September 19, 2001

Dear Employee of The Ohio Valley Coal Company:

The Ohio Valley Coal Company ("Ohio Valley") provides Health and Retirement benefits for our hourly coal miners identical to those under the National Bituminous Coal Wage Agreement ("Wage Agreement").

A coal miner's ability to retire is based on his or her number of years of signatory service. Signatory service is just that, work by a coal miner at a company that is signatory to an agreement with the United Mine Workers of America ("UMWA"). Retirees, who generally have at least 10 years of signatory service, are provided health benefits through the employer from which they retire – no matter how long they may have worked for that company. Retiree health benefits are not the obligation of the longest employer of record. The last employer of record is obligated to cover all retiree health benefits, regardless of how long the employee worked for that employer, whether it is twenty years, one day, or one minute. The present cost to cover the retiree health benefits is approximately $300,000 per employee and spouse.

There is a board of Trustees ("Trustees") set up to administer coal miner retiree benefits. There are three pages dedicated to the responsibilities of the Trustees in the National Bituminous Coal Wage Agreement of 1998. The Funds are separate and distinct from the International Union, UMWA, and separate and distinct from coal companies. Some of the Trustees of the three Health Benefit Funds are selected by the UMWA, and some by the member companies of the Bituminous Coal Operators' Association. The Trustees' duties are to administer the trust funds and manage the delivery of benefits. The Trustees' obligations are to the Funds, not to the UMWA or to the coal company.

Mr. Robert E. Murray, at the time he purchased Ohio Valley's Powhatan No. 6 Mine, committed to all employees that he would fund their retiree medical benefits in a separate account, again at a present cost of about $300,000 per employee and spouse. Mr. Murray has done this, contrary to the UMWA's repeated statements that he "breaks promises".

If anyone is hired who already has the years of service to receive his retiree medical benefits, as do the laid off employees of The North American Coal Corporation's Powhatan No. 1, 3, and 5 Mines, and that new employee retires before any of our Ohio Valley employees, that person will take the $300,000 set aside for the retiree medical benefits of our employees who have worked hard over the past thirteen years with Ohio Valley. Mr. Murray has been loyal to his employees, notwithstanding that the UMWA's motive is to force the hiring of laid off UMWA members from mines that Mr. Murray never acquired and dump their retiree medical liabilities on Ohio Valley. Remember, it's the funding that Ohio Valley has set aside for you that these people will take if they retire before you.

The scheme that the UMWA International, District and Local Union officers have circulated that a "solution" is to require the new employees to earn their retiree medical benefits over a ten year period is a ruse and façade by the UMWA. The UMWA International and District have never been able to deliver the approval of the Health & Retirement Fund Trustees for such a plan, nor can they. It was simply a scheme of the UMWA to get Mr. Murray and Ohio Valley to agree to this and then walk away, as the UMWA has done before in a similar situation, and stick Ohio Valley and Mr. Murray with these costs when the UMWA Health & Retirement Fund Trustees would eventually turn down such a flawed scheme. Unfortunately, it would have been your $300,000 that the UMWA will have taken under these circumstances.

While Ohio Valley's Powhatan No. 6 Mine is fully staffed and there is no need to hire, Ohio Valley management and Mr. Murray will continue to defend the money already set aside for Ohio Valley's employees and will not let it be used by the UMWA in their effort to force Ohio Valley to hire laid off UMWA members from another company who will take these funds.

Sincerely,

THE OHIO VALLEY COAL COMPANY

John R. Forrelli, President and General Manager

What is The United Mine Workers of America Health and Retirement Funds?

The United Mine Workers of America Health and Retirement Funds (the "Funds") is a group of six multi-employer plans that provide and/or administer health and pension benefits to retired coal miners and their eligible dependents. The Funds, in one form or another, have been in existence since 1946. A separate Board of Trustees administers each of the six (6) plans. All decisions regarding the Funds are made by the Trustees. Generally, some of the Trustees are chosen by the UMWA, the others by the Bituminous Coal Operators' Association ("BCOA"). The duties of the Trustees include interpreting the provisions of the plans, and investing the assets of the trust. The Funds are separate and distinct from the International Union, UMWA, and from the BCOA. They are headquartered in Washington, D.C.

How are the Funds connected with The Ohio Valley Coal Company?

The Funds manage the pension and health benefits for coal miners based on the eligibility requirements under Article XX of the National Bituminous Coal Wage Agreement ("Wage Agreement"). Article XX is contained in the contract between the UMWA and The Ohio Valley Coal Company ("Ohio Valley"). The Trustees of the Funds do not participate in UMWA contract negotiations. The Trustees' function is to administer Article XX of the contract signed by the UMWA and Ohio Valley; and to assure that benefits provided by Ohio Valley are consistent with each other and follow the practices of the Funds.

What happens if there is a dispute regarding eligibility for benefits?

Ohio Valley signed an agreement that requires it to provide health benefits coverage to its employees and pensioners based on the terms of the Wage Agreement's Employer Benefit Plan. Article XX, Section (e), of the Wage Agreement states that "disputes arising under this agreement with regard to the Employer benefit plan shall be referred to the Trustees ... In the event the Trustees decide such dispute, such decision of the Trustees shall be final and binding on the parties." Therefore, a Resolution of Dispute ("ROD") is a request to the Trustees of the Funds to review and issue an opinion as to whether an employer has appropriately administered benefits, or determined eligibility provisions correctly in accordance with the terms of the employer's benefit plan.

Who is responsible for health benefits when there is more than one employer?

According to Question and Answer H-10 of the Funds, consider this scenario. An employee worked for 20 years in a classified job for signatory employer A, and was last employed in a classified job for signatory employer B. His period of employment with employer B lasted three (3) months. Which employer is responsible for health benefit coverage upon approval of a pension? The answer – employer B, the last signatory employer. The benefit plans do not specify any minimum period of employment in order for employees or pensioners to qualify for coverage. New employees are eligible from the first minute worked.

January 10, 2001

BENEFICIAL USE OF COAL COMBUSTION BY-PRODUCTS