SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 7)
Arch Coal, Inc.
(Name of Issuer)
Common Stock
(Title of class of Securities)
039380100
(CUSIP Number)
David L. Hausrath
Vice President and
General Counsel
Ashland Inc.
50 E. RiverCenter Boulevard
P.O. Box 391
Covington, KY 41012-0391
(606) 815-3333
(Name, address and telephone number of person
authorized to receive notices and communications)
March 31, 2000
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this Schedule 13D,
and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box |_|.
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Page 2 of 7
CUSIP No. 039380100 13D
1 NAME OF REPORTING PERSONS Ashland Inc.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
61-0122250
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
N/A (b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS 00 (See Item 3)
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Kentucky
NUMBER OF 7 SOLE VOTING POWER
SHARES 4,753,271
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
4,753,271 (excludes 1,495,186 shares held by
Key Trust Company of Ohio, N.A. ("Key
Trust") as Trustee under the Ashland
Inc. Leveraged Employee Stock Ownership
Plan (the "LESOP shares"). Ashland has sole
power to direct the disposition of the LESOP
shares. Ashland disclaims beneficial
ownership of the LESOP shares.)
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,753,271 shares of common stock (excludes the "LESOP" shares)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ X ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.4% of the shares of common stock
14 TYPE OF REPORTING PERSON
CO
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Page 3 of 7
Securities and Exchange Commission
Washington, D.C. 20549
Schedule 13D
Item 1. Security and Issuer
Ashland Inc. ("Ashland") currently owns 4,753,271 shares of common
stock ("common stock"), par value $.01 per share, of Arch Coal, Inc. ("Arch
Coal").
Arch Coal is a Delaware corporation with its principal executive
offices located at City Place One, Suite 300, Creve Coeur, Missouri 63141.
Item 2. Identity and Background
(a), (b) and (c) Ashland is a Kentucky corporation with its
principal executive offices located at 50 E. RiverCenter Blvd., P. O. Box
391, Covington, Kentucky 41012-0391. Ashland is a diversified company with
wholly owned operations in distribution, specialty chemicals, motor oil and
car care products, and highway construction. Ashland also has a 38-percent
equity interest in Marathon Ashland Petroleum LLC and a 12-percent equity
interest in Arch Coal.
The executive officers and directors of Ashland and their
principal occupations are shown on the attached Schedule I. The business
address of each executive officer is shown on Schedule I. Each director's
business address is Ashland Inc., c/o Office of the Secretary, 50 E.
RiverCenter Boulevard, P. O. Box 391, Covington, KY 41012-0391.
(d-e) During the last five years, neither Ashland nor any of the
persons listed in Schedule I hereto, has been (i) convicted in a criminal
proceeding (excluding traffic violations and similar misdemeanors) or (ii)
a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, Federal or state securities
laws or finding any violation with respect to such laws.
(f) Each executive officer and director is a U.S. citizen.
Item 3. Source and Amount of Funds or Other Consideration
Not applicable.
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Page 4 of 7
Item 4. Purpose of Transaction
On June 22, 1999, Ashland, as a shareholder of Arch Coal,
announced that it had retained the investment banking firm of Goldman Sachs
to help Ashland explore strategic alternatives for its investment in Arch
Coal.
On October 5, 1999, Ashland announced that it was making progress
on its study to explore strategic alternatives for its investment in Arch
Coal and that, at that point, a tax-free spin-off to its shareholders
seemed to be its preferred alternative. Ashland also announced that it had
submitted a proposal to Arch Coal and had begun discussions with a special
committee of the Arch Coal Board of Directors regarding such a spin-off
transaction. Such a spin-off would have been subject, among other things,
to a negotiated agreement with the special committee of the Arch Coal Board
of Directors, approval by the Arch Coal shareholders, a favorable ruling
from the Internal Revenue Service, and approval by Ashland's Board of
Directors.
On January 24, 2000, Ashland announced that it was continuing to
pursue spin-off alternatives for its investment in Arch Coal, including
both tax-free and taxable distributions.
On February 24, 2000, Ashland announced that, absent intervening
circumstances or material events, Ashland's management intended to
recommend to its Board of Directors at the next Ashland Board meeting, to
be held on March 16, 2000, a distribution to Ashland's shareholders of
17,397,233 shares of its Arch Coal Common Stock in the form of a taxable
dividend. Ashland also announced that, in anticipation of the taxable
distribution, two of Ashland's four employees currently on the Arch Coal
Board of Directors, Paul W. Chellgren and J. Marvin Quin, will not stand
for re-election to the Arch Coal Board at Arch Coal's upcoming Annual
Meeting on April 20, 2000.
On March 16, 2000, Ashland announced that its Board of Directors
had approved a taxable distribution of 17,397,233 shares of Arch Coal
Common Stock to Ashland's shareholders, and had set a record date of March
24, 2000 for the distribution. Ashland will retain shares of Arch Coal
Common Stock to satisfy any federal tax withholding on the distribution.
Any fractional shares of Arch Coal Common Stock will also be retained by
Ashland with Ashland subsequently distributing the equivalent cash value.
On March 27, 2000, Ashland announced that 17,397,233 shares of
Arch Coal Common Stock had been distributed to Ashland's shareholders and
are being recorded in book-entry form by Arch Coal's transfer agent. Each
share of Ashland Common Stock received 0.246097 shares of Arch Coal Common
Stock. Ashland will retain the shares of Arch Coal Common Stock required to
satisfy any federal tax withholding on the distribution and any fractional
shares of Arch Coal Common Stock resulting from the distribution. Brokers
and dealers will have until April 5, 2000 to advise Ashland as to their
full and fractional share requirements. Ashland will subsequently
distribute to the
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Page 5 of 7
Ashland shareholders $7.1875 per share for any fractional shares of
Arch Common Stock, which was determined to be the value of Arch Coal Common
Stock on the record date. Also on March 27, 2000, Ashland mailed to its
shareholders an information statement in respect of the distribution.
Ashland anticipates that direct registration statements listing the number
of shares of Arch Coal Common Stock received by each Ashland shareholder
will be mailed commencing on or about March 31, 2000 by Arch Coal's
transfer agent. The distribution is a taxable event to Ashland and
constitutes dividend income to Ashland shareholders.
Ashland intends, subject to then-existing market conditions but within
one year, to dispose of its remaining shares of Arch Coal Common Stock in a
transaction or transactions that qualify as a sale for federal income tax
purposes. See Item 5.1.(b) for discussion of Arch Coal Common Stock held by
the Ashland Inc. Leveraged Employee Stock Ownership Plan (the "LESOP").
Item 5. Interest in Securities of the Issuer
I. Ashland
(a) Ashland presently owns 4,753,271 shares of Arch Coal Common Stock
which represents approximately 12.4% of the total issued and outstanding
stock of Arch Coal.
(b) Ashland has sole voting power and the sole power to dispose or to
direct the disposition of its 4,753,271 shares of Arch Coal Common Stock.
In addition, Ashland has sole power to dispose of 1,495,186 shares of Arch
Coal Common Stock held by Key Trust Company of Ohio, N.A. as Trustee for
the LESOP (the "LESOP shares"). Ashland disclaims beneficial ownership of
the LESOP shares. Because of ERISA diversification requirements, it is
expected that the LESOP will dispose of the LESOP shares, subject to
then-existing market conditions.
(c) Except as otherwise disclosed on Schedule II or in Item 4
hereof, neither Ashland nor the persons listed in Item 2 has effected any
transaction relating to Arch Coal Common Stock within the last 60 days.
(d) Not applicable.
(e) Not applicable.
II. Executive Officers and Directors of Ashland
The beneficial ownership of the Common Stock of Arch Coal of
Ashland's executive officers and directors is listed on Schedule II.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
Pursuant to a Stockholders Agreement between Arch Coal, Ashland
and Carboex S.A. ("Carboex"), Arch Coal has agreed to nominate for election
as a director of Arch Coal a person designated by Carboex, and Ashland has
agreed, among other things, to vote its shares of Arch Coal Common Stock in
a manner sufficient to cause the election of such nominee.
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Page 6 of 7
Item 7. Material to be Filed as Exhibits
Stockholders Agreement between Arch Coal, Ashland and Carboex S.A.
dated April 4, 1997 (filed as Exhibit 7 to Ashland's Schedule 13D
(Amendment No. 2) dated June 22, 1999, and incorporated herein by
reference).
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Page 7 of 7
SIGNATURE
After reasonable 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.
March 31, 2000
--------------------------
(Date)
/s/ David L. Hausrath
--------------------------
David L. Hausrath
Vice President and General
Counsel
<PAGE>
Schedule I
DIRECTORS AND EXECUTIVE OFFICERS
OF
ASHLAND INC.
PRINCIPAL OCCUPATIONS AND BUSINESS ADDRESSES
<TABLE>
<CAPTION>
DIRECTORS PRINCIPAL OCCUPATION*
- ---------------- ------------------------------------------------------------------------------------
<S> <C>
Samuel C. Butler Partner of Cravath, Swaine & Moore, Attorneys, New York, New York
Frank C. Carlucci Chairman of the Board of The Carlyle Group, Washington, D.C.
Paul W. Chellgren Chairman of the Board and Chief Executive Officer of Ashland Inc., Covington, Kentucky
Ernest H. Drew Former CEO of Westinghouse Industries and Technology Group
James B. Farley Private Investor and Retired Chairman and Chief Executive Officer of Mutual Life
Insurance Company of New York, New York (now known as The MONY Group)
Bernadine P. Healy President of the American Red Cross, Washington, D.C.
Mannie L. Jackson Majority owner and Chairman and Chief Executive Officer of the Harlem Globetrotters,
International
Patrick F. Noonan Chairman of the Board of The Conservation Fund, Arlington, Virginia
Jane C. Pfeiffer Management Consultant, Vero Beach, Florida
William L. Rouse, Jr. Investments, Naples, Florida
Theodore M. Solso Chairman and Chief Executive Officer of Cummins Engine Company, Inc., Columbus, Indiana
* For business addresses, see Item 2.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS BUSINESS ADDRESS PRINCIPAL OCCUPATION
<S> <C> <C>
Paul W. Chellgren P. O. Box 391 Chairman of the Board
Covington, KY 41012 and Chief Executive Officer
James R. Boyd P. O. Box 391 Senior Vice President
Covington, KY 41012 and Group Operating Officer
David J. D'Antoni P. O. Box 2219 Senior Vice President
Columbus, OH 43216 and Group Operating
Officer
J. Marvin Quin P. O. Box 391 Senior Vice President
Covington, KY 41012 and Chief Financial Officer
James J. O'Brien P. O. Box 1400 Senior Vice President;
Lexington, KY 40512 President, The Valvoline
Company
Charles F. Potts APAC, Inc. Senior Vice President;
3340 Peachtree Rd., NE President, APAC, Inc.
Tower Place
Atlanta, GA 30326
Kenneth L. Aulen P. O. Box 391 Administrative Vice
Ashland, KY 41114 President; Controller
Philip W. Block P. O. Box 391 Administrative Vice
Covington, KY 41012 President
J. Dan Lacy P. O. Box 391 Vice President
Covington, KY 41012
David L. Hausrath P. O. Box 391 Vice President and
Covington, KY 41012 General Counsel
Richard P. Thomas P. O. Box 391 Vice President and
Covington, KY 41012 Secretary
Peter M. Bokach P. O. Box 2219 Vice President;
Columbus, OH 43216 President of Ashland
Distribution Company
<PAGE>
James A. Duquin P. O. Box 2219 Vice President;
Columbus, OH 43216 President of Ashland
Specialty Chemical Company
Lamar M. Chambers P. O. Box 391 Auditor
Covington, KY 41012
<PAGE>
SCHEDULE II
Arch Coal Common Stock Transactions and
Ownership by Ashland Directors and Executive Officers
</TABLE>
<TABLE>
<CAPTION>
Stock Transactions
effected within
Director of Ashland past 60 days* Total Ownership
------------------- ------------------ ---------------
<S> <C> <C>
Samuel C. Butler 184 by wife 184 by wife
954 by Trust 954 by Trust
133 from Ashland DRIP 625 direct
492 direct
Frank C. Carlucci 626 from Ashland DRIP 626 direct
49 by wife 49 by wife
Paul W. Chellgren
(information included in Executive
Officer's List)
Ernest H. Drew 1,722 direct 1,722 direct
James B. Farley 98 joint with wife 98 joint with wife
492 direct 492 direct
Bernadine P. Healy 917 direct 917 direct
Mannie L. Jackson 492 direct 492 direct
Patrick F. Noonan 492 direct 492 direct
Jane C. Pfeiffer 694 direct 694 direct
William L. Rouse 1,114 direct 1,114 direct
Theodore M. Solso 492 direct 492 direct
</TABLE>
*Represents acquisitions of Arch Common Stock pursuant to the taxable
distribution by Ashland of Arch Common Stock to Ashland shareholders. All
calculations are based upon the receipt of .246097 shares of Arch Common Stock
for each share of Ashland Common Stock and exclude fractional shares.
<PAGE>
<TABLE>
<CAPTION>
Stock Transactions
Executive Officer effected within
of Ashland past 60 days* Total Ownership
------------------- ------------------ ---------------
<S> <C> <C>
Kenneth L. Aulen 1,158 (1) 1,158 (1)
1,441 (2) 1,441 (2)
1,814 direct 1,814 direct
Philip W. Block 1,480 (1) 1,480 (1)
533 (2) 533 (2)
500 direct 900 direct
Peter M. Bokach 1,401 (1) 1,401 (1)
62 (2) 62 (2)
153 by son 153 by son
676 direct 676 direct
James R. Boyd 1,635 (1) 1,635 (1)
55 (2) 55 (2)
1,045 joint with wife 1,045 joint with wife
7,647 direct 12,647 direct
Lamar M. Chambers 764 (1) 764 (1)
778 (2) 778 (2)
225 direct 225 direct
Paul W. Chellgren 29 shares purchased with the March 628 direct - held in the Arch
15, 2000 dividend through the Arch Coal DRIP
Coal DRIP 28,401 direct
4,503 direct 2,514 (1)
15,898 from Ashland DRIP 6,572 (2)
2,514 (1)
6,572 (2)
</TABLE>
*Except for Mr. Chellgren's March 15 Arch Coal DRIP purchase, all
transactions represent the acquisition of Arch Common Stock pursuant to the
taxable distribution by Ashland of Arch Common Stock to Ashland shareholders.
All calculations are based upon the receipt of .246097 shares of Arch Common
Stock for each share of Ashland Common Stock and exclude fractional shares.
(1) Shares held in Ashland's Leveraged Employee Stock Ownership Plan
(2) Shares held in Ashland's Employee Savings Plan
<PAGE>
<TABLE>
<CAPTION>
Stock Transactions
Executive Officer effected within
of Ashland past 60 days* Total Ownership
------------------- ------------------ ---------------
<S> <C> <C>
David J. D'Antoni 1,689 (1) 1,689 (1)
1,645 (2) 1,645 (2)
123 custodian for son 123 custodian for son
1,577 direct 1,577 direct
James A. Duquin 1,168 (1) 1,168 (1)
456 direct 456 direct
David L. Hausrath 764 (1) 764 (1)
914 (2) 914 (2)
73 direct 73 direct
J. Daniel Lacy 1,355 (1) 1,355 (1)
1,024 (2) 1,024 (2)
James J. O'Brien 741 (1) 741 (1)
65 (2) 65 (2)
324 direct 324 direct
Charles F. Potts 1,165 (1) 1,165 (1)
451 (2) 451 (2)
331 direct 331 direct
J. Marvin Quin 1,634 (1) 1,634 (1)
4,024 (2) 4,024 (2)
5,571 direct 7,071 direct
Richard P. Thomas 1,401 (1) 1,401 (1)
974 (2) 974 (2)
386 direct 386 direct
</TABLE>
*Except for Mr. Chellgren's March 15 Arch Coal DRIP purchase, all
transactions represent the acquisition of Arch Common Stock pursuant to the
taxable distribution by Ashland of Arch Common Stock to Ashland shareholders.
All calculations are based upon the receipt of .246097 shares of Arch Common
Stock for each share of Ashland Common Stock and exclude fractional shares.
(1) Shares held in Ashland's Leveraged Employee Stock Ownership Plan
(2) Shares held in Ashland's Employee Savings Plan
EXHIBIT INDEX
Stockholders Agreement between Arch Coal, Ashland and Carboex S.A. dated
April 4, 1997 (filed as Exhibit 7 to Ashland's Schedule 13D (Amendment No.
2) dated June 22, 1999, and incorporated herein by reference).
