<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 1, 1998
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
ASHLAND INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
KENTUCKY 5169 61-0122250
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)
----------------
1000 ASHLAND DRIVE
RUSSELL, KY 41169
(TELEPHONE: (606) 329-3333)
(ADDRESS AND TELEPHONE NUMBER OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
COPY TO:
SUSAN WEBSTER, ESQ.
CRAVATH, SWAINE & MOORE
825 EIGHTH AVENUE
NEW YORK, NY 10019
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC. As soon as
practicable after this Registration Statement becomes effective.
IF THE SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED IN
CONNECTION WITH THE FORMATION OF A HOLDING COMPANY AND THERE IS COMPLIANCE WITH
GENERAL INSTRUCTION G, CHECK THE FOLLOWING BOX. [_]
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND
LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE
REGISTRATION STATEMENT FOR THE SAME OFFERING. [_]
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(D)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING. [_]
----------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT OFFERING PRICE REGISTRATION FEE(1)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6 5/8% Senior Notes Due
2008.................. $150,000,000 $1,000.00 $150,000,000 $44,250
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Calculated pursuant to Rule 457. Previously paid.
----------------
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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<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. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MAY 1, 1998
PROSPECTUS
$150,000,000
ASHLAND INC.
OFFER TO EXCHANGE ITS 6 5/8% SENIOR NOTES DUE 2008, WHICH HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, FOR UP TO $150,000,000 PRINCIPAL
AMOUNT OF ITS OUTSTANDING 6 5/8% SENIOR NOTES DUE 2008.
-----------------
The Exchange Offer will expire at 5:00 p.m., New York City time, on ,
unless extended.
Ashland Inc., a company incorporated under the laws of Kentucky ("Ashland" or
the "Company"), hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and the accompanying Letter of Transmittal (which
together constitute the "Exchange Offer"), to exchange its 6 5/8% Senior Notes
Due 2008 (the "New Notes") which have been registered under the Securities Act
of 1933, as amended (the "Securities Act"), pursuant to a Registration
Statement (as defined herein) of which this Prospectus constitutes a part, for
up to $150,000,000 aggregate principal amount of its outstanding 6 5/8% Senior
Notes Due 2008 (the "Old Notes"), of which $150,000,000 aggregate principal
amount is outstanding as of the date hereof.
The New Notes will evidence the same debt as the Old Notes and will be issued
under and be entitled to the same benefits under the Indenture (as defined
herein) as the Old Notes. In addition, the New Notes and the Old Notes will be
treated as one series of securities under the Indenture. The terms of the New
Notes are identical in all material respects to the terms of the Old Notes,
except for certain transfer restrictions, registration rights and terms
providing for an increase in the interest rate on the Old Notes under certain
circumstances relating to the registration of the New Notes. The New Notes and
the Old Notes are collectively referred to herein as the "Notes." See
"Description of the Notes."
The New Notes will bear interest at 6 5/8% per annum, payable semiannually on
February 15 and August 15 of each year, commencing August 15, 1998, to the
person in whose name the Note is registered, subject to certain exceptions as
provided in the Indenture, at the close of business on February 1 or August 1
(each a "Record Date"), as the case may be, immediately preceding such February
15 or August 15. Interest will accrue on the Notes from February 17, 1998. The
New Notes will mature on February 15, 2008, and are not subject to any sinking
fund provision.
The New 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. As of March 31, 1998, the
Company had no indebtedness ranking senior to or subordinated to the New Notes
and $1,650 million of indebtedness ranking pari passu with the New Notes.
Except as described in certain covenants, 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 New Notes.
See "Description of the Notes."
The New Notes are being offered hereunder in order to satisfy certain
obligations of the Company under the Registration Rights Agreement dated as of
February 17, 1998 (the "Registration Rights Agreement") between the Company and
Citicorp Securities, Inc., Credit Suisse First Boston Corporation and Salomon
Brothers Inc, as the initial purchasers of the Old Notes (the "Initial
Purchasers").
(continued on next page)
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 , 1998.
<PAGE>
The Company is making the Exchange Offer in reliance on the position of the
staff of the Securities and Exchange Commission (the "Commission") as set
forth in certain no-action letters addressed to other parties in other
transactions. However, the Company has not sought its own no-action letter,
and there can be no assurance that the staff of the Commission will make a
similar determination with respect to the Exchange Offer as in such other
circumstances. Based upon these interpretations by the staff of the
Commission, the Company believes that New Notes issued pursuant to this
Exchange Offer in exchange for Old Notes may be offered for resale, resold and
otherwise transferred by a holder thereof other than (i) a broker-dealer who
purchased such Old Notes directly from the Company to resell pursuant to Rule
144A or any other available exemption under the Securities Act or (ii) a
person that is an "affiliate" (as defined in Rule 405 of the Securities Act)
of the Company without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such New Notes are
acquired in the ordinary course of such holder's business and that such holder
is not participating, and has no arrangement or understanding with any person
to participate, in the distribution of such New Notes. Holders of Old Notes
accepting the Exchange Offer will represent to the Company in the Letter of
Transmittal that such conditions have been met. Any holder who participates in
the Exchange Offer for the purpose of participating in a distribution of the
New Notes may not rely on the position of the staff of the Commission as set
forth in these no-action letters and would have to comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any secondary resale transaction. A secondary resale
transaction in the United States by a holder who is using the Exchange Offer
to participate in the distribution of New Notes must be covered by a
registration statement containing the selling securityholder information
required by Item 507 of Regulation S-K of the Securities Act.
Each broker-dealer that receives New Notes for its own account pursuant to
the Exchange Offer must acknowledge that it acquired the Old Notes as a result
of market-making activities or other trading activities and will deliver a
prospectus in connection with any resale of such New Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of New Notes received in exchange for Old Notes where such Old
Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company has agreed that, for a
period of 180 days after the Expiration Date (as defined herein), it will make
this Prospectus available to any broker-dealer for use in connection with any
such resale. See "Plan of Distribution." All broker-dealers must comply with
the registration and prospectus delivery requirements of the Securities Act in
connection with any secondary resale transaction. See "The Exchange Offer."
The New Notes are new securities for which there is currently no market. The
Company presently does not intend to apply for listing of the New Notes on any
securities exchange or for quotation through the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"). The Company has been
advised by the Initial Purchasers that, following completion of the Exchange
Offer, they presently intend to make a market in the New Notes; however, the
Initial Purchasers are not obligated to do so, and any market-making
activities with respect to the New Notes may be discontinued at any time
without notice. There can be no assurance that an active public market for the
New Notes will develop.
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD NOTES ARE URGED TO READ THIS PROSPECTUS AND THE
RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO TENDER
THEIR OLD NOTES PURSUANT TO THE EXCHANGE OFFER.
Any Old Notes not tendered and accepted in the Exchange Offer will remain
outstanding and will be entitled to all the rights and preferences and will be
subject to the limitations applicable thereto under the Indenture. Following
consummation of the Exchange Offer, the holders of Old Notes will continue to
be subject to the existing restrictions upon transfer thereof and the Company
will have no further obligation to such holders (other than the Initial
Purchasers) to provide for the registration under the Securities Act of the
Old Notes held by them.
<PAGE>
To the extent that Old Notes are tendered and accepted in the Exchange Offer,
a holder's ability to sell untendered Old Notes could be adversely affected.
It is not expected that an active market for the Old Notes will develop while
they are subject to restrictions on transfer. The Company will accept for
exchange any and all Old Notes that are validly tendered and not withdrawn on
or prior to 5:00 p.m., New York City time, on the date the Exchange Offer
expires, which will be , 1998 (the "Expiration Date"), unless the
Exchange Offer is extended by the Company in its sole discretion (but in no
event to a date later than , 1998), in which case the term "Expiration
Date" shall mean the latest date and time to which the Exchange Offer is
extended. Tenders of Old Notes may be withdrawn at any time prior to 5:00
p.m., New York City time, on the Expiration Date, unless previously accepted
for payment by the Company. The Exchange Offer is not conditioned upon any
minimum principal amount of Old Notes being tendered for exchange. However,
the Exchange Offer is subject to certain conditions which may be waived by the
Company and to the terms and provisions of the Registration Rights Agreement.
Old Notes may be tendered only in denominations of $1,000 and integral
multiples thereof. The Company has agreed to pay the expenses of the Exchange
Offer. See "The Exchange Offer--Fees and Expenses." The New Notes will bear
interest from the last interest payment date of the Old Notes to occur prior
to the issue date of the New Notes or, if no such interest has been paid, from
February 17, 1998. Holders of the Old Notes whose Old Notes are accepted for
exchange will not receive interest on such Old Notes for any period subsequent
to the last interest payment date to occur prior to the issue date of the New
Notes, if any, and will be deemed to have waived the right to receive any
interest payment on the Old Notes accrued from and after such interest payment
date or, if no such interest has been paid, from February 17, 1998.
This Prospectus, together with the Letter of Transmittal, is being sent to
all registered holders of Old Notes as of , 1998.
The Company will not receive any proceeds from this Exchange Offer. No
dealer-manager is being used in connection with this Exchange Offer. See "Use
of Proceeds" and "Plan of Distribution."
Until , 1998, all broker-dealers effecting transactions in the New
Notes, whether or not participating in the Exchange Offer, may be required to
deliver a Prospectus. This is in addition to the obligations of broker-dealers
to deliver a Prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
No broker-dealer, salesperson or other individual has been authorized to
give any information or to make any representation in connection with the
Exchange Offer other than those contained in this Prospectus and Letter of
Transmittal and, if given or made, such information or representation must not
be relied upon as having been authorized by the Company. The delivery of this
Prospectus shall not, under any circumstances, create any implication that the
information herein is correct at any time subsequent to its date.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT TENDERS
FOR EXCHANGE FROM, HOLDERS OF NEW NOTES IN ANY JURISDICTION IN WHICH THE
EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE
SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
2
<PAGE>
AVAILABLE INFORMATION
The Company 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
Commission. Such reports, proxy statements and other information filed by the
Company 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, Citicorp 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 the Company 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. The
Company files such material with the Commission electronically. The Commission
maintains a Web Site that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the
Commission. The address of such site is: http://www.sec.gov.
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) the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1997, as amended by a Form 10-K/A (Amendment No. 1) filed
on May 1, 1998; (ii) the Company's Quarterly Report on Form 10-Q for the
period ended December 31, 1997, as amended by a Form 10-Q/A (Amendment No. 1)
filed on March 30, 1998; (iii) the Company's Current Report on Form 8-K dated
December 12, 1997; (iv) the Company's Current Report on Form 8-K dated January
1, 1998, as amended by a Form 8-K/A filed with the Commission on March 17,
1998; and (v) the Company's Current Report on Form 8-K dated March 23, 1998.
All documents filed by the Company 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 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
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.
THE COMPANY 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, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE. REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO THE SECRETARY,
ASHLAND INC., P.O. BOX 391, ASHLAND, KENTUCKY 41114 (TELEPHONE: (606) 329-
3333).
3
<PAGE>
THE COMPANY
Ashland's businesses are grouped into five industry segments: Chemical,
Valvoline, APAC, Refining and Marketing, and Coal.
Ashland Chemical distributes industrial chemicals, solvents, thermoplastics
and resins, and fiberglass materials, and manufactures and sells a wide
variety of specialty chemicals and certain petrochemicals. Valvoline is a
marketer of branded, packaged motor oil and automotive chemicals, antifreeze,
filters, rust preventives, coolants and automotive appearance products. In
addition, Valvoline is engaged in the "fast oil change" business through
outlets operating under the Valvoline Instant Oil Change(R) and Valvoline
Rapid Oil Change(R) names.
APAC performs contract construction work, including highway paving and
repair, excavation and grading, and bridge construction, and produces
asphaltic and ready-mix concrete, crushed stone and other aggregate, concrete
block and certain specialized construction materials in the southern and
midwestern United States.
Effective January 1, 1998, Ashland and Marathon Oil Company completed a
transaction to form Marathon Ashland Petroleum LLC ("MAP"), which combined
major portions of the supply, refining, marketing and transportation
operations of the two companies. Marathon has a 62% interest in MAP and
Ashland holds a 38% interest. MAP operates seven refineries with a total
refining capacity of 930,000 barrels per day. Refined products are distributed
through a retail network of 5,400 independent and company owned outlets in 20
Midwest and Southern states. Ashland will account for its investment in MAP
using the equity method of accounting. However, since the transaction did not
close until January 1, 1998, Ashland continued to report its 100% ownership
interest in the Ashland Petroleum and SuperAmerica divisions (Ashland's
Refining and Marketing segment) on a consolidated basis in its financial
statements for the quarter ended December 31, 1997.
Ashland's coal operations are conducted by Arch Coal, Inc., which is 55%
owned by Ashland and is publicly traded, and which produces and markets
bituminous coal in Central Appalachia, the Illinois Basin and the Hanna Basin
in Wyoming for sale to domestic and foreign electric utility and industrial
customers.
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).
USE OF PROCEEDS
The Company received net proceeds of $149,025,000 from the issuance of the
Old Notes. Such proceeds were used to repay short-term borrowings. These
short-term borrowings were incurred to prepay certain operating leases of the
Company and to fund various acquisitions, in addition to providing for general
working capital needs.
The Company will not receive any cash proceeds from the issuance of the New
Notes offered hereby. In consideration for issuing the New Notes as described
in this Prospectus, the Company will receive in exchange Old Notes in like
principal amount, the terms of which are identical in all material respects to
those of the New Notes, except that the New Notes have been registered under
the Securities Act and are issued free of any covenant regarding registration,
including the payment of additional interest upon a failure to file or have
declared effective an exchange offer registration statement or to consummate
the Exchange Offer by certain dates. The Old Notes surrendered in exchange for
the New Notes will be retired and canceled and cannot be reissued.
Accordingly, the issuance of the New Notes will not result in any change in
the indebtedness of the Company.
4
<PAGE>
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>
QUARTER
ENDED
YEAR ENDED SEPTEMBER 30, DECEMBER 31,
------------------------ -------------
1993 1994 1995 1996 1997 1996 1997
---- ---- ---- ---- ---- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges...... 1.67 2.40 1.16 1.91 2.37 1.79 2.98
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends.. 1.59 2.06 1.07 1.71 2.23 1.61 2.98
</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 from continuing operations before
income taxes and minority interest, 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.
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
In connection with the sale of the Old Notes, the Company entered into the
Registration Rights Agreement with the Initial Purchasers, pursuant to which
the Company agreed to use its best efforts to file with the Commission a
registration statement with respect to the exchange of the Old Notes for a
series of registered debt securities with terms identical in all material
respects to the terms of the Old Notes, except that the New Notes have been
registered under the Securities Act and are issued free of any covenant
regarding registration, including the payment of additional interest upon a
failure to file or have declared effective an exchange offer registration
statement or to consummate the Exchange Offer by certain dates.
The Company is making the Exchange Offer in reliance on the position of the
staff of the Commission as set forth in Exxon Capital Holdings Corporation,
SEC No-Action Letter (April 13, 1989), Morgan Stanley & Co. Incorporated, SEC
No-Action Letter (June 5, 1991) and Shearman & Sterling, SEC No-Action Letter
(July 2, 1993). However, the Company has not sought its own no-action letter,
and there can be no assurance that the staff of the Commission would make a
similar determination with respect to the Exchange Offer as in such other
circumstances. Based upon these interpretations by the staff of the
Commission, the Company believes that New Notes issued pursuant to this
Exchange Offer in exchange for Old Notes may be offered for resale, resold and
otherwise transferred by a holder thereof other than (i) a broker-dealer who
purchased such Old Notes directly from the Company to resell pursuant to Rule
144A or any other available exemption under the Securities Act or (ii) a
person that is an "affiliate" (as defined in Rule 405 of the Securities Act)
of the Company without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such New Notes are
acquired in the ordinary course of such holder's business and that such holder
is not participating, and has no arrangement or understanding with any person
to participate, in the distribution of such New Notes. Holders of Old Notes
accepting the Exchange Offer will represent to the Company in the Letter of
Transmittal that such conditions have been met. Any holder who participates in
the Exchange Offer for the purpose of participating in a distribution of the
New Notes may not rely on the position of the staff of the Commission as set
forth in these no-action letters and would have to comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any secondary resale transaction. A secondary resale
transaction in the United States by a holder who is using the Exchange Offer
to participate in the distribution of New Notes must be covered by a
registration statement containing the selling securityholder information
required by Item 507 of Regulation S-K of the Securities Act.
5
<PAGE>
Each broker-dealer that receives New Notes for its own account pursuant to
the Exchange Offer must acknowledge that it acquired the Old Notes as a result
of market-making activities or other trading activities and will deliver a
prospectus in connection with any resale of such New Notes. The Letter of
Transmittal states that by acknowledging and delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of New Notes received in exchange for Old Notes where such Old
Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company has agreed that for a
period of 180 days after the Expiration Date, it will make this Prospectus
available to any broker-dealer for use in connection with any such resale. See
"Plan of Distribution."
Except as aforesaid, this Prospectus may not be used for an offer to resell,
resale or other retransfer of New Notes.
The Exchange Offer is not being made to, nor will the Company accept tenders
for exchange from, holders of Old Notes in any jurisdiction in which the
Exchange Offer or the acceptance thereof would not be in compliance with the
securities or blue sky laws of such jurisdiction.
TERMS OF THE EXCHANGE
Upon the terms and subject to the conditions of the Exchange Offer, the
Company will, unless such Old Notes are withdrawn in accordance with the
withdrawal rights specified in "--Withdrawal of Tenders" below, accept any and
all Old Notes validly tendered prior to 5:00 p.m., New York City time, on the
Expiration Date. The date of acceptance for exchange of the Old Notes, and
consummation of the Exchange Offer, is the Exchange Date, which will be the
first business day following the Expiration Date (unless extended as described
herein). The Company will issue, on or promptly after the Exchange Date, an
aggregate principal amount of up to $150,000,000 of New Notes in exchange for
a like principal amount of outstanding Old Notes tendered and accepted in
connection with the Exchange Offer. The New Notes issued in connection with
the Exchange Offer will be delivered on the earliest practicable date
following the Exchange Date. Holders may tender some or all of their Old Notes
in connection with the Exchange Offer. However, Old Notes may be tendered only
in integral multiples of $1,000.
The terms of the New Notes are identical in all material respects to the
terms of the Old Notes, except that the New Notes have been registered under
the Securities Act and are issued free from any covenant regarding
registration, including the payment of additional interest upon a failure to
file or have declared effective an exchange offer registration statement or to
consummate the Exchange Offer by certain dates. The New Notes will evidence
the same debt as the Old Notes and will be issued under and be entitled to the
same benefits under the Indenture as the Old Notes. As of the date of this
Prospectus, $150,000,000 aggregate principal amount of the Old Notes is
outstanding.
In connection with the issuance of the Old Notes, the Company arranged for
the Old Notes originally purchased by qualified institutional buyers to be
issued and transferable in book-entry form through the facilities of The
Depository Trust Company ("DTC"), acting as depositary. Except as described
under "--Procedures for Tendering," the New Notes will be issued in the form
of a global note registered in the name of DTC or its nominee and each
holder's interest therein will be transferable in book-entry form through DTC.
See "--Procedures for Tendering."
Holders of Old Notes do not have any appraisal or dissenters' rights in
connection with the Exchange Offer. Old Notes which are not tendered for
exchange or are tendered but not accepted in connection with the Exchange
Offer will remain outstanding and be entitled to the benefits of the
Indenture, but will not be entitled to any registration rights under the
Registration Rights Agreement.
6
<PAGE>
The Company shall be deemed to have accepted validly tendered Old Notes
when, as and if the Company has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering holders
for the purposes of receiving the New Notes from the Company.
If any tendered Old Notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, certificates for any such unaccepted Old Notes will be returned,
without expense, to the tendering holder thereof as promptly as practicable
after the Expiration Date.
Holders who tender Old Notes in connection with the Exchange Offer will not
be required to pay brokerage commissions or fees or, subject to the
instructions in the Letter of Transmittal, transfer taxes with respect to the
exchange of Old Notes in connection with the Exchange Offer. The Company will
pay all charges and expenses, other than certain applicable taxes described
below, in connection with the Exchange Offer. See "--Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1998, unless extended by the Company in its sole discretion (but in no
event to a date later than , 1998), in which case the term "Expiration
Date" shall mean the latest date and time to which the Exchange Offer is
extended.
The Company reserves the right, in its sole discretion (i) to delay
accepting any Old Notes, to extend the Exchange Offer or to terminate the
Exchange Offer and to refuse to accept Old Notes not previously accepted, if
any of the conditions set forth below under "--Conditions to the Exchange
Offer" shall not have been satisfied and shall not have been waived by the
Company (if permitted to be waived by the Company) and (ii) to amend the terms
of the Exchange Offer in any manner. Any such delay in acceptance, extension,
termination or amendment will be followed as promptly as practicable by oral
or written notice thereof to the registered holders. If the Exchange Offer is
amended in a manner determined by the Company to constitute a material change,
the Company will promptly disclose such amendment by means of a prospectus
supplement that will be distributed to the registered holders of the Old
Notes, and the Company will extend the Exchange Offer for a period of five to
ten business days, depending upon the significance of the amendment and the
manner of disclosure to the registered holders, if the Exchange Offer would
otherwise expire during such five to ten business day period. In no event,
however, shall the Exchange Date be later than the first business day
following , 1998.
If the Company determines to make a public announcement of any delay,
extension, amendment or termination of the Exchange Offer, the Company shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement, other than by making a timely release to an appropriate
news agency.
INTEREST ON THE NEW NOTES
The New Notes will bear interest at the rate of 6 5/8% per annum. Interest
on the New Notes shall accrue from the last interest payment date (February 15
or August 15) on which interest was paid on the Old Notes surrendered or, if
no interest has been paid on the Old Notes, from February 17, 1998. Interest
on the New Notes will be payable semiannually on February 15 and August 15 of
each year, commencing August 15, 1998.
Holders of Old Notes whose Old Notes are accepted for exchange will not
receive interest on such Old Notes for any period subsequent to the last
interest payment date to occur prior to the issue date of the New Notes, if
any, and will be deemed to have waived the right to receive any interest
payment on the Old Notes accrued from and after such interest payment date or,
if no such interest has been paid, from February 17, 1998.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other term of the Exchange Offer, the Company will not
be required to accept for exchange, or to exchange, any Old Notes for any New
Notes, and may terminate or amend the Exchange Offer before the acceptance of
any Old Notes for exchange, if:
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(a) any action or proceeding is instituted or threatened in any court or
by or before any governmental agency with respect to the Exchange Offer
which, in the Company's reasonable good faith judgment, would be expected
to impair the ability of the Company to proceed with the Exchange Offer, or
(b) any law, statute, rule or regulation is adopted or enacted, or any
existing law, statute, rule or regulation is interpreted by the Commission
or its staff, which, in the Company's reasonable good faith judgment, would
be expected to impair the ability of the Company to proceed with the
Exchange Offer.
If the Company determines in its reasonable good faith judgment that any of
the foregoing conditions exist, the Company may (i) refuse to accept any Old
Notes and return all tendered Old Notes to the tendering holders, (ii) extend
the Exchange Offer and retain all Old Notes tendered prior to the expiration
of the Exchange Offer, subject, however, to the rights of holders who tendered
such Old Notes to withdraw their tendered Old Notes which have not been
withdrawn. If such waiver constitutes a material change to the Exchange Offer,
the Company will promptly disclose such waiver by means of a prospectus
supplement that will be distributed to the registered holders, and the Company
will extend the Exchange Offer for a period of five to ten business days,
depending upon the significance of the waiver and the manner of disclosure to
the registered holders, if the Exchange Offer would otherwise expire during
such five to ten business days. In no event, however, shall the Exchange Date
be later than the first business day following , 1998.
PROCEDURES FOR TENDERING
Only a holder of record of Old Notes on , 1998 may tender such Old Notes
in connection with the Exchange Offer. To tender in connection with the
Exchange Offer, a holder must complete, sign and date the Letter of
Transmittal, or a facsimile thereof, have the signatures thereon guaranteed if
required by the Letter of Transmittal and mail or otherwise deliver such
Letter of Transmittal or such facsimile, together with the Old Notes (unless
such tender is being effected pursuant to the procedure for book-entry
transfer described below) and any other required documents, to the Exchange
Agent prior to 5:00 p.m., New York City time, on the Expiration Date.
Any financial institution that is a participant in DTC's Book-Entry Transfer
Facility system may make book- entry delivery of the Old Notes by causing DTC
to transfer such Old Notes into the Exchange Agent's account in accordance
with DTC's procedure for such transfer. Although delivery of Old Notes may be
effected through book-entry transfer into the Exchange Agent's account at DTC,
the Letter of Transmittal (or facsimile thereof), with any required signature
guarantees and any other required documents, must, in any case, be transmitted
to and received or confirmed by the Exchange Agent at its addresses set forth
under the caption "--Exchange Agent," below, prior to 5:00 p.m., New York City
time, on the Expiration Date. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH
ITS PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The tender by a holder of Old Notes will constitute an agreement between
such holder and the Company in accordance with the terms and subject to the
conditions set forth herein and in the Letter of Transmittal.
The method of delivery of Old Notes and the Letter of Transmittal and all
other required documents to the Exchange Agent is at the election and risk of
the holders. Instead of delivery by mail, it is recommended that holders use
an overnight or hand delivery service. In all cases, sufficient time should be
allowed to assure delivery to the Exchange Agent before the Expiration Date.
No Letter of Transmittal or Old Notes should be sent to the Company. Holders
may request their respective brokers, dealers, commercial banks, trust
companies or nominees to effect the tenders for such holders.
Any beneficial owner whose Old Notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to
tender should contact the registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such owner's own behalf, such owner must,
prior to completing and executing the Letter of Transmittal
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and delivery of such owner's Old Notes, either make appropriate arrangements
to register ownership of the Old Notes in such owner's name or obtain a
properly completed bond power from the registered holder. The transfer of
registered ownership may take considerable time.
Signature on a Letter of Transmittal or a notice of withdrawal, as the case
may be, must be guaranteed by an Eligible Institution (as defined below)
unless the Old Notes tendered pursuant thereto are tendered (i) by a
registered holder who has not completed the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal,
or (ii) for the account of an Eligible Institution. In the event that
signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, are required to be guaranteed, such guarantee must be by a member firm
of a registered national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office
or correspondent in the United States or an "eligible guarantor institution"
within the meaning of Rule 17 Ad-15 under the Exchange Act (each an "Eligible
Institution").
If the Letter of Transmittal is signed by a person other than the registered
holder of any Old Notes listed therein, such Old Notes must be endorsed by
such registered holder or accompanied by a properly completed bond power, in
each case signed or endorsed in blank by such registered holder as such
registered holder's name appears on such Old Notes.
If the Letter of Transmittal or any Old Notes or bond powers are signed or
endorsed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and unless waived by
the Company, evidence satisfactory to the Company of their authority to so act
must be submitted with the Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance and withdrawal of tendered Old Notes will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and
all Old Notes not properly tendered or any Old Notes whose acceptance by the
Company would, in the opinion of counsel for the Company, be unlawful. The
Company also reserves the right to waive any defects, irregularities or
conditions of tender as to any particular Old Notes either before or after the
Expiration Date. The Company's interpretation of the terms and conditions of
the Exchange Offer (including the instructions in the Letter of Transmittal)
will be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Old Notes must be cured within
such time as the Company shall determine. Although the Company intends to
request the Exchange Agent to notify holders of defects or irregularities with
respect to tenders of Old Notes, neither the Company, the Exchange Agent nor
any other person shall have any duty or incur any liability for failure to
give such notification. Tenders of Old Notes will not be deemed to have been
made until such defects or irregularities have been cured or waived. Any Old
Notes received by the Exchange Agent that are not properly tendered and as to
which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering holders, unless otherwise
provided in the Letter of Transmittal, as soon as practicable following the
Expiration date.
In addition, the Company reserves the right, as set forth above under the
caption "--Conditions to the Exchange Offer," to terminate the Exchange Offer.
By tendering, each holder represents to the Company that, among other
things, the New Notes acquired in connection with the Exchange Offer are being
obtained in the ordinary course of business of the person receiving such New
Notes, whether or not such person is the holder, that neither the holder nor
any such other person has an arrangement or understanding with any person to
participate in the distribution of such New Notes and that neither the holder
nor any such other person is an "affiliate" (as defined in Rule 405 under the
Securities Act) of the Company. If the holder is a broker-dealer which will
receive New Notes for its own account in exchange of Old Notes, it will
acknowledge that it acquired such Old Notes as the result of market-making
activities or other trading activities and it will deliver a prospectus in
connection with any resale of such New Notes. See "Plan of Distribution."
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GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available, or (ii) who cannot deliver their Old Notes, the Letter
of Transmittal or any other required documents to the Exchange Agent, or
cannot complete the procedure for book-entry transfer, prior to the Expiration
Date, may effect a tender of their Old Notes if:
(a) the tender is made through an Eligible Institution;
(b) prior to the Expiration Date, the Exchange Agent received from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the holder, the certificate number(s)
of such Old Notes and the principal amount of Old Notes tendered, stating
that the tender is being made thereby and guaranteeing that, within five
business days after the Expiration Date, the Letter of Transmittal (or
facsimile thereof) together with the certificate(s) representing the Old
Notes to be tendered in proper form for transfer (or confirmation of a
book-entry transfer into the Exchange Agent's account at DTC of Old Notes
delivered electronically) and any other documents required by the Letter of
Transmittal will be deposited by the Eligible Institution with the Exchange
Agent; and
(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof) as well as the certificate(s) representing all tendered
Old Notes in proper form for transfer (or confirmation of a book- entry
transfer into the Exchange Agent's account at DTC of Old Notes delivered
electronically) and all other documents required by the Letter of
Transmittal are received by the Exchange Agent within five business days
after the Expiration Date.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date.
To withdraw a tender of Old Notes in connection with the Exchange Offer, a
written facsimile transmission notice of withdrawal must be received by the
Exchange Agent at its address set forth herein prior to 5:00 p.m., New York
City time, on the Expiration Date. Any such notice of withdrawal must (i)
specify the name of the person who deposited the Old Notes to be withdrawn
(the "Depositor"), (ii) identify the Old Notes to be withdrawn (including the
certificate number or numbers and principal amount of such Old Notes), (iii)
be signed by the Depositor in the same manner as the original signature on the
Letter of Transmittal by which such Old Notes were tendered (including any
required signature guarantees) or be accompanied by documents of transfer
sufficient to have the trustee register the transfer of such Old Notes into
the name of the person withdrawing the tender, and (iv) specify the name in
which any such Old Notes are to be registered, if different from that of the
Depositor. All questions as to the validity, form and eligibility (including
time of receipt) of such withdrawal notices will be determined by the Company,
whose determination shall be final and binding on all parties. Any Old Notes
so withdrawn will be deemed not to have been validly tendered for purposes of
the Exchange Offer, and no New Notes will be issued with respect thereto
unless Old Notes so withdrawn are validly re-tendered. Any Old Notes which
have been tendered but which are not accepted for exchange or which are
withdrawn will be returned to the holder thereof without cost to such holder
as soon as practicable after withdrawal, rejection of tender or termination of
the Exchange Offer. Properly withdrawn Old Notes may be re-tendered by
following one of the procedures described above under the caption "--
Procedures for Tendering" at any time prior to the Expiration Date.
EXCHANGE AGENT
Citibank, N.A. has been appointed as Exchange Agent in connection with the
Exchange offer. Questions and requests for assistance, requests for additional
copies of this Prospectus or of the Letter of Transmittal should be directed
to the Exchange Agent, at its offices at c/o Citicorp Data Distribution, Inc.,
404 Sette Drive, Paramus, New Jersey 07652. The Exchange Agent's telephone
number is (800) 422-2077 and facsimile number is (201) 262-3240.
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FEES AND EXPENSES
The Company will not make any payment to brokers, dealers or others
soliciting acceptances of the Exchange Offer. The Company will pay certain
other expenses to be incurred in connection with the Exchange Offer, including
the fees and expenses of the Trustee, accounting and certain legal fees.
Holders who tender their Old Notes for exchange will not be obligated to pay
any transfer taxes in connection therewith. If, however, New Notes are to be
delivered to, or are to be issued in the name of, any person other than the
registered holder of the Old Notes tendered, or if tendered Old Notes are
registered in the name of any person other than the person signing the Letter
of Transmittal, or if a transfer tax is imposed for any reason other than the
exchange of Old Notes in connection with the Exchange Offer, then the amount
of any such transfer taxes (whether imposed on the registered holder or any
other persons) will be payable by the tendering holder. If satisfactory
evidence of payment of such taxes or exemption therefrom is not submitted with
the Letter of Transmittal, the amount of such transfer taxes will be billed
directly to such tendered holder.
ACCOUNTING TREATMENT
The New Notes will be recorded at the same carrying value as the Old Notes
as reflected in the Company's accounting records on the date of the exchange.
Accordingly, no gain or loss for accounting purposes will be recognized by the
Company upon the consummation of the Exchange Offer. Any expenses of the
Exchange Offer that are paid by the Company will be amortized by the Company,
as the case may be, over the term of the New Notes in accordance with
generally accepted accounting principles.
CONSEQUENCES OF FAILURES TO PROPERLY TENDER OLD NOTES IN THE EXCHANGE
Issuance of the New Notes in exchange for the Old Notes pursuant to the
Exchange Offer will be made only after timely receipt by the Exchange Agent of
such Old Notes, a properly completed and duly executed Letter of Transmittal
and all other required documents. Therefore, holders of the Old Notes desiring
to tender such Old Notes in exchange for New Notes should allow sufficient
time to ensure timely delivery. The Company is under no duty to give
notification of defects or irregularities with respect to tenders of Old Notes
for exchange. Old Notes that are not tendered or that are tendered but not
accepted by the Company for exchange, will, following consummation of the
Exchange Offer, continue to be subject to the existing restrictions upon
transfer thereof under the Securities Act and, upon consummation of the
Exchange Offer, certain registration rights under the Registration Rights
Agreement will terminate.
In the event the Exchange Offer is consummated, the Company will not be
required to register the remaining Old Notes. Remaining Old Notes will
continue to be subject to the following restrictions on transfer: (i) the
remaining Old Notes may be resold only if registered pursuant to the
Securities Act, if any exemption from registration is available thereunder, or
if neither such registration nor such exemption is required by law, and (ii)
the remaining Old Notes will bear a legend restricting transfer in the absence
of registration or an exemption therefrom. The Company does not currently
anticipate that they will register the remaining Old Notes under the
Securities Act. To the extent that Old Notes are tendered and accepted in
connection with the Exchange Offer, any trading market for remaining Old Notes
could be adversely affected.
DESCRIPTION OF THE NOTES
GENERAL
The Old Notes were and the New Notes will be issued under 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 (the "Indenture"). The
following discussion of certain provisions of the Indenture is a summary only
and does not purport to be a complete description of the terms and provisions
of the Indenture. Accordingly, the following discussion is qualified in its
entirety by reference to the provisions of the Indenture, including the
definition therein of terms used below with their initial letters capitalized.
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The New Notes will bear interest at 6 5/8% per annum, payable semiannually
on February 15 and August 15 of each year, commencing August 15, 1998, to the
person in whose name the New Note is registered, subject to certain exceptions
as provided in the Indenture, at the close of business on February 1 or August
1 (each a "Record Date"), as the case may be, immediately preceding such
February 15 or August 15. Interest will accrue on the Notes from February 17,
1998. The New Notes will mature on February 15, 2008, and are not subject to
any sinking fund provision.
The Indenture does not limit the aggregate principal amount of securities
that can be issued thereunder. Securities may be issued in one or more series
as may be authorized from time to time by the Company. Seven series of
securities are currently outstanding under the Indenture. The Old Notes and
the New Notes constitute a single series for purposes of the Indenture. The
aggregate principal amount of the Notes offered hereby is limited to
$150,000,000.
Payments of interest on the New Notes may be made at the option of the
Company by check mailed to the registered holders thereof or, at the option of
a holder, by wire transfer to an account maintained by the payee with a bank
located in the United States designated by such holder.
RANKING
The New 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 under
"--Certain Covenants--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 New Notes.
CERTAIN COVENANTS OF ASHLAND
The Indenture does not limit the amount of indebtedness or lease obligations
that may be incurred by the Company and its subsidiaries. Except as described
under "--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
New Notes in the event that the Company enters into a transaction that
adversely affects the Company's debt-to-equity ratio.
Limitations on Liens
The Indenture provides that, with respect to the Notes and except in certain
circumstances, the Company may not, nor may it permit any Subsidiary to,
issue, assume or guarantee any notes, bonds, debentures or other similar
evidences of indebtedness for money borrowed secured by certain mortgages,
liens, pledges or other encumbrances ("Mortgages") upon any of its property or
any property of such Subsidiary, real or personal, without effectively
providing that the Notes (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 Notes) 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. 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 annual report to stockholders of
Ashland.
Limitations on Sale and Lease-Back
The Indenture provides that, except in certain circumstances, the Company
may not, nor may it permit any Subsidiary to, 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
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more than three years of any real property (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.
Limitation on Consolidations and Mergers
The Indenture provides that Ashland may 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 Notes and the Indenture and certain other conditions are met.
EVENTS OF DEFAULT, NOTICE AND WAIVER
An Event of Default with respect to the Notes is defined in the Indenture to
be: (i) a default for 30 days in the payment of any installment of interest
upon any Note of such series when due; (ii) a default in the payment of
principal of any Note when due; (iii) a default by the Company in the
performance, or breach, of any of its other covenants or warranties in the
Indenture 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 Notes; and (iv) certain events of bankruptcy,
insolvency or reorganization of the Company.
The Indenture provides that if an Event of Default with respect to the Notes
then outstanding issued under such Indenture shall have happened and be
continuing, either the Trustee or the Holders of not less than 25% in
principal amount of such Notes may declare the principal of all of such Notes
to be immediately due and payable.
The Indenture provides that the Holders of not less than a majority in
principal amount of the Notes 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 Notes, 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 Indenture or would involve such Trustee in
personal liability.
The Indenture provides that the Holders of not less than a majority in
principal amount of the Notes may on behalf of the Holders of all of the Notes
waive any past default under the Indenture 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 Notes, or (ii) in respect of a covenant or
provision of such Indenture which, under the terms of such Indenture, cannot
be modified or amended without the consent of the Holders of all of the Notes.
The Indenture contains provisions entitling the Trustee, subject to the duty
of the Trustee during an Event of Default with respect to the Notes to act
with the required standard of care, to be indemnified by the Holders of the
Notes of such series before proceeding to exercise any right or power under
such Indenture at the request of the Holders of the Notes.
BOOK-ENTRY, DELIVERY AND FORM
Upon issuance, all New Notes in book-entry form will be represented by a
Global Security. Each Global Security 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, except under the circumstances
described herein, will not be issuable in definitive form.
The Depositary has advised the Company 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"
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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 (which may include the
Initial Purchasers), 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.
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 Notes 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 New
Notes. 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 Notes
represented by such Global Security for all purposes under the Indenture
governing such Notes. Except as provided below, owners of beneficial interests
in a Global Security will not be entitled to have any of the individual Notes
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 Notes
of such series in definitive form and will not be considered the owners or
holders thereof under the Indenture governing such Notes.
Payments of principal of, premium, if any, and interest, if any, on
individual Notes 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 Notes. Neither Ashland, the Trustee for such Notes, any paying agent (a
"Paying Agent"), nor the Registrar for such Notes 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 Notes or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Ashland expects that the Depositary for a series of Notes or its nominee,
upon receipt of any payment of principal, premium or interest in respect of a
permanent Global Security representing any of such Notes, immediately will
credit participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global
Security 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 the Notes 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 Notes of
such series in exchange for the Global Security. In addition, Ashland may at
any time in its sole discretion determine not to have any Notes of a series
represented by one or more Global Securities and, in such event, will issue
individual Notes of such series in exchange for the Global Security. Further,
if Ashland so specifies with respect
14
<PAGE>
to the Notes, an owner of a beneficial interest in a Global Security
representing Notes may, on terms acceptable to Ashland, the Trustee, and the
Depositary for such Global Security, receive individual Notes of such series
in exchange for such beneficial interests. In any such instance, an owner of a
beneficial interest in a Global Security will be entitled to physical delivery
of individual Notes of the series represented by such Global Security equal in
principal amount to such beneficial interest and to have such Notes registered
in its name. Individual Notes of such series so issued will be issued in
denominations, unless otherwise specified by Ashland, of $1,000 and integral
multiples thereof.
MODIFICATION OF THE INDENTURE
The Indenture provides that the Company and the Trustee thereunder may,
without the consent of any Holders of Notes, 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 Notes as permitted under the Indenture or, provided such action shall
not adversely affect the interests of the Holders of Notes in any material
respect, curing ambiguities or inconsistencies in such Indenture or making
other provisions.
The Indenture contains provisions permitting the Company, with the consent
of the Holders of not less than 66 2/3% in principal amount of the Notes (as
defined in the Indenture) of each affected series, to execute supplemental
indentures adding any provisions to or changing or eliminating any of the
provisions of the Indenture or modifying the rights of the Holders of Notes of
such series, except that no such supplemental indenture may, without the
consent of the Holders of all of the Notes 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 Notes; (ii) reduce the principal
amount thereof (or any premium thereon) or the rate of interest thereon; (iii)
change the currency, currencies or currency unit or units in which, any of the
Notes 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 Indenture; (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 Notes 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 Indenture; 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 Indenture provides that the Company will not be required to comply with
certain restrictive covenants (including those described above under "--
Certain Covenants of Ashland") if the Holders of not less than 66 2/3% in
principal amount of each series of Notes affected thereby waive compliance
with such restrictive covenants.
DEFEASANCE
The Indenture 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 Notes (except for certain obligations to register the transfer
or exchange of Notes, 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 Indenture
(including those described above under "--Certain Covenants of Ashland") if
there are deposited with the Trustee, U.S. Government Obligations (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, as the case may be, in an amount
sufficient to pay in the currency, currencies or currency unit or units in
which the Notes are payable all the principal of, and interest on, the Notes
on the dates such payments are due in accordance with the terms of the Notes.
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 Notes will not recognize income, gain or loss for Federal
income tax purposes as a result of the
15
<PAGE>
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 Notes 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 the Notes on a date
within 90 days following public notice of such Change in Control shall be less
than the rating on a specified earlier date by the equivalent of at least one
full rating category (as defined in the Indenture), each Holder of Notes shall
have the right, at the Holder's option, to require Ashland to purchase all or
any part of the Holder's Notes 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.
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 the Notes, Ashland
is obligated to mail or cause to be mailed to all Holders of record of the
Notes a notice regarding the Change in Control, the decrease in the rating of
the Notes 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 the Notes 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 Notes 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 Notes 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 Notes.
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 Notes. 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
Notes, 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 Indenture, the Notes and the coupons will be governed by, and construed
in accordance with, the laws of the State of New York.
16
<PAGE>
THE TRUSTEE
Citibank, N.A. is Trustee under the Indenture pursuant to which unsecured
debt obligations of the Company are outstanding and has other customary
banking relationships with the Company and its affiliates. Citibank, N.A. is
an affiliate of Citicorp Securities, Inc., one of the Initial Purchasers.
EXCHANGE OFFER; REGISTRATION RIGHTS
The Company and the Initial Purchasers entered into the Registration Rights
Agreement for the benefit of the holders of the Old Notes on the Closing Date.
Pursuant to the Registration Rights Agreement, the Company agreed to file with
the Commission the Exchange Offer Registration Statement in the appropriate
form under the Securities Act with respect to the New Notes. Under existing
Commission interpretations set forth in several no-action letters to third
parties, the New Notes would in general be freely transferable (other than by
holders who are broker-dealers or by an affiliate of the Company) after the
Exchange Offer without further registration under the Securities Act. In the
event that due to a change in current interpretations by the Commission, the
Company is not permitted to effect such Exchange Offer, it is contemplated
that the Company will instead file a registration statement covering resale by
the holders of Notes (a "Shelf Registration Statement") and will use its
reasonable best efforts to cause such Shelf Registration Statement to become
effective and to keep such Shelf Registration Statement effective until the
earlier to occur of (x) two years from the date on which the Company delivers
the Notes to the Initial Purchasers (the "Closing Date") and (y) the time when
all Notes registered thereunder have been sold. The Company shall, in the
event a Shelf Registration Statement is filed, provide to each holder of the
Notes copies of the prospectus and notify each such holder when the Shelf
Registration Statement has become effective. A holder that sells Notes
pursuant to a Shelf Registration Statement generally will be required to be
named as a selling security holder in the related prospectus and to deliver a
current prospectus to purchasers, and will be subject to certain of the civil
liability provisions under the Securities Act in connection with such sales.
The New Notes will be issued (i) under the Indenture or (ii) under an
indenture substantially similar to the Indenture, which, in either event, will
not contain terms with respect to transfer restrictions.
Under the Registration Rights Agreement, the Company has agreed to use its
reasonable best efforts to: (i) file the Exchange Offer Registration Statement
or a Shelf Registration Statement with the Commission within 150 days
following the Closing Date, (ii) have such Exchange Offer Registration
Statement or Shelf Registration Statement declared effective by the Commission
within 180 days after the Closing Date and (iii) commence the Exchange Offer
and issue the New Notes in exchange for all Notes validly tendered in
accordance with the terms of the Exchange Offer prior to the close of the
Exchange Offer, or, in the alternative, cause such Shelf Registration
Statement to remain effective until the earlier to occur of (x) two years from
the Closing Date and (y) the time when all Notes registered thereunder have
been sold. Although the Company intends to file the registration statement
described above, there can be no assurance that such registration statement
will be filed or, if filed, that it will become effective.
If the Company fails to comply with the above provisions (a "Registration
Default"), additional interest ("Additional Interest") shall be assessed as
follows:
(i) If the Exchange Offer Registration Statement or Shelf Registration
Statement is not filed within 150 days following the Closing Date, then
commencing on the 151st day after the Closing Date, Additional Interest
shall be accrued on the Notes over and above the accrued interest at a rate
of .25% per annum; or
(ii) If an Exchange Offer Registration Statement or Shelf Registration
Statement is filed pursuant to (i) above and is not declared effective
within 180 days following the Closing Date, then commencing on the 181st
day after the Closing Date, Additional Interest shall be accrued on the
Notes over and above the accrued interest at a rate of .25% per annum; or
(iii) If either (A) the Company has not exchanged New Notes for all Notes
validly tendered in accordance with the terms of the Exchange Offer on or
prior to 35 days after the date on which the Exchange
17
<PAGE>
Offer Registration Statement was declared effective, or (B) if applicable,
the Shelf Registration Statement has been declared effective but, subject
to certain exceptions, such Shelf Registration Statement ceases to be
effective at any time prior to the earlier to occur of (x) two years from
the Closing Date and (y) the time when all Notes registered thereunder have
been sold, then Additional Interest shall be accrued on the Notes over and
above the accrued interest at a rate of .25% per annum immediately
following the (X) 36th day after such effective date, in the case of (A)
above, or (Y) the day such Registration Statement ceases to be effective in
the case of (B) above;
provided, however, that the Additional Interest rate on the Notes may not
exceed .25% per annum: and, provided, further, that (1) upon the filing of the
Exchange Offer Registration Statement or Shelf Registration Statement (in the
case of (i) above), (2) upon the effectiveness of the Exchange Offer
Registration Statement or Shelf Registration Statement (in the case of (ii)
above), or (3) upon the exchange of New Notes for all Notes tendered or upon
the effectiveness of the Shelf Registration which, subject to certain
exceptions, had ceased to remain effective prior to the earlier to occur of
(x) two years from the Closing Date and (y) the time when all Notes thereunder
have been sold (in the case of (iii) above), Additional Interest on the Notes
as a result of such clause (i), (ii) or (iii) shall cease to accrue.
Any amounts of Additional Interest due pursuant to clauses (i), (ii) or
(iii) above will be payable in cash, on the same original payment dates of the
Notes. The amount of Additional Interest will be determined by multiplying the
applicable Additional Interest rate by the principal amount of the Notes,
multiplied by a fraction, the numerator of which is the number of days such
Additional Interest rate was applicable during such period (determined on the
basis of a 360-day year constituted of twelve 30-day months), and the
denominator of which is 360.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
OF THE EXCHANGE OFFER
The following is a general discussion of the material U.S. Federal income
tax consequences of the Exchange Offer to holders of Old Notes. This
discussion assumes that a holder of Old Notes purchased such Notes for cash at
original issue and that a holder of Old Notes holds such Notes as capital
assets within the meaning of Section 1221 of the Internal Revenue Code of
1986, as amended (the "Code"). This discussion does not deal with all U.S.
Federal income tax consequences that may be relevant to particular investors
in light of their personal investment circumstances, including persons holding
Notes as part of a conversion or constructive sale transaction or as part of a
hedge or hedging transaction, or as a position in a straddle for tax purposes,
nor does it discuss U.S. Federal income tax consequences applicable to certain
types of investors subject to special treatment under U.S. Federal income tax
laws, including insurance companies, tax-exempt organizations, financial
institutions or broker-dealers, persons that have a functional currency other
than the U.S. dollar, investors in pass-through entities and foreign persons,
including foreign corporations, partnerships and individuals. In addition,
this discussion does not consider the effect of any foreign, state, local,
gift, estate or other tax laws that may be applicable to a particular
investor.
This discussion is based upon current provisions of the Code, Treasury
regulations promulgated thereunder, administrative rulings and pronouncements
of the Internal Revenue Service ("IRS") and judicial decisions currently in
effect, all of which are subject to change, possibly with retroactive effect.
The Company has not and will not seek any rulings or opinions from the IRS
with respect to the matters discussed herein, and as a result, there can be no
assurance that the IRS will not disagree with or challenge any of the
conclusions set forth in this discussion.
EXCHANGE OFFER
The Company will be required to pay Additional Interest on the Old Notes if
it fails to comply with certain of its obligations under the Registration
Rights Agreement. Such Additional Interest should be taxable to a holder as
ordinary interest income at the time it accrues or is received in accordance
with each such holder's usual
18
<PAGE>
method of tax accounting. It is possible, however, that the IRS may take a
different position, in which case holders might be required to include such
Additional Interest in income as it accrues or becomes fixed (regardless of
their usual method of tax accounting).
The exchange of Old Notes for New Notes pursuant to the Exchange Offer
should not constitute a taxable event for U.S. Federal income tax purposes. As
a result, (i) a holder of Notes should not recognize taxable gain or loss as a
result of the exchange of Old Notes for New Notes pursuant to the Exchange
Offer, (ii) the holding period of the New Notes should include the holding
period of the Old Notes surrendered in exchange therefor and (iii) a holder's
adjusted tax basis in the New Notes should be the same as such holder's
adjusted tax basis in the Old Notes surrendered in exchange therefor.
HOLDERS OF NOTES ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE
PARTICULAR TAX CONSEQUENCES TO THEM OF OWNING AND DISPOSING OF THE OLD NOTES
OR THE NEW NOTES, INCLUDING THE APPLICATION OF FEDERAL, STATE, LOCAL AND
FOREIGN TAX LAWS AND POSSIBLE FUTURE CHANGES IN SUCH TAX LAWS.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account in connection
with the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of New Notes received in exchange for Old Notes if
such Old Notes were acquired as a result of market-making activities or other
trading activities. The Company has agreed that for a period of 180 days after
the Expiration Date, it will make this Prospectus, as amended or supplemented,
available to any broker-dealer that requests such documents in the Letter of
Transmittal, for use in connection with any such resale. In addition, until
, 1998 (90 days after the date of this Prospectus), all dealers
effecting transactions in the New Notes may be required to deliver a
prospectus.
The Company will not receive any proceeds from any sale of New Notes by
broker-dealers. New Notes received by broker-dealers for their own account in
connection with the Exchange Offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at
prices related to such prevailing market prices or negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form of commissions or concessions from
any such broker-dealer and/or the purchasers of any such New Notes. Any
broker-dealer that resells New Notes that were received by it for its own
account in connection with the Exchange Offer and any broker or dealer that
participates in a distribution of such New Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act, and any profit on any
such resale of New Notes and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that by acknowledging that it
will deliver and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act.
LEGAL MATTERS
The validity of the Notes offered hereby will be passed upon for Ashland by
Thomas L. Feazell, Esq., Senior Vice President, General Counsel and Secretary
of Ashland. Thomas L. Feazell owns beneficially 127,394 shares of Common
Stock.
19
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EXPERTS
The consolidated financial statements and schedule of the Company appearing
or incorporated by reference in the Company's Annual Report on Form 10-K (as
amended by Form 10-K/A Amendment No. 1) for the year ended September 30, 1997,
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 schedule are incorporated herein by
reference in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
20
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. 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 the Articles, its By-laws, as amended, and by contract rather than
to have such indemnification governed by the statutory provisions.
Article X of the Registrant's 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 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 21. EXHIBITS.
The following Exhibits are filed as part of this Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
-------------- ----------------------
<S> <C>
3 Bylaws, as amended (filed as Exhibit 3 to the Company's Form 10-K/A
(Amendment No. 1) filed on May 1, 1998 and incorporated herein by
reference).
4 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 (filed
as Exhibit 4(a) to the Company's Form 10-K for the fiscal year ended
September 30, 1991 and incorporated herein by reference).
* 5 Opinion of Thomas L. Feazell, Esq.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Price Waterhouse LLP.
23.3 Consent of Thomas L. Feazell, Esq. (included as part of Exhibit 5).
*24 Power of Attorney, including resolutions of the Board of Directors
*25 Statement of Eligibility and Qualification under the Trust Indenture Act
of 1939 of Citibank, N.A., as Trustee, on Form T-1.
*99.1 Form of Letter of Transmittal.
*99.2 Form of Notice of Guaranteed Delivery.
*99.3 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
*99.4 Form of Letter to Clients.
*99.5 Form of Tax Guidelines.
</TABLE>
- --------
* Previously filed.
II-1
<PAGE>
ITEM 22. UNDERTAKINGS.
The undersigned Registrant hereby undertakes that:
(A) for purposes of determining any liability under the Securities Act,
each filing of the Registrant's annual report pursuant to Section 13(a) or
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 therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof;
(B) prior to any public reoffering of the securities registered hereunder
through use of a prospectus which is a part of this registration statement,
by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other Items
of the applicable form; and
(C) every prospectus (i) that is filed pursuant to paragraph (B)
immediately preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Securities Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes 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.
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 described under Item 20 above,
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 against the Registrant 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:
(A) for purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in the 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 the registration
statement as of the time it was declared effective; and
(B) 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 respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
The undersigned Registrant hereby undertakes to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of and included in
the registration statement when it became effective.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Russell and
Commonwealth of Kentucky, on May 1, 1998.
ASHLAND INC.
/s/ Thomas L. Feazell
By:
-----------------------------------
THOMAS L. FEAZELL
SENIOR VICE PRESIDENT,
GENERAL COUNSEL
AND SECRETARY
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities
indicated on May 1, 1998.
<TABLE>
<S> <C>
</TABLE>
SIGNATURES TITLE DATE
Paul W. Chellgren* Chairman of the
- ------------------------------------- Board and Chief May 1, 1998
Executive Officer
J. Marvin Quin* Senior Vice
- ------------------------------------- President and Chief May 1, 1998
Financial Officer
Kenneth L. Aulen* Administrative Vice
- ------------------------------------- President, May 1, 1998
Controller and
Principal
Accounting Officer
Frank C. Carlucci* Director
- ------------------------------------- May 1, 1998
Ralph E. Gomory* Director
- ------------------------------------- May 1, 1998
Mannie L. Jackson* Director
- ------------------------------------- May 1, 1998
Patrick F. Noonan* Director
- ------------------------------------- May 1, 1998
Jane C. Pfeiffer* Director
- ------------------------------------- May 1, 1998
Michael D. Rose* Director
- ------------------------------------- May 1, 1998
William L. Rouse, Jr.* Director
- ------------------------------------- May 1, 1998
/s/ Thomas L. Feazell
*By: _______________________________
THOMAS L. FEAZELL
ATTORNEY-IN-FACT
<TABLE>
<S> <C>
</TABLE>
* Original powers of attorney authorizing Paul W. Chellgren, Thomas L.
Feazell, 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 this Registration Statement.
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
3 Bylaws, as amended (filed as Exhibit 3 to the Company's Form 10-K/A
(Amendment No. 1) filed on May 1, 1998 and incorporated herein by
reference).
4 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
(filed as Exhibit 4(a) to the Company's Form 10-K for the fiscal year
ended September 30, 1991 and incorporated herein by reference).
<C> <S>
* 5 Opinion of Thomas L. Feazell, Esq.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Price Waterhouse LLP.
23.3 Consent of Thomas L. Feazell, Esq. (included as part of Exhibit 5).
*24 Power of Attorney, including resolutions of the Board of Directors.
*25 Statement of Eligibility and Qualification under the Trust Indenture
Act of 1939 of Citibank, N.A., as Trustee, on Form T-1.
*99.1 Form of Letter of Transmittal.
*99.2 Form of Notice of Guaranteed Delivery.
Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
*99.3 and Other Nominees.
*99.4 Form of Letter to Clients.
*99.5 Form of Tax Guidelines.
</TABLE>
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* Previously filed.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Amendment No. 1 to Form S-4) and related Prospectus of
Ashland Inc. for the registration of $150,000,000 6 5/8% Senior Notes Due 2008
and to the incorporation by reference therein of our report dated November 5,
1997, with respect to the consolidated financial statements and financial
statement schedule of Ashland Inc. and subsidiaries, included in its Annual
Report (Form 10-K, as amended by Form 10-K/A) for the year ended September 30,
1997, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Louisville, Kentucky
April 29, 1998
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 (Amendment No. 1)
of Ashland Inc. of our report dated March 12, 1998 relating to the financial
statements of Marathon Oil Company Downstream Businesses (a division of
Marathon Oil Company), which appears in the Current Report on Form 8-K/A of
Ashland Inc. dated March 17, 1998.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Pittsburgh, PA
May 1, 1998
