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)
April 6, 1995
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
<PAGE>
Item 5. Other Events.
The discussions between Ashland Coal, Inc. and Quaker Coal
Company, Inc. concerning the possible purchase by Ashland Coal of
Quaker's Kentucky operations have terminated.
As a consequence of Saarbergwerke AG's previously disclosed
sale of its Ashland Coal Class B Preferred Stock to Ashland Inc.,
Saarbergwerke has confirmed to Ashland Coal that all
Saarbergwerke's rights and obligations under the Restated
Shareholders Agreement dated December 12, 1991, as amended
(Exhibit 4.9 to Ashland Coal's Annual Report on Form 10-K for
1994); Registration Rights Agreement dated August 2, 1993
(Exhibit 4.12 to 1994 10-K); Restated Coal Off-Take Agreement
dated December 12, 1991 (Exhibit 10.1 to 1994 10-K); Shareholder
Services Contract dated October 13, 1981 (Exhibit 4.1 under Item
7 below); and the letter agreement dated August 10, 1988
(relating to attendance at Board meetings of non-voting
observers) have terminated. No services were rendered under the
Shareholder Services Contract in the year ended December 31,
1994.
Item 7. Financial Statements and Exhibits.
4.1 Shareholder Services Contract dated October 13, 1981,
among Ashland Coal, Inc., Saarbergwerke AG, and Carboex
International, Ltd.
4.2 Letter Agreement dated as of March 27, 1995, relating
to the rights and obligations of Saarbergwerke AG under certain
contracts with Ashland Coal, Inc.
<PAGE>
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: April 6, 1995
<PAGE>
Ashland Coal, Inc.
Form 8-K for April 6, 1995
INDEX TO EXHIBITS
ITEM
4.1 Shareholder Services Contract dated October 13, 1981,
among Ashland Coal, Inc., Saarbergwerke AG, and Carboex
International, Ltd.
4.2 Letter Agreement dated as of March 27, 1995, relating
to the rights and obligations of Saarbergwerke AG under
certain contracts with Ashland Coal, Inc.
Exhibit 4.1
SHAREHOLDERS SERVICES CONTRACT
THIS SHAREHOLDERS SERVICES CONTRACT made and entered into
as of this 13th day of October, 1981, by and between ASHLAND COAL,
INC., a Delaware corporation, with a mailing address of P.O. Box
6300, Huntington, West Virginia 25771 (hereinafter referred to as
"Ashland Coal"), and ASHLAND OIL, INC., a Kentucky corporation,
with a mailing address of P.O. Box 391, Ashland, Kentucky 41114
(hereinafter referred to as "Ashland Oil"), and SAARBERG COAL
INTERNATIONAL GMBH, a company organized under the laws of the
Federal Republic of Germany, with a mailing address of Trierer
Strasse 1, D-6600 Saarbruecken, Federal Republic of Germany
(hereinafter referred to as "Saarberg Coal") (Ashland Oil and
Saarberg Coal are sometimes hereinafter collectively referred to
as the "Shareholders").
WITNESSETH:
WHEREAS, the Shareholders may, from time to time, request
Ashland Coal to provide to them services not normally rendered to
shareholders as shareholders; and,
WHEREAS, Ashland Coal and the Shareholders desire to
evidence the terms and conditions under which such services will
be provided.
NOW THEREFORE, for and in consideration of the foregoing
and the mutual benefit to be derived therefrom and the mutual
covenants and agreements herein contained, Ashland Coal, Ashland
Oil and Saarberg Coal mutually agree as follows:
1. From time to time the Shareholders, or either of them,
may desire Ashland Coal to render services to each of them in
connection with their respective coal businesses other than
Ashland Coal and other than those services Ashland Coal is
required to perform to the Shareholders as shareholders, it being
intended that nothing contained herein shall in any way affect
those services or obligations owed by Ashland Coal to the
Shareholders as shareholders. There shall also be excluded from
this Shareholders Services Contract services provided by Tri-State
Testing, Inc. and Commonwealth Equipment, Inc. (subsidiaries of
Ashland Coal) in the ordinary and regular course of their
respective businesses to the Shareholders, or either of them.
Whenever services are desired, a representative of the respective
Shareholder desiring such services (the "Shareholder
Representative") shall contact the President, any senior Vice
President, or any Vice President of Ashland Coal (the "ACI
Representative") describing the nature of the services desired and
when such services are desired to be performed. The ACI
Representative shall advise the Shareholder desiring such service
whether or not it can perform such services and if they can be
timely performed. If the respective Shareholder Representative and
the ACI Representative agree on the nature of the services to be
performed and when they shall be performed, Ashland Coal shall
provide such services upon an "if, as, and when available" basis
as determined solely by Ashland Coal, but otherwise as provided
for in this Services Contract. It is understood that Ashland Coal
is only agreeing to perform services for the Shareholders as
herein provided and Ashland Coal will not be required or
authorized to make any managerial decisions on behalf of the
Shareholders and shall have no responsibility for the ultimate use
made by the Shareholders of the services rendered by Ashland Coal.
The respective Shareholder Representatives will be designated by
each of the Shareholders hereto promptly after execution of this
Shareholders Services Contract.
2. Services provided by Ashland Coal to the Shareholders
will, to the extent possible, be provided through the same or
similarly qualified personnel using the same or similar equipment
and facilities which it uses for its own services of a similar
nature. Ashland Coal will give due consideration to the
recommendations of each Shareholder regarding the selection of
personnel, equipment and facilities; provided, however, the
selection of personnel, equipment and facilities shall always be
within the sole discretion of Ashland Coal. The services shall at
all times be performed expeditiously to the best of Ashland Coal's
ability.
3. For the services provided by Ashland Coal to the
Shareholders hereunder, each Shareholder agrees to pay Ashland
Coal for services rendered to it an amount of money calculated by
multiplying the number of hours spent by each exempt employee
performing such services by the Hourly Rate ("Hourly Rate") for
such employee for the category set forth on Exhibit A attached
hereto and made a part hereof to which such employee belongs. The
Hourly Rate has been determined by (i) taking the average of the
salaries of those exempt employees for each category (the
"Category Salary") who it is believed will be providing such
services and dividing the Category Salary by 1,852 (which
approximates each exempt employee's available man hours per year),
and adding to the result determined pursuant to (i) above, (a) 35%
of such result to cover fringe benefits and payroll taxes, and (b)
42% of such result to cover administrative and overhead expenses.
In addition, each Shareholder shall reimburse Ashland Coal for
actual direct expenses (except any such expenses included in the
Hourly Rate) incurred by Ashland Coal in connection with providing
services to such Shareholder. Time spent traveling in connection
with providing such services shall be included as part of the time
spent performing such services. As used in this Services Contract,
"exempt employee" means an employee of Ashland Coal within the
meaning of 29 CFR Section 541 et seq. The "Executive Officers"
category set forth on Exhibit A shall include the President and
any Senior Vice President of Ashland Coal, and the Presidents of
Addington Brothers Mining, Inc. and Hobet Mining & Construction
Co., Inc., subsidiaries of Ashland Coal, Inc. If an employee who
provides services is a member of more than one category set forth
on Exhibit A, the highest rate shall apply.
4. On January 1 and July 1 ("Revisions Dates") of each
year Ashland Coal will recalculate the Category Salary for each
category set forth on Exhibit A using the salaries then in effect
for the exempt employees in each category and the new Category
Salary so calculated shall be used to redetermine the Hourly Rate
which redetermined Hourly Rate shall be effective until the next
Revision Date. Promptly after each recalculation, Ashland Coal
shall provide each Shareholder with the redetermined Hourly Rate
for each category set forth on Exhibit A.
5. The effective date of this Services Contract shall be
June 9, 1981.
6. Ashland Coal's employees engaged in providing services
under this Services Contract shall maintain a record of the time
spent on such services, accurate to the hour, describing in
reasonable detail the services performed. The ACI Representative
or the Controller of Ashland Coal shall collect such records and
Ashland Coal's Accounting Department shall submit them to the
respective Shareholders on or before the tenth (10) day of each
calendar month for services performed during the preceding
calendar month together with a statement for such services
determined by using the Hourly Rate and evidence of any direct
expenses incurred in connection with providing such services. The
first statement will cover a charge for services rendered from the
effective date of this Services Contract through the end of the
calendar month in which it is executed. The Shareholders agree to
pay for such services in full within twenty (20) days after
receipt of each statement. The parties agree to use every
reasonable effort to have all requests made by the respective
Shareholder Representatives to the ACI Representative; however, if
any request for services is made by someone other than the
Shareholder Representatives, or to someone other than the ACI
Representative, and Ashland Coal performs such services, Ashland
Coal shall be paid for such services as herein provided.
7. In connection with any use by the Shareholders of
Ashland Coal's aircraft, the Shareholders shall pay Ashland Coal
at Ashland Coal's prevailing rate in effect from time to time.
Ashland Coal, if requested by either of the Shareholders, shall
advise the Shareholder so requesting of the rate prior to use by
such Shareholder of the aircraft.
8. Ashland Coal agrees to keep confidential any
proprietary information furnished to Ashland Coal by each of the
Shareholders in connection with providing the services requested
by each such Shareholder except to the extent that such
information (i) has already been disclosed by such Shareholder or
others, (ii) is already public information, or (iii) is required
to be disclosed by a court of competent jurisdiction or
governmental reporting requirements. Any information furnished by
the Shareholders to Ashland Coal shall remain the property of each
such Shareholder, and any reports, maps or information generated
by Ashland Coal for such Shareholder shall become the property of
such Shareholder.
9. Anything herein contained to the contrary
notwithstanding, it is understood that Ashland Coal has agreed to
perform services to the Shareholders as a convenience, and in this
regard, it is understood that the performance of all services
shall be at the sole risk of the Shareholder requesting such
services and Ashland Coal shall not be liable to such Shareholder
for any cost, damage, expense or loss incurred by such
Shareholder, including, without limitation, any special, indirect
or consequential damages arising from, or alleged to have arisen
from, the failure based on imputed knowledge of Ashland Coal
supervisory personnel to perform or the misperformance of Ashland
Coal, unless such failure based on imputed knowledge or
misperformance results directly from the gross negligence of
Ashland Coal.
10. In the event that any party hereto is rendered
unable, wholly or in part, by force majeure to carry out or
fulfill its obligations under this Shareholders Services Contract,
it is agreed that the party claiming force majeure shall give
notice and reasonably full particulars of the force majeure cause
or causes by telephone or telegraph (and promptly confirmed by
letter) to the other party as soon as possible after the
occurrence of the force majeure cause or causes and thereupon the
obligations of both parties insofar as and to the extent they are
affected by such force majeure, shall be suspended during the
continuation of the force majeure, but for no longer; provided,
however, that such force majeure cause or causes shall, insofar as
possible, be remedied with all reasonable dispatch, but nothing
contained herein shall be construed as requiring a party to settle
any labor dispute by acceding to any opposing demands when such
course is inadvisable in the discretion of the party having the
difficulty. The term "force majeure" as used herein shall mean
acts of God, strikes, concerted acts of workmen, acts or omissions
of subcontractors or independent contractors, lockouts or other
industrial disturbances, acts of the public enemy, wars,
blockades, insurrections, riots, epidemics, landslides, lightning,
earthquakes, fires, storms, floods, washouts, arrests or
restraints, requisitions and priorities of the government, either
federal, state, civil or military, civil disturbances, explosions,
future rules, regulations, orders, laws, or proclamations of
governmental authorities acting under claim or color of authority,
disruption or breakdown in transportation facilities, and any
other cause or causes, whether or not of the type or kind
specifically enumerated, which are not reasonably within the
control of the party claiming force majeure. Furthermore, the
parties agree to render assistance to each other, to the fullest
extent possible, to eliminate the condition of force majeure.
11. The parties hereto shall not assign this Shareholders
Services Contract in whole or in part, or assign in whole or in
part any of their respective rights hereunder, or delegate all or
any part of their respective obligations or duties hereunder
without the prior written consent of the other party; provided,
however, that such consent shall not be required for assignment or
delegation in connection with a sale of all or substantially all
of the assets of the assigning or delegating party.
12. All notices required pursuant to this Shareholders
Services Contract shall be in writing and, if to Ashland Oil,
shall be sufficient in all respects if delivered in person or sent
by first class airmail (or in the case of notices sent by Ashland
Coal, first class mail), or by telex or telecopy confirmed by such
mail to:
Ashland Oil, Inc.
P.O. Box 391
Ashland, Kentucky 41101
Telex No. 218476
Answer Back: AOINC
Attention: General Counsel
if to Saarberg Coal, shall be sufficient in all respects if
delivered in person or sent by first class airmail, or by telex or
telecopy confirmed by such mail to:
Saarberg Coal International GmbH
Trierer Strasse 1
D-6600 Saarbruecken
Federal Republic of Germany
Telex No. 4421240
Answer Back: SBWD
Attention: Geschaeftsfuehrung
and, if to Ashland Coal, shall be sufficient in all respects if
delivered in person or sent by first class airmail (or in the case
of notices sent by Ashland Oil, first class mail), or by telex or
telecopy confirmed by such mail to:
Ashland Coal, Inc.
P.O. Box 6300
Huntington, West Virginia 25771
Telex No. 7109311907
Answer Back: ASH COAL
Attention: President
13. Ashland Coal and the Shareholders are Equal
Opportunity Employers. It is, therefore, understood that this
Shareholders Services Contract is subject to the rules and
regulations adopted by the Secretary of Labor under Executive
Order No. 11246, as amended.
14. No action or failure to act by the Shareholders or
Ashland Coal shall constitute a waiver of any right or duty
afforded either of them under this Shareholders Services Contract,
nor shall any such action or failure to act constitute an approval
of or acquiescence in any breach thereunder, except as may be
specifically agreed in writing.
15. Nothing contained in this Shareholders Services
Contract shall create for, or give to, any third party any claim
or right of action against the parties hereto which would not
arise but for the existence of this Shareholders Services
Contract.
16. This Shareholders Services Contract shall be
construed, and the rights of the parties shall be determined in
accordance with the laws of the State of West Virginia.
17. This Shareholders Services Contract and the attached
Exhibit constitute the complete and final expression of the
agreement between the Shareholders and Ashland Coal with respect
to any services provided by Ashland Coal to them as set forth
herein. This Shareholders Services Contract supersedes all prior
negotiations, proposals, and agreements, either oral or written,
between the parties and shall govern and control all transactions,
rights, duties and remedies between the parties related to this
Shareholders Services Contract. The conduct of the parties hereto
arising subsequent to the execution and delivery of this
Shareholders Services Contract shall not modify or vary the
interpretation of the Shareholders Services Contract or any of the
provisions, unless and to the extent such conduct affirmatively
and clearly indicates that all parties hereto place the same
interpretation upon it. All communications between the parties
which are about or affect the right, duty or remedy of either
party to this Shareholders Services Contract, and any amendments,
alterations or modifications thereof, shall be in writing or shall
be confirmed promptly in writing and shall be signed by a duly
authorized officer of each of the parties hereto. As to any
conflict between the Exhibit attached hereto or documents
incorporated by reference and the main text of this Shareholders
Services Contract, the terms and conditions stated in the main
text shall govern in all cases.
18. Whenever in this Shareholders Services Contract
"Ashland Coal", "Ashland Oil" or "Saarberg Coal" is used, such
term shall include any entity of which Ashland Coal, Ashland Oil
or Saarberg Coal respectively, own directly or indirectly through
other affiliates or subsidiaries, more than 50% of the voting
shares or equivalent interests; provided, however, "Ashland Oil"
shall not be deemed to include Ashland Coal.
19. Ashland Coal agrees with the Shareholders to enter
into an agreement similar to this Shareholders Services Contract
with any shareholders of Ashland Coal which own more than five
percent (5%) of the voting shares of Ashland Coal.
IN WITNESS WHEREOF, Ashland Coal, Ashland Oil, and
Saarberg Coal have caused their respective duly authorized
officers to sign this Shareholders Services Contract as of the day
and year first above written.
ASHLAND COAL, INC. ASHLAND OIL, INC.
By: /s/ J.B.Keblish By: /s/Paul W. Chellgren
Its: President Its: Sr. Vice President
SAARBERG COAL INTERNATIONAL GMBH
By: /s/ Wolfgang John /s/Hubert Schaffer
ITS: GESCHAEFTSFUEHRER
EXHIBIT A
to
SHAREHOLDERS SERVICES CONTRACT
CATEGORY HOURLY RATE
Executive Officers $132.75
Other Officers 76.11
Department Heads 53.10
Managers 44.25
All Others 35.40
<PAGE>
CARBOEX INTERNATIONAL, LTD.
Bolan House
P.O. Box N-3010
Nassau, Bahamas
August 8, 1988
Ashland Coal, Inc.
2205 Fifth Street Road
Huntington, WV 25701
Ashland Oil, Inc.
P.O. Box 391
Ashland, KY 41114
Saarberg Coal International GmbH
P.O. Box 1030
D6600 Saarbruecken
Federal Republic of Germany
Shareholders Services Contract
Dear Sirs:
Reference is made to the Shareholders Services Contract, dated
October 13, 1981, among Ashland Coal, Inc., Ashland Oil, Inc. and
Saarberg Coal International GmbH.
We hereby confirm that Carboex International, Ltd. is a party
to the above-referenced Shareholders Services Contract and has been
a party thereto since February 27, 1982.
Very truly yours,
CARBOEX INTERNATIONAL, LTD.
By: /s/Luis Felipe Castresana
ITS: Secretary
Accepted and Agreed to:
Ashland Coal, Inc.
By: /s/William C. Payne
Its: President
Ashland Oil, Inc
By: /s/Paul W. Chellgren
Its: President
Saarberg Coal International GmbH
By: /s/Hans Freymann /s/Hubert Schaffer
Its: GESCHAEFTSFUEHRER
Exhibit 4.2
March 9, 1995
Saarbergwerke AG
P. O. Box 1030
D66111 Saarbruecken
Federal Republic of Germany
Gentlemen:
As a result of the sale by Saarbergwerke AG ("Saarberg") to
Ashland Inc. (formerly Ashland Oil, Inc.) of the 150 shares of
Class B Preferred Stock of Ashland Coal, Inc. ("Ashland Coal"), a
number of miscellaneous matters have arisen which have been or
need to be dealt with. In order to clarify that we have addressed
each of these matters, would you kindly review the following:
1. Ashland Coal has elected not to terminate the
so-called "Met Coal Agreement" (the Coal Sales Agency Agreement
dated December 12, 1991, as amended) and a separate letter of
understanding among Saarberg, Carboex International, Ltd.
("Carboex"), and Ashland Coal will address that matter.
2. The Sales Agency Agreement dated October 4, 1990
concerning the sale of coal in Germany will remain unchanged.
3. I believe we have resolved the matter of the
reinvestment by Saarberg in the Dividend Reinvestment and Stock
Purchase Plan of the Saarberg portion of the prorated dividends
payable in 1995. We may need a letter from Ashland Inc. to First
Chicago, but I have talked with Ashland Inc. about that and there
should not be a problem.
4. I understand that the Indemnity Agreement dated
September 21, 1981, as amended August 6, 1993, between Ashland
Inc. and Saarberg has been addressed separately, and no further
action is needed.
In addition, we need to confirm that the following
agreements have terminated with respect to Saarberg's rights and
obligations thereunder:
(a) The Restated Shareholders Agreement dated December
12, 1991, as amended, among Saarberg, Carboex, Ashland
Inc., and Ashland Coal;
(b) The Registration Rights Agreement dated August 2,
1993, among Saarberg, Carboex, Ashland Inc., and
Ashland Coal;
(c) The Restated Coal Off-Take Agreement dated December
12, 1991, among Saarberg, Carboex, and Ashland Coal;
(d) The Shareholder Services Contract dated October 13,
1981 among Ashland Coal, Saarberg and Carboex; and,
(e) That certain letter agreement dated August 10, 1988
among Ashland Inc., Ashland Coal, Saarberg, and Carboex
regarding the attendance at Ashland Coal's Board
meetings of non-voting observers.
Would you kindly confirm your agreement with the foregoing
by signing, dating, and returning a copy of this letter to me.
Also, if there are any other matters that need to be addressed,
please let me know.
Yours very truly,
ASHLAND COAL, INC.
/s/Roy F. Layman
Administrative Vice President
ACCEPTED AND AGREED TO
THIS 27th DAY OF MARCH,
1995.
SAARBERGWERKE, AG.
By: /s/ Michael G. Ziesler /s/Dietrich Reinhardt
Its: Member of the Board Executive Vice President
of Managing Directors and General Counsel
