<PAGE>
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
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.142-12
ASHLAND COAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
/ / $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:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
ASHLAND COAL, INC.
P.O. BOX 6300 - HUNTINGTON, WV 25771 - (304) 526-3333
March 31, 1994
Dear Stockholder:
You are cordially invited by me and the other members of the Board of
Directors of Ashland Coal, Inc. to attend the Annual Meeting of Stockholders to
be held in Huntington, West Virginia, on Friday, April 29, 1994 at 10:30 a.m.
The formal business to be conducted is the election of Directors and
ratification of Ernst & Young as independent auditors of the company. After
completion of the formal business, I will review Ashland Coal's 1993 results of
operations and the outlook for the future. Officers and directors will be
available to answer any questions you may have about the company.
We hope you can attend the meeting in person. If you plan to attend in
person, please mark the attendance block shown on the proxy card.
WHETHER OR NOT YOU PLAN TO ATTEND, I URGE YOU TO SIGN, DATE AND RETURN THE
ENCLOSED PROXY AS SOON AS POSSIBLE IN THE POSTAGE-PAID ENVELOPE WHICH IS
PROVIDED SO THAT YOUR SHARES CAN BE REPRESENTED AT THE MEETING. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE BOARD NOMINEES AND FOR
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG AS INDEPENDENT AUDITORS FOR
1994.
I hope you will review the enclosed Annual Report. I look forward to seeing
you in Huntington.
Sincerely,
WILLIAM C. PAYNE
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF
EXECUTIVE OFFICER
/dk
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF
ASHLAND COAL, INC.
TO BE HELD APRIL 29, 1994
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Ashland
Coal, Inc., a Delaware corporation ("Ashland Coal"), will be held on Friday,
April 29, 1994, at 10:30 A.M., local time, at the Ashland Coal Headquarters
Building, 2205 Fifth Street Road, Huntington, West Virginia, and at any
adjournment thereof, to take action upon the following proposals as well as such
other business as may properly come before the Annual Meeting or any adjournment
thereof:
(1) to elect ten directors to the Board of Directors, three of whom
shall be elected by holders of outstanding shares of Preferred Stock and
seven of whom shall be elected by holders of outstanding shares of Common
Stock, and
(2) to ratify the appointment of Ernst & Young as independent auditors
for 1994.
The Board of Directors has fixed the close of business on March 22, 1994, as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting or any adjournment thereof.
In order that your stock may be represented at the Annual Meeting, please
date and sign the enclosed form of proxy and return it to the undersigned. If
you attend the Annual Meeting and give written notice to Ashland Coal's
Secretary prior to the voting of the proxy, you may vote in person even though
you have previously sent in your form of proxy.
By Order of the Board of Directors,
ROY F. LAYMAN
ADMINISTRATIVE VICE PRESIDENT
AND SECRETARY
Huntington, West Virginia
March 31, 1994
<PAGE>
ASHLAND COAL, INC.
2205 FIFTH STREET ROAD
HUNTINGTON, WEST VIRGINIA 25701
(304) 526-3333
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
APRIL 29, 1994
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Ashland Coal, Inc. ("Ashland Coal") of proxies to be voted
at the Annual Meeting of Stockholders to be held on Friday, April 29, 1994, at
10:30 A.M., local time, at the Ashland Coal Headquarters Building, 2205 Fifth
Street Road, Huntington, West Virginia, and at any adjournment thereof, for the
purposes set forth in the accompanying Notice. This Proxy Statement and the
accompanying form of proxy will be mailed to stockholders commencing on or about
March 31, 1994. Ashland Coal's mailing address is P. O. Box 6300, Huntington,
West Virginia 25771. An annual report including financial statements for the
year ended December 31, 1993, is enclosed with this Proxy Statement.
Only the holders of record of Ashland Coal's Common Stock, convertible Class
B Preferred Stock, and convertible Class C Preferred Stock at the close of
business on March 22, 1994, will be entitled to vote at the Annual Meeting. At
that date there were 13,693,917 shares of Common Stock, 150 shares of Class B
Preferred Stock and 100 shares of Class C Preferred Stock issued and
outstanding.
With respect to the election of directors, the holders of the outstanding
shares of Class B and Class C Preferred Stock, voting together as a class, have
the right to elect one director for every 63 shares of Class B or Class C
Preferred Stock held by them. The maximum number of directors to be elected by
the holders of Class B and Class C Preferred Stock is three. Holders of Class B
and Class C Preferred Stock are entitled to one vote for each share of Preferred
Stock in the election of directors. The remaining seven directors are elected by
the holders of the outstanding shares of Common Stock, voting as a single class,
without the vote of the holders of the Class B and Class C Preferred Stock. The
holders of outstanding shares of Common Stock are entitled to one vote for each
share held by them on the record date with respect to the election of directors.
Cumulative voting applies in the election of the three directors to be
elected by the holders of outstanding shares of Preferred Stock and the seven
directors to be elected by holders of outstanding shares of Common Stock.
Cumulative voting means that a stockholder may multiply the number of votes to
which such stockholder is entitled by virtue of his share ownership by the
number of directors to be elected by such stockholder and cast this total number
of votes for any one
<PAGE>
nominee, or may distribute the total number of votes, in any proportion, among
as many nominees as the stockholder desires, up to the number of directors to be
elected.
Cumulative voting does not apply with respect to the ratification of the
appointment of auditors or any other matter that may properly come before the
meeting (other than the election of directors), and in such cases the holders of
outstanding shares of Common Stock and Class B and Class C Preferred Stock shall
vote together as one class and each holder of shares of Class B and Class C
Preferred Stock shall be entitled to the number of votes that such holder would
have if such holder had converted its Preferred Stock into Common Stock
immediately prior to the record date (SEE SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT). The holders of outstanding shares of Common
Stock are entitled to one vote for each share held by them on the record date
with respect to the ratification of auditors and any other such matters that may
properly come before the meeting.
The holders of a majority of the outstanding shares of stock, determined as
if each holder of shares of Class B and Class C Preferred Stock had converted
said Preferred Stock into Common Stock immediately prior to the record date for
such meeting, present in person or by proxy, shall constitute a quorum.
Abstentions and broker non-votes count in the determination of a quorum.
ITEM 1. ELECTION OF DIRECTORS
(Proposal 1 on form of proxy)
Under the Amended By-Laws of Ashland Coal, until otherwise fixed by the
Board of Directors, the number of directors constituting the whole Board shall
be ten. The Board has not determined otherwise. Each director holds office until
his successor is elected and qualified. All directors are seeking reelection at
the 1994 Annual Meeting. These directors are Messrs. Robert A. Charpie, Paul W.
Chellgren, Werner Externbrink, Thomas L. Feazell, Juan Antonio Ferrando, Robert
L. Hintz, William C. Payne, J. Marvin Quin, Robert E. Yancey, Jr. and Michael G.
Ziesler. All of the nominees have consented to serve if elected and all were
elected directors at last year's Annual Meeting of Stockholders. Mr. Hubert
Schaefer, a member of the Board of Directors since 1985, retired from the Board
on February 26, 1993, and Mr. Externbrink was elected by the holders of the
Class B and Class C Preferred Stock to fill the vacancy created by his
resignation and reelected at the 1993 Annual Meeting. Mr. Robert B. Claytor, a
member of the Board since 1988, intended to retire from the Board on April 23,
1993, following the meeting of the Board to be held on that date, but passed
away before that date.
With respect to the directors to be elected by the holders of outstanding
shares of Preferred Stock, the three persons receiving the greatest number of
votes cast by holders of outstanding shares of Preferred Stock, present or
represented at the Annual Meeting, shall be elected as directors. With respect
to the directors to
2
<PAGE>
be elected by the holders of outstanding shares of Common Stock, the seven
persons receiving the greatest number of votes cast by the holders of the
outstanding shares of Common Stock, present or represented at the Annual
Meeting, shall be elected as directors. Holders of Preferred Stock and holders
of Common Stock voting at the Annual Meeting may not vote for more than the
respective number of nominees listed in the Proxy Statement to be elected by the
holders of outstanding shares of Preferred Stock and Common Stock, respectively.
Abstentions and broker non-votes are not counted as votes cast either for or
against a nominee for election as a director.
It is the intention of the persons named in the enclosed form of proxy
(Messrs. Paul W. Chellgren and William C. Payne), unless otherwise instructed in
any form of proxy, to vote FOR the election of the three nominees described
herein to be elected by holders of outstanding shares of Preferred Stock and FOR
the seven nominees to be elected by holders of outstanding shares of Common
Stock. Such proxy holders also may vote such shares cumulatively for less than
the entire number of nominees if any situation arises which, in the opinion of
the proxy holders, makes such action necessary or desirable. Ashland Coal has no
reason to believe that any of the nominees will not be available for election as
directors. Ashland Coal is soliciting and the proxy holders are being granted
discretionary authority to cumulate and to vote the shares of stock as they
determine. If stockholders do not wish to confer authority to cumulate their
votes to Messrs. Chellgren and Payne as provided in the proxy, stockholders may
exercise their right to cumulate votes in the election of directors by attending
the meeting and voting in person.
3
<PAGE>
NOMINEES FOR DIRECTOR
The following information is provided regarding each nominee for election as
a director by holders of outstanding shares of Preferred Stock:
<TABLE>
<S> <C>
[PHOTO] WERNER EXTERNBRINK, member of the Board of Managing
Directors (Vorstand) of Saarbergwerke A.G. (an
international coal mining, coal trading and electric
generation company owned by the Federal Republic of
Germany and the State of Saarland) since August
1988; Coal Mine Director for Bergbau AG Lippe from
1986 to 1988. A Director of Ashland Coal since
February 1993. Age 55.
</TABLE>
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<TABLE>
<S> <C>
[PHOTO] JUAN ANTONIO FERRANDO, Director of Carboex Inter-
national, Ltd.; Senior Vice President, Business
Development, Sociedad Espaola de Carbon Exterior,
S.A. (a coal supply firm controlled by a Spanish
state-owned corporation, and the owner of Carboex)
since 1986; during the past five years, has served
in a variety of managerial positions in Desarrollo
de Operaciones Mineras, S.A. (a coal mining company
with operations in Spain and other countries); a
Director of Ashland Coal since December 1988.
Director, Granitos Espanoles, S.A. (a Spanish
company which produces and sells granite). Age 52.
</TABLE>
- ---------------------------------------------------------------------
<TABLE>
<S> <C>
[PHOTO] MICHAEL G. ZIESLER, member of the Board of Managing
Directors (Vorstand) of Saarbergwerke A.G. (an
international coal mining, coal trading and electric
generation company owned by the Federal Republic of
Germany and the State of Saarland) since October
1991; member of the management group
(Geschaftsfuhrung) of Rheinbraun Verkauf GmbH for at
least five years prior to 1990. A Director of
Ashland Coal since April 1992. Age 50.
</TABLE>
4
<PAGE>
The following information is provided regarding each nominee for election as
a director by holders of outstanding shares of Common Stock:
<TABLE>
<S> <C>
[PHOTO] ROBERT A. CHARPIE, Chairman of Ampersand Ventures,
Inc. (a venture capital company); retired in
September 1988 as Chairman of Cabot Corporation;
Chairman and Chief Executive Officer of Cabot from
1986 until February 1988; a Director of Ashland Coal
since September 1988. Director, Alliant Techsystems,
Inc., Cabot Corporation, Champion International
Corporation, Ceramics Process Systems Corporation,
Daniel Products Company, Inc. and Federated Depart-
ment Stores, Inc. Age 68.
</TABLE>
- ---------------------------------------------------------------------
<TABLE>
<S> <C>
[PHOTO] PAUL W. CHELLGREN, President and Chief Operating Of-
ficer of Ashland Oil, Inc. since 1992; Senior Vice
President and Chief Financial Officer of Ashland Oil
from 1988 to 1992; Senior Vice President and Group
Operating Officer of Ashland Oil for at least five
years prior to 1988; Chairman of the Board of
Ashland Coal from 1982 to 1992; a Director of
Ashland Coal since 1981. Director, Ashland Oil, Inc.
Age 51.
</TABLE>
- ---------------------------------------------------------------------
<TABLE>
<S> <C>
[PHOTO] THOMAS L. FEAZELL, Senior Vice President, General
Counsel and Secretary of Ashland Oil, Inc. since
1992; Administrative Vice President and General
Counsel of Ashland Oil, Inc. from 1988 and 1981,
respectively, to 1992; a Director of Ashland Coal
since 1981. Director, National City Bank of Ashland,
Kentucky. Age 57.
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
[PHOTO] ROBERT L. HINTZ, Chairman of the Board of R. L.
Hintz & Associates (a management consulting firm)
since 1989; retired in 1988 as Executive Vice
President of CSX Corporation; prior to 1988 held
various positions with CSX Corporation, including
Chief Executive Officer of several of its major
subsidiaries. A Director of Ashland Coal since April
1993. Director, Reynolds Metals Corporation, Scott &
Stringfellow, Inc. and Chesapeake Corporation. Age
63.
</TABLE>
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<TABLE>
<S> <C>
[PHOTO] WILLIAM C. PAYNE, Chairman of the Board of Ashland
Coal since 1992; President and Chief Executive
Officer and a Director of Ashland Coal since
December 1987; Senior Vice President, General
Counsel and Secretary of Ashland Coal for at least
the five years prior to 1987. Age 61.
</TABLE>
- ---------------------------------------------------------------------
<TABLE>
<S> <C>
[PHOTO] J. MARVIN QUIN, Senior Vice President and Chief
Financial Officer of Ashland Oil, Inc. since January
1992; Administrative Vice President and Treasurer of
Ashland Oil from 1987 to 1992; a Director of Ashland
Coal since 1992. Director, Kentucky Electric Steel,
Inc. Age 46.
</TABLE>
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<TABLE>
<S> <C>
[PHOTO] ROBERT E. YANCEY, JR., Senior Vice President and
Group Operating Officer of Ashland Oil, Inc. and
President of Ashland Petroleum Company, a division
of Ashland Oil, since 1986; a Director of Ashland
Coal since December 1987. Age 48.
</TABLE>
Except as otherwise indicated, the nominees have held the principal
occupations described above during the past five years. Ashland Oil, Inc. owns
approximately 38 per cent of the outstanding shares of Common Stock of Ashland
Coal (SEE SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT).
6
<PAGE>
INFORMATION CONCERNING THE BOARD OF DIRECTORS
MEETINGS AND COMMITTEES
During the year ended December 31, 1993, six meetings of the Board of
Directors were held. The standing committees of the Board of Directors are the
Audit Committee, Executive Committee, Finance Committee, Key Employee Stock
Administration Committee, Nominating Committee and Personnel and Compensation
Committee. In addition, a Technical Committee, which includes persons who are
not Directors, acts in an advisory capacity to the Board. The Audit Committee
met three times, the Personnel and Compensation Committee met five times, the
Key Employee Stock Administration Committee met once, and the Finance Committee
met five times. The Executive Committee did not meet during 1993. Although the
Nominating Committee had no formal meetings during 1993, the members of the
Nominating Committee consulted with each other by telephone and recommended to
the Board a nominee to fill the vacancy to be created by the expected retirement
of Mr. Claytor, who, as previously noted, passed away prior to his intended
retirement date from the Board. A special committee, consisting of the members
of the Executive Committee and the Chairman of the Finance Committee, created to
consider certain financing transactions acted once by written unanimous consent.
Another special committee consisting of Messrs. Charpie, Ferrando, Hintz and
Ziesler created by the Board to consider and make a recommendation with respect
to a proposed combination of Ashland Coal and Arch Mineral Corporation (a
company in which Ashland Oil, Inc. owns a significant interest) met four times.
The Technical Committee met two times. Each nominee attended more than 75
percent of the total meetings of the Board and the Committees on which he
served. Overall attendance at Board and Committee meetings during 1993 was 96
percent.
The Audit Committee is composed of Mr. Hintz (Chairman), and Messrs.
Charpie, Ferrando and Quin. Its duties include recommending Ashland Coal's
independent auditors, reviewing the scope and results of external and internal
audits, reviewing internal accounting controls, reviewing significant changes in
accounting principles, approving in advance all substantial services which are
not audit-related to be provided by the independent auditors, obtaining reports
on legal compliance and reviewing audit fees and services provided by
independent auditors.
The Executive Committee is composed of Mr. Payne (Chairman), and Messrs.
Chellgren and Ferrando. The Executive Committee, to the extent permitted by law
and Ashland Coal's Amended By-laws and Restated Certificate of Incorporation, as
amended, has and may exercise such powers and authority as the Board of
Directors shall from time to time determine.
7
<PAGE>
The Finance Committee is composed of Mr. Charpie (Chairman), and Messrs.
Chellgren, Ferrando, Payne, Quin and Ziesler. Its duties include, in addition to
such responsibilities as may be delegated to it from time to time by the Board
of Directors, the review of Ashland Coal's current fiscal policies, financing
and capital structure, and current and contemplated financial requirements, as
well as evaluation of, and recommendations respecting, significant financial
matters. The recommendations of the Finance Committee are subject to the review
and approval of the Board of Directors.
The Key Employee Stock Administration Committee is composed of Mr. Charpie
(Chairman), and Messrs. Hintz and Ziesler. Its duties include the responsibility
for approving awards and participation under Ashland Coal's 1988 Stock Incentive
Plan for Key Employees.
The Nominating Committee is composed of Mr. Chellgren (Chairman), and
Messrs. Charpie and Ziesler. Its duties include the responsibility of
recommending nominees for membership to the Board of Directors.
The Personnel and Compensation Committee is composed of Mr. Feazell
(Chairman), and Messrs. Ziesler, Charpie and Yancey. Its duties include the
approval of salaries of all principal officers and employees of Ashland Coal and
its subsidiaries above specified dollar levels and all awards and participation
under Ashland Coal's incentive plans, except for awards and participation under
Ashland Coal's 1988 Stock Incentive Plan for Key Employees (which is
administered by the Key Employee Stock Administration Committee). The Personnel
and Compensation Committee also makes recommendations with respect to
compensation policies, position evaluations, transfers, promotions, and
terminations of senior executives. In addition, it administers various Ashland
Coal employee compensation plans and various benefit plans, such as retirement
and saving plans, including contribution levels, determination of investment
guidelines, selection of investment managers and the review of their
performances.
During 1993, the Technical Committee was composed of Mr. Schaefer until his
retirement from the Board and two members who are not Directors, Mr. Michael F.
Moran, Vice President of Ashland Coal, and Mr. Jose Fernandez Olano, Technical
Director of Sociedad Espanola de Carbon Exterior, S.A. Following Mr. Schaefer's
resignation from the Board, Mr. Harald Jurecka, who is a Bergwerksdirektor
(general manager of central mine services department) with Saarbergwerke A.G.,
was appointed as his replacement on the Committee. The Technical Committee
serves in an advisory capacity to the Board on significant projects,
investments, acquisitions and other matters requiring action by the Board. This
committee cannot exercise any of the powers of the Board of Directors.
8
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information as of February 28, 1994,
unless otherwise noted, concerning ownership of Ashland Coal's outstanding Class
B Preferred Stock, outstanding Class C Preferred Stock, Common Stock into which
Class B Preferred Stock and Class C Preferred Stock may be converted
(hereinafter referred to as "Equivalents") and outstanding Common Stock. Except
for the Equivalents and Common Stock which may be acquired by means of dividend
reinvestments under the Ashland Coal Dividend Reinvestment and Stock Purchase
Plan in respect of dividends declared to holders of record on a record date
after February 28, 1994, the listed persons have no other right to acquire
beneficial ownership of Common Stock of Ashland Coal exercisable within 60 days
after February 28, 1994. Common Stock and Equivalents Beneficially Owned and
Percentage of Common Stock and Equivalents are calculated assuming full
conversion of the Class B and the Class C Preferred Stock at the current
conversion rate. If the Equivalents are excluded from the computation of
Percentage of Common Stock and Equivalents, Ashland Oil, Inc. (Ashland Oil) owns
approximately 51 per cent of the Common Stock. Each stockholder has sole voting
and dispositive power with respect to the stock listed next to its or his name
unless otherwise noted.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
COMMON STOCK
PREFERRED STOCK AND EQUIVALENTS PERCENTAGE OF
BENEFICIALLY BENEFICIALLY COMMON STOCK
NAME AND ADDRESS OWNED OWNED AND EQUIVALENTS
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Ashland Oil, Inc.(1) 0 6,998,129 38%
P. O. Box 391
Ashland, Kentucky 41114
Saarbergwerke A.G.(2) 150(Class B) 2,751,900 (3) 15%
P. O. Box 1030
D6600 Saarbruecken
Federal Republic of Germany
Carboex International, Ltd.(4) 100(Class C) 1,834,600 (5) 10%
Bolan House
P. O. Box N-3010
Nassau, Bahamas
Dalton, Grenier, Hartman, Maher & Co. 0 737,500 4%
630 Fifth Ave., Suite 3425
New York, New York 10111
Robert A. Charpie 0 10,000 *
Paul W. Chellgren(1) 0 5,072 (6) *
Werner Externbrink(2) 0 0 0%
Thomas L. Feazell(1) 0 404 *
Juan Antonio Ferrando(4) 0 0 0%
Robert L. Hintz 0 0 0%
William C. Payne 0 76,000 (7) *
J. Marvin Quin(1) 0 500 *
Robert E. Yancey, Jr.(1) 0 1,000 *
Michael G. Ziesler(2) 0 0 0%
Kenneth G. Woodring 0 39,089 (8) *
C. Henry Besten, Jr. 0 27,888 (9) *
Marc R. Solochek 0 25,149 (10) *
Roy F. Layman 0 27,319 (11) *
All Executive Officers and Directors as 0 212,421 (12) 1%
a group (14 persons)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
<TABLE>
<S> <C> <C> <C>
<FN>
(1) Messrs. Chellgren, Feazell, Quin and Yancey, directors of Ashland Coal,
are executive officers of Ashland Oil, and to the extent they may be
deemed to be control persons of Ashland Oil, they may be deemed to be
beneficial owners of shares owned by Ashland Oil. Each of Messrs.
Chellgren, Feazell, Quin and Yancey disclaims beneficial ownership of
such stock.
(2) Mr. Ziesler and Mr. Externbrink, directors of Ashland Coal, are
executive officers of Saarbergwerke A.G. and to the extent they may be
deemed to be control persons of Saarbergwerke A.G., they may be deemed
to be beneficial owners of shares owned by Saarbergwerke A.G. Each of
Messrs. Ziesler and Externbrink disclaims beneficial ownership of such
shares.
(3) The Common Stock equivalent of 150 shares of Class B Preferred Stock
currently convertible at the rate of 18,346 shares for each share of
Class B Preferred Stock. Saarbergwerke A.G. is the only holder of
Ashland Coal's Class B Preferred Stock.
(4) Mr. Ferrando, a director of Ashland Coal, is a director of Carboex
International, Ltd., and to the extent he may be deemed to be a control
person of Carboex, he may be deemed to be a beneficial owner of shares
owned by Carboex. Mr. Ferrando disclaims beneficial ownership of such
shares.
(5) The Common Stock equivalent of 100 shares of Class C Preferred Stock
currently convertible at the rate of 18,346 shares for each share of
Class C Preferred Stock. Carboex International, Ltd. is the only holder
of Ashland Coal's Class C Preferred Stock.
(6) Includes 1,014 shares owned by members of Mr. Chellgren's family for
which he disclaims beneficial ownership.
(7) Includes 72,000 shares held subject to currently exercisable stock
options.
(8) Includes 36,089 shares held subject to currently exercisable stock
options.
(9) Includes 3,678 shares, as of December 31, 1993, held by Mr. Besten under
Ashland Coal's Employee Thrift Plan, which provides participants with
voting and investment power with respect to such shares, and 23,000
shares held subject to currently exercisable stock options.
(10) Includes 2,820 shares, as of December 31, 1993, held by Mr. Solochek
under Ashland Coal's Employee Thrift Plan, which provides participants
with voting and investment power with respect to such shares, and
22,250 shares held subject to currently exercisable stock options.
(11) Includes 51 shares owned by members of Mr. Layman's family for which
Mr. Layman disclaims beneficial ownership, 518 shares, as of December
31, 1993, held by Mr. Layman under Ashland Coal's Employee Thrift Plan,
which provides participants with voting and investment power with
respect to such shares, and 26,750 shares held subject to currently
exercisable stock options.
</TABLE>
10
<PAGE>
<TABLE>
<S> <C> <C> <C>
(12) Includes 1,065 shares owned by family members of persons in the group
for which such persons disclaim beneficial ownership, 7,016 shares, as
of December 31, 1993, held by Executive Officers under Ashland Coal's
Employee Thrift Plan, which provides participants with voting and
investment power with respect to such shares, and 180,089 shares held
subject to currently exercisable stock options.
* Represents less than 1 percent of the total number of shares of Common
Stock and Equivalents outstanding.
</TABLE>
PUT AGREEMENT
As part of the 1988 restructuring of Ashland Coal, Ashland Coal and Carboex
International, Ltd. (Carboex) entered into a Put Agreement under which Carboex
was granted the right to require Ashland Coal to purchase Carboex's 100 shares
of Class C Preferred Stock. Carboex did not exercise its right under the Put
Agreement, and all rights thereunder have expired.
RESTATED SHAREHOLDERS AGREEMENT
Ashland Oil, Saarbergwerke A.G. (Saarberg) and Carboex (together, Principal
Shareholders) and Ashland Coal are parties to a Restated Shareholders Agreement
(Shareholders Agreement) imposing certain restrictions on the disposition of
Ashland Coal capital stock held by them. The Shareholders Agreement also binds
transferees of the Principal Shareholders and applies to all shares of capital
stock of Ashland Coal, including any shares of Common Stock into which the Class
A, Class B and Class C Preferred Stock may be converted. The Shareholders
Agreement also restricts Ashland Coal's business to coal mining, processing and
marketing and related business activities.
In August 1993, the Shareholders Agreement was amended by the parties
thereto to change the circumstances in which the Principal Shareholders can
dispose of their shares. Before such amendment, the Shareholders Agreement
required in every case that each of the Principal Shareholders offer its shares
of capital stock to the others before disposing of such stock to nonaffiliates
and that consent of all Principal Shareholders be obtained prior to any
disposition to nonaffiliates. Under such amendment, Principal Shareholders may
dispose of their shares without consent of the other Principal Shareholders in
an underwritten public offering; with certain limits, in resales exempt from
registration under the Securities Act of 1933 (the "Act") under Rule 144
thereof; or to buyers who with their affiliates would own fewer than 500,000
common shares after the disposition. The amendment also added an exception to
the general prohibition against a Principal Shareholder's encumbrance of its
Ashland Coal stock, changed the valuation provisions applicable to capital stock
subject to the exercise of rights of first refusal under the Shareholders
Agreement and made certain other technical changes to conform the Shareholders
Agreement to the foregoing substantive amendments.
11
<PAGE>
REGISTRATION RIGHTS AGREEMENT
In August 1993, Ashland Coal and the Principal Shareholders entered into a
Registration Rights Agreement, effective on July 1, 1994, pursuant to which
Ashland Coal granted to each of the Principal Shareholders "demand" and
"piggyback-on-demand" registration rights requiring Ashland Coal to register
common stock held by the Principal Shareholders under the Securities Act of 1933
for sale to the public, as well as certain "incidental" registration rights
entitling the Principal Shareholders to register common stock (subject to
limitations on the number registered) in offerings by Ashland Coal or other
holders of registration rights.
12
<PAGE>
PERSONNEL AND COMPENSATION COMMITTEE
AND
KEY EMPLOYEE STOCK ADMINISTRATION COMMITTEE
REPORT ON
EXECUTIVE COMPENSATION FOR 1993
GENERAL
The Personnel and Compensation Committee (P&C Committee) is composed
entirely of outside directors and has the responsibility, among others, for
approving Ashland Coal's executive compensation program, except for the grant of
stock options. The Key Employee Stock Administration Committee (KESA Committee)
which is also composed entirely of outside directors, is responsible for
approving grants of stock options under Ashland Coal's 1988 Stock Incentive Plan
for Key Employees. The members of these committees are free from interlocking or
other relationships that might be considered a conflict of interest.
The compensation of Ashland Coal's executives is reviewed and approved
annually. In 1993, Ashland Coal retained the Human Resource Advisory Group of
Coopers & Lybrand to advise the P&C Committee on the executive compensation
program and the KESA Committee on stock awards to key executives.
COMPENSATION PRINCIPLES
The fundamental objectives of Ashland Coal's compensation program are to
attract, retain and motivate key executives to enhance long-term profitability
and stockholder value. The compensation program:
-- provides for a base level of compensation that is competitive with other
similarly sized publicly traded industrial companies, particularly those
in the coal mining industry and compensates key executives based on
their level of responsibility;
-- links executives' compensation to the operating and financial
performance of Ashland Coal by making significant elements of their
compensation sensitive to the performance of the company;
-- rewards the executives for short and long-term enhancement of
shareholder value.
Presently the executive compensation program consists of four principal
components:
- annual salary
- annual incentive compensation
- medium-term incentive compensation
- stock options
13
<PAGE>
ANNUAL SALARY
Annual salaries for executive officers other than the President and Chief
Executive Officer (CEO) are determined by the P&C Committee's independent
consideration of the executive's performance of his duties (as reported by the
CEO), responsibilities and experience; the historical compensation levels of
Ashland Coal; and a consultant's report of the median range of the salaries for
similarly situated executives as derived from surveys of salaries for executives
in the mining and coal industries and other industrial companies, including
anticipated estimated salary increases given or to be given in such industries
in the current year (such factors being collectively referred to as Salary
Factors). The annual salary is not based on specific measures of corporate
performance, but, notwithstanding the Salary Factors, annual salaries could be
frozen, reduced, or increased by a smaller increment, in the P & C Committee's
discretion, as a result of poor corporate performance. Individual performance of
an officer is not measured by specific quantitative criteria, but is
qualitatively assessed. The CEO's compensation, including his annual salary, are
discussed later in this report.
Each February, the determination of annual salaries begins with the CEO's
evaluation of each executive officer's performance of his duties for the
preceding year and a comparison of the executive's salary with salaries of
similarly situated executives as reported in compensation surveys conducted by
entities not associated with Ashland Coal and a compensation report by its
compensation consultant. The companies included in these compensation surveys
are selected by such unrelated entities, and the total number of companies
surveyed is larger than the peer group of issuers selected by Ashland Coal for
comparison in the Cumulative Total Return graph included later in this Proxy
Statement. The CEO then makes recommendations to the P&C Committee which may
approve his recommendations or set salaries at a level different than the CEO's
recommendations.
The P&C Committee reviews the CEO's recommendations with the CEO and
receives the CEO's justification and support for them. The P&C Committee does
not give a specified weight to the individual Salary Factors. The individual
performance of any executive officer is measured by the extent to which the
individual discharges his or her duties. With respect to 1993 salary
recommendations, the P&C Committee followed Mr. Payne's recommendations. The
salaries of the Ashland Coal executives as determined by the P&C Committee are
at about the median level of salaries indicated by such surveys.
ANNUAL INCENTIVE COMPENSATION
This component of the executive compensation program provides short-term
incentives under the Incentive Compensation Program for Key Employees (Program).
The executives named in the Summary Compensation Table (Summary Table) set forth
later in this Proxy Statement, together with other key employees of Ashland
Coal, are provided an opportunity to earn incentive cash compensation
14
<PAGE>
based on individual and company performance. In determining the annual incentive
compensation award to any individual, a minimum company performance level must
be met, and assuming it is met, an individual's level of responsibilities,
company performance and individual performance are considered in determining the
amount of the award. There are presently six levels in the Program. The P&C
Committee determines the level within the Program at which each participant is
placed based on the executive's potential to affect profitability. All other
performance factors being equal, the maximum achievable amount of incentive
award increases based on increasing levels of potential to affect profitability.
In addition, in respect of the performance factors, company performance is given
twice the weight of individual performance. In the cases of Messrs. Payne and
Woodring (as well as one other officer not named in the Summary Table), the
environmental and health and safety performances of the operating subsidiaries
also are taken into account in making incentive compensation awards.
Company performance is measured against a target return on equity ("ROE").
ROE is calculated by dividing net income by the average of stockholders' equity.
Average stockholders' equity is determined by a five-point method consisting of
stockholders' equity at the end of the previous year, at the end of each of the
first three quarters in the current year, and at the end of the current year.
Each February the P&C Committee sets a "hurdle" ROE that must be met before any
incentive compensation may be awarded. The determination of individual
performance for purposes of incentive compensation awards is based upon the
CEO's evaluation of the extent to which an individual successfully discharges
his or her duties. There are no specific quantitative criteria by which
individual performance is measured for purposes of incentive compensation, but
such performance is qualitatively assessed. The P&C Committee may reject the
CEO's recommendations on individual performances if it does not concur.
A participant's payout at his participation level is a function of the
weighted combined company and individual performance score (expressed as a
percentage) and the participant's salary. The Program provides that total
payments are not to exceed 6 percent of net income of Ashland Coal, excluding
nonoperating items. For 1993, the hurdle ROE was exceeded and incentive
compensation awards were made. Under this stockholder-approved plan, the P&C
Committee may adjust, at its discretion, the hurdle goal and payments under this
Program. There have been no such adjustments made during the last three years.
With respect to total annual cash compensation paid to Messrs. Payne,
Woodring, Besten, Solochek, and Layman for 1993, approximately 21%, 20%, 20%,
19%, and 16%, respectively, was performance-sensitive under this program. For
the three-year period covered by the Summary Table, the portion of total annual
cash compensation which was performance sensitive under this Program was 31%,
27%, 27%, 23%, and 23%, respectively, for the named executives.
15
<PAGE>
PERFORMANCE UNIT PLAN
This component of the executive compensation program seeks to reward the
executives for successful medium-term strategic planning and operating
performance by Ashland Coal, and only company performance is taken into account
in determining awards under Ashland Coal's Performance Unit Plan (Performance
Plan). Under the Performance Plan, the named executives can be awarded
performance units contingent upon Ashland Coal's future performance. The number
of persons presently participating in the Performance Plan as determined by the
P&C Committee is a smaller number of persons than approved by the P&C Committee
for participation in the Program.
The number of performance units awarded to a participant is based on that
individual's level of responsibility. Performance units awarded are established
in dollars and are based on the participant's base salary on the date of the
award. The original amount of any award may not exceed 400 percent of the
employee's then base salary. Historically, performance units have been awarded
every two years and each award covers a four-year performance cycle.
Performance measures and the time period over which performance is to be
measured are determined by the P&C Committee. Performance measures may include,
but shall not be limited to, return on net assets employed, cumulative earnings
per share, or ROE. The present plan cycles use ROE as the performance measure.
Below a "hurdle" rate of return, there is no payment, and at or above a "target"
rate of return, 100% of the award is earned. Below-target payouts are earned for
company performance between the hurdle and target, depending on the level of
performance.
The amount paid out upon meeting the performance measures cannot exceed the
original amount of such award, and the total amount of payments under the
Performance Plan for each award period shall not exceed 2 percent of
stockholders' equity of Ashland Coal as shown in its Annual Report to
Stockholders at the end of the fiscal year next preceding the commencement of
such award period. Payments with respect to performance units may be made in one
or more installments and may be made wholly in cash, wholly in shares of Ashland
Coal Common Stock or partly in cash and partly in such shares, at the discretion
of the P&C Committee and as permitted by applicable securities laws. No Common
Stock has been authorized by Ashland Coal's Board of Directors for issuance
under the Performance Plan. Under the Performance Plan, the P&C Committee can
adjust, at its discretion, the performance measures set and payments made for
any cycle. There have been no such adjustments made during the last three years.
In 1993, the P&C Committee approved a plan cycle for 1993-1996. The awards
are incentive for the 1993-1996 period and are not compensation for past service
or performance. This cycle uses a designated ROE as the performance measure.
Although the Performance Plan permits awards of up to 400% of a
16
<PAGE>
participant's salary, the maximum award was set at 160%. Payments, if earned,
will be made in 1997. In 1993, payments were made with respect to the 1989-1992
Performance Plan cycle (which also included the last three months of 1988),
because the hurdle ROE was achieved.
When the payments under the Performance Plan are prorated among the years
covered by the 1989-1992 plan cycle, approximately 39%, 35%, 34%, 31%, and 32%
of the total cash compensation paid, with respect to 1992, to Messrs. Payne,
Woodring, Besten, Solochek and Layman, respectively, was sensitive to company
performance.
STOCK INCENTIVE PLAN FOR KEY EMPLOYEES
Stock options tie the interests of key employees of Ashland Coal to the
interests of its stockholders by providing value to an employee when the stock
price appreciates. This element of the compensation program provides longer-term
incentives. The 1988 Stock Incentive Plan for Key Employees (Stock Incentive
Plan) provides for the grant of stock options and stock appreciation rights and
awards of restricted stock. The KESA Committee is responsible for administering
the Stock Incentive Plan and making grants or awards thereunder. All stock
options are granted with an exercise price equal to the fair market value of
Ashland Coal's common stock on the date of the grant.
All salaried employees of Ashland Coal and its subsidiaries (including the
executives named in the Summary Table) are eligible to participate in the Stock
Incentive Plan. Two types of options -- incentive stock options and nonqualified
stock options -- may be granted under the Stock Incentive Plan. The ultimate
value of the options depends on the ultimate value of the underlying stock of
Ashland Coal; thus aligning the interests of the stockholders and the
executives.
The KESA Committee, in its discretion, determines the salaried employees who
are granted options, or options and SARs, or who are awarded shares of
restricted stock under the Stock Incentive Plan. The stock options granted to
executives in 1993 were not based on past company performance. The number of
options to be granted to executives is discretionary with the KESA Committee,
but the number of options awarded is generally based upon the participation
level to which an executive is assigned, which level is determined by the
executive's potential to affect profitability, as well as upon the number of
options already outstanding or previously granted to the participant. These
factors were considered in making 1993 option awards. The KESA Committee also
reserves the right to make awards that deviate from the level-based awards
depending upon an executive's individual performance.
CEO COMPENSATION
As with the other executives, the Salary Factors are the only factors
routinely considered by the P&C Committee in setting the annual salary of the
CEO, but notwithstanding the Salary Factors, the CEO's annual salary could be
frozen,
17
<PAGE>
reduced, or increased by a smaller increment, in the Committee's discretion, as
a result of poor corporate performance. With regard to the CEO's individual
performance as considered in connection with his annual salary and incentive
compensation awards, the CEO's individual performance in discharging his duties
as CEO is assessed by the P&C Committee. As is the case with the other
executives, no specific objective or other criteria are used by the P&C
Committee in assessing the individual performance of the CEO. In determining the
CEO's incentive compensation, company performance is given twice the weight of
individual performance, as for any other executive, but the CEO's incentive
compensation is further subject to adjustment upward or downward in the
Committee's sole discretion (and without specific weighting factors) depending
upon the environmental and safety performance of the operating subsidiaries.
Further, the CEO's 1993 award of performance units under the Performance Plan
was higher than for other executives because the CEO bears the highest degree of
responsibility among Ashland Coal's executives for both strategic planning and
overall operating performance. As is the case with other executives, the number
of options awarded under the Stock Incentive Plan to the CEO is higher than for
any other executive because of the potential effect of his performance upon
profitability and is also determined by reference to the total number of options
outstanding or previously granted to the CEO.
This report is submitted by the Personnel and Compensation Committee with
respect to all matters set forth in the Report, except for those matters related
to stock options, and by the Key Employee Stock Administration Committee only
with respect to stock options.
<TABLE>
<CAPTION>
PERSONNEL AND KEY EMPLOYEE STOCK
COMPENSATION COMMITTEE ADMINISTRATION COMMITTEE
- ---------------------------------- ----------------------------------
<S> <C>
Thomas L. Feazell (Chairman) Robert A. Charpie (Chairman)
Robert A. Charpie Robert L. Hintz
Robert E. Yancey, Jr. Michael G. Ziesler
Michael G. Ziesler
</TABLE>
18
<PAGE>
SUMMARY COMPENSATION TABLE
--------------------------------
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------------------
AWARDS
ANNUAL COMPENSATION -------------------------- PAYOUTS
-------------------------------------------------- RESTRICTED -----------
SALARY BONUS OTHER ANNUAL STOCK LTIP
NAME AND PRINCIPAL POSITION YEAR ($) ($)(1) COMPENSATION ($) AWARD(S) (#) OPTIONS (#) PAYOUTS ($)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
William C. Payne 1993 279,481 75,000 -0- -0- 15,000 -0-
Chairman, 1992 264,596 110,000 -0- -0- 10,000 262,208(2)
President & CEO 1991 248,846 175,000 -0- -0- 20,000 -0-
Kenneth G. Woodring 1993 209,654 52,927 -0- -0- 6,500 -0-
Senior Vice President 1992 199,327 69,481 -0- -0- 5,000 168,419(2)
1991 174,538 90,348 -0- -0- 10,000 -0-
C. Henry Besten, Jr. 1993 151,758 38,309 -0- -0- 5,000 -0-
Senior Vice President 1992 144,596 50,374 -0- -0- 4,000 102,681(2)
1991 129,769 65,815 -0- -0- 10,000 -0-
Marc R. Solochek 1993 151,758 34,919 -0- -0- 4,000 -0-
Senior Vice President 1992 144,798 39,233 -0- -0- 3,000 109,749(2)
& CFO 1991 137,165 54,525 -0- -0- 7,500 -0-
Roy F. Layman 1993 139,654 27,495 -0- -0- 4,000 -0-
Admin. Vice President 1992 129,789 39,508 -0- -0- 3,000 91,875(2)
& Sec. 1991 122,212 48,577 -0- -0- 7,500 -0-
<CAPTION>
ALL OTHER
COMPENSATION(3)
NAME AND PRINCIPAL POSITION ($)
- ----------------------------------
<S> <C>
William C. Payne 11,738
Chairman, 11,113
President & CEO 10,452
Kenneth G. Woodring 8,805
Senior Vice President 8,372
7,331
C. Henry Besten, Jr. 6,374
Senior Vice President 6,073
5,450
Marc R. Solochek 4,249
Senior Vice President 4,054
& CFO 3,841
Roy F. Layman 5,865
Admin. Vice President 5,452
& Sec. 5,133
<FN>
(1) These amounts represent the amount of money earned under the Ashland Coal,
Inc. Incentive Compensation Program for Key Employees with respect to the
subject year and paid in the immediately succeeding year.
(2) This amount represents the amount of money earned under the Ashland Coal,
Inc. Performance Unit Plan for the 1989-1992 plan cycle. This cycle also
included the last three calendar months of 1988. About 79% of the stated
amounts was accelerated and paid in 1992, and the remainder was paid in
1993.
(3) These amounts represent contributions by Ashland Coal, Inc. to the named
executive's account under the Ashland Coal, Inc. Employee Thrift Plan.
</TABLE>
19
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
-------------------------------------
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
- --------------------------------------------------------------------------------------- ANNUAL RATES OF
% OF STOCK PRICE
TOTAL OPTIONS APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OR OPTION TERM
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION --------------------
NAME (#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
William C. Payne 15,000 15.6 25.50 3/24/2003 240,552 609,606
Kenneth G. Woodring 6,500 6.8 25.50 3/24/2003 104,239 264,163
C. Henry Besten, Jr. 5,000 5.2 25.50 3/24/2003 80,184 203,202
Marc R. Solochek 4,000 4.2 25.50 3/24/2003 64,147 162,562
Roy F. Layman 4,000 4.2 25.50 3/24/2003 64,147 162,562
<FN>
(1) The options are not exercisable at all during the first year following the
date of the grant, are exercisable with respect to 50% of the underlying
shares after the first anniversary date of the grant and until the second
anniversary, are exercisable between the second and third anniversaries of
the grant with respect to an additional 25% of the underlying shares, and
are exercisable between the third and fourth anniversaries of the grant with
respect to the remaining 25% of the underlying shares. After the third
anniversary of the date of the grant, the options are exercisable with
respect to 100% of the underlying shares.
</TABLE>
20
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
------------------------------------------------------
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FY-END(#) AT FY-END($)
ACQUIRED ON VALUE -------------------------- --------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
William C. Payne 3,000 57,750 57,000 25,000 711,000 112,500
Kenneth G. Woodring -0- -0- 27,044 14,456 359,988 75,887
C. Henry Besten, Jr. -0- -0- 15,650 10,850 148,238 55,513
Marc R. Solochek 2,000 32,500 17,625 7,375 201,656 34,469
Roy F. Layman -0- -0- 22,125 7,375 288,281 34,469
</TABLE>
21
<PAGE>
LONG TERM INCENTIVE PLANS
AWARDS IN LAST FISCAL YEAR
------------------------------
<TABLE>
<CAPTION>
NUMBER OF ESTIMATED FUTURE
SHARES, PAYOUTS UNDER NON-STOCK PRICE-BASED PLANS
UNITS OR PERFORMANCE
OTHER OR OTHER PERIOD -----------------------------------------
RIGHTS UNTIL MATURATION THRESHOLD(2) TARGET(2) MAXIMUM(2)
NAME (#) OR PAYOUT(1) ($) ($) ($)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
William C. Payne 424,000 4 Years -- -- 424,000
Kenneth G. Woodring 260,000 4 Years -- -- 260,000
C. Henry Besten, Jr. 188,500 4 Years -- -- 188,500
Marc R. Solochek 145,000 4 Years -- -- 145,000
Roy F. Layman 130,000 4 Years -- -- 130,000
<FN>
(1) Each award covers a four year performance cycle. Payment is made at the end
of the four year performance cycle if performance objectives are made over
the four year period. The performance objective for the 1993-1996
performance cycle is a minimum four year average return on equity.
(2) Payouts of awards begin upon exceeding a threshold performance level. At or
below the threshold, there is no payout. Above the threshold, the amount of
payout can range from an amount just in excess of 0 to the maximum payout of
100% of the award, in all cases depending on the performance level achieved.
</TABLE>
22
<PAGE>
COMPARISON OF CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
ASHLAND COAL S&P 500 INDEX PEER COMPANIES
------------ -------------- ---------------
<S> <C> <C> <C>
Measurement Pt-12/31/88 $ 100 $ 100 $ 100
FYE 12/31/89 $ 150.91 $ 112.40 $150.68
FYE 12/31/90 $ 206.96 $ 193.03 $124.58
FYE 12/31/91 $ 319.05 $ 133.64 $126.09
FYE 12/31/92 $ 233.34 $ 168.81 $128.82
FYE 12/31/93 $ 281.79 $ 176.34 $124.01
</TABLE>
The indicated cumulative total returns assume reinvestment of dividends. The
cumulative total returns of each component company included in the peer
companies index has been weighted according to each respective company's stock
market capitalization. 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.
On November 30, 1993, AMAX, Inc. merged into Cyprus Minerals Company. The value
for the peer group of 130.78 on December 31, 1993, is based on the exclusion
23
<PAGE>
of NERCO, Inc. as of June 2, 1993, inclusion of the Pittston Minerals target
stock as of July 8, 1993, and inclusion of the Cyprus AMAX Minerals Company
stock on November 30, 1993, and recapitalization of the peer group as of each of
those dates.
OTHER COMPENSATION PLANS
DEFERRED COMPENSATION PLAN
Under the Deferred Compensation Plan for Key Employees, which is also
administered by the P&C Committee, eligible employees, including Ashland Coal's
executive officers, may defer payment of all or a part of any award of incentive
compensation, performance awards under the Performance Plan, or other employee
compensation, excluding base salary, as the P&C Committee may approve. Such
accumulated amounts, plus interest thereon at the prime rate (as quoted by
Citibank, N.A. as its prime commercial lending rate on the last day of each
calendar quarter), are payable in cash to the employee, his estate, or
beneficiary over such period as might be designated by the employee, in no event
to extend beyond the tenth anniversary of the employee's termination of
employment. Upon a "change in control" of Ashland Coal (as defined in this
plan), each participant receives an automatic distribution of all amounts in his
account.
THRIFT PLAN
The Ashland Coal, Inc. Employee Thrift Plan (Thrift Plan) permits eligible
employees--full-time salaried employees, including the executives named in the
Summary Table, and other groups of employees designated by Ashland Coal--to
contribute up to 16 percent of the first $150,000 (indexed for changes in the
cost of living) of their individual earnings on an after tax basis for
investment at the employee's election in a portfolio of guaranteed investment
contracts, a diversified stock fund, an Ashland Coal Common Stock fund and/or a
government securities fund. All earnings in the Thrift Plan accumulate on a tax
deferred basis until the funds are withdrawn or distributed. At its discretion,
Ashland Coal may make a matching contribution to the Thrift Plan. Currently, it
is doing so at the rate of 70 cents for each dollar contributed by employees (up
to 6 percent of the employee's earnings). The Thrift Plan also contains a
section 401(k) feature that permits employees to designate a portion of their
earnings as pretax contributions to the Thrift Plan. Pretax contributions also
are matched and reduce the 16 percent otherwise allowable after tax contribution
limit. In the event a tender offer is made for Ashland Coal's Common Stock,
participating employees are permitted, by written instructions, to direct the
trustee to tender all of the Ashland Coal Common Stock held in their accounts.
If no instruction to tender is received by the trustee from a participating
employee, the Thrift Plan provides that any Ashland Coal Common Stock allocated
to an employee's account will not be tendered.
24
<PAGE>
ERISA FORFEITURE PLAN
The ERISA Forfeiture Plan, administered by the P&C Committee, reimburses
eligible key executive employees for Ashland Coal matching contributions
forfeited in 1990 and subsequent years under the Thrift Plan because of
limitations imposed by the Employee Retirement Income Security Act of 1974
(ERISA) on the amounts that can be allocated to such employees thereunder. These
amounts are paid at the end of the plan year or, if approved by the P&C
Committee, the employee may elect to defer payment of these amounts under the
Deferred Compensation Plan for Key Employees described above. To date, no
matching contributions have been forfeited.
SALARY CONTINUATION PLAN
Ashland Coal has adopted a Salary Continuation Plan pursuant to which each
regular, full-time salaried employee (including the executives named in the
Summary Table, but excluding hourly employees, employees covered by collective
bargaining, employees of entities in which Ashland Coal has a 50 percent or less
ownership interest and certain international employees) is entitled to receive a
certain lump sum payment and other benefits in the event of a "change in
control" of Ashland Coal (as defined in this plan) and termination of a
participant's employment without cause within two years following such a change
in control. Benefits under the Salary Continuation Plan are determined according
to the following schedule:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
LENGTH OF SERVICE PAYMENT
- -------------------------------------------------------------------
<S> <C>
Up to 5 full years 3 months' compensation
6-10 full years 6 months' compensation
11-15 full years 1 years' compensation
16-20 full years 1 1/2 years' compensation
20+ years 2 years' compensation
</TABLE>
As of December 31, 1993, Messrs. Payne, Woodring, Besten, Solochek, and
Layman had service under the Salary Continuation Plan of 17, 16, 21, 18 and 23
years, respectively.
PENSION PLAN
The Ashland Coal, Inc. Pension Plan (Pension Plan) covers certain full-time
salaried and hourly employees, including the executives named in the Summary
Table set forth above. To the extent benefits under the qualified Pension Plan
ever exceed the per annum limit established by the Internal Revenue Code of 1986
as amended by the Omnibus Budget Reconciliation Act of 1993, they would be
payable under Ashland Coal's Nonqualified Excess Benefit Pension Plan which
provides for the payment of benefits in excess of certain limitations imposed by
the provisions of the Code. The following table shows the estimated benefits
payable
25
<PAGE>
under the qualified Pension Plan and the Nonqualified Excess Benefit Plan using
the benefit formula for salaried employees and assuming continued employment
until the normal date of retirement at age 65.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------
YEARS OF SERVICE
--------------------------------------------------------
REMUNERATION 15 20 25 30 35
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 100,000 $ 21,826 $ 29,101 $ 36,377 $ 43,652 $ 50,927
$ 125,000 $ 27,451 $ 36,601 $ 45,752 $ 54,902 $ 64,052
$ 150,000 $ 33,076 $ 44,101 $ 55,127 $ 66,152 $ 77,177
$ 175,000 $ 38,701 $ 51,601 $ 64,502 $ 77,402 $ 90,302
$ 200,000 $ 44,326 $ 59,101 $ 73,877 $ 88,652 $ 103,427
$ 225,000 $ 49,951 $ 66,601 $ 83,252 $ 99,902 $ 116,552
$ 250,000 $ 55,576 $ 74,101 $ 92,627 $ 111,152 $ 129,677
$ 275,000 $ 61,201 $ 81,601 $ 102,002 $ 122,402 $ 142,802
$ 300,000 $ 66,826 $ 89,101 $ 111,377 $ 133,652 $ 155,927
</TABLE>
Remuneration is computed only on annual salary shown in the Summary Table
and excludes all other amounts shown in that Table. The benefits set forth in
the table above assumes the remuneration set forth is the remuneration during
the highest consecutive 36-month period of the final 120-month period prior to
retirement. For the purposes of computing the Annual Retirement Benefit payable
under the Pension Plan, no more than the remuneration limit established by the
Code may be taken into account, which now is $150,000 pursuant to the Omnibus
Budget Reconciliation Act of 1993.
As of December 31, 1993, Messrs. Payne, Woodring, Besten, Solochek and
Layman had credited service in the Pension Plan of 16 years, 15 years and 7
months, 20 years and 9 months, 17 years and 4 months, and 22 years and 5 months,
respectively.
The amounts in the foregoing table are shown on a straight life basis and
are not subject to any reductions for Social Security or other benefits received
by the participant. The amounts include the pre-January 1987 portion of the
benefit vested and annuitized upon termination and re-establishment of the
Pension Plan in January 1987. Under the Pension Plan, officers are entitled to
benefits on the same basis as other salaried employees. For a complete
discussion of the supplemental annual benefits payable upon retirement to
William C. Payne under his supplemental retirement benefits agreement, see
"Employment Contracts and Termination of Employment and Change in Control
Arrangements" below.
26
<PAGE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
In October 1990, Ashland Coal entered into a new supplemental retirement
benefits agreement with Mr. Payne (Agreement) which terminated the previous
supplemental retirement benefits agreement and the employment agreement each
entered into with Mr. Payne in October 1988. The Agreement provides for
different benefits depending upon whether Mr. Payne's service to Ashland Coal
ends before, or on or after age 62 in the following circumstances. If before
reaching age 62, Mr. Payne's employment is terminated by Ashland Coal without
cause, he resigns for any reason following a change in control, or he retires
with the consent of the Board of Directors of Ashland Coal, Mr. Payne would
receive on an annual basis the greater of (a) 75% of the annualized average of
his base monthly compensation (excluding incentive awards, bonus and other
extraordinary compensation) in the most highly compensated 36 consecutive
calendar month period during the 120 consecutive calendar month period prior to
his retirement, or (b) 50% of his average base compensation plus average
incentive compensation paid or accrued under Ashland Coal's Incentive
Compensation Plan during the highest 36 months of the final 60 month period of
his employment. Upon Mr. Payne's attaining age 62 after the occurrence of any of
the events described in the preceding sentence, or if after age 62 any such
events occur, or if Mr. Payne retires without the consent of the Board, then he
is entitled to receive the retirement benefits described in clause (b) above.
All benefits payable under the Agreement are reduced by any benefits of Mr.
Payne under Ashland Coal's Pension Plan and any other qualified defined benefit
pension plan maintained by Ashland Coal. As a consequence of this Agreement, Mr.
Payne's benefits under the Pension Plan and the Nonqualified Excess Benefit
Pension Plan will be supplemented by approximately $143,000 per year, assuming
(1) he retires at age 65, (2) that half of the sum of (A) his average base
compensation paid during the highest 36 months of the final 60 month period of
his employment and (B) his average incentive compensation paid during the
highest 36 months of the final 60 month period of his employment is $238,000,
and (3) that his regular benefit under the Pension Plan and the Nonqualified
Excess Benefit Pension Plan upon retirement at age 65 would be $95,000. Benefits
under the Agreement are not prorated on years of service, and are not payable if
Mr. Payne's employment is terminated by Ashland Coal for cause.
COMPENSATION OF DIRECTORS
Nonemployee directors of Ashland Coal during 1993 received an annual
retainer of $18,000 and a $1,000 fee for each Board and Committee meeting
attended and expenses incurred in attending all such meetings. A director who
serves as a chairman of a committee is entitled to receive an additional $2,500
fee per year for each chairmanship held by such director. In addition, directors
receive accidental death and dismemberment insurance coverage of $100,000.
Messrs. Chellgren, Feazell, Quin and Yancey have waived the payment of their
fees
27
<PAGE>
and retainers, which waiver may be withdrawn at any time. Under the Deferred
Compensation Plan for Directors' Fees, a director who is separately compensated
for his services on the Board or a committee of the Board may defer all or part
of his director's retainer, meeting fees and any per diem compensation for
special assignments. A director may elect to earn interest on deferred amounts
based on either the prime rate (as quoted by Citibank, N.A. as its prime
commercial lending rate on the last day of each calendar quarter) or based on a
hypothetical investment in Ashland Coal Common Stock. Deferred amounts, plus
earnings, are payable in cash to the director, his estate, or beneficiary over
such period of time as might be designated by the director, in no event to
extend beyond the twentieth anniversary of the termination of his services as a
director.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of either the P&C Committee or the KESA Committee are
officers or employees of Ashland Coal or any of its subsidiaries or former
officers or employees of Ashland Coal or any of its subsidiaries. Messrs.
Michael G. Ziesler, Robert A. Charpie, and Thomas L. Feazell served on the P&C
Committee for all of 1993 and Mr. Robert E. Yancey served on it after April
1993. Messrs. Michael G. Ziesler and Robert A. Charpie served on the KESA
Committee for all of 1993. Mr. Robert B. Claytor served on the KESA Committee
until his death in April 1993 and Mr. Robert L. Hintz served on it following his
election to the Board in April 1993. Mr. Ziesler is an employee of Saarbergwerke
A.G., and Mr. Schaefer was an employee of Saarbergwerke A.G. until his
retirement. Messrs. Feazell and Yancey are employees of Ashland Oil, Inc. (SEE
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS FOR FURTHER INFORMATION ABOUT THE
RELATIONSHIP OF ASHLAND COAL WITH ASHLAND OIL AND SAARBERG).
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Ashland Coal receives certain services from and provides certain services to
Ashland Oil for which fees are charged between the companies. During 1993,
Ashland Coal paid Ashland Oil $423,000 and Ashland Oil paid Ashland Coal $2,000
for these services.
Ashland Coal also has purchased fuel, oil and other products from Ashland
Oil at current market prices using standard purchase orders. Such purchases
amounted to $4,205,000 in 1993.
In 1981 Ashland Coal entered into a Coal Off-Take Agreement (Off-Take
Agreement) with Saarberg that granted certain priority purchasing rights to
Saarberg with respect to Ashland Coal's annual supply of coal that is not
otherwise committed. The Off-Take Agreement was amended in 1982 to include
Carboex and in 1988 to reflect, among other things, the new ownership interests
of Saarberg and
28
<PAGE>
Carboex. During 1992, the parties entered into a Restated Coal Off-Take
Agreement (Restated Agreement) to restate in its entirety the Off-Take
Agreement, as previously amended. The Restated Agreement provides that so long
as Saarberg owns sufficient capital stock of Ashland Coal to elect one director
to Ashland Coal's Board of Directors, it has the right to purchase 15 percent of
Ashland Coal's coal in any year, and so long as Carboex owns sufficient capital
stock to so elect one director, it has the right to purchase 10 percent of
Ashland Coal's coal in any year, both to the extent not previously committed for
sale to third parties. In each case, Saarberg and Carboex also are required to
pay the prevailing market prices for any coal acquired under the Restated
Agreement. During 1993, no coal was sold by Ashland Coal to Saarberg or Carboex
under the Restated Agreement. However, during 1993, Ashland Coal paid Saarberg
and its affiliates commissions of $13,000 in connection with certain export
sales by Ashland Coal, and Saarberg paid Ashland Coal $1,408,000 for
metallurgical coal purchased from Ashland Coal.
By Coal Sales Agency Agreement dated December 12, 1991, as amended on
January 26, 1993 (Agency Agreement), the Company appointed Saarberg and Carboex
(collectively, Sales Agent), as its exclusive agent for the purpose of selling
high volatile coking coal and PCI product from reserves controlled by Ashland
Coal's subsidiaries for use in the steel making process to customers within an
area of responsibility comprised of Europe, several neighboring Mediterranean
countries and the former Soviet Union. Ashland Coal agreed to make available for
sale pursuant to the Agency Agreement a minimum of 500,000 tons of high volatile
coking coal per year. Pursuant to the Agency Agreement, the Sales Agent has
certain options to request PCI product in substitution for high volatile coking
coal. The Agency Agreement is for an initial term through December 31, 1997,
subject to elective termination by Ashland Coal or the Sales Agent if certain
sales volumes are not met by December 31, 1995. The agreement will be
automatically extended through December 31, 2000, if certain sales volumes are
achieved during the two-year period of calendar 1996 and 1997. During the
duration of the Agency Agreement, Saarberg and Carboex may utilize the Off-Take
Agreement only for the purchase of coal to be consumed (i) in their respective
home countries, or (ii) by power plants that may hereafter be constructed
outside their respective home countries in which either party holds an equity
ownership position. During 1993, Ashland Coal paid each of Saarberg and Carboex
$135,000 for their services as agents under the terms of the Agency Agreement.
Management believes charges between Ashland Coal and Ashland Oil for
services rendered or provided were reasonable, and that the other transactions
described above were concluded on terms equivalent to those prevailing among
unaffiliated parties.
Ernst & Young, whose appointment as independent auditor for Ashland Coal is
sought to be ratified under Item II, is also the independent auditor for Ashland
Oil and Carboex.
29
<PAGE>
ITEM II. RATIFICATION OF AUDITORS
(Proposal 2 on form of proxy)
The Audit Committee of the Board of Directors recommended and, subject to
stockholder ratification, the Board has appointed Ernst & Young to audit the
accounts of Ashland Coal and its subsidiaries for the year ending December 31,
1994. Ernst & Young has audited the accounts of Ashland Coal and its
subsidiaries for at least the last five years. Submission of the appointment to
the stockholders for their ratification is not required. However, the Board will
reconsider the appointment if it is not ratified by the stockholders. The
holders of outstanding shares of Preferred Stock and Common Stock will vote
together as one class with respect to this Proposal 2.
The following resolution concerning the appointment of independent auditors
will be offered at the meeting:
"RESOLVED, that the appointment of Ernst & Young by the Board of
Directors of the Corporation to audit the accounts of the Corporation and
its subsidiaries for the year ending December 31, 1994, is hereby
ratified."
Abstentions and broker non-votes will not be counted as votes either for or
against this proposal; however, an abstention or broker non-vote is in effect a
vote against the adoption of this proposal because the affirmative vote of a
majority of the shares of capital stock entitled to vote and present in person
or represented by proxy at the meeting is required for the adoption of this
proposal.
Representatives of Ernst & Young will be present at the Annual Meeting and
will have the opportunity to make a statement and to respond to appropriate
questions.
MISCELLANEOUS
The expenses of solicitation of proxies for the Annual Meeting, including
the cost of preparing and mailing this Proxy Statement and the accompanying
material, will be paid by Ashland Coal. Such expenses may also include the
charges and expenses of banks, brokerage houses and other custodians, nominees
or fiduciaries for forwarding proxies and proxy material to beneficial owners of
shares. Solicitation may be made by mail, telephone, telegraph and personal
interview, and by regularly engaged officers and employees of Ashland Coal, who
will not be additionally compensated therefor.
The Board of Directors knows of no other matters to be voted upon at the
Annual Meeting. If any other matters properly come before the Annual Meeting, it
is the intention of the persons named in the enclosed form of proxy to vote on
such matters in accordance with their judgment.
Any stockholder who executes a form of proxy may revoke it by giving written
notice to the Secretary of Ashland Coal or by giving to the Secretary of the
meeting
30
<PAGE>
a duly executed form of proxy bearing a date later than the form of proxy being
revoked, at any time before such proxy is voted. Attendance at the meeting shall
not have the effect of revoking a proxy unless the stockholder so attending
shall, in writing, so notify the Secretary of the meeting prior to the voting of
the proxy.
A form of proxy which is properly signed, dated and not revoked will be
voted in accordance with the instructions contained therein. IF NO INSTRUCTIONS
ARE GIVEN, THE PERSONS NAMED IN THE FORM OF PROXY SOLICITED BY THE BOARD OF
DIRECTORS INTEND TO VOTE FOR THE NOMINEES NAMED THEREIN FOR ELECTION AS
DIRECTORS; AND FOR THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG AS
INDEPENDENT AUDITORS FOR 1994.
Any stockholder may strike out the names of the proxies designated by the
Board of Directors on the form of proxy and may write in and substitute the name
of any other person as proxy and may deliver the revised form of proxy to such
other person whom the stockholder may wish to designate as proxy for the purpose
of representing such stockholder at the meeting.
STOCKHOLDER PROPOSALS: Proposals which are the proper subject for inclusion
in the Proxy Statement and for consideration at the 1995 Annual Meeting of
Stockholders must be received by Ashland Coal no later than November 21, 1994,
in order to be included in Ashland Coal's Proxy Statement and form of proxy.
Please fill in, sign and date the enclosed form of proxy and return it in
the accompanying addressed envelope which requires no further postage if mailed
in the United States. If you attend the Annual Meeting and wish to vote your
shares in person, you may do so if you notify the Secretary of the meeting in
writing prior to the voting of the proxy. Your cooperation in giving this matter
your prompt attention will be appreciated.
ROY F. LAYMAN
ADMINISTRATIVE VICE PRESIDENT
AND SECRETARY
Huntington, West Virginia
March 31, 1994
31
<PAGE>
ASHLAND COAL, INC.
This Proxy is Solicited on Behalf of the Board of Directors
for the Annual Meeting on April 29, 1994
p
r
o
x
y
The person(s) whose signature(s) appear(s) on the opposite side hereof hereby
constitute(s) and appoint(s) Paul W. Chellgren and William C. Payne, and each
of them, its true and lawful attorney and
proxy with full power of substitution in each, to represent such person(s) at
the Annual Meeting of Stockholders of Ashland Coal, Inc. to be held the Ashland
Coal, Inc. Headquarters Building at 2205 Fifth Street Road, Huntington, West
Virginia, at 10:30 a.m. on Friday, April 29, 1994, and at any adjournments
thereof, and to vote, with all powers such person(s) would possess if present
at such meeting (including, with respect to the election of directors, the
power to cumulate
votes and distribute such votes among the nominees), all shares of Preferred
Stock
credited to such person's(s) account(s) as of the record date for the Annual
Meeting, on the matters set forth on the opposite side hereof and on all other
matters properly coming before the meeting or any adjournments thereof.
Nominees for Election to the Board of Directors
by the Preferred Stockholders:
Juan Antonio Ferrando, Werner Externbrink, Michael G. Ziesler
(change of address/comments)
(if you have written in the above space, please mark the corresponding box on
the opposite side of this card)
See Reverse side
<PAGE>
x
Please mark your votes as in this example.
9772
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR all proposals.
The Board of Directors recommends a vote FOR all proposals.
For
Withheld
For
Against
Abstain
You are encouraged to specify your choices by marking the appropriate boxes and
promptly returning this Proxy in the enclosed envelope, which requires no
postage, but you need not mark any boxes if you wish to vote in accordance with
the recommendations of the Board of Directors.
1. Election of Directors.
(see opposite side)
For, except vote withheld from the following nominees(s):
2. Ratification of Ernst & Young as Independent auditors for 1994.
Change of Address/Comments
on opposite side
I plan to attend the Annual Meeting
Signature(s)
Note: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title
Date
<PAGE>
ASHLAND COAL, INC.
This Proxy is Solicited on Behalf of the Board of Directors
for the Annual Meeting on April 29, 1994
p
r
o
x
y
The person whose signature appears on the opposite side hereof, as a participant
in the Coal-Mac. Inc. Savings and Retirement Plan ("Plan"), hereby instructs
Society National Bank, Trustee, to constitute and appoint Paul W. Chellgren and
William C. Payne,
and each of them, the lawful attorney and proxy of said Trustee with full power
of substitution in each, to represent the interests of such person in the Common
Stock
of Ashland Coal, Inc. held under the terms of the Plan at the Annual Meeting of
Stockholders of Ashland Coal, Inc. to be held at the Ashland Coal Headquarters
Building at 2205 Fifth Street Road, Huntington, West Virginia, at 10:30 a.m.
on Friday, April 24,1994, and at any adjournmets thereof, and to vote, with
all powers such person(s) would possess if proesent at such meeting (including
with respect to the election of directors, the power to cumulate votes and
distribute such votes among the nominees) and in accordance with the
choices made on the oppsite side hereof, all shates of COmmon Stock credited
to such person's account under the Plan as of the record date for the Annual
Meeting, on the matters set forth on the opposite side hereof and on all other
matters properly coming before the meeting or any adjournments thereof.
Nominees for Election to the Board of Directors
by the Common Stockholders:
Robert A. Charpie, Paul W. Chellgren, Thomas L. Feazell,
Robert L. Hintz, William C. Payne, J. Marvin Quin, Robert E. Yancey, Jr.
(change of address/comments)
(if you have written in the above space, please mark the corresponding box on
the opposite side of this card)
See Reverse side
<PAGE>
x
Please mark your votes as in this example.
9772
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR all proposals.
The Board of Directors recommends a vote FOR all proposals.
For
Withheld authority for all Nominees
For
Against
Abstain
You are encouraged to specify your choices by marking the appropriate boxes and
promptly returning this Proxy in the enclosed envelope, which requires no
postage, but you need not mark any boxes if you wish to vote in accordance with
the recommendations
of the Board of Directors.
1. Election of Directors.
(see opposite side)
For, except vote withheld from the following nominees(s):
2. Ratification of Ernst & Young as Independent auditors for 1994.
Change of Address/Comments
on opposite side
I plan to attend the Annual Meeting
Signature(s)
Note: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full tiltle as such.
2. Amendment of Restated Certificate of Incorporation.
Date
<PAGE>
ASHLAND COAL, INC.
This Proxy is Solicited on Behalf of the Board of Directors
for the Annual Meeting on April 29, 1994
p
r
o
x
y
The person whose signature appeats on the opposite side hereof, as a
participant in the Ashland Coal, Inc. Employee Thrift Plan ("Plan"),
hereby instructs Society National Bank, Trustee, to consitute and appoint
Paul W. Chellgren and William O. Payne, and each of them, the lawful attorney
and proxy of said Trustee with full power of subsitution in each, to represent
the interest of such person in the Common Stock of Ashland Coal, Inc.
held under the terms of the Plan at the Annual Meeting of Stockholders of
Ashland Coal, Inc. to be held at the Ashland Coal Headquarters Building
at 2205 Fifth Street Road, Huntington, West Virginia, at 10:30 a.m. on
Friday, April 23, 1994, and at any adjournments thereof, and to vote in
accordance withthe choices made on the opposite side hereof, all shares of
Common Stock credited to the Annual Meeting, on the matters set forth on the
opposite side hereof and on matters set forht on the opposite side hereof and
on all othe matters properly coming before the meeting or any adjournments
thereof.
Nominees for Election to the Board of Directors
by the Common Stockholders:
Robert A. Charpie, Paul W. Chellgren, Thomas L. Feazell,
Robert L. Hintz, William C. Payne, J. Marvin Quin, Robert E. Yancey, Jr.
(change of address/comments)
(if you have written in the above space, please mark the corresponding box on
the opposite side of this card)
See Reverse side
<PAGE>
x
Please mark your votes as in this example.
9772
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR all proposals.
The Board of Directors recommends a vote FOR all proposals.
For
Withheld
For
Against
Abstain
You are encouraged to specify your choices by marking the appropriate boxes and
promptly returning this Proxy in the enclosed envelope, which requires no
postage, but you need not mark any boxes if you wish to vote in accordance with
the recommendations
of the Board of Directors.
1. Election of Directors.
(see opposite side)
For, except vote withheld from the following nominees(s):
2. Ratification of Ernst & Young as Independent auditors for 1994.
Change of Address/Comments
on opposite side
I plan to attend the Annual Meeting
Signature(s)
Note: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title
<PAGE>
ASHLAND COAL, INC.
This Proxy is Solicited on Behalf of the Board of Directors
for the Annual Meeting on April 29, 1994
p
r
o
x
y
The person(s) whose signature(s) appear(s) on the opposite side hereof hereby
constitute(s) and appoint(s) Paul W. Chellgren and William C. Payne, and each
of
them, his or her (their) true and lawful attorney and
proxy with full power of substitution in each, to represent such person(s) at
the Annual Meeting of Stockholders of Ashland Coal, Inc. to be held at the
Ashland Coal, Inc. Headquarters Building at 2205 Fifth Street Road, Huntington,
West Virginia, at
10:30 a.m. on Friday, April 29, 1994, and at any adjournments thereof, and to
vote, with all powers such person(s) would possess if present at such meeting
(including with respect to the election of directors, the power to cumulate
votes and distribute such votes among the nominees), all shares of Common Stock
credited to such person'(s) account(s) as of the record date for the Annual
Meeting, on the matters set forth on the opposite side hereof and all other
matters properly coming before the meeting or any adjournments thereof.
Nominees for Election to the Board of Directors
by the Common Stockholders:
Robert A. Charpie, Paul W. Chellgren, Thomas L. Feazell, Robert L. Hintz, J.
Marvin Quin, William C. Payne, Robert E. Yancey, Jr.
(change of address/comments)
(if you have written in the above space, please mark the corresponding box on
the opposite side of this card)
See Reverse side
<PAGE>
x
Please mark your votes as in this example.
9772
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy
will be voted FOR all proposals.
The Board of Directors recommends a vote FOR all proposals.
For
Withheld
For
Against
Abstain
You are encouraged to specify your choices by marking the appropriate boxes and
promptly returning this Proxy in the enclosed envelope, which requires no
postage, but you need not mark any boxes if you wish to vote in accordance with
the recommendations
of the Board of Directors. Your shares cannot be voted unless you sign and
return this card.
1. Election of Directors.
(see opposite side)
For, except vote withheld from the following nominees(s):
2. Ratification of Ernst & Young as Independent auditors for 1994.
Change of Address/Comments
on opposite side
I plan to attend the Annual Meeting
Signature(s)
Note: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title
