer, toll-free at (877) 248-6417.
In addition to the Companys financial information
contained or incorporated by reference in the Offering Circular,
the Company is providing the following additional financial
information. The Companys book value per common share as
of September 30, 2005 was $18.09. In addition, below is the
Companys income per common share from continuing
operations, basic and diluted, and ratio of earnings to combined
fixed charges and preference dividends for the periods indicated.
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Nine Months | |
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Years Ended December 31, | |
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Ended | |
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September 30, | |
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2000 | |
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2001 | |
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2002 | |
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2003 | |
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2004 | |
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2005 | |
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Basic earnings (loss) per common share from continuing operations
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$ |
(0.33 |
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(0.15 |
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(0.05 |
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0.19 |
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$ |
1.91 |
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$ |
0.37 |
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Diluted earnings (loss) per common share from continuing
operations
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$ |
(0.33 |
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$ |
(0.15 |
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$ |
(0.05 |
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$ |
0.19 |
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$ |
1.78 |
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$ |
0.37 |
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Ratio of earnings to combined fixed charges and preference
dividends(1)
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1.04 |
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2.54 |
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1.33 |
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(1) |
Ratio of earnings to combined fixed charges and preference
dividends is computed on a total enterprise basis including our
consolidated subsidiaries, plus our share of significant
affiliates accounted for on the equity method that are 50% or
greater owned or whose indebtedness has been directly or
indirectly guaranteed by us. Earnings consist of income (loss)
from continuing operations before income taxes and are adjusted
to include fixed charges (excluding capitalized interest). Fixed
charges consist of interest incurred on indebtedness, the
portion of operating lease rentals deemed representative of the
interest factor and the amortization of debt expense. Preference
dividends are the amount of pre-tax earnings required to pay
dividends on our outstanding preferred stock and Arch Western
Resources, LLCs preferred membership interest. In 2000,
2002 and 2003, combined fixed charges and preference dividends
exceeded earnings by $16.7 million, $22.3 million and
$2.9 million, respectively. |
With respect to the information set forth under the caption
Interests of Directors and Officers in the Offering
Circular, we amend and restate such information in its entirety
as set forth below:
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Our directors, executive officers, principal stockholders and
affiliates do not own any Preferred Stock and will not be
tendering Preferred Stock for conversion pursuant to the
conversion offer. Neither we nor any of our subsidiaries, nor
any of our officers or directors, nor any affiliates of any of
the foregoing, have engaged in any transaction in Preferred
Stock during the 60 business days prior to November 30,
2005. |
Enclosed is a new letter of transmittal for your Preferred
Stock. If you have not already returned a completed letter of
transmittal with respect to your Preferred Stock, please
complete the enclosed letter of transmittal. If you have already
returned a completed letter of transmittal, you do not need to
return the enclosed letter of transmittal unless you wish to
change the information set forth in the letter of transmittal
that you have already returned. This new letter of transmittal,
when received, will supersede your earlier letter of
transmittal. In any event, you may validly withdraw shares of
Preferred Stock that you have already tendered or that you may
tender at any time prior to the expiration date of the
conversion offer. In addition, if not previously returned, you
may withdraw any shares of Preferred Stock that you tender that
are not accepted by us for conversion before January 30,
2006, which is 40 business days from the commencement of the
conversion offer. For a withdrawal of shares of Preferred Stock
to be effective, you must comply with the appropriate procedures
of DTCs ATOP system prior to the expiration date or, if
not accepted by us before January 30, 2006, the
40th business day after the commencement of the conversion
offer. Any notice of withdrawal must identify the shares of
Preferred Stock to be withdrawn, including the name and number
of the account at DTC to be credited and otherwise comply with
the procedures of DTC.
If you have questions regarding the procedures for tendering in
the conversion offer or require assistance in tendering your
shares of Preferred Stock, please contact American Stock
Transfer & Trust Company, the information agent for the
conversion offer, toll-free at (877) 248-6417 or
(718) 921-8317. You may also contact the information agent
toll-free at (877) 248-6417 to receive an estimate of the
number of shares of Common Stock that would constitute the
premium paid in the conversion offer per share of Preferred
Stock validly tendered and accepted for conversion, assuming
that the conversion offer expired on the date of inquiry. If you
would like additional copies of this offering circular
supplement, the Offering Circular or any supplement thereto, our
annual, quarterly and current reports, proxy statement and other
information that we incorporate by reference in the Offering
Circular, please contact either the information agent at either
telephone number set forth above or Investor Relations at Arch
Coal at (314) 994-2700. Holders of Preferred Stock may also
contact their brokers, dealers, commercial banks, trust
companies or other nominees through which they hold their
Preferred Stock with questions and requests for assistance.
The date of this third offering circular supplement is
December 16, 2005.
EX-99(A)(1)(F)
Exhibit (a)(1)(F)
ARCH COAL, INC.
LETTER TO THE DEPOSITORY TRUST COMPANY PARTICIPANTS
Offer to Pay a Premium Upon the Conversion
of up to an Aggregate of 2,874,926 Shares of Its
5% Perpetual Cumulative Convertible Preferred Stock
(Liquidation Preference $50.00 Per Share)
CUSIP No. 039380 20 9
ISIN No. US0393802097
Pursuant to the Offering Circular dated November 30,
2005
and the Offering Circular Supplement dated December 5,
2005
THE CONVERSION OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME,
ON DECEMBER 30, 2005 (THE EXPIRATION DATE),
UNLESS THE CONVERSION
OFFER IS EXTENDED OR EARLIER TERMINATED.
SHARES OF 5% PERPETUAL CUMULATIVE CONVERTIBLE PREFERRED STOCK
(LIQUIDATION PREFERENCE $50.00 PER SHARE) (PREFERRED
STOCK) TENDERED IN THE CONVERSION OFFER MAY BE WITHDRAWN
AT ANY TIME PRIOR TO THE EXPIRATION DATE (AS IT MAY BE
EXTENDED). IN ADDITION, YOU MAY WITHDRAW ANY TENDERED SHARES OF
PREFERRED STOCK AFTER JANUARY 30, 2006, IF WE HAVE NOT ACCEPTED
THEM FOR CONVERSION.
To Depository Trust Company Participants:
We are enclosing herewith the documents listed below relating to
the offer by Arch Coal, Inc., a Delaware corporation (the
Company), to pay a premium to holders of any
and all of the outstanding Preferred Stock who elect to convert
their shares of Preferred Stock to the Companys Common
Stock, $.01 par value (Common Stock), in
accordance with the terms of the Preferred Stock and upon the
terms and subject to the conditions set forth in the
Companys Offering Circular, dated November 30, 2005
(the Offering Circular), in the
Companys Offering Circular Supplement, dated
December 5, 2005, the Companys Second Offering
Circular Supplement, dated December 13, 2005, the
Companys Third Offering Circular, dated December 16,
2005 (collectively, the Offering Circular
Supplements), and in the accompanying letter of
transmittal (the Letter of Transmittal). The
premium offered in this conversion offer is an amount of shares
of our Common Stock valued at $3.50, as determined by dividing
(i) $3.50 by (ii) the volume-weighted average of the
reported sales prices on the New York Stock Exchange of our
Common Stock during the 10 trading days ending at the close of
the second trading day prior to the expiration of this
conversion offer (including any extension), per share of
Preferred Stock validly tendered and accepted for conversion.
Holders who validly tender shares of Preferred Stock for
conversion will receive the premium in addition to the number of
shares of Common Stock issuable upon conversion pursuant to the
conversion terms of the Preferred Stock. As of the date of the
Offering Circular, the conversion ratio for the Preferred Stock
was 2.3985 shares of our Common Stock for each share of
Preferred Stock validly converted. On November 29, 2005,
2,874,926 shares of our Preferred Stock were outstanding.
Certain terms used but not defined herein have the meanings
ascribed to them in the Offering Circular.
The Company is requesting that you contact your clients for whom
you hold shares of our Preferred Stock through your account with
The Depository Trust Company (DTC) regarding
the Conversion Offer. For
your information and for forwarding to your clients for whom you
hold shares of our Preferred Stock through your DTC account,
enclosed herewith are copies of the following documents:
1. Offering Circular and Offering Circular Supplements;
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Letter of Transmittal (together with accompanying Substitute
Form W-9 and related Guidelines); and |
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3. |
Letter that may be sent to your clients for whose accounts you
hold shares of Preferred Stock through your DTC account, which
contains a form that may be sent from your clients to you with
such clients instruction with regard to the Conversion
Offer. |
We urge you to contact your clients promptly. Please note that
the Conversion Offer will expire on the Expiration Date, unless
extended or earlier terminated. The Conversion Offer is subject
to certain conditions. Please see the section of the Offering
Circular entitled The Conversion Offer
Conditions to the Conversion Offer.
To participate in the Conversion Offer, a duly executed and
properly completed Letter of Transmittal (or facsimile thereof
or agents message in lieu thereof), with any required
signature guarantees and any other required documents, should be
sent to the conversion agent, and the book-entry transfer
procedures should be complied with, all in accordance with the
instructions set forth in the Letter of Transmittal and the
Offering Circular.
The Company will not pay any fee, commission or expense to any
broker or dealer or to any other persons (other than the dealer
manager, the exchange agent and the information agent) in
connection with the solicitation of tenders of shares of
Preferred Stock pursuant to the Conversion Offer.
Additional copies of the enclosed materials may be obtained from
the conversion agent by calling American Stock
Transfer & Trust Company at (877) 248-6417.
Very truly yours,
ARCH COAL, INC.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE
YOU OR ANY PERSON AS AN AGENT OF THE COMPANY OR THE CONVERSION
AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT
OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM WITH RESPECT
TO THE CONVERSION OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN
THE OFFERING CIRCULAR OR THE ACCOMPANYING LETTER OF
TRANSMITTAL.
2
EX-99(A)(1)(G)
Exhibit (a)(1)(G)
ARCH COAL, INC.
LETTER TO CLIENTS
Offer To Pay a Premium Upon The Conversion
of up to an Aggregate of 2,874,926 Shares of Its
5% Perpetual Cumulative Convertible Preferred Stock
(Liquidation Preference $50.00 Per Share)
CUSIP No. 039380 20 9
ISIN No. US0393802097
Pursuant to the Offering Circular dated November 30, 2005,
the Offering Circular Supplement dated December 5,
2005,
the Second Offering Circular Supplement dated
December 13, 2005
and the Third Offering Circular Supplement dated
December 16, 2005
THE CONVERSION OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME,
ON DECEMBER 30, 2005 (THE EXPIRATION DATE),
UNLESS THE CONVERSION
OFFER IS EXTENDED OR EARLIER TERMINATED.
SHARES OF 5% PERPETUAL CUMULATIVE CONVERTIBLE PREFERRED STOCK
(LIQUIDATION PREFERENCE $50.00 PER SHARE) (PREFERRED
STOCK) TENDERED IN THE CONVERSION OFFER MAY BE WITHDRAWN
AT ANY TIME PRIOR TO THE EXPIRATION DATE (AS IT MAY BE
EXTENDED). IN ADDITION, YOU MAY WITHDRAW ANY TENDERED SHARES OF
PREFERRED STOCK AFTER JANUARY 30, 2006, IF WE HAVE NOT ACCEPTED
THEM FOR CONVERSION.
To Our Clients:
We are enclosing herewith an Offering Circular, dated November
30, 2005 (the Offering Circular), and an
Offering Circular Supplement, dated December 5, 2005, a
Second Offering Circular Supplement, dated December 13,
2005 and a Third Offering Circular dated December 16, 2005
(collectively, the Offering Circular
Supplements), of Arch Coal, Inc., a Delaware
corporation (the Company), and a letter of
transmittal (the Letter of Transmittal)
relating to the offer by the Company to pay a premium to holders
of any and all of the outstanding Preferred Stock who elect to
convert their shares of Preferred Stock to the Companys
Common Stock, $.01 par value (Common Stock),
in accordance with the terms of the Preferred Stock and upon the
terms and subject to the conditions set forth in the Offering
Circular, the Offering Circular Supplements and the accompanying
Letter of Transmittal. The premium offered in this conversion
offer is an amount of shares of the Companys Common Stock
valued at $3.50, as determined by dividing (i) $3.50 by
(ii) the volume-weighted average of the reported sales
prices on the New York Stock Exchange of the Companys
Common Stock during the 10 trading days ending at the close of
the second trading day prior to the expiration of this
conversion offer (including any extension), per share of
Preferred Stock validly tendered and accepted for conversion.
Holders who validly tender shares of Preferred Stock for
conversion will receive the premium in addition to the number of
shares of Common Stock issuable upon conversion pursuant to the
conversion terms of the Preferred Stock. As of the date of the
Offering Circular, the conversion ratio for the Preferred Stock
was 2.3985 shares of the Companys Common Stock for each
share of Preferred Stock validly converted. On November 29,
2005, 2,874,926 shares of the Companys Preferred Stock
were outstanding. Certain terms used but not defined herein have
the meanings ascribed to them in the Offering Circular.
The Conversion Offer is subject to certain conditions. See the
section of the Offering Circular entitled The Conversion
Offer Conditions to the Conversion Offer.
We are the holder of your shares of Preferred Stock through our
account with the Depository Trust Company
(DTC). A tender of such shares of Preferred
Stock can be made only by us as a DTC participant
and pursuant to your instructions. The enclosed Letter of
Transmittal is furnished to you for your information only and
cannot be used by you to tender shares of Preferred Stock held
by us for your account.
We request instructions as to whether you wish to tender any or
all of the shares of Preferred Stock held by us through our DTC
account pursuant to the terms and conditions set forth in the
Offering Circular, the Offering Circular Supplements and the
Letter of Transmittal.
We urge you to read the Offering Circular, including the
documents incorporated by reference therein, the Offering
Circular Supplements and the Letter of Transmittal carefully
before instructing us to tender your shares of Preferred Stock.
You may use the attached form to give your instructions.
PLEASE RETURN YOUR INSTRUCTIONS TO US IN THE ENCLOSED
ENVELOPE OR CONTACT YOUR REPRESENTATIVE WITH INSTRUCTIONS TO
PERMIT US TO TENDER YOUR SHARES OF PREFERRED STOCK PRIOR TO THE
EXPIRATION DATE.
2
INSTRUCTIONS TO THE DEPOSITORY TRUST COMPANY PARTICIPANT
To the Participant of The Depository Trust Company:
The undersigned hereby acknowledges receipt of the Offering
Circular, dated November 30, 2005 (the Offering
Circular), and the Offering Circular Supplement, dated
December 5, 2005 the Second Offering Circular Supplement,
dated December 13, 2005, and the Third Offering Circular
Supplement, dated December 16, 2005 (collectively, the
Offering Circular Supplements), of Arch Coal,
Inc., a Delaware corporation (the Company),
and the Letter of Transmittal, which together set forth the
terms and conditions of the offer (the Conversion
Offer) by the Company to pay a premium to holders of
any and all of the Companys outstanding 5% Perpetual
Cumulative Convertible Preferred Stock (Liquidation Preference
$50.00 Per Share) (Preferred Stock) who elect
to convert their shares of Preferred Stock to shares of the
Companys Common Stock, $0.01 par value (Common
Stock), in accordance with the terms of the Preferred
Stock and upon the terms and subject to the conditions set forth
in the Offering Circular, the Offering Circular Supplements and
in the Letter of Transmittal. Certain terms used but not defined
herein have the meanings ascribed to them in the Offering
Circular.
This will instruct you as to the action to be taken by you, for
the account of the undersigned, relating to the Conversion Offer.
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The number of shares of Preferred Stock held by you through your account with The Depository Trust Company (DTC) for the account of the undersigned is (fill in amount): |
shares of Preferred Stock. |
With respect to the Conversion Offer, the undersigned hereby
instructs you (check appropriate box):
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To tender the following shares of Preferred Stock held by you
for the account of the undersigned, upon the terms and subject
to the conditions set forth in the Offering Circular, the
Offering Circular Supplements and the Letter of Transmittal
(insert number of shares of Preferred Stock to be tendered, if
any): |
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shares of Preferred Stock.* |
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The number of shares of the Companys Common Stock that the
undersigned will beneficially own immediately prior to the
conversion of the tendered shares of Preferred Stock,
excluding shares to be issued upon conversion of shares
of Preferred stock in the Conversion Offer is (insert number of
shares of Common Stock): |
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The number of shares of the Companys Common Stock that the
undersigned will beneficially own immediately prior to the
conversion of the tendered shares of Preferred Stock,
excluding shares to be issued upon conversion of shares
of Preferred stock in the Conversion Offer is (insert number of
shares of Common Stock): |
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The number of shares of Preferred Stock beneficially owned by
the undersigned that are held by Participants other than
you, which the undersigned is tendering for conversion
(insert number of shares of Preferred Stock): |
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shares of Preferred Stock. |
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Not to tender any shares of Preferred Stock held by you for the
account of the undersigned. |
The undersigned represents that either (i) upon the
conversion of the shares of Preferred Stock tendered pursuant to
the Conversion Offer, the undersigned will not beneficially own
in excess of 9.9% of the aggregate number of shares of the
Companys Common Stock outstanding immediately after giving
effect to such conversion or (ii) these instructions set
forth (a) the number of shares of Common Stock that the
undersigned will beneficially own at the time of the conversion
of the tendered shares of Preferred Stock, excluding shares
issued upon conversion of shares of Preferred Stock in the
Conversion Offer, (b) the number of shares of Preferred
Stock the Participant is instructed to tender hereby, and
(c) the number of shares of Preferred Stock being tendered
through other Participants, and that the undersigned is
requesting that the Company does not accept for conversion any
shares of Preferred Stock to the extent that upon conversion of
such shares of Preferred Stock the undersigneds beneficial
ownership of the Companys Common Stock will exceed 9.9% of
the aggregate number of shares of the Companys Common
Stock outstanding following the Conversion Offer.
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Unless otherwise indicated, the entire number of shares of
Preferred Stock indicated above as held by the Participant for
the account of the undersigned will be tendered. |
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SIGN HERE
Name(s) of beneficial owner(s):
Signature(s):
Name(s):
(Please Print)
Address(es):
Telephone Number(s):
Taxpayer Identification or
Social Security Number(s):
Date:
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RESPONSE MEMORANDUM
DRAFT: 12/16/05
MEMORANDUM
December 16, 2005
This Memorandum, together with Amendment No. 3 (Amendment No. 3) to the Schedule TO-I filed
with the Securities and Exchange Commission (the Commission) on December 1, 2005 (as amended, the
Schedule TO) by Arch Coal, Inc. (the Company), sets forth the responses of the Company to
comments of the Staff of the Commission (the Staff) communicated by letter dated December 16,
2005 with respect to the Schedule TO.
In connection with responding to the Staffs comments, the Company hereby acknowledges that:
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The Company is responsible for the adequacy and accuracy of the disclosure in the
filings; |
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Staff comments or changes to disclosures in response to Staff comments in the filings
reviewed by the Staff do not foreclose the Commission from taking any action with respect
to the filing; and |
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The Company may not assert Staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States. |
Offering Circular
COMMENT NO. 1:
We note your response to our previous comment 5. Rule 13e-4(d)(1) requires the offer document
to specify the consideration being offered. As you note, Rule 13e-4(f)(1)(ii) and Rule 14e-1(b)
require that an offer be open for ten days following a change in the consideration being offered.
While we have determined that the formula pricing mechanisms in certain circumstances are not
inconsistent with these requirements, it does not appear that the pricing mechanisms proposed in
this offer, which provides for a five day averaging period, is consistent with the standards set
forth in our previous guidance.
RESPONSE:
In accordance with the Staffs comment, we have revised the formula pricing mechanism to
include a ten-day averaging period, rather than a five-day averaging period.
Selected Consolidated Financial and Operating Data, page 26
COMMENT NO. 2:
We note your response to comment 10 and we reissue the comment. Where you incorporate by
reference financial statements found in other documents filed with the SEC, we require you to
include in the document disseminated to investors the summary financial
statements required by Item 1010(c) of Regulation M-A. See Q&A 7 in Section I.H.7 of the Division
of Corporation Finances Manual of Publicly Available Telephone Interpretations (July 2001).
Please revise to include the requested disclosure in the Offering Circular.
RESPONSE:
In accordance with the Staffs comment, we have included the information set forth in Items
1010(c)(2), (4) and (5) of Regulation M-A.
Interest of Directors and Officers, page 57
COMMENT NO. 3:
We reissue comment 1 with respect to the disclosure in this section.
RESPONSE:
In accordance with the Staffs comment, we have revised disclosure.