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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
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ASHLAND INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 25, 1996
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of Ashland Inc., a Kentucky corporation
("Ashland"), will be held on Thursday, January 25, 1996, at 10:30 A.M., Eastern
Standard Time, at the Ashland Petroleum Executive Office Building, 2000 Ashland
Drive, Russell, Kentucky, and at any adjournment thereof, for the purpose of
acting upon the following matters as well as such other business as may properly
come before the Annual Meeting or any adjournment thereof:
(1) to elect five directors to Class I;
(2) to ratify the appointment of Ernst & Young LLP as independent
auditors for fiscal year 1996; and
(3) if presented at the Annual Meeting, to act upon a shareholder
proposal to request the Board of Directors to take steps necessary to
require that all directors be elected annually.
Only shareholders of record at the close of business on November 27, 1995
will be entitled 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 proxy card and return it promptly in the accompanying
envelope. If you attend the Annual Meeting, you may vote in person even though
you have previously sent in your proxy card.
By Order of the Board of Directors,
THOMAS L. FEAZELL,
SENIOR VICE PRESIDENT,
GENERAL COUNSEL
AND SECRETARY
Russell, Kentucky
December 4, 1995
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ASHLAND INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 25, 1996
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Ashland Inc. ("Ashland" or the "Company") of proxies to be
voted at the Annual Meeting of Shareholders to be held on Thursday, January 25,
1996, at 10:30 A.M., Eastern Standard Time, at the Ashland Petroleum Executive
Office Building, 2000 Ashland Drive, Russell, Kentucky, and at any adjournment
thereof, for the purposes set forth in the accompanying Notice. It is expected
that this Proxy Statement and the accompanying proxy card will be mailed to
shareholders commencing on or about December 4, 1995.
Only the holders of Ashland's Common Stock of record at the close of
business on November 27, 1995 will be entitled to vote at the Annual Meeting. At
that date there were 63,770,622 shares of Ashland Common Stock outstanding. Each
shareholder is entitled to one vote for each share of Ashland Common Stock held
by him or her on the record date. Cumulative voting applies in the election of
directors. Under cumulative voting, a shareholder may multiply the number of
shares owned by the number of directors to be elected and cast this total number
of votes for any one nominee or distribute the total number of votes, in any
proportion, among as many nominees as the shareholder desires. The presence in
person or by proxy of shareholders holding a majority of the shares of Ashland
Common Stock will constitute a quorum for the transaction of business at the
Annual Meeting. Abstentions and broker non-votes will be included in the
computation of the number of shares of Ashland Common Stock that are present for
purposes of determining the presence of a quorum.
Whole shares of Ashland Common Stock credited to the account of a
participant in Ashland's Dividend Reinvestment Plan will be voted in accordance
with the proxy card returned by the participant to Ashland. The voting of shares
of Ashland Common Stock held under Ashland's employee benefit plans is discussed
under "Stock Ownership of Certain Persons."
Ashland's address is Ashland Inc., 1000 Ashland Drive, Russell, Kentucky
41169.
ITEM I. ELECTION OF DIRECTORS
The Board of Directors currently consists of seventeen directors, divided
into three classes. The number of directors to be elected at the 1996 Annual
Meeting is fixed at five. The directors who are nominated for election as Class
I directors by the shareholders at the 1996 Annual Meeting are Messrs. Bolger,
Carlucci, Farley, Rinehart and Rouse.
All the nominees were recommended by the Nominating Committee of the Board
for election. All nominees were elected by the shareholders at the 1993 Annual
Meeting for a three-year term. With the exception of Mr. Bolger, the nominees,
if elected, will hold office for a three-year term expiring in 1999. Under the
Board's current retirement policy, it is anticipated that Mr. Bolger will retire
after serving two years of his three-year term. Under Ashland's By-laws, a
director elected to fill a vacancy on the Board serves until the next annual
meeting of shareholders and until his or her successor has been elected and
qualified. Mr. James W. Vandeveer, a director of Ashland since 1964, will retire
on January 25, 1996.
Shareholders voting at the Annual Meeting may not vote for more than the
number of nominees listed in the Proxy Statement. Under Ashland's By-laws, those
nominees receiving the greatest number of votes, up to the number of directors
to be elected, shall be elected directors. It is the intention of the persons
named in the enclosed proxy card (Messrs. John R. Hall and Paul W. Chellgren),
unless otherwise instructed in any form of proxy, to vote FOR the election of
the five nominees. Such persons may also vote such shares cumulatively for less
than the entire number of nominees if any situation arises which, in the
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opinion of the proxy holders, makes such action necessary or desirable or if
authority is withheld from one or more nominees. The Nominating Committee of the
Board has no reason to believe that any of the nominees will not be available
for election as directors.
NOMINEES FOR CLASS I DIRECTORS
(Term expiring in 1999)
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THOMAS E. BOLGER
(PHOTO) Mr. Bolger, 68, is a Director and Chairman of the Executive Committee
of the Board of Directors of Bell Atlantic Corporation in Philadelphia,
Pennsylvania. He also served as Chairman of the Board of Directors of
that company from 1984 to 1989. He is a Trustee of The National
Geographic Society. He has served as a Director of Ashland since 1987
and is Chairman of the Personnel and Compensation Committee and a
member of the Finance Committee of the Board of Directors.
SHARES OF ASHLAND COMMON STOCK OWNED
BENEFICIALLY................................................5,200(1)(2)
COMMON STOCK UNITS............................................14,347(6)
FRANK C. CARLUCCI
(PHOTO) Mr. Carlucci, 65, is Chairman of The Carlyle Group in Washington, D.C.
He was Secretary of Defense of the United States of America from 1987
to 1989. He is a Director of BDM International, Bell Atlantic
Corporation, CB Commercial Real Estate Group, Inc., Connecticut Mutual
Life Insurance Company, General Dynamics Corporation, Kaman
Corporation, Neurogen Corporation, Northern Telecom Ltd., Quaker Oats
Company, SunResorts, Ltd., Texas Biotechnology Corporation, Upjohn
Company and Westinghouse Electric Corporation. He has served as a
Director of Ashland since 1989 and is Chairman of the Nominating
Committee and a member of the Personnel and Compensation Committee of
the Board of Directors.
SHARES OF ASHLAND COMMON STOCK OWNED
BENEFICIALLY.............................................4,463(1)(2)(5)
COMMON STOCK UNITS............................................10,041(6)
JAMES B. FARLEY
(PHOTO) Mr. Farley, 65, is the retired Chairman of Mutual Of New York, a
position held from 1989 until 1993. Previously he had been President of
that company from 1988 to 1990. He is presently a Trustee of Mutual of
New York and a Director of Harrah's Entertainment Inc. and Walter
Industries Inc. He has served as a Director of Ashland since 1984 and
is a member of the Nominating and Public Policy - Environmental
Committees of the Board of Directors.
SHARES OF ASHLAND COMMON STOCK OWNED
BENEFICIALLY................................................4,400(1)(2)
COMMON STOCK UNITS.............................................3,812(6)
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JAMES R. RINEHART
(PHOTO) Mr. Rinehart, 65, is a business and labor consultant in Hiram, Ohio.
From 1987 to 1988 he served as Executive Vice President of Hiram
College. He previously served as the Chairman of the Board of
Directors, President and Chief Executive Officer of Clark Equipment
Company from 1981 to 1986. He has served as a Director of Ashland since
1985 and is a member of the Finance and Nominating Committees of the
Board of Directors.
SHARES OF ASHLAND COMMON STOCK OWNED
BENEFICIALLY................................................7,236(1)(2)
W. L. ROUSE, JR.
(PHOTO) Mr. Rouse, 63, is an investor in Naples, Florida. He served as Chairman
of the Board of Directors, President and Chief Executive Officer of
First Security Corporation in Lexington, Kentucky from 1982 to 1992. He
is a Director of Kentucky American Water Company and K.U. Energy. He
has served as a Director of Ashland since 1986 and is a member of the
Audit and Nominating Committees of the Board of Directors.
SHARES OF ASHLAND COMMON STOCK OWNED
BENEFICIALLY................................................5,000(1)(2)
COMMON STOCK UNITS............................................11,597(6)
</TABLE>
CONTINUING CLASS II DIRECTORS
(Term expiring in 1997)
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PAUL W. CHELLGREN
(PHOTO) Mr. Chellgren, 52, is President and Chief Operating Officer of Ashland,
positions he has held since 1992. He was Senior Vice President and
Chief Financial Officer of Ashland from 1988 to 1992. He is a Director
of Ashland Coal, Inc. and PNC Bank Corp. He has served as a Director of
Ashland since 1992 and is a member of the Finance and Public Policy -
Environmental Committees of the Board of Directors.
SHARES OF ASHLAND COMMON STOCK OWNED
BENEFICIALLY..............................................277,976(1)(7)
</TABLE>
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RALPH E. GOMORY
(PHOTO) Mr. Gomory, 66, is President of Alfred P. Sloan Foundation in New York,
New York. He was Senior Vice President for Science and Technology of
International Business Machines Corporation (IBM) from 1985 to 1989. He
is a Director of The Bank of New York, LEXMARK International, Inc.,
Polaroid Corp. and The Washington Post Company. He has served as a
Director of Ashland since 1989 and is a member of the Audit and Public
Policy - Environmental Committees of the Board of Directors.
SHARES OF ASHLAND COMMON STOCK OWNED
BENEFICIALLY................................................6,000(1)(2)
PATRICK F. NOONAN
(PHOTO) Mr. Noonan, 53, is Chairman of The Conservation Fund in Arlington,
Virginia. He is a Director of American Farmland Trust, International
Paper Company, and Saul Centers, Inc. and is a Trustee of The National
Geographic Society. He has served as a Director of Ashland since 1991
and is Chairman of the Public Policy - Environmental Committee and a
member of the Audit Committee of the Board of Directors.
SHARES OF ASHLAND COMMON STOCK OWNED
BENEFICIALLY................................................3,000(1)(2)
COMMON STOCK UNITS.............................................1,829(6)
JANE C. PFEIFFER
(PHOTO) Mrs. Pfeiffer, 63, is a management consultant in Greenwich,
Connecticut. She is a Director of International Paper Company and J. C.
Penney Company, Inc. and a Trustee of Mutual Of New York. She has
served as a Director of Ashland since 1982 and is a member of the
Personnel and Compensation Committee and the Public Policy -
Environmental Committee of the Board of Directors.
SHARES OF ASHLAND COMMON STOCK OWNED
BENEFICIALLY.............................................5,941(1)(2)(5)
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MICHAEL D. ROSE
(PHOTO) Mr. Rose, 53, is Chairman of the Board of Directors of Harrah's
Entertainment, Inc. and Promus Hotel Corporation in Memphis, Tennessee
(both of which formerly comprised The Promus Companies Incorporated of
which Mr. Rose was Chairman of the Board of Directors from 1984 to
1995). Prior to April 1994, Mr. Rose also served as Chief Executive
Officer of The Promus Companies Incorporated. He is a Director of First
Tennessee National Corporation, General Mills, Inc., and Darden
Restaurants, Inc. He has served as a Director of Ashland since 1988 and
is Chairman of the Finance Committee and a member of the Personnel and
Compensation Committee of the Board of Directors.
SHARES OF ASHLAND COMMON STOCK OWNED
BENEFICIALLY................................................4,200(1)(2)
COMMON STOCK UNITS............................................10,127(6)
DR. ROBERT B. STOBAUGH
(PHOTO) Dr. Stobaugh, 68, is a Professor at the Harvard Business School in
Boston, Massachusetts. He is a Director of National Convenience Stores,
Inc. He has served as a Director of Ashland since 1977 and is a member
of the Nominating and Finance Committees of the Board of Directors.
SHARES OF ASHLAND COMMON STOCK OWNED
BENEFICIALLY................................................6,000(1)(2)
COMMON STOCK UNITS............................................11,927(6)
</TABLE>
CONTINUING CLASS III DIRECTORS
(Term expiring in 1998)
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JACK S. BLANTON
(PHOTO) Mr. Blanton, 68, is Chairman of the Board of Houston Endowment, Inc.
and President of Eddy Refining Company in Houston, Texas. He is a
Director of Baker Hughes Incorporated, Burlington Northern Santa Fe,
Inc., Pogo Producing Co., and SBC Communications, Inc. He has served as
a Director of Ashland since 1988 and is Chairman of the Audit Committee
and a member of the Public Policy - Environmental Committee of the
Board of Directors.
SHARES OF ASHLAND COMMON STOCK OWNED
BENEFICIALLY............................................32,396(1)(2)(4)
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SAMUEL C. BUTLER
(PHOTO) Mr. Butler, 65, is a Partner of Cravath, Swaine & Moore, Attorneys in
New York, New York. He is a Director of GEICO Corporation, Millipore
Corporation and United States Trust Corporation. He has served as a
Director of Ashland since 1970 and is a member of the Personnel and
Compensation Committee and Audit Committee of the Board of Directors.
SHARES OF ASHLAND COMMON STOCK OWNED
BENEFICIALLY.......................................8,980(1)(2)(3)(4)(5)
COMMON STOCK UNITS............................................30,568(6)
EDMUND B. FITZGERALD
(PHOTO) Mr. Fitzgerald, 69, is the Managing Director of Woodmont Associates in
Nashville, Tennessee. From 1985 to 1990, he served as Chairman of the
Board of Directors and Chief Executive Officer of Northern Telecom Ltd.
He is a Director of Becton, Dickinson & Co. and G.T.I. Corporation. He
has served as a Director of Ashland since 1990 and is a member of the
Audit and Finance Committees of the Board of Directors.
SHARES OF ASHLAND COMMON STOCK OWNED
BENEFICIALLY................................................7,000(1)(2)
JOHN R. HALL
(PHOTO) Mr. Hall, 63, is Chairman of the Board of Directors and Chief Executive
Officer of Ashland, positions he has held since 1981. He is a Director
of Banc One Corporation, The Canada Life Assurance Company, CSX
Corporation, Humana Corporation, Reynolds Metals Company and Ucar
International Inc. and is a member of the American Petroleum Institute
Executive Committee. He has served as a Director of Ashland since 1968.
SHARES OF ASHLAND COMMON STOCK OWNED
BENEFICIALLY...........................................409,628(1)(4)(7)
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MANNIE L. JACKSON
(PHOTO) Mr. Jackson, 56, is the majority owner and Chairman of the Board of the
Harlem Globetrotters, International. Although retired as Senior Vice
President of marketing and administration for Honeywell Inc., he
remains as a consultant with Honeywell, an Advisor to the Chairman, and
a member of Honeywell's Southern Africa subsidiary's Board of
Directors. He serves on the Board of Advisors of Florida A&M's
Entrepreneurial Development Center, Howard University Business School
and the Humphrey Institute at the University of Minnesota. He is a
Director of Jostens, Inc. and The Stanley Works. He has served as a
Director of Ashland since May 1994 and is a member of the Audit and
Public Policy - Environmental Committees of the Board of Directors.
SHARES OF ASHLAND COMMON STOCK OWNED
BENEFICIALLY................................................2,000(1)(2)
COMMON STOCK UNITS.............................................1,783(6)
</TABLE>
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(1) Includes shares of Ashland Common Stock with respect to which each of the
individuals has the right to acquire beneficial ownership within 60 calendar
days after October 1, 1995 through the exercise of stock options: as to Mr.
Chellgren, 234,500 shares; as to Mr. Hall, 338,000 shares; and as to all
other directors except Mr. Jackson, 2,000 shares; and as to Mr. Jackson,
1,000 shares.
(2) Includes 2,000 shares of Restricted Common Stock of Ashland as to which the
director has voting power: as to directors except Messrs. Jackson and
Noonan, 2,000 shares; and as to Messrs. Jackson and Noonan, 1,000 shares.
(3) Includes 3,880 shares owned in trust for the benefit of Mr. Butler.
(4) Includes the following shares of Ashland Common Stock as to which the
respective persons disclaim any beneficial ownership: Mr. Butler, 750 shares
owned by his wife; Mr. Hall, 1,000 shares owned by his wife; and Mr.
Blanton, 2,000 shares owned by a trust for the benefit of his son for which
he is co-trustee.
(5) Includes shares of Ashland Common Stock held under the Ashland Dividend
Reinvestment Plan which provides participants with voting power with respect
to such shares.
(6) Common Stock Units held under the Deferred Compensation and Stock Incentive
Plan For Non-Employee Directors. These Stock Units are payable in cash or
Ashland Common Stock at the director's election upon termination of service
from the Board.
(7) Includes shares of Ashland Common Stock held under Ashland's Employee
Savings Plan and/or Leveraged Employee Stock Ownership Plan which provide
participants with voting and investment power with respect to such shares.
Shares shown above for each nominee and continuing director indicate
beneficial ownership at October 1, 1995. No nominee or continuing director owns
beneficially more than .64% of any class of Ashland stock.
Except as otherwise indicated, the nominees and continuing directors have
held the principal occupations described above during the past five years.
BOARD OF DIRECTORS
The standing committees of the Board of Directors are the Nominating
Committee, Audit Committee, Personnel and Compensation Committee, Public Policy
- - Environmental Committee and Finance Committee. During fiscal 1995, seven
meetings of the Board of Directors were held. The Nominating Committee met two
times, the Audit Committee met three times, the Personnel and Compensation
Committee met five times, the Public Policy - Environmental Committee met two
times and the Finance
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Committee met two times. Each director attended at least 75% of the total
meetings of the Board and the Committees on which they served with the exception
of Mr. Rinehart who attended 73% of such meetings. Overall attendance at Board
and Committee meetings was 91%.
THE NOMINATING COMMITTEE is responsible for recommending nominees for
membership to the Board of Directors. Current members of the Committee are Mr.
Carlucci (Chairman), Mr. Farley, Mr. Rinehart, Mr. Rouse, Dr. Stobaugh and Mr.
Vandeveer.
Nominees for directors are selected on the basis of recognized achievements
and their ability to bring various skills and experience to the deliberations of
the Board. The Committee will consider candidates recommended by other
directors, employees and shareholders. Written suggestions for candidates to
serve as directors should be sent to the Secretary of Ashland at Ashland Inc.,
1000 Ashland Drive, Russell, Kentucky 41169. Ashland's By-laws require that
written notice of a shareholder's intention to nominate any person for election
as a director at a meeting of shareholders must be received by the Secretary of
Ashland not later than (i) 90 days in advance of such meeting (provided that if
the annual meeting of shareholders is held earlier than the last Thursday in
January, such notice must be given within 10 days after the first public
disclosure, which may include any public filing with the Securities and Exchange
Commission, of the date of the annual meeting), and (ii) with respect to an
election to be held at a special meeting of shareholders for the election of
directors, the close of business on the seventh day following the date on which
notice of such meeting is first given to shareholders. The notice must contain:
(a) the name and address of the shareholder who intends to make the nomination
and of the person or persons to be nominated; (b) a representation that the
shareholder is a holder of record of stock of Ashland entitled to vote at such
meeting and intends to appear in person or by proxy at the meeting to nominate
the person or persons specified in the notice; (c) a description of all
arrangements or understandings between the shareholder and each nominee and any
other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the shareholder; (d) such other
information regarding each nominee proposed by such shareholder as would have
been required to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission had each nominee been nominated,
or intended to be nominated, by the Board; and (e) the consent of each nominee
to serve as a director if so elected. The chairman of any meeting of
shareholders to elect directors and the Board may refuse to acknowledge the
nomination of any person not made in compliance with the foregoing procedure. No
shareholder nominations have been received by Ashland for the January 25, 1996
Annual Meeting.
THE AUDIT COMMITTEE is responsible for recommending the selection of
Ashland's independent auditors, the audit fees and the services provided by the
independent auditors, reviewing the scope and findings of external and internal
audits and reviewing the adequacy of Ashland's policies, procedures and internal
controls. Current members of the Committee are Mr. Blanton (Chairman), Mr.
Butler, Mr. Fitzgerald, Mr. Gomory, Mr. Jackson, Mr. Noonan and Mr. Rouse.
THE PERSONNEL AND COMPENSATION COMMITTEE is responsible for approving
salaries of all corporate officers of Ashland and all awards and participation
under Ashland's incentive plans. It recommends the establishment of policies
dealing with compensation, position evaluations and personnel engagements,
transfers and terminations. In addition, it administers various Ashland employee
compensation plans and oversees Ashland's welfare and retirement and savings
plans, including the contribution levels, selection of investment managers,
determination of investment guidelines and the review of their performances.
Current members of the Committee are Mr. Bolger (Chairman), Mr. Butler, Mr.
Carlucci, Mrs. Pfeiffer and Mr. Rose.
THE PUBLIC POLICY - ENVIRONMENTAL COMMITTEE is responsible for the oversight
of policies, programs and practices in relation to public issues affecting
Ashland and the oversight of Ashland's environmental, health and safety
compliance policies, programs and practices. Current members of the Committee
are Mr. Noonan (Chairman), Mr. Blanton, Mr. Chellgren, Mr. Farley, Mr. Gomory,
Mr. Jackson and Mrs. Pfeiffer.
THE FINANCE COMMITTEE is responsible for reviewing Ashland's fiscal
policies, financial and capital structure and its current and contemplated
financial requirements and evaluating significant financial
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matters and decisions such as capital structure, dividend action, offerings of
corporate stock and debt securities and major borrowings. Current members of the
Committee are Mr. Rose (Chairman), Mr. Bolger, Mr. Chellgren, Mr. Fitzgerald,
Mr. Rinehart, Dr. Stobaugh and Mr. Vandeveer.
COMPENSATION OF DIRECTORS
Directors who are employees of Ashland are not compensated for service on
the Board or its Committees. Non-employee directors receive an annual retainer
of $30,000, $1,000 for each Board meeting attended, $1,000 per year for each
Committee assignment ($2,000 if Chairperson) and $1,000 for each Committee
meeting attended ($2,000 if Chairperson). Non-employee members of the Board may
additionally receive compensation at the rate of $1,000 per day for services for
special assignments as designated by the Chairman of the Board from time to
time.
Pursuant to the Ashland Inc. Deferred Compensation and Stock Incentive Plan
for Non-Employee Directors (the "Directors' Plan") previously approved by
Ashland's shareholders, non-employee directors may receive their directors' fees
in cash or Ashland Common Stock and may defer receipt until termination of
service. Deferred amounts may earn income based either on the prime rate of
interest or on a hypothetical investment in Ashland Common Stock ("Stock
Units"), or a combination of both, at the director's election. Upon termination
of service, deferred amounts (together with accrued earnings, if any) may be
received in cash or Ashland Common Stock, or a combination of both, in a lump
sum or installments at the director's election. Upon a "change of control" of
Ashland (as defined in the Directors' Plan), each participating director will
receive an automatic cash distribution of all amounts in such director's
account.
Under the Directors' Plan, each year following the Annual Meeting, each
non-employee director is granted an option to purchase 1,000 shares of Ashland
Common Stock at an exercise price equal to the fair market value of the stock on
the date of grant provided the return on common shareholders equity of Ashland
for the preceding fiscal year is equal to or greater than 10%. Since the return
on equity for Ashland's 1995 fiscal year was not greater than or equal to 10%,
no options will be issued under the Directors' Plan following the Annual Meeting
on January 25, 1996.
Pursuant to stock incentive plans previously approved by Ashland's
shareholders, upon becoming a director of Ashland, each non-employee director
receives an award of 1,000 shares of Restricted Stock of Ashland (the "initial
award"). In addition, each non-employee director has received or will receive an
award of 1,000 shares of Restricted Stock of Ashland upon the later of January
31, 1994 or the fifth anniversary of his or her initial award (the "subsequent
award"). As a condition to any award, the director is required to pay to Ashland
an amount equal to the par value of the shares of Restricted Stock awarded to
him or her. The Restricted Stock may not be sold, assigned, transferred or
otherwise encumbered until the earliest to occur of: (a) normal retirement from
the Board at age 70; (b) the death or disability of such director; (c) a 50%
change in the beneficial ownership of Ashland; or, in the case of a subsequent
award only, (d) voluntary early retirement to take a position in governmental
service. In the case of voluntary resignation or termination of the director for
any reason prior to the events described above, the grant of Restricted Stock to
such director will be forfeited.
Each non-employee director who retires at age 70, or earlier if the director
has at least five years of continuous service, is eligible to participate in a
director retirement plan for non-employee directors. Under this plan, upon
retirement at age 70 with at least ten years of continuous service as a director
of Ashland, the director will receive the annual retainer in effect on his or
her date of retirement, for life. Upon retirement at age 70 with less than ten
years of continuous service as a director of Ashland, or upon retirement as a
result of permanent or total disability, the director will receive, at his or
her election, either (1) for life, an amount equal to 10% of the annual retainer
in effect on the date of his or her retirement multiplied by the number of years
of continuous service as a director of Ashland, or (2) 100% of the annual
retainer in effect on the date of his or her retirement for a number of years
equal to the number of years of continuous service as a director of Ashland.
Upon retirement prior to age 70, the director will receive, commencing at age
65, the amount of the annual retainer in effect on the date of
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his or her retirement for a number of years equal to the number of years of
continuous service as a director of Ashland. Ashland's obligations under this
plan have been partially funded with the First National Bank of Louisville,
Kentucky which is serving as trustee.
Ashland maintains a Director Death Benefit Program for non-employee
directors. Under this program, Ashland will pay a one-time $50,000 death benefit
to the designated beneficiary of each active or retired director of Ashland who
was not an employee of Ashland on the date of his or her death.
Directors of Ashland participate in the Directors' Charitable Award Program.
Pursuant to the program, Ashland has purchased joint life insurance contracts in
the amount of $1 million on each director. Upon the death of a director, Ashland
will donate an amount equal to $1 million to one or more charitable
organizations recommended by the director. The donations are funded with the
proceeds Ashland receives from the joint life insurance contracts. Directors
derive no financial benefit from the program since all charitable deductions
accrue solely to Ashland.
The Board of Directors of Ashland considers stock ownership in the Company
by management to be of utmost importance. Such ownership enhances management's
commitment to the future of the Company and further aligns management's
interests with those of Ashland's shareholders. In keeping with this philosophy,
in fiscal 1993, the Board established minimum stock ownership guidelines for
directors and certain executive officers. These guidelines require directors to
own Ashland Common Stock having a value of at least five times their annual
retainer. Each director will have five years from 1993 (or, if later, the year
the director was elected to the Board) to reach this ownership level. For
further information as to these guidelines as they pertain to Ashland's
executive officers, see the Personnel and Compensation Committee Report on
Executive Compensation in this Proxy Statement.
STOCK OWNERSHIP OF CERTAIN PERSONS
The following table shows as of October 1, 1995, certain information
regarding those persons known by Ashland management to be the owners of more
than 5% of Ashland's outstanding Common Stock and the beneficial ownership of
each class of Ashland equity securities by each of the executive officers named
under "Executive Compensation" and all directors and executive officers as a
group.
<TABLE>
<CAPTION>
AMOUNT AND
CLASS OF NATURE OF PERCENT OF
STOCK BENEFICIAL OWNERSHIP CLASS(6)
----------- ---------------------- -------------
<S> <C> <C> <C>
Key Trust Company of Ohio, NA......................... Common 9,440,928(1) 14.8%
127 Public Square
Cleveland, Ohio 44114
J.P. Morgan & Co., Inc................................ Common 3,362,483(2) 5.3%
23 Wall Street
New York, New York 10015
John A. Brothers...................................... Common 214,551(3)(4)
Paul W. Chellgren..................................... Common 277,976(3)(4)
David J. D'Antoni..................................... Common 115,851(3)(4)
John R. Hall.......................................... Common 409,628(3)(4)(5)
Charles F. Potts...................................... Common 42,231(3)(4)
All directors and executive
officers as a group.................................. Common 2,171,127 3.4%
Preferred 200
</TABLE>
- ------------------------
(1) Key Trust Company of Ohio, NA ("Key") has advised Ashland that as of October
1, 1995, it was the record owner of 9,440,928 shares of Ashland Common Stock
or 14.8% of the shares of Ashland Common Stock outstanding on such date. Key
has advised Ashland that these shares include 9,317,448 shares held by it as
trustee under the Ashland Leveraged Employee Stock Ownership Plan ("LESOP"),
and 24,568 shares held by it as trustee under the SuperAmerica Hourly
Associates Savings Plan ("SA Plan"). Key has informed Ashland that with
regard to the proposals, it will vote
10
<PAGE>
shares held for the accounts of participants in the SA Plan in accordance
with instructions received from participants and, if no instructions are
received, Key will vote such shares in the same proportion as shares for
which instructions are received from other participants in the SA Plan.
Further, Key has informed Ashland that it will vote shares allocated to the
account of a participant in the LESOP in accordance with instructions
received from such participant and, if the participant has not provided
voting instructions, or where the shares have not yet been allocated to a
participant's account, Key will vote those shares in the same proportion as
shares for which instructions are received from other participants in the
LESOP. Key has advised Ashland that the remaining 98,912 shares of Ashland
Common Stock held by it as of October 1, 1995 were held by it in a variety
of fiduciary capacities.
(2) Based upon a Form 13F filed with the Securities and Exchange Commission on
or about November 15, 1995, J.P. Morgan & Co., Inc. ("J.P. Morgan") held in
the aggregate 3,362,483 shares of Ashland Common Stock as of September 29,
1995. Based upon information provided in the filing, Ashland understands
that J.P. Morgan has sole voting authority with respect to 2,018,170 shares,
shared voting authority with respect to 46,500 shares and no voting
authority with respect to 1,297,813 shares.
(3) Includes shares of Ashland Common Stock held under Ashland's Employee
Savings Plan and/or Leveraged Employee Stock Ownership Plan which provide
participants with voting and investment power with respect to such shares.
(4) Includes shares of Ashland Common Stock with respect to which each of the
individuals has the right to acquire beneficial ownership within 60 calendar
days after October 1, 1995 through the exercise of stock options: as to Mr.
Brothers, 188,750 shares; Mr. Chellgren, 234,500 shares; Mr. D'Antoni,
77,250 shares; Mr. Hall, 338,000 shares; and Mr. Potts, 35,500 shares.
(5) Includes the following shares of Ashland Common Stock as to which the
respective person disclaims any beneficial ownership: Mr. Hall, 1,000 shares
owned by his wife.
(6) Other than as indicated, share ownership does not exceed 1% of the class so
owned.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table is a summary of compensation information for each of the
last three fiscal years ended September 30, 1995, 1994, and 1993 for the Chief
Executive Officer and each of the other four most highly compensated executive
officers at September 30, 1995.
11
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------------
ANNUAL COMPENSATION
----------------------------------- AWARDS PAYOUTS
OTHER ------- ----------
ANNUAL OPTIONS LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION(2) (#) PAYOUTS(3) COMPENSATION(4)
- --------------------------------------- ---- -------- -------- --------------- ------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
John R. Hall 1995 $876,988 $ 0 $ 9,694 50,000 $ 0 $117,079
Chairman of the Board and 1994 797,262 836,741 8,042 50,000 209,226 116,905
Chief Executive Officer 1993 752,416 458,059 4,292 100,000 0 72,337
Paul W. Chellgren 1995 548,118 0 10,252 40,000 0 76,017
President and 1994 498,289 584,911 5,539 40,000 106,904 73,849
Chief Operating Officer 1993 464,559 317,777 2,029 65,000 0 43,871
John A. Brothers 1995 398,631 210,158 11,468 25,000 0 28,656
Senior Vice President and 1994 368,734 349,960 11,222 25,000 90,768 58,528
Group Operating Officer 1993 343,819 297,772 3,880 25,000 0 46,884
David J. D'Antoni 1995 323,888 326,727 2,590 15,000 0 37,843
Senior Vice President and 1994 298,973 307,944 495 10,000 156,062 49,101
President of Ashland Chemical Company 1993 279,042 272,525 346 15,000 0 47,047
Charles F. Potts 1995 250,000 298,056 2,069 10,000 0 30,794
Senior Vice President and 1994 225,000 281,799 573 10,000 36,551 36,457
President of APAC, Inc. 1993 190,000 236,361 802 10,000 0 33,375
</TABLE>
- ------------------------
(1) Amounts received under Ashland's Incentive Compensation Plan for each of the
fiscal years ended September 30, 1993, 1994 and 1995.
(2) None of the named executives received perquisites and other personal
benefits, securities or property in excess of the lesser of $50,000 or 10%
of total salary and bonus. All amounts shown in this column reflect
reimbursement of taxes paid by the named executives.
(3) Amounts received under Ashland's Performance Unit Plan for the FY 1991-1994
performance period.
(4) Amounts shown in this column reflect employer matching contributions under
Ashland's Employee Savings Plan and allocations of stock under Ashland's
LESOP as provided on the same basis for all employees and related forfeiture
payments under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). For fiscal 1995, these payments were as follows:
<TABLE>
<CAPTION>
SAVINGS PLAN LESOP ERISA FORFEITURE PAYMENTS
------------ ---------- --------------------------
<S> <C> <C> <C>
John R. Hall $ 1,800 $ 6,847 $ 108,432
Paul W. Chellgren 1,800 6,847 67,370
John A. Brothers 1,800 6,847 20,009
David J. D'Antoni 1,800 6,847 29,196
Charles F. Potts 1,800 6,847 22,147
</TABLE>
12
<PAGE>
STOCK OPTION GRANTS
The following table sets forth certain information concerning stock options
granted in fiscal year 1995 to the named executive officers.
OPTION GRANTS IN FISCAL YEAR 1995
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
- ------------------------------------------------------------------------------------ ANNUAL RATES OF
% OF TOTAL STOCK PRICE
OPTIONS EXERCISE APPRECIATION FOR
OPTIONS GRANTED TO OR BASE OPTION TERM*
GRANTED EMPLOYEES IN PRICE EXPIRATION ----------------------------
NAME (#) FISCAL YEAR ($/SH) DATE 5% 10%
- ------------------------------- --------- --------------- ---------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
John R. Hall 50,000 6.07% $ 33.875 10/21/05 $ 1,076,431 $ 2,734,433
Paul W. Chellgren 40,000 4.85% 33.875 10/21/05 861,144 2,187,546
John A. Brothers 25,000 3.03% 33.875 10/21/05 538,215 1,367,216
David J. D'Antoni 15,000 1.82% 33.875 10/21/05 322,929 820,330
Charles F. Potts 10,000 1.21% 33.875 10/21/05 215,286 546,887
</TABLE>
- ------------------------
*Option Value assuming stock price appreciation rates of 5% and 10% compounded
annually for the 10 year and 1 month term of the options. At the 5% and 10%
rates, the stock price at October 21, 2005 (the expiration date of the $33.875
options) would be $55.40 and $88.56, respectively, and the potential realizable
value for all Ashland shareholders if all 63,695,853 shares outstanding on
September 21, 1995 (the grant date of the $33.875 options) were held until
October 21, 2005 would be $3,528,965,288 and $5,641,113,825, respectively.
Actual gains will be dependent on future stock market conditions and there can
be no assurance that these amounts will be achieved.
STOCK OPTION EXERCISES
The following table sets forth certain information concerning stock options
exercised in fiscal year 1995 by each of the named executive officers and the
value of unexercised options held by such officers on September 30, 1995.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1995
AND FISCAL YEAR END OPTION VALUES*
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
AT FY-END (#) AT FY-END*
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ---------------------------------- ----------------- ------------ -------------------- -----------------------
<S> <C> <C> <C> <C>
John R. Hall 7,000 $ 75,250 325,500/100,000 $737,813/$109,375
Paul W. Chellgren 8,000 63,500 228,250/ 76,250 624,188/ 55,156
John A. Brothers 0 0 188,750/ 43,750 431,719/ 781
David J. D'Antoni 0 0 77,250/ 23,750 162,219/ 469
Charles F. Potts 0 0 35,500/ 17,500 118,875/ 313
</TABLE>
- ------------------------
*Based on the closing price of Ashland Common Stock as reported on the New York
Stock Exchange Composite Tape on September 29, 1995 of $33.25 per share.
RETIREMENT PLANS
PENSION PLANS
Ashland maintains qualified pension plans (the "qualified plans") under
which executive officers are entitled to benefits on the same basis as other
employees. Upon a "change in control" of Ashland (as defined in the plans), the
qualified plans will automatically terminate and the funds in such plans,
together with any excess assets, will be distributed to the participants.
13
<PAGE>
To the extent that benefits under the qualified plans exceed limits
established by the Internal Revenue Code of 1986, as amended (the "Code"), they
are payable under a nonqualified excess benefit pension plan (the "non-qualified
plan") which provides for the payment of benefits in excess of certain
limitations imposed by the provisions of ERISA or limitations on compensation or
benefits that may be imposed by the Code. The plan also provides that
participants may, at the discretion of the Personnel and Compensation Committee,
receive their retirement benefit under the non-qualified plan in a lump-sum
distribution. An irrevocable letter of credit has been established to partially
fund Ashland's obligations under the plan.
The following table shows the estimated annual benefits payable under the
qualified and non-qualified plans assuming continued employment until the normal
date of retirement at age 65, based on a straight-life annuity form of
retirement income. The amounts in the table are not subject to any reductions
for social security benefits received by the participant but are subject to
reductions for the actuarial value of 50% of a participant's LESOP account and
the actuarial value of 50% of any shares forfeited under the LESOP because of
the limitations established by the Code.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT BENEFITS
----------------------------------------------------------------------------
AVERAGE YEARS OF PARTICIPATION
ANNUAL ----------------------------------------------------------------------------
EARNINGS* 10 15 20 25 30 35
- ------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
$ 25,000 $ 3,300 $ 4,950 $ 6,601 $ 8,251 $ 9,901 $ 11,552
50,000 7,050 10,575 14,101 17,626 21,151 24,677
100,000 14,550 21,825 29,100 36,376 43,650 50,925
200,000 29,550 44,325 59,100 73,876 88,650 103,425
300,000 44,550 66,825 89,100 111,376 133,650 155,925
400,000 59,550 89,325 119,100 148,876 178,650 208,425
500,000 74,550 111,825 149,100 186,376 223,650 260,925
600,000 89,550 134,325 179,100 223,876 268,650 313,425
800,000 119,550 179,325 239,101 298,876 358,651 418,427
1,000,000 149,550 224,325 299,101 373,876 448,651 523,427
1,200,000 179,550 269,325 359,101 448,876 538,651 628,427
</TABLE>
- ------------------------
* Average annual earnings includes a participant's salary during the highest
consecutive 36 month period of the final 120 month period prior to
retirement, but excludes other forms of compensation included in the Summary
Compensation Table.
As of October 1, 1995, Messrs. Hall, Chellgren, Brothers, D'Antoni and Potts
had credited service in the combined plans of 33, 20, 25, 21 and 10 years,
respectively.
SUPPLEMENTAL EARLY RETIREMENT PLAN
Under the Supplemental Early Retirement Plan, eligible key executive
employees may retire prior to their normal retirement date. Messrs. Hall and
Brothers are currently eligible to participate in the plan. The plan provides
that the maximum total annual benefit payable to a participant under the plan is
an amount equal to 50% of the final average annual compensation (salary plus
incentive compensation awards) received by the participant during the highest 36
months of the final 60 month period prior to retirement. The amount payable
under the plan is reduced to the extent payments are made under the qualified
and non-qualified pension plans of Ashland, subject to reductions for the
actuarial value of 50% of a participant's LESOP account and the actuarial value
of 50% of any shares forfeited under the LESOP because of the limitations
established by the Code. In addition, if the executive has entered into an
Executive Employment Agreement with Ashland, the amount payable under the plan
is reduced to reflect payments, if any, under such Agreement. An irrevocable
letter of credit has been established to partially fund Ashland's obligations
under the plan.
The plan provides that participants may, at the discretion of the Committee,
receive their retirement benefit under the plan in a lump-sum distribution. The
retirement benefit received as a lump-sum distribution is equal to the actuarial
present value of all expected future payments if the participant received
monthly payments discounted at the Pension Benefit Guaranty Corporation ("PBGC")
rate
14
<PAGE>
used to value annuities in effect during the participant's last full calendar
month of employment. The estimated lump-sum value of the retirement benefit
under the plan to Mr. Hall at age 63 and Mr. Brothers, assuming retirement at
age 62, using the current PBGC rate is $2,568,984 and $1,576,034, respectively.
Upon a "change in control" of Ashland (as defined in the plan), eligible key
executive employees may, in their discretion, elect to retire at an earlier age
pursuant to the plan. Ashland normally enters into consulting agreements with
its retiring key executive employees who participate in the plan. Under these
agreements, a retiring employee receives payment of a mutually agreeable per
diem compensation for services rendered to Ashland.
EXECUTIVE EMPLOYMENT AGREEMENTS
Currently, the named executive officers have employment agreements with
Ashland which provide for continuation of their then-current salaries for two
years after termination of their employment by Ashland without "Cause". In the
event of termination without "Cause" or resignation for "Good Reason" within two
years after any "change in control" of Ashland, the executive officers would
receive a payment equal to three times their annual compensation, including
incentive payments, based on the average of the preceding five years. In
addition, the agreements provide for continuation of certain benefits for a
period of one year. The terms "Cause", "Good Reason" and "change in control" are
defined in the agreements. In no event shall the total payment to any executive
officer exceed an amount which would be deemed an "excess parachute payment"
under Section 280G of the Code.
PERSONNEL AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
PERSONNEL AND COMPENSATION COMMITTEE OF THE BOARD
The Personnel and Compensation Committee (the "Committee") is comprised
entirely of non-employee members of Ashland's Board of Directors (the "Board").
It is the Committee's responsibility to review, recommend and approve changes to
the Company's executive compensation policies and programs. It is also the
Committee's responsibility to review and approve all compensation payments to
the Chief Executive Officer and Ashland's other executive officers.
ASHLAND'S COMPENSATION POLICY AND OBJECTIVES
Ashland's executive compensation program is designed to enable the Company
to attract, retain and motivate the high caliber of executives required for the
success of its business. The purpose of this program and the specific objectives
of the Committee are to:
- Pay for performance, motivating both long- and short-term
performance for the benefit of Ashland's shareholders;
- Provide a total compensation program competitive with those of
companies with which Ashland competes for top management
talent;
- Place greater emphasis on variable incentive compensation
versus fixed or base pay, particularly for Ashland's executive
officers;
- Reward executives based primarily on the performance of their
particular business units, while including a component
recognizing corporate performance;
- Encourage significant Ashland Common Stock ownership by
Ashland's executive officers in order to align their interests
with those of Ashland's shareholders; and
- Most importantly, join shareholder and management interests in
achieving superior performance which should translate into a
superior total return to Ashland's shareholders.
15
<PAGE>
Overall, Ashland's executive compensation program is designed to be
performance-oriented, with a large portion of executive compensation "at risk".
The portion of total compensation represented by annual and long-term incentives
that relate directly to performance has grown significantly and now constitutes
over 60% of the total compensation of Ashland's executive officers.
In recent years, the Committee has expanded the number of individuals
eligible for annual incentives and option grants in order to enhance the
commitment of mid-level managers to the objectives of the Company, its principal
business units, and Ashland's shareholders. Today approximately 320 of Ashland's
management and professional employees participate in the Company's annual
incentive plan, and approximately 490 employees participate in the Company's
stock option program.
In fiscal year 1993, the Committee retained Frederic W. Cook & Co., Inc., an
independent nationally-known compensation consultant, to review Ashland's
Executive Compensation Program. After extensive study, Frederic W. Cook
concluded that Ashland's program is both reasonable and competitive.
ASHLAND'S COMPENSATION PROGRAMS
In order to further the Committee's objectives, the executive compensation
program for Ashland's executive officers includes three primary components: (1)
base pay; (2) an annual incentive bonus; and (3) a long-term incentive program
consisting of stock options and performance shares or units. The overall program
is designed to provide total compensation opportunities which are comparable to
the opportunities provided by a group of nineteen companies of similar size and
diversity to Ashland (the "Compensation Peer Group"). This Compensation Peer
Group contains a larger number of companies than the peer group of companies
selected for comparison in the Five-Year and Ten-Year Cumulative Total Return
Performance Graphs.
BASE SALARY
Annual salary is designed to compensate executives for their sustained
performance. Base salary levels for executive officers are reviewed each year by
the Committee and are generally less than the median of the Compensation Peer
Group. In addition, consideration is given to individual experience as well as
individual and corporate, subsidiary or division performance. Increases in
salaries are typically granted annually; however, executive salary increases
have been delayed to at least 14-month periods during two of the last four
fiscal years in recognition of less than satisfactory corporate performance
during these periods. No salary increases were granted this fiscal year for
executive officers.
ANNUAL INCENTIVE BONUS
Incentive compensation is awarded annually based 20% upon the participant's
individual performance for the last fiscal year and 80% upon the Company's
operating performance as further described below. Within ninety days of the
beginning of each fiscal year, (i) corporate Return on Equity ("ROE") Hurdles
and Targets, (ii) division and subsidiary Return on Investment ("ROI") Hurdles
and Targets, and (iii) for the Chairman of the Board and Chief Executive Officer
and President and Chief Operating Officer, in addition to the ROE Hurdles and
Targets, a net income Target, are set by the Committee for the upcoming fiscal
year. "Hurdles" are the minimum objectives that must be reached in order to
trigger a bonus payout. If the applicable "Target(s)" is achieved, maximum
incentive payments may be earned. The Committee may adjust incentive awards
downward based on such factors as the Committee deems appropriate.
Awards for the Chairman of the Board and Chief Executive Officer, President
and Chief Operating Officer and senior vice presidents (other than group
operating officers and division and subsidiary presidents) are based upon
overall corporate performance. For Ashland group operating officers, awards are
based upon the performance of the business units for which they are responsible
in addition to a corporate performance component. Awards to corporate employees
are based equally upon general overall corporate performance and division
performance and for division employees are entirely based on division
performance. A participant's maximum potential payout is generally a fixed
percentage of the midpoint of the annual salary range for the position held by
the participant and is dependent upon the participant's level of participation
in Ashland's Incentive Compensation Plan.
16
<PAGE>
In view of the results for fiscal 1995, no incentive payments were made to
the Chairman or President and most officers and divisional and corporate staff
executives received significantly reduced incentive payments. To the extent that
payment of incentives did occur, such payment was made 80% in cash and 20% in
shares of Ashland Common Stock, in keeping with the Committee's belief that
stock ownership provides a direct relationship between an executive's
compensation and the shareholders' interests. It is anticipated that payment of
any fiscal 1996 awards will also be made 80% in cash and 20% in shares of
Ashland Common Stock.
LONG-TERM INCENTIVE COMPENSATION
PERFORMANCE SHARES/UNITS
The performance share/unit program is a long-term incentive plan primarily
tied to company performance. It is designed to motivate senior executives whose
work most affects Company earnings and to tie their compensation directly to
Ashland's long-term financial objectives. Historically, the Committee has
granted awards of performance shares or units to selected employees every two
years with each award covering a four-year performance cycle. The number of
performance shares or units awarded is based on the employee's responsibility
level, performance, and salary level. Awards granted to date under the plan have
generally ranged from 70% to 160% of an employee's base salary. Payment of an
award is made only if one or more of the established performance objectives are
met over the four-year performance period. In the past, awards were denominated
in cash and have been paid in cash. In keeping with the goal of increasing stock
ownership by executives, performance awards for the fiscal 1995 - 1998
performance period to certain of Ashland's executive officers were denominated
in shares of Ashland Common Stock. It is anticipated that payment of these
awards will be made in shares of Ashland Common Stock.
Performance objectives are determined by the Committee at the beginning of
each performance period. Historically, awards made prior to fiscal 1993 to
corporate employees were based 100% on the achievement of a minimum four-year
average ROE. Awards made for the performance periods beginning in fiscal 1993
and thereafter to corporate employees are based on achievement of the following
performance objectives: (a) a minimum four-year average corporate ROE (the
"corporate objective"); (b) total return to shareholders ("TRS") at least equal
to or greater than the median of the TRS of a peer group of companies over the
four-year period (the "peer TRS objective"); and (c) TRS at least equal to or
greater than the median of the companies in the Standard & Poor's 500 over the
four-year period (the "S&P TRS objective"). These objectives are weighted 50%,
25%, and 25%, respectively. Historically, awards made prior to fiscal 1993 to
division and subsidiary personnel were based 50% on the achievement of the
corporate objective and 50% on the achievement of a minimum four-year average
ROI for the division or subsidiary in which the person was employed. Beginning
in fiscal 1993 and thereafter, the awards made to division and subsidiary
personnel are based on achievement of the following performance objectives: (a)
a minimum four-year average ROI for the applicable division or subsidiary; (b)
the corporate objective; (c) the peer TRS objective; and (d) the S&P TRS
objective. These objectives are weighted 50%, 25%, 12.5%, and 12.5%,
respectively. For the performance period beginning in fiscal 1995, in addition
to the performance objectives above, certain awards are based upon achievement
of an average net income objective for the four-year period. If the foregoing
objectives are met, the Committee may adjust any award payment downward based on
such factors as the Committee deems appropriate.
STOCK OPTIONS
Ashland's employee stock option program is a long-term plan designed to link
executive compensation with increased shareholder value over time. The Committee
believes that the use of stock is an important key employee retention and
motivation tool and results in long-term management for the benefit of Ashland's
shareholders. In determining the amount of stock options to be granted annually
to key employees, a target number of shares for each executive grade level is
established.
All stock options are granted with an exercise price equal to the fair
market value of Ashland Common Stock on the date of grant. Accordingly, the
upside or downside value of options granted to an
17
<PAGE>
executive corresponds exclusively with Ashland's stock price performance. In the
event that Ashland's stock price declines to a level below the option grant
price, options are not re-valued or re-issued. Vesting of awards generally
occurs over a period of three years.
STOCK OWNERSHIP GUIDELINES
The Committee and Senior Management believe that linking a significant
portion of an executive's current and potential future net worth to the
Company's success, as reflected in the stock price, gives the executive a stake
similar to that of the Company's owners and results in long-term management for
the benefit of those owners. Consistent with this philosophy, the Committee
adopted Stock Ownership Guidelines in fiscal 1993 for 17 of Ashland's executive
officers. In 1995, the Committee extended this coverage to include an additional
120 key managers. These guidelines establish minimum levels of stock ownership
as follows: the Chief Executive Officer -- stock having a value equal to five
times base salary; the President -- four times base salary; senior vice
presidents, division and subsidiary presidents and administrative vice
presidents -- three times base salary; and designated key managers -- one times
base salary. The Board has also adopted Stock Ownership Guidelines for
non-employee members of the Board of Directors described under "Compensation of
Directors". In keeping with this philosophy, payment of incentive compensation
for fiscal 1994 and 1995 was generally made 20% in Ashland Common Stock and it
is anticipated that payment of fiscal 1996 incentive compensation will also be
made 20% in stock. It is anticipated that fiscal 1993-1996 and fiscal 1995-1998
performance unit awards will be paid 50% in stock, with the remainder to be paid
in cash. In addition, fiscal 1995-1998 performance awards to certain executive
officers were denominated 100% in stock and it is anticipated that any payment
will be made 100% in stock.
DEDUCTIBILITY OF COMPENSATION
Under Section 162(m) of the Internal Revenue Code, the Company is subject to
the loss of the deduction for compensation in excess of $1,000,000 paid to one
or more of the executive officers named in this proxy statement. The deduction
can be preserved if the Company complies with certain conditions in the design
and administration of its compensation programs.
The Committee believes all compensation paid in fiscal 1995 is deductible by
the Company. The Committee has determined that it will make every reasonable
effort, consistent with sound executive compensation principles and the needs of
the Company, to ensure that all future amounts paid to its executive officers
will be fully deductible by the Company.
OTHER PLANS
Ashland also has various broad-based employee benefit plans, including a
Leveraged Employee Stock Ownership and Employee Savings Plan. Ashland also
maintains pension, insurance and other benefit plans for its employees.
Executives participate in these plans on the same terms as other eligible
employees, subject to any legal limits on the amounts that may be contributed or
paid to executives under the plans.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
While Ashland's reported financial results this year are disappointing, real
progress was achieved during the year on an operating basis and from the
perspective of long-term value creation. The most significant of these
accomplishments include:
- The completion of 17 acquisitions at a total investment of
approximately $380 million;
- A 38% increase in capital employed in Ashland's related energy
and chemical businesses;
- The reorganization of Ashland's refining unit in an ongoing
strategy to maintain a competitive cost structure, as well as
reduce the volatility of refining earnings; and
- The effective management of Ashland's financial resources to
pursue growth and, at the same time, preserve Ashland's
investment grade debt rating.
18
<PAGE>
Despite these factors, which the Committee believes will positively position
Ashland for the future, Mr. Hall's base salary for fiscal 1995 remained static
at $880,000. Mr. Hall did not receive any incentive compensation for fiscal
1995. In September 1995, Mr. Hall received an award of stock options to purchase
50,000 shares of Ashland Common Stock at an exercise price equal to the then
fair market value of $33.875 per share.
SUMMARY
The Committee believes that the compensation and long-term incentive plans
provided to Ashland's executive officers are structured and operated to create
strong linkage and alignment with the long-term best interests of Ashland and
its shareholders.
PERSONNEL AND COMPENSATION
COMMITTEE
Thomas E. Bolger, Chairman
Samuel C. Butler
Frank C. Carlucci
Jane C. Pfeiffer
Michael D. Rose
19
<PAGE>
FIVE-YEAR AND TEN-YEAR CUMULATIVE TOTAL RETURN PERFORMANCE GRAPHS
The following graphs compare Ashland's five-year and ten-year cumulative
total shareholder return (assuming reinvestment of dividends) with the
cumulative total return of the Standard & Poor's 500 Index and a group of
company peers which consists of Diamond Shamrock, Inc.; FINA, Inc.; Pennzoil
Company; Sun Company, Inc.; Total Petroleum (North America) Ltd.; Union Carbide
Corporation and USX-Marathon Group.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
ASHLAND, S&P 500 INDEX AND PEER GROUP
[Graph Appears Here]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ashland 100 102 86 122 131 128
S&P 500 100 131 146 165 171 221
Peer Group 100 115 100 122 136 151
</TABLE>
20
<PAGE>
COMPARISON OF TEN-YEAR CUMULATIVE TOTAL RETURN
ASHLAND, S&P 500 INDEX AND PEER GROUP
[Graph Appears Here]
<TABLE>
<CAPTION>
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ashland 100 188 211 219 273 214 218 185 261 280 273
S&P 500 100 132 189 166 220 200 262 291 329 341 442
Peer Group 100 102 142 129 164 140 161 139 171 190 211
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Personnel and Compensation Committee of the Board of
Directors during fiscal 1995 were Mr. Bolger (Chairman), Mr. Butler, Mr.
Carlucci, Mrs. Pfeiffer and Mr. Rose. During fiscal 1995, the firm of Cravath,
Swaine & Moore, of which Mr. Butler is a member, was paid for legal services
rendered to Ashland and certain of its subsidiaries.
ITEM II. RATIFICATION OF AUDITORS
The Audit Committee of the Board of Directors recommended and the Board has,
subject to shareholder ratification, appointed Ernst & Young LLP to audit the
accounts of Ashland and its subsidiaries for fiscal 1996. Ernst & Young LLP has
audited the accounts of Ashland and its subsidiaries for many years.
The following resolution concerning the appointment of independent auditors
will be offered at the meeting:
"RESOLVED, that the appointment by the Board of Directors of the Company
of Ernst & Young LLP to audit the accounts of the Company and its
subsidiaries for the fiscal year 1996 is hereby ratified."
Representatives of Ernst & Young LLP will be present at the Annual Meeting
with the opportunity to make a statement and to respond to appropriate
questions. Submission of the appointment to shareholders is not required.
However, the Board will reconsider the appointment if it is not approved by the
21
<PAGE>
shareholders. The appointment will be deemed ratified if the votes cast in favor
of the proposal exceed the votes cast against the proposal. Abstentions and
broker non-votes are not counted as votes cast either for or against the
proposal.
ITEM III. SHAREHOLDER PROPOSAL
John J. Gilbert of 29 East 64th St., New York, New York 10021-7043, owner of
124 shares of Ashland Common Stock, stating that he (i) represents the Lewis D.
and John J. Gilbert Foundation, the owner of 100 shares of Ashland Common Stock,
(ii) is a co-trustee under the will of Minnie D. Gilbert for 400 shares of
Ashland Common Stock, and (iii) represents an additional family interest of
1,112 shares of Ashland Common Stock, and John C. Henry, owner of 2,850 shares
of Ashland Common Stock (Messrs. Gilbert and Henry hereinafter collectively
called the "Proponents"), has notified Ashland in writing that he intends to
present the following resolution at the Annual Meeting:
"RESOLVED: That the stockholders of Ashland Inc., assembled in annual
meeting in person and by proxy, hereby request that the Board of Directors
take the needed steps to provide that at future elections of directors new
directors be elected annually and not by classes as is now provided and that
on expiration of present terms of directors their subsequent election shall
also be on an annual basis."
The Proponents have submitted the following statement in support of their
proposal (reproduced as written):
Continued very strong support along the lines we suggest were shown at the
last annual meeting when 38%, an increase over the previous year, 2,093
owners of 18,432,619 shares, were cast in favor of this proposal. The vote
against included 2,251 unmarked proxies.
ARCO, to its credit, voluntarily ended theirs stating that when a very high
percentage (34.6%) desired it to be changed to an annual election, it was
reason enough for them to change it. Several other companies have also
followed suit such as Pacific Enterprises, Hanover Direct and at the recent
Lockheed-Martin Marietta merger.
Because of the normal need to find new directors and because of
environmental problems as well as the recent avalanche of derivative losses
and many groups desiring to have directors who are qualified on the
subjects, we think that ending the stagger system of electing directors is
the answer. In addition, some recommendations have been made to carry out
the Valdez 10 points. The 11th, in our opinion, should be to end the stagger
system of electing directors and to have cumulative voting. Ashland does
have the latter, to its credit.
Equitable Life Insurance Company, which is now called Equitable Companies,
converted from a policy owned company to a public stockholder meeting.
Thanks to AXA, the comptrolling French insurance company not wanting it they
now do not have a staggered board.
Maybe, ending the stagger system of electing directors at Ashland Oil would
have helped the company in its past losses as well as the recent losses.
The Orange and Rockland Utility Company had a terrible time with the stagger
system and its 80% clause to recall a director. The chairman was involved in
a scandal effecting the company interest. Not having enough votes the
meeting to get rid of the chairman had to be adjourned. Finally, at the
adjourned meeting enough votes were counted to recall him.
If you agree, please mark your proxy for this resolution; otherwise, it is
automatically cast against it, unless you have marked to abstain.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST THIS
PROPOSAL FOR THE FOLLOWING REASONS:
The identical proposal was presented by the Proponents and defeated at
Ashland's 1995, 1994, 1993 and 1992 Annual Meetings of Shareholders when more
than 62%, 63%, 70% and 71%, respectively, of the shares of Common Stock voted
were voted against it.
22
<PAGE>
Ashland's directors, elected by the shareholders, are fully accountable to
serve the shareholders' interests throughout their term of office, whether that
term is three years or one year. The Board of Directors believes there is no
reason to change the current procedure of electing a classified Board of
Directors with a staggered system of election (the "Classified Board"), adopted
by Ashland's shareholders in 1986 with more than 75% of the votes cast in favor
of the procedure. Further, similar Classified Board provisions exist at
approximately 300 of the 500 companies comprising the 1995 Standard & Poor's 500
Stock Price Index.
The Board of Directors continues to believe that the Classified Board
structure is a sound one. Under this structure approximately one-third of the
Board of Directors is elected annually for a three-year term. The Classified
Board requires that at least two annual meetings, rather than one, be held
before a change in control of the Board could be effected through the normal
election process. This longer time period assures the continuity and stability
of management that Ashland has traditionally enjoyed.
The shareholder proposal will be adopted only if the votes cast in favor of
such proposal exceed the votes cast against such proposal. Abstentions and
broker non-votes are not counted as votes cast either for or against the
proposal. The adoption of this proposal would not in itself reinstate the annual
election of directors but would simply amount to a request that the Board take
the "needed steps" to accomplish such reinstatement.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST THIS
SHAREHOLDER PROPOSAL.
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. 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, who will
not be additionally compensated therefor. Ashland has arranged for the services
of Morrow & Co., Inc. ("Morrow") to assist in the solicitation of proxies. The
fees of Morrow, estimated at $35,000 excluding out-of-pocket expenses, will be
paid by Ashland.
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 proxy card to vote on such
matters in accordance with their judgment.
Any shareholder who executes a proxy card may revoke it by giving written
notice to the Secretary of Ashland or by giving to the Secretary a duly executed
form of proxy bearing a date later than the proxy card 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 shareholder so attending shall, in
writing, so notify the Secretary of the meeting prior to the voting of the
proxy.
A proxy card which is properly signed, dated and not revoked will be voted
in accordance with the instructions contained thereon. If no instructions are
given, the persons named on the proxy card solicited by the Board of Directors
intend to vote: (i) FOR the election of the five nominees for directors; (ii)
FOR the ratification of the appointment of independent auditors for the 1996
fiscal year; and (iii) AGAINST the shareholder proposal requesting the Board to
require that at future elections of directors all directors be elected annually.
Any shareholder may strike out the names of the proxies designated by the
Board of Directors on the proxy card and may write in and substitute the name of
any other person and may deliver the revised proxy card to such other person
whom the shareholder may wish to designate as proxy for the purpose of
representing such shareholder at the meeting.
23
<PAGE>
SHAREHOLDER PROPOSALS: Proposals which are the proper subject for inclusion
in the proxy statement and for consideration at an annual meeting may be
presented by shareholders. Any proposals by shareholders intended to be
presented at the 1997 Annual Meeting of Shareholders must be received by Ashland
at its Executive Headquarters, 1000 Ashland Drive, Russell, Kentucky, 41169 no
later than August 7, 1996 in order to be included in Ashland's proxy statement
and proxy card. In addition, Ashland's By-laws currently require that for
business to be properly brought before an annual meeting by a shareholder,
regardless of whether included in Ashland's proxy statement, the shareholder
must give written notice of his or her intent to propose such business, either
by personal delivery or by United States mail, postage prepaid, to the Secretary
of Ashland, at least 90 days in advance of such meeting. Such notice must set
forth as to each matter the shareholder proposes to bring before the annual
meeting: (i) a brief description of the business desired to be brought before
the meeting and the reasons for conducting such business at the meeting and, in
the event that such business includes a proposal to amend either the Second
Restated Articles of Incorporation or By-laws of Ashland, the language of the
proposed amendment, (ii) the name and address of the shareholder proposing such
business, (iii) a representation that the shareholder is a holder of record of
stock of Ashland entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to propose such business, and (iv) any
material interest of the shareholder in such business. The By-laws further
provide that no business shall be conducted at any annual meeting of
shareholders except in accordance with the foregoing procedures and that the
chairman of any such meeting may refuse to permit any business to be brought
before an annual meeting without compliance with the foregoing procedures.
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. Your cooperation in giving this matter your
prompt attention will be appreciated.
THOMAS L. FEAZELL,
SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
Russell, Kentucky
December 4, 1995
24
<PAGE>
PROXY PROXY
[LOGO] ASHLAND INC.
THE SOLICITATION OF THIS PROXY IS MADE ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints JOHN R. HALL and PAUL W. CHELLGREN, and each of
them, with full power of substitution, the attorney and proxy of the undersigned
to attend the Annual Meeting of Shareholders of ASHLAND INC. to be held at the
Ashland Petroleum Executive Office Building, Ashland Drive, Russell, Kentucky,
10:30 a.m. on January 25, 1996, or any adjournment thereof, and to vote the
stock of the undersigned with all powers the undersigned would possess if
present upon the matters described on the reverse side of this form and upon any
other business that may properly come before the meeting or any adjournment
thereof.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
<PAGE>
ASHLAND INC.
PLEASE MARK VOTE IN OVAL, IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
Shares represented by this proxy will be voted as directed by the stockholder.
If no such choice is specified, the proxy will be voted FOR proposals 1 and 2
and AGAINST proposal 3.
- -------------------------------------------------------------------------------
/ / To vote for all items AS RECOMMENDED BY THE BOARD OF DIRECTORS, mark this
box, sign, date and return this proxy.
(NO ADDITIONAL VOTE IS NECESSARY.)
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR:
1. Election of five directors to Class 1 --
NOMINEES ARE: Thomas E. Bolger, Frank C. Carlucci,
James B. Farley, James R. Rinehart and W.L. Rouse, Jr.
FOR WITHHOLD FOR ALL (Except Nominee(s) written below)
/ / / / / /
------------------------------------------------------------------------------
2. To ratify Ernst & Young LLP as independent auditors for the 1996 fiscal
year.
FOR AGAINST ABSTAIN
/ / / / / /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST SHAREHOLDER PROPOSAL 3:
3. To request the Board of Directors to take steps
necessary to require that all directors be elected
annually in future elections.
FOR AGAINST ABSTAIN
/ / / / / /
Dated:
--------------------------------------------------------
Signature(s)
----------------------------------------------------
- ----------------------------------------------------------------
Please date and sign exactly as your name or names appear(s) hereon. If stock
is held jointly, signature should include both names. Executors,
administrators, trustees, guardians and others signing in a representative
capacity should give their full title.
<PAGE>
- -------------------------------------------------------------------------------
[LOGO-ASHLAND INC.]
THE SOLICITATION OF THESE CONFIDENTIAL VOTING INSTRUCTIONS IS
MADE ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, as a participant in the Employee Savings Plan, the Leveraged
Employee Stock Ownership Plan or the SuperAmerica Hourly Associates Savings
Plan, or any combination, hereby instructs the Trustees of the respective
Plans to appoint JOHN R. HALL and PAUL W. CHELLGREN, and each of them, with
full power of substitution, the attorney and proxy of the said Trustees to
represent the interests of the undersigned in Ashland Common Stock held under
the terms of said Plan(s), at the Annual Meeting of Shareholders of ASHLAND
INC. to be held at the Ashland Petroleum Executive Office Building, Ashland
Drive, Russell, Kentucky, 10:30 a.m. on January 25, 1996, or any adjournment
thereof, and to vote, with all powers the Trustees would possess if present,
(a) all shares of Ashland Common Stock ("Common Stock") credited to the
undersigned's account(s) under said Plan(s) as of the record date for the
Annual Meeting ("Allocated Shares") and (b) the proportionate number of
Non-Directed and Unallocated Shares of Common Stock as to which the
undersigned is entitled to direct the voting in accordance with the
provisions of the Plan(s), upon the following matters and upon any other
business that may properly come before the meeting or any adjournment,
thereof.
By completing, signing and returning this voting instruction card you will be
acting as a named fiduciary under the Employee Retirement Income Security Act of
1974, as amended, for the Plans in which you participate and will be voting all
Allocated Shares as well as all Non-Directed and Unallocated Shares of Common
Stock the same way. Any participant wishing to vote the Non-Directed and
Unallocated Shares differently from the Allocated Shares or not wishing to vote
the Non-Directed and Unallocated Shares at all may do so by requesting a
separate voting instruction card from Harris Trust and Savings Bank, 311 W.
Monroe St., 11th Floor, Chicago, IL 60606, 312-461-8888 Cheryl Dorsey.
Non-Directed Shares are those shares of Common Stock, allocated to a participant
account, but for which a voting instruction card is not timely received by the
Trustees. Unallocated Shares are those shares of Common Stock which remain
unallocated under the Plan(s).
PLEASE MARK, SIGN, DATE AND MAIL THE VOTING INSTRUCTION CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
ASHLAND INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /
Shares represented by this proxy will be voted as directed by the stockholder.
If no such choice is specified, the proxy will be voted FOR proposals 1 and 2
and AGAINST proposal 3.
- --------------------------------------------------------------------------------
/ / To vote for all items AS RECOMMENDED BY THE BOARD OF DIRECTORS, mark
this box, sign, date and return this proxy.
(NO ADDITIONAL VOTE IS NECESSARY)
-------------------------------
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR:
1. Election of five directors to Class I- NOMINEES ARE: Thomas E. Bolger, Frank
C. Carlucci, James B. Farley, James R. Rinehert and W.L. Rouse, Jr.
FOR ALL(Except
Nominee(s)
FOR WITHHOLD written below)
/ / / / / /
- ------------------------------------------------------------------
2. To ratify Ernest & Young, LLP as independent auditors
for the 1996 fiscal year.
FOR AGAINST ABSTAIN
/ / / / / /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST SHAREHOLDERS PROPOSAL 3:
- --------------------------------
3. To request the Board of Directors to take steps necessary to require that
all directors be elected annually in future elections.
FOR AGAINST ABSTAIN
/ / / / / /
Dated:
-------------------------------------------------
Signature(s) ----------------------------------------------------------
- -------------------------------------------------------------------------
Please date and sign exactly as your name or names appear(s) hereon. If stock is
held jointly, signature should include both names. Executors, administrators,
trustees, guardians and others signing in a representative capacity should give
their full titles.
<PAGE>
[Ashland Inc. logo]
THOMAS L. FEAZELL
Senior Vice President,
General Counsel and Secretary
December 4, 1995
TO PARTICIPANTS IN THE FOLLOWING
EMPLOYEE BENEFIT PLANS:
Ashland Inc. Employee Savings Plan
Ashland Inc. Leveraged Employee Stock Ownership Plan
Ashland Inc. SuperAmerica Hourly Associates Savings Plan
Dear Plan Participant:
Please find enclosed:
(1) Notice of Meeting and Proxy Statement relating to Ashland Inc.'s
annual shareholders' meeting to be held on January 25, 1996. The proxy
statement describes the items of business to be voted upon by Ashland's
shareholders at the annual meeting. The proxy statement also gives the
recommendations of the board of directors on how to vote these items.
(2) Confidential Voting Instructions Card. Please use this card to
instruct the Trustee how to vote the shares credited to your account(s) under
the Plan(s), and the proportionate number of the shares for which voting
instructions are not received under the Plans or which are not yet allocated
to LESOP members' accounts.
(3) 1995 Ashland Inc. Annual Report.
To vote the shares described above as you desire, please mark the card in
accordance with its instructions, date and sign it, and return it in the
accompanying prepaid envelope.
Very truly yours,
Thomas L. Feazell
Enclosures
