As filed with the Securities and Exchange Commission on May 22, 2000
Registration Statement No. 333-36842
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
the Securities Act of 1933
ASHLAND INC.
(Exact name of Registrant as specified in its charter)
Kentucky 61-0122250
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
50 E. RiverCenter Boulevard
Covington, KY 41012
(859) 815-3333
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
David L. Hausrath, Esq.
Vice President and General Counsel
50 E. RiverCenter Boulevard
Covington, KY 41012
(859) 815-3333
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Susan Webster, Esq.
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
(212) 474-1000
Approximate date of commencement of proposed sale to public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: _
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, please check the following
box: [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act of 1933, please
check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering: _
<PAGE>
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act of 1933, check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering: _
If delivery of the prospectus is expected to be made pursuant to Rule
434 under the Securities Act of 1933, please check the following box. _
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================
Title of Each Class of Securities Amount to be Proposed Proposed Amount of
to be Registered Registered Maximum Maximum Registration
Offering Price Aggregate Fee
Per Unit(1) Offering
Price(1)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $1.00 par value 96,600(2)(4) $36.625 $3,537,975(3) $934.02(4)
====================================================================================================================
</TABLE>
(1) Estimated solely for the purposes of computing the registration fee.
(2) Number of shares issuable upon exercise of nonqualified stock options
granted to selected officers and employees of Marathon Ashland
Petroleum LLC under the Ashland Inc. Stock Option Plan for Employees
of Joint Ventures.
(3) Calculated pursuant to Rule 457(h)(1) of the Securities Act of 1933.
Accordingly, the price per share of the common stock offered pursuant
to the plan is based on the 96,600 shares of common stock reserved for
issuance under the plan and at an exercise price per share of $36.625,
which is the closing price of the New York Stock Exchange composite
tape on September 16, 1999 per share of common stock.
(4) On May 12, 2000, $672.96 of the registration fee was paid for the
registration of 69,600 shares of common stock reserved for issuance
under the plan. This Pre-Effective Amendment No. 1 to the Registration
Statement relates to the registration of an additional 27,000 shares
of common stock reserved for issuance under the plan. An additional
registration fee of $261.06 is being paid in connection with this
filing.
ASHLAND HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL ASHLAND SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A)
OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
<PAGE>
INTRODUCTORY NOTE
On May 12, 2000, Registration Statement No. 333-36842 was filed relating to
the registration of 69,600 shares of Ashland Inc. common stock, $1.00 par
value per share, that we will issue upon exercise of the outstanding
nonqualified stock options that we granted to selected employees and
officers of Marathon Ashland Petroleum LLC, or "MAP". MAP is a joint
venture between Ashland and Marathon Oil Company. This Pre-Effective
Amendment No. 1 to the Registration Statement relates to an additional
27,000 shares of common stock to be registered for issuance under the plan.
When declared effective, a total of 96,600 shares of common stock will be
registered for issuance under the plan.
<PAGE>
LEGEND INFORMATION
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MAY 22, 2000
PROSPECTUS
ASHLAND INC.
50 E. RIVERCENTER BOULEVARD
COVINGTON, KENTUCKY 41012
(859) 815-3333
96,600 SHARES
COMMON STOCK
This prospectus relates to the 96,600 shares of Ashland Inc. common
stock, $1.00 par value per share, that we will issue upon exercise of the
outstanding nonqualified stock options that we granted to selected
employees and officers of Marathon Ashland Petroleum LLC, or "MAP". MAP is
a joint venture between Ashland and Marathon Oil Company.
Our common stock is listed on the New York Stock Exchange and the
Chicago Stock Exchange under the symbol "ASH". On May 19, 2000, the last
reported sale price of our common stock as reported by the New York Stock
Exchange was $34.9375 per share.
You should read this prospectus and any supplement carefully before
you invest.
EXERCISE PRICE PROCEEDS TO ASHLAND
-------------- -------------------
Per share of common stock $36.625 $36.625
Total $3,537,975 $3,537,975
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved these securities or
determined if this prospectus is truthful or complete. Any representation
to the contrary is a criminal offense.
This prospectus is dated May ___, 2000.
<PAGE>
TABLE OF CONTENTS
Page
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Where You Can Find More Information About Ashland 3
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Ashland Inc. 4
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Use of Proceeds 4
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Description of Common Stock 4
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The Plan 6
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Federal Income Tax Consequences 9
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Plan of Distribution 10
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Legal Matters 10
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WHERE YOU CAN FIND MORE INFORMATION ABOUT ASHLAND
We file annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document we file
at the SEC's public reference rooms in Washington, D.C., New York, New York
and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also
available to the public at the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus
the information we file with it, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be a part of this prospectus,
and later information filed with the SEC will update and supersede this
information. We incorporate by reference the documents listed below and any
future filings made with the SEC under Section 13(a), 13(c), 14, or 14(d)
of the Securities Exchange Act of 1934 until our offering is completed:
(a) Annual Report on Form 10-K for the year ended September 30,
1999, as amended by the Form 10-K/A filed March 21, 2000;
(b) Quarterly Reports on Form 10-Q for the quarters ended December
31, 1999 and March 31, 2000;
(c) Current Reports on Form 8-K filed on October 6, 1999, October
12, 1999, January 24, 2000, February 24, 2000, March 16, 2000, and March
22, 2000; and
(d) The description of our common stock, par value $1.00 per
share, set forth in the registration statement on Form 10, as amended in
its entirety by the Form 8 filed with the SEC on May 1, 1983.
You may request a copy of these filings, at no cost, by writing to or
telephoning us at the following address (or by visiting our website at
http://www.ashland.com):
Office of the Secretary
Ashland Inc.
50 E. RiverCenter Boulevard
P.O. Box 391
Covington, KY 41012-0391
859-815-3333
You should rely only on the information incorporated by reference or
provided in this prospectus or the prospectus supplement. We have
authorized no one to provide you with different information. We are not
making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus or
the prospectus supplement is accurate as of any date other than the date on
the front of the document.
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ASHLAND INC.
Our businesses are grouped into five industry segments: APAC, Ashland
Distribution, Ashland Specialty Chemical, Valvoline, and Refining and
Marketing.
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.
Ashland Distribution distributes industrial chemicals, solvents,
thermoplastics and resins, fiberglass materials and fine ingredients in
North America and plastics in Europe.
Ashland Specialty Chemical manufactures and sells a wide variety of
specialty chemicals, resins, products and services and certain
petrochemicals.
Valvoline is a marketer of branded, packaged motor oil and automotive
chemicals, automotive appearance products, antifreeze, filters, rust
preventives and coolants. In addition, Valvoline is engaged in the "fast
oil change" business through outlets operating under the Valvoline Instant
Oil Change(R) name.
Marathon Ashland Petroleum LLC ("MAP"), a joint venture with Marathon
Oil Company, operates seven refineries with a total crude oil refining
capacity of 935,000 barrels per day. Refined products are distributed
through a network of independent and company-owned outlets in the Midwest,
the upper Great Plains and the southeastern United States. Marathon Oil
Company has a 62% interest in MAP, and Ashland holds a 38% interest.
Ashland accounts for its investment in MAP using the equity method.
We are a Kentucky corporation, organized on October 22, 1936, with our
principal executive offices located at 50 E. RiverCenter Boulevard,
Covington, Kentucky 41012 (Mailing Address: 50 E. RiverCenter Boulevard,
P.O. Box 391, Covington, Kentucky 41012-0391) (Telephone: (859) 815-3333).
USE OF PROCEEDS
We will use the net proceeds we receive from the sale of our common
stock to which this prospectus relates in connection with the exercise of
the options described in this prospectus for general corporate purposes.
General corporate purposes may include additions to working capital,
capital expenditures, stock redemption, repayment of debt or the financing
of possible acquisitions.
DESCRIPTION OF COMMON STOCK
COMMON STOCK
As of the date of this prospectus, we are authorized to issue up to
300,000,000 shares of common stock. As of April 30, 2000, we had 70,574,938
shares of common stock issued and outstanding and had reserved 12,749,550
additional shares of common stock for issuance under our various stock and
compensation incentive plans.
The following summary is not complete and is not intended to give full
effect to provisions of statutory or common law. You should refer to the
applicable provisions of the following documents:
o the Restated Articles, which are incorporated by reference to
Exhibit 3.2 to our Form 10-Q for the quarter ended December 31,
1997, and
o the By-laws, as amended, which are incorporated by reference to
Exhibit 3 to our Form 10-Q for the quarter ended December 31,
1999.
DIVIDENDS. The holders of common stock are entitled to receive
dividends when, as and if declared by our board of directors, out of funds
legally available for their payment subject to the rights of holders of
preferred stock.
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VOTING RIGHTS. The holders of common stock are entitled to one vote
per share on all matters submitted to a vote of shareholders. The holders
of common stock also possess cumulative voting rights for the election of
directors. Under cumulative voting, a shareholder may multiply the number
of shares owned by the number of directors to be elected and either cast
this total number of votes for any one nominee or distribute the total
number of votes, in any proportion, among as many nominees as the
shareholder desires.
RIGHTS UPON LIQUIDATION. In the event of our voluntary or involuntary
liquidation, dissolution or winding up, the holders of common stock will be
entitled to share equally in any of our assets available for distribution
after the payment in full of all debts and distributions and after the
holders of all series of outstanding preferred stock have received their
liquidation preferences in full.
MISCELLANEOUS. The outstanding shares of common stock are fully paid
and nonassessable. The holders of common stock are not entitled to
preemptive or redemption rights. Shares of common stock are not convertible
into shares of any other class of capital stock. Harris Trust and Savings
Bank, Chicago, Illinois, is the transfer agent and registrar for the common
stock.
PREFERRED STOCK PURCHASE RIGHTS
The board of directors has authorized the distribution of one right
for each outstanding share of our common stock. Each right entitles its
holder to buy one-one thousandth (1/1000th) of a share of Series A
Participating Cumulative Preferred Stock at a price of $140.
The rights will become exercisable upon the earlier of (a) any time we
learn that a person or group has acquired, or obtained the right to
acquire, beneficial ownership of more than 15% of our outstanding common
stock (an "acquiring person"), unless provisions intended to prevent
accidental triggering apply, and (b) any date designated by our board of
directors following the commencement of, or first public disclosure of an
intention to commence, a tender or exchange offer for our outstanding
common stock. Each right other than those held by the acquiror will entitle
its holder to purchase, at the right's exercise price, shares of our common
stock having a market value of twice the right's exercise price.
Additionally, if we are acquired in a merger or other business combination,
each right other than those held by the surviving or acquiring company will
entitle its holder to purchase, at the right's exercise price, shares of
the acquiring company's common stock (or our stock if we are the surviving
corporation) having a market value of twice the right's exercise price.
Each one-one thousandth of a share of Series A Participating Cumulative
Preferred Stock will be entitled to dividends and to vote on an equivalent
basis with one share of our common stock.
Rights may be redeemed at the option of the board of directors for
$.01 per right at any time before the earlier of any time there is an
acquiring person or the tenth anniversary of the date of the plan. The
board of directors may amend the rights at any time without shareholder
approval. The rights will expire by their terms on May 15, 2006.
CERTAIN PROVISIONS OF ASHLAND'S RESTATED ARTICLES
In the event of a proposed merger or tender offer, proxy contest or
other attempt to gain control of us and not approved by our board of
directors, it would be possible for our board of directors to authorize the
issuance of one or more series of preferred stock with voting rights or
other rights and preferences which would impede the success of the proposed
merger, tender offer, proxy contest or other attempt to gain control of us.
Applicable law, the Restated Articles and the applicable rules of the stock
exchanges upon which the common stock is listed may limit this authority.
The consent of the holders of common stock would not be required for any
issuance of preferred stock like this.
The Restated Articles incorporate in substance certain provisions of
the Kentucky Business Corporation Act to require certain approvals as a
condition to mergers and certain other business combinations involving us
and the 10% shareholder unless (a) the transaction is approved by a
majority of our continuing directors or (b) certain minimum price and
procedural requirements are met. Those approvals include the approval of
the holders of at least 80% of our voting stock, plus two-thirds of the
voting stock other than voting stock owned by a 10% shareholder. In
addition, the Kentucky Business Corporation Act includes a standstill
provision which precludes a business combination from occurring with a 10%
shareholder, notwithstanding any vote of shareholders or price paid, for a
period of five years after the date that 10% shareholder becomes a 10%
shareholder, unless a majority of our independent directors approves the
combination before that date.
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The Restated Articles also provide that
o our board of directors is classified into three classes,
o a director may be removed from office without cause only by
the affirmative vote of the holders of at least 80% of the
voting power of our then outstanding voting stock,
o our board of directors may adopt by-laws concerning the
conduct of, and matters considered at, meetings of
shareholders, including special meetings,
o the By-laws and certain provisions of the Restated Articles
may be amended only by the affirmative vote of the holders of
at least 80% of the voting power of our then outstanding
voting stock and
o the By-laws may be adopted or amended by our board of
directors. However, the By-laws adopted in this fashion may
be amended or repealed by affirmative vote of the holders of
at least 80% of the voting power of our then outstanding
voting stock.
THE PLAN
GENERAL PLAN INFORMATION
Marathon Ashland Petroleum LLC, or MAP, is a joint venture between
Marathon Oil Company and Ashland. Our management determined that it would
be in our best interest that certain MAP officers and employees have an
ownership interest in Ashland. On September 16, 1999 our board of directors
approved the grant of 102,000 options to purchase our common stock to 235
officers and employees of MAP. Several of these employees have terminated
their employment with MAP, and as a result there are currently 96,600
options outstanding to which this prospectus relates. Throughout this
prospectus, we will refer to the stock options as the "MAP stock options"
and our Personnel and Compensation Committee as the "Committee." We granted
the MAP stock options under the terms and conditions of the notice of grant
and the Ashland Inc. Stock Option Plan for Employees of Joint Ventures, a
plan, approved by our board of directors on September 17, 1998,
specifically designated to grant options to joint ventures in which we have
an interest. The MAP stock options supplement options granted to those MAP
employees by Marathon Oil Company in amounts recommended by the MAP
Executive Committee.
The summary of the terms and provisions of the plan in this prospectus
is not complete. You should refer to the documents relating to the plan
which are incorporated by reference to as exhibits to the registration
statement of which this prospectus is a part. If necessary, we will in the
future provide supplemental material to update the available information
with respect to the plan, the MAP stock options and the underlying shares
of our common stock to holders of MAP stock options.
The plan is not a qualified deferred compensation plan under Section
401(a) of the Internal Revenue Code of 1986, as amended, and is exempt from
the provisions of the Employee Retirement Income Security Act of 1974, as
amended.
Participants under the plan may obtain additional information
regarding the plan and its administration from the Office of the Secretary,
Ashland Inc., 50 E. RiverCenter Boulevard, P.O. Box 391, Covington, KY
41012-0391. The Secretary's Office may also be reached by phone at (859)
815-3333.
PURPOSE OF THE PLAN
The principal purpose of the plan is to promote our interests and
those of our shareholders by attracting and retaining management personnel
whose training, experience and abilities contribute to the success of MAP
or another joint venture in which we have an interest and which our board
of directors designates as being governed by the plan. To achieve this
purpose, we may in our discretion grant MAP stock options to selected MAP
officers and employees. A recipient of the MAP stock options will have the
right to purchase our common stock at a price and on terms to be specified
by the Committee or determined in some other manner under the plan.
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ADMINISTRATION
The Committee will administer the plan. Frank C. Carlucci, James B.
Farley, Mannie L. Jackson, Patrick F. Noonan, and W.L. Rouse, Jr. presently
serve on the Committee.
ELIGIBILITY AND GRANT OF MAP STOCK OPTIONS
The MAP Executive Committee recommends to the Committee certain
regular, full-time or part-time employees of MAP to participate in the
plan. The Committee selects the MAP employees to receive an award of MAP
stock options under the plan. The MAP stock options to which this
prospectus relates were granted to MAP employees on September 16, 1999.
Under the notice of grant, none of the rights and obligations of those MAP
employees, including under the vesting provisions or other terms of the
notice of grant or the plan, will be affected by the transfer of any of the
MAP employees from MAP to Ashland or from MAP to another unit of USX. Under
the notice of grant, by accepting the award of MAP stock options granted on
September 16, 1999, the MAP employees agree to remain at MAP for a period
of at least one year from the date of the award although this does not in
any way confer from Ashland to any MAP employee any right to continue
employment with MAP or affect any existing right of MAP to terminate any
MAP employee.
EXERCISE PRICE
Under the plan, the exercise price for the underlying Ashland common
stock that will be issued for each MAP stock option will be fixed by the
Committee at the time the option is granted. The Committee determined that
exercise price for the options granted on September 16, 1999 to be the fair
market value per share of our common stock on the date of grant. The
Committee further determined fair market value to be the closing price per
share of Ashland common stock on the New York Stock Exchange composite tape
on the date of grant, which was $36.625 on September 16, 1999.
ACCEPTANCE OF AWARDS
By accepting any award of MAP stock options under the plan, each MAP
employee will be conclusively deemed to have indicated his or her
acceptance and ratification of and consent to any action that we, our board
of directors or the Committee may have taken with respect to the plan,
including any amendment of the plan by the board of directors or the
Committee. The terms of this provision will also be deemed to apply to each
personal representative or beneficiary claiming under or through the MAP
employee, as those individuals are defined under the plan.
NOTICE OF GRANT
Each MAP stock option will, at our discretion and as directed by the
Committee, be evidenced by a notice of grant between the recipient and
Ashland. The notice of grant will contain those terms and conditions that
the Committee determines and that are consistent with the plan.
VESTING
Unless the Committee determines otherwise, each MAP stock option will
provide that its recipient may not wholly or partially exercise the option
for a period of one year after the date of the option's grant. Under the
notice of grant of the MAP stock options to which this prospectus relates,
50% of the MAP stock options granted to a MAP employee on September 16,
1999 will vest on the first anniversary of the grant date, an additional
25% will vest on the second anniversary of the grant date and the remaining
25% will vest on the third anniversary of the grant date.
EXERCISE OF MAP STOCK OPTIONS AND PAYMENT
A stock option may be exercised by written notice to us. The written
notice must be consistent with the terms of the notice of grant relating to
the MAP stock option and must be accompanied by payment of the full
exercise price for the underlying shares of our common stock which the
holder of the MAP stock option chooses to exercise. The exercise price for
any shares purchased may be paid in cash, in shares of our common stock
previously owned by the holder, partly in cash and partly in our common
stock or in such other consideration as shall constitute lawful
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consideration for the issuance of common stock (including, but not limited
to, a "cashless exercise"), as the Committee, in its sole discretion, may
determine.
In order to assure compliance with the securities laws, during any
time that the registration statement of which this prospectus is a part is
not effective, the Committee may require evidence of a type and degree it
considers necessary to establish that the underlying shares of common stock
are being purchased for investment only and not with a view to, or for sale
in connection with, a distribution. As used in this context, "distribution"
is defined under the Securities Act. If this prospectus is not then part of
an effective registration statement, the Committee may further require
legends on the certificates representing the underlying shares.
As a condition to the transfer of a certificate representing those
shares, the Committee may obtain those agreements or undertakings that it
considers necessary or advisable to assure compliance with any provision of
the plan or any law or regulation.
CANCELLATION OF MAP STOCK OPTION
The Committee has the right in its sole discretion and without the
option holder's consent to cancel a MAP stock option granted under the
plan, whether vested or not, at any time. If the Committee does so, it will
cause us to pay the MAP employee holding the canceled option an amount
determined by using the Black-Scholes or some other valuation method
generally accepted and used by nationally recognized executive compensation
consulting firms. The Committee will determine whether we make the buyout
payments under this provision in cash, in shares of Ashland common stock or
partly in cash and partly in common stock. Buyout payments will be made net
of any applicable foreign, federal (including FICA), state or local
withholding taxes.
TRANSFERABILITY
Unless our board of directors or the Committee directs otherwise, the
rights and interest of a MAP employee who has received MAP stock options
under the plan may not wholly or partially be assigned or transferred
directly, by operation of law or in some other manner, including but not
limited to the following: execution, levy, garnishment, attachment, pledge
or bankruptcy. No MAP employee's rights or interest under the plan will be
assigned or transferred because of any obligation or liability of that MAP
employee. The sole exception to this provision is that the MAP employee's
rights and interest under the plan may pass by will or the laws of descent
and distribution in the event of the MAP employee's death.
RESERVE OF COMMON STOCK
Shares of our common stock to be issued upon the exercise of MAP stock
options will be from authorized but unissued shares. If any MAP stock
option or a part of a MAP stock option expires, terminates or is canceled
or surrendered for any reason without having been fully exercised, the
shares relating to the unexercised portion of the MAP stock option may
again be subject to the grant of MAP stock options under the plan.
TERM OF THE PLAN
The plan became effective on September 17, 1998, the date of the
plan's approval by our board of directors. Each MAP stock option will have
a fixed expiration date of not later than ten years and one month from the
option's date of grant, unless the option is canceled or the plan is
terminated before the fixed expiration date. Each of the MAP stock options
granted on September 16, 1999 will expire on October 16, 2009, if not
terminated earlier as provided below.
TERMINATION OF EMPLOYMENT
The plan provides that the Committee will decide when and the terms
under which a MAP employee (or his beneficiaries or legal personal
representative, as the case may be, as those terms are defined in the plan)
who dies, becomes disabled or retires or leaves MAP employment may continue
to exercise vested MAP stock options. The Committee will also decide the
extent to which unvested MAP stock options will vest for those MAP
employees. Under the notice of grant, a MAP employee who retires from or
dies or becomes disabled while employed at MAP, Ashland or from MAP to
another unit of USX or his or her beneficiary or personal representative
may exercise any MAP stock option granted on September 16, 1999 until its
expiration date. That option may be exercised for the
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number of shares which the MAP employee could have acquired under the
option immediately prior to the retirement, death or disability.
The plan provides that if the employment of a MAP employee who has
received MAP stock options terminates before the end of the one year
vesting period for the options or any other period determined by the
Committee, then those options will immediately terminate. Under the notice
of grant, a MAP employee, after terminating employment from MAP, Ashland or
from MAP to another unit of USX for a reason other than retirement, death
or disability, may exercise any MAP stock option granted on September 16,
1999 until the earlier of 30 days after termination or the expiration date
of the option. The MAP employee may exercise the option for the number of
shares of Ashland common stock, which the MAP employee could have acquired
under the option immediately prior to termination.
ADJUSTMENTS
The kind of shares that we may issue under the plan and the kind of
shares underlying or the exercise price for any outstanding MAP stock
options will be automatically adjusted to maintain the proportionate
interest of any MAP employee who received MAP stock options before any of
the following types of events: a stock split, stock dividend,
recapitalization, merger, consolidation, reorganization, combination,
exchange of shares, split-up, split-off, spin-off, liquidation or any
distribution to holders of our common stock other than cash dividends. Any
adjustment under this provision will be conclusive and binding for all
purposes of the plan.
AMENDMENT
Our board of directors or the Committee may at any time terminate,
modify or amend the plan in those respects it deems advisable and as
permitted by law.
TYPE OF STOCK OPTION
The MAP stock options will be nonqualified stock options and will not
be entitled to tax treatment as incentive stock options as defined in
Section 422 of the Internal Revenue Code of 1986, as amended.
LISTING
The shares of our common stock underlying the MAP stock options have
been listed on the New York Stock Exchange and the Chicago Stock Exchange.
FEDERAL INCOME TAX CONSEQUENCES
The following brief description of the tax consequences of awards
under the plan is based on Federal tax laws currently in effect and does
not purport to be a complete description of such Federal tax consequences.
If shares are issued to the original holder of a nonqualified option
that is granted and exercised in accordance with the plan, then:
o no income will be recognized by the holder at the time of
grant of the option;
o upon exercise of the option the holder will recognize taxable
ordinary income in an amount equal to the excess of the fair
market value, at the time of exercise, of the shares acquired
over the option price;
o subject to the limitation described below, we will be
entitled to a deduction at the same time and in the same
amount as the holder has income under the preceding item; and
o upon a sale of the shares acquired, the holder will have
short-term or long-term capital gain or loss, as the case may
be, in an amount equal to the difference between the amount
realized on the sale and the tax basis of the shares sold.
<PAGE>
9
<PAGE>
Assuming that the payment of the option price is made entirely in cash, the
tax basis of the shares will be equal to their fair market value on the
date of exercise, but not less than the option price, and their holding
period will begin on the day after the tax basis of the shares is
determined in this manner.
If the optionee uses previously owned shares to exercise an option in whole
or in part, the transaction will not be considered to be a taxable
disposition of the previously owned shares. The holder's tax basis and
holding period of the previously owned shares will be carried over to the
equivalent number of shares received on exercise. The tax basis of the
additional shares received upon exercise will be the fair market value of
the shares on the date of exercise but not less than the amount of cash
used in payment, and the holding period for the additional shares will
begin on the day after the tax basis of the shares is determined in this
manner. In order to facilitate recordkeeping by optionees, when an option
is exercised with previously owned shares, we will deliver separate stock
certificates to the optionee representing the shares surrendered and the
additional shares to which the optionee is entitled as a result of the
exercise.
In addition to the Federal income tax consequences described above, the
acquisition, ownership or disposition of a MAP stock option or shares
acquired upon the exercise of a MAP stock option may have tax consequences
under various state or foreign laws that may be applicable to certain
option holders. Since these tax consequences, as well as the Federal income
tax consequences described above, may vary from holder to holder depending
upon the particular facts and circumstances involved, each holder should
consult its own tax advisor with respect to the Federal income tax
consequences of the grant or exercise of a MAP stock option, and also with
respect to any tax consequences under applicable state or foreign law.
Ashland will not withhold more than the statutorily required amounts for
federal, state and local taxes.
PLAN OF DISTRIBUTION
We will offer the underlying shares of our common stock directly to the MAP
employees who have received MAP stock options under the terms of the plan.
We will pay all expenses relating to the offer and sale to eligible MAP
employees of the shares of our common stock underlying the MAP stock
options. Those MAP employees will not incur any commissions, fees or other
charges or expenses in connection with the offer of securities covered by
this prospectus.
LEGAL MATTERS
The validity of the shares of Ashland common stock offered hereby has
been passed upon by David L. Hausrath, Esq., Vice President and General
Counsel of Ashland. David L. Hausrath owns beneficially 25,625 shares of
our common stock (including common stock units held in our deferred
compensation plan).
10
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered, other than underwriting compensation, are:
Filing Fee for Registration Statement $ 934.02
Accounting Fees and Expenses $ 10,000.00
Stock Exchange Listing Fees $ 1,084.00
------------
Total $ 12,018.02
============
All of the above amounts, other than the Commission filing fee, are
estimates only.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 271B.8-500 through 580 of the Kentucky Business Corporation Act
contain detailed provisions for indemnification of directors and officers
of Kentucky corporations against judgments, penalties, fines, settlements
and reasonable expenses in connection with litigation. Under Kentucky law,
the provisions of a company's articles and by-laws may govern the
indemnification of officers and directors in lieu of the indemnification
provided for by statute. We have elected to indemnify our officers and
directors pursuant to our Restated Articles, our By-laws and by contract
rather than to have such indemnification governed by the statutory
provisions.
Article X of the Restated Articles permits, but does not require, us to
indemnify our directors, officers and employees to the fullest extent
permitted by law. Our By-laws require indemnification of our officers and
employees under certain circumstances. We have entered into indemnification
contracts with each of our directors that require indemnification to the
fullest extent permitted by law, subject to certain exceptions and
limitations.
We have purchased insurance which insures (subject to certain terms and
conditions, exclusions and deductibles) us against certain costs which we
might be required to pay by way of indemnification to our directors or
officers under our Restated Articles or By-laws, indemnification agreements
or otherwise and protects individual directors and officers from certain
losses for which they might not be indemnified by us. In addition, we have
purchased insurance which provides liability coverage (subject to certain
terms and conditions, exclusions and deductibles) for amounts which we, or
the fiduciaries under our employee benefit plans, which may include our
directors, officers and employees, might be required to pay as a result of
a breach of fiduciary duty.
ITEM 16. EXHIBITS.
The following Exhibits are filed as part of this Registration Statement:
3.1 -- Second Restated Articles of Incorporation, as amended
effective January 30, 1998 (incorporated by reference to
Exhibit 3 to Ashland's Form 10-Q for the quarter ended
December 31, 1997).
3.2 -- By-laws, as amended effective January 27, 2000
(incorporated by reference to Exhibit 3 to Ashland's Form
10-Q for the quarter ended December 31, 1999).
**4.1 -- Form of Certificate of Common Stock, par value $1.00 per
share.
*5 -- Opinion of David L. Hausrath, Esq.
**10.1 -- Ashland Inc. Stock Option Plan for Employees of Joint
Ventures.
**10.2 -- Notice of Grant of Non-Qualified Stock Option.
*23.1 -- Consent of Ernst & Young LLP.
*23.2 -- Consent of PricewaterhouseCoopers LLP.
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<PAGE>
*23.3 -- Consent of David L. Hausrath, Esq. (included as part of
Exhibit 5).
**24 -- Power of Attorney, including resolutions of the board of
directors.
*Filed herewith
**Previously filed.
ITEM 17. UNDERTAKINGS.
(A) Ashland hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
PROVIDED, HOWEVER, that paragraphs (A)(l)(i) and (A)(1)(ii) do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Ashland pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain
unsold at the termination of the offering.
(B) Ashland hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Ashland's
annual report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(C) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of Ashland pursuant to the foregoing provisions, or otherwise, Ashland has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the
payment by Ashland of expenses incurred or paid by a director, officer or
controlling person of Ashland in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, Ashland will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of
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<PAGE>
appropriate jurisdiction the question whether such indemnification by it is
against public policy, as expressed in the Securities Act of 1933 and will
be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, Ashland certifies that
it has reasonable grounds to believe that it meets all the requirements for
filing on Form S-3 and has duly caused this Pre-Effective Amendment No. 1
to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Covington,
Commonwealth of Kentucky, on May 22, 2000.
ASHLAND INC.,
By /s/ David L. Hausrath
David L. Hausrath
Vice President and General Counsel
Pursuant to the requirements of the Securities Act, this Pre-Effective
Amendment No. 1 to the Registration Statement has been signed below by the
following persons in the capacities indicated on May 22, 2000.
<TABLE>
<CAPTION>
Signature Title
<S> <C>
* Chairman of the Board and Chief Executive Officer
--
Paul W. Chellgren (Principal Executive Officer)
* Senior Vice President and Chief Financial Officer
--
J. Marvin Quin (Principal Financial Officer)
* Administrative Vice President and Controller
--
Kenneth L. Aulen (Principal Accounting Officer)
* Director
--
Samuel C. Butler
* Director
--
Frank C. Carlucci
* Director
--
Ernest H. Drew
* Director
--
James B. Farley
* Director
--
Bernadine P. Healy
--
* Director
--
Mannie L. Jackson
* Director
--
Patrick F. Noonan
* Director
--
Jane C. Pfeiffer
* Director
--
William L. Rouse, Jr.
* Director
--
Theodore L. Solso
</TABLE>
*By /s/ David L. Hausrath
-------------------------
David L. Hausrath
Attorney-in-fact
*Original powers of attorney authorizing, Paul W. Chellgren, David L.
Hausrath and Linda L. Foss and each of them to sign the Registration
Statement and amendments thereto on behalf of the above-mentioned
directors and officers of Ashland have been filed with the Commission
as Exhibit 24 to the Registration Statement.
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<PAGE>
EXHIBIT INDEX
5 -- Opinion of David L. Hausrath, Esq.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of PricewaterhouseCoopers LLP.
23.3 -- Consent of David L. Hausrath, Esq. (included as part of
Exhibit 5).
Exhibit 5
May 22, 2000
Ashland Inc.
50 E. RiverCenter Boulevard
P.O. Box 391
Covington, KY 41012-0391
Gentlemen:
As Vice President and General Counsel of Ashland Inc., a Kentucky
corporation ("Ashland"), I have examined and am familiar with such
documents, corporate records and other instruments as I have deemed
necessary for the purposes of this opinion, including the Ashland Inc.
Stock Option Plan for Employees of Joint Ventures (the "Plan"), the
corporate proceedings of Ashland taken to adopt the Plan, and the the
Pre-Effective Amendment No. 1 to the Registration Statement No. 333-36842
(Form S-3) and related Prospectus dated May 22, 2000 of Ashland Inc. (the
"Registration Statement") filed by Ashland with the Securities and Exchange
Commission for the registration under the Securities Act of 1933, as
amended, of 96,600 shares of Common Stock, par value $1.00 per share, of
Ashland ("Common Stock") to be distributed under the Plan.
Based upon the foregoing, I am of the opinion that when
certificates representing such shares of Common Stock have been duly
executed, countersigned by a Transfer Agent, registered by a Registrar of
Ashland and paid for in accordance with applicable law and delivered in
accordance with the terms of the Plan, such shares of Common Stock will be
duly authorized, validly issued, fully paid and nonassessable.
I hereby consent to the use of my opinion for filing as an exhibit
to the Registration Statement.
Very truly yours,
/s/ David L. Hausrath
David L. Hausrath
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Pre-Effective
Amendment No. 1 to the Registration Statement No. 333-36842 (Form S-3) and
related Prospectus dated May 22, 2000 of Ashland Inc. and consolidated
subsidiaries (Ashland), for the registration of 96,600 shares of its common
stock, (i) of our report dated November 3, 1999, with respect to the
consolidated financial statements and schedule of Ashland, and (ii) of our
reports dated January 21, 2000 and March 14, 2000, with respect to the
consolidated financial statements and schedule, respectively, of Arch Coal,
Inc., included in Ashland's Annual Report on Form 10-K, as amended by Form
10-K/A, for the year ended September 30, 1999, filed with the Securities
and Exchange Commission.
/s/ Ernst & Young LLP
Cincinnati, Ohio
May 19, 2000
Exhibit 23.2
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Pre-Effective
Amendment No. 1 to the Registration Statement No. 333-36842 (Form S-3) and
related Prospectus dated May 22, 2000 of Ashland Inc. of our report dated
February 8, 2000, relating to the financial statements of Marathon Ashland
Petroleum LLC, which appears in Ashland Inc.'s Annual Report on Form 10-K/A
for the fiscal year ended September 30, 1999.
PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania
May 22, 2000
