SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported)
December 6, 1994
ASHLAND COAL, INC.
(Exact name or registrant as specified in its charter)
Delaware 1-9993 61-0880012
(State or other (Commission file number) (I.R.S.Employer
jurisdiction of Identification No.)
incorporation or
organization)
2205 Fifth Street Road, Huntington, West Virginia 25701
(Address of principal executive offices) (Zip Code)
P.O. Box 6300, Huntington, West Virginia 25771
(Mailing Address) (Zip Code)
Registrant's telephone number, including area code: (304) 526-3333
Item 1. Changes in Control of Registrant.
Ashland Oil, Inc., a Delaware corporation ("Ashland Oil"),
has reported it has entered into a Put and Call Agreement (the
"Agreement") with Saarbergwerke AG ("Saarberg") that gives
Ashland Oil an option (the "Call Option") to purchase 150 shares
of Ashland Coal, Inc. ("Ashland Coal") Class B Preferred Stock
(the "Class B Preferred") held by Saarberg, and gives Saarberg
the option (the "Put Option") to require Ashland Oil to purchase
the Class B Preferred held by Saarberg, in each case in February
1995. The effectiveness of the Agreement was conditioned upon
approval of the transaction by Saarberg's Supervisory Board.
Ashland Coal understands approval was obtained on December 6,
1994.
Upon exercise of the Call Option or the Put Option, the
purchase is subject to certain closing conditions under the
Agreement, including receipt of governmental approvals. In
addition, pursuant to a Restated Shareholders Agreement dated
December 12, 1991, as amended August 6, 1993 (the "Shareholders
Agreement") among Ashland Oil, Saarberg, Carboex International,
Inc. ("Carboex") and Ashland Coal, Carboex has a right of first
refusal to purchase about 20.6% of the Class B Preferred (31
shares). The Shareholders Agreement also requires Carboex's
consent to the Sale of Class B Preferred, which consent may not
be unreasonably withheld.
As of December 15, 1994, Ashland Oil reported it owned
7,071,827 shares of par value $.01 Ashland Coal Common Stock
("Common Stock"), which equates to about 38.6% of the voting
power of Ashland Coal in matters other than the election of
directors. Assuming the exercise of either the Call Option or
Put Option in February 1995, and the immediate conversion of the
150 shares of Class B Preferred into Common Stock, Ashland Oil
would own a total of 9,823,727 shares of Common Stock which would
constitute about 53.7% of the voting power of Ashland Coal in
matters other than the election of directors. Ashland Oil has
stated its intention to exercise the Call Option during the
February 1995 exercise period. The purchase price of the Class B
Preferred pursuant to the exercise of either the Call Option or
the Put Option is $110,076,000. Ashland Oil has stated that the
consideration for the purchase price will be provided from the
issuance of corporate debt.
Assuming Carboex does not exercise its right of first
refusal under the Shareholders Agreement, Ashland Oil's proposed
purchase of 150 shares of Class B Preferred pursuant to the
Agreement will permit Ashland Oil to elect a majority of the
members of Ashland Coal's Board of Directors and will result in
Ashland Oil obtaining majority voting power in Ashland Coal with
respect to matters that may be determined by holders of a
majority of Ashland Coal Common Stock. The Agreement provides
that upon the closing of Ashland Oil's purchase of the Class B
Preferred, the two directors elected by Saarberg to Ashland
Coal's Board of Directors will resign.
Ashland Coal currently has a ten-member Board of Directors,
and Ashland Oil's current holdings of Common Stock permit it to
elect four members of the Board of Directors. Under Ashland
Coal's certificate of incorporation, the holders of Class B
Preferred and Class C Preferred Stock, voting together as a class
and using cumulative voting, have the right to elect one director
to Ashland Coal's Board of Directors for every 63 shares of Class
B Preferred and Class C Preferred Stock held by such holders,
provided that the maximum number of directors which can be
elected by holders of the Class B Preferred and C Preferred Stock
is three. Assuming Carboex does not exercise its right of first
refusal under the Shareholders Agreement, upon conversion of the
Class B Preferred, the number of members of the Board of
Directors that could be elected by holders of Common Stock would
automatically increase from seven to nine members and the holders
of Common Stock obtained in such conversion would vote with other
Common Stockholders in the election of directors. Ashland Oil has
stated it does not currently intend to convert any Class B
Preferred that it acquires into Common Stock. Nevertheless, if
Carboex does not exercise its right of first refusal, by voting
its Common Stock holdings and the Class B Preferred, Ashland Oil
could elect six members of the current ten-member Board of
Directors.
In addition, in matters other than the election of
directors, under Ashland Coal's certificate of incorporation the
holders of the Class B Preferred and Class C Preferred Stock vote
with holders of Common Stock as if the Preferred Stock had been
converted into Common Stock. Each share of Class B Preferred
Stock is presently convertible into 18,346 shares of Common
Stock. This conversion rate increases to 19,596 shares of Common
Stock on August 18,1998, and to 20,846 shares of Common Stock on
August 18, 2003. As noted above, at the current conversion rate
the acquisition of the Class B Preferred, coupled with Ashland
Oil's current holdings of Common Stock, would give Ashland Oil
about 53.7% of the voting power in matters other than the
election of directors. This gives Ashland Oil the power to
determine the outcome of such matters to the extent determinable
by majority vote.
Except for the Agreement, as of December 15, 1994, Ashland
Oil reported it has no current plans or proposals which relate to
or would result in (a) the acquisition by any person of
additional securities of Ashland Coal, except securities acquired
through periodic reinvestment of dividends under the Ashland Coal
Dividend Reinvestment and Stock Purchase Plan, or the disposition
of securities of Ashland Coal; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation
involving Ashland Coal or any of its subsidiaries; (c) a sale or
transfer of a material amount of assets of Ashland Coal or any of
its subsidiaries; (d) any change in the present Board of
Directors or management of Ashland Coal other than as described
above; (e) any material change in the present capitalization or
dividend policy of Ashland Coal; (f) any other material change in
Ashland Coal's business or corporate structure; (g) changes in
Ashland Coal's charter, by-laws or instruments corresponding
thereto or other actions which may impede the acquisition of
control of Ashland Coal by any person; (h) the delisting of a
class of securities of Ashland Coal; (i) a class of equity
securities of Ashland Coal becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or (j) any action similar to any of those
enumerated above.
Item 5. Other Events
The labor forces at Mingo Logan Coal Company and its
Mountaineer Mining Company and Bearco divisions ("Mingo Logan")
are not currently unionized. However, in a recent National Labor
Relations Board ("NLRB") proceeding, Mingo Logan and certain
other employers with whom Mingo Logan contracts for construction
and mining services were determined to be joint employers by the
Acting Regional Director for NLRB Region 9. As a consequence of
this ruling, the bargaining unit at Mingo Logan's Mountaineer
Mine for purposes of collective bargaining has been determined to
be comprised of employees of Mingo Logan and its contractors and
these employees will vote together in the vote on the question of
whether or not to be represented by the United Mine Workers of
America ("UMWA"). This vote is required by the NLRB decision. A
date for the election has not yet been set. Mingo Logan has
until January 3, 1995, to appeal to the full NLRB the decision of
the Acting Regional Director. It is Mingo Logan's intention to
appeal the decision and Mingo Logan expects to prevail in its
appeal.
If an election is held, Mingo Logan believes that the
employees of Mingo Logan and its contractors will reject the UMWA
as their representative for collective bargaining purposes. If
Mingo Logan is incorrect in its belief and the UMWA is chosen by
such employees to be their representative for collective
bargaining purposes, Mingo Logan and such contractors shall be
obligated to bargain with the UMWA on the terms of employment.
Item 7. Financial Statements and Exhibits
2.1 Put and Call Agreement between Ashland Oil, Inc. and
Saarbergwerke AG (filed as Exhibit A to Ashland Oil's Schedule
13D filed with the SEC on December 15, 1994, and incorporated
herein by reference).
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ASHLAND COAL, INC.
(Registrant)
By: /s/ Roy F. Layman
Administrative Vice
President and Secretary
Date: December 21, 1994
