<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 12, 1995
REGISTRATION NO. 33-57011
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ASHLAND INC.
(Exact name of Registrant as specified in its charter)
KENTUCKY 61-0122250
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
1000 ASHLAND DRIVE
RUSSELL, KENTUCKY 41169
(606) 329-3333
(Address, including zip code, and telephone number,
including area code, of Registrants' principal executive offices)
--------------------------
THOMAS L. FEAZELL, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
1000 ASHLAND DRIVE
RUSSELL, KENTUCKY 41169
(606) 329-3333
(Name, address, including zip code and telephone number,
including area code, of agent for service)
--------------------------
COPIES TO:
<TABLE>
<S> <C>
DAVID G. ORMSBY, ESQ. FRANCIS J. MORISON, ESQ.
CRAVATH, SWAINE & MOORE DAVIS POLK & WARDWELL
825 EIGHTH AVENUE 450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10019 NEW YORK, NEW YORK 10017
(212) 474-1000 (212) 450-4800
</TABLE>
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
--------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. /X/
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
AMOUNT TO PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED (1) REGISTERED (2)(3) PER UNIT (3)(4) PRICE (4)(5) FEE (6)
<S> <C> <C> <C> <C>
Debt Securities, Debt Warrants, Preferred
Stock, Depositary Shares, Preferred Stock
Warrants, Common Stock and Common Stock
Warrants.................................... -- -- $600,000,000 $206,898
<FN>
(1) This Registration Statement also covers (i) Debt Securities, Preferred
Stock and Common Stock which may be issued upon exercise of Securities
Warrants and (ii) such indeterminate amount of securities as may be issued
in exchange for, or upon conversion of, as the case may be, the securities
registered hereunder. In addition, any other securities registered
hereunder may be sold separately or as units with other securities
registered hereunder.
(2) In no event will the aggregate initial offering price of Debt Securities,
Debt Warrants, Preferred Stock, Depositary Shares, Preferred Stock
Warrants, Common Stock and Common Stock Warrants issued under this
Registration Statement exceed $600,000,000, or the equivalent thereof in
one or more foreign currencies or composite currencies, including European
Currency Units.
(3) Not specified as to each class of securities to be registered pursuant to
General Instruction II.D of Form S-3 under the Securities Act.
(4) The proposed maximum offering price per unit will be determined from time
to time by the Registrant in connection with, and at the time of, the
issuance by the Registrant of the securities registered hereunder.
(5) Estimated solely for the purposes of computing the registration fee
pursuant to Rule 457(o) of the Securities Act.
(6) Previously paid.
</TABLE>
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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- --------------------------------------------------------------------------------
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 12, 1995
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED APRIL __, 1995
U.S. $200,000,000
Ashland Inc.
Medium-Term Notes, Series G
Due 9 Months or More from Date of Issue
-------------
ASHLAND INC., (THE "COMPANY") MAY OFFER AND SELL FROM TIME TO TIME ITS
MEDIUM-TERM NOTES (ISSUABLE IN ONE OR MORE SERIES) WITHIN THE UNITED STATES OR
OUTSIDE THE UNITED STATES OR BOTH SIMULTANEOUSLY. THE MEDIUM-TERM NOTES,
SERIES G (THE "NOTES"), OFFERED BY THIS PROSPECTUS SUPPLEMENT ARE BEING
OFFERED IN THE UNITED STATES IN AN AGGREGATE PRINCIPAL AMOUNT OF U.S.
$200,000,000 (OR THE EQUIVALENT THEREOF IF ANY OF THE NOTES ARE DENOMINATED
IN FOREIGN CURRENCIES OR CURRENCY UNITS), SUBJECT TO REDUCTION AS A RESULT
OF THE SALE OF OTHER SECURITIES (OTHER THAN THE NOTES) PURSUANT TO THE
REGISTRATION STATEMENT OF WHICH THE ACCOMPANYING PROSPECTUS IS A PART.
SEE "DESCRIPTION OF THE MEDIUM-TERM NOTES--GENERAL" AND "PLAN OF
DISTRIBUTION". UNLESS OTHERWISE INDICATED IN A PRICING SUPPLEMENT TO
THIS PROSPECTUS SUPPLEMENT (A "PRICING SUPPLEMENT"), THE INTEREST
PAYMENT DATES FOR EACH NOTE WILL BE JUNE 15 AND DECEMBER 15 OF EACH
YEAR. EACH NOTE WILL MATURE ON A DAY 9 MONTHS OR MORE FROM ITS DATE
OF ISSUE, AS SET FORTH ON THE FACE OF SUCH NOTE (THE "STATED
MATURITY"). THE INTEREST PAYMENT DATES FOR EACH FLOATING RATE NOTE
WILL BE ESTABLISHED ON THE DATE OF SALE AND WILL BE SET FORTH IN
EACH SUCH NOTE AND IN THE APPLICABLE PRICING SUPPLEMENT. IF SO
INDICATED IN THE APPLICABLE PRICING SUPPLEMENT, SUCH NOTE WILL BE
SUBJECT TO REDEMPTION BY THE COMPANY, IN WHOLE OR IN PART, ON
AND AFTER THE REDEMPTION DATE, IF ANY, FIXED BY THE COMPANY AT
THE TIME OF SALE AND SET FORTH IN THE APPLICABLE PRICING
SUPPLEMENT WITH RESPECT TO ANY NOTE (THE "REDEMPTION DATE"), AT
100% OF ITS PRINCIPAL AMOUNT, UNLESS OTHERWISE SPECIFIED,
TOGETHER WITH INTEREST TO THE REDEMPTION DATE. THE NOTES MAY BE
DENOMINATED IN U.S. DOLLARS, OR IN SUCH FOREIGN CURRENCIES OR
CURRENCY UNITS AS MAY BE DESIGNATED BY THE COMPANY ("SPECIFIED
CURRENCY"). THE NOTES WILL BE ISSUED ONLY IN FULLY REGISTERED
FORM AND FOR NOTES DENOMINATED IN U.S. DOLLARS, IN MINIMUM
DENOMINATIONS OF $1,000 AND ANY INTEGRAL MULTIPLE OF $1,000
IN EXCESS THEREOF. TERMS RELATING TO NOTES NOT DENOMINATED
IN U.S. DOLLARS ("FOREIGN CURRENCY NOTES") OR TO THE
REDEMPTION OF THE NOTES WILL BE SET FORTH IN THE
APPLICABLE PRICING SUPPLEMENT. SEE
"DESCRIPTION OF THE MEDIUM-TERM NOTES".
EACH NOTE WILL BE REPRESENTED BY EITHER A GLOBAL SECURITY (A "GLOBAL NOTE")
REGISTERED IN THE NAME OF A NOMINEE OF THE DEPOSITORY TRUST COMPANY, AS
DEPOSITARY (THE "DEPOSITARY") (EACH SUCH NOTE REPRESENTED BY A GLOBAL NOTE
BEING REFERRED TO HEREIN AS A "BOOK-ENTRY NOTE"), OR A CERTIFICATE ISSUED IN
DEFINITIVE FORM (A "CERTIFICATED NOTE"), AS SET FORTH IN THE APPLICABLE
PRICING SUPPLEMENT. INTERESTS IN BOOK-ENTRY NOTES WILL BE SHOWN ON, AND
TRANSFERS THEREOF WILL BE EFFECTED ONLY THROUGH, THE RECORDS
MAINTAINED BY THE DEPOSITARY AND ITS PARTICIPANTS. EXCEPT AS
DESCRIBED IN "DESCRIPTION OF THE MEDIUM-TERM NOTES--BOOK-ENTRY
NOTES", OWNERS OF BENEFICIAL INTERESTS IN GLOBAL SECURITIES (AS
DEFINED IN THE PROSPECTUS) WILL NOT BE ENTITLED TO RECEIVE NOTES
IN DEFINITIVE FORM AND WILL NOT BE
CONSIDERED THE HOLDERS THEREOF FOR
PURPOSES OF THE INDENTURE.
THE INTEREST RATE OR INTEREST RATE FORMULA, IF ANY, ISSUE PRICE AND STATED
MATURITY FOR EACH NOTE WILL BE ESTABLISHED BY THE COMPANY AT THE DATE OF SALE
OF SUCH NOTE AND WILL BE SET FORTH IN THE APPLICABLE PRICING SUPPLEMENT.
UNLESS OTHERWISE INDICATED IN THE APPLICABLE PRICING SUPPLEMENT, THE NOTES
WILL BEAR INTEREST AT A FIXED RATE (A "FIXED RATE NOTE") OR A RATE OR RATES
DETERMINED BY REFERENCE TO THE COMMERCIAL PAPER RATE, THE PRIME RATE,
LIBOR, THE TREASURY RATE, THE FEDERAL FUNDS RATE OR THE CD RATE (A
"FLOATING RATE NOTE"), AS ADJUSTED BY A SPREAD OR SPREAD MULTIPLIER (AS
SUCH TERMS ARE DEFINED HEREIN), IF ANY, APPLICABLE TO SUCH NOTES.
INTEREST RATES AND INTEREST RATE FORMULAS ARE SUBJECT TO CHANGE BY THE
COMPANY, BUT NO SUCH CHANGE WILL AFFECT THE INTEREST RATE ON ANY NOTE
THERETOFORE ISSUED OR WHICH THE COMPANY HAS
AGREED TO SELL. SEE "DESCRIPTION OF THE MEDIUM-TERM NOTES".
THE NOTES MAY BE ISSUED AS INDEXED NOTES THE PRINCIPAL AMOUNT OF WHICH, PAYABLE
AT STATED MATURITY, AND/OR THE INTEREST, PAYABLE ON EACH INTEREST PAYMENT DATE
AND AT STATED MATURITY, WILL BE DETERMINED BY REFERENCE TO CURRENCIES,
CURRENCY UNITS, COMMODITY PRICES, FINANCIAL OR NON-FINANCIAL INDICES OR
OTHER FACTORS (THE "INDEXED NOTES"), AS INDICATED IN THE APPLICABLE
PRICING SUPPLEMENT. SEE "DESCRIPTION OF THE
MEDIUM-TERM NOTES--INDEXED
NOTES".
UNLESS OTHERWISE INDICATED IN THE APPLICABLE PRICING SUPPLEMENT, A FOREIGN
CURRENCY NOTE WILL NOT BE SOLD IN, OR TO A RESIDENT OF, THE COUNTRY OF
THE SPECIFIED CURRENCY IN WHICH SUCH NOTE IS DENOMINATED. SEE "SPECIAL
PROVISIONS RELATING TO FOREIGN CURRENCY NOTES."
FOR A DISCUSSION OF CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES, SEE
"CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES".
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT,
ANY PRICING SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO AGENTS' NET PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) THE COMPANY(2)(3)
----------------- ---------------------------------- -------------------------------------------
<S> <C> <C> <C>
PER NOTE.................... 100% .125%--.750% 99.250%--99.875%
TOTAL(4)(5)................. U.S.$200,000,000 U.S.$250,000--U.S.$1,500,000 U.S.$198,500,000--U.S.$199,750,000
(1) UNLESS OTHERWISE SPECIFIED IN A PRICING SUPPLEMENT, NOTES WILL BE ISSUED AT 100% OF THEIR PRINCIPAL AMOUNT.
(2)THE COMPANY WILL PAY TO EACH AGENT A COMMISSION RANGING FROM .125% TO .750% OF THE PRINCIPAL AMOUNT OF ANY NOTE, DEPENDING UPON
ITS STATED MATURITY, SOLD THROUGH SUCH AGENT. THE COMPANY MAY ALSO SELL NOTES TO ANY AGENT AT OR ABOVE PAR FOR RESALE TO ONE OR
MORE INVESTORS OR BROKER-DEALERS AT VARYING PRICES RELATED TO PREVAILING MARKET PRICES AT THE TIME OF RESALE, AS DETERMINED BY
SUCH AGENT, WITH AN APPROPRIATE CONCESSION BEING GIVEN TO SUCH AGENT FOR THE RESALE PRICE OF THE NOTES. THE COMMISSION PAYABLE
BY THE COMPANY TO THE AGENTS WITH RESPECT TO NOTES WITH MATURITIES GREATER THAN THIRTY YEARS WILL BE NEGOTIATED AT THE TIME THE
COMPANY ISSUES SUCH NOTES. IN EACH CASE, THE COMPANY HAS AGREED TO INDEMNIFY THE AGENTS AGAINST CERTAIN LIABILITIES, INCLUDING
LIABILITIES UNDER THE SECURITIES ACT OF 1933.
(3) ASSUMING NOTES ARE ISSUED AT 100% OF PRINCIPAL AMOUNT AND BEFORE DEDUCTING EXPENSES PAYABLE BY THE COMPANY ESTIMATED AT
$150,000.
(4) IN U.S. DOLLARS OR THE EQUIVALENT THEREOF IN FOREIGN CURRENCIES OR CURRENCY UNITS.
(5) TO BE REDUCED AS A RESULT OF SALES OF OTHER SECURITIES (OTHER THAN THE NOTES) PURSUANT TO THE REGISTRATION STATEMENT OF WHICH
THE ACCOMPANYING PROSPECTUS IS A PART.
</TABLE>
------------------
THE NOTES MAY BE OFFERED ON A CONTINUING BASIS BY THE COMPANY THROUGH CS
FIRST BOSTON CORPORATION, SALOMON BROTHERS INC AND CITICORP SECURITIES, INC.
(THE "AGENTS"), WHICH HAVE AGREED TO USE THEIR REASONABLE EFFORTS TO SOLICIT
OFFERS TO PURCHASE THE NOTES. THE NOTES MAY BE SOLD AT OR ABOVE PAR TO ANY AGENT
AS PRINCIPAL FOR RESALE TO INVESTORS AT VARYING PRICES RELATED TO PREVAILING
MARKET PRICES AT THE TIME OF RESALE AS DETERMINED BY SUCH AGENT. THE COMPANY MAY
FROM TIME TO TIME SELL NOTES DIRECTLY ON ITS OWN BEHALF AT OR ABOVE PAR TO
INVESTORS, AND ON SUCH SALES NO COMMISSION WILL BE PAID. THE NOTES WILL NOT BE
LISTED ON ANY SECURITIES EXCHANGE, AND THERE CAN BE NO ASSURANCE THAT THE NOTES
WILL BE SOLD OR THAT THERE WILL BE A SECONDARY MARKET FOR THE NOTES. THE COMPANY
RESERVES THE RIGHT TO WITHDRAW, CANCEL OR MODIFY THE OFFER OR SOLICITATION OF
OFFERS MADE HEREBY WITHOUT NOTICE. THE COMPANY, OR THE SOLICITING AGENT, MAY
REJECT ANY OFFER IN WHOLE OR IN PART. SEE "PLAN OF DISTRIBUTION".
CS FIRST BOSTON
SALOMON BROTHERS INC
Citicorp Securities, Inc.
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS APRIL __, 1995
<PAGE>
IN CONNECTION WITH THE DISTRIBUTION OF THE NOTES, THE AGENTS MAY OVER-ALLOT
OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES
OFFERED HEREBY OR OTHER DEBT SECURITIES OF THE COMPANY AT LEVELS ABOVE THOSE
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
-------------------
DESCRIPTION OF THE MEDIUM-TERM NOTES
The following description of the particular terms of the Notes offered
hereby supplements and to the extent inconsistent therewith replaces the
description of the general terms of the Debt Securities set forth under the
heading "Description of Debt Securities" in the accompanying Prospectus, to
which description reference is made. The Notes are referred to in the Prospectus
as the "Debt Securities". Capitalized terms not defined under this heading have
the meanings ascribed to them in the Indenture.
GENERAL
The Notes offered hereby will be issued under the Indenture (the
"Indenture") referred to in the accompanying Prospectus with Citibank, N.A., as
Trustee (the "Trustee"). The Notes offered hereby constitute a single series for
purposes of the Indenture. The aggregate proceeds for which the Notes offered
hereby may be issued is limited to U.S. $200,000,000 (or the equivalent thereof
in foreign currencies or currency units), less an amount equal to the proceeds
from the sale of other Securities (other than the Notes) pursuant to the
Registration Statement of which the accompanying Prospectus is a part. See "Plan
of Distribution". Unless otherwise indicated in the applicable Pricing
Supplement, currency amounts in this Prospectus Supplement, the accompanying
Prospectus and any Pricing Supplement are stated in United States dollars ("$",
"dollars", "U.S. dollars" or "U.S.$").
Each Note will mature on a day 9 months or more from the date of issue, as
selected by the initial purchaser and agreed to by the Company and as specified
in the applicable Pricing Supplement. "Business Day" means any day, other than a
Saturday or Sunday, that meets each of the following applicable requirements:
the day is (a) not a day on which banking institutions are authorized or
required by law or regulation to be closed in The City of New York, (b) if the
Note is denominated in a Specified Currency other than the European Currency
Unit as defined and revised from time to time by the Council of the European
Communities ("ECU") or United States dollars, not a day on which banking
institutions are authorized or required by law or regulation to close in the
financial center of the country issuing the Specified Currency, (c) if the Note
is denominated in ECU, any day that is designated as an ECU settlement day by
the ECU Banking Association in Paris or otherwise generally regarded in the ECU
interbank market as a day on which payments in ECU are made, and (d) with
respect to LIBOR Notes, a London Banking Day. "London Banking Day" means any day
on which dealings in deposits in United States dollars are transacted in the
London interbank market.
The Notes will be issuable only in fully registered form, and if denominated
in U.S. dollars, in denominations of $1,000 and integral multiples of $1,000 in
excess thereof. The authorized denominations of Notes not denominated in U.S.
dollars will be set forth in the applicable Pricing Supplement.
The Notes are unsecured obligations of the Company and will rank on a parity
with the Company's other unsecured and unsubordinated indebtedness and senior to
the Company's subordinated indebtedness. Except as described in the accompanying
Prospectus under the headings "Certain Restrictive Provisions--Limitations on
Liens" and "--Limitations on Sale and Lease-Back," the Indenture does not
contain any provision that restricts or otherwise regulates the Company's
ability to incur additional indebtedness ranking senior, PARI PASSU or junior to
the Notes.
S-2
<PAGE>
Each Note will be issued initially as either a Book-Entry Note or a
Certificated Note. See "Book-Entry Notes".
Unless otherwise indicated in the applicable Pricing Supplement, the Notes
will be denominated in U.S. dollars and payments of principal, premium, if any,
and any interest on the Notes will be made in U.S. dollars. If any of the Notes
are to be denominated in a foreign currency (one other than U.S. dollars) or
currency unit, or if the principal, premium, if any, and any interest on any of
the Notes is to be payable at the option of the holder or the Company in a
currency, including a currency unit, other than that in which such Note is
denominated, the applicable Pricing Supplement will provide additional
information, including applicable exchange rate information, pertaining to the
terms of such Notes and other matters of interest to the holders thereof. See
also "Special Provisions Relating to Foreign Currency Notes".
A Note is not subject to redemption by the Company prior to the Redemption
Date fixed at the time of sale and set forth in the applicable Pricing
Supplement. If no Redemption Date is indicated with respect to a Note, such Note
is not redeemable prior to its Stated Maturity. Unless otherwise indicated in
the applicable Pricing Supplement, on or after the indicated Redemption Date,
the related Note will be redeemable in whole or in part in increments of $1,000
at the option of the Company at a redemption price equal to 100% of the
principal amount to be redeemed, together with interest thereon payable to the
date of redemption, on notice given not more than 60 nor less than 30 days prior
to the Redemption Date. The Notes will not have a sinking fund unless otherwise
specified in the applicable Pricing Supplement.
The Company may provide that any Note will be repayable at the option of the
holder thereof, at such times and on such terms and conditions as are set forth
in such Note and described in the applicable Pricing Supplement.
Payments of principal, premium, if any, and interest on Book-Entry Notes
will be made to the Depositary, or its nominee, as Holder thereof, in accordance
with arrangements then in effect between the Trustee and the Depositary. Unless
otherwise specified in the applicable Pricing Supplement, payments of principal,
premium, if any, and interest on Certificated Notes will be made in immediately
available funds at the office of the Paying Agent in the Borough of Manhattan,
The City of New York, or such other office or agency as the Company may
designate, provided that payments in such funds will be made only if such
Certificated Notes are presented to the Paying Agent in time for the Paying
Agent to make such payments in such funds in accordance with its normal
procedures. The Company has initially designated Citibank, N.A., acting through
its principal corporate trust office in the Borough of Manhattan, The City of
New York, as its Paying Agent for the Certificated Notes. The Company, at its
option, may pay interest on the Notes (other than interest payable at Maturity)
by check mailed to the person entitled thereto (which, in the case of Book-Entry
Notes, will be a nominee of the Depositary).
Certificated Notes may be presented for registration of transfer or exchange
at the Corporate Trust Office of the Trustee in the Borough of Manhattan, The
City of New York.
Except as described in the accompanying Prospectus under the heading
"Certain Rights to Require Purchase of Securities by Ashland Upon Unapproved
Change in Control and Decline in Debt Rating", the Indenture does not contain
any covenants or provisions designed to protect the holders of the Notes in the
event that the Company enters into a transaction that adversely affects the
Company's debt-to-equity ratio.
For a description of the rights attaching to different series of Debt
Securities under the Indenture, see "Description of Debt Securities" in the
Prospectus.
BOOK-ENTRY NOTES
Upon issuance, all Notes in book-entry form having the same original
issuance date, Stated Maturity and otherwise having identical terms and
provisions will be represented by a Global Note.
S-3
<PAGE>
Each Global Note representing Book-Entry Notes will be deposited with, or on
behalf of, the Depositary, and registered in the name of a nominee of the
Depositary. Book-Entry Notes will not be exchangeable at the option of the
holder for Certificated Notes and, except under the circumstances described in
the accompanying Prospectus, will not otherwise be issuable in definitive form.
The Depositary has advised the Company and the Agents as follows: The
Depositary is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of section 17A of the
Securities Exchange Act of 1934. The Depositary was created to hold securities
of its participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. The Depositary's participants
include securities brokers and dealers (including the Agents), banks, trust
companies, clearing corporations, and certain other organizations, some of whom
(and/or their representatives) own the Depositary. Access to the Depositary's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly.
A further description of the Depositary's procedures with respect to Global
Securities representing Book-Entry Notes is set forth in the accompanying
Prospectus under "Description of Debt Securities--Global Securities". The
Depositary has confirmed to the Company, the Agents and the Trustee that it
intends to follow such procedures.
INTEREST
Each interest bearing Note will bear interest from and including the date of
issuance, or from and including the most recent Interest Payment Date (or, if
such Note is a Floating Rate Note and the Interest Reset Date (as defined
herein) is daily or weekly, the day following the most recent regular record
date (a "Regular Record Date")) to which interest on such Note has been paid or
duly provided for, at the fixed rate per annum, or at the rate per annum
determined pursuant to the interest rate formula, stated therein and in the
applicable Pricing Supplement, until the principal thereof is paid or made
available for payment. Interest payments, if any, will be in the amount of
interest accrued from and including the next preceding Interest Payment Date in
respect of which interest has been paid or duly provided for, or from and
including the date of issue, if no interest has been paid with respect to such
Note, to but excluding the applicable Interest Payment Date. However, unless
otherwise specified in the applicable Pricing Supplement, in the case of
Floating Rate Notes on which the interest rate is reset daily or weekly, the
interest payments (other than interest payments on any date on which principal
is payable) will include interest accrued from but excluding the second
preceding Regular Record Date, or from and including the date of issue, if no
interest has been paid with respect to such Note, through and including the
Regular Record Date next preceding the applicable Interest Payment Date, except
that interest paid at Maturity will include interest accrued to but excluding
such date. "Maturity" means the date on which the principal of a Note becomes
due, whether at Stated Maturity, upon redemption or otherwise.
Interest, if any, will be payable at each Interest Payment Date and at
Maturity. See "Description of Debt Securities--Payment and Paying Agents" in the
Prospectus. Interest will be payable to the Person (which, in the case of a
Book-Entry Note, shall be the Depositary) in whose name a Note is registered at
the close of business on the Regular Record Date next preceding each Interest
Payment Date; PROVIDED, HOWEVER, that interest payable at Maturity or, if
applicable, upon redemption, will be payable to the Person (which, in the case
of a Book-Entry Note, shall be the Depositary) to whom principal shall be
payable. Unless otherwise specified in the applicable Pricing Supplement, the
first payment of interest on any Note (other than a Floating Rate Note on which
interest is reset daily or weekly) originally issued between a Regular Record
Date and an Interest Payment Date will be made on the Interest Payment Date
following the next succeeding Regular Record Date to the registered owner on
such Regular Record Date.
S-4
<PAGE>
The Company will select an interest rate or interest rate formula for each
issue of Notes based on market conditions at the time of issuance, taking into
account, among other things, expectations concerning the level of interest rates
that will prevail during the period the Notes will be outstanding, the relative
attractiveness of such interest rate or interest rate formula to prospective
investors and the Company's financial needs. Unless otherwise provided in the
applicable Pricing Supplement, Citibank, N.A., will be the calculation agent
(the "Calculation Agent") with respect to the Floating Rate Notes.
Interest rates, or interest rate formulas, are subject to change by the
Company from time to time, but no such change will affect any Note already
issued or as to which an offer to purchase has been accepted by the Company.
FIXED RATE NOTES
The applicable Pricing Supplement relating to a Fixed Rate Note will
designate a fixed rate of interest per annum payable on such Fixed Rate Note.
Unless otherwise indicated in the applicable Pricing Supplement, the Interest
Payment Dates with respect to Fixed Rate Notes will be June 15 and December 15
of each year and at Maturity and the Regular Record Dates for such Notes will be
the June 1 and December 1 next preceding the June 15 and December 15 Interest
Payment Dates. Unless otherwise indicated in the applicable Pricing Supplement,
interest on Fixed Rate Notes will be computed on the basis of a 360-day year of
twelve 30-day months.
If any Interest Payment Date or the Maturity of a Fixed Rate Note falls on a
day that is not a Business Day, the related payment of principal, premium, if
any, or interest will be made on the next succeeding Business Day as if made on
the date such payment was due, and no interest will accrue on the amount so
payable for the period from and after such Interest Payment Date or Maturity, as
the case may be.
FLOATING RATE NOTES
The applicable Pricing Supplement relating to a Floating Rate Note will
designate an interest rate basis for such Floating Rate Note, which may be
adjusted by adding or subtracting the Spread or multiplying by the Spread
Multiplier (as defined below) as specified in the applicable Pricing Supplement.
Such basis may be: (a) the Commercial Paper Rate, in which case such Note will
be a Commercial Paper Rate Note, (b) the Prime Rate, in which case such Note
will be a Prime Rate Note, (c) LIBOR, in which case such Note will be a LIBOR
Note, (d) the Treasury Rate, in which case such Note will be a Treasury Rate
Note, (e) the Federal Funds Rate, in which case such Note will be a Federal
Funds Rate Note, (f) the CD Rate, in which case such Note will be a CD Rate
Note, or (g) such other interest rate formula as is set forth in such Pricing
Supplement. In addition, a Floating Rate Note may bear interest at the lowest or
highest or average of two or more interest rate formulae. The applicable Pricing
Supplement for a Floating Rate Note also will specify the Spread or Spread
Multiplier, if any, applicable to each Note. In addition, such Pricing
Supplement will define or particularize for each Note the following terms, if
applicable: Calculation Date, Initial Interest Rate, Interest Payment Dates,
Regular Record Dates, Index Maturity (as defined below), Interest Determination
Dates and Interest Reset Dates with respect to such Note. The "Spread" is the
number of basis points specified in the applicable Pricing Supplement as being
applicable to the interest rate for such Note and the "Spread Multiplier" is the
percentage specified in the applicable Pricing Supplement as being applicable to
the interest rate for such Note. "Index Maturity" means, with respect to a
Floating Rate Note, the period to maturity of the instrument or obligation on
which the interest rate formula is based, as specified in the applicable Pricing
Supplement.
The rate of interest on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semi-annually or annually (each an "Interest Reset Date"),
as specified in the applicable Pricing Supplement. Unless otherwise specified in
the applicable Pricing Supplement, the Interest Reset Date will be, in the case
of Floating Rate Notes which reset daily, each Business Day; in the case of
Floating Rate Notes (other than Treasury Rate Notes) which reset weekly, the
Wednesday of each week; in the case of Treasury Rate Notes which reset weekly,
except as provided below, the Tuesday of each week; in the case of Floating Rate
Notes which reset monthly, the third Wednesday of each month; in the
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<PAGE>
case of Floating Rate Notes which reset quarterly, the third Wednesday of March,
June, September and December; in the case of Floating Rate Notes which reset
semi-annually, the third Wednesday of two months of each year, as specified in
the applicable Pricing Supplement; and in the case of Floating Rate Notes which
reset annually, the third Wednesday of one month of each year, as specified in
the applicable Pricing Supplement. The rate of interest on a Floating Rate Note
in effect on any day will be (i) if such day is an Interest Reset Date with
respect to such Floating Rate Note, the interest rate on such Floating Rate Note
determined as of the Interest Determination Date pertaining to such Interest
Reset Date, or (ii) if such day is not an Interest Reset Date with respect to
such Floating Rate Note, the interest on such Floating Rate Note determined as
of the Interest Determination Date pertaining to the immediately preceding
Interest Reset Date with respect to such Floating Rate Note; PROVIDED, HOWEVER,
that (a) the interest rate in effect from the date of issue to but excluding the
first Interest Reset Date with respect to a Floating Rate Note will be the
Initial Interest Rate (as set forth in the applicable Pricing Supplement) and
(b) the interest rate in effect for the ten days immediately prior to Maturity
will be that in effect on the tenth day preceding such Maturity. If any Interest
Reset Date for any Floating Rate Note would otherwise be a day that is not a
Business Day for such Floating Rate Note, the Interest Reset Date for such
Floating Rate Note shall be postponed to the next day that is a Business Day for
such Floating Rate Note, except that in the case of a LIBOR Note, if such
Business Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Business Day.
The Interest Determination Date pertaining to an Interest Reset Date for a
Commercial Paper Rate Note (the "Commercial Paper Interest Determination Date"),
for a Prime Rate Note (the "Prime Rate Interest Determination Date"), for a
Federal Funds Rate Note (the "Federal Funds Interest Determination Date") and
for a CD Rate Note (the "CD Interest Determination Date") will be the second
Business Day preceding the Interest Reset Date with respect to such Note. The
Interest Determination Date pertaining to an Interest Reset Date for a LIBOR
Note (the "LIBOR Interest Determination Date") will be the second London Banking
Day preceding such Interest Reset Date. The Interest Determination Date
pertaining to an Interest Reset Date for a Treasury Rate Note (the "Treasury
Interest Determination Date") will be the day of the week in which such Interest
Reset Date falls on which Treasury bills would normally be auctioned. Treasury
bills are usually sold at auction on the Monday of each week, unless that day is
a legal holiday, in which case the auction is usually held on the following
Tuesday, except that such auction may be held on the preceding Friday. If, as
the result of a legal holiday, an auction is so held on the preceding Friday,
such Friday will be the Treasury Interest Determination Date pertaining to the
Interest Reset Date occurring in the next succeeding week. If an auction date
shall fall on any Interest Reset Date for a Treasury Rate Note, then such
Interest Reset Date shall instead be the first Business Day immediately
following such auction date.
A Floating Rate Note may also have either or both of the following: (a) a
maximum numerical interest rate limitation, or ceiling, on the rate of interest
which may accrue during any interest period; and (b) a minimum numerical
interest rate limitation, or floor, on the rate of interest which may accrue
during any interest period, as specified in the applicable Pricing Supplement.
In addition to any maximum interest rate which may be applicable to any Floating
Rate Note pursuant to the above provisions, assuming that a court would enforce
the provisions of the Notes and the Indenture specifying New York law as the
governing law, the interest rate on the Floating Rate Notes will in no event be
higher than the maximum rate permitted by New York law, as the same may be
modified by United States law of general application. Under present New York law
the maximum rate of interest is 25% per annum on a simple interest basis. The
limit may not apply to Floating Rate Notes in which $2,500,000 or more has been
invested.
Unless otherwise indicated in the applicable Pricing Supplement and except
as provided below, interest will be payable, in the case of Floating Rate Notes
which reset weekly, on the third Wednesday of March, June, September and
December of each year, in the case of Floating Rate Notes which reset daily or
monthly, on the third Wednesday of each month or on the third Wednesday of
March, June,
S-6
<PAGE>
September and December of each year (as indicated in the applicable Pricing
Supplement); in the case of Floating Rate Notes which reset quarterly, on the
third Wednesday of March, June, September and December of each year, in the case
of Floating Rate Notes which reset semi-annually, on the third Wednesday of the
two months of each year specified in the applicable Pricing Supplement; and in
the case of Floating Rate Notes which reset annually, on the third Wednesday of
the month specified in the applicable Pricing Supplement (each an "Interest
Payment Date"), and in each case, at Maturity. If an Interest Payment Date
(other than an Interest Payment Date at Maturity) with respect to any Floating
Rate Note would otherwise fall on a day that is not a Business Day with respect
to such Note, such Interest Payment Date will be the following day that is a
Business Day with respect to such Note, except that in the case of a LIBOR Note,
if such day falls in the next calendar month, such Interest Payment Date will be
the preceding day that is a Business Day with respect to such LIBOR Note. If the
Maturity of a Floating Rate Note falls on a day that is not a Business Day, the
payment of principal, premium, if any, and interest will be made on the next
succeeding Business Day, and no interest on such payment shall accrue from and
after such Maturity. Unless otherwise indicated in the applicable Pricing
Supplement, the Regular Record Date with respect to Floating Rate Notes shall be
the date 15 calendar days prior to each Interest Payment Date, whether or not
such date shall be a Business Day.
Unless otherwise specified in the applicable Pricing Supplement, the
interest accrued from and including the date of issue, or from and including the
last date to which interest has been paid or duly provided for, is calculated by
multiplying the face amount of such Floating Rate Note by an accrued interest
factor. Such accrued interest factor is computed by adding the interest factor
calculated for each day in such period from and including the date of issue, or
from and including the last date to which interest has been paid or duly
provided for, as the case may be, to but excluding the date for which accrued
interest is being calculated. The interest factor for each such day is computed
by dividing the interest rate applicable to such date by 360, in the case of
Commercial Paper Rate Notes, LIBOR Notes, Federal Funds Rate Notes or CD Rate
Notes, or by the actual number of days in the year, in the case of Treasury Rate
Notes and Prime Rate Notes. The interest factor for Notes for which two or more
interest rate formulae are applicable will be calculated in each period in the
same manner as if only the lowest, highest or average of, as the case may be,
such interest rate formulae applied.
Unless otherwise specified in the applicable Pricing Supplement, all
percentages resulting from any calculation on Floating Rate Notes will be
rounded, upwards if necessary, to the nearest one-hundred thousandth of a
percentage point, with five one-millionths of a percentage point rounded upwards
(e.g., 9.876545% (or .9876545) being rounded to 9.87655% (or .987655) and
9.876544% (or .9876544) being rounded to 9.87654% (or .987654)), and all dollar
amounts used in or resulting from such calculation on Floating Rate Notes will
be rounded to the nearest cent or, in the case of Foreign Currency Notes, the
nearest unit (with one-half cent or five one-thousandths of a unit being rounded
upwards).
Upon the request of the holder of any Floating Rate Note, the Calculation
Agent will provide the interest rate then in effect, and, if determined, the
interest rate which will become effective as a result of a determination made on
the most recent Interest Determination Date with respect to such Floating Rate
Note.
Unless otherwise specified in the applicable Pricing Supplement, the
"Calculation Date", if applicable, pertaining to any Interest Determination
Date, will be the earlier of (i) the tenth calendar day after such Interest
Determination Date, or, if such day is not a Business Day, the next suceeding
Business Day or (ii) the Business Day preceding the applicable Interest Payment
Date or Maturity, as the case may be.
COMMERCIAL PAPER RATE NOTES.__Commercial Paper Rate Notes will bear interest
at the interest rates (calculated with reference to the Commercial Paper Rate
and the Spread or Spread Multiplier, if any), and will be payable on the dates,
specified on the face of the Commercial Paper Rate Note and in the applicable
Pricing Supplement.
S-7
<PAGE>
Unless otherwise indicated in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Commercial Paper Interest Determination
Date, the Money Market Yield (as defined below) of the rate on such date for
commercial paper having the Index Maturity designated in the applicable Pricing
Supplement as published by the Board of Governors of the Federal Reserve System
in "Statistical Release H.15(519), Selected Interest Rates" or any successor
publication of the Board of Governors of the Federal Reserve System
("H.15(519)") under the heading "Commercial Paper". In the event that such rate
is not published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Commercial Paper Interest Determination Date, then the
Commercial Paper Rate will be the Money Market Yield of the rate on such
Commercial Paper Interest Determination Date for commercial paper having the
Index Maturity designated in the applicable Pricing Supplement as published by
the Federal Reserve Bank of New York in its daily statistical release,
"Composite 3:30 P.M. Quotations for U.S. Government Securities" ("Composite
Quotations") under the heading "Commercial Paper". If such rate is not yet
published by 3:00 P.M., New York City time, on the Calculation Date pertaining
to such Commercial Paper Interest Determination Date, then the Commercial Paper
Rate for such Commercial Paper Interest Determination Date will be calculated by
the Calculation Agent and will be the Money Market Yield of the arithmetic mean
of the offered rates of three leading dealers of commercial paper in The City of
New York selected by the Calculation Agent as of 11:00 A.M., New York City time,
on such Commercial Paper Interest Determination Date for commercial paper having
the Index Maturity designated in the applicable Pricing Supplement placed for an
industrial issuer whose bond rating is "AA", or the equivalent, from a
nationally recognized rating agency; PROVIDED, HOWEVER, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the Commercial Paper Rate will be the Commercial Paper Rate then
in effect on such Commercial Paper Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage rounded to the
next higher one-hundred thousandth of a percentage point) calculated in
accordance with the following formula:
<TABLE>
<S> <C> <C>
DX360
Money Market Yield = ------------------- X 100
360-(DXM)
</TABLE>
where "D" refers to the per annum rate for the commercial paper, quoted on a
bank-discount basis and expressed as a decimal; and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
PRIME RATE NOTES. Prime Rate Notes will bear interest at the interest rates
(calculated with reference to the Prime Rate and the Spread or Spread
Multiplier, if any), and will be payable on the dates, specified on the face of
the Prime Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Prime Rate Interest Determination Date, the
arithmetic mean of the prime rates quoted on the basis of the actual number of
days in the year divided by 365 or 366 days, as the case may be, as of the close
of business on such Prime Rate Interest Determination Date by three major money
center banks in The City of New York selected by the Calculation Agent. If fewer
than three such quotations are provided, the Prime Rate shall be determined on
the basis of the rates furnished in The City of New York by three substitute
banks or trust companies organized and doing business under the laws of the
United States, or any state thereof, having total equity capital of at least
$500 million and being subject to supervision or examination by Federal or state
authority, selected by the Calculation Agent to provide such rate or rates;
PROVIDED, HOWEVER, that if the banks selected as aforesaid are not quoting as
mentioned in this sentence, the Prime Rate will be the Prime Rate then in effect
on such Prime Rate Interest Determination Date.
LIBOR NOTES. LIBOR Notes will bear interest at the interest rates
(calculated with reference to LIBOR and the Spread or Spread Multiplier, if
any), and will be payable on the dates, specified on the face of such LIBOR Note
and in the applicable Pricing Supplement.
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<PAGE>
Unless otherwise indicated in the applicable Pricing Supplement, LIBOR will
be determined by the Calculation Agent in accordance with the following
provisions: On each LIBOR Interest Determination Date, LIBOR will be determined
on the basis of the offered rate for deposits in U.S. dollars having the Index
Maturity specified in the applicable Pricing Supplement, commencing on the
second London Banking Day immediately following such LIBOR Interest
Determination Date, which appears on the Telerate Page 3750 as of 11:00 A.M.,
London time, on that LIBOR Interest Determination Date. If such rate does not so
appear on the Telerate Page 3750, the rate in respect of such LIBOR Interest
Determination Date will be determined on the basis of the rates at which
deposits in U.S. dollars are offered by four major banks in the London interbank
market, selected by the Calculation Agent at approximately 11:00 A.M., London
time, on the LIBOR Interest Determination Date next preceding the relevant
Interest Reset Date, to prime banks in the London interbank market for a period
of the Index Maturity commencing on that Interest Reset Date and in a principal
amount equal to an amount not less than $1,000,000 that is representative for a
single transaction in such market at such time. In such case, the Calculation
Agent will request the principal London office of each of the aforesaid major
banks to provide a quotation of such rate. If at least two such quotations are
provided in respect of such LIBOR Interest Determination Date, the rate for that
Interest Reset Date will be the arithmetic mean of the quotations, and, if fewer
than two quotations are provided as requested in respect of such LIBOR Interest
Determination Date, the rate for that Interest Reset Date will be the arithmetic
mean of the rates quoted by three major banks in The City of New York, selected
by the Calculation Agent (which may include one or more of the Agents or their
affiliates), at approximately 11:00 A.M., New York City time, on that LIBOR
Interest Determination Date for loans in U.S. dollars to leading European banks
for a period of the Index Maturity commencing on that Interest Reset Date and in
a principal amount equal to an amount not less than $1,000,000 that is
representative for a single transaction in such market at such time; PROVIDED,
HOWEVER, if the aforesaid rate cannot be determined by the Calculation Agent,
LIBOR in respect of such LIBOR Interest Determination Date will be LIBOR then in
effect on such LIBOR Interest Determination Date.
"Telerate Page 3750" means the display page so designated on the Dow Jones
Telerate Service (or such other page as may replace that page on that service,
or such other service as may be nominated as the information vendor, for the
purpose of displaying rates or prices relating to LIBOR).
TREASURY RATE NOTES. Treasury Rate Notes will bear interest at the interest
rates (calculated with reference to the Treasury Rate and the Spread or Spread
Multiplier, if any), and will be payable on the dates, specified on the face of
such Treasury Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Treasury Interest Determination Date, the rate
for the most recent auction of direct obligations of the United States
("Treasury bills") having the Index Maturity designated in the applicable
Pricing Supplement as published in H.15(519) under the heading "U.S. Government
Securities--Treasury Bills--Auction Average (Investment)" or, if not so
published by 3:00 P.M., New York City time, on the Calculation Date pertaining
to such Treasury Interest Determination Date, the Treasury Rate will be the
auction average rate, expressed as a Bond Equivalent Yield (calculated as
described below), for such auction as otherwise announced by the United States
Department of the Treasury. If the results of the auction of Treasury bills
having the Index Maturity designated in the applicable Pricing Supplement are
not published or announced as provided above by 3:00 P.M., New York City time,
on such Calculation Date or if no such auction is held in a particular week,
then the Treasury Rate will be calculated by the Calculation Agent and will be a
yield to maturity, expressed as a Bond Equivalent Yield of the arithmetic mean
of the secondary market bid rates, as of approximately 3:30 P.M., New York City
time, on such Treasury Interest Determination Date, of three leading primary
United States government securities dealers selected by the Calculation Agent,
for the issue of Treasury bills with a remaining maturity closest to the Index
Maturity designated in the applicable Pricing Supplement; PROVIDED, HOWEVER,
that if the dealers selected as aforesaid by the Calculation
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Agent are not quoting as mentioned in this sentence, the Treasury Rate with
respect to such Treasury Interest Determination Date will be the Treasury Rate
then in effect on such Treasury Interest Determination Date.
"Bond Equivalent Yield" shall be a yield calculated in accordance with the
following formula:
<TABLE>
<S> <C> <C>
DXN
Bond Equivalent Yield = ------------------- X 100
360-(DXM)
</TABLE>
where "D" refers to the per annum rate for Treasury bills, quoted on a
bank-discount basis and expressed as a decimal; "N" refers to the actual number
of days in the year for which interest is being calculated; and "M" refers to
the actual number of days in the interest period for which interest is being
calculated.
FEDERAL FUNDS RATE NOTES. Federal Funds Rate Notes will bear interest at
the interest rates (calculated with reference to the Federal Funds Rate and the
Spread or Spread Multiplier, if any), and will be payable on the dates,
specified in the Federal Funds Rate Note and in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Federal Funds Interest Determination
Date, the rate on that day for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)" or, if not so published by 3:00 P.M., New
York City time, on the Calculation Date pertaining to such Federal Funds
Interest Determination Date, the Federal Funds Rate will be the rate on such
Federal Funds Interest Determination Date as published in Composite Quotations
under the heading "Federal Funds/Effective Rate". If such rate is not yet
published by 3:00 P.M., New York City time, on the Calculation Date pertaining
to such Federal Funds Interest Determination Date, then the Federal Funds Rate
for such Federal Funds Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of the rates prior to 9:00
A.M., New York City time, on such Federal Funds Interest Determination Date for
the last transaction in overnight Federal Funds arranged by three leading
brokers of Federal Funds transactions in The City of New York selected by the
Calculation Agent; PROVIDED, HOWEVER, that if the brokers selected as aforesaid
by the Calculation Agent are not quoting as mentioned in this sentence, the
Federal Funds Rate with respect to such Federal Funds Interest Determination
Date will be the Federal Funds Rate in effect on such Federal Funds Interest
Determination Date.
CD RATE NOTES. CD Rate Notes will bear interest at the interest rates
(calculated with reference to the CD Rate and the Spread or Spread Multiplier,
if any), and will be payable on the dates, specified in the CD Rate Note and in
the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "CD Rate"
means, with respect to any CD Interest Determination Date, the rate on such date
for negotiable certificates of deposit having the Index Maturity designated in
the applicable Pricing Supplement as published in H.15(519) under the heading
"CDs (Secondary Market)" or, if not so published by 3:00 P.M., New York City
time, on the Calculation Date pertaining to such CD Interest Determination Date,
the CD Rate will be the rate on such CD Interest Determination Date for
negotiable certificates of deposit of the Index Maturity designated in the
applicable Pricing Supplement as published in Composite Quotations under the
heading "Certificates of Deposit". If such rate is not published by 3:00 P.M.,
New York City time, on such Calculation Date, then the CD Rate on such CD
Interest Determination Date will be calculated by the Calculation Agent and will
be the arithmetic mean of the secondary market offered rates as of the opening
of business, New York City time, on such CD Interest Determination Date, of
three leading nonbank dealers in negotiable U.S. dollar certificates of deposit
in The City of New York selected by the Calculation Agent for negotiable
certificates of deposit of major United States money market banks of the highest
credit standing (in the market for negotiable certificates of deposit) with a
remaining maturity closest to the Index Maturity designated in the applicable
Pricing Supplement in
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<PAGE>
a denomination of $5,000,000; PROVIDED, HOWEVER, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the CD Rate with respect to such CD Interest Determination Date will
be the CD Rate in effect on such CD Interest Determination Date.
INDEXED NOTES
Notes may be issued as Indexed Notes, as indicated in the applicable Pricing
Supplement. Holders of Indexed Notes may receive a principal amount at Maturity
that is greater than or less than the face amount of such Note depending upon
the fluctuation of the relative value, rate or price of the specified index.
Specific information pertaining to the method for determining the principal
amount payable at Maturity, a historical comparison of the relative value, rate
or price of the specified index and the face amount of the Indexed Note and
certain additional tax considerations will be described in the applicable
Pricing Supplement.
SPECIAL PROVISIONS RELATING TO FOREIGN CURRENCY NOTES
GENERAL
Unless otherwise indicated in the applicable Pricing Supplement, the Notes
will be denominated in U.S. dollars and payments of principal of and interest on
the Notes will be made in U.S. dollars. If any of the Notes are to be
denominated in a currency or currency unit other than U.S. dollars, the
following provisions shall apply, which are in addition to, and to the extent
inconsistent therewith replace, the description of general terms and provisions
of Notes set forth in the accompanying Prospectus and elsewhere in this
Prospectus Supplement.
Foreign Currency Notes are issuable in registered form only, without
coupons. The denominations for particular Foreign Currency Notes will be
specified in the applicable Pricing Supplement.
Unless otherwise provided in the applicable Pricing Supplement, payment of
the purchase price of Foreign Currency Notes will be made in immediately
available funds.
Notes denominated in Specified Currencies other than European Currency Units
will not be sold in, or to residents of, the country of the Specified Currency
in which particular Notes are denominated except as otherwise specified in the
applicable Pricing Supplement.
CURRENCIES
Unless otherwise specified in the applicable Pricing Supplement, purchasers
are required to pay for Foreign Currency Notes in the Specified Currency. At the
present time there are limited facilities in the United States for the
conversion of U.S. dollars into the Specified Currencies and vice versa, and
banks do not generally offer non-U.S. dollar checking or savings account
facilities in the United States. However, if requested on or prior to the fifth
Business Day preceding the date of delivery of the Notes, or by such other day
as determined by the Agent who presented such offer to purchase Notes to the
Company, such Agent may at its discretion arrange for the conversion of U.S.
dollars into the Specified Currency set forth in the applicable Pricing
Supplement to enable the purchasers to pay for the Notes. Each such conversion,
if any, will be made on such terms and subject to such conditions, limitations
and charges as the person making such conversion may from time to time establish
in accordance with its regular foreign exchange practices. All costs of exchange
will be borne by the purchasers of the Notes.
Specific information about the foreign currency or currency units in which a
particular Foreign Currency Note is denominated, including historical exchange
rates and a description of the currency and any exchange controls, will be
contained in the applicable Pricing Supplement.
PAYMENT OF PRINCIPAL AND INTEREST
The principal of and interest on Foreign Currency Notes are payable by the
Company in U.S. dollars. However, unless otherwise specified in the applicable
Pricing Supplement, the holder of a Foreign Currency Note may elect to receive
such payments in the Specified Currency as described below. Unless otherwise
specified in the applicable Pricing Supplement, the Exchange Rate Agent will
determine the rate of conversion for all payments of principal of and interest
on Foreign Currency
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<PAGE>
Notes to U.S. dollars. "Exchange Rate Agent" means the agent appointed by the
Company to make such determinations. Unless otherwise specified in a Pricing
Supplement, the Exchange Rate Agent shall be Citibank, N.A.
Unless otherwise specified in the applicable Pricing Supplement, any U.S.
dollar amount to be received by a holder of a Foreign Currency Note will be
based on the indicative spot quotation which will yield the largest number of
U.S. dollars upon conversion of the Specified Currency, out of indicative spot
quotations in The City of New York received by the Exchange Rate Agent at
approximately 11:00 A.M., New York City time, on the second Business Day
preceding the applicable payment date from three recognized foreign exchange
dealers (one of which may be the Exchange Rate Agent) obtained from Reuters or,
if quotes from Reuters are not available, the Telerate foreign exchange
quotation service for the purchase by the quoting dealer of the Specified
Currency for U.S. dollars for settlement on such payment date; PROVIDED HOWEVER,
that if fewer than three such quotes are available, such dollar amount shall be
based on an applicable rate published by the Federal Reserve Bank of New York.
If such bid quotations and such rate published by the Federal Reserve Bank are
not available, payments will be made in the Specified Currency. Unless otherwise
specified in the applicable Pricing Supplement, all currency exchange costs will
be borne by the holder of the Foreign Currency Note by deductions from such
payments.
Unless otherwise specified in the applicable Pricing Supplement, a holder of
Foreign Currency Notes may elect to receive payment of the principal of and
interest on the Notes in the Specified Currency by transmitting a written
request for such payment to the corporate trust department of Citibank, N.A. in
the Borough of Manhattan, The City of New York on or prior to the Regular Record
Date or at least sixteen days prior to Maturity, as the case may be. Such
request shall be in writing (mailed or hand delivered) or by cable, telex or
other form of facsimile transmission. A holder of a Foreign Currency Note may
elect to receive payment in the Specified Currency for all principal and
interest payments and need not file a separate election for each payment. Such
election will remain in effect until revoked by written notice to Citibank, N.A.
in the Borough of Manhattan, The City of New York, but written notice of any
such revocation must be received by Citibank, N.A. in the Borough of Manhattan,
The City of New York on or prior to the Regular Record Date or at least sixteen
days prior to Maturity, as the case may be. Holders of Foreign Currency Notes
whose Foreign Currency Notes are to be held in the name of a broker or nominee
should contact such broker or nominee to determine whether and how an election
to receive payments in the Specified Currency may be made.
Interest on and principal of Foreign Currency Notes paid in U.S. dollars
will be paid in the manner specified in the accompanying Prospectus and
elsewhere in this Prospectus Supplement for interest on and principal of Notes
denominated in U.S. dollars. Interest on Foreign Currency Notes paid in the
Specified Currency will be paid by a check drawn on an account maintained at a
bank outside the United States, unless other arrangements have been made. The
principal of Foreign Currency Notes paid in the Specified Currency, together
with interest accrued and unpaid thereon, due at Maturity will be paid in
immediately available funds by wire transfer to such account maintained with a
bank outside the United States (unless other arrangements have been made) as
shall have been designated at least sixteen days prior to Maturity by the
holders thereof so long as such Foreign Currency Notes are presented to the
Trustee or the Paying Agents designated in the applicable Pricing Supplement in
time for the Trustee or such Paying Agents to make such payments in such funds.
Any payment of principal or interest required to be made on an Interest Payment
Date or at Maturity of a Foreign Currency Note which is not a Business Day need
not be made on such day, but may be made on the next succeeding Business Day
with the same force and effect as if made on the Interest Payment Date or at
Maturity, as the case may be, and no interest shall accrue for the period from
and after such Interest Payment Date or Maturity.
PAYMENT CURRENCY
If a Specified Currency is not available for the payment of principal or
interest with respect to a Foreign Currency Note due to the imposition of
exchange controls or other circumstances beyond the control of the Company, the
Company will be entitled to satisfy its obligations to holders of Foreign
S-12
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Currency Notes by making such payment in U.S. dollars on the basis of the Market
Exchange Rate on the date of such payment, or if such Market Exchange Rate is
not then available, on the basis of the most recently available Market Exchange
Rate. See "Foreign Currency Risks--Exchange Rates and Exchange Controls".
"Market Exchange Rate" for any Specified Currency means the noon buying rate in
The City of New York for cable transfers for such Specified Currencies as
certified for customs purposes by the Federal Reserve Bank of New York.
FOREIGN CURRENCY RISKS
GENERAL
EXCHANGE RATES AND EXCHANGE CONTROLS. An investment in Notes that are
denominated in a Specified Currency entails significant risks that are not
associated with a similar investment in a security denominated in U.S. dollars.
Such risks include, without limitation, the possibility of significant changes
in rates of exchange between the U.S. dollar and the various foreign currencies
and the possibility of the imposition or modification of foreign controls by
either the U.S. or foreign governments. Such risks generally depend on economic
and political events over which the Company has no control. In recent years,
rates of exchange between U.S. dollars and certain foreign currencies have been
highly volatile and such volatility may be expected to continue in the future.
Fluctuations in any particular exchange rate that have occurred in the past are
not necessarily indicative, however, of fluctuations in such rate that may occur
during the term of any Note. Depreciation of the currency specified in a Note
against the U.S. dollar would result in a decrease in the effective yield of
such Note below its coupon rate, and in certain circumstances could result in a
loss to the investor on a U.S. dollar basis.
THIS PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS DO NOT DESCRIBE ALL
THE RISKS OF AN INVESTMENT IN NOTES DENOMINATED IN A FOREIGN CURRENCY OR A
CURRENCY UNIT AND THE COMPANY DISCLAIMS ANY RESPONSIBILITY TO ADVISE PROSPECTIVE
PURCHASERS OF SUCH RISKS AS THEY EXIST AT THE DATE OF THIS PROSPECTUS SUPPLEMENT
OR AS SUCH RISKS MAY CHANGE FROM TIME TO TIME. PROSPECTIVE INVESTORS SHOULD
CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN
INVESTMENT IN NOTES DENOMINATED IN CURRENCIES OTHER THAN U.S. DOLLARS. SUCH
NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED
WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS.
The information set forth in this Prospectus Supplement is directed to
prospective purchasers who are United States residents, and the Company
disclaims any responsibility to advise prospective purchasers who are residents
of countries other than the United States with respect to any matters that may
affect the purchase, holding or receipt of payments of principal of and interest
on the Notes. Such persons should consult their own counsel with regard to such
matters.
GOVERNING LAW AND JUDGMENTS. The Notes will be governed by and construed in
accordance with the laws of the State of New York. An amendment to the Judiciary
Law of the State of New York adopted in 1987 provides that a judgment or decree
in an action based upon an obligation denominated in a currency other than U.S.
dollars will be rendered in the foreign currency of the underlying obligation
converted into U.S. dollars at a rate of exchange prevailing on the date of
entry of the judgment or decree.
EXCHANGE CONTROLS AND AVAILABILITY OF SPECIFIED CURRENCY. Governments have
imposed from time to time, and may in the future impose, exchange controls which
could affect exchange rates as well as the availability of a specified foreign
currency at the time of payment of principal of, and premium, if any, or
interest on a Note. Even if there are no actual exchange controls, it is
possible that the Specified Currency for any particular Note would not be
available at such Note's Maturity. In that event, the Company would make
required payments in U.S. dollars on the basis of the Market Exchange Rate on
the date of such payment, or if such rate of exchange is not then available, on
the basis of the most recently available Market Exchange Rate. See "Special
Provisions Relating to Foreign Currency Notes--Payment Currency."
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Information concerning exchange rates for the Specified Currency in which
principal of, premium, if any, and interest on the Notes is payable, as against
the U.S. dollar at selected times during the last five years, as well as
exchange controls affecting such currencies, will be set forth in the applicable
Pricing Supplement. The information concerning exchange rates will be furnished
as a matter of information only and should not be regarded as indicative of the
range of or trends in fluctuations in currency exchange rates that may occur in
the future.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the principal United States Federal income tax
consequences resulting from the beneficial ownership of Notes by certain
persons. This summary does not purport to consider all the possible United
States Federal tax consequences of the purchase, ownership or disposition of the
Notes and is not intended to reflect the individual tax position of any
beneficial owner. It deals only with Notes and currencies or composite
currencies other than U.S. dollars ("Foreign Currency") held as capital assets.
Moreover, except as expressly indicated, it addresses initial purchasers and
does not address beneficial owners that may be subject to special tax rules,
such as banks, insurance companies, dealers in securities or currencies,
purchasers that hold Notes (or Foreign Currency) as a hedge against currency
risks or as part of a straddle with other investments or as part of a "synthetic
security" or other integrated investment (including a "conversion transaction")
comprised of a Note and one or more other investments, or purchasers that have a
"functional currency" other than the U.S. dollar. Except to the extent discussed
below under "Non-United States Holders", this summary is not applicable to
non-United States persons not subject to United States Federal income tax on
their worldwide income. This summary is based upon the United States Federal tax
laws and regulations as now in effect and as currently interpreted and does not
take into account possible changes in such tax laws or such interpretations, any
of which may be applied retroactively. It does not include any description of
the tax laws of any state, local or foreign governments that may be applicable
to the Notes or Holders thereof, and it does not discuss the tax treatment of
Notes denominated in certain hyperinflationary currencies or dual currency
Notes. Persons considering the purchase of Notes should consult their own tax
advisors concerning the application of the United States Federal tax laws to
their particular situations as well as any consequences to them under the laws
of any other taxing jurisdiction.
UNITED STATES HOLDERS
PAYMENTS OF INTEREST
In general, interest on a Note, whether payable in U.S. dollars or a Foreign
Currency (other than certain payments on a Discount Note, as defined and
described below under "Original Issue Discount"), will be taxable to a
beneficial owner who or which is (i) a citizen or resident of the United States,
(ii) a corporation created or organized under the laws of the United States or
any State thereof (including the District of Columbia) or (iii) a person
otherwise subject to United States Federal income taxation on its worldwide
income (a "United States Holder") as ordinary income at the time it is received
or accrued, depending on the Holder's method of accounting for tax purposes. If
an interest payment is denominated in or determined by reference to a Foreign
Currency, then special rules, described below under "Foreign Currency Notes",
apply.
ORIGINAL ISSUE DISCOUNT
The following discussion summarizes the United States Federal income tax
consequences to United States Holders of Notes issued with original issue
discount for Federal income tax purposes ("OID"). United States Holders of a
Note issued with OID generally will be subject to special tax accounting rules
provided in the Internal Revenue Code of 1986, as amended (the "Code"). On
February 4, 1994, the Treasury Department published final regulations (the "OID
Regulations"), which expand and illustrate the rules provided by the Code.
Special rules apply to OID on a Discount Note that is denominated in Foreign
Currency. See "Foreign Currency Notes--Foreign Currency Discount Notes".
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GENERAL. A Note will be treated as issued with OID (a "Discount Note") if
the excess of the Note's "stated redemption price at maturity" over its issue
price is greater than a DE MINIMIS amount (set forth in the Code and the OID
Regulations). Generally, the issue price of a Note (or any Note that is part of
an issue of Notes) will be the first price at which a substantial amount of
Notes that are part of such issue of Notes are sold (other than to underwriters,
placement agents or wholesalers). Under the OID Regulations, the "stated
redemption price at maturity" of a Note is the sum of all payments provided by
the Note that are not payments of "qualified stated interest". A "qualified
stated interest" payment includes any stated interest payment on a Note that is
unconditionally payable at least annually at a single fixed rate (or at certain
floating rates) that appropriately takes into account the length of the interval
between stated interest payments. The Pricing Supplement will state whether a
particular issue of Notes will constitute an issue of Discount Notes.
In general, if the excess of a Note's stated redemption price at maturity
over its issue price is DE MINIMIS, then such excess constitutes "DE MINIMIS
OID". Under the OID Regulations, unless the election described below under
"Election to Treat All Interest as Original Issue Discount" is made, such a Note
will not be treated as issued with OID (in which case the following paragraphs
under "Original Issue Discount" will not apply) and a United States Holder of
such a Note will recognize capital gain with respect to such DE MINIMIS OID as
stated principal payments on the Note are made. The amount of such gain with
respect to each such payment will equal the product of the total amount of the
Note's DE MINIMIS OID and a fraction, the numerator of which is the amount of
the principal payment made and the denominator of which is the stated principal
amount of the Note.
In certain cases, Notes that bear stated interest and are issued at par may
be deemed to bear OID for Federal income tax purposes, with the result that the
inclusion of interest in income for Federal income tax purposes may vary from
the actual cash payments of interest made on such Notes, generally accelerating
income for cash method taxpayers. Under the OID Regulations, a Note may be a
Discount Note where, among other things, (i) a Floating Rate Note provides for a
maximum interest rate or a minimum interest rate that is reasonably expected as
of the issue date to cause the yield on the debt instrument to be significantly
less, in the case of a maximum rate, or more, in the case of a minimum rate,
than the expected yield determined without the maximum or minimum rate, as the
case may be; (ii) a Floating Rate Note provides for significant front-loading or
back-loading of interest; or (iii) a Note bears interest at a floating rate in
combination with one or more other floating or fixed rates. Notice will be given
in the applicable Pricing Supplement when the Company determines that a
particular Note will be a Discount Note. Unless specified in the applicable
Pricing Supplement, Floating Rate Notes will not be Discount Notes.
The Code and the OID Regulations provide rules that require a United States
Holder of a Discount Note having a maturity of more than one year from its date
of issue to include OID in gross income before the receipt of cash attributable
to such income, without regard to the Holder's method of accounting for tax
purposes. The amount of OID includible in gross income by a United States Holder
of a Discount Note is the sum of the "daily portions" of OID with respect to the
Discount Note for each day during the taxable year or portion of the taxable
year in which the United States Holder holds such Discount Note ("accrued OID").
The daily portion is determined by allocating to each day in any "accrual
period" a pro rata portion of the OID allocable to that accrual period. Under
the OID Regulations, accrual periods with respect to a Note may be any set of
periods (which may be of varying lengths) selected by the United States Holder
as long as (i) no accrual period is longer than one year and (ii) each scheduled
payment of interest or principal on the Note occurs on the first day or final
day of an accrual period.
The amount of OID allocable to an accrual period equals the excess of (a)
the product of the Discount Note's adjusted issue price at the beginning of the
accrual period and the Discount Note's yield to maturity (determined on the
basis of compounding at the close of each accrual period and properly adjusted
for the length of the accrual period) over (b) the sum of any payments of
qualified stated interest on the Discount Note allocable to the accrual period.
The "adjusted issue price" of a Discount Note at the beginning of the first
accrual period is the issue price and at the beginning of any accrual period
thereafter is (x) the sum of the issue price of such Discount Note, the accrued
OID for
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each prior accrual period (determined without regard to the amortization of any
acquisition premium or bond premium, which are discussed below), and the amount
of any qualified stated interest on the Note that has accrued prior to the
beginning of the accrual period but is not payable until a later date, less (y)
any prior payments on the Discount Note that were not qualified stated interest
payments. If a payment (other than a payment of qualified stated interest) is
made on the first day of an accrual period, then the adjusted issue price at the
beginning of such accrual period is reduced by the amount of the payment. If a
portion of the initial purchase price of a Note is attributable to interest that
accrued prior to the Note's issue date, the first stated interest payment on the
Note is to be made within one year of the Note's issue date and such payment
will equal or exceed the amount of pre-issuance accrued interest, then the issue
price will be decreased by the amount of pre-issuance accrued interest, in which
case a portion of the first stated interest payment will be treated as a return
of the excluded pre-issuance accrued interest and not as an amount payable on
the Note.
The OID Regulations contain certain special rules that generally allow any
reasonable method to be used in determining the amount of OID allocable to a
short initial accrual period (if all other accrual periods are of equal length)
and require that the amount of OID allocable to the final accrual period equal
the excess of the amount payable at the maturity of the Discount Note (other
than any payment of qualified stated interest) over the Discount Note's adjusted
issue price as of the beginning of such final accrual period. In addition, if an
interval between payments of qualified stated interest on a Discount Note
contains more than one accrual period, then the amount of qualified stated
interest payable at the end of such interval is allocated PRO RATA (on the basis
of their relative lengths) between the accrual periods contained in the
interval.
United States Holders of Discount Notes generally will have to include in
income increasingly greater amounts of OID over the life of the Notes.
ACQUISITION PREMIUM. A United States Holder that purchases a Discount Note
at its original issuance for an amount in excess of its issue price but less
than its stated redemption price at maturity (any such excess being "acquisition
premium"), and that does not make the election described below under "Original
Issue Discount--Election To Treat All Interest as Original Issue Discount", is
permitted to reduce the daily portions of OID by a fraction, the numerator of
which is the excess of the United States Holder's purchase price for the Note
over the issue price, and the denominator of which is the excess of the sum of
all amounts payable on the Note after the purchase date, other than payments of
qualified stated interest, over the Note's issue price. Alternatively, a United
States Holder may elect to compute OID accruals as described under "Original
Issue Discount--General" above, treating the United States Holder's purchase
price as the issue price.
OPTIONAL REDEMPTION. If the Company has an option to redeem a Discount
Note, or the Holder has an option to cause a Discount Note to be repurchased,
prior to the Discount Note's stated maturity, such option will be presumed to be
exercised if, by utilizing any date on which such Discount Note may be redeemed
or repurchased as the maturity date and the amount payable on such date in
accordance with the terms of such Discount Note (the "redemption price") as the
stated redemption price at maturity, the yield on the Discount Note would be (i)
in the case of an option of the Company, lower than its yield to stated
maturity, or (ii) in the case of an option of the Holder, higher than its yield
to stated maturity. If such option is not in fact exercised when presumed to be
exercised, the Note would be treated solely for OID purposes as if it were
redeemed or repurchased, and a new Note were issued, on the presumed exercise
date for an amount equal to the Discount Note's adjusted issue price on that
date.
SHORT-TERM NOTES. Under the Code, special rules apply with respect to OID
on Notes that mature one year or less from the date of issuance ("Short-Term
Notes"). In general, a cash basis United States Holder of a Short-Term Note is
not required to include OID in income as it accrues for United States Federal
income tax purposes unless it elects to do so. Accrual basis United States
Holders and certain other United States Holders, including banks, regulated
investment companies, dealers in securities and cash basis United States Holders
who so elect, are required to include OID in income as it accrues on Short-Term
Notes on a straight-line basis or, at the election of the United
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States Holder, under the constant yield method (based on daily compounding). In
the case of United States Holders not required and not electing to include OID
in income currently, any gain realized on the sale or retirement of Short-Term
Notes will be ordinary income to the extent of the OID accrued on a
straight-line basis (unless an election is made to accrue the original issue
discount under the constant yield method) through the date of sale or
retirement. United States Holders who are not required and do not elect to
include OID on Short-Term Notes in income as it accrues will be required to
defer deductions for interest on borrowings allocable to Short-Term Notes in an
amount not exceeding the deferred income until the deferred income is realized.
Any United States Holder of a Short-Term Note can elect to apply the rules
in the preceding paragraph taking into account the amount of "acquisition
discount", if any, with respect to the Note (rather than the OID with respect to
such Note). Acquisition discount is the excess of the stated redemption price at
maturity of the Short-Term Note over the United States Holder's purchase price
therefor. Acquisition discount will be treated as accruing on a ratable basis
or, at the election of the United States Holder, on a constant-yield basis.
For purposes of determining the amount of OID subject to these rules, the
OID Regulations provide that no interest payments on a Short-Term Note are
qualified stated interest, but instead such interest payments are included in
the Short-Term Note's stated redemption price at maturity.
NOTES PURCHASED AT A PREMIUM
Under the Code, a United States Holder that purchases a Note for an amount
in excess of its stated redemption price at maturity will not be subject to the
OID rules and may elect to treat such excess as "amortizable bond premium", in
which case the amount of qualified stated interest required to be included in
the United States Holder's income each year with respect to interest on the Note
will be reduced by the amount of amortizable bond premium allocable (based on
the Note's yield to maturity) to such year. Any election to amortize bond
premium is applicable to all bonds (other than bonds the interest on which is
excludible from gross income) held by the United States Holder at the beginning
of the first taxable year to which the election applies or thereafter acquired
by the United States Holder, and may not be revoked without the consent of the
Internal Revenue Service ("IRS"). See also "Original Issue Discount--Election to
Treat All Interest as Original Issue Discount".
NOTES PURCHASED AT A MARKET DISCOUNT
A Note, other than a Short-Term Note, will be treated as issued at a market
discount (a "Market Discount Note") if the amount for which a United States
Holder purchased the Note is less than the Note's issue price, subject to a DE
MINIMIS rule similar to the rule relating to DE MINIMIS OID described under
"Original Issue Discount--General".
In general, any gain recognized on the maturity or disposition of a Market
Discount Note will be treated as ordinary income to the extent that such gain
does not exceed the accrued market discount on such Note. Alternatively, a
United States Holder of a Market Discount Note may elect to include market
discount in income currently over the life of the Market Discount Note. Such an
election applies to all debt instruments with market discount acquired by the
electing United States Holder on or after the first day of the first taxable
year to which the election applies and may not be revoked without the consent of
the IRS.
Market discount accrues on a straight-line basis unless the United States
Holder elects to accrue such discount on a constant yield to maturity basis.
Such an election is applicable only to the Market Discount Note with respect to
which it is made and is irrevocable. A United States Holder of a Market Discount
Note that does not elect to include market discount in income currently
generally will be required to defer deductions for interest on borrowings
allocable to such Note in an amount not exceeding the accrued market discount on
such Note until the maturity or disposition of such Note.
The market discount rules do not apply to a Short-Term Note.
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ELECTION TO TREAT ALL INTEREST AS ORIGINAL ISSUE DISCOUNT
Any United States Holder may elect to include in gross income all interest
that accrues on a Note using the constant yield method described above under the
heading "Original Issue Discount-- General," with the modifications described
below. For purposes of this election, interest includes stated interest, OID, DE
MINIMIS OID, market discount, acquisition discount, DE MINIMIS market discount
and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium.
In applying the constant yield method to a Note with respect to which this
election has been made, the issue price of the Note will equal the electing
United States Holder's adjusted basis in the Note immediately after its
acquisition, the issue date of the Note will be the date of its acquisition by
the electing United States Holder, and no payments on the Note will be treated
as payments of qualified stated interest. This election is generally applicable
only to the Note with respect to which it is made and may not be revoked without
the consent of the IRS. If this election is made with respect to a Note with
amortizable bond premium, the electing United States Holder will be deemed to
have elected to apply amortizable bond premium against interest with respect to
all debt instruments with amortizable bond premium (other than debt instruments
the interest on which is excludible from gross income) held by such electing
United States Holder as of the beginning of the taxable year in which the
election is made or any debt instruments acquired thereafter. The deemed
election with respect to amortizable bond premium may not be revoked without the
consent of the IRS.
If the election described above to apply the constant yield method to all
interest on a Note is made with respect to a Market Discount Note, as defined
above, then the electing United States Holder will be treated as having made the
election discussed above under "Notes Purchased at a Market Discount" to include
market discount in income currently over the life of all debt instruments held
or thereafter acquired by such United States Holder.
PURCHASE, SALE AND RETIREMENT OF THE NOTES
A United States Holder's tax basis in a Note generally will equal its U.S.
dollar cost (which, in the case of a Note purchased with a Foreign Currency,
will be the U.S. dollar value of the purchase price on the date of purchase),
increased by the amount of any OID or market discount (or acquisition discount,
in the case of a Short-Term Note) included in the United States Holder's income
with respect to the Note and the amount, if any, of income attributable to DE
MINIMIS OID included in the United States Holder's income with respect to the
Note, and reduced by the sum of (i) the amount of any payments that are not
qualified stated interest payments, and (ii) the amount of any amortizable bond
premium applied to reduce interest on the Note. A United States Holder generally
will recognize gain or loss on the sale or retirement of a Note equal to the
difference between the amount realized on the sale or retirement and the United
States Holder's tax basis in the Note. The amount realized on a sale or
retirement for an amount in Foreign Currency will be the U.S. dollar value of
such amount on the date of sale or retirement. Except to the extent described
above under "Original Issue Discount-- Short-Term Notes" or "Market Discount" or
below under "Foreign Currency Notes--Exchange Gain or Loss", and except to the
extent attributable to accrued but unpaid interest, gain or loss recognized on
the sale or retirement of a Note will be capital gain or loss and will be
long-term capital gain or loss if the Note was held for more than one year.
FOREIGN CURRENCY NOTES
INTEREST PAYMENTS. If an interest payment is denominated in or determined
by reference to a Foreign Currency, the amount of income recognized by a cash
basis United States Holder will be the U.S. dollar value of the interest
payment, based on the exchange rate in effect on the date of receipt, regardless
of whether the payment is in fact converted into U.S. dollars. Accrual basis
United States Holders may determine the amount of income recognized with respect
to such interest payment in accordance with either of two methods. Under the
first method, the amount of income recognized will be based on the average
exchange rate in effect during the interest accrual period (or, with respect to
an accrual period that spans two taxable years, the partial period within the
taxable year). Upon receipt of an interest payment (including a payment
attributable to accrued but unpaid interest upon
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the sale or retirement of a Note) determined by reference to a Foreign Currency,
an accrual basis United States Holder will recognize ordinary income or loss
measured by the difference between such average exchange rate and the exchange
rate in effect on the date of receipt, regardless of whether the payment is in
fact converted into U.S. dollars. Under the second method, an accrual basis
United States Holder may elect to translate interest income into U.S. dollars at
the spot exchange rate in effect on the last day of the accrual period or, in
the case of an accrual period that spans two taxable years, at the exchange rate
in effect on the last day of the partial period within the taxable year.
Additionally, if a payment of interest is actually received within 5 business
days of the last day of the accrual period or taxable year, an accrual basis
United States Holder applying the second method may instead translate such
accrued interest into U.S. dollars at the spot exchange rate in effect on the
day of actual receipt (in which case no exchange gain or loss will result). Any
election to apply the second method will apply to all debt instruments held by
the United States Holder at the beginning of the first taxable year to which the
election applies or thereafter acquired by the United States Holder and may not
be revoked without the consent of the IRS.
EXCHANGE OF AMOUNTS IN OTHER THAN U.S. DOLLARS. Foreign Currency received
as interest on a Note or on the sale or retirement of a Note will have a tax
basis equal to its U.S. dollar value at the time such interest is received or at
the time of such sale or retirement, as the case may be. Foreign Currency that
is purchased will generally have a tax basis equal to the U.S. dollar value of
the Foreign Currency on the date of purchase. Any gain or loss recognized on a
sale or other disposition of a Foreign Currency (including its use to purchase
Notes or upon exchange for U.S. dollars) will be ordinary income or loss.
FOREIGN CURRENCY DISCOUNT NOTES. OID for any accrual period on a Discount
Note that is denominated in a Foreign Currency will be determined in the Foreign
Currency and then translated into U.S. dollars in the same manner as stated
interest accrued by an accrual basis United States Holder. Upon receipt of an
amount attributable to original issue discount (whether in connection with a
payment of interest or the sale or retirement of a Note), a United States Holder
may recognize ordinary income or loss.
AMORTIZABLE BOND PREMIUM. In the case of a Note that is denominated in a
Foreign Currency, bond premium will be computed in units of Foreign Currency,
and amortizable bond premium will reduce interest income in units of the Foreign
Currency. At the time amortized bond premium offsets interest income, a United
States Holder may realize ordinary income or loss, measured by the difference
between exchange rates at that time and at the time of the acquisition of the
Notes.
MARKET DISCOUNT. Market discount is determined in units of the Foreign
Currency, accrued market discount that is required to be taken into account on
the maturity or upon disposition of a Note is translated into U.S. dollars at
the exchange rate on the maturity or the disposition date, as the case may be
(and no part is treated as exchange gain or loss), accrued market discount
currently includible in income by an electing United States Holder is translated
into U.S. dollars at the average exchange rate for the accrual period (or the
partial accrual period during which the United States Holder held the Note), and
exchange gain or loss is determined on maturity or disposition of the Note (as
the case may be) in the manner described above under "Foreign Currency
Notes--Interest Payments" with respect to the computation of exchange gain or
loss on the receipt of accrued interest by an accrual method Holder.
EXCHANGE GAIN OR LOSS.__Gain or loss recognized by a United States Holder on
the sale or retirement of a Note that is attributable to changes in exchange
rates will be treated as ordinary income or loss. However, exchange gain or loss
is taken into account only to the extent of total gain or loss realized on the
transaction.
INDEXED NOTES
The applicable Pricing Supplement will contain a discussion of any special
United States Federal income tax rules with respect to currency indexed notes or
other indexed Notes.
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NON-UNITED STATES HOLDERS
Subject to the discussion of backup withholding below, payments of principal
(and premium, if any) and interest (including OID) by the Company or any agent
of the Company (acting in its capacity as such) to any Holder of a Note that is
not a United States Holder (a "Non-United States Holder") will not be subject to
United States Federal withholding tax, provided, in the case of interest
(including OID), that (i) the Non-United States Holder does not actually or
constructively own 10% or more of the total combined voting power of all classes
of stock of the Company entitled to vote, (ii) the Non-United States Holder is
not a controlled foreign corporation for United States tax purposes that is
related to the Company (directly or indirectly) through stock ownership and
(iii) either (A) the Non-United States Holder certifies to the Company or its
agent under penalties of perjury that it is not a United States person and
provides its name and address or (B) a securities clearing organization, bank or
other financial institution that holds customers' securities in the ordinary
course of its trade or business (a "financial institution") and holds the Note
certifies to the Company or its agent under penalties of perjury that such
statement has been received from the Non-United States Holder by it or by
another financial institution and furnishes the payor with a copy thereof.
If a Non-United States Holder is engaged in a trade or business in the
United States and interest (including OID) on the Note is effectively connected
with the conduct of such trade or business, the Non-United States Holder,
although exempt from the withholding tax discussed in the preceding paragraph
(provided that such Holder furnishes a properly executed IRS Form 4224 on or
before any payment date to claim such exemption), may be subject to United
States Federal income tax on such interest (or OID) in the same manner as if it
were a United States Holder. In addition, if the Non-United States Holder is a
foreign corporation, it may be subject to a branch profits tax equal to 30% of
its effectively connected earnings and profits for the taxable year, subject to
certain adjustments. For purposes of the branch profits tax, interest (including
OID) on a Note will be included in the earnings and profits of such Holder if
such interest (or OID) is effectively connected with the conduct by such Holder
of a trade or business in the United States. In lieu of the certificate
described in the preceding paragraph, such a Holder must provide the payor with
a properly executed IRS Form 4224 to claim an exemption from United States
Federal withholding tax.
Any capital gain, market discount or exchange gain realized on the sale,
exchange, retirement or other disposition of a Note by a Non-United States
Holder will not be subject to United States Federal income or withholding taxes
if (i) such gain is not effectively connected with a United States trade or
business of the Non-United States Holder and (ii) in the case of an individual,
such Non-United States Holder (A) is not present in the United States for 183
days or more in the taxable year of the sale, exchange, retirement or other
disposition or (B) does not have a tax home (as defined in Section 911(d)(3) of
the Code) in the United States in the taxable year of the sale, exchange,
retirement or other disposition and the gain is not attributable to an office or
other fixed place of business maintained by such individual in the United
States.
Notes held by an individual who is neither a citizen nor a resident of the
United States for United States Federal tax purposes at the time of such
individual's death will not be subject to United States Federal estate tax,
provided that the income from such Notes was not or would not have been
effectively connected with a United States trade or business of such individual
and that such individual qualified for the exemption from United States Federal
withholding tax (without regard to the certification requirements) described
above.
PURCHASERS OF NOTES THAT ARE NON-UNITED STATES HOLDERS SHOULD CONSULT THEIR
OWN TAX ADVISORS WITH RESPECT TO THE POSSIBLE APPLICABILITY OF UNITED STATES
WITHHOLDING AND OTHER TAXES UPON INCOME REALIZED IN RESPECT OF THE NOTES.
INFORMATION REPORTING AND BACKUP WITHHOLDING
For each calendar year in which the Notes are outstanding, the Company is
required to provide the IRS with certain information, including the Holder's
name, address and taxpayer identification number (either the Holder's Social
Security number or its employer identification number, as the case
S-20
<PAGE>
may be), the aggregate amount of principal and interest paid (including OID, if
any) to that Holder during the calendar year and the amount of tax withheld, if
any. This obligation, however, does not apply with respect to certain United
States Holders, including corporations, tax-exempt organizations, qualified
pension and profit sharing trusts and individual retirement accounts.
In the event that a United States Holder subject to the reporting
requirements described above fails to supply its correct taxpayer identification
number in the manner required by applicable law or underreports its tax
liability, the Company, its agents or paying agents or a broker may be required
to "backup" withhold a tax equal to 31% of each payment of interest (including
OID) and principal (and premium, if any) on the Notes. This backup withholding
is not an additional tax and may be credited against the United States Holder's
United States Federal income tax liability, provided that the required
information is furnished to the IRS.
Under current Treasury Regulations, backup withholding and information
reporting will not apply to payments made by the Company or any agent thereof
(in its capacity as such) to a Non-United States Holder of a Note if such Holder
has provided the required certification that it is not a United States person as
set forth in clause (iii) in the first paragraph under "Non-United States
Holders" above, or has otherwise established an exemption (provided that neither
the Company nor its agent has actual knowledge that the Holder is a United
States person or that the conditions of any exemption are not in fact
satisfied).
Payment of the proceeds from the sale of a Note to or through a foreign
office of a broker will not be subject to information reporting or backup
withholding, except that if the broker is a United States person, a controlled
foreign corporation for United States tax purposes or a foreign person 50
percent or more of whose gross income from all sources for the three-year period
ending with the close of its taxable year preceding the payment was effectively
connected with a United States trade or business, information reporting may
apply to such payments. Payment of the proceeds from a sale of a Note to or
through the United States office of a broker is subject to information reporting
and backup withholding unless the Holder or beneficial owner certifies as to its
taxpayer identification number or otherwise establishes an exemption from
information reporting and backup withholding.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR
SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING
THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE
POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
PLAN OF DISTRIBUTION
Under the terms of a Distribution Agreement to be entered into by the
Company and the Agents (the "Distribution Agreement"), the Notes may be offered
on a continuing basis by the Company through the Agents, which have agreed to
use reasonable efforts to solicit purchases of the Notes. The Company will pay
an Agent a commission ranging from .125% to .750% of the principal amount of
each Note, depending on its Stated Maturity, sold through such Agent, as agent.
The commission payable by the Company to the Agents with respect to Notes with
maturities greater than thirty years will be negotiated at the time the Company
issues such Notes. The Company will have the sole right to accept offers to
purchase Notes and may reject any such offer, in whole or in part. Each Agent
will have the right, in its discretion reasonably exercised, without notice to
the Company, to reject any offer to purchase Notes received by it, in whole or
in part. The Company reserves the right to sell Notes at or above par directly
on its own behalf to investors. No commission will be payable to the Agents on
any such sales. The Company may also sell Notes at or above par to any Agent,
acting as principal, for resale to one or more investors at varying prices
related to prevailing market prices at the time of such resale, as determined by
such Agent, or for resale to broker-dealers, with a concession being given to
such Agent for the resale price of the Notes. The offering and selling terms for
such resale may be varied by such Agent. The Company may appoint other persons
to act as its agents pursuant to the
S-21
<PAGE>
Distribution Agreement for purposes of soliciting offers to purchase Notes. The
Company also reserves the right to sell Notes through agents other than pursuant
to the Distribution Agreement where offers to purchase are received through such
agents on an unsolicited basis. Settlement of such sales will be on
substantially the same terms and conditions as contained in the Distribution
Agreement, including commissions.
Unless otherwise indicated in the applicable Pricing Supplement, payment of
the purchase price of Notes will be required to be in The City of New York in
immediately available funds.
The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933. The Company has agreed to indemnify the Agents against
and contribute toward certain liabilities, including liabilities under such Act.
The Company has agreed to reimburse the Agents for certain expenses.
Each of the Agents may, from time to time, purchase and sell Notes in the
secondary market, but is not obligated to do so, and there can be no assurance
that there will be a secondary market for the Notes or liquidity in the
secondary market if one develops. From time to time, each of the Agents may make
a market in the Notes.
The Agents engage in transactions with and perform services for the Company
and certain of its affiliates in the ordinary course of business. In addition,
Citicorp Securities, Inc., one of the Agents, is an affiliate of the Trustee.
S-22
<PAGE>
PROSPECTUS
ASHLAND INC.
DEBT SECURITIES
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
WARRANTS
------------------
Ashland Inc. ("Ashland" or the "Company") intends to issue from time to time
its (i) unsecured debt securities, which may either be senior (the "Senior
Securities") or subordinated (the "Subordinated Securities"; the Senior
Securities and the Subordinated Securities being referred to collectively as the
"Debt Securities"), (ii) warrants to purchase the Debt Securities (the "Debt
Warrants"), (iii) shares of cumulative preferred stock, without par value (the
"Preferred Stock"), (iv) depositary shares representing entitlement to all
rights and preferences of a fraction of a share of Preferred Stock of a
specified series ("Depositary Shares"), (v) warrants to purchase shares of
Preferred Stock ("Preferred Stock Warrants"), (vi) shares of common stock, par
value $1.00 per share (the "Common Stock") and (vii) warrants to purchase shares
of Common Stock ("Common Stock Warrants"; the Debt Warrants, Preferred Stock
Warrants and Common Stock Warrants being referred to herein collectively as the
"Securities Warrants"), having an aggregate initial public offering price not to
exceed $600,000,000 or the equivalent thereof in one or more foreign currencies
or composite currencies, including European Currency Units, on terms to be
determined at the time of sale. The Debt Securities, Preferred Stock, Depositary
Shares, Common Stock and Securities Warrants offered hereby (collectively, the
"Offered Securities") may be offered separately or as units with other Offered
Securities, in separate series in amounts, at prices and on terms to be
determined at the time of sale and to be set forth in a supplement to this
Prospectus (a "Prospectus Supplement").
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered, such as, where applicable, (i) in the case of
Debt Securities, the specific designation, aggregate principal amount, currency,
denomination, maturity, priority, interest rate (which may be variable or
fixed), time of payment of interest, terms of redemption at the option of the
Company or repayment at the option of the holder or for sinking fund payments,
the designation of the Trustee acting under the applicable Indenture and the
initial public offering price; (ii) in the case of Preferred Stock, the specific
title and stated value, number of shares or fractional interests therein, and
the dividend, liquidation, redemption, conversion, voting and other rights and
the initial public offering price, and whether the Company has elected to offer
the Preferred Stock in the form of Depositary Shares; (iii) in the case of
Common Stock, the initial public offering price; (iv) in the case of Securities
Warrants, the duration, offering price, exercise price and detachability
thereof; and (v) in the case of all Offered Securities, whether such Offered
Security will be offered separately or as a unit with other Offered Securities,
will be set forth in the accompanying Prospectus Supplement.
The Prospectus Supplement will also contain information, where applicable,
concerning certain United States Federal income tax considerations relating to,
and any listing on a securities exchange of, the Offered Securities covered by
the Prospectus Supplement.
The Offered Securities may be sold directly by the Company, or through
agents, underwriters or dealers. Such underwriters or agents for the Common
Stock may include NatWest Securities Limited and CS First Boston Corporation. If
any agent of the Company, or any underwriters are involved in the sale of
Offered Securities, the names of such agents or underwriters and any applicable
fees or commissions and the net proceeds to the Company from such sale will be
set forth in the applicable Prospectus Supplement. The Company may also issue
the Offered Securities to one or more persons in exchange for outstanding
securities of the Company acquired by such persons from third parties in open
market transactions or in privately negotiated transactions. The newly issued
Offered Securities in such cases may be offered pursuant to this Prospectus and
the applicable Prospectus Supplement by such persons acting as principal for
their own accounts, at market prices prevailing at the time of sale, at prices
otherwise negotiated or at fixed prices. Unless otherwise indicated in the
applicable Prospectus Supplement, the Company will only receive outstanding
securities and will not receive cash proceeds in connection with such exchanges
or sales. See "Plan of Distribution".
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
The date of this Prospectus is April __, 1995
<PAGE>
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT
DELIVERED HEREWITH AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY
UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT DO
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OFFERED
SECURITIES BY ANYONE IN ANY JURISDICTION IN WHICH THE OFFER OR SOLICITATION IS
NOT AUTHORIZED OR IN WHICH THE PERSON MAKING THE OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
AVAILABLE INFORMATION
Ashland is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by Ashland with the Commission can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Regional Offices of the Commission at Suite 1400, Northwestern Atrium
Center, 500 West Madison Street, Chicago, Illinois 60661 and Seven World Trade
Center, Suite 1300, New York, New York 10048. In addition, copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Such
reports, proxy statements and other information concerning Ashland can also be
inspected at the offices of The New York Stock Exchange, 20 Broad Street, New
York, New York 10005, and The Chicago Stock Exchange, 440 South LaSalle Street,
Chicago, Illinois 60605.
Ashland has filed with the Commission a Registration Statement on Form S-3
under the Securities Act of 1933, as amended (the "Securities Act") with respect
to the securities offered hereby. For further information with respect to
Ashland and the Offered Securities, reference is made to such Registration
Statement and to the exhibits thereto. Statements contained herein concerning
the provisions of certain documents are not necessarily complete and, in each
instance, reference is made to the copy of such document filed as an exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed pursuant to Section 13 or 15(d) of the
Exchange Act (File No. 1-2918) are hereby incorporated by reference into this
Prospectus:
(i) Ashland's Annual Report on Form 10-K for the fiscal year ended
September 30, 1994;
(ii) Ashland's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1994;
(iii) the description of its Common Stock, par value $1.00 per share, set
forth in the Registration Statement on Form 10, as amended in its entirety
by the Form 8 filed with the Commission on May 1, 1983;
(iv) the description of its Rights to Purchase Cumulative Preferred
Stock, Series of 1987, set forth in the Registration Statement on Form 8-A
dated May 29, 1986 (as amended by the Forms 8 dated February 5, 1987, and
September 21, 1989); and
(v) the description of its Cumulative Preferred Stock, without par
value, set forth in the Registration Statement on Form 8-A, as amended by
Amendment No. 1 thereto, filed with the Commission on April 30, 1993.
All documents filed by Ashland with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering made hereby shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated
2
<PAGE>
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein or in any Prospectus Supplement
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
ASHLAND WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF THIS
PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY
OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS, OTHER THAN CERTAIN EXHIBITS TO
SUCH DOCUMENTS. COPIES OF THE INDENTURES SUMMARIZED BELOW ARE ALSO AVAILABLE
UPON REQUEST. REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO THE SECRETARY,
ASHLAND INC., P.O. BOX 391, ASHLAND, KENTUCKY 41114 (TELEPHONE: (606) 329-3333).
THE COMPANY
Ashland is a worldwide energy and chemical company engaged in petroleum
refining, transportation and wholesale marketing; retail gasoline marketing;
motor oil and lubricant marketing; chemicals; coal; highway construction; and
oil and gas exploration and production. Ashland's businesses are grouped into
six industry segments: Petroleum, SuperAmerica, Valvoline, Chemical,
Construction and Exploration. In addition, Ashland is involved in the coal
industry through its ownership interests in Arch Mineral Corporation ("Arch")
and Ashland Coal, Inc. ("Ashland Coal").
Ashland Petroleum is one of the nation's largest independent petroleum
refiners and a leading supplier of petroleum products to the transportation and
commercial fleet industries, other industrial customers and independent
marketers, and to SuperAmerica for retail distribution. In addition, Ashland
Petroleum gathers and transports crude oil and petroleum products and
distributes petroleum products under the Ashland-Registered Trademark- brand
name. SuperAmerica operates combination gasoline and merchandise stores under
the SuperAmerica-Registered Trademark- and Rich-Registered Trademark- brand
names. Valvoline is a marketer of branded, packaged motor oil and automotive
chemicals, filters, rust preventives and coolants. In addition, Valvoline is
engaged in the "fast oil change" business through outlets operating under the
Valvoline Instant Oil Change-Registered Trademark- and Valvoline Rapid Oil
Change-Registered Trademark- names.
Ashland Chemical distributes industrial chemicals, solvents, thermoplastics
and resins, and fiberglass materials, and manufactures a wide variety of
specialty chemicals and certain petrochemicals. Construction performs contract
construction work, including highway paving and repair, excavation and grading,
and bridge and sewer construction and produces asphaltic and ready-mix concrete,
crushed stone and other aggregate, concrete block and certain specialized
construction materials in the southern United States. Exploration explores for,
develops, produces and sells crude oil and natural gas principally in the
eastern and Gulf Coast areas of the United States, explores for and produces
crude oil in Nigeria for export and explores for oil and gas in other
international areas.
Arch, one of the largest producers of low sulfur coal in the eastern United
States, produces steam and metallurgical coal for sale in the domestic and
international markets. Arch's production comes from surface and deep mines in
Illinois, Kentucky, West Virginia and Wyoming. Ashland Coal produces low-sulfur,
bituminous coal in central Appalachia for sale to domestic and foreign electric
utility and industrial customers. Both Arch and Ashland Coal market coal mined
by independent producers.
Ashland is a Kentucky corporation, organized on October 22, 1936, with its
principal executive offices located at 1000 Ashland Drive, Russell, Kentucky
41169 (Mailing Address: P.O. Box 391, Ashland, Kentucky 41114) (Telephone: (606)
329-3333).
3
<PAGE>
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement, the net
proceeds from the sale of the Offered Securities will be used for general
corporate purposes, which may include additions to working capital, capital
expenditures, stock and debt repurchases, repayment of indebtedness and
acquisitions.
RATIOS
The following table sets forth the consolidated ratios of earnings to fixed
charges and earnings to combined fixed charges and preferred stock dividends for
the Company:
<TABLE>
<CAPTION>
THREE
MONTHS
ENDED
DECEMBER
YEAR ENDED SEPTEMBER 30, 31,
---------------------------- ----------
1990 1991 1992 1993 1994 1993 1994
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges........... 2.53 1.96 ** 1.84 2.51 2.90 2.01
Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends............... 2.53 1.96 ** 1.76 2.19 2.50 1.76
<FN>
- ------------------------
**Fixed charges exceeded earnings (as defined) by $174 million as a result of
special charges and the current year impact of accounting changes.
</TABLE>
The above ratios are computed on a total enterprise basis including Ashland
and its consolidated subsidiaries, plus their share of significant affiliates
accounted for on the equity method that are 50% owned or whose indebtedness has
been directly or indirectly guaranteed by Ashland or its consolidated
subsidiaries. Earnings consist of income before income taxes and the cumulative
effect of accounting changes, adjusted to exclude fixed charges (excluding
capitalized interest) and undistributed earnings of equity method affiliates
excluded from the total enterprise. Fixed charges consist of interest incurred
on indebtedness, the portion of operating lease rentals deemed representative of
the interest factor and the amortization of debt expense.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Debt Securities so offered will be described
in the Prospectus Supplement relating to such Debt Securities. Accordingly, for
a description of the terms of a particular issue of Debt Securities and the
identity of the Trustee for any Debt Securities, reference must be made to both
the Prospectus Supplement relating thereto and to the following description.
The Debt Securities will be general obligations of the Company and may be
subordinated to "Superior Indebtedness" (as defined below) of the Company to the
extent set forth in the Prospectus Supplement relating thereto. See
"Subordination of Subordinated Securities" below. Unless otherwise set forth in
the applicable Prospectus Supplement, Senior Securities will be issued under an
Indenture dated as of August 15, 1989 as amended and restated as of August 15,
1990 between the Company and Citibank, N.A., as Trustee pursuant to which the
Company has issued an aggregate of $1,119,990,000 senior debt securities.
Subordinated Securities will be issued under an Indenture between the Company
and a commercial bank to be selected as Trustee. A copy of the forms of
Indentures has been filed as exhibits to the Registration Statement filed with
the Commission. The following discussion of certain provisions of the Indentures
is a summary only and does not purport to be a complete description of the terms
and provisions of the Indentures. Accordingly, the following discussion is
qualified in its entirety by reference to the provisions of the Indentures,
including the definition therein of the terms used below with their initial
letters capitalized.
4
<PAGE>
GENERAL
The Indentures do not limit the aggregate principal amount of Debt
Securities which may be issued thereunder. The Debt Securities may be issued in
one or more series as may be authorized from time to time by Ashland. Reference
is made to the applicable Prospectus Supplement for the following terms of the
Debt Securities: (i) the title and the limit on the aggregate principal amount
of the Debt Securities; (ii) the date or dates on which the Debt Securities will
mature; (iii) the rate or rates (which may be fixed or variable) per annum, if
any, or the method of determining such rate or rates, at which the Debt
Securities will bear interest; (iv) the date or dates from which such interest
shall accrue and the date or dates on which such interest will be payable; (v)
the currency or currencies or units of two or more currencies in which the Debt
Securities are denominated and principal and interest may be payable, and for
which the Debt Securities may be purchased, which may be in United States
dollars, a foreign currency or currencies or units of two or more foreign
currencies; (vi) whether such Debt Securities are to be Senior Securities or
Subordinated Securities; (vii) any redemption or sinking fund terms or certain
other specific terms; (viii) any Event of Default or covenant with respect to
the Debt Securities of a particular series, if not set forth herein; (ix)
whether the Debt Securities will be issued as Registered Securities (as defined
below) or as Bearer Securities (as defined below); (x) whether the Debt
Securities are to be issued in whole or in part in the form of one or more
Global Securities (as defined below) and, if so, the identity of the depositary
for such Global Security or Securities; and (xi) any other terms of such series
(which terms shall not be inconsistent with the provisions of the Subordinated
Indenture or the Senior Indenture, as the case may be). Unless otherwise
indicated in the applicable Prospectus Supplement, principal, premium, if any,
and interest, if any, will be payable and the Debt Securities will be
transferable at the corporate trust office of the respective Trustee, provided
that payment of interest may be made at the option of Ashland by check mailed to
the address of the person entitled thereto as it appears in the respective Debt
Securities register.
The Debt Securities will be unsecured. Senior Securities will rank on a
parity with all other unsecured and unsubordinated indebtedness of Ashland.
Subordinated Securities will be subordinated to certain present and future
superior indebtedness of Ashland. See "Subordination of Subordinated Securities"
below.
The Debt Securities may be issued in fully registered form without coupons
("Registered Securities") or in bearer form with or without coupons ("Bearer
Securities"). The Securities denominated in U.S. dollars will be issued, unless
otherwise set forth in the applicable Prospectus Supplement, in denominations of
$1,000 or an integral multiple thereof for Registered Securities, and in
denominations of $5,000 or an integral multiple thereof for Bearer Securities.
Unless otherwise indicated in the applicable Prospectus Supplement, the Debt
Securities will be only Registered Securities. No service charge will be made
for any transfer or exchange of such Debt Securities, but Ashland may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Special Federal income tax and other considerations relating to Debt
Securities denominated in foreign currencies or units of two or more foreign
currencies will be described in the applicable Prospectus Supplement.
Unless otherwise indicated in the applicable Prospectus Supplement, the
covenants contained in the Indentures and the Debt Securities will not afford
holders of Debt Securities protection in the event of a highly leveraged
transaction involving the Company.
EXCHANGE, REGISTRATION AND TRANSFER
Registered Securities (other than Book-Entry Securities) of any series will
be exchangeable for other Registered Securities of the same series and of a like
aggregate principal amount and tenor of different authorized denominations. In
addition, if Securities of any series are issuable as both Registered Securities
and Bearer Securities, at the option of the holder upon request confirmed in
writing, and subject to the terms of the Indenture, Bearer Securities (with all
unmatured coupons, except as provided below, and all matured coupons in default)
of such series will be exchangeable into
5
<PAGE>
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor. Bearer Securities with coupons
appertaining thereto surrendered in exchange for Registered Securities between a
Regular Record Date or a Special Record Date and the relevant date for payment
of interest shall be surrendered without the coupon relating to such date for
payment of interest and interest will not be payable in respect of the
Registered Security issued in exchange for such Bearer Security, but will be
payable only to the holder of such coupon when due in accordance with the terms
of the Indenture. Bearer Securities will not be issued in exchange for
Registered Securities.
Securities may be presented for exchange as provided above, and Registered
Securities may be presented for registration of transfer (with the form of
transfer endorsed thereon duly executed), at the office of the Security
Registrar or at the office of any transfer agent designated by the Company for
such purpose with respect to any series of Securities and referred to in an
applicable Prospectus Supplement, without service charge and upon payment of any
taxes and other governmental charges as described in the Indenture. Such
transfer or exchange will be effected upon the Security Registrar or such
transfer agent, as the case may be, being satisfied with the documents of title
and identity of the person making the request. The Company has appointed the
Trustee as Security Registrar for the Indenture. If a Prospectus Supplement
refers to any transfer agents (in addition to the Security Registrar) initially
designated by the Company with respect to any series of Securities, the Company
may at any time rescind the designation of any such transfer agent or approve a
change in the location through which any such transfer agent acts, except that,
if Securities of a series are issuable solely as Registered Securities, the
Company will be required to maintain a transfer agent in each Place of Payment
for such series and, if Securities of a series are issuable as Bearer
Securities, the Company will be required to maintain (in addition to the
Security Registrar) a transfer agent in a Place of Payment for such series
located in Europe. The Company may at any time designate additional transfer
agents with respect to any series of Securities.
In the event of any redemption in part, the Company shall not be required
to: (i) issue, register the transfer of or exchange Securities of any series
during a period beginning at the opening of business 15 days before any
selection of Securities of that series to be redeemed and ending at the close of
business on (a) if Securities of the series are issuable only as Registered
Securities, the day of mailing of the relevant notice of redemption and (b) if
Securities of the series are issuable only as Bearer Securities, the day of the
first publication of the relevant notice of redemption or (c) if Securities of
the series are issuable as Registered Securities and Bearer Securities and there
is no publication of the relevant notice of redemption, the day of mailing of
the relevant notice of redemption, otherwise the date of such publication; (ii)
register the transfer of or exchange any Registered Security, or portion
thereof, called for redemption, except the unredeemed portion of any Registered
Security being redeemed in part; or (iii) exchange any Bearer Security called
for redemption, except to exchange such Bearer Security for a Registered
Security of that series and like tenor which is immediately surrendered for
redemption.
For a discussion of restrictions on the exchange, registration and transfer
of Global Securities, see "Global Securities".
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal, premium, if any, and interest on Bearer Securities will be
payable, subject to any applicable laws and regulations, at the offices of such
Paying Agents outside the United States as the Company may designate from time
to time and payment of interest on Bearer Securities with coupons appertaining
thereto on any Interest Paying Date will be made only against surrender of the
coupon relating to such Interest Payment Date. No payment with respect to any
Bearer Security will be made at any office or agency of the company in the
United States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States.
Notwithstanding the foregoing, payments of principal, premium, if any, and
interest on Bearer Securities denominated and
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payable in U.S. dollars will be made at the office of the Company's Paying Agent
in the Borough of Manhattan, The City of New York, if (but only if) payment of
the full amount thereof in U.S. dollars at all offices or agencies outside the
United States is illegal or effectively precluded by exchange controls or other
similar restrictions.
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal, premium, if any, and any interest on Registered Securities will be
made at the office of such Paying Agent or Paying Agents as the Company may
designate from time to time, except that at the option of the Company, payment
of any interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register. Unless
otherwise indicated in an applicable Prospectus Supplement, payment of any
installment of interest on Registered Securities will be made to the Person in
whose name such Registered Security is registered at the close of business on
the Regular Record Date for such interest.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of
New York, will be designated as the Company's sole Paying Agent for payments
with respect to Offered Securities that are issuable solely as Registered
Securities and as the Company's Paying Agent in the Borough of Manhattan, The
City of New York, for payments with respect to Offered Securities (subject to
the limitation described above in the case of Bearer Securities) that are
issuable solely as Bearer Securities or as both Registered Securities and Bearer
Securities. Any Paying Agents outside the United States and any other Paying
Agents in the United States initially designated by the Company for the Offered
Securities will be named in an applicable Prospectus Supplement. The Company may
at any time designate additional Paying Agents or rescind the designation of any
Paying Agent or approve a change in the office through which any Paying Agent
acts, except that, if Securities of a series are issuable solely as Registered
Securities, the Company will be required to maintain a Paying Agent in each
Place of Payment for such series and, if Securities of a series are issuable as
Bearer Securities, the Company will be required to maintain (i) a Paying Agent
in the Borough of Manhattan, The City of New York, for payments with respect to
any Registered Securities of the series (and for payments with respect to Bearer
Securities of the series in the circumstances described above, but not
otherwise), and (ii) a Paying Agent in a Place of Payment located outside the
United States where Securities of such series and any coupons appertaining
thereto may be presented and surrendered for payment; provided that if the
Securities of such series are listed on The International Stock Exchange of the
United Kingdom and the Republic of Ireland Limited or the Luxembourg Stock
Exchange or any other stock exchange located outside the United States and such
stock exchange shall so require, the Company will maintain a Paying Agent in
London or Luxembourg or any other required city located outside the United
States, as the case may be, for the Securities of such series.
All moneys paid by the Company to a Paying Agent for the payment of
principal, premium, if any, or interest on any Security or coupon that remains
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will be repaid to the Company and the holder
of such Security or coupon will thereafter look only to the Company for payment
thereof.
GLOBAL SECURITIES
The Debt Securities of a series issued under the Indentures may be issued in
whole or in part in the form of one or more global securities (the "Global
Securities") that will be deposited with, or on behalf of, a depositary (the
"Depositary") identified in the Prospectus Supplement relating to such series.
Global Securities may be issued in either registered or bearer form and in
either temporary or permanent form. Unless and until it is exchanged in whole or
in part for the individual Debt Securities represented thereby, a Global
Security may not be transferred except as a whole by the Depositary for such
Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any nominee to a successor Depositary or any nominee of such
successor.
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The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the Prospectus Supplement relating to such
series. Ashland anticipates that the following provisions will generally apply
to depositary arrangements.
Upon the issuance of a Global Security in registered form, the Depositary
for such Global Security or its nominee will credit, on its book-entry
registration and transfer system, the respective principal amounts of the
individual Debt Securities represented by such Global Security to the accounts
of persons that have accounts with such Depositary. Such accounts shall be
designated by the dealers, underwriters or agents with respect to such Debt
Securities or by Ashland if such Debt Securities are offered and sold directly
by Ashland. Ownership of beneficial interests in a Global Security will be
limited to persons that have accounts with the applicable Depositary
("participants") or persons that may hold interests through participants.
Ownership of beneficial interests in such Global Security will be shown on, and
the transfer of that ownership will be effected only through, records maintained
by the applicable Depositary or its nominee (with respect to interests of
participants) and the records of participants (with respect to interests of
persons other than participants). The laws of some states require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture governing such Debt Securities. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have any of
the individual Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of any such Debt Securities of such series in definitive form and will
not be considered the owners or holders thereof under the Indenture governing
such Debt Securities.
Payments of principal of, premium, if any, and interest, if any, on
individual Debt Securities represented by a Global Security registered in the
name of a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Security
representing such Debt Securities. Neither Ashland, the Trustee for such Debt
Securities, any paying agent (a "Paying Agent"), nor the Registrar for such Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made by the Depositary or any participants on
account of beneficial ownership interests of the Global Security for such Debt
Securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Ashland expects that the Depositary for a series of Debt Securities or its
nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Debt Securities,
immediately will credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security for such Debt Securities as shown on the records of such
Depositary or its nominee. Ashland also expects that payments by participants to
owners of beneficial interests in such Global Security held through such
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name". Such payments will be the responsibility of
such participants.
If the Depositary for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as Depositary and a successor Depositary is not
appointed by Ashland within 90 days, Ashland will issue individual Debt
Securities of such series in exchange for the Global Security or Securities
representing such series of Debt Securities. In addition, Ashland may at any
time in its sole discretion, subject to any limitations described in the
Prospectus Supplement relating to such Debt Securities, determine not to have
any Debt Securities of a series represented by one or more Global Securities
and, in such event, will issue individual Debt Securities of such series in
exchange for the Global Security or Securities representing such series of Debt
Securities. Further, if Ashland so
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specifies with respect to the Debt Securities of a series, an owner of a
beneficial interest in a Global Security representing Debt Securities of such
series may, on terms acceptable to Ashland, the Trustee, and the Depositary for
such Global Security, receive individual Debt Securities of such series in
exchange for such beneficial interests, subject to any limitations described in
the Prospectus Supplement relating to such Debt Securities. In any such
instance, an owner of a beneficial interest in a Global Security will be
entitled to physical delivery of individual Debt Securities of the series
represented by such Global Security equal in principal amount to such beneficial
interest and to have such Debt Securities registered in its name. Individual
Debt Securities of such series so issued will be issued in denominations, unless
otherwise specified by Ashland, of $1,000 and integral multiples thereof.
If so specified in an applicable Prospectus Supplement, all or any portion
of the Debt Securities of a series that are issuable as Bearer Securities
initially will be represented by one or more temporary Global Securities, with
or without interest coupons, to be deposited with a Common Depositary in London
for Morgan Guaranty Trust Company of New York, Brussels Office, as operator of
the Euroclear System ("Euroclear") and Centrale de Livraison de Valeurs
Mobilieres S.A. ("CEDEL") for credit to the respective accounts of the
beneficial owners of such Debt Securities (or to such other accounts as they may
direct). On and after the exchange date determined as provided in any such
temporary Global Security and described in an applicable Prospectus Supplement,
each such temporary Global Security will be exchangeable for definitive Debt
Securities in bearer form, registered form, or definitive global form
(registered or bearer), or any combination thereof, as specified in an
applicable Prospectus Supplement. No Bearer Security (including a Debt Security
in definitive global bearer form) delivered in exchange for a portion of a
temporary Global Security shall be mailed or otherwise delivered to any location
in the United States in connection with such exchange.
Unless otherwise specified in an applicable Prospectus Supplement, Ashland
or its agent must receive a certificate signed by Euroclear or CEDEL, as the
case may be, prior to the delivery of a definitive Bearer Security, and prior to
the actual payment of interest in respect of the applicable portion of the
temporary Global Security payable in respect of an Interest Payment Date
occurring prior to the delivery of a definitive Debt Security. Such certificate
must be based on statements provided to Euroclear or CEDEL by its member
organizations. Such certificate must be dated on the date of the earlier of the
first actual payment of interest on the Debt Security and the date of delivery
of the Debt Security in definitive form, and must state that on such date the
Debt Security is owned by (i) a person that is not a United States person and is
not a financial institution holding the obligation for purposes of resale during
the Restricted Period, (ii) a United States person that is either (A) the
foreign branch of a United States financial institution purchasing for its own
account and not for resale during the Restricted Period or (B) a United States
person who acquired its interest through the foreign branch of a United States
financial institution and who holds the obligation through such financial
institution, provided that in either case (A) or (B) the United States financial
institution either provides a certificate stating that it agrees to comply with
the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue
Code of 1986, as amended, and the regulations thereunder or has provided a valid
blanket certificate stating that the financial institution will comply with such
requirements or (iii) a financial institution holding for purposes of resale
during the Restricted Period, and such financial institution certifies in
addition that it has not acquired the obligation for purposes of resale directly
or indirectly to a United States person or to a person within the United States
or its possessions. As used herein, the term "Restricted Period" means (i) the
period from the closing date until 40 days thereafter or (ii) any time if the
obligation is held as part of an unsold allotment or subscription.
Each of Euroclear and CEDEL will in such circumstances credit the interest
received by it in respect of such temporary Global Security to the accounts of
the beneficial owners thereof (or to such other accounts as they may direct).
The beneficial owner of a Debt Security represented by a definitive Global
Security in bearer form may, upon not less than 30 days' written notice to the
Trustee, given by it through either Euroclear or
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CEDEL, exchange its interest in such definitive Global Security for a definitive
Bearer Security or Securities, or a definitive Registered Security or Securities
of any authorized denomination. No individual definitive Bearer Security will be
delivered in or to the United States.
CERTAIN COVENANTS OF ASHLAND WITH RESPECT TO SENIOR SECURITIES
LIMITATIONS ON LIENS. Unless otherwise provided in the applicable Prospectus
Supplement, Ashland will agree that neither it nor any Subsidiary (as defined in
the Senior Indenture) will issue, assume or guarantee any notes, bonds,
debentures or other similar evidences of indebtedness for money borrowed
("Debt") secured by a mortgage, lien, pledge or other encumbrance ("Mortgages")
upon any of its property or any property of such Subsidiary, real or personal,
located in the continental United States of America without effectively
providing that the Senior Securities (together with, if Ashland so determines,
any other indebtedness or obligation then existing and any other indebtedness or
obligation, thereafter created, ranking equally with the Senior Securities)
shall be secured equally and ratably with (or, at the option of Ashland, prior
to) such Debt so long as such Debt shall be so secured, except that the
foregoing provisions shall not apply to: (a) Mortgages existing on the date of
the Senior Indenture, (b) Mortgages affecting property of a corporation existing
at the time it becomes a Subsidiary or at the time it is merged into or
consolidated with Ashland or a Subsidiary, (c) Mortgages on property (i)
existing at the time of acquisition thereof, (ii) to secure payment of all or
part of the purchase price thereof, (iii) to secure Debt incurred prior to, at
the time of or within 24 months after acquisition thereof for the purpose of
financing all or part of the purchase price thereof or (iv) assumed or incurred
in connection with the acquisition thereof, (d) Mortgages on property to secure
all or part of the cost of repairing, altering, constructing, improving,
exploring, drilling or developing such property, or to secure Debt incurred to
provide funds for any such purpose, (e) Mortgages on (i) pipelines, gathering
systems, pumping or compressor stations, pipeline storage facilities or other
related facilities, (ii) tank cars, tank trucks, tank vessels, barges, tow boats
or other vessels or boats, drilling barges, drilling platforms, or other movable
railway, automotive, aeronautic or marine facilities, (iii) office buildings,
laboratory and research facilities, retail service stations, retail or wholesale
sales facilities, terminals, bulk plants, warehouses or storage or distribution
facilities, (iv) manufacturing facilities other than units for the refining of
crude oil, (v) the equipment of any of the foregoing or (vi) any "margin stock"
or "margin security" within the meaning of Regulation U or Regulation G of the
Board of Governors of the Federal Reserve System as amended from time to time,
(f) Mortgages on current assets or other personal property (other than shares of
stock or indebtedness of Subsidiaries) to secure loans maturing not more than
one year from the date of the creation thereof or to secure any renewal thereof
for not more than one year at any one time, (g) Mortgages which secure
indebtedness owing by a Subsidiary to Ashland or a Subsidiary, (h) Mortgages on
property of any Subsidiary principally engaged in a financing or leasing
business, (i) Mortgages upon the oil, gas or other minerals produced or to be
produced (or proceeds thereof) from properties which shall have been acquired or
shall have become producing subsequent to August 15, 1977, if, in respect to
each such Mortgage it shall have been given to secure indebtedness incurred to
pay or to reimburse the cost (incurred subsequent to the date of the acquisition
of such property or August 15, 1977, whichever shall be later) of drilling or
equipping such property and (j) any extension, renewal or replacement (or
successive extensions, renewals or replacements), in whole or in part, of any
Mortgage referred to in the foregoing clauses (a) to (i) inclusive or of any
Debt secured thereby, PROVIDED that the principal amount of Debt secured thereby
shall not exceed the principal amount of Debt so secured at the time of such
extension, renewal or replacement, and that such extension, renewal or
replacement Mortgage shall be limited to all or part of substantially the same
property which secured the Mortgage extended, renewed or replaced (plus
improvements on such property). Notwithstanding the above, Ashland and any one
or more Subsidiaries may issue, assume or guarantee Debt secured by Mortgages
which would otherwise be subject to the foregoing restrictions in an aggregate
principal amount which, together with the aggregate outstanding principal amount
of all other Debt of Ashland and its Subsidiaries which would otherwise be
subject to the foregoing restrictions, does not at any one time exceed 5% of the
stockholders' equity in Ashland and its consolidated subsidiary companies as
shown on the audited consolidated balance sheet contained in the latest
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annual report to stockholders of Ashland. The following types of transactions,
among others, shall not be deemed to create Debt secured by Mortgages: (1) the
sale or other transfer of oil, gas or other minerals in place for a period of
time until, or in an amount such that, the transferee will realize therefrom a
specified amount (however determined) of money or such minerals, or the sale or
other transfer of any other interest in property of the character commonly
referred to as an oil payment or a production payment and (2) Mortgages required
by any contract or statute in order to permit Ashland or a Subsidiary to perform
any contract or subcontract made by it with or at the request of the United
States, any State or any department, agency or instrumentality of either.
LIMITATIONS ON SALE AND LEASE-BACK. Unless otherwise provided in the
applicable Prospectus Supplement, Ashland will agree that neither it nor any
Subsidiary will enter into any arrangement with any bank, insurance company or
other lender or investor, or to which any such lender or investor is a party,
providing for the leasing to Ashland or a Subsidiary for a period of more than
three years of any real property located in the continental United States
(except a lease for a temporary period not to exceed three years by the end of
which it is intended that the use of such real property by the lessee will be
discontinued) which has been or is to be sold or transferred by Ashland or a
Subsidiary to such lender or investor or to any Person or organization to which
funds have been or are to be advanced by such lender or investor on the security
of the leased property ("Sale and Lease-Back Transactions") unless either: (a)
Ashland or such Subsidiary would be entitled to create Debt secured by a
Mortgage on the property to be leased, without equally and ratably securing the
Senior Securities or (b) Ashland (and in any such case Ashland covenants and
agrees that it will do so), within four months after the effective date of such
Sale and Lease-Back Transaction (whether made by Ashland or a Subsidiary),
applies to the retirement of Debt of Ashland maturing by the terms thereof more
than one year after the original creation thereof ("Funded Debt"), an amount
equal to the greater of (i) the net proceeds of the sale of the real property
leased pursuant to such arrangement or (ii) the fair value of the real property
so leased at the time of entering into such arrangement (as determined by the
Board of Directors); PROVIDED that the amount to be applied to the retirement of
Funded Debt shall be reduced by an amount equal to the sum of (a) the principal
amount of Senior Securities delivered, within four months after the effective
date of such arrangement, to the Trustee for retirement and cancellation and (b)
the principal amount of other Funded Debt voluntarily retired by Ashland within
such four-month period, excluding retirements of Senior Securities and other
Funded Debt pursuant to mandatory sinking fund or prepayment provisions or by
payment at maturity.
LIMITATION ON CONSOLIDATIONS AND MERGERS. The Senior Indenture provides
that Ashland will not consolidate with or merge into any other corporation or
convey or transfer its properties and assets substantially as an entirety to any
entity (other than a wholly owned subsidiary of Ashland, except in the event
that such a subsidiary is the surviving corporation in a consolidation or
merger) unless the successor or transferee is a domestic corporation that
assumes Ashland's obligations under the Senior Securities and the Senior
Indenture and certain other conditions are met.
SUBORDINATION OF SUBORDINATED SECURITIES
The payment of the principal of, premium, if any, and interest on the
Subordinated Securities, including sinking fund payments, if any, will be
subordinated in right of payment, as set forth in the Subordinated Indenture, to
the prior payment in full of all Superior Indebtedness of Ashland. Superior
Indebtedness is defined as (a) the principal of, premium, if any, and accrued
and unpaid interest on (whether outstanding on the date of execution of the
Subordinated Indenture or thereafter created, incurred or assumed) (i)
indebtedness of Ashland for money borrowed (other than the Subordinated
Securities), (ii) guarantees by Ashland of indebtedness for money borrowed of
any other person, (iii) indebtedness evidenced by notes, debentures, bonds or
other instruments of indebtedness for the payment of which Ashland is
responsible or liable, by guarantees or otherwise, (iv) obligations of Ashland
under any agreement relating to any interest rate or currency swap, interest
rate cap, interest rate collar, interest rate future, currency exchange or
forward currency transaction, or any similar interest rate or currency hedging
transaction and (v) obligations of Ashland under any agreement to lease, or any
lease of, any real or personal property which, in accordance with generally
accepted accounting principles, is classified on Ashland's balance sheet as a
liability and
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(b) modifications, renewals, extensions and refundings of any such indebtedness,
liability, obligation or guarantee; unless, in the instrument created or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such indebtedness, liability, obligation or guarantee, or such
modification, renewal, extension or refunding thereof, is not superior in right
of payment to the Subordinated Securities; PROVIDED, HOWEVER, that Superior
Indebtedness shall not be deemed to include (i) any obligations of Ashland to
any subsidiary and (ii) any other indebtedness, guarantee or obligation of
Ashland of the type set forth above which is subordinate or junior in ranking in
any respect to any other indebtedness, guarantee or obligation of Ashland.
No payment by Ashland on account of principal of, premium, if any, or
interest on the Subordinated Securities, including sinking fund payments, if
any, may be made if any default or event of default with respect to any Superior
Indebtedness shall have occurred and be continuing and (unless such default or
event of default is the failure by Ashland to pay principal or interest on any
instrument constituting Superior Indebtedness) written notice thereof shall have
been given to the Trustee by Ashland or to Ashland and the Trustee by the
Holders of at least 10% in principal amount of any kind or category of any
Superior Indebtedness (or a representative or trustee on their behalf). Ashland
may resume payments on the Subordinated Securities (unless otherwise prohibited
by the related Indenture) if (i) such default is cured or waived or (ii) unless
such default is the failure of Ashland to pay principal or interest on any
Superior Indebtedness, 120 days pass after the notice is given if such default
is not the subject of judicial proceedings. In the event that any Subordinated
Security is declared due and payable before the date specified therein as the
fixed date on which the principal thereof is due and payable, or upon any
payment or distribution of assets of Ashland to creditors upon any dissolution,
winding up, liquidation or reorganization, whether voluntary or involuntary or
in bankruptcy, insolvency, receivership or other proceedings, all principal of
(and premium, if any) and interest due or to become due on all Superior
Indebtedness must be paid in full before the Holders of Subordinated Securities
are entitled to receive or take any payment (other than shares of stock or
subordinated indebtedness provided by a plan of reorganization or adjustment
which does not alter the rights of Holders of Superior Indebtedness without such
Holders' consent). Subject to the payment in full of all Superior Indebtedness,
the Holders of the Subordinated Securities are to be subrogated to the rights of
the Holders of Superior Indebtedness to receive payments or distribution of
assets of Ashland applicable to Superior Indebtedness until the Subordinated
Securities are paid in full.
By reason of such subordination, in the event of insolvency, creditors of
Ashland who are Holders of Superior Indebtedness, as well as certain general
creditors of Ashland, may recover more, ratably, than the Holders of the
Subordinated Securities.
The Subordinated Indenture will not limit the amount of Superior
Indebtedness or Debt Securities which may be issued by Ashland or any of its
subsidiaries.
MODIFICATION OF THE INDENTURES
The Indentures provide that the Company and the Trustee thereunder may,
without the consent of any Holders of Debt Securities, enter into supplemental
indentures for the purposes, among other things, of adding to the Company's
covenants, adding additional Events of Default, establishing the form or terms
of the Debt Securities as permitted under the Indentures or, provided such
action shall not adversely affect the interests of the Holders of Debt
Securities in any material respect, curing ambiguities or inconsistencies in
such Indentures or making other provisions.
The Indentures contain provisions permitting the Company, with the consent
of the Holders of not less than 66 2/3% in principal amount of the Outstanding
Securities (as defined in the Indentures) of each affected series, to execute
supplemental indentures adding any provisions to or changing or eliminating any
of the provisions of the Indentures or modifying the rights of the Holders of
Debt Securities of such series, except that no such supplemental indenture may,
without the consent of the Holders of all of the Outstanding Securities affected
thereby, among other things: (i) change the maturity of the principal of, or any
installment of principal of or interest on, any of the Debt Securities; (ii)
reduce the principal amount thereof (or any premium thereon) or the rate of
interest
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thereon; (iii) change the currency, currencies or currency unit or units in
which, any of the Debt Securities or any premium or interest thereon is payable;
(iv) change any obligation of the Company to maintain an office or agency in the
places and for the purposes required by such Indentures; (v) impair the right to
institute suit for the enforcement of any such payment on or after the
applicable maturity date; (vi) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of the Holders of which is
required for any such supplemental indenture or for any waiver of compliance
with certain provisions of, or of certain defaults under, such Indentures; or
(vii) with certain exceptions, modify the provisions for the waiver of certain
covenants and defaults and any of the foregoing provisions.
WAIVER OF CERTAIN COVENANTS
The Indentures provide that the Company will not be required to comply with
certain restrictive covenants (including those described above under "Certain
Restrictive Provisions") if the Holders of not less than 66 2/3% in principal
amount of each series of Outstanding Securities affected thereby waive
compliance with such restrictive covenants.
EVENTS OF DEFAULT, NOTICE AND WAIVER
An Event of Default in respect of any series of Debt Securities (unless it
is either inapplicable to a particular series or has been modified or deleted
with respect to any particular series) is defined in the Indentures to be: (i) a
default for 30 days in the payment of any installment of interest upon any of
the Debt Securities of such series when due; (ii) a default in the payment of
principal of (or premium, if any, on) any of the Debt Securities of such series
when due; (iii) a default for 30 days in the deposit of any sinking fund payment
when the same becomes due by the terms of the Debt Securities of such series;
(iv) a default by the Company in the performance, or breach, of any of its other
covenants or warranties in the applicable Indentures which shall not have been
remedied for a period of 60 days after notice from the Trustee thereunder or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of such series; (v) certain events of bankruptcy, insolvency or reorganization
of the Company; and (vi) any other Event of Default provided with respect to
Debt Securities of that series.
The Indentures provide that if an Event of Default specified therein in
respect of any series of Outstanding Securities issued under such Indentures
shall have happened and be continuing, either the Trustee thereunder or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of such series may declare the principal of all of the Outstanding Securities of
such series to be immediately due and payable.
The Indentures provide that the Holders of not less than a majority in
principal amount of the Outstanding Securities of any series may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee thereunder, or exercising any trust or power conferred on such
Trustee, with respect to the Debt Securities of such series, provided that such
Trustee may act in any way that is not inconsistent with such directions and may
decline to act if any such direction is contrary to law or to such Indentures or
would involve such Trustee in personal liability.
The Indentures provide that the Holders of not less than a majority in
principal amount of the Outstanding Securities of any series may on behalf of
the Holders of all of the Outstanding Securities of such series waive any past
default under the Indentures with respect to such series and its consequences,
except a default (i) in the payment of the principal of (or premium, if any) or
interest on any of the Debt Securities of such series or (ii) in respect of a
covenant or provision of such Indentures which, under the terms of such
Indentures, cannot be modified or amended without the consent of the Holders of
all of the Outstanding Securities of such series affected thereby.
The Indentures contain provisions entitling the Trustee, subject to the duty
of the Trustee during an Event of Default in respect of any series of Debt
Securities to act with the required standard of care, to be indemnified by the
Holders of the Debt Securities of such series before proceeding to exercise any
right or power under such Indentures at the request of the Holders of the Debt
Securities of such series.
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The Indentures provide that the Trustee will, within 90 days after the
occurrence of a default in respect of any series of Debt Securities, give to the
Holders of the Debt Securities of such series notice of such uncured and
unwaived default known to it; PROVIDED, HOWEVER, that, except in the case of a
default in the payment of the principal of (or premium, if any) or interest on,
or any sinking fund installment with respect to, any of the Debt Securities of
such series, such Trustee will be protected in withholding such notice if it in
good faith determines that the withholding of such notice is in the interest of
the Holders of the Debt Securities of such series; and PROVIDED FURTHER, that
such notice shall not be given until at least 30 days after the occurrence of an
Event of Default regarding the performance, or breach, of any covenant or
warranty of the Company under such Indentures other than for the payment of the
principal of (or premium, if any) or interest on, or any sinking fund
installment with respect to, any of the Debt Securities of such series. The term
"default" for the purpose of this provision only means any event that is, or
after notice or lapse of time, or both, would become, an Event of Default with
respect to the Debt Securities of such series.
The Indentures require the Company to file annually with the Trustee
thereunder a certificate, executed by an officer of the Company, indicating
whether such officer has knowledge of any default under such Indentures.
MEETINGS
The Indentures contain provisions for convening meetings of the Holders of
Debt Securities of a series if Debt Securities of that series are issuable as
Bearer Securities. A meeting may be called at any time by the Trustee, and, if
the Trustee fails to call a meeting within 21 days after receipt of a request
from the Company or the Holders of at least 10% in principal amount of the
Outstanding Securities of such series, the Company or such Holders may call a
meeting upon notice given in accordance with "Notices" below. Persons entitled
to vote a majority in principal amount of the Outstanding Securities of a series
shall constitute a quorum at a meeting of the Holders of Debt Securities of such
series; PROVIDED, HOWEVER, that if any action is to be taken at such meeting
with respect to a consent or waiver which is required to be given by the Holders
of not less than 66 2/3% in principal amount of the Outstanding Securities of a
series, the persons entitled to vote 66 2/3% in principal amount of the
Outstanding Securities of such series shall constitute a quorum. In the absence
of a quorum, a meeting called by the Company or the Trustee shall be adjourned
for a period of not less than 10 days, and in the absence of a quorum at any
such adjourned meeting, the meeting shall be further adjourned for a period of
not less than 10 days. Any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action which may be
made, given or taken by the Holders of a specified percentage in principal
amount of Outstanding Securities of a series may be adopted at a meeting or
adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the Holders of such specified percentage in principal amount
of the Outstanding Securities of that series. Any resolution passed or decision
taken at any meeting of Holders of Debt Securities of any series duly held in
accordance with the Indentures will be binding on all Holders of Securities of
that series and the related coupons. With respect to any consent, waiver or
other action which the Indentures expressly provide may be given by the Holders
of a specified percentage of Outstanding Securities of any series affected
thereby (acting as one class), only the principal amount of Outstanding
Securities of any series represented at a meeting or adjourned meeting duly
reconvened at which a quorum is present as aforesaid and voting in favor of such
action shall be counted for purposes of calculating the aggregate principal
amount of Outstanding Securities of all series affected thereby favoring such
action.
NOTICES
Except as otherwise provided in the applicable Prospectus Supplement,
notices to Holders of Bearer Securities will be given by publication at least
once in a daily newspaper in The City of New York and London and in such other
city or cities as may be specified in such Bearer Securities and will be mailed
to such Persons whose names and addresses were previously filed with the Trustee
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within the last two years under the Indentures, within the time prescribed for
the giving of such notice. Notices to Holders of Registered Securities will be
given by mail to the address of such Holders as they appear in the Security
Register.
TITLE
Title to any Bearer Securities (including Bearer Securities in temporary or
definitive global bearer form) and any coupons appertaining thereto will pass by
delivery. The Company, the appropriate Trustee and any agent of the Company or
such Trustee may treat the bearer of any Bearer Security and the bearer of any
coupon and registered owner of any Registered Security as the absolute owner
thereof (whether or not such security or coupon shall be overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all other purposes.
REPLACEMENT OF SECURITIES AND COUPONS
Any mutilated Debt Security and any Debt Security with a mutilated coupon
appertaining thereto will be replaced by the Company at the expense of the
Holder upon surrender of such mutilated Debt Security or Debt Security with a
mutilated coupon to the appropriate Trustee. Debt Securities or coupons that
become destroyed, stolen or lost will be replaced by the Company at the expense
of the Holder upon delivery to the appropriate Trustee of evidence of the
destruction, loss or theft thereof satisfactory to the Company and such Trustee;
in the case of any coupon which becomes destroyed, stolen or lost, such coupon
will be replaced (upon surrender to the appropriate Trustee of the Debt Security
with all appurtenant coupons not destroyed, stolen or lost) by issuance of a new
Debt Security in exchange for the Debt Security to which such coupon appertains.
In the case of a destroyed, lost or stolen Debt Security or coupon an indemnity
satisfactory to the appropriate Trustee and the Company may be required at the
expense of the Holder of such Debt Security or coupon before a replacement Debt
Security will be issued.
DEFEASANCE
Unless the Prospectus Supplement relating to the Offered Securities provides
otherwise, the Company at its option (a) will be Discharged (as such term is
defined in the Indentures) from any and all obligations in respect of the
Offered Securities (except for certain obligations to register the transfer or
exchange of Debt Securities, replace stolen, lost or mutilated securities and
coupons, maintain paying agencies and hold moneys for payment in trust) or (b)
need not comply with certain restrictive covenants of the Indentures (including
those described above under "Certain Restrictive Provisions"), if there are
deposited with the Trustee, in the case of Debt Securities and coupons
denominated in U.S. dollars, U.S. Government Obligations (as defined in the
Indentures) or, in the case of Debt Securities and coupons denominated in a
foreign currency, Foreign Government Securities (as defined in the Indentures),
which through the payment of interest thereon and principal thereof in
accordance with their terms will provide money or a combination of money and
U.S. Government Obligations or Foreign Government Securities, as the case may
be, in an amount sufficient to pay in the currency, currencies or currency unit
or units in which the Offered Securities are payable all the principal of, and
interest on, the Offered Securities on the dates such payments are due in
accordance with the terms of the Offered Securities. As a condition to the
Company's exercise of either such option, the Company is required to deliver to
the Trustee an opinion of counsel to the effect that Holders of the Offered
Securities will not recognize income, gain or loss for Federal income tax
purposes as a result of the deposit and related defeasance and will be subject
to Federal income tax in the same amount, in the same manner and at the same
times as would have been the case if such deposit and related defeasance had not
occurred. The deposit and the Discharge or release from compliance with certain
covenants described in the preceding sentence may result in the Holders of the
Offered Securities recognizing income, gain or loss for Federal income tax
purposes as a result of such deposit and Discharge or release, and may result in
the Holders recognizing income in a manner or at times different than would have
been the case if such deposit and Discharge or release had not occurred.
CERTAIN RIGHTS TO REQUIRE PURCHASE OF SECURITIES BY ASHLAND UPON UNAPPROVED
CHANGE IN CONTROL AND DECLINE IN DEBT RATING
In the event that (a) there occurs any Change in Control (as hereinafter
defined) of Ashland and (b) the prevailing rating of any series of the Debt
Securities issued under the Indentures on a date within 90 days following public
notice of such Change in Control shall be less than the rating on a
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specified earlier date by the equivalent of at least one full rating category
(as defined in the Indentures), each Holder of Debt Securities of such series
shall have the right, at the Holder's option, to require Ashland to purchase all
or any part of the Holder's Debt Securities on the date (the "Repurchase Date")
that is 100 days after the last to occur of (i) public notice of such Change in
Control and (ii) the rating decline, at 100% of the principal amount on the
Repurchase Date, plus accrued and unpaid interest to the Repurchase Date.
Notwithstanding the foregoing, if such a rating decline applies to less than all
series of the Debt Securities, the repurchase rights described above will apply
only to those series with respect to which there has been a rating decline.
On or before the twenty-eighth day after the last to occur of public notice
of the Change in Control and the decrease in the rating of such Debt Securities,
Ashland is obligated to mail or cause to be mailed to all Holders of record of
such Debt Securities a notice regarding the Change in Control, the decrease in
the rating of the Debt Securities and the repurchase right. The notice shall
state the Repurchase Date, the date by which the repurchase right must be
exercised, the applicable price for such Debt Securities and the procedure which
the Holder must follow to exercise this right. Ashland shall cause a copy of
such notice to be published in a newspaper of general circulation in the Borough
of Manhattan, The City of New York. To exercise this right, the Holder of a Debt
Security must deliver on or before the tenth day before the Repurchase Date
written notice to Ashland (or an agent designated by Ashland for such purpose)
of the Holder's exercise of such right, together with the Debt Security with
respect to which the right is being exercised, duly endorsed for transfer. The
Company will comply with Rules 13e-4 and 14e-1 under the Exchange Act and any
other applicable securities laws in connection with any such repurchase of Debt
Securities.
As used herein, a "Change in Control" shall be deemed to have occurred at
such time as (i) a "person" or "group" (within the meaning of Section 13(d) and
14(d)(2) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) of more than 50% of the then outstanding voting
stock of Ashland, otherwise than through a transaction consummated with the
prior approval of the Board of Directors of Ashland or (ii) during any period of
two consecutive years, individuals who at the beginning of such period
constitute Ashland's Board of Directors (together with any new director whose
election by Ashland's Board of Directors or whose nomination for election by
Ashland's shareholders was approved by a vote of at least two-thirds of the
Directors then still in office who either were Directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Directors then in
office. In considering whether to approve a transaction which might otherwise
constitute a Change in Control, the Board of Directors of Ashland will be
required to consider the interests of stockholders, employees and other
creditors of Ashland which may not necessarily be consistent with the interests
of Holders of Debt Securities. In considering whether to pursue a transaction
which might otherwise constitute a Change in Control, a potential acquirer of
the Company will be required to consider that, to the extent the repurchase
right becomes exercisable and is exercised by Holders of Debt Securities of any
series, sufficient funds must be made available to make payment to such Holders.
The Company cannot presently predict the source of such funds, but expects that
the source would be determined in the context of the overall consideration of
such a transaction.
GOVERNING LAW
The Indentures, the Debt Securities and the coupons will be governed by, and
construed in accordance with, the laws of the State of New York.
THE TRUSTEE
Citibank, N.A. is Trustee under the Senior Indenture and one other indenture
pursuant to which unsecured debt obligations of the Company are outstanding and
has other customary banking relationships with the Company and its affiliates.
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DESCRIPTION OF CAPITAL STOCK
The authorized stock of the Company consists of 150,000,000 shares of Common
Stock, and 30,000,000 shares of Preferred Stock, issuable in series. On March
17, 1995, there were 62,192,084 shares of Common Stock and 6,000,000 shares of
Preferred Stock outstanding. 10,000,000 shares of Preferred Stock designated as
Cumulative Preferred Stock, Series of 1987, are reserved for issuance upon
exercise of rights issued pursuant to the Rights Agreement dated as of May 15,
1986, as amended (the "Rights Agreement"). An aggregate of 23,505,355 additional
shares of Common Stock are reserved for issuance upon conversion of the
Company's 6 3/4% Convertible Subordinated Debentures, the Company's $3.125
Cumulative Convertible Preferred Stock (the "$3.125 Preferred Stock") and
issuance under the Company's various stock and compensation incentive plans.
The following statements with respect to the capital stock of the Company
are subject to the detailed provisions of the Company's Second Restated Articles
of Incorporation, as amended (the "Restated Articles"), and By-laws, as amended
(the "By-laws"), as currently in effect. These statements do not purport to be
complete, or to give full effect to the terms of the provisions of statutory or
common law, and are subject to, and are qualified in their entirety by reference
to, the terms of the Restated Articles, By-laws and the Rights Agreement, which
are filed as Exhibits to the Registration Statement of which this Prospectus is
a part.
DESCRIPTION OF COMMON STOCK
The holders of Common Stock are entitled to receive dividends as may be
declared from time to time by the Board of Directors of the Company (the "Board
of Directors") out of funds legally available therefor. The holders of Common
Stock are entitled to one vote per share on all matters submitted to a vote of
shareholders and have cumulative voting rights. 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. Holders of Common Stock are entitled to receive,
upon any liquidation of the Company, all remaining assets available for
distribution to shareholders after satisfaction of the Company's liabilities and
the preferential rights of any Preferred Stock that may then be issued and
outstanding. The outstanding shares of Common Stock are, and the shares of
Common Stock issuable upon conversion of the $3.125 Preferred Stock and the
6 3/4% Convertible Subordinated Debentures will be, fully paid and
nonassessable. The holders of Common Stock have no preemptive, conversion or
redemption rights. The Transfer Agent and Registrar of Ashland's Common Stock is
Harris Trust and Savings Bank, Chicago, Illinois.
PREFERRED STOCK PURCHASE RIGHTS
The Board of Directors has authorized the distribution of one-half a Right
(a "Right") for each outstanding share of Common Stock. Each Right entitles the
holder thereof to buy one-tenth of a share of Cumulative Preferred Stock, Series
of 1987, at a price of $120.
Currently, the Rights trade together with the Common Stock. They may be
exercised or traded separately only after the earlier to occur of (i) 10 days
following a public announcement that a person or group of persons has obtained
the right to acquire 15% or more of the outstanding Common Stock or (ii) 10
business days (or such later date as may be determined by action of the Board of
Directors) following the commencement or announcement of an intent to make a
tender offer or exchange offer which would result in beneficial ownership by a
person or group of persons of 20% or more of the Company's outstanding Common
Stock. If the acquiring person or group of persons acquires 20% or more of the
Common Stock, each Right (other than those held by the acquiror) will entitle
its holder to purchase, at the Right's exercise price, shares of Common Stock
having a market value of twice the Right's exercise price. Additionally, if the
Company is acquired in a merger or other business combination, each Right (other
than those held by the surviving or acquiring company) will entitle its holder
to purchase, at the Right's exercise price, shares of the acquiring company's
common stock (or stock of
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the Company if it is the surviving corporation) having a market value of twice
the Right's exercise price. Each one-tenth share of Cumulative Preferred Stock,
Series of 1987, will be entitled to dividends and to vote on an equivalent basis
with two shares of Common Stock.
Rights may be redeemed at the option of the Board of Directors for $.05 per
Right at any time before the earliest of 10 calendar days after the first public
disclosure of a person or group's acquisition of beneficial ownership of 15% or
more of the Company's Common Stock or the acquisition by a person of 20% of such
outstanding Common Stock. The Board of Directors may amend the Rights at any
time without shareholder approval. The Rights will expire by their terms on May
15, 1996.
DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which a
Prospectus Supplement may relate. Specific terms of any series of the Preferred
Stock offered by a Prospectus Supplement will be described in the Prospectus
Supplement relating to such series of the Preferred Stock. The description set
forth below is subject to and qualified in its entirety by reference to the
Articles of Amendment to the Restated Articles establishing a particular series
of the Preferred Stock which will be filed with the Commission in connection
with the offering of such series of Preferred Stock.
GENERAL. Under the Restated Articles, the Board of Directors is authorized,
without further shareholder action, to provide for the issuance of up to
30,000,000 shares of Preferred Stock, in one or more series, and to fix the
designations, terms, and relative rights and preferences, including the dividend
rate, voting rights, conversion rights, redemption and sinking fund provisions
and liquidation values of each such series. The Company may amend from time to
time its Restated Articles to increase the number of authorized shares of
Preferred Stock. Any such amendment would require the approval of the holders of
66 2/3% of the outstanding shares of all series of Preferred Stock voting
together as a single class without regard to series. As of the date of this
Prospectus, the Company has one series of preferred stock outstanding.
The Preferred Stock will have the dividend, liquidation, redemption,
conversion and voting rights set forth below unless otherwise provided in the
Prospectus Supplement relating to a particular series of the Preferred Stock.
Reference is made to the Prospectus Supplement relating to the particular series
of the Preferred Stock offered thereby for specific terms, including: (i) the
title and liquidation preference per share of such Preferred Stock and the
number of shares offered; (ii) the price at which such Preferred Stock will be
issued; (iii) the dividend rate (or method of calculation), the dates on which
dividends shall be payable and the dates from which dividends shall commence to
accumulate; (iv) any redemption or sinking fund provisions of such Preferred
Stock; (v) any conversion provisions of such Preferred Stock; (vi) the voting
rights, if any, of such Preferred Stock; and (vii) any additional dividend,
liquidation, redemption, sinking fund and other rights, preferences, privileges,
limitations and restrictions of such Preferred Stock.
The Preferred Stock will, when issued, be fully paid and nonassessable.
DIVIDEND RIGHTS. The Preferred Stock will be preferred over the Common
Stock as to payment of dividends. Before any dividends or distributions (other
than dividends or distributions payable in Common Stock) on the Common Stock
shall be declared and set apart for payment or paid, the holders of shares of
each series of Preferred Stock shall be entitled to receive dividends (either in
cash, shares of Common Stock or Preferred Stock, or otherwise) when, as and if
declared by the Board of Directors, at the rate and on the date or dates as set
forth in the Prospectus Supplement. With respect to each series of Preferred
Stock, the dividends on each share of such series shall be cumulative from the
date of issue of such share unless some other date is set forth in the
Prospectus Supplement relating to any such series. Accruals of dividends shall
not bear interest.
RIGHTS UPON LIQUIDATION. The Preferred Stock shall be preferred over the
Common Stock as to assets so that the holders of each series of Preferred Stock
shall be entitled to be paid, upon the voluntary or involuntary liquidation,
dissolution or winding up of the Company and before any
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distribution is made to the holders of Common Stock, the amount set forth in the
Prospectus Supplement relating to any such series, but in such case the holders
of such series of Preferred Stock shall not be entitled to any other or further
payment. If upon any such liquidation, dissolution or winding up of the Company
its net assets shall be insufficient to permit the payment in full of the
respective amounts to which the holders of all outstanding Preferred Stock are
entitled, the entire remaining net assets of the Company shall be distributed
among the holders of each series of Preferred Stock in amounts proportionate to
the full amounts to which the holders of each such series are respectively so
entitled.
REDEMPTION. All shares of any series of Preferred Stock shall be redeemable
to the extent set forth in the Prospectus Supplement relating to any such
series. All shares of any series of Preferred Stock shall be convertible into
shares of Common Stock or into shares of any other series of Preferred Stock to
the extent set forth in the Prospectus Supplement relating to any such series.
VOTING RIGHTS. Unless otherwise provided in the Prospectus Supplement, the
holders of shares of Preferred Stock shall be entitled to one vote for each
share of Preferred Stock held by them on all matters properly presented to
shareholders, the holders of Common Stock and the holders of all series of
Preferred Stock voting together as one class.
$3.125 CUMULATIVE PREFERRED STOCK
In May 1993, the Company issued 6,000,000 shares of $3.125 Preferred Stock
of which all such shares are currently outstanding. Annual cumulative dividends
of $3.125 per share are payable quarterly as and if declared by the Board of
Directors. Each share of $3.125 Preferred Stock is convertible at any time at
the option of the holder thereof into 1.546 shares of Common Stock, equivalent
to an initial conversion price of $32.343 for each share of Common Stock,
subject to adjustment in certain circumstances. The $3.125 Preferred Stock is
not redeemable prior to March 25, 1997. On and after such date, the $3.125
Preferred Stock is redeemable, in whole or in part, at the option of the
Company, at $51.88 per share during the period from March 25, 1997 to March 14,
1998, and declining ratably annually to $50.31 per share on or after March 15,
2003, plus in each case accrued and unpaid dividends to the redemption date. The
holders of $3.125 Preferred Stock generally have no voting rights, but have the
right to elect two additional directors of the Company if the equivalent of six
quarterly dividends payable on the $3.125 Preferred Stock are in arrears. In the
case of the voluntary or involuntary liquidation, dissolution or winding up of
the Company, holders of shares of $3.125 Preferred Stock are entitled to receive
the liquidation preference of $50 per share, plus an amount equal to any accrued
and unpaid dividends to the payment date.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL. The Company may, at its option, elect to offer fractional shares
of Preferred Stock, rather than full shares of Preferred Stock. In the event
such option is exercised, the Company will issue to the public receipts for
Depositary Shares, each of which will represent a fraction (to be set forth in
the Prospectus Supplement relating to a particular series of Preferred Stock) of
a share of a particular series of Preferred Stock as described below.
The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") between
the Company and a bank or trust company selected by the Company having its
principal office in the United States and having a combined capital and surplus
of at least $50,000,000 (the "Depositary"). Subject to the terms of the Deposit
Agreement, each owner of a Depositary Share will be entitled, in proportion to
the applicable fraction of a share of Preferred Stock represented by such
Depositary Share, to all the rights and preferences of the Preferred Stock
represented thereby (including dividend, voting, redemption and liquidation
rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be distributed to those persons purchasing the fractional shares of
Preferred Stock in accordance with the terms of the offering. Copies of the
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forms of Deposit Agreement and Depositary Receipt will be filed as exhibits to
the Registration Statement in connection with the offering of any such
Depositary Shares and the following summary is qualified in its entirety by
reference to such exhibits.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of the Company, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at the Company's expense.
DIVIDENDS AND OTHER DISTRIBUTIONS. The Depositary will distribute all cash
dividends or other cash distributions received in respect of the Preferred Stock
to the record holders of Depositary Shares relating to such Preferred Stock in
proportion to the number of such Depositary Shares owned by such holders.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
REDEMPTION OF DEPOSITARY SHARES. If a series of Preferred Stock represented
by Depositary Shares is subject to redemption, the Depositary Shares will be
redeemed from the proceeds received by the Depositary resulting from the
redemption, in whole or in part, of such series of Preferred Stock held by the
Depositary. The redemption price per Depositary Share will be equal to the
applicable fraction of the redemption price per share payable with respect to
such series of the Preferred Stock. Whenever the Company redeems shares of
Preferred Stock held by the Depositary, the Depositary will redeem as of the
same redemption date the number of Depositary Shares representing the shares of
Preferred Stock so redeemed. If fewer than all the Depositary Shares are to be
redeemed, the Depositary Shares to be redeemed will be selected by lot or PRO
RATA as may be determined by the Depositary.
VOTING THE PREFERRED STOCK. Upon receipt of notice of any meeting at which
the holders of the Preferred Stock are entitled to vote, the Depositary will
mail the information contained in such notice of meeting to the record holders
of the Depositary Shares relating to such Preferred Stock. Each record holder of
such Depositary Shares on the record date (which will be the same date as the
record date for the Preferred Stock) will be entitled to instruct the Depositary
as to the exercise of the voting rights pertaining to the amount of the
Preferred Stock represented by such holder's Depositary Shares. The Depositary
will endeavor, insofar as practicable, to vote the amount of the Preferred Stock
represented by such Depositary Shares in accordance with such instructions, and
the Company will agree to take all actions which may be deemed necessary by the
Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting shares of the Preferred Stock to the extent it does not
receive specific instructions from the holders of Depositary Shares representing
such Preferred Stock.
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT. The form of
Depositary Receipt evidencing the Depositary Shares and any provision of the
Deposit Agreement may at any time be amended by agreement between the Company
and the Depositary. However, any amendment which materially and adversely alters
the rights of the holders of Depositary Shares will not be effective unless such
amendment has been approved by the holders of at least a majority of the
Depositary Shares then outstanding. The Deposit Agreement may be terminated by
the Company or the Depositary only if (i) all outstanding Depositary Shares have
been redeemed or (ii) there has been a final distribution in respect of the
Preferred Stock in connection with any liquidation, dissolution or winding up of
the Company and such distribution has been distributed to the holders of
Depositary Receipts.
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CHARGES OF DEPOSITARY. The Company will pay all transfer and other taxes
and governmental charges arising solely from the existence of the depositary
arrangements. The Company will pay charges of the Depositary in connection with
the initial deposit of the Preferred Stock and any redemption of the Preferred
Stock. Holders of Depositary Receipts will pay other transfer and other taxes
and governmental charges and such other charges, including a fee for the
withdrawal of shares of Preferred Stock upon surrender of Depositary Receipts,
as are expressly provided in the Deposit Agreement to be for their accounts.
MISCELLANEOUS. The Depositary will forward to holders of Depositary
Receipts all reports and communications from the Company which are delivered to
the Depositary and which the Company is required to furnish to the holders of
the Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or upon information provided by persons
presenting Preferred Stock for deposit, holders of Depositary Receipts or other
persons believed to be competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY. The Depositary may resign at any
time by delivering to the Company notice of its election to do so, and the
Company may at any time remove the Depositary, any such resignation or removal
to take effect upon the appointment of a successor Depositary and its acceptance
of such appointment. Such successor Depositary must be appointed within 60 days
after delivery of the notice of resignation or removal and must be a bank or
trust company having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000.
CERTAIN PROVISIONS OF ASHLAND'S RESTATED ARTICLES
In the event of a proposed merger or tender offer, proxy contest or other
attempt to gain control of Ashland not approved by the Board of Directors, it
would be possible, subject to any limitations imposed by applicable law, the
Restated Articles and the applicable rules of the stock exchanges upon which the
Common Stock is listed, for the Board of Directors to authorize the issuance of
one or more series of preferred stock with voting rights or other rights and
preferences which would impede the success of the proposed merger, tender offer,
proxy contest or other attempt to gain control of Ashland. The consent of the
holders of Common Stock would not be required for any such issuance of preferred
stock.
The Restated Articles incorporate in substance certain provisions of the
Kentucky Business Corporation Act to require approval of the holders of at least
80% of Ashland's voting stock, plus two-thirds of the voting stock other than
voting stock owned by a 10% shareholder, as a condition to mergers and certain
other business combinations involving Ashland and such 10% shareholder unless
(a) the transaction is approved by a majority of the continuing directors (as
defined) of Ashland or (b) certain minimum price and procedural requirements are
met. In addition, the Kentucky Business Corporation Act includes a standstill
provision which precludes a business combination from occurring with a 10%
shareholder, notwithstanding any vote of shareholders or price paid, for a
period of five years after the date such 10% shareholder becomes a 10%
shareholder, unless a majority of the independent directors (as defined) of
Ashland approves such combination before the date such shareholder becomes a 10%
shareholder.
The Restated Articles also provide that (i) the Board of Directors is
classified into three classes, (ii) a director may be removed from office
without "cause" (as defined) only by the affirmative vote of the holders of at
least 80% of the voting power of the then outstanding voting stock of Ashland,
(iii) the Board of Directors may adopt By-laws concerning the conduct of, and
matters considered at, meetings of shareholders, including special meetings,
(iv) the By-laws and certain provisions of the Restated
21
<PAGE>
Articles may be amended only by the affirmative vote of the holders of at least
80% of the voting power of the then outstanding voting stock of Ashland and (v)
the By-laws may be adopted or amended by the Board of Directors, subject to
amendment or repeal only by affirmative vote of the holders of at least 80% of
the voting power of the then outstanding voting stock of Ashland.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Debt
Securities, Preferred Stock or Common Stock. Securities Warrants may be issued
independently or together with Debt Securities, Preferred Stock or Common Stock
offered by any Prospectus Supplement and may be attached to or separate from any
such Offered Securities. Each series of Securities Warrants will be issued under
a separate warrant agreement (a "Securities Warrant Agreement") to be entered
into between the Company and a bank or trust company, as warrant agent (the
"Securities Warrant Agent"), all as set forth in the Prospectus Supplement
relating to the particular issue of Offered Securities Warrants. The Securities
Warrant Agent will act solely as an agent of the Company in connection with the
Securities Warrants and will not assume any obligation or relationship of agency
or trust for or with any holders of Securities Warrants or beneficial owners of
Securities Warrants. The following summary of certain provisions of the
Securities Warrants does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the Securities
Warrant Agreements.
Reference is made to the Prospectus Supplement relating to the particular
issue of Securities Warrants offered thereby for the terms of such Securities
Warrants, including, where applicable: (i) the designation, aggregate principal
amount, currencies, denominations and terms of the series of Debt Securities
purchasable upon exercise of Securities Warrants to purchase Debt Securities and
the price at which such Debt Securities may be purchased upon such exercise;
(ii) the designation, number of shares, stated value and terms (including,
without limitation, liquidation, dividend, conversion and voting rights) of the
series of Preferred Stock purchasable upon exercise of Securities Warrants to
purchase shares of Preferred Stock and the price at which such number of shares
of Preferred Stock of such series may be purchased upon such exercise; (iii) the
number of shares of Common Stock purchasable upon the exercise of Securities
Warrants to purchase shares of Common Stock and the price at which such number
of shares of Common Stock may be purchased upon such exercise; (iv) the date on
which the right to exercise such Securities Warrants shall commence and the date
on which such right shall expire (the "Expiration Date"); (v) United States
Federal income tax consequences applicable to such Securities Warrants; and (vi)
any other terms of such Securities Warrants. Securities Warrants for the
purchase of Preferred Stock and Common Stock will be offered and exercisable for
U.S. dollars only. Securities Warrants will be issued in registered form only.
The exercise price for Securities Warrants will be subject to adjustment in
accordance with the applicable Prospectus Supplement.
Each Securities Warrant will entitle the holder thereof to purchase such
principal amount of Debt Securities or such number of shares of Preferred Stock
or Common Stock at such exercise price as shall in each case be set forth in, or
calculable from, the Prospectus Supplement relating to the Offered Securities
Warrants, which exercise price may be subject to adjustment upon the occurrence
of certain events as set forth in such Prospectus Supplement. After the close of
business on the Expiration Date (or such later date to which such Expiration
Date may be extended by the Company), unexercised Securities Warrants will
become void. The place or places where, and the manner in which, Securities
Warrants may be exercised shall be specified in the Prospectus Supplement
relating to such Securities Warrants.
Prior to the exercise of any Securities Warrants to purchase Debt
Securities, Preferred Stock or Common Stock, holders of such Securities Warrants
will not have any of the rights of holders of the Debt Securities, Preferred
Stock or Common Stock, as the case may be, purchasable upon such exercise,
including the right to receive payments of principal of, premium, if any, or
interest, if any, on
22
<PAGE>
the Debt Securities purchasable upon such exercise or to enforce covenants in
the applicable Indenture, or to receive payments of dividends, if any, on the
Preferred Stock or Common Stock purchasable upon such exercise or to exercise
any applicable right to vote.
PLAN OF DISTRIBUTION
Ashland may sell the Offered Securities in any of three ways: (i) through
underwriters or dealers; (ii) directly to one or a limited number of
institutional purchasers; or (iii) through agents. This Prospectus or an
appropriate Prospectus Supplement (which may be included in a Post-Effective
Amendment to the Registration Statement with respect to the Offered Securities)
will set forth the terms of the offering of the Offered Securities, which may
include the name or names of any underwriters, dealers or agents, the price of
the Offered Securities and the net proceeds to Ashland from such sale, any
underwriting discounts or other items constituting underwriters' compensation,
any discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which the Offered Securities may be listed.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Offered Securities may be offered to the public either through underwriting
syndicates represented by managing underwriters or directly by one or more
investment banking firms or others, as designated. Unless otherwise set forth in
the Prospectus Supplement, the obligations of the underwriters to purchase the
Offered Securities will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all the Offered Securities if any are
purchased. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
If a dealer is utilized in the sale of any Offered Securities in respect of
which this Prospectus is delivered, Ashland will sell such Offered Securities to
the dealer, as principal. The dealer may then resell such Offered Securities to
the public at varying prices to be determined by such dealer at the time of
resale. The name of the dealer and the terms of the transaction will be set
forth in the Prospectus Supplement.
Offered Securities may be sold directly by Ashland to one or more
institutional purchasers, or through agents at a fixed price or prices, which
may be changed, or at varying prices determined at the time of sale. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be acting
on a best efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, Ashland will authorize agents,
underwriters or dealers to solicit offers by certain specified institutions to
purchase Offered Securities from Ashland at the public offering price set forth
in the Prospectus Supplement pursuant to delayed delivery contracts providing
for payment and delivery on a specified date in the future. Such contracts will
be subject only to those conditions set forth in the Prospectus Supplement and
the Prospectus Supplement will set forth the commission payable for solicitation
of such contracts.
Ashland intends to enter into a Sales Agency Agreement (the "Sales Agency
Agreement") with NatWest Securities Limited and CS First Boston Corporation (the
"Agents"), the form of which has been filed as an exhibit to the Registration
Statement and is incorporated by reference herein. Subject to the terms and
conditions of the Sales Agency Agreement, Ashland may issue and sell up to
3,000,000 shares of Common Stock from time to time through the Agents, as sales
agents for Ashland. Ashland reserves the right to appoint additional agents to
sell shares of Common Stock pursuant to the Sales Agency Agreement. Ashland is
required to designate one Agent (the "Designated Agent") to make all sales under
the Sales Agency Agreement during each Pricing Period (as hereinafter defined)
and no other Agent is permitted to make any sales during such Pricing Period.
Such sales, if any, will be made by means of ordinary brokers' transactions on
any national securities exchange, including the New York and Chicago Stock
Exchanges, on which such shares of Common Stock are listed. Such
23
<PAGE>
sales will be effected during a series of one or more pricing periods each of
which shall end on a Friday (each a "Pricing Period"), each consisting of five
consecutive calendar days in duration, unless a shorter period has otherwise
been agreed to by Ashland and the Designated Agent. The aggregate number of
shares of Common Stock sold in all Pricing Periods will not exceed 3,000,000.
Except for the sale of Additional Shares as set forth below, during any Pricing
Period, no more than 50,000 shares ("Average Market Price Shares") will be sold.
In addition, for each Pricing Period, an Average Market Price (as hereinafter
defined) will be computed. With respect to any Pricing Period, "Average Market
Price" shall equal the average of the arithmetic mean of the high and low sale
prices of the Common Stock reported on the New York Stock Exchange for each
trading day of such Pricing Period.
The net proceeds to Ashland with respect to sales of Average Market Price
Shares will equal 97.5% of the Average Market Price for each share of Common
Stock sold during the Pricing Period (subject to adjustment in certain
circumstances), plus Excess Proceeds (as defined below), if any. The
compensation to the Designated Agent for such sales in any Pricing Period will
equal the difference between the aggregate gross sales prices at which such
sales are actually effected and the net proceeds to Ashland for such sales, but
in no case will exceed ten percent of such aggregate gross sales prices. To the
extent that such aggregate gross sales prices are less than the Average Market
Price, the compensation to the Designated Agent would be correspondingly
reduced; to the extent that such aggregate gross sales prices are greater than
the Average Market Price, the compensation to the Designated Agent will be
correspondingly increased (but in no event will exceed ten percent of the
aggregate gross sales price). In the event that the average aggregate gross
sales price in any Pricing Period equals 97.5% of Average Market Price (or less)
for such Pricing Period, all of the proceeds from such sales would be for the
account of Ashland and no compensation would be payable to the Designated Agent.
To the extent the Designated Agent's compensation under the foregoing formula
would otherwise exceed ten percent of the aggregate gross sales prices in any
Pricing Period, the excess over ten percent will constitute additional net
proceeds to Ashland (the "Excess Proceeds").
Any shares of Common Stock sold by the Designated Agent during the Pricing
Period on behalf of Ashland other than Average Market Price Shares ("Additional
Shares") will be at a fixed commission rate of $0.10 per share for the first
50,000 Additional Shares and 1.40% of the gross sales price per share for any
Additional Shares in excess thereof. In no event will the compensation to the
Designated Agent be in excess of any applicable National Association of
Securities Dealers, Inc. requirements.
Settlements of sales of Additional Shares will occur on the fifth business
day (or such shorter period as may be required by applicable regulatory
authority or as otherwise agreed to by Ashland and the Designated Agent)
following the date on which such sales are made. Settlements for sales of
Average Market Price Shares will occur on a weekly basis (unless a shorter
period is required by applicable regulatory authority or is otherwise agreed to
by Ashland and the Designated Agent) on each Monday (or the next succeeding
business day if such Monday is not a business day) following the end of each
Pricing Period. Purchases of Common Stock from the Designated Agent for Ashland
will settle the regular way on the national securities exchange where such
purchases were executed. Compensation to the Designated Agent with respect to
sales of Average Market Price Shares will be paid out of the proceeds of such
settlements. There is no arrangement for funds to be received in an escrow,
trust or similar arrangement.
At the end of each Pricing Period, Ashland will file a Prospectus Supplement
under Rule 424(b)(3) promulgated under the Act, which Prospectus Supplement will
set forth the dates included within the Pricing Period, the number of such
shares of Common Stock sold through the Designated Agent as sales agent
(identifying separately the number of Average Market Price Shares and any
Additional Shares), the high and low prices at which Average Market Price Shares
were sold during such Pricing Period, the net proceeds to Ashland and the
compensation payable by Ashland to the Designated Agent with respect to such
sales pursuant to the formula set forth above. Unless otherwise indicated in a
Prospectus Supplement, each of the Agents will act on a best efforts basis.
24
<PAGE>
In connection with the sale of the Common Stock on behalf of Ashland, each
of the Agents may be deemed to be an "underwriter" within the meaning of the
Act, and the compensation of the Agents may be deemed to be underwriting
commissions or discounts. Ashland has agreed to provide indemnification and
contribution to the Agents against certain civil liabilities, including
liabilities under the Securities Act. In the ordinary course of business, each
of the Agents provides investment banking services to Ashland. In addition,
affiliates of each of the Agents have engaged in commercial banking transactions
with Ashland, including acting as participants under the $320,000,000 Credit
Agreement dated as of February 9, 1995, among Ashland and various banks.
The offering of Common Stock pursuant to the Sales Agency Agreement will
terminate upon the earlier of (i) the sale of all 3,000,000 shares of Common
Stock subject thereto or (ii) termination of the Sales Agency Agreement. The
Sales Agency Agreement may be terminated by Ashland in its sole discretion on
the date occurring 60 days after the date of the Sales Agency Agreement and
every 60 days thereafter. Ashland has covenanted in the Sales Agency Agreement
not to directly or indirectly offer or sell any other shares of its Common Stock
(other than shares pursuant to employee benefit plans and outstanding
convertible securities), or securities convertible into or exchangeable for, or
any rights to purchase or acquire, Common Stock without first suspending all
activity under the Sales Agency Agreement.
Underwriters and agents may be entitled under agreements entered into with
Ashland to indemnification by Ashland against certain civil liabilities,
including liabilities under the Securities Act, or to contribution with respect
to payments which the agents or underwriters may be required to make in respect
thereof. Underwriters and agents may be customers of, engage in other
transactions with or perform services for Ashland in the ordinary course of
business.
LEGAL MATTERS
The validity of the issuance of the Offered Securities will be passed upon
for Ashland by Cravath, Swaine & Moore, New York, New York, who will rely as to
matters of Kentucky law upon the opinion of Thomas L. Feazell, Esq., Senior Vice
President, General Counsel and Secretary of Ashland. Cravath, Swaine & Moore has
in the past represented and continues to represent the Company in other matters
on a regular basis. Samuel C. Butler is a director of Ashland and a partner in
the law firm of Cravath, Swaine & Moore and owns beneficially 7,945 shares of
Common Stock of Ashland. Thomas L. Feazell owns beneficially 73,467 shares of
Common Stock and 200 shares of $3.125 Preferred Stock of Ashland.
EXPERTS
The consolidated financial statements and schedules of Ashland appearing or
incorporated by reference in Ashland's Annual Report (Form 10-K) for the year
ended September 30, 1994 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference. Such consolidated financial statements and schedules are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
25
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
__NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT, ANY PRICING SUPPLEMENT HERETO AND THE ACCOMPANYING PROSPECTUS, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY AGENT. THIS PROSPECTUS SUPPLEMENT,
ANY PRICING SUPPLEMENT HERETO AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT HERETO OR THE ACCOMPANYING
PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
PROSPECTUS SUPPLEMENT
Description of the Medium-Term Notes............. S-2
Special Provisions Relating to Foreign Currency
Notes........................................... S-11
Foreign Currency Risks........................... S-13
Certain United States Federal Income Tax
Consequences.................................... S-14
Plan of Distribution............................. S-21
PROSPECTUS
Available Information............................ 2
Incorporation of Certain Documents by
Reference....................................... 2
The Company...................................... 3
Use of Proceeds.................................. 4
Ratios........................................... 4
Description of Debt Securities................... 4
Description of Capital Stock..................... 17
Description of Securities Warrants............... 22
Plan of Distribution............................. 23
Legal Matters.................................... 25
Experts.......................................... 25
</TABLE>
Ashland Inc.
U.S. $200,000,000
Medium-Term Notes,
Series G
PROSPECTUS SUPPLEMENT
CS First Boston
Salomon Brothers Inc
Citicorp Securities, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSE OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered, other than underwriting compensation, are:
<TABLE>
<S> <C>
Filing Fee for Registration Statement............................ $ 206,898
Legal Fees and Expenses.......................................... 50,000
Accounting Fees and Expenses..................................... 30,000
Trustee's Fees and Expenses...................................... 25,000
Blue Sky Fees and Expenses....................................... 15,000
Printing and Engraving Fees...................................... 20,000
Miscellaneous.................................................... 15,000
---------
Total...................................................... $ 361,898
</TABLE>
All of the above amounts, other than the Commission filing fee, are
estimates only.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 271B.8-500 through 580 of the Kentucky Business Corporation Act
contain detailed provisions for indemnification of directors and officers of
Kentucky corporations against judgments, penalties, fines, settlements and
reasonable expenses in connection with litigation. Under Kentucky law, the
provisions of a company's articles and by-laws may govern the indemnification of
officers and directors in lieu of the indemnification provided for by statute.
The Registrant has elected to indemnify its officers and directors pursuant to
its Restated Articles, its By-laws and by contract rather than to have such
indemnification governed by the statutory provisions.
Article X of the Restated Articles permits, but does not require, the
Registrant to indemnify its directors, officers and employees to the fullest
extent permitted by law. The Registrant's By-laws require indemnification of
officers and employees of the Registrant and its subsidiaries under certain
circumstances. The Registrant has entered into indemnification contracts with
each of its directors that require indemnification to the fullest extent
permitted by law, subject to certain exceptions and limitations.
The Registrant has purchased insurance which insures (subject to certain
terms and conditions, exclusions and deductibles) the Registrant against certain
costs which it might be required to pay by way of indemnification to its
directors or officers under its Restated Articles or By-laws, indemnification
agreements or otherwise and protects individual directors and officers from
certain losses for which they might not be indemnified by the Registrant. In
addition, the Registrant has purchased insurance which provides liability
coverage (subject to certain terms and conditions, exclusions and deductibles)
for amounts which the Registrant, or the fiduciaries under its employee benefit
plans, which may include its directors, officers and employees, might be
required to pay as a result of a breach of fiduciary duty.
ITEM 16. EXHIBITS.
The following Exhibits are filed as part of this Registration Statement:
<TABLE>
<C> <S>
**1.1 -- Form of Underwriting Agreement.
1.2 -- Form of Distribution Agreement.
1.3 -- Form of Sales Agency Agreement.
3.1 -- Second Restated Articles of Incorporation of the Company, as amended
effective May 18, 1993 (incorporated by reference to Exhibit 3.1 to
Registrant's Form 10-K for the year ended September 30, 1994).
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
3.2 -- By-laws of the Company, as amended effective March 17, 1994
(incorporated by reference to Exhibit 3.2 to Registrant's Form 10-K
for the year ended September 30, 1994).
4.1 -- Indenture, dated as of August 15, 1989 as amended and restated as of
August 15, 1990 between the Company and Citibank, N.A., as Trustee
(incorporated by reference to Exhibit 4(a) to Registration Statement
No. 33-39359, filed with the Commission on March 11, 1991).
4.2 -- Form of Senior Security (incorporated by reference to Exhibit 4(a) to
Registration Statement No. 33-39359, filed with the Commission on
March 11, 1991).
*4.3 -- Form of Indenture for Subordinated Securities.
*4.4 -- Form of Subordinated Security.
*4.5 -- Rights Agreement dated as of May 15, 1986, between the Company and
Mellon Bank N.A., as amended.
**4.6 -- Form of Warrant Agreement for Debt Securities.
**4.7 -- Form of Warrant Certificate for Debt Securities.
**4.8 -- Form of Warrant Agreement for Preferred Stock.
**4.9 -- Form of Warrant Certificate for Preferred Stock.
**4.10 -- Form of Warrant Agreement for Common Stock.
**4.11 -- Form of Warrant Certificate for Common Stock.
**4.12 -- Form of Deposit Agreement for Depositary Shares.
**4.13 -- Form of Depositary Receipt.
4.14 -- Form of Certificate of Common Stock, par value $1.00 per share, of
the Company (incorporated by reference to Exhibit 4(e) to
Registration No. 33-60040, filed with the Commission on March 26,
1993).
4.15 -- Proposed form of Debt Securities (Certificated Medium-Term Note,
Series G, Fixed Rate).
4.16 -- Proposed form of Debt Securities (Certificated Medium-Term Note,
Series G, Floating Rate).
4.17 -- Proposed form of Debt Securities (Book-Entry Medium-Term Note, Series
G, Fixed Rate).
4.18 -- Proposed form of Debt Securities (Book-Entry Medium-Term Note, Series
G, Floating Rate).
*5 -- Opinion of Thomas L. Feazell, Esq.
12 -- Computation of Ratios of Earnings to Fixed Charges and Earnings to
Combined Fixed Charges and Preferred Stock Dividends.
23.1 -- Consent of Ernst & Young LLP.
*23.2 -- Consent of Thomas L. Feazell, Esq. (included as part of Exhibit 5).
*24 -- Power of Attorney, including resolutions of the Board of Directors.
*26 -- Form T-1 Statement of Eligibility and Qualification of Trustee under
the Trust Indenture Act of 1939 for Citibank, N.A.
<FN>
- ------------------------
* Previously filed
** To be filed
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act unless the information required to be included in such
post-effective amendment is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the registration statement;
II-2
<PAGE>
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement unless the information required to be included
in such post-effective amendment is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in the registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) For the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy, as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby, undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the Trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Trust
Indenture Act.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all the requirements for
filing on Form S-3 and has duly caused this Post-Effective Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Russell, Commonwealth of Kentucky, on
April 12, 1995.
ASHLAND INC.,
by /s/ THOMAS L. FEAZELL
------------------------------------
Thomas L. Feazell
Senior Vice President, General
Counsel
and Secretary
Pursuant to the requirements of the Securities Act, this Post-Effective
Amendment No. 1 to the Registration Statement has been signed below by the
following persons in the capacities indicated on April 12, 1995.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------ ------------------------------------
<C> <S>
JOHN R. HALL* Chairman of the Board and Chief
- ------------------------------------ Executive Officer (Principal
Executive Officer)
PAUL W. CHELLGREN* President, Chief Operating Officer
- ------------------------------------ and Director
J. MARVIN QUIN* Senior Vice President and Chief
- ------------------------------------ Financial Officer (Principal
Financial Officer)
KENNETH L. AULEN* Administrative Vice President and
- ------------------------------------ Controller (Principal Accounting
Officer)
THOMAS E. BOLGER* Director
- ------------------------------------
SAMUEL C. BUTLER* Director
- ------------------------------------
FRANK C. CARLUCCI* Director
- ------------------------------------
JAMES B. FARLEY* Director
- ------------------------------------
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------ ------------------------------------
<C> <S>
EDMUND B. FITZGERALD* Director
- ------------------------------------
RALPH E. GOMORY* Director
- ------------------------------------
MANNIE L. JACKSON* Director
- ------------------------------------
PATRICK F. NOONAN* Director
- ------------------------------------
JANE C. PFEIFFER* Director
- ------------------------------------
MICHAEL D. ROSE* Director
- ------------------------------------
WILLIAM L. ROUSE, JR.* Director
- ------------------------------------
ROBERT B. STOBAUGH* Director
- ------------------------------------
JAMES W. VANDEVEER* Director
- ------------------------------------
*by /s/ THOMAS L. FEAZELL
- ------------------------------------
Thomas L. Feazell
Attorney-in-fact
</TABLE>
* Original powers of attorney authorizing John R. Hall, Paul W. Chellgren,
Thomas L. Feazell, James G. Stephenson and David L. Hausrath and each of them to
sign the Registration Statement and amendments thereto on behalf of the
above-mentioned directors and officers of the Registrant have been filed with
the Commission as Exhibit 24 to the Registration Statement.
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ---------------------------------------------------------
<C> <S> <C>
**1.1 Form of Underwriting Agreement.
1.2 Form of Distribution Agreement.
1.3 Form of Sales Agency Agreement.
3.1 Second Restated Articles of Incorporation of the Company,
as amended effective May 18, 1993 (incorporated by
reference to Exhibit 3.1 to Registrant's Form 10-K for
the year ended September 30, 1994).
3.2 By-laws of the Company, as amended effective March 17,
1994 (incorporated by reference to Exhibit 3.2 to
Registrant's Form 10-K for the year ended September 30,
1994).
4.1 Indenture, dated as of August 15, 1989 as amended and
restated as of August 15, 1990 between the Company and
Citibank, N.A., as Trustee (incorporated by reference to
Exhibit 4(a) to Registration Statement No. 33-39359,
filed with the Commission on March 11, 1991).
4.2 Form of Senior Security (incorporated by reference to
Exhibit 4(a) to Registration Statement No. 33-39359,
filed with the Commission on March 11, 1991).
*4.3 Form of Indenture for the Subordinated Securities.
*4.4 Form of Subordinated Security.
*4.5 Rights Agreement dated as of May 15, 1986, between the
Company and Mellon Bank N.A., as amended.
**4.6 Form of Warrant Agreement for Debt Securities.
**4.7 Form of Warrant Certificate for Debt Securities.
**4.8 Form of Warrant Agreement for Preferred Stock.
**4.9 Form of Warrant Certificate for Preferred Stock.
**4.10 Form of Warrant Agreement for Common Stock.
**4.11 Form of Warrant Certificate for Common Stock.
**4.12 Form of Deposit Agreement for Depositary Shares.
**4.13 Form of Depositary Receipt.
4.14 Form of Certificate of Common Stock, par value $1.00 per
share, of the Company (incorporated by reference to
Exhibit 4(e) to Registration No. 33-60040, filed with
the Commission on March 26, 1993).
4.15 Proposed form of Debt Securities (Certificated
Medium-Term Note, Series G, Fixed Rate).
4.16 Proposed form of Debt Securities (Certificated
Medium-Term Note, Series G, Floating Rate).
4.17 Proposed form of Debt Securities (Book-Entry Medium-Term
Note, Series G, Fixed Rate).
4.18 Proposed form of Debt Securities (Book-Entry Medium-Term
Note, Series G, Floating Rate).
*5 Opinion of Thomas L. Feazell, Esq.
12 Computation of Ratios of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and Preferred Stock
Dividends.
23.1 Consent of Ernst & Young LLP.
*23.2 Consent of Thomas L. Feazell, Esq. (included as part of
Exhibit 5).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ---------------------------------------------------------
<C> <S> <C>
*24 Power of Attorney, including resolutions of the Board of
Directors.
*26 Form T-1 Statement of Eligibility and Qualification of
Trustee under the Trust Indenture Act of 1939 for
Citibank, N.A.
<FN>
- ------------------------
* Previously filed
** To be filed
</TABLE>
<PAGE>
EXHIBIT 1.2
U.S. $200,000,000
MULTIPLE CURRENCY
MEDIUM-TERM NOTES, SERIES G
DUE NINE MONTHS OR MORE
FROM DATE OF ISSUE
ASHLAND INC.
DISTRIBUTION AGREEMENT
April ___, 1995
New York, New York
CS First Boston Corporation
Park Avenue Plaza
55 East 52nd Street
New York, N.Y. 10055
Salomon Brothers Inc
Seven World Trade Center
New York, N.Y. 10048
Citicorp Securities, Inc.
399 Park Avenue
New York, N.Y. 10043
Ladies and Gentlemen:
Ashland Inc., a Kentucky corporation (the "Company"), confirms its
agreement with you with respect to the issue and sale by the Company of up to
$200,000,000 aggregate principal amount of its Medium-Term Notes, Series G, Due
Nine Months or More from Date of Issue (the "Notes"). The Notes will have the
annual interest rates, maturities, redemption provisions and other terms as set
forth in a pricing supplement ("Pricing Supplement") to the Prospectus referred
to below. The Notes will be issued under an Indenture dated as of August 15,
1989 as amended and restated as of August 15, 1990 (the "Indenture"), between
the Company and Citibank, N.A., as trustee (the "Trustee"). The Notes will be
issued, and the terms thereof established, in accordance with the Indenture and,
in the case of Notes sold pursuant to Section 1(a), the Medium-Term Notes
Administrative Procedures attached hereto as Annex A (the "Procedures"). For
the purposes of this Agreement, the term "Agents" shall refer to any or all of
you (and any other person appointed by the Company in accordance with Section
1(a)) acting solely in the capacity as agent for the Company pursuant to
<PAGE>
Section 1(a) and not as principal, the term "Purchasers" shall refer to any or
all of you acting solely as principal pursuant to Section 1(g) and not as agent,
the term "you" shall refer to you acting in both such capacities or in either
such capacity and the term "Closing Date" shall mean the date of delivery of any
Notes sold hereunder, whether to purchasers solicited by you as agents or to you
as principal. The term "Terms Agreement" is defined in Section 1(g). Other
terms are defined in Section 3.
1. APPOINTMENT OF AGENT; SOLICITATION BY THE AGENT OF OFFERS TO PURCHASE;
SALES OF NOTES TO A PURCHASER. (a) Subject to the terms and conditions set
forth herein, the Company hereby appoints the Agents to act as its agents for
the purpose of soliciting offers to purchase all or part of the Notes from the
Company upon the terms set forth in the Prospectus, as amended or supplemented
from time to time, and in the Procedures. The Company shall have the right to
appoint additional persons to act as its agents for such purposes upon three
days prior notice to the Agents then acting hereunder so long as any such
additional persons become parties to this Agreement upon the same terms and
conditions as shall then be applicable to such Agents. So long as this
Agreement shall remain in effect with respect to any Agents, the Company shall
not, without the consent of such Agents, solicit offers to purchase Notes
otherwise than through one of such Agents, except as contemplated by Section
1(g) hereof and except that nothing contained herein shall be construed to
prevent the Company from selling Notes at any time (x) in a firm commitment
underwriting pursuant to an underwriting agreement which does not provide for a
continuous offering of such Notes or (y) directly to investors other than the
Purchasers, and no commission shall be payable to the Agents with respect to any
such sales. The Company also reserves the right to sell Notes through agents
other than pursuant to this Agreement where offers to purchase are received
through such agents on an unsolicited basis. Settlement of such sales will be
on substantially the same terms and conditions as are contained herein,
including commissions.
(b) On the basis of the representations and warranties set forth herein,
but subject to the terms and conditions set forth herein, each Agent agrees to
use its reasonable efforts, as agent of the Company, to solicit offers to
purchase Notes from the Company upon the terms set forth in the Prospectus, as
amended or supplemented from time to time, and in the Procedures. Subject to
the provisions of Section 1(c) and to the Procedures, offers for the purchase of
Notes may be solicited at such times and in such amounts as each Agent may from
time to time deem advisable.
(c) The Company reserves the right, in its sole discretion, to suspend
solicitation of offers to purchase Notes from the Company at any time for any
period of time or permanently. Upon receipt of at least one business day's
prior notice from the Company, the Agents forthwith will suspend their
solicitation of offers to purchase Notes from the Company until such time as the
Company has advised the Agents that such solicitation may be resumed.
-2-
<PAGE>
(d) Each Agent will communicate to the Company, orally or in writing, each
offer to purchase Notes from the Company that is received by such Agent as agent
of the Company and that is not rejected by such Agent as provided below. The
Company will have the sole right to accept offers to purchase Notes from the
Company and may reject any such offer, in whole or in part, for any reason.
Each Agent may, without notice to the Company, in its discretion reasonably
exercised, reject any offer to purchase Notes from the Company that is received
by such Agent, in whole or in part, and any such rejection shall not be deemed a
breach of such Agent's agreements contained herein.
(e) The Company agrees to pay each Agent a commission, on the Closing Date
with respect to each sale of Notes by the Company as a result of a solicitation
made by such Agent, in an amount equal to that percentage specified in Schedule
I hereto of the aggregate principal amount of each Note sold by the Company.
Such commission shall be payable as specified in the Procedures. The commission
rates may be amended from time to time by written agreement of the Company and
the Agents. The Terms Agreement may specify any concessions allowed or
reallowed or paid to dealers.
(f) Each Agent agrees, with respect to any Note denominated in a currency
other than U.S. dollars, as agent, directly or indirectly, not to solicit offers
to purchase, and as principal under any Terms Agreement or otherwise, directly
or indirectly, not to offer, sell or deliver, such Note in, or to residents of,
the country issuing such currency (or, if such Note is denominated in a
composite currency, in any country issuing a currency comprising a portion of
such composite currency), except as permitted by applicable law.
(g) Subject to the terms and conditions stated herein, whenever the
Company and you determine that the Company shall sell Notes directly to any or
all of you acting as principal (the "Purchaser"), each such sale of Notes shall
be made in accordance with the terms of this Agreement and any supplemental
agreement relating thereto between the Company and the Purchaser. Each such
supplemental agreement (which shall be substantially in the form of Annex B) is
herein referred to as a "Terms Agreement". The Purchaser's commitment to
purchase Notes pursuant to any Terms Agreement shall be deemed to have been made
on the basis of the representations and warranties of the Company herein
contained and shall be subject to the terms and conditions herein set forth.
Each Terms Agreement shall describe the Notes to be purchased by the Purchaser
pursuant thereto, specify the maturity and principal amount of such Notes, the
price to be paid to the Company for such Notes, the rate at which interest will
be paid on the Notes, the Closing Date for such Notes, the place of delivery of
the Notes and payment therefor, the method of payment and any modification of
the requirements for the delivery of the opinions of counsel, the certificates
from the Company or its officers, and the letter from the Company's independent
public accountants, pursuant to Section 7(c). Such Terms Agreement shall also
specify the period of time referred to in Section 5(l). The Terms Agreement may
specify the terms upon which an Agent may resell any Notes to other dealers.
-3-
<PAGE>
Delivery of the certificates if the Notes are certificated, or entry into
the books of the Depository Trust Company if the Notes are book-entry Notes, for
Notes sold to the Purchaser pursuant to any Terms Agreement shall be made as
agreed to between the Company and the Purchaser as set forth in the respective
Terms Agreement, not later than the Closing Date set forth in such Terms
Agreement, against payment of funds to the Company in the amount due to the
Company for such Notes by the method and in the form set forth in the respective
Terms Agreement.
2. OFFERING PROCEDURES. The Procedures may be amended only by written
agreement of the Company and the Agents after notice to the Trustee, and, to the
extent any such amendment materially affects the Trustee, with the approval of
the Trustee. The Company and the Agents agree to perform the respective duties
and obligations specifically provided to be performed by them in the Procedures.
The Company will furnish to the Trustee a copy of the Procedures as from time to
time in effect.
3. REGISTRATION STATEMENT AND PROSPECTUS. The Company has filed with the
Securities and Exchange Commission (the "Commission"), pursuant to the
Securities Act of 1933 (the "Securities Act") and the published rules and
regulations adopted by the Commission thereunder (the "Rules"), a registration
statement on Form S-3 (No. 33-57011) as amended by Amendment No. 1 and
Post-Effective Amendment No. 1 thereto (the "Registration Statement") relating
to $600,000,000 aggregate principal amount of securities, including debt
securities, (the "Securities") of the Company registered under the Securities
Act. The Company has included in the Registration Statement, or has filed or
will file with the Commission pursuant to the applicable paragraph of Rule
424(b) and Rule 429 under the Securities Act, a supplement to the form of
prospectus included in the Registration Statement relating to the Notes and the
plan of distribution thereof (the "Prospectus Supplement"). In connection with
the sale of the Notes, the Company proposes to file with the Commission pursuant
to the applicable paragraph of Rule 424(b) and Rule 429 under the Securities Act
further supplements to the Prospectus Supplement specifying the interest rates,
maturity dates, redemption provisions and other similar terms of the Notes sold
pursuant hereto or the offering thereof. The Indenture has been qualified under
the Trust Indenture Act of 1939 (the "Trust Indenture Act"). The term "the
Effective Date" shall mean each date that the Registration Statement and any
posteffective amendment or amendments thereto became or becomes effective.
"Basic Prospectus" shall mean the form of basic prospectus relating to the
Securities contained in the Registration Statement at the Effective Date. The
term "Prospectus" means the Basic Prospectus as supplemented by the Prospectus
Supplement. Any reference herein to the Registration Statement, the Basic
Prospectus, the Prospectus Supplement or the Prospectus includes the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 (the
"Incorporated Documents") which were filed under the Securities Exchange Act of
1934 (the "Exchange Act") on or before the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus,
-4-
<PAGE>
the Prospectus Supplement or the Prospectus, as the case may be, and any
reference herein to "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Basic Prospectus, the Prospectus Supplement or the
Prospectus includes the Incorporated Documents filed under the Exchange Act
after the Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, the Prospectus Supplement or the Prospectus, as the case may
be.
The Company confirms that you are authorized to distribute the Prospectus
and any amendments or supplements thereto.
4. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to
you as follows:
(a) The Company meets the requirements for the use of Form S-3 under the
Securities Act. The Registration Statement meets the requirements set forth in
Rule 415(a)(1)(x) of the Rules and complies in all other material respects with
Rule 415 of the Rules.
(b) As of the date hereof, when any amendment to the Registration
Statement becomes effective (including the filing with the Commission of any
document incorporated by reference in the Registration Statement), when any
amendment or supplement to the Prospectus is filed with the Commission pursuant
to Rule 424 of the Rules, as of the date of any Terms Agreement and on any
Closing Date, (i) the Registration Statement, as amended as of any such time,
the Prospectus, as amended or supplemented as of any such time, and the
Incorporated Documents will comply in all material respects with the applicable
requirements of the Securities Act and the Rules, and the Exchange Act and the
Trust Indenture Act and the respective published rules and regulations adopted
by the Commission thereunder, (ii) the Registration Statement, as amended as of
any such time, did not or will not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading, and (iii) the
Prospectus, as supplemented as of any such time, will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; except that this representation and warranty
does not apply to (x) statements or omissions made in reliance on and in
conformity with information relating to you furnished in writing to the Company
by you expressly for use in the Registration Statement, the Prospectus or any
amendment or supplement thereto or (y) that part of the Registration Statement
consisting of the Statement of Eligibility and Qualification on Form T-1 of the
Trustee under the Trust Indenture Act, except statements or omissions in such
Statement made in reliance upon information furnished in writing to the Trustee
by or on behalf of the Company for use therein.
-5-
<PAGE>
5. AGREEMENTS. (a) Prior to the termination of the offering of the Notes
under this Agreement, the Company will not file any amendment or supplement to
the Registration Statement or the Prospectus (except for a supplement relating
to an offering of Securities other than Notes and filings with the Commission
pursuant to the Exchange Act) unless a copy thereof has been submitted to you a
reasonable period of time before its filing and you have not reasonably objected
thereto within a reasonable period of time after receiving such copy. Subject
to the foregoing sentence, the Company will cause each amendment or supplement
to the Prospectus to be filed with the Commission as required pursuant to the
applicable paragraph of Rule 424(b) of the Rules or, in the case of any document
to be incorporated therein by reference, to be filed with the Commission as
required pursuant to the Exchange Act, within the time period prescribed.
(b) The Company will advise you promptly (i) when each amendment or
supplement to the Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) of the Rules or, in the case of any document incorporated therein
by reference, when such document shall have been filed with the Commission
pursuant to the Exchange Act, (ii) when, prior to the termination of the
offering of the Notes, any amendment to the Registration Statement shall have
been filed or become effective, (iii) of the initiation or threatening of any
proceedings for, or receipt by the Company of any notice with respect to, the
suspension of the qualification of the Notes for sale in any jurisdiction or the
issuance of any order by the Commission suspending the effectiveness of the
Registration Statement, and (iv) of the receipt by the Company or any
representative or attorney of the Company of any other communication from the
Commission relating to the Registration Statement, the Prospectus or any
amendment or supplement thereto or to the transactions contemplated by this
Agreement. The Company will use reasonable efforts to prevent the issuance of
an order suspending the effectiveness of the Registration Statement and, if any
such order is issued, to obtain its lifting as soon as possible.
(c) The Company will deliver to you, without charge, three signed copies
of the Registration Statement and each post-effective amendment thereto
(including all exhibits filed with any such document) and as many conformed
copies of the Registration Statement and each such amendment (excluding
exhibits) and the Indenture as you may reasonably request.
(d) During such period as (i) a prospectus is required by law to be
delivered by you and (ii) no suspension of solicitation of offers to purchase
Notes pursuant to Section 1(c) shall be in effect (any such time referred to in
clause (ii) and any time when any Agent shall own any Notes with the intention
of reselling them or the Company has accepted an offer to purchase Notes but the
related settlement has not occurred being referred to herein as a "Marketing
Time"), the Company will deliver, without charge, to you, at such office or
offices as you may designate, as many copies of the Prospectus or any amendment
or supplement thereto as you may reasonably
-6-
<PAGE>
request, and, if any event occurs during such period as a result of which the
Prospectus, as then amended or supplemented, would include any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if during such period it is necessary to amend the
Registration Statement or to amend or supplement the Prospectus to comply with
the Securities Act or the Rules or the Exchange Act or the published rules and
regulations adopted by the Commission thereunder, the Company promptly will
(y) notify you to suspend solicitation of offers to purchase Notes from
the Company and (z) prepare and file with the Commission, subject to Section
5(a), and deliver, without charge, to you, an amendment or supplement which will
correct such statement or omission or effect such compliance, and supply any
supplemented Prospectus to you in such quantities as you may reasonably request.
(e) The Company will make generally available to its security holders as
soon as practicable, but in any event not later than 15 months after (i) the
Effective Date of the Registration Statement, (ii) the Effective Date of each
post-effective amendment to the Registration Statement, and (iii) the date of
each filing by the Company with the Commission of an Annual Report on Form 10-K
that is incorporated by reference in the Registration Statement, an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 of the Rules.
(f) The Company will take such actions as you may reasonably designate in
order to qualify the Notes for offer and sale under the securities or "blue sky"
laws of such jurisdictions as you designate, will maintain such qualification in
effect for so long as may be required for the distribution of the Notes and will
arrange for the determination of the legality of the Notes for purchase by
institutional investors.
(g) During the term of this Agreement, the Company will supply to you
copies of such financial statements and other periodic and special reports as
the Company may from time to time distribute generally to the holders of any
class of its capital stock and of each annual or other report it is required to
file with the Commission. The Company shall furnish to you such information,
documents, certificates of officers of the Company and opinions of counsel for
the Company relating to the business, operations and affairs of the Company, the
Registration Statement, the Prospectus, and any amendments thereof or
supplements thereto, the Indenture, the Notes, this Agreement, the Procedures
and the performance by the Company and you of its and your respective
obligations hereunder and thereunder as you may from time to time and at any
time prior to the termination of this Agreement reasonably request.
(h) The Company will, whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, (i) pay, or reimburse
if paid by you, all costs and expenses incident to the performance of the
obligations of the Company under this Agreement, including costs and expenses
relating to (A) the
-7-
<PAGE>
preparation, printing and filing of the Registration Statement and exhibits
thereto, the Prospectus, all amendments and supplements to the Registration
Statement and the Prospectus, and the printing or other reproduction of the
Indenture and this Agreement, (B) the authorization and issuance of the Notes,
the preparation and delivery of certificates for the Notes, and the fees charged
in connection with the maintenance of a book-entry system for the Notes, (C) the
registration or qualification of the Notes for offer and sale under the
securities or "blue sky" laws of the jurisdictions referred to in paragraph (f)
of this Section 5 and the determination of the legality of the Notes for
investment, including the reasonable fees and disbursements of counsel for you
in that connection, and the preparation and printing of preliminary and
supplemental "blue sky" memoranda and legal investment memoranda, (D) the
furnishing (including costs of shipping and mailing) to you of copies of the
Prospectus, and all amendments or supplements to the Prospectus, and of all
other documents, reports and other information required by this Section to be so
furnished, (E) all transfer taxes, if any, with respect to the sale and delivery
of the Notes by the Company, (F) the fees and expenses of the Trustee, and (G)
the fees charged by rating agencies in connection with any rating of the Notes,
(ii) reimburse you on a quarterly basis for all reasonable out-of-pocket
expenses (including advertising expenses) incurred by you with the advance
approval of the Company, and (iii) reimburse the reasonable fees and
disbursements of counsel for you incurred in connection with this Agreement.
(i) During any Marketing Time, each time that either of the Registration
Statement or the Prospectus is amended or supplemented (other than by an
amendment or supplement (x) relating to any offering of Securities other than
the Notes, (y) providing solely for the specification of or a change in the
maturity dates, the interest rates, the issuance prices or other similar terms
of any Notes sold pursuant hereto or (z) resulting from the filing by the
Company of a Current Report on Form 8-K (or any similar successor form), unless
in the case of clause (z) above, in your reasonable judgment, such Current
Report is of such a nature that a certificate should be furnished), including by
the filing of any document incorporated therein by reference, the Company will
deliver or cause to be delivered forthwith to you a certificate of the Company,
signed by the Chairman of the Board, the President, or any Senior or
Administrative Vice President or any Vice President and the principal financial
or accounting officer of the Company, dated the date of the effectiveness of
such amendment or the date of filing of such supplement, in form reasonably
satisfactory to you, to the effect that the statements contained in the
certificate that was last furnished to you pursuant to either Section 6(c) or
this paragraph (i) are true and correct at the time of the effectiveness of such
amendment or the filing of such supplement as though made at and as of such time
(except that (i) the last day of the fiscal quarter for which financial
statements of the Company were last filed with the Commission shall be
substituted for the corresponding date in such certificate and (ii) such
statements shall be deemed to relate to the Registration Statement and the
Prospectus as amended or supplemented to the time of the effectiveness of such
-8-
<PAGE>
amendment or the filing of such supplement) or, in lieu of such certificate, a
certificate of the same tenor as the certificate referred to in Section 6(c) but
modified to relate to the last day of the fiscal quarter for which financial
statements of the Company were last filed with the Commission and to the
Registration Statement and the Prospectus as amended or supplemented to the time
of the effectiveness of such amendment or the filing of such supplement.
(j) During any Marketing Time, each time that either of the Registration
Statement or the Prospectus is amended or supplemented (other than by an
amendment or supplement (x) relating to any offering of Securities other than
the Notes, (y) providing solely for the specifications of or a change in the
maturity dates, the interest rates, the issuance prices or other similar terms
of any Notes sold pursuant hereto, or (z) resulting from the filing by the
Company of a Quarterly Report on Form 10-Q or a Current Report on Form 8-K (or
any similar successor forms), unless, in the case of clause (z) above, in your
reasonable judgment, such Quarterly or Current Report is of such a nature that
an opinion of counsel should be furnished), including by the filing of any
document incorporated therein by reference, the Company will furnish or cause to
be furnished forthwith to you a written opinion of counsel for the Company
reasonably satisfactory to you, dated the date of the effectiveness of such
amendment or date of filing of such supplement, in form reasonably satisfactory
to you, of the same tenor as the opinion referred to in Section 6(d) but
modified to relate to the Registration Statement and the Prospectus as amended
or supplemented to the time of the effectiveness of such amendment or the filing
of such supplement or, in lieu of such opinion, counsel last furnishing such an
opinion to you may furnish you with a letter to the effect that you may rely on
such counsel's last opinion to the same extent as though it were dated the date
of such letter authorizing reliance (except that statements in such counsel's
last opinion will be deemed to relate to the Registration Statement and the
Prospectus as amended or supplemented to the time of the effectiveness of such
amendment or the filing of such supplement).
(k) During any Marketing Time, each time that either of the Registration
Statement or the Prospectus is amended or supplemented to set forth amended or
supplemental financial information (other than by an amendment or supplement
resulting from the filing by the Company of a Quarterly Report on Form 10-Q or a
Current Report on Form 8-K (or any similar successor forms), unless, in your
reasonable judgment, such Quarterly Report or Current Report is of such a nature
that a letter from the Company's independent public accountants should be
furnished), the Company will cause its independent public accountants forthwith
to furnish a letter, dated the date of the effectiveness of such amendment or
the date of filing of such supplement, in form satisfactory to you, of the same
tenor as the letter referred to in Section 6(f) with such changes as may be
necessary to reflect the amended and supplemental financial information included
or incorporated by reference in the Registration Statement and the Prospectus,
as amended or supplemented to the date of such letter, provided that if either
of the Registration Statement or the Prospectus is
-9-
<PAGE>
amended or supplemented solely to include or incorporate by reference financial
information as of and for a fiscal quarter and you shall have reasonably
requested that such a letter be furnished, the Company's independent public
accountants may limit the scope of such letter, which shall be satisfactory in
form to you, to the unaudited financial statements, the related "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
any other information of an accounting, financial or statistical nature included
in such amendment or supplement.
(l) During the period, if any, specified in any Terms Agreement, the
Company shall not, without the prior consent of the Purchaser, issue or announce
the proposed issuance of any of its debt securities, including Notes, with terms
substantially similar to the Notes being purchased pursuant to such Terms
Agreement.
(m) Each acceptance by the Company of an offer for the purchase of Notes
shall be deemed to be an affirmation that its representations and warranties
contained in this Agreement are true and correct at the time of such acceptance
and a covenant that such representations and warranties will be true and correct
at the time of delivery to the purchaser of the Notes relating to such
acceptance as though made at and as of each such time, it being understood that
such representations and warranties shall relate to the Registration Statement
and the Prospectus as amended or supplemented at each such time. Each such
acceptance by the Company of an offer for the purchase of Notes shall be deemed
to constitute an additional representation, warranty and agreement by the
Company that, as of the settlement date for the sale of such Notes, after giving
effect to the issuance of such Notes, of any other Notes to be issued on or
prior to such settlement date and of any other Securities, which have been
issued and sold by the Company will not exceed the amount of Securities
registered pursuant to the Registration Statement.
6. CONDITIONS OF THE AGENTS' OBLIGATIONS. The obligations of the Agents
to solicit offers to purchase Notes from the Company are subject to the accuracy
of the representations and warranties of the Company in this Agreement on the
date of this Agreement, when any amendment to the Registration Statement becomes
effective (including the filing with the Commission of any document incorporated
by reference in the Registration Statement), when any amendment or supplement to
the Prospectus is filed with the Commission pursuant to the applicable paragraph
of Rule 424(b) or Rule 429 of the Rules and on each Closing Date, to performance
by the Company of its obligations under this Agreement and to each of the
following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Prospectus, and any such supplement, shall have
been filed in the manner and within the time period required by Rule 424(b); and
no order suspending the effectiveness of the Registration Statement, as amended
from time to time, may be in effect and no proceedings for such purpose may be
pending before or threatened by the Commission, and any requests for additional
information on the part of the
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Commission (to be included in the Registration Statement or the Prospectus or
otherwise) must be complied with to the reasonable satisfaction of the Agents.
(b) Since the date of the most recent financial statements included or
incorporated by reference in the Prospectus, (i) there must not have been any
material adverse change or decrease (of the type indicated in paragraphs (ii)(B)
or (ii)(C) of Annex D to this Agreement) specified in the most recent letter of
the type referred to in Section 5(k) or in paragraph (f) of this Section 6, (ii)
there must not have been any material adverse change in the general affairs,
prospects, management, business, properties, financial condition or results of
operations of the Company and its subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as set
forth in or contemplated by the Prospectus, as amended or supplemented at the
time of acceptance by the Company of any offer to purchase the Notes, (iii) the
Company and its subsidiaries taken as a whole must not have sustained any
material loss or interference with their business or properties from fire,
explosion, earthquake, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or any court or legislative or other
governmental action, order or decree not described in the Prospectus, as then
amended or supplemented at the time of acceptance by the Company of any offer to
purchase the Notes, and (iv) there must not have been any downgrading in the
rating of any of the Company's long-term debt securities by Standard & Poor's
Corporation ("S&P") or Moody's Investors Service ("Moody's"), if, in the
judgment of the Agents, any such development referred to in clause (i), (ii),
(iii) or (iv) makes it impracticable or inadvisable to proceed with the
soliciting of offers to purchase Notes from the Company as contemplated by the
Prospectus, as then amended or supplemented.
(c) The Company shall have furnished to the Agents on the date of this
Agreement a certificate of the Company, signed by the Chairman of the Board, the
President, or any Senior or Administrative Vice President or any Vice President
and the principal financial or accounting officer of the Company, dated such
date, certifying that the signers have carefully examined the Registration
Statement, the Prospectus, the Indenture and this Agreement, and, to the best of
their knowledge, after reasonable investigation, (i) the representations and
warranties of the Company in this Agreement are accurate on and as of the date
of such certificate and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied as a
condition to the obligation of the Agents to solicit offers to purchase the
Notes, (ii) there has not been any material adverse change in the general
affairs, prospects, management, business, properties, financial condition or
results of operations of the Company and its subsidiaries taken as a whole,
whether or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus, as amended or
supplemented as of the date of such certificate, and (iii) no actions to suspend
the effectiveness of the Registration Statement, as amended as of the date of
such certificate, or to prohibit the sale of the Notes have been taken or
threatened by the Commission.
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(d) The Agents shall have received on the date of this Agreement from
Thomas L. Feazell, Esq., Senior Vice President, General Counsel and Secretary of
the Company, and Cravath, Swaine & Moore, special counsel to the Company,
opinions dated such date substantially in the forms set forth in Annex C-1 and
Annex C-2-A to this Agreement.
(e) The Agents shall have received on the date of this Agreement from
Davis Polk & Wardwell, their counsel, an opinion dated such date with respect to
the Company, the Notes, the Indenture, the Registration Statement, the
Prospectus, this Agreement and the form and sufficiency of all proceedings taken
in connection with the sale and delivery of the Notes. Such opinion and
proceedings shall be satisfactory in all respects to the Agents. The Company
must have furnished to such counsel such documents as they may reasonably
request for the purpose of enabling them to render such opinion.
(f) The Agents shall have received, at the date of this Agreement, a
signed letter from Ernst & Young LLP substantially in the form of Annex D to
this Agreement.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement will comply with this Agreement only if they are in
form and scope reasonably satisfactory to the Agents and their counsel.
If any of the conditions specified in this Section 6 shall not have been
fulfilled when and as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Agents and their counsel,
this Agreement and all obligations of the Agents hereunder may be canceled at
any time by the Agents. Notice of such cancellation shall be given to the
Company in writing or by telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered
at the offices of Davis Polk & Wardwell, counsel for the Agents, at 450
Lexington Avenue, New York, New York, on the date of this Agreement.
7. CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER. The obligations of the
Purchaser to purchase any Notes from the Company are subject to the accuracy, on
the Closing Date for such Notes, of the representations and warranties of the
Company in this Agreement, to performance by the Company of its obligations
under this Agreement and to each of the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
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(b) Since the date of the most recent financial statements included or
incorporated by reference in the Prospectus, (i) there must not have been any
material adverse change or decrease (of the type indicated in paragraphs (ii)(B)
or (C) of Annex D to this Agreement) specified in the most recent letter of the
type referred to in Section 5(k) or in paragraph (c) of this Section 7, (ii)
there must not have been any material adverse change in the general affairs,
prospects, management, business, properties, financial condition or results of
operations of the Company and its subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as set
forth in or contemplated by the Prospectus, as amended or supplemented at the
date of execution of the Terms Agreement relating to such Notes, (iii) the
Company and its subsidiaries taken as a whole must not have sustained any
material loss or interference with their business or properties from fire,
explosion, earthquake, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or any court or legislative or other
governmental action, order or decree not described in the Prospectus, as amended
or supplemented at the date of execution of the Terms Agreement relating to such
Notes, and (iv) there must not have been any downgrading in the rating of any of
the Company's long-term debt securities by S&P or Moody's, if, in the judgment
of the Purchaser, any such development referred to in clause (i), (ii), (iii) or
(iv) makes it impracticable or inadvisable to consummate the sale and delivery
of the Notes to the Purchaser as contemplated by the Prospectus, as then amended
or supplemented.
(c) If specified by any related Terms Agreement and except to the extent
modified by such Terms Agreement, the Purchaser shall have received (i) a
certificate of the Company, dated as of such Closing Date, to the effect set
forth in Section 6(c), (ii) the opinions of Thomas L. Feazell, Esq., Senior Vice
President, General Counsel and Secretary of the Company, and Cravath, Swaine &
Moore, special counsel to the Company, each dated as of such Closing Date, to
the effect set forth in Section 6(d), (iii) the opinion of Davis Polk &
Wardwell, counsel for the Purchaser, dated as of such Closing Date, to the
effect set forth in Section 6(e), and (iv) a letter of Ernst & Young LLP,
independent accountants for the Company, dated as of such Closing Date, to the
effect set forth in Section 6(f).
(d) Prior to the Closing Date, the Company shall have furnished to the
Purchaser such further information, certificates and documents as the Purchaser
may reasonably request.
If any of the conditions specified in this Section 7 shall not have been
fulfilled when and as provided in this Agreement and any Terms Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement or such Terms Agreement shall not be reasonably satisfactory in form
and substance to the Purchaser and its counsel, such Terms Agreement and all
obligations of the Purchaser thereunder and with respect to the Notes subject
thereto may be canceled at, or at any
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time prior to, the respective Closing Date by the Purchaser. Notice of such
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
8. RIGHT OF PERSON WHO AGREED TO PURCHASE TO REFUSE TO PURCHASE. The
Company agrees that any person who has agreed to purchase and pay for any Note
pursuant to a solicitation by the Agents, shall have the right to refuse to
purchase such Note if, at the Closing Date therefor, any condition set forth in
Section 6(a) and (b) shall not be satisfied.
9. INDEMNIFICATION. (a) The Company will indemnify and hold harmless you
and each person, if any, who controls you within the meaning of Section 15 of
the Securities Act against any and all losses, claims, damages and liabilities,
joint or several (including any investigation, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted), to which they, or any of
them, may become subject under the Securities Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading;
provided that the Company will not be liable to the extent that such loss,
claim, damage or liability arises from the sale of Notes by the Company as a
result of a solicitation by you and is based upon an untrue statement or
omission or alleged untrue statement or omission (i) made in reliance upon and
in conformity with information relating to you furnished in writing to the
Company by you expressly for use in the document or (ii) in a preliminary
prospectus if the Prospectus, as amended or supplemented as of the time of the
confirmation of the sale to such person, corrected the untrue statement or
omission or alleged untrue statement or omission which is the basis of the loss,
claim, damage or liability for which indemnification is sought and a copy of the
Prospectus, as so amended (but excluding any documents incorporated therein by
reference), was not sent or given to such person at or before the confirmation
of the sale to such person in any case where such delivery is required by the
Securities Act, unless such failure to deliver the Prospectus, as so amended,
was a result of noncompliance by the Company with Section 5(d). This indemnity
agreement will be in addition to any liability that the Company might otherwise
have.
(b) Each of you, severally and not jointly, will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act, each director of the Company and
each officer of the Company who signs the Registration Statement to the same
extent as the foregoing indemnity from the Company to each of you, but only
insofar as losses, claims,
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damages or liabilities arise from the sale of Notes by the Company to any person
as a result of a solicitation by each of you and are based upon any untrue
statement or omission or alleged untrue statement or omission made in any
preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with
information relating to each of you furnished in writing to the Company by each
of you expressly for use in the document. This indemnity agreement will be in
addition to any liability that you might otherwise have.
(c) Any party that proposes to assert the right to be indemnified under
this Section 9 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 9, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission to so notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party
otherwise than under this Section 9. If any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate in, and, to the
extent that it elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel who shall be reasonably
satisfactory to the indemnified party, and, after notice from the indemnifying
party to the indemnified party of its election to assume the defense, the
indemnifying party will not be liable to the indemnified party for any legal or
other expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in connection with
the defense. The indemnified party will have the right to employ its own
counsel in any such action, but the fees and expenses of such counsel will be at
the expense of such indemnified party unless (1) the employment of counsel by
the indemnified party has been authorized in writing by the indemnifying party,
(2) the indemnified party has reasonably concluded that there may be legal
defenses available to it or other indemnified parties which are different from
or in addition to those available to the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (3) the indemnifying party has not in
fact employed counsel reasonably satisfactory to such indemnified party to
assume the defense of such action within a reasonable time after receiving
notice of the commencement of the action, in each of which cases the reasonable
fees and expenses of such counsel will be at the expense of the indemnifying
party or parties and all such fees and expenses will be reimbursed promptly as
they are incurred. An indemnifying party will not be liable for any settlement
of any action or claim effected without its written consent or, in connection
with any proceeding or related proceedings in the same jurisdiction, for the
fees and expenses of more than one separate counsel for all indemnified parties.
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10. CONTRIBUTION. In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in Section 9 is
applicable in accordance with its terms but for any reason is held by a tribunal
to be unavailable from the Company or you, the Company and you will contribute
to the aggregate losses, claims, damages and liabilities (including any
investigation, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action or any claims asserted, but
after deducting any contribution received by the Company from persons other than
you, such as persons who control the Company within the meaning of the
Securities Act, officers of the Company who signed the Registration Statement
and directors of the Company, who may also be liable for contribution) to which
the Company and you may be subject in such proportion so that you are
responsible for that portion represented by the percentage that the aggregate
commissions received by you pursuant to Section 1 bears to the aggregate
principal amount of Notes sold by the Company and the Company is responsible for
the balance; provided that (i) you will not be responsible for any amount in
excess of the aggregate commissions received by you pursuant to Section 1 and
(ii) no person found guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) will be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 10, any person who controls a party to this Agreement
within the meaning of the Securities Act will have the same rights to
contribution as that party, and each officer of the Company who signed the
Registration Statement and each director of the Company will have the same
rights to contribution as the Company, subject in each case to clauses (i) and
(ii) of this Section 10. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action against such party in
respect of which a claim for contribution may be made under this Section 10,
notify such party or parties from whom contribution may be sought, but the
omission so to notify will not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
otherwise than under this Section 10. No party will be liable for contribution
with respect to any action or claim settled without its written consent.
11. TERMINATION. (a) Upon three days written notice, this Agreement may
be terminated for any reason at any time by the Company as to any or all of you,
or may be terminated for any reason at any time by any or all of you as to those
of you giving such notice. In the event of any such termination, no party
giving such notice shall have any liability to the other party or parties
hereto, except as provided in Sections 1(e), 5(h), 9, 10 and 12.
(b) Each Terms Agreement shall be subject to termination in the absolute
discretion of the Purchaser, by notice given to the Company prior to delivery of
any payment for Notes to be purchased thereunder, if prior to such time (1)
trading in any securities of the Company is suspended by the Commission,
by an exchange that lists such securities of the Company, or by the
National Association of Securities Dealers Automated Quotation National Market
System, (2) additional
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material governmental restrictions, not in force on the date of this Agreement,
have been imposed upon trading in securities generally or minimum or maximum
prices have been generally established on the New York Stock Exchange or on the
American Stock Exchange, or trading in securities generally has been suspended
on any such Exchange or a general banking moratorium has been established by
Federal or New York authorities, or (3) any outbreak or material escalation of
hostilities or other calamity or crisis occurs the effect of which is such as to
make it impracticable to market such Notes.
12. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements in Sections 1(e), 5(h), 9, 10 and 11 and the representations and
agreements of the Company and you in this Agreement will remain in full force
and effect until the sixth anniversary of the date of termination of this
Agreement as to any party regardless of any termination of this Agreement or any
investigation made by or on behalf of you, the Company or any controlling person
and will survive delivery of and payment for the Notes.
This Agreement is for the benefit of you and the Company and their
respective successors and, to the extent expressed in this Agreement, for the
benefit of persons controlling you or the Company, and directors and officers of
the Company, and their respective successors, and no other person, partnership,
association or corporation shall acquire or have any right under or by virtue of
this Agreement.
All notices and communications under this Agreement will be in writing,
effective only on receipt and mailed or delivered, by messenger, facsimile
transmission or otherwise, addressed to the parties as follows: if to the
Agents, to CS First Boston Corporation, Park Avenue Plaza, 55 East 52nd Street,
New York, New York 10055, attention of Richard W. Kurz, Salomon Brothers Inc,
Seven World Trade Center, New York, New York 10048, attention of C. Scott
Baxter and the Medium-Term Note Group, and Citicorp Securities, Inc., 399 Park
Avenue, New York, N.Y. 10043, attention of James S. Hart, and if to the Company,
to Ashland Inc., 1000 Ashland Drive, Russell, Kentucky 41169, attention of the
Treasurer, except that legal notices will be sent to the attention of the
General Counsel.
This Agreement may be signed in multiple counterparts that taken as a whole
constitute one agreement.
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This Agreement will be governed by and construed in accordance with the
laws of the State of New York.
Please confirm that the foregoing correctly sets forth the agreement
between us.
Very truly yours,
ASHLAND INC.
By
-----------------------------------
Title:
Confirmed:
CS FIRST BOSTON CORPORATION
By
------------------------------
Title:
SALOMON BROTHERS INC
By
------------------------------
Title:
CITICORP SECURITIES, INC.
By
-------------------------------
Title:
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ANNEX A
MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
APRIL __, 1995
The Medium-Term Notes due Nine Months or More from their issue date (the
"Notes") are to be offered on a continuing basis by Ashland Inc. (the
"Company"). CS First Boston Corporation, Salomon Brothers Inc and Citicorp
Securities, Inc., as agents (individually, an "Agent" and collectively, the
"Agents"), have each agreed to use reasonable efforts to solicit offers to
purchase the Notes. None of the Agents will be obligated to purchase Notes for
their own accounts. The Notes are being sold pursuant to a Distribution
Agreement, dated April ___, 1995 (the "Distribution Agreement"), among the
Company and the Agents, and will be issued pursuant to an Indenture, dated as of
August 15, 1989 as amended and restated as of August 15, 1990 (the "Indenture"),
between the Company and Citibank, N.A., as trustee (the "Trustee"). The Notes
will rank equally with all other unsecured and unsubordinated indebtedness of
the Company and will have been registered with the Securities and Exchange
Commission (the "Commission"). The Notes may be denominated in U.S. dollars, or
in such foreign currencies or currency units as may be designated by the
Company. The Notes are to be offered in an aggregate principal amount of up to
U.S. $200,000,000 (or the equivalent thereof if any of the Notes is denominated
in foreign currency or currency units).
Administrative and record-keeping responsibilities will be handled for the
Company by its Treasury and Finance Department. The Company will advise the
Agents in writing of those persons handling administrative responsibilities with
whom the Agents are to communicate regarding offers to purchase Notes and the
details of their delivery. Administrative procedures and certain terms of the
offering are explained below. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned thereto in the Distribution
Agreement, the Prospectus or the Indenture.
CERTAIN TERMS OF THE OFFERING
Notes will be issued only in fully registered form and will be represented
by either a global certificate (a "Global Certificate") delivered to Citibank,
N.A. as custodian for the Depository Trust Company (the "Depositary"), with
ownership of beneficial interests in such Global Certificates recorded in the
book-entry system maintained by the Depositary (a "Book-Entry Note") or a
certificate (a "Definitive Certificate") delivered to a person designated by an
Agent.
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Citibank, N.A., in addition to acting as Trustee, will act as Exchange Rate
Agent, Paying Agent, Calculation Agent and Security Registrar for the Company,
in each case, under the Indenture (in any of the foregoing capacities, as
applicable, "Citibank").
Part I contains provisions common to Book-Entry and Certificated Notes.
Part II contains provisions specific to Certificated Notes and Part III contains
provisions specific to Book-Entry Notes. To the extent the procedures set forth
below conflict with the provisions of the Notes, the Indenture or the
Distribution Agreement, the terms and provisions of the Notes, the Indenture and
the Distribution Agreement shall prevail. Unless otherwise defined herein,
terms defined in the Indenture or the Notes shall be used herein as therein
defined.
PART I: GENERAL
PRICE TO PUBLIC
Each Note will be issued at or above par.
DENOMINATIONS
The minimum denomination of the Notes will be $1,000 and in denominations
of integral multiples of $1,000 in excess thereof.
ISSUE DATE
Each Note will be dated the date of its authentication. Each Note will
also bear an original issue date (the "Issue Date") which, with respect to any
Note (or portion thereof), shall mean the date of its original issuance and
shall be specified therein. The Issue Date shall remain the same for all Notes
subsequently issued upon transfer, exchange or substitution of a Note,
regardless of their dates of authentication.
MATURITIES
Each Note will mature on a Business Day, selected by the purchaser and
agreed to by the Company, which will be at least nine months after the Issue
Date. Each Floating Rate Note (as defined below) will mature on an Interest
Payment Date (as defined below) for such Note.
INTEREST PAYMENT
Each interest bearing Note will bear interest from and including its Issue
Date, or in the case of Notes issued upon transfer or exchange, from the most
recent Interest Payment Date to which interest has been paid or provided for, to
but excluding the relevant Interest Payment Date or the maturity date of such
Note. Interest payments, if any, will be the amount of interest accrued from
and including the next preceding
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Interest Payment Date in respect of which interest has been paid or duly
provided for, or from and including the date of issue, if no interest has been
paid with respect to such Note, to but excluding the applicable Interest Payment
Date. However, in the case of Floating Rate Notes on which the interest rate is
reset daily or weekly, the interest payments (other than payments on any date on
which principal is payable) will include interest accrued from but excluding the
second preceding Regular Record Date, or from and including the date of issue,
if no interest has been paid with respect to such Note, through and including
the Regular Record Date next preceding the applicable Interest Payment Date,
except that interest paid at Maturity will include interest accrued to but
excluding such date. Each Note will bear interest (i), in the case of Notes
bearing interest at a Fixed Rate (the "Fixed Rate Notes"), at the annual rate
stated on the face thereof, payable semi-annually in arrears on June 15 and
December 15 unless otherwise specified in the related pricing supplement to the
Prospectus Supplement (the "Pricing Supplement") (each an "Interest Payment
Date" with respect to such Fixed Rate Note) and at maturity and (ii), in the
case of Notes bearing interest at a rate or rates determined by reference to an
interest rate formula (the "Floating Rate Notes"), at a rate determined pursuant
to the formula stated on the face thereof, payable in arrears on such dates as
are specified therein and in the Pricing Supplement (each such date an "Interest
Payment Date" with respect to such Floating Rate Note). In addition, a Floating
Rate Note may bear interest at the lowest or highest or average of two or more
interest rate formulae. Interest (including payments for partial periods) will
be calculated and paid (a) in the case of Fixed Rate Notes on the basis of a
360-day year of 12 30-day months, (b) in the case of Floating Rate Notes whose
interest formula is based on the Treasury Rate or the Prime Rate on the basis of
the actual number of days in the year divided by 365 or 366, as the case may be,
and (c) in the case of Floating Rate Notes whose interest formula is based on
the Commercial Paper Rate, the LIBOR Rate, the Federal Funds Rate, or on the CD
Rate, on the basis of the actual number of days in the year divided by 360.
Interest will be payable (a) in the case of Fixed Rate Notes, to the person in
whose name the Note is registered at the close of business on the June 1 or
December 1 (the Regular Record Dates with respect to Fixed Rate Notes) next
preceding the Interest Payment Date, unless otherwise specified in the Pricing
Supplement, and (b) in the case of Floating Rate Notes, to the person in whose
name the Note is registered at the close of business on the dates established on
the Issue Date and set forth in each such Note and in the applicable Pricing
Supplement (the Regular Record Dates with respect to Floating Rate Notes);
PROVIDED, HOWEVER, that interest payable on a maturity date will be payable to
the person to whom principal shall be payable. Unless otherwise set forth in
the applicable Prospectus Supplement, the first payment of interest on any Note
originally issued between a Regular Record Date and an Interest Payment Date
will be made on the Interest Payment Date following the next succeeding Regular
Record Date. With respect to Fixed Rate Notes, each payment of interest shall
include interest accrued to but excluding the date of such payment. For special
provisions relating to Floating Rate Notes, see the section entitled
"Description of the Medium-Term Notes" in the Prospectus Supplement relating to
the Notes, dated December 2, 1993, attached hereto and hereinafter referred to
as the "Prospectus Supplement". Except in the case of Book-Entry Notes, all
interest payments (excluding interest payments made at maturity) will be made by
check mailed to the person
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entitled thereto as provided above. All interest payments on any Book-Entry
Note will be made to the Depositary, or its nominee, as Noteholder thereof, in
accordance with arrangements then in effect between the Trustee and the
Depositary.
TRUSTEE AND CITIBANK NOT TO RISK FUNDS
Nothing herein shall be deemed to require the Trustee or Citibank to risk
or expend its own funds in connection with any payment to the Company, or the
Agents, or the Depositary, or any Noteholder, it being understood by all parties
that payments made by the Trustee or Citibank to either the Company, or the
Agents, or the Depositary, or any Noteholder shall be made only to the extent
that funds are provided to the Trustee for such purpose.
ADVERTISING COSTS
The Company will determine with the Agents the amount of advertising that
may be appropriate in offering the Notes. Advertising expenses approved in
advance by the Company will be paid by the Company.
BUSINESS DAY
"Business Day" means any day, other than a Saturday or Sunday, that meets
each of the following applicable requirements: the day is (a) not a day on which
banking institutions are authorized or required by law or regulation to be
closed in The City of New York, (b) if the Note is denominated in a Specified
Currency other than the European Currency Unit as defined and revised from time
to time by the Council of the European Communities ("ECU") or United States
dollars, not a day on which banking institutions are authorized or required by
law or regulation to close in the financial center of the country issuing the
Specified Currency, (c) if the Note is denominated in ECU, any day that is
designated as an ECU settlement day by the ECU Banking Association in Paris or
otherwise generally regarded in the ECU interbank market as a day on which
payments in ECU are made, and (d) with respect to LIBOR Notes, a London Banking
Day. "London Banking Day" means any day on which dealings in deposits in United
States dollars are transacted in the London interbank market.
PROCEDURES FOR ESTABLISHING THE TERMS OF THE NOTES
The Company and the Agents will discuss from time to time the Issue Date,
maturity date, interest rates, and other provisions of the Notes that may be
sold as a result of the solicitation of offers by the Agents. If the Company
decides to post rates and a decision has been reached to change interest rates,
the Company will promptly notify each Agent. Each Agent will forthwith suspend
solicitation of purchases. At that time, the Agents will recommend and the
Company will establish rates to be so "posted". Following establishment of
posted rates and prior to the filing or mailing described in the following
sentence, the Agents may only record indications of interest in purchasing Notes
at the posted rates. If the Company accepts an offer at the posted rates, it
will prepare a Pricing Supplement reflecting the terms of such offer and will
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arrange to have such Pricing Supplement electronically filed with the Commission
in accordance with the applicable paragraph of Rule 424(b) under the Act and
Rule 101(a) of Regulation S-T, and will supply at least 10 copies of the Pricing
Supplement to the Agent who presented such offer (the "Presenting Agent"). No
settlements may occur prior to such mailing or filing and the Agents will not,
prior to such mailing or filing, mail confirmations to customers who have
offered to purchase Notes at the posted rates. The Company will not offer Notes
denominated in a foreign currency unless it has received confirmation from the
Trustee that the Trustee will be able to perform its duties in respect of such
Notes, and that the Trustee has had sufficient time to make the necessary
arrangements.
Outdated Pricing Supplements and copies of the Prospectus to which they are
attached (other than those retained for files) will be destroyed.
SUSPENSION OF SOLICITATION; AMENDMENT OR SUPPLEMENT
As provided in the Distribution Agreement, the Company may suspend
solicitation of purchases at any time and, upon receipt of at least one Business
Day's prior notice from the Company, the Agents will each forthwith suspend
solicitation until such time as the Company has advised them that solicitation
of purchases may be resumed.
If the Agents receive the notice from the Company contemplated by Section
5(b) of the Distribution Agreement, they will promptly suspend solicitation and
will only resume solicitation as provided in the Distribution Agreement. If the
Company decides to amend or supplement the Registration Statement or the
Prospectus relating to the Notes, it will promptly advise each Agent and will
furnish each Agent with the proposed amendment or supplement in accordance with
the terms of the Distribution Agreement. The Company will promptly file or mail
to the Commission for filing such amendment or supplement, provide the Agents
with copies of any such amendment or supplement, confirm to the Agents that such
amendment or supplement has been filed with the Commission and advise the Agents
that solicitation may be resumed.
Any such suspension shall not affect the Company's obligations under the
Distribution Agreement; and in the event that at the time the Company suspends
solicitation of purchases there shall be any offers already accepted by the
Company outstanding for settlement, the Company will have the sole
responsibility for fulfilling such obligations. The Company will in addition
promptly advise the Agents and the Trustee if such offers are not to be settled
and if copies of the Prospectus as in effect at the time of the suspension may
not be delivered in connection with the settlement of such offers.
ACCEPTANCE OF OFFERS
Each Agent will promptly advise the Company, orally or in writing, of each
reasonable offer to purchase Notes received by it, other than those rejected by
such Agent. Each Agent may, in its discretion reasonably exercised, without
notice to the
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Company, reject any offer received by it, in whole or in part. The Company will
have the sole right to accept offers to purchase Notes and may reject any such
offer, in whole or in part. If the Company rejects an offer, the Company will
promptly notify the Agent involved.
DELIVERY OF PROSPECTUS
A copy of the Prospectus as most recently amended or supplemented on the
date of delivery thereof (except as provided below) must be delivered to a
purchaser prior to or together with the earlier of the delivery of (i) the
written confirmation provided for above, and (ii) any Note purchased by such
purchaser. The Company shall ensure that the Presenting Agent receives copies
of the Prospectus and each amendment or supplement thereto (including
appropriate pricing supplements) in such quantities and within such time limits
as will enable the Presenting Agent to deliver such confirmation or Note to a
purchaser as contemplated by these procedures and in compliance with the
preceding sentence. If, since the date of acceptance of a purchaser's offer,
the Prospectus shall have been supplemented solely to reflect any sale of Notes
on terms different from those agreed to between the Company and such purchaser
or a change in posted rates not applicable to such purchaser, such purchaser
shall not receive the Prospectus as supplemented by such new supplement, but
shall receive the Prospectus as supplemented to reflect the terms of the Notes
being purchased by such purchaser and otherwise as most recently amended or
supplemented on the date of delivery of the Prospectus.
DETERMINATION OF SETTLEMENT DATE
All offers accepted by the Company will be settled no later than the fifth
Business Day next succeeding the date of acceptance unless otherwise agreed by
any purchaser and the Company. The settlement date shall be specified upon
receipt of an offer.
PART II: CERTIFICATED NOTES
SETTLEMENT DATE
The Company will instruct, by telephone and telecopy or other acceptable
means, the Trustee to authenticate and deliver the Notes no later than 2:15
P.M., New York City time, on the settlement date. Such instructions will be
given by the Company no later than 3:00 P.M., New York City time, on the
Business Day prior to the settlement date unless the settlement date is the date
of acceptance by the Company of the offer to purchase the Notes, in which case
such instructions will be given by the Company by 10:00 A.M., New York City
time.
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DETAILS FOR SETTLEMENT
For each offer accepted by the Company, the Presenting Agent shall
communicate to the Company's Treasury and Finance Department by telephone,
facsimile transmission or other acceptable means the following information (the
"Purchase Information"):
1. Exact name in which the Note or Notes are to be registered
("registered owner").
2. Exact address of registered owner and, if different, the address for
payment of principal and interest.
3. Taxpayer identification number of registered owner.
4. Principal amount of each Note in authorized denominations to be
delivered to registered owner.
5. Currency or currency unit of such principal amount.
6. The issue price, interest rate, if fixed or, if floating, the initial
interest rate, the interest rate basis, the spread or spread
multiplier, the maximum or minimum interest rates, if any, the index
maturity, the Interest Reset Dates and the Interest Payment Dates (as
such terms are defined in the Prospectus Supplement) of Notes, and all
other items necessary to complete a Note.
7. Maturity date of Notes.
8. Issue date of Notes.
9. Settlement date for Notes.
10. Presenting Agent's commission (to be paid by the Company upon
settlement).
11. Terms of redemption and Redemption Date, if any.
12. Net proceeds to the Company.
The Issue Date of, and the settlement date for, Notes will be the same.
Before accepting any offer to purchase Notes to be settled in less than three
Business Days, the Company shall verify that the Trustee will have adequate time
to prepare and authenticate the Notes.
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After receiving the details for each offer from the Presenting Agent, the
Company will, after recording the details and any necessary calculations,
communicate the Purchase Information by telephone and facsimile transmission or
other acceptable means, to the Trustee. The Company will identify in writing to
the Trustee officers of the Company who are authorized to provide such details
for each such offer to the Trustee.
SETTLEMENT; NOTE DELIVERIES AND CASH PAYMENT
Upon the receipt of appropriate documentation and instructions from the
Company, the Trustee will cause the Notes to be prepared and authenticated.
The Trustee will deliver the Notes, in accordance with instructions from
the Company, to the Presenting Agent, as the Company's agent, for the benefit of
the purchaser. The Agent shall make payment in immediately available funds
directly to the account of the Company in an amount equal to the face amount of
the Notes.
The Presenting Agent, as the Company's agent, will deliver the Notes (with
the written confirmation provided for above) to the purchaser thereof against
payment by such purchaser in immediately available funds. Delivery of any
confirmation or Note will be made in compliance with "Delivery of Prospectus"
above.
FAILS
In the event that a purchaser shall fail to accept delivery of and make
payment for a Note on the settlement date, the Presenting Agent will notify the
Trustee and the Company, by telephone or other acceptable means. If the Note
has been delivered to the Presenting Agent, as the Company's agent, the
Presenting Agent shall return such Note to the Trustee. If funds have been
advanced for the purchase of such Note, the Trustee will, immediately upon
receipt of such Note, confirm receipt to the Company and the Company shall
refund the payment previously made by the Presenting Agent in immediately
available funds. Such payments will be made on the settlement date, if
possible, and in any event not later than the Business Day following the
settlement date. If such fail shall have occurred for any reason other than the
failure of the Presenting Agent to provide the Purchase Information to the
Company or to provide a confirmation to the purchaser, the Company will
reimburse the Presenting Agent on an equitable basis for its loss of the use of
funds during the period when they were credited to the account of the Company.
Immediately upon receipt of the Note in respect of which the fail occurred,
the Trustee will cause the Security Registrar to make appropriate entries to
reflect the fact that the Note was never issued and will destroy the Note.
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PAYMENT OF INTEREST
On the fifth Business Day immediately preceding each Interest Payment Date,
the Trustee will furnish the Company with the total amount of the interest
payments to be paid on the Certificated Notes on such Interest Payment Date.
The Trustee will provide monthly to the Company's Treasury and Finance
Department a list of the principal and interest to be paid on Certificated Notes
maturing in the next succeeding month, to the extent then known. The Trustee
will assume responsibility for withholding taxes on interest paid as required by
law.
MATURITY
Upon presentation of each Certificated Note at maturity the Trustee (or any
duly appointed Paying Agent) will pay the principal amount thereof, together
with accrued interest due at maturity out of immediately available funds
provided by the Company. Such payment shall be made in immediately available
funds to the holder of the Note, provided that the Note is presented to the
Trustee (or any such Paying Agent) in time for the Trustee (or such Paying
Agent) to make payments in such funds in accordance with its normal procedures.
The Company will provide the Trustee (and any such Paying Agent) with funds
available for immediate use for such purpose. Notes presented at maturity will
be cancelled by the Trustee as provided in the Indenture.
AUTHENTICITY OF SIGNATURES
The Company will cause the Trustee to furnish the Agents from time to time
with the specimen signatures of each of the Trustee's officers, employees or
agents who have been authorized by the Trustee to authenticate Notes, but the
Agents will have no obligation or liability to the Company or the Trustee in
respect of the authenticity of the signature of any officer, employee or agent
of the Company or the Trustee on any Note.
PART III: BOOK-ENTRY NOTES
An owner of a Book-Entry Note will not be entitled to receive a certificate
representing such Note. In connection with the qualification of the Book-Entry
Notes for eligibility in the book-entry system maintained by the Depositary,
Citibank will perform the custodial, document control and administrative
functions described below, in accordance with its respective obligations under a
Letter of Representations (the "Letter of Representations") from the Company and
Citibank to the Depositary and a Medium-Term Note Certificate Agreement (the
"Certificate Agreement") between Citibank and the Depositary, and its
obligations as a participant in the Depositary, including the Depositary's
Same-Day Funds Settlement system ("SDFS").
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ISSUANCE
On any date of settlement (as defined under "settlement" below) for one or
more Book-Entry Notes, the Company will issue a Global Certificate or
Certificates in fully registered form without coupons representing in each case
not in excess of $150,000,000 principal amount of all of such Book-Entry Notes
that have the same interest rate, Stated Maturity and terms. Each Global
Certificate will be dated and issued as of the date of its authentication by
Citibank as Trustee. No Global Certificate will represent any Certificated
Note.
IDENTIFICATION NUMBERS
The Company will arrange, on or prior to the commencement of a program for
the offering of Book-Entry Notes, with the CUSIP Service Bureau of Standard &
Poor's Corporation (the "CUSIP Service Bureau") for the reservation of a series
of CUSIP numbers (including tranche numbers), consisting of approximately 900
CUSIP numbers relating to Global Certificates representing the Book-Entry Notes.
The Company will obtain from the CUSIP Service Bureau a written list of such
series of reserved CUSIP numbers and will deliver such list to Citibank and the
Depositary. Citibank will assign CUSIP numbers to Global Certificates as
described below under Settlement Procedure "B". The Depositary will notify the
CUSIP Service Bureau periodically of the CUSIP numbers that the Company has
assigned to Global Certificates. Citibank will notify the Company at any time
when fewer than 100 of the reserved CUSIP numbers remain unassigned to Global
Certificates, and if it deems it necessary, the Company will reserve additional
CUSIP numbers for assignment to Global Certificates representing Book-Entry
Notes. Upon obtaining such additional CUSIP numbers, the Company shall deliver
a list thereof to Citibank and the Depositary.
REGISTRATION
Each Global Certificate will be registered in the name of Cede & Co., as
nominee for the Depositary, on the Securities Register maintained under the
Indenture governing such Global Certificate. The beneficial owner of a
BookEntry Note (or one or more indirect participants in the Depositary
designated by such owner) will designate one or more participants in the
Depositary (with respect to such Note, the "Participants") to act as agent or
agents for such owner in connection with the book-entry system maintained by the
Depositary, and the Depositary will record in book-entry form, in accordance
with instructions provided by such Participants, a credit balance with respect
to such Note in the account of such Participants. The ownership interest of
such beneficial owner in such Note will be recorded through the records of such
Participants or through the separate records of such Participants and one or
more indirect participants in the Depositary. So long as Cede & Co. is the
registered owner of a Global Certificate, the Depositary will be considered the
sole owner and holder of the Book-Entry Notes represented by such Global
Certificate for all purposes under the Indenture.
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TRANSFERS
Transfers of a Book-Entry Note will be accomplished by book entries made by
the Depositary and, in turn, by Participants (and in certain cases, one or more
indirect participants in the Depositary) acting on behalf of beneficial
transferors and transferees of such Note.
CONSOLIDATION AND EXCHANGE
Citibank may deliver to the Depositary and the CUSIP Service Bureau at any
time a written notice of consolidation specifying (i) the CUSIP numbers of two
or more Outstanding Global Certificates that represent Book-Entry Notes having
the same interest rate, Stated Maturity and tenor and for which interest has
been paid to the same date, (ii) a date, occurring at least thirty days after
such written notice is delivered and at least thirty days before the next
Interest Payment Date for such Book-Entry Notes, on which such Global
Certificates shall be exchanged for a single replacement Global Certificate and
(iii) a new CUSIP number, obtained from the Company, to be assigned to such
replacement Global Certificate. Upon receipt of such a notice, the Depositary
will send to its participants (including Citibank) a written reorganization
notice to the effect that such exchange will occur on such date. Prior to the
specified exchange date, Citibank will deliver to the CUSIP Service Bureau a
written notice setting forth such exchange date and the new CUSIP number and
stating that, as of such exchange date, the CUSIP numbers of the Global
Certificates to be exchanged will no longer be valid. On the specified exchange
date, Citibank will exchange such Global Certificates for a single Global
Certificate bearing the new CUSIP number and new Issue Date, which shall be the
most recent Interest Payment Date to which interest has been paid or duly
provided for on the predecessor Global Certificates, and the CUSIP numbers of
the exchanged Global Certificates will, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. Notwithstanding the
foregoing, if the Global Certificates to be exchanged exceed $150,000,000 in
aggregate principal amount, one Global Certificate will be authenticated and
issued to represent each $150,000,000 of principal amount of the exchanged
Global Certificates and an additional Global Certificate will be authenticated
and issued to represent any remaining principal amount of such Global
Certificates (see "Denominations" below).
DENOMINATIONS
Book-Entry Notes will be issued in principal amounts of $1,000 or any
amount in excess thereof that is an integral multiple of $1,000. Global
Certificates will be denominated in principal amounts not in excess of
$150,000,000. If one or more Book-Entry Notes having an aggregate principal
amount in excess of $150,000,000 would, but for the preceding sentence, be
represented by a single Global Certificate, then one Global Certificate will be
issued to represent $150,000,000 principal amount of such Book-Entry Note or
Notes and an additional Global Certificate will be issued to represent any
remaining principal amount of such Book-Entry Note or Notes. In such a case,
each of the Global Certificates representing such Book-Entry Note or Notes shall
be assigned the same CUSIP number.
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INTEREST
Standard & Poor's Corporation will use the information received in the
pending deposit message described under Settlement Procedure "C" below in order
to include the amount of any interest payable and certain other information
regarding the related Global Security in the appropriate weekly bond report
published by Standard & Poor's Corporation.
PAYMENTS OF PRINCIPAL AND INTEREST
PAYMENTS OF INTEREST ONLY. Promptly after each Regular Record Date,
Citibank will deliver to the Company and the Depositary a written notice
specifying by CUSIP number the amount of interest to be paid on each Global
Certificate on the following Interest Payment Date (other than an Interest
Payment Date coinciding with Maturity) and the total of such amounts. The
Depositary will confirm the amount payable on each Global Certificate on such
Interest Payment Date by reference to the daily bond reports published by
Standard & Poor's Corporation. The Company will pay to Citibank, as Paying
Agent, the total amount of interest due on such Interest Payment Date (other
than at Maturity), and Citibank will pay such amount to the Depositary at the
times and in the manner set forth below under "Manner of Payment".
PAYMENTS AT MATURITY. On or about the first Business Day of each month,
Citibank will deliver to the Company, the Depositary and the Trustee a written
list of principal and interest to be paid on each Global Certificate maturing in
the following month. The Company, Citibank and the Depositary will confirm the
amounts of such principal and interest payments with respect to each such Global
Certificate on or about the fifth Business Day preceding the Maturity of such
Global Certificate. The Company will pay to Citibank as the Paying Agent, the
principal amount of such Global Certificate, together with interest due at such
Maturity and Citibank will pay such amount to the Depositary at the times and in
the manner set forth below under "Manner of Payment".
Promptly after payment to the Depositary of the principal and interest due
at the Maturity of such Global Certificate, Citibank will cancel such Global
Certificate and deliver it to the Company. Citibank will from time to time, on
request by the Trustee, deliver to the Trustee a written statement indicating
the total principal amount of outstanding Global Certificates for which it
serves as Trustee as of the immediately preceding Business Day.
MANNER OF PAYMENT. The total amount of any principal and/or interest due
on Global Certificates on any Interest Payment Date or at Maturity shall be paid
by the Company to Citibank in funds available for use by Citibank as of 9:30
A.M. (New York City time) on such date. The Company will make such payment on
such Global Certificates by instructing Citibank to withdraw funds from an
account maintained by the Company at Citibank, N.A. The Company will confirm
such instruction in writing to Citibank. Citibank will forward to the Company
an appropriate debit advice. Prior to
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10:00 A.M. (New York City time) on such date or as soon as possible thereafter,
Citibank will make such payments to the Depositary in same day funds in
accordance with the payment provisions contained in the Letter of
Representations. The Depositary will allocate such payments to its Participants
in accordance with its existing operating procedures. NONE OF THE COMPANY, THE
TRUSTEE NOR CITIBANK SHALL HAVE ANY RESPONSIBILITY OR LIABILITY FOR THE PAYMENT
BY THE DEPOSITARY TO SUCH PARTICIPANTS OF THE PRINCIPAL OF AND INTEREST ON THE
BOOK-ENTRY NOTES.
WITHHOLDING TAXES. The amount of any taxes required under applicable law
to be withheld from any interest payment on a Book-Entry Note will be determined
and withheld by the Participant, indirect participant in the Depositary or other
Person responsible for forwarding payments and materials directly to the
beneficial owner of such Note.
SETTLEMENT
The receipt by the Company of immediately available funds in payment for a
Book-Entry Note and the authentication and issuance of the Global Certificate
representing such Note shall constitute "settlement" with respect to such
Book-Entry Note. All orders accepted by the Company will be settled on the next
Business Day pursuant to the timetable for settlement set forth below unless the
Company and the purchaser agree to settlement on a later date.
SETTLEMENT PROCEDURES
Settlement Procedures with regard to each Global Certificate sold by the
Company through an Agent, as agent, shall be as follows:
A. Such Agent will advise the Company by telephone of the Purchase
Information with respect to each Book-Entry Note which will be represented by
the Global Certificate which is to be issued.
B. The Company will advise Citibank by telephone (confirmed in writing at
any time on the same date) or electronic transmission of the information set
forth in Settlement Procedure "A" above and the name of such Agent. Each such
communication by the Company shall constitute a representation and warranty by
the Company to Citibank, the Trustee and each Agent that (i) such Global
Certificate is then, and at the time of issuance and sale thereof will be, duly
authorized for issuance and sale by the Company, (ii) such Global Certificate
will conform with the terms of the Indenture pursuant to which such Global
Certificate is issued and (iii) upon authentication and delivery of such Global
Certificate, the aggregate initial offering price of all Notes issued under the
Indenture will not exceed $301,627,000 (except for Book-Entry Notes represented
by Global Certificates authenticated and delivered in exchange for or in lieu of
Global Certificates pursuant to Section 304, 305, 306 or 906 of the Indenture
and except for Certificated Notes authenticated and delivered upon registration
of, transfer of, in exchange for, or in lieu of Certificated Notes pursuant to
any such Section).
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C. Citibank will assign a CUSIP number to such Global Certificate and
advise the Company by telephone of such CUSIP number. Citibank will enter a
pending deposit message through the Depositary's Participant Terminal System,
providing the following settlement information to the Depositary (which will
provide such information to Standard & Poor's Corporation), such Agent, and,
upon request, the Trustee under the Indenture pursuant to which each Book-Entry
Note which is represented by the Global Certificate which is to be issued:
1. The information set forth in Settlement Procedure "A".
2. Initial Interest Payment Date for such Book-Entry Note, number of days
by which such date succeeds the related Regular Record Date (which, in
the case of Floating Rate Notes which reset daily or weekly, shall be
the date 5 calendar days immediately preceding the applicable Interest
Payment Date, and in the case of all other Notes shall be the Regular
Record Date as defined in the Note) and amount of interest payable on
such Interest Payment Date.
3. CUSIP number of the Global Certificate representing such Book-Entry
Note.
4. Whether such Global Certificate will represent any other Book-Entry
Note (to the extent known at such time).
D. The Trustee will complete the first page of the preprinted 4-ply note
packet, the form of which was previously approved by the Company, the Agents and
the Trustee.
E. The Trustee, as Trustee, will authenticate the Global Certificate.
F. The Depositary will credit each Book-Entry Note represented by the
Global Certificate to be issued to Citibank's participant account at the
Depositary.
G. Citibank will enter an SDFS deliver order through the Depositary's
Participant Terminal System, with respect to each Book-Entry Note represented by
the Global Certificate to be issued, instructing the Depositary to (i) debit
such Book-Entry Note to Citibank's participant account and credit such BookEntry
Note to such Agent's participant account and (ii) debit such Agent's settlement
account and credit Citibank's settlement account for an amount equal to the
price of such Book-Entry Note less such Agent's commission. The entry of such a
deliver order shall constitute a representation and warranty by Citibank to the
Depositary that (i) the Global Certificate representing such Book-Entry Note has
been issued and authenticated and (ii) Citibank is holding such Global
Certificate pursuant to the Certificate Agreement.
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H. The Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System, with respect to each Book-Entry Note represented by
the Global Certificate to be issued, instructing the Depositary (i) to debit
such Book-Entry Note to such Agent's participant account and credit such
Book-Entry Note to the participant account of the Participant with respect to
such Book-Entry Note and (ii) to debit the settlement account of such
Participant and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Note.
I. Transfers of funds in accordance with SDFS deliver orders described in
Settlement Procedures "G" and "H" will be settled in accordance with SDFS Paying
Agent Operating Procedures (as defined in the Letter of Representations) in
effect on the settlement date.
J. Citibank will credit to an account of the Company maintained at
Citibank, N.A. funds available for immediate use in the amount transferred to
Citibank in accordance with Settlement Procedure "G".
K. Citibank, N.A., as custodian for the Depositary, will hold the Global
Certificate pursuant to the Certificate Agreement. Citibank will deliver the
yellow stub of the packet for the Global Certificate to the Trustee and will
send the pink stub to the Company by first-class mail. Upon written request,
Citibank will deliver the blue stub to such Agent. Periodically, Citibank will
send to the Company a statement setting forth the principal amount of Book-Entry
Notes and Global Certificates outstanding as of that date under the Indenture
and setting forth a brief description of any sales of which the Company has
advised Citibank but which have not yet been settled.
L. Such Agent will deliver to the purchaser a copy of the most recent
Prospectus applicable to the Notes with or prior to any written offer of Notes
and the confirmation and payment by the purchaser of the Note.
Such Agent will confirm the purchase of each BookEntry Note to the
purchaser either by transmitting to the Participant with respect to such
Book-Entry Note a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
SETTLEMENT PROCEDURES TIMETABLE
For orders of Book-Entry Notes solicited by an Agent, as agent, and
accepted by the Company for settlement on the first Business Day after the sale
date, Settlement Procedures "A" through "L" set forth above shall be completed
as soon as possible but not later than the respective times (New York City time)
set forth below:
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SETTLEMENT
PROCEDURE TIME
A-B 11:00 A.M. on the sale date
C 2:00 P.M. on the sale date
D 3:00 P.M. on day before settlement date
E 9:00 A.M. on settlement date
F 10:00 A.M. on settlement date
G-H 2:00 P.M. on settlement date
I 4:45 P.M. on settlement date
J-L 5:00 P.M. on settlement date
If a sale is to be settled more than one Business Day after the sale date,
Settlement Procedures "A", "B" and "C" shall be completed as soon as practicable
but no later than 11:00 A.M. and 2:00 P.M., as the case may be, on the first
Business Day after the sale date. In connection with a sale which is to be
settled more than one Business Day after the sale date, if the initial interest
rate for a Floating Rate Note is not known at the time that Settlement Procedure
"A" is completed, Settlement Procedures "B" and "C" shall be completed as soon
as such rates have been determined, but no later than 11:00 a.m. and 2:00 p.m.,
respectively, on the second Business Day before the Settlement Date. Settlement
Procedure "I" is subject to extension in accordance with any extension of
Fedwire closing deadlines and in the other events specified in the SDFS
operating procedures in effect on the settlement date.
If settlement of a Note is rescheduled or cancelled, Citibank will deliver
to the Depositary, through the Depositary's Participant Terminal System, a
cancellation message to such effect by no later than 2:00 p.m. on the Business
Day immediately preceding the scheduled settlement date.
FAILURE TO SETTLE
Prior to Citibank's entry of an SDFS deliver order with respect to a
Book-Entry Note pursuant to Settlement Procedure "G", Citibank, upon written
request of the Company, shall deliver through the Depositary's Participant
Terminal System, as soon as practicable, but not later than 2:00 p.m. on any
Business Day, a withdrawal message instructing the Depositary to debit such
Book-Entry Note to Citibank's participant account. The Depositary will process
the withdrawal message, provided that Citibank's participant account contains a
principal amount of the Global Certificate representing such Book-Entry Note
that is at least equal to the principal amount to be debited. If a withdrawal
message is processed with respect to all the Book-Entry Notes represented by a
Global Certificate, Citibank will mark such Global Certificate "Cancelled", make
appropriate entries in Citibank's records and send such cancelled Global
Certificate to the Company. The CUSIP number assigned to such Global
Certificate shall, in accordance with CUSIP Service Bureau procedures, be
cancelled and not immediately reassigned. If a withdrawal message is processed
with respect to one or more, but not all, of the Book-Entry Notes represented by
a Global Certificate,
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Citibank will exchange such Global Certificate for two Global Certificates, one
of which shall represent such Book-Entry Note or Notes and shall be cancelled
immediately after issuance and the other of which shall represent the other
Book-Entry Notes previously represented by the surrendered Global Certificate
and shall bear the CUSIP number of the surrendered Global Certificate.
If the purchase price for any Book-Entry Note is not timely paid to the
Participant with respect to such Note by the beneficial purchaser thereof (or a
Person, including an indirect participant in the Depositary, acting on behalf of
such purchaser), such Participant and, in turn, the Agent for such Note may
enter a deliver order through the Depositary's Participant Terminal System
debiting such Note to such Agent's participant account and crediting such Note
free to the participant account of Citibank and shall notify Citibank and the
Company thereof. Thereafter, Citibank (i) will immediately notify the Company
thereof, once Citibank has confirmed that such Note has been credited to its
participant account, and the Company shall immediately transfer by Fedwire (in
immediately available funds) to such Agent an amount equal to the price of such
Note which was previously transferred to the account of the Company maintained
at Citibank, N.A. in accordance with Settlement Procedure and (ii) Citibank will
deliver the withdrawal message and take the related actions described in the
preceding paragraph. The Agent will not be entitled to any commission with
respect to any Note which the purchaser does not accept and make payment for.
Such debits and credits will be made on the Settlement Date, if possible, and in
any event not later than 5:00 p.m. on the following Business Day. If such
failure shall have occurred for any reason other than failure by the applicable
Agent to perform its obligations hereunder or under the Distribution Agreement,
the Company will reimburse such Agent on an equitable basis for its loss of the
use of funds during the period when the funds were credited to the account of
the Company.
Notwithstanding the foregoing, upon any failure to settle with respect to a
Book-Entry Note, the Depositary may take any actions in accordance with its SDFS
operating procedures then in effect. In the event of a failure to settle with
respect to one or more, but not all, of the Book-Entry Notes to have been
represented by a Global Certificate, Citibank will provide, in accordance with
Settlement Procedures "D" and "E", for the authentication and issuance of a
Global Certificate representing the other Book-Entry Notes to have been
represented by such Global Certificate and will make appropriate entries in its
records.
-17-
<PAGE>
ANNEX B
Ashland Inc.
TERMS AGREEMENT
April ___, 1995
CS First Boston Corporation
Park Avenue Plaza
55 East 52nd Street
New York, N.Y. 10055
Salomon Brothers Inc
Seven World Trade Center
New York, N.Y. 10048
Citicorp Securities, Inc.
399 Park Avenue
New York, N.Y. 10043
Ladies and Gentlemen:
Ashland Inc. (the "Company") proposes, subject to the terms and conditions
stated herein and in the Distribution Agreement, dated April ___, 1995 (the
"Distribution Agreement"), between the Company on the one hand and CS First
Boston Corporation, Salomon Brothers Inc and Citicorp Securities, Inc. (the
"Purchasers") on the other, to issue and sell to CS First Boston Corporation,
Salomon Brothers Inc and Citicorp Securities, Inc. the securities specified in
the Schedule hereto (the "Purchased Securities"). Each of the provisions of the
Distribution Agreement not specifically related to the solicitation by the
Agents, as the agents of the Company, of offers to purchase Securities is
incorporated herein by reference in its entirety, and shall be deemed to be part
of this Terms Agreement to the same extent as if such provisions had been set
forth in full herein. Nothing contained herein or in the Distribution Agreement
shall make any party hereto an agent of the Company or make such party subject
to the provisions therein relating to the solicitation of offers to purchase
securities from the Company, solely by virtue of its execution of this Terms
Agreement. Each of the representations and warranties set forth therein shall
be deemed to have been made at and as of the date of this Terms Agreement,
except that each representation and warranty in Section 4 of the Distribution
Agreement which makes reference to the Prospectus shall be deemed to be a
representation and
<PAGE>
warranty as of the date of this Terms Agreement in relation to the Prospectus as
amended and supplemented to relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to the Purchasers and the Purchasers agree to purchase from the
Company the Purchased Securities, at the time and place, in the principal amount
and at the purchase price set forth in the Schedule hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us the counterparts hereof, and upon acceptance hereof by you this
letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
ASHLAND INC.
By _________________________
Title:
Accepted:
CS FIRST BOSTON CORPORATION
By ________________________
Title:
SALOMON BROTHERS INC
By ________________________
Title:
CITICORP SECURITIES, INC.
By ________________________
Title:
-2-
<PAGE>
SCHEDULE TO ANNEX B
Title of Purchased Securities:
[ %] Medium-Term Notes
Aggregate Principal Amount:
$
[Price to Public:]
Purchase Price by [Name of Purchaser]:
% of the principal amount of the Purchased Securities, plus accrued
interest from to
Method of and Specified Funds for Payment of Purchase Price:
[By certified or official bank check or checks, payable to the order of the
Company, in [[New York] Clearing House] [immediately available] funds]
[By wire transfer to a bank account specified by the Company in [next day]
[immediately available] funds]]
Time of Delivery:
Closing Location:
Maturity:
Interest Rate:
[ %]
Interest Payment Dates:
[months and dates]
-3-
<PAGE>
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(1) The officers' certificate referred to in Section 6(c).]
[(2) The opinions referred to in Section 6(d).]
[(3) The opinion referred to in Section 6(e).]
[(4) The accountants' letter referred to in Section 6(f).]
Other Provisions (including Syndicate Provisions, if applicable):
-4-
<PAGE>
ANNEX C-1
FORM OF OPINION OF THOMAS L. FEAZELL, ESQ.
April ___, 1995
CS First Boston Corporation
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Citicorp Securities, Inc.
399 Park Avenue
New York, N.Y. 10043
Ladies and Gentlemen:
Re: Distribution Agreement by and between
CS First Boston Corporation, Salomon
Brothers Inc, Citicorp Securities, Inc. and Ashland Inc.
I am Senior Vice President, General Counsel and Secretary of Ashland Inc.,
a Kentucky corporation ("Ashland"), and as such I have acted as counsel for
Ashland in connection with the execution and delivery of a Distribution
Agreement dated April___, 1995 (the "Distribution Agreement") between you and
Ashland, providing for the issue and sale by Ashland of up to $200,000,000
aggregate principal amount of its Medium-Term Notes, Series G, Due Nine Months
or More from Date of Issue (the "Notes"), to be issued pursuant to the Indenture
dated as of August 15, 1989, as amended and restated as of August 15, 1990, (the
"Indenture"), between Ashland and Citibank, N.A., as Trustee.
In that connection, I have examined originals, or copies certified or
otherwise identified to my satisfaction, of such documents, corporate records
and other instruments as I have deemed necessary or appropriate for the purpose
of this opinion, including (a) the Second Restated Articles of Incorporation of
Ashland, as amended; (b) the By-laws of Ashland, as amended; (c) the
Registration Statement on Form S-3 (File No. 33-57011), as amended by Amendment
No. 1 and Post-Effective
<PAGE>
April ____, 1995 C-2
Page 2
Amendment No. 1 thereto (the "Registration Statement"), relating to $600,000,000
aggregate principal amount of securities of Ashland registered under the
Securities Act of 1933, as amended (the "Act"); (d) the prospectus dated April
___, 1995 and the prospectus supplement dated April ___, 1995 included in the
Registration Statement (such prospectus together with such prospectus supplement
(including all material incorporated by reference therein) as supplemented or
amended to the date hereof being hereinafter collectively called the "Final
Prospectus"); (e) the Distribution Agreement; (f) the Indenture; (g) the form of
the Notes; and (h) resolutions adopted by the Board of Directors of the Company
on November 3, 1994.
Based upon the foregoing, I am of the opinion that:
(a) Ashland has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the Commonwealth of Kentucky with
full corporate power and authority to own its properties and conduct its
business as described in the Final Prospectus[, and is duly qualified to do
business as a foreign corporation under the laws of each jurisdiction which
requires such qualification wherein it owns or leases material properties or
conducts material business except for any jurisdiction wherein failure to be so
qualified would not have a material adverse effect on the business, financial
condition or results of operations of Ashland and its subsidiaries, taken as a
whole.](1)
(b) Ashland's authorized equity capitalization is as set forth or
incorporated by reference in the Final Prospectus.
(c) The Indenture has been duly authorized, executed and delivered by
Ashland, and constitutes a legal, valid and binding instrument enforceable
against Ashland in accordance with its terms (subject to applicable bankruptcy,
reorganization, fraudulent transfers, insolvency, moratorium or other laws
relating to and affecting creditors' rights generally from time to time in
effect). The enforceability of Ashland's obligations is also subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(d) The Notes have been duly authorized and, when the terms of any Notes
have been established in accordance with the Indenture and have been executed,
authenticated, issued and delivered against payment therefor in accordance with
the provisions of the Indenture, will constitute legal, valid and binding
obligations of Ashland enforceable against Ashland in accordance with their
terms (subject to applicable bankruptcy, reorganization, fraudulent transfer,
insolvency, moratorium or
- -----------------------
(1) Language in brackets to be included only in opinion dated the date of
the Distribution Agreement.
<PAGE>
April ____, 1995 C-3
Page 3
other laws relating to and affecting creditors' rights generally from time to
time in effect) and will be entitled to the benefits of the Indenture. The
enforceability of Ashland's obligations is also subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
(e) To the best knowledge of the undersigned (i) there is no pending or
threatened action, suit or proceeding before any court or governmental agency,
authority or body or any arbitrator involving Ashland or any of its
subsidiaries, the probable outcome of which would have a material adverse effect
on the financial condition of Ashland and its subsidiaries taken as a whole and
which is not adequately disclosed in the Final Prospectus; (ii) there is no
franchise, contract or other document of a character required to be described in
the Registration Statements, as amended, or the Final Prospectus or to be filed
as an exhibit to the Registration Statements, as amended, which is not described
or filed as required; and (iii) the statements included or incorporated in the
Registration Statement, as amended, and the Final Prospectus describing any
legal proceedings or contracts or agreements relating to Ashland fairly
summarize such matters in accordance with the rules under the Act.
(f) The Registration Statement, as amended, has become effective under the
Act; to the best knowledge of the undersigned, no stop order suspending the
effectiveness of the Registration Statement, as amended, has been issued, no
proceedings for that purpose have been instituted or threatened, and the
undersigned has no reason to believe that any part of the Registration
Statement, as amended, (other than the Form T-1 and the financial statements
including the notes thereto and related schedules and other financial and
statistical data included therein or incorporated therein by reference, as to
which the undersigned expresses no opinion), when such part became effective or
was incorporated by reference into such Registration Statement, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading or that
the Final Prospectus (other than the financial statements, including the notes
thereto and related schedules and other financial and statistical data included
therein or incorporated therein by reference, as to which the undersigned
expresses no belief), includes any untrue statement of a material fact or omits
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(g) The Distribution Agreement has been duly authorized, executed and
delivered by Ashland.
(h) To the best knowledge of the undersigned, no consent, approval,
authorization or order of any court or governmental agency or body is required,
insofar
<PAGE>
April ____, 1995 C-4
Page 4
as the same may be applicable to Ashland, for the consummation of the
transactions contemplated in the Distribution Agreement, except such as have
been obtained under the Act and the Trust Indenture Act and such as may be
required under the blue sky laws of any jurisdiction in connection with the sale
of the Notes.
(i) Neither the issue and sale of the Notes, nor the consummation of any
other of the transactions contemplated in the Distribution Agreement nor the
fulfillment of the terms thereof will conflict with, result in a material breach
of, or constitute a material default under the Second Restated Articles of
Incorporation or By-laws of Ashland, both as amended, or the terms of any
indenture or other agreement or instrument known to the undersigned and to which
Ashland or any of its subsidiaries is a party or bound, or any order or
regulation known to the undersigned to be applicable to Ashland or any of its
subsidiaries of any court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over Ashland or any of its subsidiaries.
(j) No holders of securities of Ashland have rights to the registration of
such securities under the Registration Statement.
As to certain of the matters referred to in Paragraph (c), Paragraph (d),
Paragraph (e), Paragraph (f) and Paragraph (h) in the foregoing opinion, I have
relied upon the opinion or letter of Cravath, Swaine & Moore dated the date
hereof, a copy of which opinion or letter is attached hereto and the undersigned
believes that you and the undersigned are justified in relying on such opinion
or letter.
I am not a member of the bar of any states other than the Commonwealth of
Kentucky and the State of West Virginia and, accordingly, do not purport to be
an expert on matters of law outside of such jurisdictions. I have, however,
reviewed such of the laws of other jurisdictions as I have deemed necessary and
relevant regarding the matters referred to above which are governed by such law
and have no reason to believe that the opinions stated herein are not correct.
Very truly yours,
Thomas L. Feazell
Attachment
<PAGE>
ANNEX C-2-A
FORM OF OPINION OF
CRAVATH, SWAINE & MOORE
[date]
ASHLAND INC.
MEDIUM-TERM NOTES
Ladies and Gentlemen:
We have acted as counsel for Ashland Inc., a Kentucky corporation (the
"Company"), in connection with the execution and delivery of a Distribution
Agreement dated ____________, 1995 (the "Distribution Agreement"), between you
and the Company, providing for the issue and sale by the Company of up to
$200,000,000 aggregate principal amount of its Medium-Term Notes, Series G, Due
Nine Months or More from Date of Issue (the "Notes"), to be issued pursuant to
the Indenture dated as of August 15, 1989, as amended and restated as of August
15, 1990 (the "Indenture"), between the Company and Citibank, N.A., as Trustee.
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate records
and other instruments as we have deemed necessary or appropriate for the purpose
of this opinion, including (a) the Second Restated Articles of Incorporation of
the Company, as amended; (b) the By-laws of the Company, as amended; (c) the
Registration Statement on Form S-3 (No. 33-57011) filed with the Securities and
Exchange Commission (the "Commission"), as amended by Amendment No. 1 and
Post-Effective Amendment No. 1 thereto (the "Registration Statement"), relating
to $600,000,000 aggregate principal amount of securities of the Company
registered under the Securities Act of 1933, as amended (the "Act"); (d) the
Prospectus dated ____________, as supplemented by the Prospectus Supplement
dated ______________ (such Prospectus, including all material incorporated by
reference therein, and Prospectus Supplement being hereinafter collectively
called the "Final Prospectus"); (e) the Distribution Agreement; (f) the
Indenture; (g) the form of the Notes; and (h) certain resolutions adopted by the
Board of Directors of the Company on November 3, 1994.
Based on the foregoing, we are of opinion as follows:
(a) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the Commonwealth of Kentucky,
with full corporate power and authority to own its properties and conduct its
business as described in the Final Prospectus.
<PAGE>
(b) The Company's authorized equity capitalization is as set forth or
incorporated by reference in the Final Prospectus and the Notes conform to the
description thereof contained in the Final Prospectus.
(c) The Indenture has been duly authorized, executed and delivered by the
Company, has been duly qualified under the Trust Indenture Act of 1939, as
amended, and constitutes a legal, valid and binding instrument enforceable
against the Company in accordance with its terms (subject to applicable
bankruptcy, reorganization, fraudulent transfer, insolvency, moratorium and
other laws affecting creditors' rights generally from time to time in effect).
The enforceability of the Company's obligations is also subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(d) The Notes have been duly authorized and, when the terms of any Notes
have been established in accordance with the Indenture and when such Notes have
been executed, authenticated, issued and delivered against payment therefor in
accordance with the provisions of the Indenture, will constitute legal, valid
and binding obligations of the Company enforceable against the Company in
accordance with their terms (subject to applicable bankruptcy, reorganization,
fraudulent transfer, insolvency, moratorium and other laws affecting creditors'
rights generally from time to time in effect) and will be entitled to the
benefits of the Indenture. The enforceability of the Company's obligations is
also subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(e) The Distribution Agreement has been duly authorized, executed and
delivered by the Company.
(f) Neither the issue and sale of the Notes nor the consummation of any
other of the transactions contemplated in the Distribution Agreement nor the
fulfillment of the terms thereof will conflict with, result in a material breach
of, or constitute a material default under, the Second Restated Articles of
Incorporation or By-laws of the Company.
(g) To the best of our knowledge, no consent, approval, authorization or
order of any court or governmental agency or body is required, insofar as the
same may be applicable to the Company, for the consummation of the transactions
contemplated in the Distribution Agreement except such as have been obtained
under the Act and the Trust Indenture Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the sale of the Notes.
In rendering this opinion, we have relied, with your approval, as to
matters governed by the law of the Commonwealth of Kentucky on the opinion dated
today of Thomas L. Feazell, Esq., Senior Vice President, General Counsel and
Secretary of the Company.
-2-
<PAGE>
Thomas L. Feazell, Esq. and Citibank, N.A., as Trustee, are each entitled
to rely on this letter as fully as if this letter had been addressed to them
directly.
Very truly yours,
CS First Boston Corporation
Park Avenue Plaza
55 East 52nd Street
New York, NY 10055
Salomon Brothers Inc
Seven World Trade Center
New York, NY 10048
Citicorp Securities, Inc.
399 Park Avenue
7th Floor
New York, NY 10043
-3-
<PAGE>
ANNEX C-2-B
[date]
ASHLAND INC.
MEDIUM-TERM NOTES
Ladies and Gentlemen:
We have acted as counsel for Ashland Inc., a Kentucky corporation (the
"Company"), in connection with the execution and delivery of a Distribution
Agreement dated ____________, 1995, between you and the Company, providing for
the issue and sale by the Company of up to $200,000,000 aggregate principal
amount of its Medium-Term Notes, Series G, Due Nine Months or More from Date of
Issue, to be issued pursuant to the Indenture dated as of August 15, 1989, as
amended and restated as of August 15, 1990, between the Company and Citibank,
N.A, as Trustee.
In that capacity, we participated in conferences with certain officers of,
and with the accountants for, the Company concerning the preparation of (a) the
Registration Statement on Form S-3 (Registration No. 33-57011) filed with the
Securities and Exchange Commission (the "Commission"),as amended by Amendment
No. 1 and Post-Effective Amendment No. 1 thereto (such Registration Statement,
as amended, being hereinafter called the "Registration Statement"), for
registration of $600,000,000 aggregate principal amount of securities of the
Company under the Securities Act of 1933 (the "Securities Act"); and (b) the
Prospectus dated ________________, as supplemented by the Prospectus Supplement
dated ________________ (such Prospectus, including all material incorporated by
reference therein, and Prospectus Supplement being hereinafter collectively
called the "Final Prospectus"). Certain of the documents incorporated by
reference in the Registration Statement and Final Prospectus were prepared and
filed by the Company without our participation.
Although we have made certain inquiries and investigations in connection
with the preparation of the Registration Statement and the Final Prospectus, the
limitations inherent in the role of outside counsel are such that we cannot and
do not assume responsibility for the accuracy or completeness of the statements
made in the Registration Statement and Final Prospectus, except insofar as such
statements relate to us. Subject to the foregoing, we hereby advise you that
our work in connection with this matter did not disclose any information that
gave us reason to believe that: (i) the Registration Statement, the Final
Prospectus and each amendment or supplement thereto (except the financial
statements and other accounting or financial data included therein, as to which
we do not express any view) were not, as of their respective effective or issue
dates, appropriately responsive in all material respects to the requirements of
the Securities Act and the applicable rules and regulations of the
<PAGE>
Commission thereunder, or (ii) the Registration Statement, at the time the
Registration Statement became effective contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the Final
Prospectus or any amendment or supplement thereto, at the date hereof, include
or included an untrue statement of a material fact or omit or omitted to state a
material fact necessary in order to make the statements therein, in the light of
the circumstance under which they were made, not misleading (in each case except
for the financial statements and other accounting or financial data included
therein, as to which we do not express any view).
We are furnishing this letter to you, as Agents, solely for your benefit.
This letter is not to be used, circulated, quoted or otherwise referred to for
any other purposes.
Thomas L. Feazell, Esq. and Citibank, N.A., as Trustee, are each entitled
to rely on this letter as fully as if this letter had been addressed to them
directly.
Very truly yours,
CS First Boston Corporation
Park Avenue Plaza
55 East 52nd Street
New York, NY 10055
Salomon Brothers Inc
Seven World Trade Center
New York, NY 10048
Citicorp Securities, Inc.
399 Park Avenue
7th Floor
New York, NY 10043
-2-
<PAGE>
ANNEX D
ACCOUNTANTS' COMFORT LETTER
Upon execution of the Distribution Agreement and, to the extent provided in
Section 7 of the Distribution Agreement, at each Closing Date,(1) Ernst & Young
LLP shall furnish to the Agents or Purchaser, as the case may be, a letter or
letters (which may refer to letters previously delivered to the Agents or
Purchaser, as the case may be), dated as of the date of the Distribution
Agreement or such Closing Date, as the case may be, in form and substance
satisfactory to the Agents or the Purchaser, as the case may be, confirming that
they are independent accountants within the meaning of the Securities Act and
the applicable published rules and regulations thereunder and stating in effect
that:
(i) in their opinion the consolidated financial statements audited by them
and incorporated by reference in the Registration Statements and the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act and the Exchange Act and the related
published rules and regulations;
(ii) on the basis of a reading of the latest available interim consolidated
financial statements of the Company, carrying out certain specified procedures
(but not an audit in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with respect to the
comments set forth in such letter, inquiries of officials of the Company
responsible for financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
(A) the unaudited consolidated financial statements, if any, included or
incorporated in the Registration Statements and the Prospectus do not comply as
to form in all material respects with the applicable accounting requirements and
with the published rules and regulations of the Commission with respect to
financial statements included or incorporated in quarterly reports on Form 10-Q
under the Exchange Act, or are not in conformity with generally accepted
accounting principles applied on a basis consistent with that of the audited
financial statements included or incorporated in the Registration Statement and
the Prospectus, except for the accounting changes discussed in the notes
thereto;
(B) with respect to the period subsequent to the date of the most recent
financial statements included or incorporated in the Registration Statements or
Prospectus, (i) at the date of the latest available consolidated balance sheet
read by such
- --------------------
(1) All capitalized terms used herein shall have the meanings ascribed to
them in the Distribution Agreement of which this Annex D is part.
<PAGE>
D-2
accountants or (ii) at a subsequent specified date not more than five days prior
to the date of the letter, there was any decrease in the working capital (but
only with respect to the date referred to in the foregoing clause (i)), any
change in capital stock of the Company (except pursuant to existing stock
option, bonus or other similar plans or conversion of debentures or preferred
stock) or increase in long-term debt and debt due within one year, or decrease
in the common stockholders' equity of the Company and its consolidated
subsidiaries (except such changes, increases or decreases which the Prospectus
(directly or by incorporation) discloses have occurred or may occur) as compared
with the amounts shown on the most recent consolidated balance sheet included or
incorporated in the Registration Statements and the Prospectus;
(C) for the period from the closing date of the most recent consolidated
balance sheet included or incorporated in the Registration Statements and the
Prospectus to the closing date of the latest available consolidated income
statement read by such accountants there were any decreases, as compared with
the corresponding period in the previous year, in consolidated sales and
operating revenues or consolidated net income except for changes or decreases
which the Prospectus (directly or by incorporation) discloses have occurred or
may occur, or which are described in such letter; or
(D) unaudited pro forma consolidated condensed financial statements, if
any, included or incorporated by reference in the Prospectus do not comply as to
form in all material respects with the applicable accounting requirements of the
Securities Act and the published rules and regulations thereunder or the pro
forma adjustments have not been properly applied to the historical amounts in
the compilation of those statements;
(iii) they have performed certain other specified procedures as a result of
which they determined that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial or statistical
information derived from the general accounting records of the Company and its
subsidiaries) set forth in the Registration Statements and the Prospectus and in
Exhibit 12 to the Registration Statements, including the information included or
incorporated in Items 1, 6 and 7 of the Company's Annual Report on Form 10-K,
incorporated in the Registration Statements and the Prospectus, and the
information included in the "Management's Discussion and Analysis" included or
incorporated in the Company's quarterly reports on Form 10-Q, incorporated in
the Registration Statements and the Prospectus, agrees with the accounting
records of the Company and its subsidiaries excluding any questions of legal
interpretation; and
(iv) they have made a review of any unaudited financial statements included
in the Registration Statement in accordance with standards established by the
American Institute of Certified Public Accountants, as indicated in their report
or reports, if any, attached to such letter.
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Agent's Commissions
-------------------
Commission
(percent of
principal amount
of Note)
----------------
Maturity of Note
- ----------------
Maturity
--------
<S> <C>
9 months to less than 12 months .125%
12 months to less than 18 months .150
18 months to less than 24 months .200
24 months to less than 30 months .250
30 months to less than 3 years .300
3 years to less than 4 years .350
4 years to less than 5 years .450
5 years to less than 7 years .500
7 years to less than 10 year .550
10 years to less than 20 years .600
20 years or more .750
</TABLE>
<PAGE>
Exhibit 1.3
ASHLAND INC.
3,000,000 Shares
(Common Stock, $1.00 par value)
SALES AGENCY AGREEMENT
April ___, 1995
NatWest Securities Limited
135 Bishopsgate
London EC2 M 3UR
England
CS First Boston Corporation
Park Avenue Plaza
New York, NY 10055
Gentlemen:
Ashland Inc., a Kentucky corporation (the "Company"), confirms its
agreement with Natwest Securities Limited and CS First Boston Corporation (the
"Agents") as follows:
SECTION 1. DESCRIPTION OF SECURITIES. The Company proposes to
issue and sell through the Agents, as sales agents, up to 3,000,000 shares (the
"Maximum Amount") of Common Stock, $1.00 par value, of the Company (the "Stock")
on the terms set forth in Section 3 hereof.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to, and agrees with, the Agents that:
(a) The Company meets the requirements for use of Form S-3 under
the Securities Act of 1933 (the "Act") and the rules and regulations ("Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder. A registration statement on Form S-3 (Registration No. 33-57011)
with respect to, among other
<PAGE>
2
securities, the Stock, including a form of prospectus, has been prepared by the
Company in conformity with the requirements of the Act and the Rules and
Regulations and filed with the Commission and has become effective. Such
registration statement and prospectus have been amended or supplemented prior to
the date of this Agreement, and any such amendment filed after the effective
date of such registration statement has become effective. No stop order
suspending the effectiveness of the registration statement has been issued, and
no proceeding for that purpose has been instituted or threatened by the
Commission. Copies of such registration statement and prospectus, any such
amendment or supplement relating to the Stock and all documents incorporated by
reference therein that were filed with the Commission on or prior to the date of
this Agreement have been delivered to the Agents. Such registration statement,
as it may have heretofore been amended, is referred to herein as the
"Registration Statement," and the final form of prospectus included in the
Registration Statement, as amended or supplemented from time to time with
respect to the Stock, is referred to herein as the "Prospectus." Any reference
herein to the Registration Statement, the Prospectus or any amendment or
supplement thereto relating to the Stock shall be deemed to refer to and include
the documents incorporated (or deemed to be incorporated) by reference therein,
and any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement or Prospectus shall be deemed to refer to
and include the filing after the execution hereof of any document with the
Commission deemed to be incorporated by reference therein.
(b) Each part of the Registration Statement, when such part became
or becomes effective, and the Prospectus and any amendment or supplement thereto
relating to the Stock, on the date of filing thereof with the Commission and at
each Closing Date (as hereinafter defined), conformed or will conform in all
material respects with the requirements of the Act and the Rules and
Regulations; each part of the Registration Statement, when such part became or
becomes effective, did not or will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; and the Prospectus and any
amendment or supplement thereto relating to the Stock, on the date of filing
thereof with the Commission and at each Closing Date, did not and will not
include an untrue statement of a material fact or omit to state a material fact
necessary to
<PAGE>
3
make the statements therein, in the light of the circumstances under which they
were made, not misleading; except that the foregoing shall not apply to
statements in or omissions from any such document in reliance upon, and in
conformity with, written information furnished to the Company by or on behalf of
the Agents, specifically for use in the Registration Statement, the Prospectus
or any amendment or supplement thereto.
(c) The documents incorporated by reference in the Registration
Statement or the Prospectus, or any amendment or supplement thereto, when they
became or become effective under the Act, or were or are filed with the
Commission under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), as the case may be, conformed or will conform in all material respects
with the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder.
(d) The consolidated financial statements of the Company, together
with the related notes and schedules, and any selected financial data set forth
or incorporated by reference in the Registration Statement and Prospectus for
the periods therein specified were prepared in conformity with generally
accepted accounting principles consistently applied throughout the periods
involved (except as otherwise stated therein) and fairly present on any basis
stated therein the information included therein.
SECTION 3. SALE AND DELIVERY OF SECURITIES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell
through the Agents, and the Agents agree to sell, as sales agents for the
Company, on a best efforts basis, up to the Maximum Amount of Stock on the terms
set forth herein. The Company shall have the right to appoint additional
persons to act as its agents to effect such sales upon three days prior notice
to the Agents then acting hereunder so long as any such additional persons
become parties to this Agreement upon the same terms and conditions as shall
then be applicable to such Agents. The Company shall designate one Agent (the
"Designated Agent") to make all sales for it hereunder during each Pricing
Period (as hereinafter defined) and no other Agent shall make any such sales
during such period.
<PAGE>
4
The Stock, up to the Maximum Amount, is to be sold during one or
more pricing periods each of which shall end on a Friday (each a "Pricing
Period"), each Pricing Period consisting of five consecutive calendar days or
such lesser number of days as shall be agreed to by the Company and the
Designated Agent. The Company and the Designated Agent shall agree to any
Pricing Period and the number of shares of Stock (not to exceed 50,000 shares)
to be sold by the Designated Agent during such Pricing Period (the "Average
Market Price Shares"). Subject to the terms and conditions hereof, the
Designated Agent shall use its best efforts to sell all of the Average Market
Price Shares during such Pricing Period. The Agents shall sell the shares of
Stock (including both the Average Market Price Shares and any Additional Shares,
as hereinafter defined) only in ordinary brokers' transactions (within the
meaning of Section 4(4) of the Act) on any national securities exchange,
including the New York and Chicago Stock Exchanges, on which such shares of
Stock are listed. The Agents shall not solicit or arrange for the solicitation
of customers' orders in anticipation of or in connection with such transactions,
nor shall they sell short as principal shares of Common Stock of the Company
except in connection with customary market making activities in the Company's
outstanding securities. The Agents shall not engage in any special selling
efforts or selling methods relating to the Stock within the meaning of
Rule 10b-6(c)(5) under the Exchange Act. The Company or the Designated Agent
may, upon notice to the other hereto by telephone (confirmed promptly by
telecopy), suspend or terminate the offering of Stock during any Pricing
Period; PROVIDED, HOWEVER, that such suspension or termination shall not
affect or impair the parties' respective obligation with respect to shares
of Stock sold hereunder prior to the giving of such notice.
The net proceeds (the "Net Proceeds") to the Company for the Average
Market Price Shares sold by the Designated Agent during a Pricing Period will
equal the sum of (i) the product of (x) 97.5% times (y) the average of the
arithmetic mean of the high and low sales prices of the Common Stock of the
Company reported on the New York Stock Exchange ("NYSE") for each trading day of
such Pricing Period (the "Average Market Price"), times (z) the number of
Average Market Price Shares sold during such Pricing Period, plus (ii)
Alternative Proceeds (defined below), if any plus (iii) Excess Proceeds (defined
below), if any. Subject to adjustment as set forth in the next two paragraphs,
the compensation to the Designated Agent with respect to the sale of Average
Market Price Shares sold hereunder shall equal the difference between the
aggregate gross sales
<PAGE>
5
prices at which such sales are actually effected by the Designated Agent and the
Net Proceeds.
Prior to and from time to time during any Pricing Period, the
Company may instruct the Designated Agent by telephone (confirmed promptly by
telecopy) not to sell shares of Stock if such sales cannot be effected at or
above the price designated by the Company in any such instruction. If such an
instruction is given and as a result thereof the Designated Agent is unable to
sell shares of Stock in an amount greater than or equal to the daily PRO RATA
portion of Average Market Price Shares to be sold during such Pricing Period,
then (i) that day's high and low sales prices of Common Stock of the Company
reported on the NYSE shall not be included in the calculation of Average Market
Price and (ii) the net proceeds payable to the Company (the "Alternative
Proceeds") and the compensation payable to the Designated Agent in respect of
any sales of Average Market Price Shares effected that day by the Designated
Agent shall be equal to 97.5% and 2.5%, respectively, of the weighted average
sales prices at which the Designated Agent has actually effected sales of Stock
during that day.
To the extent the compensation payable to the Designated Agent
hereunder would otherwise exceed ten percent of the aggregate gross sales prices
of the Average Market Price Shares during any Pricing Period, such excess over
ten percent shall constitute "Excess Proceeds" payable to the Company.
During any Pricing Period, the Company and the Designated Agent may
agree upon the sale of shares ("Additional Shares") of Stock in an amount of
1,000 shares or more, in addition to the sale of Average Market Price Shares
(such Additional Shares to be included in the Maximum Amount). The compensation
to the Designated Agent for sales of the first 50,000 Additional Shares sold in
any Pricing Period shall be $0.10 per share, and the compensation to the Agents
for sales of Additional Shares in excess thereof during such Pricing Period
shall be 1.40% of the gross sales price per share. The sale of Additional
Shares during any day shall be confirmed in writing by the Designated Agent to
the Company following the close of business that day. All other shares of Stock
sold during a Pricing Period not so confirmed shall be deemed Average Market
Price Shares.
The Designated Agent shall provide written confirmation to the
Company following the close of business
<PAGE>
6
on the final day of each Pricing Period setting forth the dates included within
the Pricing Period, the number of Average Market Price Shares and Additional
Shares, if any, sold during the Pricing Period, the gross proceeds from the sale
of such shares, the high and low prices at which Average Market Price Shares and
Additional Shares, if any, were sold during such Pricing Period, the Net
Proceeds to the Company, the amount of Excess Proceeds, if any, the amount of
Alternative Proceeds, if any, the compensation payable by the Company to the
Designated Agent with respect to such sales and the Average Market Price for
such Pricing Period. The Agents hereby acknowledge that the Company will be
relying upon such information in preparing a prospectus supplement pursuant to
the applicable paragraph of Rule 424(b) of the Rules and Regulations with
respect to each Pricing Period.
Settlement for sales of Additional Shares will occur on the fifth
business day (or such shorter period as may be required by applicable regulatory
authority or as otherwise agreed to by the Company and the Designated Agent)
following the date on which such sales are made. The amount of proceeds for
such sales to be delivered to the Company against the receipt of the Additional
Shares sold shall be equal to the aggregate sales prices at which such
Additional Shares were sold, net of the Designated Agent's compensation for such
sales and after deduction for any transaction fees imposed by any governmental
or self-regulatory organization in respect of such sales. Settlement for sales
of Average Market Price Shares will occur on a weekly basis (unless a shorter
period is required by applicable regulatory authority or is otherwise agreed to
by the Company and the Designated Agent) as follows. On each Monday (or the
next succeeding business day if such Monday is not a business day) following the
end of a Pricing Period (each a "Closing Date"), the Average Market Price Shares
sold through the Designated Agent during such Pricing Period will be delivered
by the Company to the Designated Agent against payment of the Net Proceeds for
such Pricing Period. In the event a Pricing Period shall end on a day other
than a Friday, arrangements will be made by the Company to assure delivery of
shares of the Stock to the Designated Agent to avoid any failure by such
Designated Agent to deliver shares of Stock in accordance with applicable
regulatory requirements. Settlement for all shares shall be effected via The
Depository Trust Corporation on a delivery-versus-payment basis.
<PAGE>
7
At each settlement, the Company shall be deemed to have affirmed
each representation, warranty, covenant and other agreement contained in this
Agreement. The Company covenants and agrees with the Agents that within two
business days of the termination of each Pricing Period, the Company will file a
prospectus supplement pursuant to the applicable paragraph of Rule 424(b) of the
Rules and Regulations, which prospectus supplement will name the Designated
Agent, set forth the dates included within the Pricing Period, the number of
such shares of Stock sold through the Designated Agent, the high and low prices
at which Average Market Price Shares were sold during such Pricing Period, the
Net Proceeds to the Company and the compensation payable by the Company to the
Designated Agent with respect to such sales (all as provided in writing by the
Designated Agent for inclusion in each such prospectus supplement). The
obligations of the Agents to sell the Stock shall be subject to the continuing
accuracy of the representations and warranties of the Company herein, to the
performance by the Company of its obligations hereunder and to the continuing
satisfaction of the additional conditions specified in Section 5 of this
Agreement.
SECTION 4. COVENANTS. The Company covenants and agrees with the
Agents that:
(a) Prior to the termination of the offering of the Stock under
this Agreement, the Company will not file any amendment or supplement to the
Registration Statement or the Prospectus (except for a supplement relating to an
offering of securities other than the Stock) unless a copy thereof has been
submitted to you a reasonable period of time before its filing and you have not
reasonably objected thereto within a reasonable period of time after receiving
such copy. Subject to the foregoing sentence, the Company will cause each
amendment or supplement to the Prospectus to be filed with the Commission as
required pursuant to the applicable paragraph of Rule 424(b) of the Rules and
Regulations or, in the case of any document to be incorporated therein by
reference, to be filed with the Commission as required pursuant to the Exchange
Act, within the time period prescribed.
(b) Within the time during which a prospectus relating to the Stock
is required to be delivered under the Act, the Company will use its best efforts
to comply with all requirements imposed upon it by the Act and by the Rules and
Regulations, as from time to time in force, so far as
<PAGE>
8
necessary to permit the continuance of sales of or dealings in the Stock as
contemplated by the provisions hereof and the Prospectus. If during such period
any event occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances then existing, not misleading, or if during such period it is
necessary to amend or supplement the Registration Statement or Prospectus to
comply with the Act, the Company promptly will (x) notify the Agents to suspend
or terminate the offering of Stock during such period and (y) amend or
supplement the Registration Statement or Prospectus (at the expense of the
Company) so as to correct such statement or omission or effect such compliance.
(c) The Company will at its expense arrange for the qualification
of the Stock for sale under the securities laws of such jurisdictions as you
reasonably designate and the continuance of such qualifications in effect so
long as required for the distribution of the Stock, except that the Company
shall not be required in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction.
(d) The Company will furnish to the Agents and their counsel (at
the expense of the Company) copies of the Registration Statement, the Prospectus
(including all documents incorporated by reference therein) and all amendments
and supplements to the Registration Statement or Prospectus (except for
supplements relating to an offering of securities other than the Stock) that are
filed with the Commission during the period in which a prospectus relating to
the Stock is required to be delivered under the Act (including all documents
filed with the Commission during such period that are deemed to be incorporated
by reference therein), in each case as soon as available and in such quantities
as you may from time to time reasonably request, and will also furnish copies of
the Prospectus to the NYSE in accordance with Rule 153 of the Rules and
Regulations.
(e) The Company will make generally available to its security
holders as soon as practicable, an earnings statement or statements (which need
not be audited) that will satisfy the provisions of Section 11(a) of the Act and
Rule 158 of the Rules and Regulations.
<PAGE>
9
(f) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay all expenses
incident to the performance of its obligations hereunder, will pay all expenses
of preparing and printing all documents relating to the offering, and will
reimburse the Agents for all reasonable fees and disbursements of counsel
incurred by them in connection with the performance of their obligations under
this Agreement. The Company shall not in any event be liable to the Agents for
loss of anticipated profits from the transactions covered by this Agreement.
(g) The Company will apply the net proceeds from the sale of the
Stock as set forth in the Prospectus.
(h) The Company will not, directly or indirectly, offer or sell,
any shares of its Common Stock (other than the Stock as provided herein and any
such shares pursuant to employee incentive or benefit plans or outstanding
convertible securities) or securities convertible into or exchangeable for, or
any rights to purchase or acquire, Common Stock during the period ending on the
final Closing Date for the sale of Stock hereunder without first suspending
activity under this program.
(i) Each time that either of the Registration Statement or the
Prospectus is amended or supplemented to set forth amended or supplemental
financial information including, without limitation, by filing an Annual Report
on Form 10-K (other than by an amendment or supplement resulting from the filing
by the Company of a Quarterly Report on Form 10-Q or a Current Report on Form
8-K, or any similar successor forms), unless, in your reasonable judgment, such
Quarterly Report or Current Report is of such a nature that a letter from the
Company's independent public accountants should be furnished), the Company will
cause its independent public accountants forthwith to furnish a letter, dated
the date of the effectiveness of such amendment or the date of filing of such
supplement, in form satisfactory to you, of the same tenor as the letter
referred to in Section 5(f) with such changes as may be necessary to reflect the
amended and supplemental financial information included or incorporated by
reference in the Registration Statement and the Prospectus, as amended or
supplemented to the date of such letter, provided that if either of the
Registration Statement or the Prospectus is amended or supplemented solely to
include or incorporate by reference financial information as of and for a fiscal
<PAGE>
10
quarter and you shall have reasonably requested that such a letter be furnished,
the Company's independent public accountants may limit the scope of such letter,
which shall be satisfactory in form to you, to the unaudited financial
statements, the related "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and any other information of an accounting,
financial or statistical nature included in such amendment or supplement.
(j) The Company will, at any time during the term of this
Agreement, as supplemented from time to time, advise the Agents immediately
after it shall have received notice or obtained knowledge thereof, of any
information or fact that would alter or affect any opinion, certificate, letter
or other document provided to the Agents pursuant to Section 5 herein.
SECTION 5. CONDITIONS OF AGENTS' OBLIGATIONS. The obligations of
the Agents and of the Designated Agent to sell the Stock as provided herein
shall be subject to the accuracy, in the sole discretion of the Agents or the
Designated Agent, as of the date hereof and as of the first date and the Closing
Date or Dates for any Pricing Period contemplated under this Agreement of the
representations and warranties of the Company herein, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement and no other order of the Commission pertaining to any document
incorporated therein by reference shall have been issued and no proceeding for
that purpose shall have been instituted or, to the knowledge of the Company or
the Agents, threatened by the Commission, and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to your satisfaction.
(b) No Agent shall have advised the Company that the Registration
Statement or Prospectus, or any amendment or supplement thereto relating to the
Stock, contains an untrue statement of fact that in the opinion of such Agent is
material, or omits to state a fact that in such Agent's opinion is material and
is required to be stated therein or is necessary to make the statements therein
not misleading.
<PAGE>
11
(c) Except as contemplated in the Prospectus (directly or by
incorporation), subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall not have
been any material adverse change, on a consolidated basis, in the business,
financial condition or results of operations of the Company and its
subsidiaries.
(d) The Agents shall have received at the date of the commencement
of the first Pricing Period hereunder (the "Commencement Date") and at the date
of closing of the last Pricing Period hereunder an opinion of Thomas L. Feazell,
Esq., Senior Vice President, General Counsel and Secretary of the Company, dated
as of the Commencement Date or the date of Closing of the last Pricing Period,
to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the Commonwealth of
Kentucky with full corporate power and authority to own its properties and
conduct its business as described in the Prospectus; and is duly qualified
to do business as a foreign corporation under the laws of each
jurisdiction which requires such qualification wherein it owns or leases
material properties or conducts material business, except for any
jurisdiction wherein the failure to be so qualified would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole;
(ii) To the best knowledge of such counsel, no consent, approval,
authorization or order of, any governmental agency or body or any court is
required for the consummation of the transactions contemplated by this
Agreement in connection with the issuance or sale of the Stock by the
Company, except such as have been obtained and made under the Act and such
as may be required under state securities laws;
(iii) The shares of Stock have been duly authorized and, upon due
execution and delivery against payment therefor pursuant to this
Agreement, will be validly issued and fully paid and non-assessable and no
holder thereof will be subject to personal liability by reason of being
such a holder; the shares of Stock will not be subject to the preemptive
rights of any stockholder of the Company or any lien attributable to the
Company's acts; all corporate action required to be
<PAGE>
12
taken for the authorization, issue and sale of the Stock has been validly
and sufficiently taken; and the shares of Stock are the subject of an
effective registration statement permitting their sale in the manner
contemplated by this Agreement;
(iv) The execution, delivery and performance of this Agreement and
the issuance and sale of the shares of Stock and compliance with the terms
and provisions thereof will not conflict with, result in a material breach
or violation of any of the terms and provisions of or constitute a
material default under, any statute, any rule, regulation or order known
to such counsel to be applicable to the Company of any governmental
agency, authority or body or any court having jurisdiction over the
Company or any subsidiary of the Company or any of their properties, or
any agreement or instrument known to such counsel to which the Company or
any such subsidiary is a party or by which the Company or any such
subsidiary is bound or to which any of the properties of the Company or
any such subsidiary is subject, or the Second Restated Articles of
Incorporation or By-laws of the Company, in each case as amended to the
date of this Agreement, and the Company has full power and authority to
authorize, issue and sell the shares of Stock as contemplated by this
Agreement;
(v) To the best knowledge of such counsel (a) there is no pending
or threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or any
of its subsidiaries, the probable outcome of which would have a material
adverse effect on the financial condition of the Company and its
subsidiaries taken as a whole and which is not adequately disclosed in the
Prospectus (directly or by incorporation); (b) there is no franchise,
contract or other document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an exhibit, which
is not described or filed as required; and (c) the statements included or
incorporated in the Prospectus describing any statutes, legal or
governmental proceedings or material contracts or agreements relating to
the Company fairly summarize such matters.
<PAGE>
13
(vi) The Registration Statement was declared effective under the
Act as of the date and time specified in such opinion, the Prospectus
either was filed with the Commission pursuant to the subparagraph of Rule
424(b) specified in such opinion on the date specified therein or was
included in the Registration Statement (as the case may be) and, to the
best knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act, and the Registration Statement and the
Prospectus and each amendment or supplement thereto which relates to the
Stock specified in such opinion, as of their respective effective or issue
date, complied as to form in all material respects with the requirements
of the Act and the Rules and Regulations; such counsel has no reason to
believe that either the Registration Statement or the Prospectus, or any
such amendment or supplement, as of such respective dates or as of the
date of such opinion, contained or contain any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; it
being understood that such counsel need express no opinion as to the
financial statements including the notes thereto and related schedules or
other financial and statistical data contained or incorporated by
reference in the Registration Statement or the Prospectus;
(vii) This Agreement has been duly authorized, executed and
delivered by the Company; and
(viii) No holders of Common Stock of the Company have rights to the
registration of such shares of Common Stock under the Registration
Statement.
(e) The Agents shall have received at the times specified in
Section 5(d) from each of (i) Cravath, Swaine & Moore, special counsel to the
Company, such opinions or letters with respect to the incorporation of the
Company, the matters addressed in Section 5(d)(iii), (vi) and (vii) and other
related matters as the Agents reasonably may request, and (ii) Davis Polk &
Wardwell, counsel for the Agents, as to such matters as the Agents reasonably
may request and such counsel shall have received such documents
<PAGE>
14
and other information as they may reasonably request to enable them to pass upon
such matters.
(f) At or prior to the Commencement Date and such other dates as
may be required, the Agents shall have received a letter from Ernst & Young LLP,
independent public accountants for the Company, dated the date of delivery
thereof, substantially in the form attached hereto as Annex 1.
(g) The Agents shall have received from the Company a certificate,
or certificates, signed by two authorized officers, including the principal
financial or accounting officer (unless such officers are unavailable), of the
Company, dated as of the Commencement Date and as of the date of filing by the
Company of a Quarterly Report on Form 10-Q and an Annual Report on Form 10-K, to
the effect that, to the best of their knowledge based upon reasonable
investigation:
(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made at and as of the date of such
certificate, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at
or prior to such date;
(ii) No stop order suspending the effectiveness of the Registration
Statement and no other order of the Commission pertaining to any document
incorporated therein has been issued, and no proceeding for that purpose
has been instituted or is threatened, by the Commission;
(iii) Since the date of this Agreement there has occurred no event
required to be described in an amendment or supplement to the Registration
Statement or Prospectus that has not been so described and there has been
no document required to be filed under the Exchange Act and the rules and
regulations of the Commission thereunder that upon such filing would be
deemed to be incorporated by reference in the Prospectus that has not been
so filed; and
(iv) Since the date of this Agreement, there has not been any
material adverse change, on a consolidated basis, in the business,
financial condition or results of operations of the Company and its
subsidiaries which
<PAGE>
15
has not been described in an amendment or supplement to the Registration
Statement or Prospectus (directly or by incorporation).
(h) The Company shall have furnished to you such further
certificates and documents as you shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are in the form set forth
herein or, if not set forth herein, satisfactory in form and substance to the
Agents. The Company will furnish the Agents with such conformed copies of such
opinions, certificates, letters and other documents as the Agents shall
reasonably request.
SECTION 6. INDEMNIFICATION. (a) The Company will indemnify and
hold harmless each Agent and each person, if any, who controls such Agent within
the meaning of Section 15 of the Act against any and all losses, claims, damages
and liabilities, joint or several (including any investigation, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted), to which
they, or any of them, may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment or supplement thereto which relates to the Stock, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that the Company will not be
liable to the extent that such loss, claim, damage or liability arises from or
is based upon an untrue statement or omission or alleged untrue statement or
omission (i) made in reliance upon and in conformity with information relating
to an Agent furnished in writing to the Company by the Agent expressly for use
in the document or (ii) in a preliminary prospectus if the Prospectus, as
amended or supplemented as of the time of the confirmation of the sale to such
person, corrected the untrue statement or omission or alleged untrue statement
or omission which is the basis of the loss, claim, damage or liability for which
indemnification is sought and a copy of the Prospectus, as so amended (but
excluding any
<PAGE>
16
documents incorporated therein by reference), was not sent or given to such
person at or before the confirmation of the sale to such person in any case
where such delivery is required by the Act, unless such failure to deliver the
Prospectus, as so amended, was a result of noncompliance by the Company with
Section 4(b). This indemnity agreement will be in addition to any liability
that the Company might otherwise have.
(b) Each of the Agents, severally and not jointly, will indemnify
and hold harmless the Company, each person, if any, who controls the Company
within the meaning of Section 15 of the Act, each director of the Company and
each officer of the Company who signs the Registration Statement to the same
extent as the foregoing indemnity from the Company to each of the Agents, but
only insofar as losses, claims, damages or liabilities arise from or are based
upon any untrue statement or omission or alleged untrue statement or omission
made in any preliminary prospectus, the Registration Statement or the Prospectus
or any amendment or supplement thereto which relates to the Stock in reliance
upon and in conformity with information relating to such Agent furnished in
writing to the Company by such Agent expressly for use in the document. This
indemnity agreement will be in addition to any liability that the Agents might
otherwise have.
(c) Any party that proposes to assert the right to be indemnified
under this Section 6 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 6, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission to so notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party
otherwise than under this Section 6. If any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate in, and, to the
extent that it elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel who shall be reasonably
satisfactory to the indemnified party, and, after notice from the indemnifying
party to the indemnified party of its
<PAGE>
17
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees and
expenses of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded that there may be legal defenses available to it or other indemnified
parties which are different from or in addition to those available to the
indemnifying party (in which case the indemnifying party will not have the right
to direct the defense of such action on behalf of the indemnified party) or (3)
the indemnifying party has not in fact employed counsel reasonably satisfactory
to such indemnified party to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees and expenses of such counsel will be at
the expense of the indemnifying party or parties and all such fees and expenses
will be reimbursed promptly as they are incurred. An indemnifying party will
not be liable for any settlement of any action or claim effected without its
written consent or, in connection with any proceeding or related proceedings in
the same jurisdiction, for the fees and expenses of more than one separate
counsel for all indemnified parties.
SECTION 7. CONTRIBUTION. In order to provide for just and
equitable contribution in circumstances in which the indemnification provided
for in Section 6 is applicable in accordance with its terms but for any reason
is held by a tribunal to be unavailable from the Company or the Agents, the
Company and the Agents will contribute to the aggregate losses, claims, damages
and liabilities (including any investigation, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action or any claims asserted, but after deducting any contribution received
by the Company from persons other than the Agents, such as persons who control
the Company within the meaning of the Act, officers of the Company who signed
the Registration Statement and directors of the Company, who may also be liable
for contribution) to which the Company and the Agents may be subject in such
proportion so that the Agents are responsible for that portion represented by
the
<PAGE>
18
percentage that the aggregate commissions received by the Agents pursuant to
Section 3 bears to the aggregate proceeds received by the Company from the sale
of the Stock and the Company is responsible for the balance; provided that (i)
the Agents will not be responsible for any amount in excess of the aggregate
commissions received by the Agents pursuant to Section 3 and (ii) no person
found guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7,
any person who controls a party to this Agreement within the meaning of the Act
will have the same rights to contribution as that party, and each officer of the
Company who signed the Registration Statement and each director of the Company
will have the same rights to contribution as the Company, subject in each case
to clauses (i) and (ii) of this Section 7. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action against
such party in respect of which a claim for contribution may be made under this
Section 7, notify such party or parties from whom contribution may be sought,
but the omission so to notify will not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
otherwise than under this Section 7. No party will be liable for contribution
with respect to any action or claim settled without its written consent.
SECTION 8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of each Agent
contained in Section 6 and Section 7 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of such
Agent or any controlling persons, or the Company or any of its officers,
directors or any controlling persons, and shall survive delivery of and payment
for the Stock.
SECTION 9. TERMINATION. (a) Each Agent shall have the right, by
giving notice as hereinafter specified at any time at or prior to any Closing
Date, to terminate this Agreement with respect to such Agent if (i) any material
adverse change, or any development involving a prospective material adverse
change, in the business, financial condition or results of operations of the
Company and its subsidiaries has occurred which, in the judgment of such
<PAGE>
19
Agent, materially impairs the investment quality of the Stock; (ii) the Company
shall have failed, refused or been unable, at or prior to the Closing Date, to
perform any agreement on its part to be performed hereunder, (iii) any other
condition of the Agents' obligations hereunder is not fulfilled, (iv) any
suspension or limitation of trading in the Common Stock of the Company on the
New York Stock Exchange, or any setting of minimum prices for trading of the
Stock on such exchange, shall have occurred, (v) any banking moratorium shall
have been declared by Federal or New York authorities or (vi) an outbreak or
material escalation of major hostilities in which the United States is involved,
a declaration of war by Congress, any other substantial national or
international calamity or any other event or occurrence of a similar character
shall have occurred since the execution of this Agreement that, in the judgment
of such Agent, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Stock to be sold by such Agent on
behalf of the Company. Any such termination shall be without liability of any
party to any other party except that the provisions of Section 4(f), Section 6
and Section 7 hereof shall at all times be effective. If any Agent elects to
terminate this Agreement as provided in this Section, such Agent shall provide
the required notice promptly by telephone, telex or telecopy, confirmed by
letter.
(b) The Company shall have the right, by giving notice as
hereinafter specified, to terminate this Agreement in its sole discretion on the
date occurring sixty (60) days after the date of this Agreement and every sixty
(60) days thereafter. Notwithstanding the foregoing, if the Company chooses to
effect any offering of equity securities or equity-related securities (other
than the offering of the Stock) before the completion of the offering
contemplated hereby, the Company may terminate this Agreement at any time. Any
termination shall be without liability of any party to any other party except
that the provisions of Section 4(f) and Section 6 hereof shall at all times be
effective. If the Company elects to terminate this Agreement as provided in
this Section, the Company shall provide the required notice promptly by
telephone, telex, or telecopy, confirmed by letter.
(c) Any termination of this Agreement shall be effective on the
date specified in such notice of termination; provided that such termination
shall not be effective until the close of business on the date of receipt
<PAGE>
20
of such notice by the Agents. If such termination shall occur during a Pricing
Period, any Additional Shares and Average Market Price Shares shall settle in
accordance with the provisions of the second to last paragraph of Section 3
hereof.
SECTION 10. NOTICES. All notices or communications hereunder
shall be in writing and if sent to the Agents or a Designated Agent shall be
mailed, delivered, telexed or telecopied and confirmed to NatWest Securities
Limited, c/o NatWest Markets Group, 175 Water Street, New York, New York 10038,
and CS First Boston Corporation, Park Avenue Plaza, New York, New York 10055,
Attention of Kenneth Wallace, Equity Capital Markets, or if sent to the Company,
shall be mailed, delivered, telexed or telecopied and confirmed to the Company
at 1000 Ashland Drive, Russell, Kentucky 41169, Attention: Assistant
Treasurer-Finance, except that legal notices will be sent to the attention of
the General Counsel, with a copy to Cravath, Swaine & Moore, Worldwide Plaza,
825 Eighth Avenue, New York, New York 10019, Attention: David G. Ormsby, Esq.
Each party to this Agreement may change such address for notices by sending to
the parties to this Agreement written notice of a new address for such purpose.
SECTION 11. PARTIES. This Agreement shall inure to the benefit
of and be binding upon the Company and the Agents and their respective
successors and the controlling persons, officers and directors referred to in
Section 6 hereof, and no other person will have any right or obligation
hereunder.
SECTION 12. APPLICABLE LAW. This Agreement shall be governed by,
and construed in accordance with, the internal laws of the State of New York
without regard to the principles of conflicts of laws.
SECTION 13. COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
<PAGE>
21
If the foregoing correctly sets forth the understanding between the
Company and the Agents, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between the
Company and the Agents. Alternatively, the execution of this Agreement by the
Company and its acceptance by or on behalf of the Agents may be evidenced by an
exchange of telegraphic or other written communications.
Very truly yours,
ASHLAND INC.,
By:________________________________
Title:_____________________________
ACCEPTED as of the date
first above written
NATWEST SECURITIES
LIMITED
By:__________________________
Title:_______________________
CS FIRST BOSTON
CORPORATION
By:__________________________
Title:_______________________
<PAGE>
ANNEX 1
ACCOUNTANTS' COMFORT LETTER
Upon the Commencement Date (1) and thereafter, to the extent
provided in Section 4(i) of the Sales Agency Agreement, Ernst & Young LLP shall
furnish to the Agents a letter, dated as of the date of delivery thereof, in
form and substance satisfactory to the Agents confirming that they are
independent accountants within the meaning of the Securities Act and the
applicable published rules and regulations thereunder and stating in effect
that:
(i) in their opinion the consolidated financial statements audited
by them and incorporated by reference in the Registration Statement and
the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the Exchange
Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest available interim
consolidated financial statements of the Company, carrying out certain
specified procedures (but not an audit in accordance with generally
accepted auditing standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such letter,
inquiries of officials of the Company responsible for financial and
accounting matters and other specified procedures, nothing came to their
attention that caused them to believe that:
(A) the unaudited consolidated financial statements, if any,
included or incorporated in the Registration Statement and the
Prospectus do not comply as to form in all material respects with
the applicable accounting requirements and with the published rules
and regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on Form
10-Q under the Exchange Act, or are not in
_______________________
(1) All capitalized terms used herein shall have the meanings ascribed to
them in the Sales Agency Agreement of which this Annex 1 is a part.
<PAGE>
1-2
conformity with generally accepted accounting principles applied on
a basis consistent with that of the audited financial statements
included or incorporated in the Registration Statement and the
Prospectus, except for the accounting changes discussed in the notes
thereto;
(B) with respect to the period subsequent to the date of the
most recent financial statements included or incorporated in the
Registration Statement or Prospectus, (i) at the date of the latest
available consolidated balance sheet read by such accountants or
(ii) at a subsequent specified date not more than five days prior to
the date of the letter, there was any decrease in the working
capital (but only with respect to the date referred to in the
foregoing clause (i)), any change in capital stock of the Company
(except pursuant to existing stock option, bonus or other similar
plans or conversion of debentures or preferred stock) or increase in
long-term debt and debt due within one year, or decrease in the
common stockholders' equity of the Company and its consolidated
subsidiaries (except such changes, increases or decreases which the
Prospectus (directly or by incorporation) discloses have occurred or
may occur) as compared with the amounts shown on the most recent
consolidated balance sheet included or incorporated in the
Registration Statement and the Prospectus;
(C) for the period from the closing date of the most recent
consolidated balance sheet included or incorporated in the
Registration Statement and the Prospectus to the closing date of the
latest available consolidated income statement read by such
accountants there were any decreases, as compared with the
corresponding period in the previous year, in consolidated sales and
operating revenues or consolidated net income except for changes or
decreases which the Prospectus (directly or by incorporation)
discloses have occurred or may occur, or which are described in such
letter; or
(D) unaudited pro forma consolidated condensed financial
statements, if any, included or incorporated by reference in the
Prospectus do
<PAGE>
1-3
not comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the published
rules and regulations thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of those statements;
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting records of
the Company and its subsidiaries) set forth in the Registration Statement
and the Prospectus and in Exhibit 12 to the Registration Statement,
including the information included or incorporated in Items 1, 6 and 7 of
the Company's Annual Report on Form 10-K, incorporated in the Registration
Statement and the Prospectus, and the information included in the
"Management's Discussion and Analysis" included or incorporated in the
Company's quarterly reports on Form 10-Q, incorporated in the Registration
Statement and the Prospectus, agrees with the accounting records of the
Company and its subsidiaries excluding any questions of legal
interpretation; and
(iv) they have made a review of any unaudited financial statements
included in the Registration Statement in accordance with standards
established by the American Institute of Certified Public Accountants, as
indicated in their report or reports, if any, attached to such letter.
<PAGE>
1
Exhibit 4.15
[Form of Certificated Fixed Rate Registered Security--United States]
[Form of Face]
NOTE NUMBER AGENT'S NAME
ASHLAND INC.
- ----------------------------------------------------
PRINCIPAL AMOUNT SETTLEMENT DATE TRADE DATE
U.S.$ (ORIGINAL ISSUE DATE)
- --------------------------------------------------------------------------------
MATURITY DATE TRUSTEE'S CUST. NO. INTEREST RATE TAXPAYER ID TRANSFERRED
OR SOC. SEC.
NO. OF
PURCHASER
- --------------------------------------------------------------------------------
NAME AND ADDRESS OF REGISTERED OWNER MEDIUM-TERM
NOTE
PROGRAM
CITIBANK, N.A.
TRUSTEE
- --------------------------------------------------------------------------------
CUSTOMER'S RETAIN FOR THE TIME OF THE PLEASE SIGN SEE
COPY TAX PURPOSES TRANSACTION WILL BE AND RETURN REVERSE SIDE
FURNISHED UPON REQUEST ENCLOSED
OF THE CUSTOMER RECEIPT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
2
REGISTERED REGISTERED
ASHLAND INC.
MEDIUM-TERM NOTE, SERIES G
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
NO. (FIXED RATE) U.S.$
CUSIP
ORIGINAL ISSUE DATE: INTEREST RATE: MATURITY DATE:
REDEMPTION DATE: INDEXED NOTES: / / YES (see attached) / / NO
OTHER PROVISIONS:
ASHLAND INC., a corporation duly organized and existing under the laws
of Kentucky (herein called the "Company", which term includes any successor
corporation under the Indenture referred to on the reverse hereof), for value
received, hereby promises to pay to
, or registered assigns, the principal sum of
U.S. DOLLARS, on the Maturity Date specified above, and to pay
interest thereon from the Original Issue Date specified above, or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, to but excluding the relevant Interest Payment Date, semiannually in
arrears on June 15 and December 15 in each year, unless otherwise indicated in
the applicable pricing supplement, commencing on the first such date after the
Original Issue Date set forth above, at the rate set forth on the face hereof,
until the principal hereof is paid or made available for payment; PROVIDED,
HOWEVER, that if the Original Issue Date set forth above is after a Regular
Record Date referred to below and before the related Interest Payment Date, the
first payment of interest will be made on the Interest Payment Date following
the next succeeding Regular Record Date. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date (other than
at Maturity) will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the June 1 or December 1 (whether or not a Business Day), unless otherwise
indicated in the applicable pricing supplement, as the case may be, next
preceding such Interest
<PAGE>
3
Payment Date; PROVIDED, HOWEVER, that interest payable at Maturity shall be
payable to the Person to whom principal shall be payable. Except as otherwise
provided in the Indenture, any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture. Payment of the principal, premium, if any, and
interest on this Security will be made at the principal corporate trust office
of the Trustee in the Borough of Manhattan, The City of New York, or such other
office or agency of the Company as may be designated by it for such purpose in
the Borough of Manhattan, The City of New York (the "Paying Agent"), in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts; PROVIDED, HOWEVER, that at
the option of the Company, payment of interest (except at Maturity) may be made
by United States dollar check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register. Payment of the
principal, premium, if any, and interest on this Security due at Maturity will
be made in immediately available funds upon surrender of this Security to the
Paying Agent; PROVIDED that this Security is presented to the Paying Agent in
time for the Paying Agent to make such payment in accordance with its normal
procedures. "Maturity" shall mean the date on which the principal of this
Security or an installment of principal becomes due, whether on the Maturity
Date specified above, upon redemption or otherwise.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY
SET FORTH IN FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature of an authorized officer, this
Security
<PAGE>
4
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: ASHLAND INC.
By
---------------------------------
Senior Vice President
[Seal] Attest:
---------------------------------
Assistant Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the Series designated therein referred to in
the within-mentioned Indenture.
CITIBANK, N.A.
As Trustee
By
-----------------------------------
Authorized Officer
<PAGE>
5
[Form of Reverse]
ASHLAND INC.
MEDIUM-TERM NOTE, SERIES G
(Fixed Rate)
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of August 15, 1989, as amended and restated
as of August 15, 1990 (herein called the "Indenture"), between the Company and
Citibank, N.A., as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof.
This Security may not be redeemed prior to the Redemption Date set
forth on the face hereof. If no Redemption Date is so set forth, this Security
is not redeemable prior to the Maturity Date. On or after the Redemption Date
set forth on the face hereof, this Security is redeemable in whole or in part in
increments of U.S. $1,000 at the option of the Company at a redemption price
equal to 100% of the principal amount to be redeemed together with interest
thereon to the date of redemption.
Notice of redemption will be given by mail to Holders of Securities,
not more than 60 nor less than 30 days prior to the date fixed for redemption,
all as provided in the Indenture.
In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
surrender hereof.
The Securities of this series will not have a sinking fund unless
otherwise specified in the applicable pricing supplement.
<PAGE>
6
Subject to a number of important qualifications and exceptions set
forth in the Indenture, the Indenture provides that neither the Company nor any
Subsidiary (as defined in the Indenture) will (i) issue, assume or guarantee any
notes, bonds, debentures or other similar evidences of indebtedness for money
borrowed secured by a mortgage, lien, pledge or other encumbrance upon any real
or personal property located in the continental United States of America without
effectively providing that the Securities will be secured equally and ratably
with (or, at the option of the Company, prior to) such indebtedness so long as
such indebtedness shall be so secured or (ii) enter into any Sale and Lease-Back
Transactions (as defined in the Indenture).
The Indenture also provides that the Company at its option (a) will be
Discharged (as such term is defined in the Indenture) from any and all
obligations in respect of the Securities (except for certain obligations to
register the transfer or exchange of Securities, replace stolen, lost or
mutilated Securities, maintain paying agencies and hold moneys for payment in
trust) or (b) need not comply with certain restrictive covenants of the
Indenture, if there is deposited with the Trustee, in the case of Securities
Denominated in U.S. dollars, U.S. Government Obligations (as defined in the
Indenture) or, in the case of Securities denominated in a foreign currency,
Foreign Government Securities (as defined in the Indenture), which through the
payment of interest thereon and principal thereof in accordance with their terms
will provide money or a combination of money and U.S. Government Obligations or
Foreign Government Securities, as the case may be, in an amount sufficient to
pay in the currency, currencies or currency unit or units in which the
Securities are payable all the principal, premium, if any, and interest on, the
Securities on the dates such payments are due in accordance with the terms of
the Securities.
Interest payments for this Security will include interest accrued to
but excluding the Interest Payment Date. Interest payments for this Security
shall be computed and paid on the basis of a 360-day year of twelve 30-day
months.
The interest rate on this Security will in no event be higher than the
maximum rate permitted by New York law as the same may be modified by United
States law of general applicability.
<PAGE>
7
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66 2/3% in principal amount of the Securities at the
time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to this series, the Holders of not less
than 25% in principal amount of the Outstanding Securities of this series shall
have made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, the Trustee shall not have received from
the Holders of a majority in principal amount of the Outstanding Securities of
this series a direction inconsistent with such request and the Trustee shall
have failed to institute such proceeding within 60 days; PROVIDED, HOWEVER, that
such limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal, premium, if any, or interest on this
Security on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal, premium, if any, and
<PAGE>
8
interest on this Security at the times, places and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
corporate trust office of the Trustee or such other office or agency as may be
designated by the Company in the Borough of Manhattan, The City of New York,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series and of like tenor, of authorized
denominations and with like terms and conditions and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form,
without coupons, in denominations of $1,000 and any integral multiple of $1,000
in excess thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination and with like terms and conditions, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security is overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
<PAGE>
9
----------------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM-as tenants UNIF GIFT MIN ACT-..............Custodian.............
in common (Cust) (Minor)
TEN ENT-as tenants Under Uniform Gifts to Minors Act
by the entireties
JT TEN-as joint tenants ..................................
with right of (State)
survivorship and
not as tenants in common
Additional abbreviations may also be used though not in the above
list.
---------------------
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security or Other
Identifying Number of Assignee
- -----------------------------------------
------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE
- --------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing ________________________________________________ attorney
to transfer said Security on the books of the Company, with full power of
substitution in the premises.
Dated:
-------------------------------- --------------------------------
Signature
<PAGE>
1
Exhibit 4.16
[Form of Certificated Floating Rate Registered Security--United States]
[Form of Face]
NOTE NUMBER AGENT'S NAME
ASHLAND INC.
- -----------------------------------------------------
PRINCIPAL AMOUNT SETTLEMENT DATE TRADE DATE
U.S.$ (ORIGINAL ISSUE DATE)
- --------------------------------------------------------------------------------
MATURITY DATE TRUSTEE'S CUST. NO. INTEREST RATE TAXPAYER ID TRANSFERRED
OR SOC. SEC.
NO. OF
PURCHASER
- --------------------------------------------------------------------------------
NAME AND ADDRESS OF REGISTERED OWNER MEDIUM-TERM
NOTE
PROGRAM
CITIBANK, N.A.
TRUSTEE
- --------------------------------------------------------------------------------
CUSTOMER'S RETAIN FOR THE TIME OF THE PLEASE SIGN SEE
COPY TAX PURPOSES TRANSACTION WILL BE AND RETURN REVERSE SIDE
FURNISHED UPON REQUEST
OF THE CUSTOMER
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
2
REGISTERED REGISTERED
ASHLAND INC.
MEDIUM-TERM NOTE, SERIES G
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
NO. (FLOATING RATE) U.S.$
ORIGINAL ISSUE DATE: INITIAL INTEREST RATE: MATURITY DATE:
REDEMPTION DATE:
CALCULATION AGENT: INDEX MATURITY: SPREAD: +/-
- 1 MONTH SPREAD MULTIPLIER %
- 3 MONTHS
- 6 MONTHS
- 1 YEAR
INTEREST RATE BASIS: / / COMMERCIAL / / LIBOR / / TREASURY / / PRIME
PAPER RATE RATE RATE
/ / FEDERAL FUNDS / / CD RATE
RATE
MAXIMUM INTEREST RATE: % INTEREST PAYMENT PERIOD: .......................
(monthly, quarterly,
semi-annually or annually)
MINIMUM INTEREST RATE: % INTEREST RATE RESET PERIOD: ....................
(daily, weekly,
monthly, quarterly,
semi-annually or
annually)
INTEREST PAYMENT DATES: INTEREST RESET DATES:
REGULAR RECORD INDEXED NOTES: / / YES (see attached)
/ / NO
DATES:
OTHER PROVISIONS:
ASHLAND INC., a corporation duly organized and existing under the laws
of Kentucky (herein called the "Company" which term includes any successor
corporation under the Indenture referred to on the reverse hereof), for value
received, hereby promises to pay to
<PAGE>
3
, or registered assigns, the principal sum of
U.S. DOLLARS on the Maturity Date specified above, and to pay interest
thereon at a rate per annum equal to the Initial Interest Rate specified above
until the first Interest Reset Date specified above following the Original Issue
Date specified above and thereafter at a rate determined in accordance with the
provisions on the reverse hereof under the heading "Determination of Commercial
Paper Rate", "Determination of Prime Rate", "Determination of LIBOR",
"Determination of Treasury Rate", "Determination of Federal Funds Rate" or
"Determination of CD Rate", depending upon whether the Interest Rate Basis
specified above is the Commercial Paper Rate, Prime Rate, LIBOR, Treasury Rate,
Federal Funds Rate or CD Rate, which rate may be adjusted by adding or
subtracting the Spread or multiplying by the Spread Multiplier (as such terms
are defined below) depending on whether a Spread or Spread Multiplier is
designated above, until the principal hereof is paid or duly made available for
payment. In addition, a Floating Rate Note may bear interest at the lowest or
highest or average of two or more interest rate formulae. The "Spread", if any,
is the number of basis points designated above, and the "Spread Multiplier", if
any, is the percentage designated above. The Company will pay interest monthly,
quarterly, semi-annually or annually as specified above under "Interest Payment
Period", commencing with the first Interest Payment Date specified above next
succeeding the Original Issue Date and thereafter on the Interest Payment Dates
as specified above, and on the Maturity Date. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest set forth above (whether or not a
Business Day), next preceding such Interest Payment Date; PROVIDED, HOWEVER,
that interest payable at Maturity shall be payable to the Person to whom
principal shall be payable. Except as otherwise provided in the Indenture, any
such interest not so punctually paid or duly provided for will forthwith cease
to be payable to the Holder on such Regular Record Date and may either be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
thereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by
<PAGE>
4
such exchange, all as more fully provided in said Indenture. Payment of the
principal, premium, if any, and interest on this Security will be made at the
principal corporate trust office of the Trustee in the Borough of Manhattan, The
City of New York, or such other office or agency of the Company as may be
designated by it for such purpose in the Borough of Manhattan, The City of New
York (the "Paying Agent"), in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; PROVIDED, HOWEVER, that at the option of the Company payment of
interest (except at Maturity) may be made by United States dollar check mailed
to the address of the Person entitled thereto as such address shall appear in
the Security Register. Payment of the principal, premium, if any, and interest
on this Security due at Maturity will be made in immediately available funds
upon surrender of this Security to the Paying Agent; PROVIDED that this Security
is presented to the Paying Agent in time for the Paying Agent to make such
payment in accordance with its normal procedures. "Maturity" shall mean the
date on which the principal of this Security or an installment of principal
becomes due, whether on the Maturity Date specified above, upon redemption or
otherwise.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY
SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature of an authorized officer, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: ASHLAND INC.
By
-------------------------------
Senior Vice President
(Seal) Attest:
------------------------------
Assistant Secretary
<PAGE>
5
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the Series designated therein referred to in
the within-mentioned Indenture.
Dated:
CITIBANK, N.A.
As Trustee
By
-----------------------
Authorized Officer
<PAGE>
6
[Form of Reverse]
ASHLAND INC.
MEDIUM-NOTE, SERIES G
(Floating Rate)
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of August 15, 1989, as amended and restated
as of August 15, 1990 (herein called the "Indenture"), between the Company and
Citibank, N.A., as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof.
This Security may not be redeemed prior to the Redemption Date set
forth on the face hereof. If no Redemption Date is so set forth, this Security
is not redeemable prior to the Maturity Date. On or after the Redemption Date
set forth on the face hereof, this Security is redeemable in whole or in part in
increments of U.S. $1,000 at the option of the Company at a redemption price
equal to 100% of the principal amount to be redeemed together with interest
thereon to the date of redemption.
Notice of redemption will be given by mail to Holders of Securities,
not more than 60 nor less than 30 days prior to the date fixed for redemption,
all as provided in the Indenture.
In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
surrender hereof.
The Securities of this series will not have a sinking fund unless
otherwise specified in the applicable pricing supplement.
<PAGE>
7
Commencing with the first Interest Reset Date specified on the face
hereof following the Original Issue Date, the rate at which interest on this
Security is payable shall be adjusted daily, weekly, monthly, quarterly,
semi-annually or annually as shown on the face hereof under "Interest Rate Reset
Period"; PROVIDED, HOWEVER, that the interest rate in effect hereon for the 10
days immediately prior to the Maturity hereof, shall be that in effect on the
10th day preceding the Maturity hereof. Each such adjusted rate shall be
applicable on and after the Interest Reset Date to which it relates, to but not
including the next succeeding Interest Reset Date or until Maturity, as the case
may be. If any Interest Reset Date specified on the face hereof would otherwise
be a day that is not a Business Day, such Interest Reset Date shall be postponed
to the next succeeding day that is a Business Day, except that if (i) the rate
of interest on the Security shall be determined in accordance with the
provisions of the heading "Determination of LIBOR" below, and (ii) such London
Banking Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding London Banking Day. "Business Day" means any
day, other than a Saturday or Sunday, that meets each of the following
applicable requirements: the day is (a) not a day on which banking institutions
are authorized or required by law or regulation to be closed in The City of New
York, (b) if the Note is denominated in a Specified Currency other than the
European Currency Unit as defined and revised from time to time by the Council
of the European Communities ("ECU") or United States dollars, not a day on which
banking institutions are authorized or required by law or regulation to close in
the financial center of the country issuing the Specified Currency, (c) if the
Note is denominated in ECU, any day that is designated as an ECU settlement day
by the ECU Banking Association in Paris or otherwise generally regarded in the
ECU interbank market as a day on which payments in ECU are made, and (d) with
respect to LIBOR Notes, a London Banking Day. "London Banking Day" means any day
on which dealings in deposits in United States dollars are transacted in the
London interbank market. Subject to applicable provisions of law and except as
specified herein, on each Interest Reset Date, the rate of interest on this
Security shall be the rate determined in accordance with the provisions of the
applicable heading below.
The interest rate on this Security will in no event be higher than the
maximum rate permitted by New York law as the same may be modified by United
States law of general applicability.
DETERMINATION OF COMMERCIAL PAPER RATE. The interest rate payable
with respect to this Security shall be
<PAGE>
8
calculated by the Calculation Agent with reference to the Commercial Paper Rate
and the Spread or Spread Multiplier, if any, specified on the face hereof.
"Commercial Paper Rate" means, with respect to each Interest Determination Date
specified on the face hereof, the Money Market Yield (calculated as described
below) of the rate on such date for commercial paper having the Index Maturity
specified on the face hereof as published by the Board of Governors of the
Federal Reserve System in "Statistical Release H.15(519), Selected Interest
Rates" or any successor publication of the Board of Governors of the Federal
Reserve System ("H.15(519)") under the heading "Commercial Paper". In the event
that such rate is not published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, then the
Commercial Paper Rate will be the Money Market Yield of the rate on such
Interest Determination Date for commercial paper having the Index Maturity
specified on the face hereof as published by the Federal Reserve Bank of New
York in its daily statistical release, "Composite 3:30 P.M. Quotations for U.S.
Government Securities" ("Composite Quotations") under the heading "Commercial
Paper". If such rate is not yet published by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such Interest Determination Date, then the
Commercial Paper Rate for such Interest Determination Date will be calculated by
the Calculation Agent and will be the Money Market Yield of the arithmetic mean
(rounded to the next higher one hundred thousandth of a percentage point) of the
offered rates of three leading dealers of commercial paper in The City of New
York selected by the Calculation Agent as of 11:00 A.M., New York City time, on
such Interest Determination Date for commercial paper having the Index Maturity
specified on the face hereof placed for an industrial issuer whose bond rating
is "AA", or the equivalent, from a nationally recognized rating agency;
PROVIDED, HOWEVER, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Commercial Paper Rate
will be the Commercial Paper Rate in effect on such Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage rounded
to the next higher one hundred thousandth of a percentage point) calculated in
accordance with the following formula:
Money Market Yield = D x 360 x 100
-------------
360 - (D x M)
<PAGE>
9
where "D" refers to the per annum rate for commercial paper quoted on a
bank-discount basis and expressed as a decimal; and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
DETERMINATION OF PRIME RATE. The interest rate payable with respect
to this Security shall be calculated by the Calculation Agent with reference to
the Prime Rate and the Spread or Spread Multiplier, if any, specified on the
face hereof. "Prime Rate" means, with respect to each Interest Determination
Date specified on the face hereof, the arithmetic mean (rounded to the next
higher one hundred thousandth of a percentage point) of the prime rates quoted
on the basis of the actual number of days in the year divided by 365 or 366
days, as the case may be, as of the close of business on such Interest
Determination Date by three major money center banks in The City of New York
selected by the Calculation Agent. If fewer than three such quotations are
provided, the Prime Rate shall be determined on the basis of the rates furnished
in The City of New York by three substitute banks or trust companies organized
and doing business under the laws of the United States, or any state thereof
having total equity capital of at least U.S. $500 million and being subject to
supervision or examination by Federal or state authority, selected by the
Calculation Agent to provide such rate or rates; PROVIDED, HOWEVER, that if the
banks selected as aforesaid are not quoting as mentioned in this sentence, the
Prime Rate will be the Prime Rate in effect on such Interest Determination Date.
DETERMINATION OF LIBOR. The interest rate payable with respect to
this Security shall be calculated with reference to LIBOR and the Spread or
Spread Multiplier, if any, specified on the face hereof. "LIBOR" will be
determined with respect to each Interest Determination Date specified on the
face hereof by the Calculation Agent in accordance with the following
provisions: On each LIBOR Interest Determination Date, LIBOR will be determined
on the basis of the offered rate for deposits in U.S. dollars having the Index
Maturity specified in the applicable Pricing Supplement, commencing on the
second London Banking Day immediately following such LIBOR Interest
Determination Date, which appears on the Telerate Page 3750 as of 11:00 A.M.,
London time, on that LIBOR Interest Determination Date. If such rate does not
so appear on the Telerate page 3750, the rate in respect of such LIBOR Interest
Determination Date will be determined on the basis of the rates at which
deposits in U.S. dollars are offered by four major banks in the London interbank
market, selected by the Calculation Agent at approximately 11:00 A.M., London
time, on the LIBOR Interest Determination Date next preceding the relevant
Interest Reset Date, to prime banks in the London
<PAGE>
10
interbank market for a period of the Index Maturity commencing on that Interest
Reset Date and in a principal amount equal to an amount not less than $1,000,000
that is representative for a single transaction in such market at such time. In
such case, the Calculation Agent will request the principal London office of
each of the aforesaid major banks to provide a quotation of such rate. If at
least two such quotations are provided in respect of such LIBOR Interest
Determination Date, the rate for that Interest Reset Date will be the arithmetic
mean of the quotations, and, if fewer than two quotations are provided as
requested in respect of such LIBOR Interest Determination Date, the rate for
that Interest Reset Date will be the arithmetic mean of the rates quoted by
three major banks in The City of New York, selected by the Calculation Agent
(which may include one or more of the Agents or their affiliates), at
approximately 11:00 A.M., New York City time, on that LIBOR Interest
Determination Date for loans in U.S. dollars to leading European banks for a
period of the Index Maturity commencing on that Interest Reset Date and in a
principal amount equal to an amount not less than $1,000,000 that is
representative for a single transaction in such market at such time; PROVIDED,
HOWEVER, if the aforesaid rate cannot be determined by the Calculation Agent,
LIBOR in respect of such LIBOR Interest Determination Date will be LIBOR then in
effect on such LIBOR Interest Determination Date.
"Telerate Page 3750" means the display page so designated on the Dow
Jones Telerate Service (or such other page as may replace that page on that
service, or such other service as may be nominated as the information vendor,
for the purpose of displaying rates or prices relating to LIBOR).
DETERMINATION OF TREASURY RATE. The interest rate payable with
respect to this Security shall be calculated by the Calculation Agent with
reference to the Treasury Rate and the Spread or Spread Multiplier, if any,
specified on the face hereof. "Treasury Rate" means, with respect to each
Interest Determination Date specified on the face hereof, the rate for the most
recent auction of direct obligations of the United States ("Treasury bills")
having the Index Maturity specified on the face hereof as published in H.15(519)
under the heading "U.S. Government Securities--Treasury Bills--Auction Average
(Investment)" or, if not so published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the Treasury
Rate will be the auction average rate, expressed as a Bond Equivalent Yield
(calculated as described below), for such auction as otherwise announced by the
United States Department of the Treasury. If the results of the auction of
Treasury bills having the Index Maturity specified on the face hereof are not
published or announced as provided above by 3:00 P.M., New York City time,
<PAGE>
11
on such Calculation Date, or if no such auction is held in a particular week,
then the Treasury Rate shall be calculated by the Calculation Agent and shall be
a yield to maturity, expressed as a Bond Equivalent Yield, of the arithmetic
mean of the secondary market bid rates as of approximately 3:30 P.M., New York
City time, on such Interest Determination Date, of three leading primary United
States government securities dealers selected by the Calculation Agent, for the
issue of Treasury bills with a remaining maturity closest to the specified Index
Maturity; PROVIDED, HOWEVER, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Treasury
Rate with respect to such Interest Determination Date will be the Treasury Rate
in effect on such Interest Determination Date.
"Bond Equivalent Yield" shall be a yield (expressed as a percentage
rounded to the next higher one-hundred thousandth of a percentage point)
calculated in accordance with the following formula:
Bond Equivalent Yield = D x N x 100
-------------
360 - (D x M)
where "D" refers to the per annum rate for Treasury bills, quoted on a
bank-discount basis and expressed as a decimal; "N" refers to the actual number
of days in the year for which interest is being calculated; and "M" refers to
the actual number of days in the interest period for which interest is being
calculated.
DETERMINATION OF FEDERAL FUNDS RATE. The interest rate payable with
respect to this Security shall be calculated by the Calculation Agent with
reference to the Federal Funds Rate and the Spread or Spread Multiplier, if any,
specified on the face hereof. "Federal Funds Rate" means, with respect to each
Interest Determination Date specified on the face hereof, the rate on that day
for Federal Funds as published in H.15(519) under the heading "Federal Funds
(Effective)" or, if not so published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, then the
Federal Funds Rate for such Interest Determination Date will be the rate on such
Interest Determination Date as published in Composite Quotations under the
heading "Federal Funds/ Effective Rate". If such rate is not yet published by
3:00 P.M., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, then the Federal Funds Rate for such Interest
Determination Date will be calculated by the Calculation Agent and will be the
arithmetic mean (rounded to the nearest one-hundred thousandth of a percentage
point) of the rates prior to 9:00 A.M., New York City time, on such Interest
<PAGE>
12
Determination Date for the last transaction in overnight Federal Funds arranged
by three leading brokers of Federal Funds transactions in The City of New York
selected by the Calculation Agent; PROVIDED, HOWEVER, that if the brokers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the Federal Funds Rate with respect to such Interest
Determination Date will be the Federal Funds Rate in effect on such Interest
Determination Date.
DETERMINATION OF CD RATE. The interest rate payable with respect to
this Security shall be calculated by the Calculation Agent with reference to the
CD Rate and the Spread or Spread Multiplier, if any, specified on the face
hereof. "CD Rate" means, with respect to each Interest Determination Date, the
rate on such date for negotiable certificates of deposit having the Index
Maturity specified on the face hereof as published in H.15(519) under the
heading "CDs (Secondary Market)" or, if not so published by 3:00 P.M., New York
City time, on the Calculation Date pertaining to such Interest Determination
Date, the CD Rate will be the rate on such Interest Determination Date for
negotiable certificates of deposit of the Index Maturity specified on the face
hereof as published in Composite Quotations under the heading "Certificates of
Deposit". If such rate is not published by 3:00 P.M., New York City time, on
such Calculation Date, then the CD Rate on such Interest Determination Date will
be calculated by the Calculation Agent and will be the arithmetic mean (each as
rounded to the nearest one-hundred thousandth of a percentage point) of the
secondary market offered rates as of the opening of business, New York City
time, on such Interest Determination Date, of three leading nonbank dealers in
negotiable U.S. dollar certificates of deposit in The City of New York selected
by the Calculation Agent for negotiable certificates of deposit of major United
States money market banks of the highest credit standing (in the market for
negotiable certificates of deposit) with a remaining maturity closest to the
Index Maturity specified on the face hereof in a denomination of U.S.
$5,000,000; PROVIDED, HOWEVER, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the CD Rate
with respect to such Interest Determination Date will be the CD Rate in effect
on such Interest Determination Date.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, shown on the face hereof. The Calculation Agent shall
calculate the interest rate on this Security in accordance with the foregoing on
or before each Calculation Date and shall promptly thereafter notify the Company
and the Trustee of such
<PAGE>
13
interest rate. Any such calculation by the Calculation Agent shall be
conclusive and binding on the Company, the Trustee and the Holder of this
Security, absent manifest error.
The Calculation Agent will, upon the request of the Holder of this
Security, provide to such Holder the interest rate hereon then in effect and, if
determined, the interest rate which will become effective as of the next
Interest Reset Date.
If any Interest Payment Date specified on the face hereof would
otherwise be a day that is not a Business Day, the Interest Payment Date shall
be postponed to the next day that is a Business Day, except that if (i) the rate
of interest on this Security shall be determined in accordance with the
provisions of the heading "Determination of LIBOR" above and (ii) such London
Banking Day is in the next succeeding calendar month, such Interest Payment Date
shall be the immediately preceding London Banking Day.
The Interest Determination Date pertaining to an Interest Reset Date
if the rate of interest on the Security shall be determined in accordance with
the provisions of the headings "Determination of Commercial Paper Rate",
"Determination of Prime Rate", "Determination of Federal Funds Rate" or
"Determination of CD Rate" above will be the second Business Day preceding such
Interest Reset Date. The Interest Determination Date pertaining to an Interest
Reset Date if the rate of interest on this Security shall be determined in
accordance with the provisions of the heading "Determination of LIBOR" above
will be the second London Banking Day preceding such Interest Reset Date. The
Interest Determination Date pertaining to an Interest Reset Date if the rate of
interest on the Security shall be determined in accordance with the provisions
of the heading "Determination of Treasury Rate" above (the "Treasury Interest
Determination Date") will be the day of the week in which such Interest Reset
Date falls on which Treasury bills would normally be auctioned. Treasury bills
are usually sold at auction on the Monday of each week, unless that day is a
legal holiday, in which case the auction is usually held on the following
Tuesday, except that such auction may be held on the preceding Friday. If, as a
result of a legal holiday, an auction is so held on the preceding Friday, such
Friday will be the Treasury Interest Determination Date pertaining to the
Interest Reset Date occurring in the next succeeding week. If an auction date
shall fall on any Interest Reset Date for a Treasury Rate Note, then such
Interest Reset Date shall instead be the first Business Day immediately
following such auction date.
<PAGE>
14
The Calculation Date, if applicable, pertaining to any Interest
Determination Date shall be the tenth calendar day after such Interest
Determination Date, or if any such day is not a Business Day, the next
succeeding Business Day.
Interest payments for this Security will include interest accrued to
but excluding the Interest Payment Date; PROVIDED, HOWEVER, that if the interest
rate with respect to this Security is reset daily or weekly, interest payable on
any Interest Payment Date, other than interest payable on any date on which
principal hereof is payable, will include interest accrued from but excluding
the second preceding Regular Record Date, or from and including the date of
issue, if no interest has been paid with respect to such Note, to and including
the next preceding Regular Record Date. Accrued interest hereon from and
including the Original Issue Date, or from but excluding the last date to which
interest hereon has been paid or duly provided for, as the case may be, will be
an amount calculated by multiplying the face amount hereof by an accrued
interest factor. Such accrued interest factor will be computed by adding the
interest factor calculated for each day from and including the Original Issue
Date, or from but excluding the last date to which interest shall have been paid
or duly provided for, as the case may be, to and including the date for which
accrued interest is being calculated. The interest factor (expressed as a
decimal rounded upwards, if necessary, to the next higher one-hundred thousandth
of a percentage point) for each such day will be computed by dividing the
interest rate (expressed as a decimal rounded upwards, if necessary, to the next
higher one-hundred thousandth of a percentage point) applicable to such day by
360, in the case of the Commercial Paper Rate, LIBOR, the Federal Funds Rate or
the CD Rate, or by the actual number of days in the year, in the case of the
Treasury Rate or the Prime Rate. The interest factor for Floating Rate Notes
for which two or more interest rate formulae are applicable will be calculated
in the same manner as if only the lowest, highest or average of, as the case may
be, such interest rate formulae applied.
Subject to a number of important qualifications and exceptions set
forth in the Indenture, the Indenture provides that neither the Company nor any
Subsidiary (as defined in the Indenture) will (i) issue, assume or guarantee any
notes, bonds, debentures or other similar evidences of indebtedness for money
borrowed secured by a mortgage, lien, pledge or other encumbrance upon any real
or personal property located in the continental United States of America without
effectively providing that the Securities will be secured equally and ratably
with (or, at the option of the Company, prior to) such indebtedness so long as
such indebtedness shall
<PAGE>
15
be so secured or (ii) enter into any Sale and Lease-Back Transactions (as
defined in the Indenture).
The Indenture also provides that the Company at its option (a) will be
Discharged (as such term is defined in the Indenture) from any and all
obligations in respect of the Securities (except for certain obligations to
register the transfer or exchange of Securities, replace stolen, lost or
mutilated securities, maintain paying agencies and hold moneys for payment in
trust) or (b) need not comply with certain restrictive covenants of the
Indenture, if there is deposited with the Trustee, in the case of Securities
denominated in U.S. dollars, U.S. Government Obligations (as defined in the
Indenture) or, in the case of Securities denominated in a foreign currency,
Foreign Government Securities (as defined in the Indenture), which through the
payment of interest thereon and principal thereof in accordance with their terms
will provide money or a combination of money and U.S. Government Obligations or
Foreign Government Securities, as the case may be, in an amount sufficient to
pay in the currency, currencies or currency unit or units in which the
Securities are payable, all the principal, premium, if any, and interest on, the
Securities on the dates such payments are in accordance with the terms of the
Securities.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66 2/3% in principal amount of the Securities at the
time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
or transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
<PAGE>
16
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to this series, the Holders of not less
than 25% in principal amount of the Outstanding Securities of this series shall
have made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, the Trustee shall not have received from
the Holders of a majority in principal amount of the Outstanding Securities of
this series a direction inconsistent with such request and the Trustee shall
have failed to institute such proceeding within 60 days; PROVIDED, HOWEVER, that
such limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal, premium, if any, or interest on this
Security on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company which is
absolute and unconditional, to pay the principal, premium, if any, and interest
on this Security at the times, places and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
corporate trust office of the Trustee or such other office or agency as may be
designated by the Company in the Borough of Manhattan, The City of New York,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this Series and of like tenor, of authorized
denominations and with like terms and conditions and for the same aggregate
principal amount will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form,
without coupons, in denominations of $1,000 and any integral multiple of $1,000
in excess thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination and with like terms and conditions, as
requested by the Holder surrendering the same.
<PAGE>
17
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security is overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
<PAGE>
18
-------------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM-as tenants UNIF GIFT MIN ACT...............Custodian.............
in common (Cust) (Minor)
TEN ENT-as tenants Under Uniform Gifts to Minors Act
by the entireties
JT TEN-as joint tenants ..................................
with right of (State)
survivorship and
not as tenants in common
Additional abbreviations may also be used though not in the above
list.
---------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security or Other
Identifying Number of Assignee
- ---------------------------------------
-------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE
- --------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing ________________________________________________ attorney
to transfer said Security on the books of the Company, with full power of
substitution in the premises.
Dated:
---------------------------------- ----------------------------------
Signature
<PAGE>
1
Exhibit 4.17
[Form of Global Fixed Rate Registered Security
in connection with Book-Entry Notes--United States]
[Form of Face]
NOTE NUMBER AGENT'S NAME
ASHLAND INC.
- -----------------------------------------------------
PRINCIPAL AMOUNT SETTLEMENT DATE TRADE DATE
U.S.$ (ORIGINAL ISSUE DATE)
- --------------------------------------------------------------------------------
MATURITY DATE TRUSTEE'S CUST. NO. INTEREST RATE TAXPAYER ID TRANSFERRED
OR SOC. SEC.
NO. OF
PURCHASER
- --------------------------------------------------------------------------------
NAME AND ADDRESS OF REGISTERED OWNER MEDIUM-TERM
NOTE
PROGRAM
CITIBANK, N.A.
TRUSTEE
- --------------------------------------------------------------------------------
CUSTOMER'S RETAIN FOR THE TIME OF THE PLEASE SIGN SEE
COPY TAX PURPOSES TRANSACTION WILL BE AND RETURN REVERSE SIDE
FURNISHED UPON REQUEST ENCLOSED
OF THE CUSTOMER RECEIPT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE AND CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
<PAGE>
2
REGISTERED REGISTERED
ASHLAND INC.
MEDIUM-TERM NOTE, SERIES G
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
NO. (FIXED RATE) U.S.$
CUSIP
ORIGINAL ISSUE DATE: INTEREST RATE: MATURITY DATE:
REDEMPTION DATE: INDEXED NOTES: / / YES (see attached) / / NO
OTHER PROVISIONS:
ASHLAND INC., a corporation duly organized and existing under the laws
of Kentucky (herein called the "Company", which term includes any successor
corporation under the Indenture referred to on the reverse hereof), for value
received, hereby promises to pay to
, or registered assigns, the principal sum of
U.S. DOLLARS, on the Maturity Date specified above, and to pay
interest thereon from the Original Issue Date specified above, or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, to but excluding the relevant Interest Payment Date, semiannually in
arrears on June 15 and December 15 in each year, unless otherwise indicated in
the applicable Pricing Supplement, commencing on the first such date after the
Original Issue Date set forth above, at the rate set forth on the face hereof,
until the principal hereof is paid or made available for payment; PROVIDED,
HOWEVER, that if the Original Issue Date set forth above is after a Regular
Record Date referred to below and before the related Interest Payment Date, the
first payment of interest will be made on the Interest Payment Date following
the next succeeding Regular Record Date. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date (other than
at Maturity) will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the June 1 or December 1 (whether or not a Business Day), unless otherwise
indicated in the applicable Pricing Supplement, as the case may be, next
preceding such Interest Payment Date; PROVIDED, HOWEVER, that interest payable
at
<PAGE>
3
Maturity shall be payable to the Person to whom principal shall be payable.
Except as otherwise provided in the Indenture, any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the Payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture. Payment of the principal,
premium, if any, and interest on this Security will be made to the Depository,
or its nominee, as Holder thereof, in accordance with arrangements then in
effect between the Trustee and the Depositary, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; PROVIDED, HOWEVER, that at the option of the
Company, payment of interest (except at Maturity) may be made by United States
dollar check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register (which in the case of Book-Entry
Notes, will be a nominee of the Depositary). Payment of the principal, premium,
if any, and interest on this Security due at Maturity will be made in
immediately available funds upon surrender of this Security to the Paying Agent;
PROVIDED that this Security is presented to the Paying Agent in time for the
Paying Agent to make such payment in accordance with its normal procedures.
"Maturity" shall mean the date on which the principal of this Security or an
installment of principal becomes due, whether on the Maturity Date specified
above, upon redemption or otherwise.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY
SET FORTH IN FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature of an authorized officer, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
<PAGE>
4
Dated: ASHLAND INC.
By
----------------------------
Senior Vice President
[Seal] Attest:
----------------------------
Assistant Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the Series designated therein referred to in
the within-mentioned Indenture.
CITIBANK, N.A.
As Trustee
By
---------------------------
Authorized Officer
<PAGE>
5
[Form of Reverse]
ASHLAND INC.
MEDIUM-TERM NOTE, SERIES G
(Fixed Rate)
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of August 15, 1989, as amended and restated
as of August 15, 1990 (herein called the "Indenture"), between the Company and
Citibank, N.A., as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof.
This Security may not be redeemed prior to the Redemption Date set
forth on the face hereof. If no Redemption Date is so set forth, this Security
is not redeemable prior to the Maturity Date. On or after the Redemption Date
set forth on the face hereof, this Security is redeemable in whole or in part in
increments of U.S. $1,000 at the option of the Company at a redemption price
equal to 100% of the principal amount to be redeemed together with interest
thereon to the date of redemption.
Notice of redemption will be given by mail to Holders of Securities,
not more than 60 nor less than 30 days prior to the date fixed for redemption,
all as provided in the Indenture.
In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
surrender hereof.
The Securities of this series will not have a sinking fund unless
otherwise specified in the applicable pricing supplement.
Subject to a number of important qualifications and exceptions set
forth in the Indenture, the Indenture provides that neither the Company nor any
Subsidiary (as defined in the Indenture) will (i) issue, assume or guarantee any
notes, bonds,
<PAGE>
6
debentures or other similar evidences of indebtedness for money borrowed secured
by a mortgage, lien, pledge or other encumbrance upon any real or personal
property located in the continental United States of America without effectively
providing that the Securities will be secured equally and ratably with (or, at
the option of the Company, prior to) such indebtedness so long as such
indebtedness shall be so secured or (ii) enter into any Sale and Lease-Back
Transactions (as defined in the Indenture).
The Indenture also provides that the Company at its option (a) will be
Discharged (as such term is defined in the Indenture) from any and all
obligations in respect of the Securities (except for certain obligations to
register the transfer or exchange of Securities, replace stolen, lost or
mutilated Securities, maintain paying agencies and hold moneys for payment in
trust) or (b) need not comply with certain restrictive covenants of the
Indenture, if there is deposited with the Trustee, in the case of Securities
denominated in U.S. dollars, U.S. Government Obligations (as defined in the
Indenture) or, in the case of Securities denominated in a foreign currency,
Foreign Government Securities (as defined in the Indenture), which through the
payment of interest thereon and principal thereof in accordance with their terms
will provide money or a combination of money and U.S. Government Obligations or
Foreign Government Securities, as the case may be, in an amount sufficient to
pay in the currency, currencies or currency unit or units in which the
Securities are payable all the principal, premium, if any, and interest on, the
Securities on the dates such payments are due in accordance with the terms of
the Securities.
Interest payments for this Security will include interest accrued to
but excluding the Interest Payment Date. Interest payments for this Security
shall be computed and paid on the basis of a 360-day year of twelve 30-day
months.
The interest rate on this Security will in no event be higher than the
maximum rate permitted by New York law as the same may be modified by United
States law of general applicability.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66-2/3% in principal amount of the Securities at the
time outstanding of each series to be affected.
<PAGE>
7
The Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any of such consent
or waiver by the Holder of this Security shall be conclusive and binding upon
such Holder and upon all future Holders of this Security and of any Security
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon this
Security.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to this series, the Holders of not less
than 25% in principal amount of the Outstanding Securities of this series shall
have made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, the Trustee shall not have received from
the Holders of a majority in principal amount of the Outstanding Securities of
this series a direction inconsistent with such request and the Trustee shall
have failed to institute such proceeding within 60 days; PROVIDED, HOWEVER, that
such limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal, premium, if any, or interest on this
Security on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal, premium, if any, and
interest on this Security at the times, places and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
corporate trust office of the Trustee or such other office or agency as may be
designated by the Company in the Borough of Manhattan, The City of New York,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series and of like tenor, of authorized
denominations and with like terms and conditions and for the same aggregate
<PAGE>
8
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form,
without coupons, in denominations of $1,000 and any integral multiple of $1,000
in excess thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination and with like terms and conditions, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security is overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
<PAGE>
9
----------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM-as tenants UNIF GIFT MIN ACT-..............Custodian.............
in common (Cust) (Minor)
TEN ENT-as tenants Under Uniform Gifts to Minors Act
by the entireties
JT TEN-as joint tenants ..................................
with right of (State)
survivorship and
not as tenants in common
Additional abbreviations may also be used though not in the above list.
--------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security or Other
Identifying Number of Assignee
- --------------------------------------
----------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE
- --------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing ________________________________________________ attorney
to transfer said Security on the books of the Company, with full power of
substitution in the premises.
Dated:
------------------------------- -----------------------------------
Signature
<PAGE>
1
Exhibit 4.18
[Form of Global Floating Rate Registered Security
in connection with Book-Entry Notes--United States]
[Form of Face]
NOTE NUMBER AGENT'S NAME
ASHLAND INC.
- -----------------------------------------------------
PRINCIPAL AMOUNT SETTLEMENT DATE TRADE DATE
U.S.$ (ORIGINAL ISSUE DATE)
- --------------------------------------------------------------------------------
MATURITY DATE TRUSTEE'S CUST. NO. INTEREST RATE TAXPAYER ID TRANSFERRED
OR SOC. SEC.
NO. OF
PURCHASER
- --------------------------------------------------------------------------------
NAME AND ADDRESS OF REGISTERED OWNER MEDIUM-TERM
NOTE
PROGRAM
CITIBANK, N.A.
TRUSTEE
- --------------------------------------------------------------------------------
CUSTOMER'S RETAIN FOR THE TIME OF THE PLEASE SIGN SEE
COPY TAX PURPOSES TRANSACTION WILL BE AND RETURN REVERSE SIDE
FURNISHED UPON REQUEST ENCLOSED
OF THE CUSTOMER RECEIPT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE AND CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
<PAGE>
2
REGISTERED REGISTERED
ASHLAND INC.
MEDIUM-TERM NOTE, SERIES G
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
NO. (FLOATING RATE) U.S.$
ORIGINAL ISSUE DATE: INITIAL INTEREST RATE: MATURITY DATE:
REDEMPTION DATE:
CALCULATION AGENT: INDEX MATURITY: SPREAD: +/-
- 1 MONTH SPREAD MULTIPLIER %
- 3 MONTHS
- 6 MONTHS
- 1 YEAR
INTEREST RATE BASIS: / / COMMERCIAL / / LIBOR / / TREASURY / / PRIME
PAPER RATE RATE RATE
/ / FEDERAL FUNDS / / CD RATE
RATE
MAXIMUM INTEREST RATE: % INTEREST PAYMENT PERIOD: .......................
(monthly, quarterly,
semi-annually or annually)
MINIMUM INTEREST RATE: % INTEREST RATE RESET PERIOD: ....................
(daily, weekly,
monthly, quarterly,
semi-annually or
annually)
INTEREST PAYMENT DATES: INTEREST RESET DATES:
REGULAR RECORD INDEXED NOTES: / / YES (see attached) / / NO
DATES:
OTHER PROVISIONS:
ASHLAND INC., a corporation duly organized and existing under the laws
of Kentucky (herein called the "Company" which term includes any successor
corporation under the Indenture referred to on the reverse hereof), for value
received, hereby promises to pay to
<PAGE>
3
, or registered assigns, the principal sum of
U.S. DOLLARS on the Maturity Date specified above, and to pay interest
thereon at a rate per annum equal to the Initial Interest Rate specified above
until the first Interest Reset Date specified above following the Original Issue
Date specified above and thereafter at a rate determined in accordance with the
provisions on the reverse hereof under the heading "Determination of Commercial
Paper Rate", "Determination of Prime Rate", "Determination of LIBOR",
"Determination of Treasury Rate", "Determination of Federal Funds Rate" or
"Determination of CD Rate", depending upon whether the Interest Rate Basis
specified above is the Commercial Paper Rate, Prime Rate, LIBOR, Treasury Rate,
Federal Funds Rate or CD Rate, which rate may be adjusted by adding or
subtracting the Spread or multiplying by the Spread Multiplier (as such terms
are defined below) depending on whether a Spread or Spread Multiplier is
designated above, until the principal hereof is paid or duly made available for
payment. In addition, a Floating Rate note may bear interest at the lowest or
highest or average of two or more interest rate formulae. The "Spread", if any,
is the number of basis points designated above, and the "Spread Multiplier", if
any, is the percentage designated above. The Company will pay interest monthly,
quarterly, semi-annually or annually as specified above under "Interest Payment
Period", commencing with the first Interest Payment Date specified above next
succeeding the Original Issue Date and thereafter on the Interest Payment Dates
as specified above, and on the Maturity Date. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest set forth above (whether or not a
Business Day), next preceding such Interest Payment Date; PROVIDED, HOWEVER,
that interest payable at Maturity shall be payable to the Person to whom
principal shall be payable. Except as otherwise provided in the Indenture, any
such interest not so punctually paid or duly provided for will forthwith cease
to be payable to the Holder on such Regular Record Date and may either be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
thereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series
<PAGE>
4
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture. Payment of the principal, premium, if
any, and interest on this Security will be made to the Depositary, or its
nominee, as Holder thereof, in accordance with arrangements then in effect
between the Trustee and the Depositary, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; PROVIDED, HOWEVER, that at the option of the Company
payment of interest (except at maturity) may be made by United States dollar
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register (which, in the case of Book-Entry Notes, will be
a nominee of the Depositary). Payment of the principal, premium, if any, and
interest on this Security due at Maturity will be made in immediately available
funds upon surrender of this Security to the Paying Agent; PROVIDED that this
Security is presented to the Paying Agent in time for the Paying Agent to make
such payment in accordance with its normal procedures. "Maturity" shall mean
the date on which the principal of this Security or an installment of principal
becomes due, whether on the Maturity Date specified above, upon redemption or
otherwise.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY
SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature of an authorized officer, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: ASHLAND INC.
By
-------------------------
Senior Vice President
[Seal] Attest:
-------------------------
Assistant Secretary
<PAGE>
5
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the Series designated therein referred to in
the within-mentioned Indenture.
Dated:
CITIBANK, N.A.
As Trustee
By
------------------------
Authorized Officer
<PAGE>
6
[Form of Reverse]
ASHLAND INC.
MEDIUM-TERM, SERIES G
(Floating Rate)
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of August 15, 1989, as amended and restated
as of August 15, 1990 (herein called the "Indenture"), between the Company and
Citibank, N.A., as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof.
This Security may not be redeemed prior to the Redemption Date set
forth on the face hereof. If no Redemption Date is so set forth, this Security
is not redeemable prior to the Maturity Date. On or after the Redemption Date
set forth on the face hereof, this Security is redeemable in whole or in part in
increments of U.S. $1,000 at the option of the Company at a redemption price
equal to 100% of the principal amount to be redeemed together with interest
thereon to the date of redemption.
Notice of redemption will be given by mail to Holders of Securities,
not more than 60 nor less than 30 days prior to the date fixed for redemption,
all as provided in the Indenture.
In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
surrender hereof.
<PAGE>
7
The Securities of this series will not have a sinking fund unless
otherwise specified in the applicable pricing supplement.
Commencing with the first Interest Reset Date specified on the face
hereof following the Original Issue Date, the rate at which interest on this
Security is payable shall be adjusted daily, weekly, monthly, quarterly,
semi-annually or annually as shown on the face hereof under "Interest Rate Reset
Period"; PROVIDED, HOWEVER, that the interest rate in effect hereon for the 10
days immediately prior to the Maturity hereof, shall be that in effect on the
10th day preceding the Maturity hereof. Each such adjusted rate shall be
applicable on and after the Interest Reset Date to which it relates, to but not
including the next succeeding Interest Reset Date or until Maturity, as the case
may be. If any Interest Reset Date specified on the face hereof would otherwise
be a day that is not a Business Day, such Interest Reset Date shall be postponed
to the next succeeding day that is a Business Day, except that if (i) the rate
of interest on the Security shall be determined in accordance with the
provisions of the heading "Determination of LIBOR" below, and (ii) such London
Banking Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding London Banking Day. "Business Day" means any
day, other than a Saturday or Sunday, that meets each of the following
applicable requirements: the day is (a) not a day on which banking institutions
are authorized or required by law or regulation to be closed in The City of New
York, (b) if the Note is denominated in a Specified Currency other than the
European Currency Unit as defined and revised from time to time by the Council
of the European Communities ("ECU") or United States dollars, not a day on which
banking institutions are authorized or required by law or regulation to close in
the financial center of the country issuing the Specified Currency, (c) if the
Note is denominated in ECU, any day that is designated as an ECU settlement day
by the ECU Banking Association in Paris or otherwise generally regarded in the
ECU interbank market as a day on which payments in ECU are made, and (d) with
respect to LIBOR Notes, a London Banking Day. "London Banking Day" means any day
on which dealings in deposits in United States dollars are transacted in the
London interbank market. Subject to applicable provisions of law and except as
specified herein, on each Interest Reset Date, the rate of interest on this
Security shall be the rate determined in accordance with the provisions of the
applicable heading below.
The interest rate on this Security will in no event be higher than the
maximum rate permitted by New York law as
<PAGE>
8
the same may be modified by United States law of general applicability.
DETERMINATION OF COMMERCIAL PAPER RATE. The interest rate payable
with respect to this Security shall be calculated by the Calculation Agent with
reference to the Commercial Paper Rate and the Spread or Spread Multiplier, if
any, specified on the face hereof. "Commercial Paper Rate" means, with respect
to each Interest Determination Date specified on the face hereof, the Money
Market Yield (calculated as described below) of the rate on such date for
commercial paper having the Index Maturity specified on the face hereof as
published by the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(519), Selected Interest Rates" or any successor
publication of the Board of Governors of the Federal Reserve System
("H.15(519)") under the heading "Commercial Paper". In the event that such rate
is not published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, then the Commercial Paper Rate
will be the Money Market Yield of the rate on such Interest Determination Date
for commercial paper having the Index Maturity specified on the face hereof as
published by the Federal Reserve Bank of New York in its daily statistical
release, "Composite 3:30 P.M. Quotations for U.S. Government Securities"
("Composite Quotations") under the heading "Commercial Paper". If such rate is
not yet published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, then the Commercial Paper Rate
for such Interest Determination Date will be calculated by the Calculation Agent
and will be the Money Market Yield of the arithmetic mean (rounded to the next
higher one-hundred thousandth of a percentage point) of the offered rates of
three leading dealers of commercial paper in The City of New York selected by
the Calculation Agent as of 11:00 A.M., New York City time, on such Interest
Determination Date for commercial paper having the Index Maturity specified on
the face hereof placed for an industrial issuer whose bond rating is "AA", or
the equivalent, from a nationally recognized rating agency; PROVIDED, HOWEVER,
that if the dealers selected as aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence, the Commercial Paper Rate will be the
Commercial Paper Rate in effect on such Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage rounded
to the next higher one-hundred thousandth of a percentage point) calculated in
accordance with the following formula:
<PAGE>
9
Money Market Yield = D x 360 x 100
-------------
360 - (D x M)
where "D" refers to the per annum rate for commercial paper quoted on a
bank-discount basis and expressed as a decimal; and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
DETERMINATION OF PRIME RATE. The interest rate payable with respect
to this Security shall be calculated by the Calculation Agent with reference to
the Prime Rate and the Spread or Spread Multiplier, if any, specified on the
face hereof. "Prime Rate" means, with respect to each Interest Determination
Date specified on the face hereof, the arithmetic mean (rounded to the next
higher one-hundred thousandth of a percentage point) of the prime rates quoted
on the basis of the actual number of days in the year divided by 365 or 366
days, as the case may be, as of the close of business on such Interest
Determination Date by three major money center banks in The City of New York
selected by the Calculation Agent. If fewer than three such quotations are
provided, the Prime Rate shall be determined on the basis of the rates furnished
in The City of New York by three substitute banks or trust companies organized
and doing business under the laws of the United States, or any state thereof,
having total equity capital of at least U.S. $500 million and being subject to
supervision or examination by Federal or state authority, selected by the
Calculation Agent to provide such rate or rates; PROVIDED, HOWEVER, that if the
banks selected as aforesaid are not quoting as mentioned in this sentence, the
Prime Rate will be the Prime Rate in effect on such Interest Determination Date.
DETERMINATION OF LIBOR. The interest rate payable with respect to
this Security shall be calculated with reference to LIBOR and the Spread or
Spread Multiplier, if any, specified on the face hereof. "LIBOR" will be
determined with respect to each Interest Determination Date specified on the
face hereof by the Calculation Agent in accordance with the following
provisions: On each LIBOR Interest Determination Date, LIBOR will be determined
on the basis of the offered rate for deposits in U.S. dollars having the Index
Maturity specified in the applicable Pricing Supplement, commencing on the
second London Banking Day immediately following such LIBOR Interest
Determination Date, which appears on the Telerate Page 3750 as of 11:00 A.M.,
London time, on that LIBOR Interest Determination Date. If such rate does not
so appear on the Telerate page 3750, the rate in respect of such LIBOR Interest
Determination Date will be determined on the basis of the rates at which
<PAGE>
10
deposits in U.S. dollars are offered by four major banks in the London interbank
market, selected by the Calculation Agent at approximately 11:00 A.M., London
time, on the LIBOR Interest Determination Date next preceding the relevant
Interest Reset Date, to prime banks in the London interbank market for a period
of the Index Maturity commencing on that Interest Reset Date and in a principal
amount equal to an amount not less than $1,000,000 that is representative for a
single transaction in such market at such time. In such case, the Calculation
Agent will request the principal London office of each of the aforesaid major
banks to provide a quotation of such rate. If at least two such quotations are
provided in respect of such LIBOR Interest Determination Date, the rate for that
Interest Reset Date will be the arithmetic mean of the quotations, and, if fewer
than two quotations are provided as requested in respect of such LIBOR Interest
Determination Date, the rate for that Interest Reset Date will be the arithmetic
mean of the rates quoted by three major banks in The City of New York, selected
by the Calculation Agent (which may include one or more of the Agents or their
affiliates), at approximately 11:00 A.M., New York City time, on that LIBOR
Interest Determination Date for loans in U.S. dollars to leading European banks
for a period of the Index Maturity commencing on that Interest Reset Date and in
a principal amount equal to an amount not less than $1,000,000 that is
representative for a single transaction in such market at such time; PROVIDED,
HOWEVER, if the aforesaid rate cannot be determined by the Calculation Agent,
LIBOR in respect to such LIBOR Interest Determination Date will be LIBOR then in
effect on such LIBOR Interest Determination Date.
"Telerate Page 3750" means the display page so designated on the Dow
Jones Telerate Service (or such other page as may replace that page on that
service, or such other service as may be nominated as the information vendor,
for the purpose of displaying rates or prices relating to LIBOR).
DETERMINATION OF TREASURY RATE. The interest rate payable with
respect to this Security shall be calculated by the Calculation Agent with
reference to the Treasury Rate and the Spread or Spread Multiplier, if any,
specified on the face hereof. "Treasury Rate" means, with respect to each
Interest Determination Date specified on the face hereof, the rate for the most
recent auction of direct obligations of the United States ("Treasury bills")
having the Index Maturity specified on the face hereof as published in H.15(519)
under the heading "U.S. Government Securities--Treasury Bills--Auction Average
(Investment)" or, if not so published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the Treasury
<PAGE>
11
Rate will be the auction average rate, expressed as a Bond Equivalent Yield
(calculated as described below), for such auction as otherwise announced by the
United States Department of the Treasury. If the results of the auction of
Treasury bills having the Index maturity specified on the face hereof are not
published or announced as provided above by 3:00 P.M., New York City time, on
such Calculation Date, or if no such auction is held in a particular week, then
the Treasury Rate shall be calculated by the Calculation Agent and shall be a
yield to maturity, expressed as a Bond Equivalent Yield, of the arithmetic mean
of the secondary market bid rates as of approximately 3:30 P.M., New York City
time, on such Interest Determination Date, of three leading primary United
States government securities dealers selected by the Calculation Agent, for the
issue of Treasury bills with a remaining maturity closest to the specified Index
Maturity; PROVIDED, HOWEVER, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Treasury
Rate with respect to such Interest Determination Date will be the Treasury Rate
in effect on such Interest Determination Date.
"Bond Equivalent Yield" shall be a yield (expressed as a percentage
rounded to the next higher one-hundred thousandth of a percentage point)
calculated in accordance with the following formula:
Bond Equivalent Yield D x N x 100
-------------
360 - (D x M)
where "D" refers to the per annum rate for Treasury bills, quoted on a
bank-discount basis and expressed as a decimal; "N" refers to the actual number
of days in the year for which interest is being calculated; and "M" refers to
the actual number of days in the interest period for which interest is being
calculated.
DETERMINATION OF FEDERAL FUNDS RATE. The interest rate payable with
respect to this Security shall be calculated by the Calculation Agent with
reference to the Federal Funds Rate and the Spread or Spread Multiplier, if any,
specified on the face hereof. "Federal Funds Rate" means, with respect to each
Interest Determination Date specified on the face hereof, the rate on that day
for Federal Funds as published in H.15(519) under the heading "Federal Funds
(Effective)" or, if not so published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, then the
Federal Funds Rate for such Interest Determination Date will be the rate on such
Interest Determination Date as published in Composite Quotations under the
heading "Federal Funds/ Effective Rate".
<PAGE>
12
If such rate is not yet published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, then the
Federal Funds Rate for such Interest Determination Date will be calculated by
the Calculation Agent and will be the arithmetic mean (rounded to the nearest
one-hundred thousandth of a percentage point) of the rates prior to 9:00 A.M.,
New York City time, on such Interest Determination Date for the last transaction
in overnight Federal Funds arranged by three leading brokers of Federal Funds
transactions in The City of New York selected by the Calculation Agent;
PROVIDED, HOWEVER, that if the brokers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Federal Funds Rate with
respect to such Interest Determination Date will be the Federal Funds Rate in
effect on such Interest Determination Date.
DETERMINATION OF CD RATE. The interest rate payable with respect to
this Security shall be calculated by the Calculation Agent with reference to the
CD Rate and the Spread or Spread Multiplier, if any, specified on the face
hereof. "CD Rate" means, with respect to each Interest Determination Date, the
rate on such date for negotiable certificates of deposit having the Index
Maturity specified on the face hereof as published in H.15(519) under the
heading "CDs (Secondary Market)" or, if not so published by 3:00 P.M., New York
City time, on the Calculation Date pertaining to such Interest Determination
Date, the CD Rate will be the rate on such Interest Determination Date for
negotiable certificates of deposit of the Index Maturity specified on the face
hereof as published in Composite Quotations under the heading "Certificates of
Deposit". If such rate is not published by 3:00 P.M., New York City time, on
such Calculation Date, then the CD Rate on such Interest Determination Date will
be calculated by the Calculation Agent and will be the arithmetic mean (each as
rounded to the nearest one-hundred thousandth of a percentage point) of the
secondary market offered rates as of the opening of business, New York City
time, on such Interest Determination Date, of three leading nonbank dealers in
negotiable U.S. dollar certificates of deposit in The City of New York selected
by the Calculation Agent for negotiable certificates of deposit of major United
States money market banks of the highest credit standing (in the market for
negotiable certificates of deposit) with a remaining maturity closest to the
Index Maturity specified on the face hereof in a denomination of U.S.
$5,000,000; PROVIDED, HOWEVER, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the CD Rate
with respect to such Interest Determination Date will be the CD Rate in effect
on such Interest Determination Date.
<PAGE>
13
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, shown on the face hereof. The Calculation Agent shall
calculate the interest rate on this Security in accordance with the foregoing on
or before each Calculation Date and shall promptly thereafter notify the Company
and the Trustee of such interest rate. Any such calculation by the Calculation
Agent shall be conclusive and binding on the Company, the Trustee and the Holder
of this Security, absent manifest error.
The Calculation Agent will, upon the request of the Holder of this
Security, provide to such Holder the interest rate hereon then in effect and, if
determined, the interest rate which will become effective as of the next
Interest Reset Date.
If any Interest Payment Date specified on the face hereof would
otherwise be a day that is not a Business Day, the Interest Payment Date shall
be postponed to the next day that is a Business Day, except that if (i) the rate
of interest on this Security shall be determined in accordance with the
provisions of the heading "Determination of LIBOR" above and (ii) such London
Banking Day is in the next succeeding calendar month, such Interest Payment Date
shall be the immediately preceding London Banking Day.
The Interest Determination Date pertaining to an Interest Reset Date
if the rate of interest on the Security shall be determined in accordance with
the provisions of the headings "Determination of Commercial Paper Rate",
"Determination of Prime Rate", "Determination of Federal Funds Rate" or
"Determination of CD Rate" above will be the second Business Day preceding such
Interest Reset Date. The Interest Determination Date pertaining to an Interest
Reset Date if the rate of interest on this Security shall be determined in
accordance with the provisions of the heading "Determination of LIBOR" above
will be the second London Banking Day preceding such Interest Reset Date. The
Interest Determination Date pertaining to an Interest Reset Date if the rate of
interest on the Security shall be determined in accordance with the provisions
of the heading "Determination of Treasury Rate" above (the "Treasury Interest
Determination Date") will be the day of the week in which such Interest Reset
Date falls on which Treasury bills would normally be auctioned. Treasury bills
are usually sold at auction on the Monday of each week, unless that day is a
legal holiday, in which case the auction is usually held on the following
Tuesday, except that such auction may be held on the
<PAGE>
14
preceding Friday. If, as a result of a legal holiday, an auction is so held on
the preceding Friday, such Friday will be the Treasury Interest Determination
Date pertaining to the Interest Reset Date occurring in the next succeeding
week. If an auction date shall fall on any Interest Reset Date for a Treasury
Rate Note, then such Interest Reset Date shall instead be the first Business
Day immediately following such auction date.
The Calculation Date, if applicable, pertaining to any Interest
Determination Date shall be the tenth calendar day after such Interest
Determination Date, or if any such day is not a Business Day, the next
succeeding Business Day.
Interest payments for this Security will include interest accrued to
but excluding the Interest Payment Date; PROVIDED, HOWEVER, that if the interest
rate with respect to this Security is reset daily or weekly, interest payable on
any Interest Payment Date, other than interest payable on any date on which
principal hereof is payable, will include interest accrued from but excluding
the second preceding Regular Record Date, or from and including the date of
issue, if no interest has been paid with respect to such Note, to and including
the next preceding Regular Record Date. Accrued interest hereon from and
including the Original Issue Date, or from but excluding the last date to which
interest hereon has been paid or duly provided for, as the case may be, will be
an amount calculated by multiplying the face amount hereof by an accrued
interest factor. Such accrued interest factor will be computed by adding the
interest factor calculated for each day from and including the Original Issue
Date, or from the last date to which interest shall have been paid or duly
provided for, as the case may be, to and including the date for which accrued
interest is being calculated. The interest factor (expressed as a decimal
rounded upwards, if necessary, to the next higher one-hundred thousandth of a
percentage point) for each such day will be computed by dividing the interest
rate (expressed as a decimal rounded upwards, if necessary, to the next higher
one-hundred thousandth of a percentage point) applicable to such day by 360, in
the case of the Commercial Paper Rate, LIBOR, the Federal Funds Rate or the CD
Rate, or by the actual number of days in the year, in the case of the Treasury
Rate or the Prime Rate. The interest factor for Floating Rate Notes for which
two or more interest rate formulae are applicable will be calculated in the same
manner as if only the lowest, highest or average of, as the case may be, such
interest rate formulae applied.
Subject to a number of important qualifications and exceptions set
forth in the Indenture, the Indenture provides
<PAGE>
15
that neither the Company nor any Subsidiary (as defined in the Indenture) will
(i) issue, assume or guarantee any notes, bonds, debentures or other similar
evidences of indebtedness for money borrowed secured by a mortgage, lien, pledge
or other encumbrance upon any real or personal property located in the
continental United States of America without effectively providing that the
Securities will be secured equally and ratably with (or, at the option of the
Company, prior to) such indebtedness so long as such indebtedness shall be so
secured or (ii) enter into any Sale and Lease-Back Transactions (as defined in
the Indenture).
The Indenture also provides that the Company at its option (a) will be
Discharged (as such term is defined in the Indenture) from any and all
obligations in respect of the Securities (except for certain obligations to
register the transfer or exchange of Securities, replace stolen, lost or
mutilated Securities, maintain paying agencies and hold moneys for payment in
trust) or (b) need not comply with certain restrictive covenants of the
Indenture, if there is deposited with the Trustee, in the case of Securities
denominated in U.S. dollars, U.S. Government Obligations (as defined in the
Indenture) or, in the case of Securities denominated in a foreign currency,
Foreign Government Securities (as defined in the Indenture), which through the
payment of interest thereon and principal thereof in accordance with their terms
will provide money or a combination of money and U.S. Government Obligations or
Foreign Government Securities, as the case may be, in an amount sufficient to
pay in the currency, currencies or currency unit or units in which the
Securities are payable, all the principal, premium, if any, and interest on, the
Securities on the dates such payments are due in accordance with the terms of
the Securities.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66 2/3% in principal amount of the Securities at the
time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time
<PAGE>
16
outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration or transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to this series, the Holders of not less
than 25% in principal amount of the Outstanding Securities of this series shall
have made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, the Trustee shall not have received from
the Holders of a majority in principal amount of the Outstanding Securities of
this series a direction inconsistent with such request and the Trustee shall
have failed to institute such proceeding within 60 days; PROVIDED, HOWEVER, that
such limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal, premium, if any, or interest on this
Security on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this security
or of the Indenture shall alter or impair the obligation of the Company which is
absolute and unconditional, to pay the principal, premium, if any, and interest
on this Security at the times, places and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
corporate trust office of the Trustee or such other office or agency as may be
designated by the Company in the Borough of Manhattan, The City of New York,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this Series and of like tenor, of authorized
denominations and with like terms
<PAGE>
17
and conditions and for the same aggregate principal amount will be issued to the
designated transferee or transferees.
The Securities of this series are issuable only in registered form,
without coupons, in denominations of $1,000 and any integral multiple of $1,000
in excess thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination and with like terms and conditions, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security is overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
<PAGE>
18
------------------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM-as tenants UNIF GIFT MIN ACT.........Custodian..........
in common (Cust) (Minor)
TEN ENT-as tenants Under Uniform Gifts to Minors Act
by the entireties
JT TEN-as joint tenants ..................................
with right of (State)
survivorship and
not as tenants in common
Additional abbreviations may also be used though not in the above list.
-------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security or Other
Identifying Number of Assignee
- ---------------------------------------
--------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE
- --------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing _______________________________________________ attorney
to transfer said Security on the books of the Company, with full power of
substitution in the premises.
Dated:
--------------------------------------------------------------------------
Signature
<PAGE>
ASHLAND INC.
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
(In millions)
<TABLE>
<CAPTION>
Three Months Ended
Years Ended September 30 December 31
------------------------------------------------------------ ---------------------
1990 1991 1992 1993 1994 1993 1994
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS
Net income (loss) $ 182 $ 145 $ (336) $ 142 $ 197 $ 58 $ 35
Cumulative effect of accounting changes - - 268 - - - -
Income taxes 81 48 (90) 58 75 27 15
Interest expense 120 125 132 124 119 29 33
Interest portion of rental expense 28 28 34 35 38 9 9
Amortization of deferred debt expense 1 1 1 2 1 - -
Undistributed earnings of unconsolidated
affiliates (41) (3) (22) (12) (14) 8 (7)
Amounts related to significant affiliates*
Earnings 57 6 30 (2) 27 (7) 10
Dividends (4) (5) (4) (4) - - (1)
--------- --------- --------- --------- --------- --------- ---------
$ 424 $ 345 $ 13 $ 343 $ 443 $ 124 $ 94
========= ========= ========= ========= ========= ========= =========
FIXED CHARGES
Interest expense $ 120 $ 125 $ 132 $ 124 $ 119 $ 29 $ 33
Interest portion of rental expense 28 28 34 35 38 9 9
Amortization of deferred debt expense 1 1 1 2 1 - -
Capitalized interest 1 2 3 9 - 1 -
Fixed charges of significant affiliates* 18 20 17 16 18 4 5
--------- --------- --------- --------- --------- --------- ---------
$ 168 $ 176 $ 187 $ 186 $ 176 $ 43 $ 47
========= ========= ========= ========= ========= ========= =========
COMBINED FIXED CHARGES AND PREFERRED
STOCK DIVIDENDS
Preferred dividend requirements $ - $ - $ - $ 6 $ 19 $ 5 $ 5
Ratio of pretax to net income** - - - 1.41 1.38 1.45 1.43
--------- --------- --------- --------- --------- --------- ---------
Preferred dividends on a pretax basis - - - 9 26 7 6
Fixed charges 168 176 187 186 176 43 47
--------- --------- --------- --------- --------- --------- ---------
$ 168 $ 176 $ 187 $ 195 $ 202 $ 50 $ 53
========= ========= ========= ========= ========= ========= =========
RATIO OF EARNINGS TO FIXED CHARGES 2.53 1.96 *** 1.84 2.51 2.90 2.01
RATIO OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS 2.53 1.96 *** 1.76 2.19 2.50 1.76
<FN>
* Significant affiliates are companies accounted for on the equity
method that are 50% owned or whose indebtedness has been directly or
indirectly guaranteed by Ashland or its consolidated subsidiaries.
** Computed as income before income taxes divided by net income, which
adjusts dividends on preferred stock to a pretax basis.
*** Fixed charges exceeded earnings (as defined) by $174 million as a
result of special charges and the current year impact of accounting
changes.
</TABLE>
<PAGE>
EXHIBIT 23.1
Ernst & Young LLP
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Post-Effective Amendment No. 1 to Registration Statement (Form S-3, No.
33-57011) and related Prospectus of Ashland Inc., and to the incorporation by
reference therein of our reports dated November 2, 1994, with respect to the
consolidated financial statements and schedules of Ashland Inc. (name change
from Ashland Oil, Inc.) and subsidiaries, included in its Annual Report (Form
10-K) for the year ended September 30, 1994 filed with the Securities and
Exchange Commission.
Ernst & Young LLP
Louisville, Kentucky
April 7, 1995
