SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
BLUE DIAMOND COAL COMPANY
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(Name of Registrant As Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transactions applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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BLUE DIAMOND COAL COMPANY
341 TROY CIRCLE
P. O. BOX 59015
KNOXVILLE, TENNESSEE 37950-9015
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of Blue Diamond Coal Company will be
held Tuesday, August 26, 1997, at 11:00 a.m. Knoxville time, at the Howard
Johnson Plaza Hotel (formerly Quality Inn), 7621 Kingston Pike (West Hills
Exit - I-40, across from West Town Mall), Knoxville, Tennessee to:
1. Elect a Board of Directors for the ensuing year, and
2. Transact such other business as may properly come before
the meeting or any adjournment thereof.
Only stockholders of record at the close of business on July 7, 1997
will be entitled to notice of and to vote at the meeting.
EVEN IF YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE URGED TO DATE, SIGN
AND PROMPTLY RETURN YOUR ENCLOSED PROXY SO THAT YOUR SHARES MAY BE VOTED IN
ACCORDANCE WITH YOUR WISH AND IN ORDER THAT THE PRESENCE OF A QUORUM MAY BE
ASSURED. THE GIVING OF SUCH PROXY DOES NOT AFFECT YOUR RIGHT TO REVOKE IT
LATER OR VOTE YOUR SHARES IN PERSON IN THE EVENT YOU SHOULD ATTEND THE
MEETING.
K. Roger Foster
Secretary
July 18, 1997
<PAGE>
BLUE DIAMOND COAL COMPANY
341 TROY CIRCLE
P. O. BOX 59015
KNOXVILLE, TENNESSEE 37950-9015
July 18, 1997
PROXY STATEMENT
GENERAL INFORMATION
The enclosed proxy is solicited on behalf of the Board of Directors of Blue
Diamond Coal Company ("Company") for use at the annual meeting of
stockholders to be held on August 26, 1997. The proxy may be revoked by a
shareholder at any time before its exercise by written notice to the
Secretary of the Company or by voting in person at the meeting. The
expense of this solicitation will be paid by the Company.
Stockholders of record at the close of business on July 7, 1997 (the
"record date") will be entitled to vote at the meeting. On the record
date, the Company had outstanding 935,220 shares of common stock with a par
value of $1.00 each, which constitute all of the Company's voting
securities. Each outstanding share will entitle the holder to one vote on
all business of the meeting.
A majority in the amount of stock outstanding and entitled to vote shall
constitute a quorum. The vote required to elect a director is the
affirmative vote of the majority of shares present in person or represented
by proxy at the meeting. Broker non-votes do not count in the
determination of a quorum or the number of votes cast.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of July 7, 1997, (a) all persons or
entities known to the Company beneficially owning more than 5% of the
Company's common stock, (b) the beneficial ownership of each director and
nominee for director, and (c) all directors and officers of the Company as
a group.
<PAGE>
Amount and
Nature of
Title of Name and Address of Beneficial Percent
Class Beneficial Owner Ownership (1) of Class (2)
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(a) Common Hamilton Holdings, Ltd. 469,362 50.2%
Bardstown, Kentucky
Common Gordon Bonnyman 75,075 (3) 8.0%
Knoxville, Tennessee
(b) Common Ted B. Helms 18,517 2.0%
Knoxville, Tennessee
Common Alexander A. Bonnyman 205 --
Knoxville, Tennessee
Common Stephen Hamilton (4) --
Bardstown, Kentucky
Common Thomas Hamilton (4) --
Bardstown, Kentucky
Common Leo Hamilton 2,200 (4) --
Bardstown, Kentucky
Common Thomas O'Connell 17,524 1.9%
Whitesburg, Kentucky
Common Thomas H. Dickenson -0- --
Knoxville, Tennessee
(c) Common All Directors and 507,808 54.3%
Officers as a group
(1) Except as noted below, the nature of the beneficial ownership of all
shares is sole voting and investment power.
(2) Percentages less than 1% are not reflected.
(3) Includes 6,675 shares issued to Gordon Bonnyman as the record and
beneficial owner; also includes 12,100 shares owned by a trust with
respect to which he shares voting and investment power with the
trustee and in which he has beneficial interests and 56,300 shares
owned by two trusts with respect to which he shares voting and
investment power, but in which he has no beneficial interest except
as such fiduciary. Does not include 2,700 shares owned by Gordon
Bonnyman's wife nor 7,500 shares in a trust with respect to which she
shares voting and investment powers with the trustee. Gordon
Bonnyman disclaims beneficial ownership of the shares.
(4) Thomas Hamilton, Leo Hamilton and Stephen Hamilton hold 67.5%, 25%
and 7.5%, respectively, of Hamilton Holdings, Ltd., a Kentucky
Limited Partnership. Leo Hamilton holds 2,200 shares directly.
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION TO BOARD OF DIRECTORS
The persons named in the following table have been designated as nominees
to the Board for a one-year term. All of the nominees presently serve as
directors of the Company. The persons named in the enclosed proxy intend
to vote for the election of these nominees. Each nominee has consented to
being named and to serve if elected. If any should decline or be unable to
serve, the persons named in the proxy will vote for the election of such
substitute nominee as shall have been designated by the Board of Directors.
The Company has no reason to believe that any nominee will decline or be
unable to serve.
Director
Past Five Years of the
Business Experience Company
Name And Other Directorships Age Since
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Ted B. Helms President of the Company 48 1983
(since September 1984)
Alexander A. Bonnyman Currently principal in Pellissippi 40 1987
Marketing Consultants established
January 1993; Director of Power-
metrix Corporation of Knoxville,
TN since 1994; V.P. of Resource
Optimization, Inc. of Knoxville,
TN since 1996.
Thomas H. Dickenson Partner in the Knoxville law firm 43 1993
of Hodges, Doughty & Carson since
1988; Member of the National
Association of Bankruptcy Trustees
and the American, Tennessee and
Knox County Bar Associations
Leo Hamilton Vice President of Nally & Hamilton 57 1993
Enterprises, Inc. for more than 5
years; Minority stockholder in
Hamilton Holdings, Ltd. and Nally &
Hamilton Enterprises, Inc. (surface
mine contractor for Blue Diamond);
extensive experience in surface mining
of coal and manufacturing engineering
Stephen Hamilton Secretary-Treasurer of Nally & 43 1995
Hamilton Enterprises, Inc. for
more than 5 years; Minority stock-
holder in Hamilton Holdings, Ltd.
and Nally & Hamilton Enterprises, Inc.
(surface mine contractor for Blue
Diamond); Civil Engineer with
experience in the administrative
and financial aspects of surface
coal mining
Thomas Hamilton President of Nally & Hamilton 58 1993
Enterprises, Inc. for more than 5
years; Co-founder and majority
stockholders in Nally & Hamilton
Enterprises, Inc. (surface mine
contractor for Blue Diamond);
Controlling interest in Hamilton
Holdings, Ltd; Extensive experience
in surface mining of coal and
highway construction
Thomas L. O'Connell Chairman of the Board and 54 1993
President of Drill Steel
Services, Inc. of Whitesburg,
KY for more than 5 years.
INFORMATION REGARDING THE BOARD AND COMMITTEES
The Board of Directors held six meetings during the fiscal year ending
March 31, 1997. Each director attended all of the meetings.
The Audit Committee of the Board of Directors met one time during the
fiscal year ending March 31, 1997. The Audit Committee reviews, with the
Company's independent auditors, the audit plan for the Company, the
Company's internal accounting controls and the Company's financial
statements and it reports to the Board of Directors. The Audit Committee
consists of Alexander Bonnyman, Thomas Dickenson and Leo Hamilton.
The Board does not have any other standing committees.
EXECUTIVE COMPENSATION
The following table sets forth the total annual compensation paid by the
Company to each officer of the Company whose total compensation for the
fiscal year ending March 31, 1997 exceeded $100,000.
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<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
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Name and Annual Compensation Long Term Compensation
Principal Other Annual (# of Shares)
Position Year Salary Bonus Compensation(1) Options Compensation (2)
- -------- ---- ------ ----- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Ted B. Helms 1997 $123,900 $20,000 $9,000 -0- $313
President 1996 121,200 16,000 8,000 -0- 313
and Director 1995 121,200 12,000 8,000 -0- 685
</TABLE>
(1) The regular fee for Directors is $700 per month, plus $600 for each Board
Meeting or Audit Committee Meeting attended, effective April 1, 1988.
Effective June 1, 1991, until further notice, the Board reduced the fee
to $500 per month and $500 for each Board Meeting or Audit Committee
Meeting attended. This fee is not considered as compensation covered
under the Retirement Plan explained below.
(2) The amounts in this column consist of costs of premiums paid for life and
disability insurance policies. No benefits paid under the Company's
medical and dental reimbursement plan appear in the table since the plan
is available to all salaried employees. No amounts appear in the table
in respect of retirement plan contributions for the reasons explained
below.
SAVINGS PLAN
The Blue Diamond Savings Plan, which became effective January 1, 1985, covers
all employees of the Company who elect participation. Electing employees
contribute each month, through payroll deductions, from 1% to 12% of their
regular pay for that month. These salary deferral contributions quality for
the federal income tax treatment provided by Section 401(k) of the Internal
Revenue Code. The first 1% contributed each month by a participant will be
matched by the Company provided it was profitable the previous fiscal year.
When Company profits and dividends any given fiscal year meet levels defined
in the Plan, the Company shall make a bonus matching contribution for the next
5% of regular pay contributed each month by a participant. If the profit and
dividend levels defined in the Plan are not met, contributions by the Company
will be made at the discretion of management.
A participant has immediate vesting in his contributions, Company matching
contributions and all earnings from these contributions. All amounts
contributed to the plan are held for distribution with the earnings thereon
upon retirement, disability, death or other termination of employment. In
addition, in accordance with the terms of the Plan, participants may withdraw
amounts contributed to the Plan and the earnings thereon in certain
circumstances. The amounts set aside under the Savings Plan for the fiscal
year ended March 31, 1997 for the benefit of Messrs. Helms, Foster, Way and
Lyon (all the executive officers) were $7,850, $6,250, $4,820 and $5,065,
respectively, which consisted primarily of salary deferrals.
RETIREMENT PLAN
The Blue Diamond Coal Company Pension Plan is a defined benefit pension plan
funded by Company contributions to a tax-qualified trust fund. The plan
covers all employees, but only after such employees have either reached age 30
or have both reached age 21 and completed "one year of service". "One year of
service" for this purpose means a consecutive 12-month period computed from
date of employment or, after the first 12 months, from January 1 immediately
following such date of employment, during which employees work at least 1,000
hours.
The formula used to determine benefits under the Plan is 1.50% of final 10-
year average "compensation" up to Social Security Covered Compensation, plus
2% of final 10-year average "compensation" in excess of Social Security
Covered Compensation, the sum multiplied by "service" up to 35 years, plus
1.50% of final 10 year average "compensation" multiplied by "service" in
excess of 35 years. "Compensation" for this purpose means the annual rate of
base pay as of January 1 of each year. "Service" for this purpose means
service as a participant while employed by a member of the Blue Diamond
controlled group of corporations.
Benefits determined under the above described formula are payable in the form
of a life annuity. The amounts in the Pension Table shown below are not
subject to deduction for Social Security.
<TABLE>
<CAPTION>
PENSION TABLE
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Years of Covered Service
Rate of Base ----------------------------------------------------
Pay on January 1 10 20 25 30 35
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<S> <C> <C> <C> <C> <C>
$20,000 $ 2,481 $ 4,961 $ 6,202 $ 7,442 $ 8,682
50,000 6,803 13,607 17,008 20,410 23,811
80,000 11,764 23,529 29,411 35,293 41,176
110,000 16,726 33,451 41,814 50,177 58,540
140,600 21,786 43,573 54,466 65,359 76,252
</TABLE>
Years of service credited under the Salaried Employees Pension Plan for the
following individuals are: Mr. Helms - 20 years; Mr. Foster - 21 years;
Mr. Way - 20 years; and Mr. Lyon - 20 years.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Coulter & Justus, P.C. were the Company's independent auditors for the fiscal
year ending March 31, 1997 and will continue to serve as such for the coming
fiscal year.
SHAREHOLDERS PROPOSALS
Any proposal submitted by shareholders for inclusion in the Company's proxy
statement and proxy for the 1998 annual meeting of shareholders of the Company
must be received by the Company at its principal executive offices no later
than March 31, 1998 and must comply in all other respects with applicable
rules and regulations of the Securities and Exchange Commission.
Upon the written request of any person who on the record date was a record
owner of Company common stock, or who represents in good faith that he or she
was on such date a beneficial owner of such stock entitled to vote at the
annual meeting, the Company will send to such person, without charge, a copy
without exhibits of its Annual Report on Form 10-K for the fiscal year ending
March 31, 1997, as filed with the Securities and Exchange Commission.
Requests for this report should be directed to Secretary, Blue Diamond Coal
Company, P. O. Box 59015, Knoxville, Tennessee 37950-9015. A copy of any
exhibit to the Form 10-K is available to any record owner of the Company
common stock upon payment of a fee of $1.00 per page.
OTHER BUSINESS
The Board of Directors has no present intention of bringing any other business
before the meeting and has not been informed of any other matters that are to
be presented to the meeting. If any other matters properly come before the
meeting, however, the persons named in the enclosed proxy will vote in
accordance with their best judgment.
By Order of the Board of Directors.
K. Roger Foster
Secretary
<PAGE>
APPENDIX A
BLUE DIAMOND COAL COMPANY
341 Troy Circle, Knoxville, Tennessee 37919
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Stephen Hamilton, Ted B. Helms, Thomas
O'Connell, Alexander A. Bonnyman, Thomas Hamilton, Leo Hamilton and Thomas H.
Dickenson, and each of them, as proxies, each with the power to appoint his
substitute and hereby authorizes them to represent and to vote, as designated
below, all the shares of common stock of Blue Diamond Coal Company held of
record by the undersigned on July 7, 1997, at the annual meeting of
stockholders to be held on August 26, 1997 at 11:00 A.M. local time at the
Howard Johnson Plaza Hotel, 7621 Kingston Pike, Knoxville, Tennessee.
1. ELECTION OF DIRECTORS FOR WITHHOLD AUTHORITY
all nominees listed below (except) to vote for all nominees
as marked to the contrary below) --- below ---
(INSTRUCTIONS: To withhold authority to vote for any individual nominee
strike a line through the nominee's name in the list below.)
Leo Hamilton Ted B. Helms Stephen Hamilton
Thomas Hamilton Alexander A. Bonnyman Thomas H. Dickenson
Thomas O'Connell
(Continued on Reverse Side)
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2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting. This proxy when properly
executed will be voted in the manner directed herein by the undersigned
stockholder.
If no direction is made, this proxy will be voted FOR No. 1.
Dated:
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Signature
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Signature if held jointly
Please sign exactly as name appears
hereon. When shares are held by joint
tenants, both should sign. When signing
as attorney, executor, administrator,
trustee or guardian, please sign full
title. If a corporation, please sign in
full corporate name by President or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
Please mark, sign, date and return the proxy card promptly, using the enclosed
envelope.
