<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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 Section 240.14a-11(c) or Section 240.14a-12
Addington Resources, Inc.
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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), 14a-6(i)(2)
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 transaction 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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Notes:
<PAGE>
ADDINGTON RESOURCES, INC.
September 22, 1995
Dear Stockholder:
You are cordially invited to attend the 1995 Annual Meeting of Stockholders
which will be held on Tuesday, October 17, 1995, at the offices of Schulte Roth
& Zabel, 21st floor, 900 Third Avenue, New York, New York at 10:00 a.m., local
time. We hope you will be able to attend.
The enclosed meeting notice and proxy statement contain details concerning
the business to come before the Meeting. You will note that the Board of
Directors of the Corporation recommends a vote
* "FOR" election of seven Directors to serve until the 1996 Annual Meeting
of Stockholders; and
* "FOR" ratification of Arthur Andersen LLP as independent accountants of
the Corporation for 1995.
Please sign and return your proxy card in the enclosed envelope at your
earliest convenience to assure that your shares will be represented and voted
at the Meeting even if you cannot attend.
Howard P. Berkowitz
Chairman of the Board
<PAGE>
ADDINGTON RESOURCES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Holders of Common Stock of Addington Resources, Inc.:
The 1995 Annual Meeting of Stockholders of Addington Resources, Inc., a
Delaware corporation, will be held at the offices of Schulte Roth & Zabel, 21st
floor, 900 Third Avenue, New York, New York on Tuesday, October 17, 1995, at
10:00 a.m., local time, for the following purposes:
1. To elect seven Directors to serve until the 1996 Annual Meeting of
Stockholders;
2. To ratify the appointment of Arthur Andersen LLP as independent
accountants of the Corporation to serve for 1995; and
3. To transact such other business as may properly come before the
meeting, and any adjournments thereof.
Stockholders of record at the close of business on August 21, 1995, are
entitled to notice of and to vote at the meeting, and any adjournments thereof.
By Order of the Board of Directors
Douglas D. Moore
Secretary
Ashland, Kentucky
EACH STOCKHOLDER IS URGED TO EXECUTE AND RETURN THE ENCLOSED PROXY PROMPTLY.
IN THE EVENT A STOCKHOLDER DECIDES TO ATTEND THE MEETING, HE OR SHE MAY, IF SO
DESIRED, REVOKE THE PROXY AND VOTE THE SHARES IN PERSON.
<PAGE>
ADDINGTON RESOURCES, INC.
1500 NORTH BIG RUN ROAD
ASHLAND, KENTUCKY 41102
September 22, 1995
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished to the holders of common stock (the "Common
Stock") of Addington Resources, Inc. (the "Corporation") in connection with the
solicitation of proxies on behalf of the Board of Directors of the Corporation
to be voted at the 1995 Annual Meeting of Stockholders of the Corporation to be
held at the offices of Schulte Roth & Zabel, 21st floor, 900 Third Avenue, New
York, New York on Tuesday, October 17, 1995, at 10:00 a.m., local time, and at
any adjournments thereof (the "Annual Meeting").
All proxies delivered pursuant to this solicitation are revocable at any time
at the option of the persons executing them by giving written notice to the
Secretary of the Corporation, by delivering a later proxy, or by voting in
person at the Annual Meeting.
The mailing address of the principal executive offices of the Corporation is
Addington Resources, Inc., 1500 North Big Run Road, Ashland, Kentucky 41102.
The approximate date on which this Proxy Statement and form of proxy are first
being sent or given to stockholders is September 26, 1995.
All properly executed proxies delivered pursuant to this solicitation and not
revoked will be voted at the Annual Meeting in accordance with the directions
given. Regarding the election of directors to serve until the 1996 Annual
Meeting of Stockholders, in voting by proxy, stockholders may vote in favor of
all nominees or withhold their votes as to all nominees or withhold their votes
as to specific nominees. Regarding the ratification of the appointment of
Arthur Andersen LLP as independent accountants for the fiscal year ending
December 31, 1995, stockholders may vote in favor of, against or abstain from
voting on the proposal. Stockholders should specify their choice on the
enclosed form of proxy.
If no specific instructions are given with respect to the matters to be acted
upon, the shares represented by a signed and dated proxy will be voted "FOR"
the election of all nominees and "FOR" the ratification of the appointment of
Arthur Andersen LLP as independent accountants.
The election of directors will require the affirmative vote by the holders of
a plurality of the shares of Common Stock of the Corporation voting in person
or by proxy at the Annual Meeting, and all other actions will require the
affirmative vote by the holders of a majority of the shares of Common Stock of
the Corporation voting in person or by proxy at the Annual Meeting.
Only holders of record of shares of Common Stock of the Corporation at the
close of business on August 21, 1995, are entitled to vote at the Annual
Meeting or adjournments thereof. Each holder of record on the record date is
entitled to one vote for each share of Common Stock of the Corporation so held.
On August 21, 1995, there were 15,925,501 shares of Common Stock of the
Corporation issued and outstanding. A majority of the outstanding shares will
constitute a quorum at the Annual Meeting. Abstentions and broker non-votes are
counted for purposes of determining the presence or absence of a quorum for the
transaction of business. Abstentions are counted in tabulations of the votes
cast on proposals presented to stockholders, whereas broker non-votes are not
counted for purposes of determining whether a proposal has been approved.
<PAGE>
PRINCIPAL STOCKHOLDERS
Except as otherwise noted in the footnotes following the table, the following
table sets forth certain information concerning beneficial ownership of the
Common Stock as of September 19, 1995, by (i) each person who is known to the
Corporation to be the beneficial owner of more than 5% of the Common Stock,
(ii) each of the directors and nominees, (iii) each executive officer named in
the Summary Compensation Table contained herein currently serving as an
executive officer, and (iv) all directors and executive officers as a group.
Except as otherwise noted, each beneficial owner listed below has sole voting
and dispositive power with respect to the shares listed next to the owner's
name.
<TABLE>
<CAPTION>
SHARES PERCENTAGE
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
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<S> <C> <C>
Morgan Stanley Asset Management Limited 25
Cabot Square
Canary Wharf
London, E14 4QA England 1,187,000(1) 7.4%
Howard P. Berkowitz
HPB Associates, L.P.
888 Seventh Avenue
New York, New York 10106 2,455,285(2)(3) 15.4%
Larry Addington
1500 North Big Run Road
Ashland, Kentucky 41102 3,113,324(4) 19.5%
Robert Addington
1500 North Big Run Road
Ashland, Kentucky 41102 1,020,000(4) 6.4%
Bruce Addington
1500 North Big Run Road
Ashland, Kentucky 41102 1,078,006(4) 6.8%
Stephen Addington 10,000(5) *
Harold Blumenstein 100,000(3) *
Jack C. Fisher 2,500 *
James Grosfeld 155,000(3)(6) 1.0%
Richard Ravitch 10,000(3) *
Carl R. Whitehouse 3,100(7) *
Kirby J. Taylor 13,833(8) *
R. Douglas Striebel 0 *
All directors and executive
officers as a group (9 persons) 5,863,042(9) 36.7%
</TABLE>
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* Represents less than 1% of outstanding shares.
(1) Morgan Stanley Asset Management Limited is an investment advisory
subsidiary of Morgan Stanley Group Inc., 1251 Avenue of the Americas, New
York, New York 10020. Each of these entities shares voting and dispositive
power with respect to the 1,187,000 shares with holders of accounts managed
on a discretionary basis by Morgan Stanley Asset Management Limited. In
addition to these shares, Morgan Stanley Group Inc. shares voting and
dispositive powers with respect to 700 shares. Information concerning these
entities is according to a Schedule 13G dated January 30, 1995.
(2) Mr. Berkowitz, as managing partner of HPB Associates, L.P., has sole voting
and dispositive powers with respect to the shares owned by the partnership.
For information concerning a voting agreement with respect to these shares,
see "Election of Directors" herein.
2
<PAGE>
(3) A group consisting of HPB Associates, L.P., Messrs. Berkowitz, Blumenstein,
Grosfeld and Ravitch, and certain other limited and general partners of HPB
Associates, L.P., beneficially owns 2,953,785 shares, including the shares
set forth above. Each member of the group has the power to vote and dispose
of the shares held by him, and no member has the power to vote and dispose
of the shares held by another member of the group, other than with respect
to shares beneficially owned by HPB Associates L.P., which power to vote
and dispose of such shares may be exercised by its managing partner, Mr.
Berkowitz.
(4) As a group, Larry Addington, Robert Addington, and Bruce Addington
beneficially own 5,211,330 shares, including the shares set forth above.
For information concerning a voting agreement with respect to these shares,
see "Election of Directors" herein. Messrs. Addington agreed to certain
restrictions on the transfer of their shares in connection with this voting
agreement.
(5) Includes 10,000 shares that may be purchased pursuant to currently
exercisable options.
(6) Includes 100,000 shares for which Mr. Grosfeld shares voting and
dispositive powers with his wife.
(7) Includes 1,100 shares owned by Mr. Whitehouse's wife; Mr. Whitehouse has no
voting or dispositive powers with respect to these 1,100 shares.
(8) Includes 250 shares owned by Mr. Taylor's wife; Mr. Taylor has no voting or
dispositive powers with respect to these 250 shares. Includes 13,333 shares
that may be purchased pursuant to options exercisable with 60 days.
(9) Includes 23,333 shares that may be purchased pursuant to options
exercisable within 60 days, which shares are deemed outstanding for
computing percentage of class owned by the group.
Of the 5,211,330 shares of Common Stock owned by Larry, Robert and Bruce
Addington, Larry Addington has pledged 200,000 shares, Robert Addington has
pledged 1,000,000 shares, and Bruce Addington has pledged 400,000 shares to
various financial institutions or brokers. No one pledgee has received 5% or
more of the shares in pledge.
ELECTION OF DIRECTORS
BOARD OF DIRECTORS
The Board of Directors of the Corporation, pursuant to the By-laws of the
Corporation, has set the number of directors of the Corporation at seven. All
directors hold office until the next annual meeting of stockholders following
their election and until their successors are elected and qualified.
In 1994 the Board of Directors met four times. All of the directors attended
at least 75 percent of the aggregate of all meetings of the Board of Directors
and the aggregate of all meetings of the Committees on which they served
(during the periods in which they served).
The following information is furnished as of September 19, 1995. Unless
stated otherwise, each director nominee has been engaged in the principal
occupations listed below for five years or more.
3
<PAGE>
NOMINEES FOR ELECTION TO BOARD OF DIRECTORS
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LARRY ADDINGTON
Ashland, Kentucky
Larry Addington, age 59, has served as Chief Executive Officer and a director
of the Corporation since its organization in 1986 and was the founder of each
of the corporate entities acquired by the Corporation pursuant to the
Corporation's 1987 reorganization. Mr. Addington served as President of the
Corporation from its organization until June 30, 1994
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STEPHEN ADDINGTON
Ashland, Kentucky
Mr. Addington, age 29, served as Vice President of Operations for the
Corporation's environmental subsidiary from 1992 to August 1995. From 1990 to
1992, Mr. Addington served as a regional manager for a coal subsidiary of the
Corporation.
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HOWARD P. BERKOWITZ
Scarsdale, New York
Mr. Berkowitz, age 54, has been Chairman of the Board of Directors of the
Corporation since August 1995, and had previously been a director of the
Corporation from April 1995 to July 1995. Mr. Berkowitz has served as the
managing partner of HPB Associates, L.P., a private investment partnership,
since 1979. Mr. Berkowitz is also a director of Pulte Corporation.
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HAROLD BLUMENSTEIN
Bingham Farms, Michigan
Mr. Blumenstein, age 57, has served as a director of the Corporation since
August 1995. Mr. Blumenstein is a general partner of Paragon Properties
Company, a real estate development, investment and management company, where he
has been employed since 1971. Mr. Blumenstein is also a director of Copart,
Inc.
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JACK C. FISHER
Owensboro, Kentucky
Mr. Fisher, age 67, has served as a director of the Corporation since 1987.
Mr. Fisher served as mayor of Owensboro, Kentucky from 1984 to 1987. He is
currently retired. Before 1984, Mr. Fisher served as manager of U.S. Postal
Service mail processing operations in Owensboro, Kentucky.
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JAMES GROSFELD
Southfield, Michigan
Mr. Grosfeld, age 58, has served as a director of the Corporation since
August 1995. Mr. Grosfeld, an independent investor, served as Chairman of the
Board and Chief Executive Officer of Pulte Corporation, a homebuilding
corporation, from 1974 to 1990. In addition to serving as Co-Chairman of the
Executive Committee, Mr. Grosfeld serves as consultant and director of Pulte
Corporation, and a director of each of the publicly-traded BlackRock Financial
Management funds. Mr. Grosfeld is a director of Copart, Inc. and from 1993
until November 1994, he also served as Chairman of the Board of Copart, Inc.
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RICHARD RAVITCH
New York, New York
Mr. Ravitch, age 62, has been a director of the Corporation since August
1995, and had previously been a director of the Corporation from April 1995 to
July 1995. Mr. Ravitch has served as the Chairman of Aquarius Management
Corporation, a real estate management company, for over five years. Mr. Ravitch
served as the president of the Players Relations Committee of Major League
Baseball from November 1991 to December 1994. Mr. Ravitch also serves as a
director of Parsons Brinckerhoff Inc.
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4
<PAGE>
In 1990, the Commodity Futures Trading Commission ("CFTC") brought a civil
action against MultiVest Options, Inc., ("MOI") alleging various violations of
the Commodity Exchange Act ("CEA") and certain rules and regulations of the
CFTC. Mr. Grosfeld was the principal stockholder of the ultimate parent
corporation of MOI, but, according to Mr. Grosfeld, was never an officer or
director of MOI and did not participate in the day-to-day conduct of its
business. Without admitting or denying the allegations of the CFTC complaint,
MOI consented to the entry of a permanent injunction and appointment of a
receiver. MOI discontinued its business operations in 1990. Mr. Grosfeld was
not specifically named in the CFTC proceeding or in the injunction related
thereto. Subsequently, in 1990 certain individuals who had previously purchased
and sold commodity options through MOI brought a class action lawsuit against
the parent and affiliated companies of MOI and Mr. Grosfeld alleging that the
defendants, among other things, violated the antifraud provisions of the CEA
and asserting other federal and state law claims. Mr. Grosfeld, who believes
that the litigation is without merit, has denied all such allegations and is
vigorously defending such litigation.
HPB Associates, L.P. ("HPB') entered into a Stock Purchase Agreement, dated
as of August 4, 1995 (the "Stock Purchase Agreement"), with Larry Addington,
Robert Addington and Bruce Addington pursuant to which HPB agreed to purchase
an aggregate of 2,000,000 shares of Common Stock from Messrs. Addington at
$9.00 per share. Pursuant to the terms of the Stock Purchase Agreement, HPB
purchased 577,003 shares of Common Stock on August 4, 1995. On August 24, 1995,
HPB purchased the remaining 1,422,997 shares of Common Stock.
On August 4, 1995, the Board was reconstituted to consist of eight members,
four of whom were already members of the Board (Larry Addington, Bruce
Addington, Messrs. Fisher and Whitehouse) and four of whom were not on the
Board at such time (Messrs. Berkowitz, Blumenstein, Grosfeld and Ravitch). The
four new directors were designated by HPB, and Mr. Berkowitz was appointed as
Chairman of the Board. Bruce Addington resigned from the Board on August 15,
1995.
The terms of the Stock Purchase Agreement include certain voting agreements.
Among other things, Messrs. Addington agreed that (i) if the number of
Addington Designees (as hereinafter defined) are included as part of the
management slate of nominees for the Board, they shall vote all of their Common
Stock in favor of the management slate of nominees for the Board in each
election of directors of the Corporation and (ii) Messrs. Addington will not,
directly or indirectly, solicit, nor participate in the solicitation of,
proxies or consents in opposition to the management slate of nominees to the
Board provided it includes the number of Addington Designees specified below,
nor may they, directly or indirectly, solicit, nor participate in the
solicitation of, proxies or consents to increase their representation on the
Board to a number of persons in excess of the number of Addington Designees.
HPB agreed that it will recommend inclusion in management's slate of nominees
to the Board, and vote all of its Common Stock in favor of, three persons
designated by Messrs. Addington (one of whom shall be Larry Addington) in each
election of directors of the Corporation (the "Addington Designees"); provided,
that (x) HPB shall not be obligated to recommend inclusion of, or to vote in
favor of (i) more than two Addington Designees if Messrs. Addington shall then
beneficially own less than 3,000,000 shares of Common Stock, (ii) more than one
Addington Designee if Messrs. Addington shall then beneficially own less than
2,000,000 shares of Common Stock or (iii) any Addington Designee if Messrs.
Addington shall then beneficially own less than 1,000,000 shares of Common
Stock.
The Addington Designees are Larry Addington, Stephen Addington and Jack C.
Fisher. Larry Addington, Robert Addington, Bruce Addington, and Stephen
Addington are brothers.
The affirmative vote of a plurality of the shares represented at the Annual
Meeting, in person or by proxy, is required for the election of directors.
5
<PAGE>
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE CORPORATION RECOMMENDS A VOTE "FOR" LARRY
ADDINGTON, STEPHEN ADDINGTON, HOWARD P. BERKOWITZ, HAROLD BLUMENSTEIN, JACK C.
FISHER, JAMES GROSFELD, AND RICHARD RAVITCH. PROPERLY EXECUTED PROXIES RECEIVED
BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY IN THEIR
PROXIES A CONTRARY CHOICE.
COMMITTEES OF THE BOARD OF DIRECTORS AND COMPENSATION OF DIRECTORS
In accordance with the By-laws of the Corporation, the Board of Directors has
established several committees, including an Executive Committee and an Audit
Committee. The Audit Committee performs functions similar to a compensation
committee. The Board of Directors has not established a nominating committee.
The Executive Committee has delegated authority to act for the full Board
between meetings of the Board. The Executive Committee is comprised of Messrs.
Berkowitz, Blumenstein and Grosfeld.
The Audit Committee reviews with the independent accountants the scope and
results of the Corporation's audits, the Corporation's internal accounting
controls and the professional service furnished by the independent accountants
to the Corporation. The Audit Committee also establishes the policies and
procedures with respect to compensation of the Corporation's personnel and sets
the targets and goals for the Corporation's management incentive program. The
Audit Committee also reviews certain related party transactions. In 1994 the
Audit Committee met two times. The Audit Committee is comprised of Messrs.
Fisher and Whitehouse.
Directors of the Corporation who are also officers of the Corporation receive
no compensation for their services as directors. During 1994, the Corporation's
standard directors fees for non-management directors were a base salary of
$10,000 per year for services as directors, with an additional $1,000 per Board
meeting actually attended, and $500 for each Committee meeting attended which
was not held in conjunction with a meeting of the Board of Directors.
On March 1, 1995, the Corporation received a proposal from Larry Addington,
Robert Addington and Bruce Addington to purchase the Corporation's non-
environmental businesses. The Corporation's Board of Directors authorized a
special committee comprised of the Corporation's non-management directors
(Messrs. Berkowitz, Fisher, Ravitch, Whitehouse and Stephen D. Weinress) to
evaluate the proposal. The special committee was terminated following the
withdrawal of the proposal on July 11, 1995. In connection with service on the
special committee, each of the directors will receive $20,000, in lieu of any
fees otherwise due the members for attendance at the committee's meetings.
EXECUTIVE OFFICERS
Executive officers serve at the discretion of the Board of Directors. In
addition to Larry Addington, the following persons serve as executive officers
of the Corporation.
Kirby J. Taylor, age 50, has served as President of the Corporation since
July 1, 1994. From March 1993 through June 1994, Mr. Taylor served as vice
president and chief financial officer of Outboard Marine Corporation, an
international marketer of marine engines, boats, accessories and services. For
22 years before joining Outboard Marine Corporation, Mr. Taylor served various
Tenneco companies, including service as vice president-finance from 1990 to
March 1993 at Tenneco Automotive Company and service as a vice president and
chief financial officer of Tenneco Minerals Company from 1984 to 1990.
R. Douglas Striebel, age 38, became Vice President and Chief Financial
Officer of the Corporation in June 1988. From July 1984 to June 1988, Mr.
Striebel was an Audit Manager with Arthur Andersen & Co.
6
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers and directors, and persons who own more than ten percent
of the Corporation's common stock, to file reports (including a year-end
report) of ownership and changes of ownership with the Securities and Exchange
Commission and to furnish the Corporation with copies of all reports filed.
Based solely on a review of the forms furnished to the Corporation, or
written representations from certain reporting persons, the Corporation
believes that all persons who were subject to Section 16(a) in 1994 complied
with the filing requirements.
INTEREST OF MANAGEMENT AND AGREEMENTS TO SELL CERTAIN NON-ENVIRONMENTAL
OPERATIONS
Following the reconstitution of the Board on August 4, 1995, the Corporation
announced that it would pursue the prompt but prudent sale of the Corporation's
non-environmental businesses, with the net proceeds from such sale being
deployed to expand the Corporation's environmental operations. Since the
announcement, the Corporation has held preliminary discussions with a number of
interested parties, which included companies that have contacted the
Corporation as well as companies contacted by the Corporation, concerning the
possible sale of the Corporation's non-environmental operations. These
discussions have involved the potential sale of individual operations, but not
the sale of a substantial portion of the Corporation's diverse non-
environmental operations in a single transaction.
By letter dated August 4, 1995 (the "Tennessee Put Agreement"), Larry
Addington, Robert Addington, and Bruce Addington granted the Corporation the
right, exercisable on or before September 29, 1995, to either (i) transfer to
Messrs. Addington the stock of the Corporation's subsidiary, Tennessee Mining
Company, Inc. ("TMI") (which at such time would own the Corporation's Tennessee
coal properties and the contract with Tennessee Valley Authority ("TVA")) or
(ii) assign the Tennessee coal properties and the TVA contract to a corporation
to be formed by Messrs. Addington. The outstanding payables as of August 4 with
respect to the Tennessee coal properties (not exceeding $2.5 million) would be
borne by the Corporation, or the Corporation would contribute that amount to
TMI. The Corporation has contributed approximately $1.2 million through
September 7, leaving $1.3 million to be contributed (the "Owed Contribution").
The consideration for the transaction would consist of the payment to the
Corporation of $1.00 for each ton of coal delivered to the TVA under the TVA
contract; provided that the maximum royalty payable to the Corporation would
not exceed $12,000,000. On September 6, 1995, the Corporation gave notice to
Messrs. Addington of exercise of its rights under the Tennessee Put Agreement.
In connection with the Corporation's exercise of its rights under the
Tennessee Put Agreement, the Corporation and Messrs. Addington entered into
negotiations to sell certain of the Corporation's other non-environmental
businesses to Messrs. Addington. On September 22, 1995, the Corporation and the
Messrs. Addington entered into a definitive agreement (the "Coal Agreement"),
pursuant to which, subject to certain conditions described below, Messrs.
Addington would purchase the Corporation's coal mining subsidiaries, including
TMI, and its mining equipment manufacturing and licensing subsidiary for $30
million cash and the assumption of certain liabilities related to the coal
operations. The Coal Agreement also provides that the Corporation will retain
certain cash payments (anticipated to be $7,000,000) to be received under the
Technology Exchange Agreement between the Corporation's mining technology
subsidiary and BHP Australia Coal Pty. Ltd. The Coal Agreement provides for the
$1.00 per ton royalty to the Corporation for coal delivered under the TVA
contract, with a $12 million maximum royalty. In addition, the Corporation
would be entitled to retain the difference between (i) the net working capital
of the subsidiaries to be transferred, excluding TMI and certain other assets
and liabilities, as of the closing date less (ii) the amount of the Owed
Contribution. If such difference is less than zero, then no cash adjustment
will be made; however, the $1.00 per ton royalty under the TVA contract will be
suspended until the Messrs. Addington have recouped the lesser of the Owed
Contribution and the negative working capital.
7
<PAGE>
The Corporation and the Messrs. Addington have also entered into an agreement
(the "Citrus Agreement") pursuant to which, subject to certain conditions
described below, the Messrs. Addington would purchase the Corporation's citrus
operations in Belize in exchange for 1,000,000 shares of Common Stock.
The Board of Directors of the Corporation (excluding Larry Addington)
believes that the transactions, if consummated, would enable the Corporation to
promptly sell substantially all of the Corporation's non-environmental
operations (excluding gold, lime, and Wind Mountain) on attractive terms,
enabling the Corporation to focus on its key environmental operations and
exploit opportunities for those operations currently available to it.
Consummation of the transactions contemplated by the Coal Agreement and the
Citrus Agreement is conditioned upon several items, including the receipt by
the Corporation of a favorable fairness opinion, the receipt of financing by
Messrs. Addington, and receipt of governmental, regulatory and third-party
consents and releases. If the transactions are not consummated, the Corporation
still intends to consummate the sale of TMI to the Messrs. Addington under the
Tennessee Put Agreement.
TASK Trucking Company ("TASK") provides trucking services to the Corporation
and is owned by a brother-in-law of Messrs. Addington. During 1994, the
Corporation's expense was $7,407,000 for trucking services provided through
TASK. The Corporation believes that the price charged for such trucking
services was not greater than the prices generally charged by non-affiliated
entities in the area.
Larry Addington owns a 50% interest in an office building in Owensboro,
Kentucky in which the Corporation leases approximately 7,300 square feet of
office space for a rent of $117,350 per year plus utilities. The lease is for a
term of five years, expiring in 1996. The Corporation believes that the rental
paid is not greater than that charged by non-affiliated entities in the area
for similar facilities and is comparable to the rate charged to other tenants
in the building, none of whom are related to the Corporation or Messrs.
Addington.
On February 23, 1993, the U.S. District Court for the District of Montana
entered a judgment in a suit by Bill Robinson, Sr. stating that the defendants
Larry Addington, Larry Harrington, Addwest Gold, Inc., Addington Resources,
Inc., Addington Holding Company and Addwest Mining, Inc. were jointly and
severally liable to Mr. Robinson for compensatory damages in the amount of
$850,000 and that Mr. Robinson was entitled to punitive damages in the amount
of $1,000 from Larry Harrington, $6,000,000 from Larry Addington, and
$4,500,000 jointly and severally from defendants Addwest Gold, Inc., Addington
Resources, Inc., Addington Holding Company, and Addwest Mining, Inc. Mr.
Robinson had alleged breach of contract, fraud and bad faith in relation to his
employment with Addwest Gold, Inc. A settlement has been reached in which Mr.
Robinson released all parties from all claims. The Corporation paid Mr.
Robinson $3,450,000 on April 18, 1994. Pursuant to indemnification agreements,
including an agreement with Larry Addington, the Corporation paid the full
amount of the settlement.
With respect to the claims against Larry Addington, although the jury
specifically rejected a claim by Mr. Robinson that Mr. Addington had committed
fraud upon him, the court found that there was sufficient evidence to sustain
the finding of liability upon the plaintiff's claim for negligent
misrepresentation and the imposition of punitive damages against Larry
Addington. The court stated that there was sufficient evidence to support a
finding that the alleged negligent misrepresentations made by Larry Addington
to the plaintiff were accomplished with actual malicious intent within the
meaning of the Montana statute relating to the claims for punitive damages.
Upon a determination by the Board of Directors (Larry Addington abstaining)
that Larry Addington did at all times relevant to the litigation act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Corporation, the Corporation indemnified Mr.
Addington against the amount of any final judgment entered against him and any
and all expenses incurred by him in connection with the litigation. Because the
interests of all the defendants were coincident, no marginal expenses were
incurred by Mr. Addington during the trial phase of the litigation. However,
Mr. Addington did engage separate counsel on appeal. This indemnification is
pursuant to an indemnity agreement entered into with
8
<PAGE>
Mr. Addington in August 1988, the form of which was previously approved by the
Corporation's stockholders. The indemnification is also in accordance to
Section 145 of the General Corporation Law of the State of Delaware and the
Corporation's Certificate of Incorporation and Bylaws. The Board of Directors,
in meetings at which it received reports from counsel on the litigation,
determined to indemnify Mr. Addington for past and future expenses as well as
the trial court judgment.
Larry Addington had guaranteed the Corporation's obligations in connection
with the assignment of a coal sales contract subsequently transferred by the
Corporation.
EXECUTIVE COMPENSATION
The following table sets forth the aggregate cash compensation paid by the
Corporation for 1994, 1993 and 1992 to the five most highly compensated
executive officers of the Corporation whose salary and bonus compensation
exceeded $100,000 in 1994, and who were serving at the end of the year, along
with two executive officers who would have otherwise been included in such
table but were not serving as executive officers at the end of the year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG TERM
COMPENSATION COMPENSATION
----------------- ------------
NAME AND PRINCIPAL ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION OPTIONS (#)
------------------ ---- ------ ----- ------------ -----------
<S> <C> <C> <C> <C> <C>
Larry Addington 1994 $276,000 $ -0- $ -0- -0-
Chief Executive Officer
and 1993 274,134 -0- -0- -0-
Director 1992 259,615 39,468 -0- -0-
Kirby J. Taylor(1) 1994 $107,658 $100,000(1) $ -0- 40,000
President
Robert Addington 1994 $226,000 $ -0- $ -0- -0-
Vice President--Operations 1993 224,134 -0- -0- -0-
and Engineering 1992 207,692 39,468 -0- -0-
Bruce Addington 1994 $176,000 $ -0- $ -0- -0-
Vice President--Operations 1993 173,442 -0- -0- -0-
1992 135,000 39,468 -0- -0-
R. Douglas Striebel 1994 $132,250 $250,000(2) $ -0- 25,000
Vice President, Chief 1993 128,403 -0- -0- -0-
Financial Officer 1992 122,116 90,468 -0- 5,000
William R. Nelson(3) 1994 $149,900 $100,000(2) $217,100(4) -0-
Vice President 1993 201,000 -0- 995(5) -0-
1992 77,123 -0- 735(5) -0-
Michael J. Quillen(6) 1994 $ 19,519 $250,000(2) $255,000(7) -0-
Vice President 1993 201,000 100,000 -0- -0-
1992 95,406 -0- -0- 40,000
</TABLE>
- --------
(1) Employment began June 28, 1994, and Mr. Taylor received an aggregate
$100,000 signing bonus, $50,000 of which was paid in each of 1994 and 1995.
(2) Bonus paid in connection with the disposition of certain assets to a
subsidiary of The Pittston Company on January 14, 1994.
(3) Employment began August 1, 1992 and ended as of September 15, 1994.
9
<PAGE>
(4) $217,100 represents a severance payment to Mr. Nelson.
(5) Represents the premium on term life insurance with a $500,000 death
benefit.
(6) Employment began July 1, 1992; Mr. Quillen resigned effective January 14,
1994.
(7) Payment to Mr. Quillen made in February 1995 in connection with the
termination of options for 40,000 shares of common stock as a result of the
transaction with The Pittston Company described in note 2 above.
The Corporation has entered into an employment agreement with Kirby J.
Taylor. Pursuant to the employment agreement, Mr. Taylor will be employed as
the President and Chief Operating Officer of the Corporation at an annual base
salary of $250,000, subject to annual increases. Mr. Taylor received a signing
bonus of $100,000. The employment agreement provides that Mr. Taylor would
initially receive options for 40,000 shares, and subsequently receive grants of
options for 20,000 shares per year for three years, for an aggregate of 100,000
shares. The agreement provides that if Mr. Taylor is discharged for any reason
other than cause, as defined, the Corporation will pay him an amount equal to
twice his base salary unless such termination is because of Mr. Taylor's death
or retirement, or by the Corporation for gross negligence or willful
misconduct. The employment agreement provides for an annual performance bonus
calculated as follows: if the Corporation earns after tax profits of $1.00 per
share, Mr. Taylor will receive 40% of his base salary as a performance bonus;
if the Corporation earns after tax profits of $1.50 or more per share, Mr.
Taylor will receive 75% of his base salary as a performance bonus; for after
tax profits per share of $2.00 or more, Mr. Taylor will receive 100% of his
base salary as a performance bonus. For after tax profits between $1.00, $1.50
and $2.00 per share, Mr. Taylor will receive a performance bonus of his base
salary on a pro rata basis. In addition, for after tax profits of $1.50 per
share, or $2.00 or greater per share, Mr. Taylor will be granted an annual
bonus of options for 20,000 shares or 40,000 shares, respectively. For after
tax profits between $1.50 and $2.00 per share, such bonus stock options will be
granted on a pro rata basis. These stock options will be issued in accordance
with the terms of the Corporation's Restated Stock Option Plan. The Corporation
will provide Mr. Taylor the use of an automobile, limited country club dues,
and a term life insurance policy with a death benefit of $750,000. The
employment agreement also provides the Corporation contemplates making a seat
on the Board of Directors available to Mr. Taylor upon the successful
completion of one year of employment.
The Corporation has entered into an employment agreement with R. Douglas
Striebel. Pursuant to the employment agreement, Mr. Striebel will be employed
as Chief Financial Officer of the Corporation at the rate of $131,250 per
annum. Mr. Striebel may receive a bonus of up to $120,120 each year as a
participant in the Corporation's management incentive program. In addition, Mr.
Striebel may receive discretionary bonuses. If the Corporation is acquired by,
or merged into, another entity, and Mr. Striebel's position is eliminated for
reasons other than poor performance, the new management shall be required to
grant him severance pay of no less than $300,000 or employ him for at least
three years.
The Corporation entered into an employment agreement with William R. Nelson.
Pursuant to the employment agreement, the Corporation employed Mr. Nelson as
the President and Chief Executive Officer of its subsidiary, Addington
Environmental, Inc. Mr. Nelson was paid an annual salary of $200,000. The
employment agreement provided a three-year term ending on July 31, 1995. The
employment agreement provided certain benefits if a Change of Control (as
defined) occurred. Pursuant to a release dated September 15, 1994, Mr. Nelson's
employment agreement was terminated and he was provided a payment of $217,100.
Mr. Nelson is subject to certain restrictive covenants set forth in the
agreement for a period of three years from the termination.
10
<PAGE>
STOCK OPTION PLAN
During 1988, the Corporation adopted, with stockholder approval, the Restated
Stock Option Plan (the "Option Plan"). Pursuant to the Option Plan, the
Corporation has reserved for issuance 1,500,000 shares of Common Stock for
which options may be granted by the Option Committee of the Board of Directors
to officers, employees and independent contractors of the Corporation and its
subsidiaries in amounts and upon terms and conditions to be determined from
time to time by the Option Committee.
OPTION GRANTS IN 1994
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
% OF AT ASSUMED ANNUAL
TOTAL RATES OF STOCK
OPTIONS PRICE
GRANTED APPRECIATION FOR
OPTIONS TO EXERCISE OPTION TERMS
GRANTED EMPLOYEES PRICE EXPIRATION -----------------
NAME (#) IN 1994 ($/SH) DATE 5% ($) 10% ($)
- ---- ------- --------- -------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Larry Addington...... -0- N/A N/A N/A N/A N/A
Kirby J. Taylor...... 40,000(1) 12.4% $9.75 10/23/04 $245,269 $621,560
Robert Addington..... -0- N/A N/A N/A N/A N/A
Bruce Addington...... -0- N/A N/A N/A N/A N/A
R. Douglas Striebel.. 25,000(2) 7.7% $9.75 10/23/04 $153,293 $388,475
William R. Nelson.... -0- N/A N/A N/A N/A N/A
Michael J. Quillen... -0- N/A N/A N/A N/A N/A
</TABLE>
- --------
(1) Options become exercisable in one-third increments on October 24, 1995,
October 24, 1996 and October 24, 1997.
(2) Options are exercisable October 24, 1999.
AGGREGATED 1994
YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT YEAR END (#) AT YEAR END ($)(1)
-------------------- --------------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
- ---- -------------------- --------------------
<S> <C> <C>
Larry Addington....................... N/A N/A
Kirby J. Taylor....................... -0-/40,000 $0.00/$0.00
Robert Addington...................... N/A N/A
Bruce Addington....................... N/A N/A
R. Douglas Striebel................... -0-/30,000 $0.00/$11,250
William R. Nelson..................... -0-/-0- $0.00/$0.00
Michael J. Quillen(2)................. -0-/-0- $0.00/$0.00
</TABLE>
- --------
(1) Dollar amounts reflect market value of Common Stock based on December 31,
1994 price per share of $9.75; minus the exercise price.
(2) See Note 7 to the Summary Compensation Table.
STOCK GRANT PLAN
On December 6, 1989, the Corporation adopted the Stock Grant Plan, pursuant
to which 500,000 shares of Common Stock were reserved for issuance to employees
of the Corporation, except that officers, directors and owners of more than 10%
of the Corporation's Common Stock are not eligible to receive stock grants. The
Stock Grant Plan is administered and interpreted by the Stock Grant Committee.
A stock grant under the Stock Grant Plan confers upon a recipient the right to
receive a specified number of shares of the
11
<PAGE>
Corporation's Common Stock provided that certain conditions established by the
Stock Grant Committee are satisfied. As of December 31, 1994, 338,900 shares
were available for grants to employees pursuant to the terms of the Stock Grant
Plan.
INDEMNITY AGREEMENTS
The Corporation has entered into Amended and Restated Indemnity Agreements
(the "Indemnity Agreements") with each of its directors and officers. The
Indemnity Agreements generally provide that the directors and officers are
entitled to indemnification to the fullest extent permitted by law against
liabilities arising from any claims made against them as a result of acts or
omissions alleged to have been committed while acting as directors or officers
of the Corporation or at the request of the Corporation as an officer or
director of a partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans and solely because of their
being directors or officers. Under the Indemnity Agreements, the Corporation is
not obligated to pay any fine, obligation or fee if such is prohibited by law.
In addition, the Corporation is not liable under the Indemnity Agreements in
connection with any claim made against a director or officer, if the director
or officer has insurance coverage for a specific claim or is otherwise
indemnified. Further, the Corporation has no liability for matters with respect
to which a director or officer has (i) obtained an illegal personal profit,
(ii) committed certain acts of dishonesty, or (iii) been required to make an
accounting of profits for the purchase and sale of securities under Section
16(b) of the Securities Exchange Act of 1934.
REPORT ON EXECUTIVE COMPENSATION
During 1994, the Audit Committee of the Board of Directors was authorized to
set the salaries and other compensation of each of Larry Addington, Robert
Addington and Bruce Addington. The Audit Committee was also authorized to set
the targets, goals and awards for the Corporation's Management Incentive
Program. Finally, the Audit Committee was authorized to establish the policies
and procedures with respect to compensation of the Corporation's personnel.
With respect to setting the base salary compensation of Messrs. Addington,
including Larry Addington as Chief Executive Officer, such compensation was
based upon the Audit Committee's general subjective sense of the compensation
of executive officers in the coal industry (although specific compensation
packages were not reviewed or considered), the extensive experience of each of
Messrs. Addington in the coal industry, and the desirability of continuity of
management for the Corporation. In increasing Messrs. Addington's base salaries
for 1993, the Audit Committee also considered that each of Messrs. Addington's
base salary for 1992 was the same as the salary established in the
Corporation's employment agreements dated January 1, 1987 with each of them.
During 1994, none of Messrs. Addington requested a modification of his base
salary, and the Audit Committee took no action with respect to such base
salaries. The base salary of Larry Addington was more than that of Robert
Addington and Bruce Addington to reflect his greater responsibility as Chief
Executive Officer of the Corporation.
The Corporation's interest in providing its executive officers with
incentive-based compensation has also been considered. In previous years, the
Audit Committee established specific goals for the Corporation's Management
Incentive Program. Each of Messrs. Addington and R. Douglas Striebel, the
Corporation's Chief Financial Officer, were entitled to receive bonuses under
the Management Incentive Program if the Corporation achieved certain target
performance levels in sales, operating profits and mining productivity as
established by the Audit Committee. With respect to the Management Incentive
Program, bonuses are awarded based on corporate performance and an individual's
performance is not considered in the determination of a bonus. During 1994, the
Audit Committee did not establish specific target performance levels following
the disposition of certain assets of the Corporation's coal mining operations
to a subsidiary of The Pittston Company in January 1994. However, in light of
the Audit Committee's previous policy to
12
<PAGE>
award bonuses under the Management Incentive Program on the basis of corporate
performance, with a long-standing policy of awarding no bonuses if the return
on stockholders' equity were less than 12.5% (a return the Corporation did not
achieve for 1994), the Audit Committee did not award any bonuses pursuant to
the Management Incentive Program for 1994.
With respect to the salaries and other compensation of the Corporation's
personnel (other than Messrs. Addington) during 1994, the Audit Committee
believed that Larry Addington as Chief Executive Officer was in the best
position to establish such compensation and acted upon his recommendations. In
establishing the salaries and other compensation of the Corporation's
personnel, it is the Audit Committee's understanding that Larry Addington
considered the executive's performance of his duties, the executive's
responsibilities and experience, and the historical compensation levels of the
Corporation. Such compensation was not based on specific measures of corporate
performance such as the Corporation's profitability or the market value of its
Common Stock and was not measured by specific quantitative criteria, but was
qualitatively assessed. During 1994, such compensation also included bonuses
awarded at the time of the disposition of certain assets to a subsidiary of The
Pittston Company in January 1994. These bonuses were awarded in connection with
compensating employees for extraordinary efforts expended in connection with
the consummation of this transaction.
The Company's Restated Stock Option Plan (the "Option Plan") is designed to
afford an incentive to certain employees and independent contractors to remain
in the employ of the Corporation and to aid the Corporation in attracting,
maintaining and developing capable personnel of a caliber required to insure
the Corporation's continued success. The Option Plan is administered and
interpreted by the Option Committee, comprised solely of Larry, Robert and
Bruce Addington during 1994. Messrs. Addington were not eligible to receive
options pursuant to the Option Plan. During 1994, the Option Committee issued
options for a total of 283,000 shares of Common Stock. Of these options, 40,000
options were issued to Kirby Taylor in connection with the arm's-length
negotiation and execution of his employment agreement to serve as the
Corporation's President. In determining to grant options to other employees in
1994, the employees to whom options would be granted, and the number of options
to be granted each such employee, the Option Committee considered the
employee's performance of his duties, the employee's responsibilities and
experience, the employee's base salary, and the number of options previously
granted to each such employee. The Option Committee did not accord a particular
weight to any one of these factors but made its determinations based on its
overall subjective sense of the best interests of the Corporation. The Option
Committee's determinations were not based on specific measures of corporate
performance.
This report is submitted by the Audit Committee with respect to all matters
involving executive compensation, except for those matters related to stock
options, and by the members of the Option Committee during 1994 with respect to
stock options.
Members of the Audit Committee Members of the Option Committee
Carl R. Whitehouse Larry Addington
Jack C. Fisher Robert Addington
Bruce Addington
13
<PAGE>
PERFORMANCE GRAPH
The following graph shows a five-year comparison of cumulative total returns
for the Corporation, the NASDAQ Stock Market and indices of peer companies
selected by the Corporation engaged in coal mining and waste management
operations.
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG ADDINGTON RESOURCES INC., NASDAQ MARKET INDEX, COAL PEER GROUP AND
WASTE MANAGEMENT PEER GROUP
<CAPTION>
Measurement Period ADDINGTON NASDAQ COAL WASTE MANAGEMENT
(Fiscal Year Covered) RESOURCES INC. MARKET INDEX PEER GROUP PEER GROUP
- ------------------- -------------- ------------ ---------- ----------------
<S> <C> <C> <C> <C>
Measurement Pt-
12/31/89 $100 $100 $100 $100
FYE 12/31/90 $ 65.67 $ 81.12 $ 96.29 $ 88.31
FYE 12/31/91 $ 50.75 $104.14 $112.32 $ 93.55
FYE 12/31/92 $ 89.55 $105.16 $ 97.17 $ 94.09
FYE 12/31/93 $113.43 $126.14 $ 87.34 $ 69.33
FYE 12/31/94 $ 58.21 $132.44 $ 72.95 $ 72.86
</TABLE>
The total cumulative return on investment (change in the year-end stock price
plus reinvested dividends) for each year for the Corporation, the NASDAQ Stock
Market and the peer groups assumes that the value of the investment in the
Corporation's Common Stock, the NASDAQ Stock Market and the peer groups was
$100 on December 31, 1989.
The above graph compares the performance of the Corporation with that of the
NASDAQ Stock Market and groups of peer companies with the investment weighted
by market capitalization. Companies in the coal mining operations peer group
are as follows: Ashland Coal Company, MAPCO, Inc., Nerco, Inc., The Pittston
Company, and Westmoreland Coal Company. On June 2, 1993, Nerco, Inc. merged
into a subsidiary of Kennecott Corp. On July 8, 1993, The Pittston Company
ceased trading its shares and commenced trading "target" shares of Pittston
Services representing its non-minerals businesses, and Pittston Minerals
representing its minerals business. The value for the coal peer group of $72.86
on December 31, 1994, is based on the exclusion of Nerco, Inc. as of June 2,
1993, inclusion of the Pittston Minerals target stock as of July 8, 1993, and
recapitalization of the peer group as of each of those dates. Companies in the
waste management operations peer group are as follows: Browning-Ferris
Industries, Inc., Eastern Environmental Services, Inc., Laidlaw Inc. (Class B),
and WMX Technologies, Inc.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Corporation has appointed the firm of Arthur
Andersen LLP to serve as independent accountants of the Corporation for the
year ending December 31, 1995, subject to ratification of this appointment by
the stockholders of the Corporation. Arthur Andersen LLP has served as
independent accountants of the Corporation for many years and is considered by
management of the Corporation to be well qualified.
14
<PAGE>
Representatives of Arthur Andersen LLP will be present at the Annual Meeting,
will have an opportunity to make a statement if they desire to do so, and will
be available to respond to appropriate questions.
The affirmative vote of a majority of the shares represented at the Annual
Meeting, in person or by proxy, is required to ratify the appointment of Arthur
Andersen LLP as the independent accountants for 1995. If the stockholders
should not ratify the appointment of Arthur Andersen LLP, the Board of
Directors will reconsider the appointment.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE CORPORATION RECOMMENDS A VOTE "FOR" THE
PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT
ACCOUNTANTS OF THE CORPORATION FOR 1995. PROPERLY EXECUTED PROXIES RECEIVED BY
THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY IN THEIR
PROXIES A CONTRARY CHOICE.
EXPENSES OF SOLICITATION
All expenses incurred in connection with the solicitation of proxies will be
borne by the Corporation. The Corporation will reimburse brokers, fiduciaries
and custodians for their costs in forwarding proxy materials to beneficial
owners of Common Stock held in their names. Solicitation may be undertaken by
mail, telephone and personal contact by Directors, officers and employees of
the Corporation without additional compensation.
STOCKHOLDERS' PROPOSALS FOR 1996 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 1996 Annual Meeting
of Stockholders must be received by the Corporation on or before May 28, 1996
to be eligible for inclusion in the Corporation's proxy statement and proxy
relating to that meeting.
OTHER INFORMATION
Management does not know of any matters other than those referred to in the
accompanying Notice of Annual Meeting of Stockholders which may properly come
before the meeting. As to any other matter or proposal that may properly come
before the meeting, it is intended that proxies solicited will be voted in
accordance with the discretion of the proxy holders.
The form of proxy and the proxy statement are being mailed and delivered to
stockholders by the authority of the Board of Directors.
Ashland, Kentucky
September 22, 1995
15
<PAGE>
ADDINGTON RESOURCES, INC.
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
ADDINGTON RESOURCES, INC. (THE "CORPORATION")
The undersigned hereby appoints Howard P. Berkowitz and James Grosfeld, or
either of them (with full power to act alone), as proxies, with the
Corporation's Chairman of the Board retaining the power of substitution should
either of them be unable to serve, to represent and to vote all of the stock
of the Corporation held of record or which the undersigned is otherwise
entitled to vote, at the close of business on August 21, 1995, at the 1995
Annual Meeting of Stockholders to be held at the offices of Schulte Roth &
Zabel, New York, New York, on Tuesday, October 17, 1995, at 10:00 a.m., local
time, and at any adjournments thereof, with all the powers the undersigned
would possess if personally present, as follows:
1.ELECTION OF DIRECTORS
[_] FOR all nominees listed below (except as marked to the contrary below)
[_] WITHHOLD AUTHORITY to vote for all nominees
listed below
Larry Addington, Stephen Addington, Howard P. Berkowitz, Harold
Blumenstein, Jack C. Fisher, James Grosfeld, and Richard Ravitch
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THE NOMINEE'S NAME ON THE LINE BELOW)
------------------------------------------------------------------------------
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT
ACCOUNTANTS OF THE CORPORATION TO SERVE FOR 1995
[_] FOR [_] AGAINST [_] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting
(Continued and to be Signed and Dated on reverse side)
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE VOTED AS
SPECIFIED AND IN ACCORDANCE WITH THE ACCOMPANYING PROXY STATEMENT. IF NO
INSTRUCTION IS INDICATED, THIS PROXY WILL BE VOTED "FOR" ALL OF THE NOMINEES
LISTED IN ITEM 1 AND "FOR" ITEM 2.
----------------------------------------------
Signature
----------------------------------------------
Additional signature, if held jointly
Dated______________ , 1995
---------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
---------------------------------------------
Please sign exactly as name appears at left.
When shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such. 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.
