As filed with the Securities and Exchange Commission on January 25, 2005
Registration No. 333-_________
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
-------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ASHLAND INC.
(Exact name of registrant as specified in its charter)
KENTUCKY 61-0122250
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
50 E. RIVERCENTER BLVD. P.O. BOX 391
COVINGTON, KENTUCKY 41011 COVINGTON, KENTUCKY 41012
(Address of Principal Executive Officers) (Mailing Address)
ASHLAND INC.
DEFERRED COMPENSATION PLAN FOR EMPLOYEES (2005)
(Full title of the Plan)
DAVID L. HAUSRATH
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
ASHLAND INC.
50 E. RIVERCENTER BLVD.
COVINGTON, KENTUCKY 41011
(Name and address of agent for service)
(859) 815-3333
(Telephone number of agent for service)
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CALCULATION OF REGISTRATION FEE
===================================================================================================================
Proposed
Title of Maximum
Securities Amount Proposed Maximum Aggregate Amount of
to be to be Offering Price Offering Registration
Registered Registered Per Share (1)(2) Price (1)(2) Fee
- ----------------------------------- ------------------- ------------------------- ---------------- ----------------
Common Stock, par value
$1.00 per share ............. 500,000 shares $57.53 $28,765,000 $3,386
===================================================================================================================
(1) In accordance with Rules 416 and 457 under the Securities Act of
1933, calculated on the basis of $57.53 per share of Common Stock
which was the average of the high and low prices on the New York
Stock Exchange -- Composite Tape on January 20, 2005.
(2) Estimated solely for the purpose of determining the registration
fee.
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EXPLANATORY NOTE
This Registration Statement on Form S-8 is filed by Ashland Inc., a
Kentucky corporation, relating to 500,000 shares of its common stock, par
value $1.00 per share, issuable to eligible employees of Ashland Inc.
pursuant to the Ashland Inc. Deferred Compensation Plan for Employees
(2005).
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION
Not filed as part of this Registration Statement pursuant to Note to
Part 1 of Form S-8.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
Not filed as part of this Registration Statement pursuant to Note 1 to
Part 1 of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, filed with the Securities and Exchange
Commission (the "Commission") pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") (File No. 1-2918), are
hereby incorporated by reference into this Registration Statement:
(i) Ashland Inc.'s Annual Report on Form 10-K for the fiscal year
ended September 30, 2004;
(ii) the description of Ashland's Common Stock, par value $1.00 per
share, set forth in the Registration Statement on Form 10, as amended in
its entirety by the Form 8 filed with the Commission on May 1, 1983; and
(iii) the description of Ashland's Rights to Purchase Series A
Participating Cumulative Preferred Stock set forth in the Registration
Statement on Form 8-A dated May 16, 1996.
In addition, all documents hereafter filed with the Commission by
Ashland pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act, prior to the filing of a post-effective amendment which indicates that
all securities offered have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of
such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the Common Stock offered hereby has been passed upon
by David L. Hausrath, Esq., Senior Vice President, General Counsel and
Secretary of Ashland. Mr. Hausrath owns beneficially 126,205 shares of
Common Stock (including common stock units held in Ashland's deferred
compensation plan).
II-1
The consolidated financial statements and schedule of Ashland
appearing in Ashland's Annual Report (Form 10-K) for the year ended
September 30, 2004, have been audited by Ernst & Young LLP, Independent
Registered Public Accounting Firm, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements and schedule are, and audited consolidated financial
statements and schedules to be included in subsequently filed documents
will be, incorporated herein in reliance upon the reports of Ernst & Young
pertaining to such financial statements (to the extent covered by consents
filed with the Commission) given upon the authority of such firm as experts
in accounting and auditing.
ITEM 6. 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. Ashland has elected to indemnify
its officers and directors pursuant to Articles, its By-laws, as amended,
and by contract rather than to have such indemnification governed by the
statutory provisions.
Article X of Ashland's Third Restated Articles permits, but does not
require, Ashland to indemnify its directors, officers and employees to the
fullest extent permitted by law. Ashland's By-laws require indemnification
of officers and employees of Ashland and its subsidiaries under certain
circumstances. Ashland 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.
Ashland has purchased insurance which insures (subject to certain
terms and conditions, exclusions and deductibles) Ashland against certain
costs which it might be required to pay by way of indemnification of its
directors or officers under its Third 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
Ashland. In addition, Ashland has purchased insurance which provides
liability coverage (subject to certain terms and conditions, exclusions and
deductibles) for amounts which Ashland, 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 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4 Ashland Inc. Deferred Compensation Plan for Employees (2005).
5 Opinion of David L. Hausrath, Esq.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of David L. Hausrath, Esq. (included as part of Exhibit 5).
24(a) Power of Attorney.
24(b) Certified copy of resolutions of the Board of Directors.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
II-2
(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 (the "Securities Act") unless the information
required to be included in such post-effective amendment is contained in
periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15 (d) of the Exchange Act
that are incorporated by reference in the registration statement;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement unless the information required to be included in
such post-effective amendment is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that
are incorporated by reference in the registration statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 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.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-3
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act,
the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Covington and Commonwealth of
Kentucky on January 25, 2005.
ASHLAND INC.
By: /s/ David L. Hausrath
--------------------------------
David L. Hausrath
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 January 25, 2005.
Signature Title
James J. O'Brien * Chairman of the Board of Directors, Chief Executive
- ----------------------------------------------------- Officer and Director
J. Marvin Quin * Chief Financial Officer and Senior Vice President
- -----------------------------------------------------
Lamar M. Chambers * Vice President and Controller
- -----------------------------------------------------
Ernest H. Drew * Director
- -----------------------------------------------------
Roger W. Hale * Director
- -----------------------------------------------------
Bernadine P. Healy * Director
- -----------------------------------------------------
Mannie L. Jackson * Director
- -----------------------------------------------------
Kathleen Ligocki * Director
- -----------------------------------------------------
Patrick F. Noonan * Director
- -----------------------------------------------------
Jane C. Pfeiffer * Director
- -----------------------------------------------------
William L. Rouse, Jr. * Director
- -----------------------------------------------------
George A. Schaefer, Jr. * Director
- -----------------------------------------------------
Theodore M. Solso * Director
- -----------------------------------------------------
Michael J. Ward * Director
- -----------------------------------------------------
* By: /s/ David L. Hausrath
----------------------------------------------
David L. Hausrath
Attorney-in-fact
January 25, 2005
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EXHIBIT INDEX
Exhibit
No. Description
-------- ----------------------------------------------------
4 Ashland Inc. Deferred Compensation Plan for Employees (2005).
5 Opinion of David L. Hausrath, Esq.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of David L. Hausrath, Esq. (included as part of Exhibit 5).
24(a) Power of Attorney.
24(b) Certified copy of resolutions of the Board of Directors.
EXHIBIT 4
ASHLAND INC.
DEFERRED COMPENSATION PLAN FOR EMPLOYEES (2005)
(EFFECTIVE AS OF JANUARY 1, 2005)
1. PURPOSE
The Ashland Inc. Deferred Compensation Plan for Employees (2005)
(the "Plan") is maintained primarily for the purpose of providing an
opportunity to defer compensation for retirement or other future purposes
to a select group of management or highly compensated employees (including
former employees that met these criteria when employed). The obligations of
the Company hereunder constitute a mere promise to make the payments
provided for in this Plan. No employee, his or her spouse or the estate of
either of them shall have, by reason of this Plan, any right, title or
interest of any kind in or to any property of the Company. To the extent
any Participant has a right to receive payments from the Company under this
Plan, such right shall be no greater than the right of any unsecured
general creditor of the Company.
This Plan is a replacement of the prior Ashland Inc. Deferred
Compensation Plan amended and restated as of April 1, 2003 (the "Former
Plan"). Compensation deferred under the Former Plan shall remain subject to
all of the rules, terms and conditions in effect under the Former Plan as
of December 31, 2004. For this purpose, the Compensation deferred under the
Former Plan shall include all income, gains and losses connected to such
Compensation.
The rules, terms and conditions of this Plan shall apply to
Compensation deferred after December 31, 2004, including any Election to
defer such Compensation made in 2004. For this purpose, the Compensation
deferred after December 31, 2004 shall include all income, gains and losses
connected to such Compensation.
2. DEFINITIONS
The following definitions shall be applicable throughout the Plan:
(a) "Accounting Date" means the Business Day on which a
calculation concerning a Participant's Compensation Account is performed,
or as otherwise defined by the Committee.
(b) "Beneficiary" means the person(s) designated by the
Participant in accordance with Section 10, or if no person(s) is/are so
designated, the estate of a deceased Participant.
(c) "Board" means the Board of Directors of Ashland Inc. or its
designee.
(d) "Business Day" means a day on which the New York Stock
Exchange is open for trading activity.
(e) "Change in Control" shall be deemed to occur (1) upon the
approval of the shareholders of the Company (or if such approval is not
required, upon the approval of the Board) of (A) any consolidation or
merger of the Company, other than a consolidation or merger of the Company
into or with a direct or indirect wholly-owned subsidiary, in which the
Company is not the continuing or surviving corporation or pursuant to which
shares of Common Stock would be converted into cash, securities or other
property other than a merger in which the holders of Common Stock
immediately prior to the merger will have the same proportionate ownership
of common stock of the surviving corporation immediately after the merger,
(B) any sale, lease, exchange, or other transfer (in one transaction or a
series of related transactions) of all or substantially all the assets of
the Company, provided, however, that no sale, lease, exchange or other
transfer of all or substantially all the assets of the Company shall be
deemed to occur unless assets constituting 80% of the total assets of the
Company are transferred pursuant to such sale, lease, exchange or other
transfer, or (C) adoption of any plan or proposal for the liquidation or
dissolution of the Company, (2) when any "person" (as defined in Section
3(a)(9) or 13(d) of the Exchange Act), other than Ashland Inc. or any
subsidiary or employee benefit plan or trust maintained by Ashland Inc. or
any of its subsidiaries, shall become the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of more than
15% of the Common Stock outstanding at the time, without the approval of
the Board, or (3) if at any time during a period of two consecutive years,
individuals who at the beginning of such period constituted the Board shall
cease for any reason to constitute at least a majority thereof, unless the
election or the nomination for election by the Company's shareholders of
each new director during such two-year period was approved by a vote of at
least two-thirds of the directors then still in office who were directors
at the beginning of such two-year period. Notwithstanding the foregoing,
any transaction, or series of transactions, that shall result in the
disposition of the Company's interest in Marathon Ashland Petroleum LLC,
including without limitation any transaction arising out of that certain
Put/Call, Registration Rights and Standstill Agreement dated January 1,
1998 among Marathon Oil Company, USX Corporation, the Company and Marathon
Ashland Petroleum LLC, as amended from time to time, shall not be deemed to
constitute a Change in Control.
The definition of Change in Control as written
hereinabove shall remain in effect until the Secretary of the Treasury
prescribes a definition that is inconsistent with the definition in the
Plan. If a definition is prescribed that is inconsistent with the
definition in the Plan, such prescribed definition shall supercede the one
in the Plan. If such definition is not inconsistent with the definition in
the Plan, then the Plan's definition shall remain in effect.
(f) "Code" means the Internal Revenue Code of 1986, as amended.
(g) "Committee" means the Personnel and Compensation Committee of
the Board or its designee.
(h) "Common Stock" means the common stock, $1.00 par value, of
Ashland Inc.
(i) "Common Stock Fund" means that investment option, approved by
the Committee, in which a Participant's Compensation Account may be deemed
to be invested and may earn income based on a hypothetical investment in
Common Stock.
(j) "Company" means Ashland Inc., its divisions, subsidiaries and
affiliates. "Company" shall also include any direct successor in interest
to Ashland Inc. that results from a corporate reorganization connected with
divesting the interest Ashland Inc. has in Marathon Ashland Petroleum LLC.
(k) "Compensation" means any employee compensation determined by
the Committee to be properly deferrable under the Plan.
(l) "Compensation Account(s)" means the Retirement Account and/or
the In-Service Account(s).
(m) "Corporate Human Resources" means the Corporate Human
Resources Department of the Company.
(n) "Credit Date" means the date on which Compensation would
otherwise have been paid to the Participant or in the case of the
Participant's designation of investment option changes, within three
Business Days after the Participant's designation is received by Corporate
Human Resources, or as otherwise designated by the Committee.
(o) "Deferred Compensation" means the Compensation elected by the
Participant to be deferred pursuant to the Plan.
(p) "Disability" means that a Participant is either:
1. Unable to engage in any substantial gainful activity because
of a medically determinable physical or mental impairment
that is expected to result in death or last for a continuous
period of 12 or more months; or
2. Receiving income replacement benefits for a period of at
least three months under an accident and health plan
covering employees of the Company because of a medically
determinable physical or mental impairment that is expected
to result in death or last for a continuous period of 12 or
more months.
(q) "Election" means a Participant's delivery of a notice of
election to defer payment of all or a portion of his or her Compensation
under the terms of the Plan. Such notice shall also include instructions
specifying the time the deferred Compensation will be paid and the form in
which it will be paid. Such elections shall be irrevocable except as
otherwise provided in the Plan or pursuant to Treasury guidance. Elections
shall be made and delivered as prescribed by the Committee or the Company.
(r) "Employee" means a full-time, regular salaried employee (which
term shall be deemed to include officers) of the Company, its present and
future subsidiary corporations as defined in Section 424 of the Internal
Revenue Code of 1986, as amended or its affiliates.
(s) "Employee Savings Plan" means the Ashland Inc. Employee
Savings Plan, as it now exists or as it may hereafter be amended.
(t) "Excess Payments" means payments made to a Participant
pursuant to the Plan and the Excess Plan.
(u) "Excess Plan" means the Ashland Inc. Nonqualified Excess
Benefit Pension Plan, as it now exists or as it may hereafter be amended.
(v) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(w) "Fair Market Value" means the price of a share of Common
Stock, as reported on the Composite Tape for New York Stock Exchange issues
on the date and at the time designated by the Company.
(x) "In-Service Account" means the account(s) to which the
Participant's Deferred Compensation is credited and from which
distributions are made.
(y) "Key Employee" means any Employee who at any time during the
Plan Year was -
1. an officer of the Company having annual compensation greater
than $ 130,000 (as adjusted under section 416(i)(1) of the
Code), provided that no more than 50 individuals may be
considered an officer (or if less, the greater of 3 or 10
percent of the employees);
2. a 5-percent owner of the Company; or
3. a 1-percent owner of the Company with annual compensation
exceeding $150,000.
For this purpose, annual compensation means compensation within the meaning
of section 415(c)(3) of the Code.
(z) "Participant" means an Employee selected by the Committee to
participate in the Plan and who has elected to defer payment of all or a
portion of his or her Compensation under the Plan.
(aa) "Performance-Based Compensation" means Compensation that
meets requirements specified by the Secretary of the Treasury.
Performance-Based Compensation will include the attributes that it is
variable, contingent on the satisfaction of preestablished metrics and is
not readily ascertainable at the time of the Election to defer such
compensation under Section 8(b).
(bb) "Plan" means this Ashland Inc. Deferred Compensation Plan for
Employees (2005) as it now exists or as it may hereafter be amended.
(cc) "Plan Year" means the calendar year. The first Plan Year of
the Plan is 2005.
(dd) "Retirement Account" means the account(s) to which the
Participant's Deferred Compensation is credited and from which
distributions are made.
(ee) "Secretary of the Treasury" or "Treasury" means the United
States Department of Treasury.
(ff) "SERP" means the Ashland Inc. Supplemental Early Retirement
Plan for Certain Employees, as it now exists or as it may hereafter be
amended.
(gg) "SERP Payments" means payments made to a Participant pursuant
to the Plan and the SERP.
(hh) "Stock Unit(s)" means the share equivalents credited to the
Common Stock Fund of a Participant's Compensation Account pursuant to
Section 6.
(ii) "Termination" means termination of services as an Employee
for any reason other than retirement.
(jj) "Unforeseeable Emergency" means a severe financial hardship
of a Participant because of -
1. An illness or accident of the Participant, the Participant's
spouse or dependent (as defined in Internal Revenue Code
section 152(a));
2. A loss of the Participant's property due to casualty; or
3. Such other similar extraordinary unforeseeable circumstances
because of events beyond the control of the Participant.
The meaning of Unforeseeable Emergency shall be interpreted and applied in
accordance with applicable guidance that may be issued by the Treasury.
3. SHARES; ADJUSTMENTS IN EVENT OF CHANGES IN CAPITALIZATION
(a) Shares Authorized for Issuance. There shall be reserved for
issuance under the Plan 500,000 shares of Common Stock, subject to
adjustment pursuant to subsection (c) below.
(b) Units Authorized for Credit. The maximum number of Stock Units
that may be credited to Participants' Compensation Accounts under the Plan
is 1,500,000, subject to adjustment pursuant to subsection (c) below.
(c) Adjustments in Certain Events. In the event of any change in
the outstanding Common Stock of the Company by reason of any stock split,
share dividend, recapitalization, merger, consolidation, reorganization,
combination, or exchange or reclassification of shares, split-up,
split-off, spin-off, liquidation or other similar change in capitalization,
or any distribution to common shareholders other than cash dividends, the
number or kind of shares or Stock Units that may be issued or credited
under the Plan shall be automatically adjusted so that the proportionate
interest of the Participants shall be maintained as before the occurrence
of such event. Such adjustment shall be conclusive and binding for all
purposes of the Plan.
4. ELIGIBILITY
The Committee shall have the authority to select from management
and/or highly compensated Employees those Employees who shall be eligible
to participate in the Plan; provided, however, that employees and/or
retirees who have elected to defer an amount into this Plan from another
plan sponsored or maintained by Ashland Inc., the terms of which allowed
such employee or retiree to make such a deferral election into this Plan,
shall be considered to be eligible to participate in this Plan.
5. ADMINISTRATION
Full power and authority to construe, interpret and administer the
Plan shall be vested in the Company and the Committee or one or more of
their delegates. This power and authority includes, but is not limited to,
selecting Compensation eligible for deferral, establishing deferral terms
and conditions and adopting modifications, amendments and procedures as may
be deemed necessary, appropriate or convenient by the Committee. This power
and authority also includes, without limitation, the ability to construe
and interpret provisions of the Plan, make determinations regarding law and
fact, reconcile any inconsistencies between provisions in the Plan or
between provisions of the Plan and any other statement concerning the Plan,
whether oral or written, supply any omissions to the Plan or any document
associated with the Plan, and to correct any defect in the Plan or in any
document associated with the Plan. Decisions of the Company and the
Committee (or their delegates) shall be final, conclusive and binding upon
all parties. Day-to-day administration of the Plan shall be the
responsibility of Corporate Human Resources.
6. PARTICIPANT ACCOUNTS
Upon election to participate in the Plan, there shall be
established a Retirement Account and/or In-Service Account, as designated
by the Participant to which there shall be credited any Deferred
Compensation, as of each Credit Date. Each such Compensation Account shall
be credited (or debited) on each Accounting Date with income (or loss)
based upon a hypothetical investment in any one or more of the investment
options available under the Plan, as prescribed by the Committee for the
particular compensation credited, which may include a Common Stock Fund, as
elected by the Participant under the terms of Section 8. The crediting or
debiting on each Accounting Date of income (or loss) shall be made for the
respective amounts that were subject to each Election under Section 8.
7. EARLY WITHDRAWAL
(a) Unforeseeable Emergency. A Participant or a Participant's
legal representative may submit an application for a distribution from
either a Retirement Account or an In-Service Account because of an
Unforeseeable Emergency. The amount of the distribution shall not exceed
the amount necessary to satisfy the needs of the Unforeseeable Emergency.
Such distribution shall include an amount to pay taxes reasonably
anticipated as a result of the distribution. The amount allowed as a
distribution under this Section 7(a) shall take into account the extent to
which the Unforeseeable Emergency may be relieved by reimbursement,
insurance or liquidation of the Participant's assets (but only to the
extent such liquidation would itself not cause a severe financial
hardship). The distribution shall be made in a single sum and paid as soon
as practicable after the application for the distribution on account of the
Unforeseeable Emergency is approved. The provisions of this Section 7(a)
shall be interpreted and administered in accordance with applicable
guidance that may be issued by the Treasury.
(b) Disability. A Participant or a Participant's legal
representative may submit an application for a distribution from the
Retirement Account and In-Service Account because of the Participant's
Disability. The distribution shall be made in a single sum and paid as soon
as practicable after the application for the distribution on account of the
Participant's Disability is approved. The provisions of this Section 7(b)
shall be interpreted and administered in accordance with applicable
guidance that may be issued by the Treasury. If such guidance should allow
an election of a period or form of distribution at the time of the
application for a distribution on account of the Participant's Disability
then the Plan shall allow such elections.
(c) Prohibition on Acceleration. Except as otherwise provided in
the Plan and except as may be allowed in guidance from the Secretary of the
Treasury, distributions from a Participant's Compensation Account may not
be made earlier than the time such amounts would otherwise be distributed
pursuant to the terms of the Plan.
8. DEFERRAL ELECTION
(a) General. The Company or the Committee shall determine the
timing of the filing of the appropriate Election forms. An effective
Election may not be revoked or modified except as otherwise determined by
the Company or the Committee or as stated herein. In addition to the
provisions contained in this Plan, any deferrals of SERP Payments or Excess
Payments must be in accordance with the terms of the SERP or the Excess
Plan.
(b) Permissible Deferral Election. A Participant's Election to
defer Compensation may only be made in the taxable year before the
Compensation is earned, with two exceptions. The first exception applies to
a Participant during his or her first year of eligibility to participate in
the Plan. In that event such a Participant may, if so offered by the
Company or the Committee, elect to defer Compensation for services
performed after the Election, provided that the Election is made within 30
days of the date the Participant becomes eligible to participate in the
Plan. The second exception is with respect to an election to defer
Performance-Based Compensation. If Performance-Based Compensation is based
on services of a Participant performed over a period of at least 12 months,
then the Participant may make an Election to defer all or part of such
Compensation not later than six months before the end of such service
period. A Participant's Election under this Section 8(b) shall specify the
amount or percentage of Compensation deferred and specify the time and form
of distribution from among those described in Section 9 of the Plan. Each
Election to defer Compensation is a separate election regarding the time
and form of distribution.
(c) Investment Alternatives -- Existing Balances. A Participant
may elect to change an existing selection as to the investment alternatives
in effect with respect to an existing Compensation Account (in increments
prescribed by the Committee or the Company) as often, and with such
restrictions, as determined by the Committee or by the Company. If a
Participant fails to make an investment selection for his or her
Compensation Account, the Committee or the Company may prescribe a default
selection or selections in any manner that appears reasonable in their
discretion.
(d) Change of Beneficiary. A Participant may, at any time, elect
to change the designation of a Beneficiary in accordance with Section 10 of
the Plan.
9. DISTRIBUTION
(a) Retirement Account. In accordance with a Participant's
Election under Section 8, but subject to Sections 7 and 11, amounts subject
to such Election in the Retirement Account (determined in accordance with
Section 6) shall be distributed -
1. Upon a Participant's separation from service as either a
lump sum or in installments not exceeding 15 years;
provided, however, that the distribution to a Participant
who is a Key Employee must not be made before the earliest
of the date that is six months after the Participant's
separation from service or the date of the Participant's
death;
2. Upon a Participant's death to the Participant's Beneficiary
as either a lump sum or in installments not exceeding 15
years; or
3. At a specified time or under a fixed schedule not exceeding
15 years.
(b) In-Service Account. In accordance with a Participant's
Election under Section 8, but subject to Sections 7 and 11, amounts subject
to such Election in the In-Service Account (determined in accordance with
Section 6) shall be distributed -
1. Upon a Participant's death to the Participant's Beneficiary
as either a lump sum or in installments not exceeding 15
years; or
2. At a specified time or under a fixed schedule not exceeding
15 years.
(c) Medium of Distribution and Default Method. In accordance with
the Participant's Election and within the guidelines established by the
Committee or the Company, a Participant's Retirement Account or In-Service
Account shall be distributed in cash or shares of Common Stock (or a
combination of both). To the extent permissible under law, a Participant
may make this Election at any time before a distribution is to be made. If
no Election is made by a Participant as to the distribution or form of
payment of his or her Retirement Account or In-Service Account, upon the
earliest time that a distribution from such account is to be made pursuant
to the terms of the Plan, such account shall be paid in cash or shares of
Common Stock (or a combination of both) in lump sum.
(d) Election to Delay the Time or Change the Form of Distribution
.. A Participant may make an Election to delay the time of a distribution or
change the form of a distribution, or may elect to do both, with respect to
an amount that would be payable pursuant to an Election under paragraphs
(a) or (b) of this Section 9, except in the event of a distribution on
account of the Participant's death, if all of the following requirements
are met -
1. Such an Election may not take effect until at least 12
months after it is made;
2. Any delay to the distribution that would take effect because
of the Election is at least to a date five years after the
date the distribution otherwise would have begun; and
3. In the case of a distribution that would be made under
paragraphs (a)(3) or (b)(2) of this Section 9 such an
Election may not be made less than 12 months before the date
of the first scheduled payment.
10. BENEFICIARY DESIGNATION
A Participant may designate one or more persons (including a
trust) to whom or to which payments are to be made if the Participant dies
before receiving distribution of all amounts due hereunder. A designation
of Beneficiary will be effective only after the signed Election is filed
with Corporate Human Resources while the Participant is alive and will
cancel all designations of Beneficiary signed and filed earlier. If the
Participant fails to designate a Beneficiary as provided above or if all of
a Participant's Beneficiaries predecease him or her and he or she fails to
designate a new Beneficiary, the remaining unpaid amounts shall be paid in
one lump sum to the estate of such Participant. If all Beneficiaries of the
Participant die after the Participant but before complete payment of all
amounts due hereunder, the remaining unpaid amounts shall be paid in one
lump sum to the estate of the last to die of such Beneficiaries.
11. CHANGE IN CONTROL
Notwithstanding any provision of this Plan to the contrary, and to
the extent consistent with guidance issued by the Secretary of the
Treasury, in the event of a Change in Control, each Participant in the Plan
shall receive an automatic lump sum cash distribution of all amounts
accrued in the Participant's Compensation Account not later than fifteen
(15) days after the date of the Change in Control. For this purpose, the
balance in the portion of a Participant's Compensation Account invested in
the Common Stock Fund shall be determined by multiplying the number of
Stock Units by the higher of (a) the highest Fair Market Value on any date
within the period commencing 30 days prior to such Change in Control, or
(b) if the Change in Control of the Company occurs as a result of a tender
or exchange offer or consummation of a corporate transaction, then the
highest price paid per share of Common Stock pursuant thereto. Any
consideration other than cash forming a part or all of the consideration
for Common Stock to be paid pursuant to the applicable transaction shall be
valued at the valuation price thereon determined by the Board.
In addition, the Company shall reimburse a Participant for the
legal fees and expenses incurred if the Participant is required to seek to
obtain or enforce any right to distribution. In the event that it is
determined that such Participant is properly entitled to a cash
distribution hereunder, such Participant shall also be entitled to interest
thereon payable in an amount equivalent to the Prime Rate of Interest
quoted by Citibank, N.A. as its prime commercial lending rate on the
subject date from the date such distribution should have been made to and
including the date it is made. Notwithstanding any provision of this Plan
to the contrary, this Section 11 may not be amended after a Change in
Control occurs without the written consent of a majority in number of
Participants.
12. INALIENABILITY OF BENEFITS
The interests of the Participants and their Beneficiaries under
the Plan may not in any way be voluntarily or involuntarily transferred,
alienated or assigned, nor subject to attachment, execution, garnishment or
other such equitable or legal process. A Participant or Beneficiary cannot
waive the provisions of this Section 12. Notwithstanding anything contained
herein to the contrary, valid court ordered divisions of a Participant's
Compensation Account pursuant to a domestic relations order may be
recognized and distributions may be made pursuant to such an order to the
extent permissible under guidance that may be published by the Secretary of
the Treasury.
13. CLAIMS
(a) Initial Claim - Notice of Denial. If any claim for benefits
(within the meaning of section 503 of ERISA) is denied in whole or
in part, the Company (which shall include the Company or its
delegate throughout this Section 13) will provide written
notification of the denied claim to the Participant or
beneficiary, as applicable, (hereinafter referred to as the
claimant) in a reasonable period, but not later than 90 days after
the claim is received. The 90-day period can be extended under
special circumstances. If special circumstances apply, the
claimant will be notified before the end of the 90-day period
after the claim was received. The notice will identify the special
circumstances. It will also specify the expected date of the
decision. When special circumstances apply, the claimant must be
notified of the decision not later than 180 days after the claim
is received.
The written decision will include:
(i) The reasons for the denial.
(ii) Reference to the Plan provisions on which the denial is based.
The reference need not be to page numbers or to section
headings or titles. The reference only needs to sufficiently
describe the provisions so that the provisions could be
identified based on that description.
(iii) A description of additional materials or information needed
to process the claim. It will also explain why those
materials or information are needed.
(iv) A description of the procedure to appeal the denial,
including the time limits applicable to those procedures. It
will also state that the claimant may file a civil action
under section 502 of ERISA (ERISA - ss.29 U.S.C. 1132). The
claimant must complete the Plan's appeal procedure before
filing a civil action in court.
If the claimant does not receive notice of the decision on the
claim within the prescribed time periods, the claim is deemed
denied. In that event the claimant may proceed with the appeal
procedure described below.
(b) Appeal of Denied Claim. The claimant may file a written appeal of
a denied claim with the Company in such manner as determined from
time to time. The Company is the named fiduciary under ERISA for
purposes of the appeal of the denied claim. The Company may
delegate its authority to rule on appeals of denied claims and any
person or persons or entity to which such authority is delegated
may re-delegate that authority. The appeal must be sent at least
60 days after the claimant received the denial of the initial
claim. If the appeal is not sent within this time, then the right
to appeal the denial is waived.
The claimant may submit materials and other information relating
to the claim. The Company will appropriately consider these
materials and other information, even if they were not part of the
initial claim submission. The claimant will also be given
reasonable and free access to or copies of documents, records and
other information relevant to the claim.
Written notification of the decision on the appeal will be
delivered to the claimant in a reasonable period, but not later
than 60 days after the appeal is received. The 60-day period can
be extended under special circumstances. If special circumstances
apply, the claimant will be notified before the end of the 60-day
period after the appeal was received. The notice will identify the
special circumstances. It will also specify the expected date of
the decision. When special circumstances apply, the claimant must
be notified of the decision not later than 120 days after the
appeal is received.
Special rules apply if the Company designates a committee as the
appropriate named fiduciary for purposes of deciding appeals of
denied claims. For the special rules to apply, the committee must
meet regularly on at least a quarterly basis.
When the special rules for committee meetings apply the decision
on the appeal must be made not later than the date of the
committee meeting immediately following the receipt of the appeal.
If the appeal is received within 30 days of the next following
meeting, then the decision must not be made later than the date of
the second committee meeting following the receipt of the appeal.
The period for making the decision on the appeal can be extended
under special circumstances. If special circumstances apply, the
claimant will be notified by the committee or its delegate before
the end of the otherwise applicable period within which to make a
decision. The notice will identify the special circumstances. It
will also specify the expected date of the decision. When special
circumstances apply, the claimant must be notified of the decision
not later than the date of the third committee meeting after the
appeal is received.
In any event, the claimant will be provided written notice of the
decision within a reasonable period after the meeting at which the
decision is made. The notification will not be later than 5 days
after the meeting at which the decision is made.
Whether the decision on the appeal is made by a committee or not,
a denial of the appeal will include:
(i) The reasons for the denial.
(ii) Reference to the Plan provisions on which the denial is
based. The reference need not be to page numbers or to
section headings or titles. The reference only needs to
sufficiently describe the provisions so that the provisions
could be identified based on that description.
(iii) A statement that the claimant may receive free of charge
reasonable access to or copies of documents, records and
other information relevant to the claim.
(iv) A description of any voluntary procedure for an additional
appeal, if there is such a procedure. It will also state
that the claimant may file a civil action under section 502
of ERISA (ERISA - ss.29 U.S.C. 1132).
If the claimant does not receive notice of the decision on the
appeal within the prescribed time periods, the appeal is deemed
denied. In that event the claimant may file a civil action in
court. The decision regarding a denied claim is final and binding
on all those who are affected by the decision. No additional
appeals regarding that claim are allowed.
14. GOVERNING LAW
The provisions of this plan shall be interpreted and construed in
accordance with the laws of the Commonwealth of Kentucky, except to the
extent preempted by Federal law.
15. AMENDMENTS
The Committee may amend, alter or terminate this Plan at any time
without the prior approval of the Board; provided, however, that the
Committee may not, without approval by the Board:
(a) increase the number of securities that may be issued under the
Plan (except as provided in Section 3(c));
(b) materially modify the requirements as to eligibility for
participation in the Plan; or
(c) otherwise materially increase the benefits accruing to
Participants under the Plan.
15. EFFECTIVE DATE
The Plan was approved and originally became effective as of
January 1, 2005.
IN WITNESS WHEREOF, this adoption of the Plan is executed this
_________ day of _____________________, 2004.
ATTEST: ASHLAND INC.
By:
- --------------------------------- ---------------------------------------
Secretary Vice President Human Resources
EXHIBIT 5
January 25, 2005
Ashland Inc.
50 E. RiverCenter Blvd.
Covington, KY 41012
Gentlemen:
As Senior Vice President, General Counsel and Secretary of Ashland
Inc. ("Ashland"), a Kentucky corporation, 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. Deferred Compensation Plan for Employees (2005) (the "Plan"), the
corporate proceedings of Ashland taken to adopt the Plan, and the
Registration Statement on Form S-8 (the "Registration Statement") filed by
Ashland with the Securities and Exchange Commission for the registration
under the Securities Act of 1933, as amended, of 500,000 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 for 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 the Common Stock will upon issuance
thereof 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
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the reference to our firm under the caption "Interests of
Named Experts and Counsel" in the Registration Statement (Form S-8)
pertaining to the Ashland Inc. Deferred Compensation Plan for Employees
(2005) and to the incorporation by reference therein of our report dated
November 3, 2004, with respect to the consolidated financial statements and
schedule of Ashland Inc. included in its Annual Report (Form 10-K) for the
year ended September 30, 2004, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young
Cincinnati, Ohio
January 21, 2005
EXHIBIT 24(a)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned Directors and
Officers of ASHLAND INC., a Kentucky corporation, which is about to file a
Registration Statement on Form S-8 for the registration of up to 500,000
shares of Ashland Common Stock with the Securities and Exchange Commission
under the provisions of the Securities Act of 1933, as amended, to be
issued pursuant to the Ashland Inc. Deferred Compensation Plan for
Employees, hereby constitutes and appoints JAMES J. O'BRIEN, DAVID L.
HAUSRATH and LINDA L. FOSS, and each of them, his or her true and lawful
attorneys-in-fact and agents, with full power to act without the others to
sign and file such Registration Statement and the exhibits thereto and any
and all other documents in connection therewith, and any such amendments
thereto, with the Securities and Exchange Commission, and to do and perform
any and all acts and things requisite and necessary to be done in
connection with the foregoing as fully as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, may lawfully do or cause to be done by virtue
hereof.
Dated: November 4, 2004
/s James J. O'Brien /s/ Kathleen A. Ligocki
- -------------------------------------------- --------------------------------------------------------
James J. O'Brien, Chairman of the Board Kathleen A. Ligocki, Director
and Chief Executive Officer
/s/ J. Marvin Quin /s/ Patrick F. Noonan
- -------------------------------------------- --------------------------------------------------------
J. Marvin Quin, Senior Vice President Patrick F. Noonan, Director
and Chief Financial Officer
/s/ Lamar M. Chambers /s/ Jane C. Pfeiffer
- -------------------------------------------- --------------------------------------------------------
Lamar M. Chambers, Vice President and Jane C. Pfeiffer, Director
Controller
/s/ Ernest H. Drew /s/ William L. Rouse, Jr.
- -------------------------------------------- --------------------------------------------------------
Ernest H. Drew, Director William L. Rouse, Jr., Director
/s/ Roger W. Hale /s/ George A. Schaefer, Jr.
- -------------------------------------------- --------------------------------------------------------
Roger W. Hale, Director George A. Schaefer, Jr., Director
/s/ Bernadine P. Healy /s/ Theodore M. Solso
- -------------------------------------------- --------------------------------------------------------
Bernadine P. Healy, Director Theodore M. Solso, Director
/s/ Mannie L. Jackson /s/ Michael J. Ward
- -------------------------------------------- --------------------------------------------------------
Mannie L. Jackson, Director Michael J. Ward, Director
EXHIBIT 24(b)
CERTIFICATION
The undersigned certifies that he is Secretary of ASHLAND INC.
("ASHLAND"), a Kentucky corporation, and that, as such, he is authorized to
execute this Certificate on behalf of ASHLAND and further certifies that
attached is a true and correct copy of an excerpt from the minutes of a
meeting of the Board of Directors of ASHLAND duly called, convened and held
on November 4, 2004 at which a quorum was present and acting throughout.
IN WITNESS WHEREOF, I have signed and sealed this Certification
this 24th day of January 2005.
/s/ David L. Hausrath
-----------------------------------
David L. Hausrath, Secretary
(S E A L)
Excerpts from November 4, 2004
Ashland Inc.
Board of Directors Meeting
***
WHEREAS, the Board of Directors desires to adopt new replacement
plans for the three frozen plans effective as of January 1, 2005,
which will be called the Deferred Compensation Plan (the "New
Deferred Compensation Plan"), the Supplemental Early Retirement
Plan for Certain Employees (the "New SERP") and the Nonqualified
Excess Benefit Pension Plan (the "New Excess Plan") with the
intent of complying with new federal tax rules applicable to these
plans;
***
FURTHER RESOLVED, that there is hereby reserved for issuance under
the New Deferred Compensation Plan 500,000 shares of fully paid
and nonassessable $1.00 par value Common Stock of the Company (the
"Common Stock");
FURTHER RESOLVED, that the Chairman of the Board or any Vice
President of the Corporation, the Secretary or any Assistant
Secretary of the Corporation (the "Authorized Officers") be, and
each of them hereby is, acting singly, authorized to execute and
file with Securities and Exchange Commission (1) a Registration
Statement on Form S-8 or any other appropriate form with respect
to the Common Stock and (2) such further amendments thereto as are
necessary or desirable;
***