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 NON-EMPLOYEE DIRECTORS (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 directors of Ashland Inc.
pursuant to the Ashland Inc. Deferred Compensation Plan for Non-Employee
Directors (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 Non-Employee
Directors (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
II-4
EXHIBIT INDEX
Exhibit
No. Description
-------- ----------------------------------------------------
4 Ashland Inc. Deferred Compensation Plan for Non-Employee Directors (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 NON-EMPLOYEE DIRECTORS (2005)
(Effective as of January 1, 2005)
ARTICLE I. GENERAL PROVISIONS
1. PURPOSE
The purpose of this Ashland Inc. Deferred Compensation Plan For
Non-Employee Directors (2005) (the "Plan") is to provide each Director with
an opportunity to defer some or all of the Director's Fees as a means of
saving for retirement or other purposes. In addition, the Plan provides
Directors with the ability to increase their proprietary interest in the
Company's long-term prospects by permitting Directors to receive all or a
portion of their Fees in Ashland Common Stock. The obligations of the
Company hereunder constitute a mere promise to make the payments provided
for in this Plan. No Director, 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 for Non-Employee Directors amended as of April 1, 2003
(the "Former Plan"). Fees 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 Fees deferred
under the Former Plan shall include all income, gains and losses connected
to such Deferred Fees.
The rules, terms and conditions of this Plan shall apply to Fees
deferred after December 31, 2004, including any Election to defer such Fees
made in 2004. For this purpose, the Fees deferred after December 31, 2004
shall include all income, gains and losses connected to such Fees.
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) "Act" means the Securities Act of 1933, as amended from time
to time.
(c) "Beneficiary" means the person(s) designated by a Participant
in accordance with Article IV, Section 1.
(d) "Board" means the Board of Directors of Ashland Inc. or its
designee.
(e) "Business Day" means a day on which the New York Stock
Exchange is open for trading activity.
(f) "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 the Company or any
subsidiary or employee benefit plan or trust maintained by the Company,
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.
(g) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(h) "Committee" means the Governance and Nominating Committee of
the Board or its designee.
(i) "Common Stock" means the common stock, $1.00 par value, of
Ashland Inc.
(j) "Common Stock Fund" means that investment option, approved by
the Committee, in which a Participant's Retirement Account may be deemed to
be invested and may earn income based on a hypothetical investment in
Common Stock.
(k) "Company" means Ashland Inc., its divisions and subsidiaries.
"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.
(l) "Corporate Human Resources" means the Corporate Human
Resources Department of the Company.
(m) "Credit Date" means the date on which any Fees 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.
(n) "Deferral Account" means the account(s) to which the
Participant's Deferred Fees are credited and from which distributions are
made.
(o) "Deferred Fees" means the Fees elected by the Participant to
be deferred pursuant to the Plan.
(p) "Director" means any non-employee director of the Company.
(q) "Disability" means that a Participant is 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.
(r) "Election" means a Participant's delivery of a written notice
of election to the Secretary of the Company electing to defer payment of
his or her Fees or to receive such Fees in the form of Common Stock, under
the terms of the Plan. Such notice shall also include instructions
specifying the time and form under which the Deferred Fees 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.
(s) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(t) "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.
(u) "Fees" mean the annual retainer and meeting fees, as well as
any per diem compensation for special assignments, earned by a Director for
his or her service as a member of the Board during a calendar year or
portion thereof.
(v) "Fiscal Year" means that annual period commencing October
1 and ending the following September 30.
(w) "Participant" means a Director who has elected to defer
payment of all or a portion of his or her Fees and/or to receive all or a
specified portion of his or her Fees in shares of Common Stock.
(x) "Payment Commencement Date" means the date payments of amounts
deferred begin pursuant to Article III, Section 6.
(y) "Performance-Based Fees" mean Fees that meet requirements
specified by the Secretary of the Treasury. Performance-Based Fees will
include the attributes that they are variable, contingent on the
satisfaction of preestablished metrics and are not readily ascertainable at
the time of the election.
(z) "Personal Representative" means the person or persons who,
upon the disability or incompetence of a Director, shall have acquired on
behalf of the Director, by legal proceeding or otherwise, the right to
receive the benefits specified in this Plan.
(aa) "Plan" means this Ashland Inc. Deferred Compensation Plan For
Non-Employee Directors (2005) as it now exists or may hereafter be amended.
(bb) "Secretary of the Treasury" or "Treasury" means the United
States Department of Treasury.
(cc) "Stock Account" means an account by that name established
pursuant to Article III, Section 1,which is a subset of the Deferral
Account.
(dd) "Stock Unit(s)" means the share equivalents credited to a
Participant's Stock Account pursuant to Article III, Section 1.
(ee) "Termination" means retirement from the Board or termination
of service as a Director for any other reason.
(ff) "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 (b) below. Such shares shall be
authorized but unissued shares of Common Stock.
(b) Adjustments in Certain Events. In the event of any change in
the outstanding Common Stock of the Company by reason of any stock split,
stock dividend, recapitalization, merger, consolidation, reorganization,
combination, or exchange 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 that may be issued under the Plan shall be automatically adjusted so
that the proportionate interest of the Directors 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
Any non-employee Director of the Company shall be eligible to
participate in the 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,
establishing deferral terms and conditions and adopting modifications and
amendments to procedures as may be deemed necessary, appropriate or
convenient. 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. This
Department may authorize new or modify existing forms for use under this
Plan so long as any such modified or new forms are not inconsistent with
the terms of the Plan.
ARTICLE II. COMMON STOCK PROVISION
Each Director may elect to receive all or a portion of his or her
Fees in shares of Common Stock by making an Election pursuant to Article
III, Section 3. Shares shall be issued to the Director at the end of each
quarter beginning in the quarter the Election is effective. The number of
shares of Common Stock so issued shall be equal to the amount of Fees which
otherwise would have been payable to such Director during the quarter
divided by the Fair Market Value. Only whole number of shares of Common
Stock will be issued, with any fractional shares to be paid in cash.
ARTICLE III. DEFERRED COMPENSATION
1. PARTICIPANT ACCOUNTS
(a) Upon election to participate in the Plan, there shall be
established a Deferral Account to which there shall be credited any
Deferred Fees as of each Credit Date. The Deferral 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, which may include
a Common Stock Fund, as elected by the Participant under the terms of
Article III, Section 3. 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 Article III Section 3.
(b) The Stock Account of a Participant shall be credited on each
Accounting Date with Stock Units equal to the number of shares of Common
Stock (including fractions of a share) that could have been purchased with
the amount of such Deferred Fees as to which a stock deferral election has
been made at the Fair Market Value on the Accounting Date. As of the date
of any dividend distribution date for the Common Stock, the Participant's
Stock Account shall be credited with additional Stock Units equal to the
number of shares of Common Stock (including fractions of a share) that
could have been purchased, at the Fair Market Value on such date, with the
amount which would have been paid as dividends on that number of shares
(including fractions of a share) of Common Stock which is equal to the
number of Stock Units then credited to the Participant's Stock Account with
respect to a particular Election under Article III Section 3.
2. EARLY WITHDRAWAL
(a) Unforeseeable Emergency. A Participant or a Participant's
legal representative may submit an application for a distribution from the
Participant's Deferral 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 2(a)
shall take into account the extent to which the Unforeseeable Emergency may
be relieved 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 2(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
Participant's Deferral 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 2(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 Deferral Account may not be
made earlier than the time such amounts would otherwise be distributed
pursuant to the terms of the Plan.
3. DEFERRAL ELECTION
(a) General. Any Director wishing to participate in the Plan may
elect to do so by delivering to the Secretary of the Company an Election on
a form prescribed by Corporate Human Resources designating the manner in
which such Deferred Fees are to be invested in accordance with Article III,
Section 1 and electing the timing and form of distribution. The timing of
the filing of the appropriate form with Corporate Human Resources shall be
determined by the Company or the Committee. An effective election to defer
Fees may not be revoked or modified except as otherwise determined by the
Company or the Committee or as stated herein.
(b) Permissible Deferral Election. A Participant's Election to
defer Fees may only be made in the taxable year before the Fees are 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 Fees 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 Fees.
If Performance-Based Fees are 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 Fees not later than six months before
the end of such service period. A Participant's Election under this Section
3(b) shall specify the amount or percentage of Fees deferred and specify
the time and form of distribution from among those described in Article III
Section 4 of the Plan. Each Election to defer Fees 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 existing deferred Fees (in increments prescribed by
the Committee or the Company) as often, and with such restrictions, as
determined by the Committee or by the Company.
(d) Change of Beneficiary. A Participant may, at any time, elect
to change the designation of a Beneficiary in accordance with Article IV,
Section 1 hereof.
4. DISTRIBUTION
(a) Deferral Account. In accordance with the Participant's
Election and as prescribed by the Committee, Deferred Fees credited to a
Participant's Deferral Account shall be distributed in cash or shares of
Common Stock (or a combination of both). Unless otherwise directed by the
Committee, if no Election is made by a Participant as to the distribution
or form of payment of his or her Deferral Account, upon Termination such
account shall be paid in cash in lump sum. The entire Deferral Account must
be paid out within fifteen years following the date of the Participant's
Termination. In accordance with a Participant's Election under Article III
Section 3, but subject to Sections 2 and 6 of Article III, amounts subject
to such Election in the Deferred Account (determined in accordance with
Article III Section 1) shall be distributed -
1. Upon a Participant's separation from service as a Director as
either a lump sum or in installments not exceeding 15 years;
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) 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 Deferral 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
Deferral 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.
(c) 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) of this Section 4, 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 paragraph
(a)(3) of this Section 4 such an Election may not be made less
than 12 months before the date of the first scheduled payment.
5. PAYMENT COMMENCEMENT DATE
Payments of amounts deferred pursuant to a valid Election shall
commence in accord with the Participant's Election. If a Participant dies
prior to the first deferred payment specified in an Election, payments
shall commence to the Participant's Beneficiary on the first payment date
so specified.
6. 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" (as defined in Section 2(f)
of Article I), each Participant in the Plan shall receive an automatic lump
sum cash distribution of all amounts accrued in the Participant's Cash
and/or Stock Account(s) (including interest at the Prime Rate of Interest
through the business day immediately preceding the date of distribution)
not later than fifteen (15) days after the date of the "Change in Control."
For this purpose, the balance in the Stock Account shall be determined by
multiplying the number of Stock Units by the higher of (a) the highest
closing price of a share of Common Stock during 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 Director for the legal
fees and expenses incurred if the Director is required to seek to obtain or
enforce any right to distribution. In the event that it is determined that
such Director is properly entitled to a cash distribution hereunder, such
Director shall also be entitled to interest thereon at 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, Article I, Section 2(f) and Section 6 of this Article
may not be amended after a "Change in Control" occurs without the written
consent of a majority in number of Participants.
ARTICLE IV. MISCELLANEOUS PROVISIONS
1. BENEFICIARY DESIGNATION
A Director may designate one or more persons (including a trust)
to whom or to which payments are to be made if the Director dies before
receiving payment of all amounts due hereunder. A designation of
Beneficiary will be effective only after the signed Election is filed with
the Secretary of the Company while the Director is alive and will cancel
all designations of a Beneficiary signed and filed earlier. If the Director
fails to designate a Beneficiary as provided above or if all of a
Director's Beneficiaries predecease him or her and he or she fails to
designate a new Beneficiary, remaining unpaid amounts shall be paid in one
lump sum to the estate of such Director. If all Beneficiaries of the
Director die before the Director or 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.
2. INALIENABILITY OF BENEFITS
The interests of the Directors and their Beneficiaries under the
Plan may not in any way be voluntarily or involuntarily transferred,
alienated or assigned, nor be subject to attachment, execution, garnishment
or other such equitable or legal process.
3. GOVERNING LAW
The provisions of this Plan shall be interpreted and construed in
accordance with the laws of the Commonwealth of Kentucky.
4. AMENDMENTS
The Committee may amend, alter or terminate this Plan at any time
without the prior approval of the Directors; provided, however, that the
Committee may not, without approval by theBoard:
(a) materially increase the number of securities that may be
issued under the Plan (except as provided in Article I, Section 3),
(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.
5. COMPLIANCE WITH RULE 16b-3
It is the intention of the Company that the Plan comply in all
respects with Rule 16b-3 promulgated under Section 16(b) of the Exchange
Act and that Plan Participants remain non-employee directors ("Non-Employee
Directors") for purposes of administering other employee benefit plans of
the Company and having such other plans be exempt from Section 16(b) of the
Exchange Act. Therefore, if any Plan provision is found not to be in
compliance with Rule 16b-3 or if any Plan provision would disqualify Plan
participants from remaining Non-Employee Directors, that provision shall be
deemed amended so that the Plan does so comply and the Plan participants
remain Non-Employee Directors, to the extent permitted by law and deemed
advisable by the Committee, and in all events the Plan shall be construed
in favor of its meeting the requirements of Rule 16b-3.
6. 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 Non-Employee Directors (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 Non-Employee
Directors (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
Non-Employee Directors, 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 a new replacement
plan for the said frozen plan effective as of January 1, 2005,
which will be called the Deferred Compensation Plan for
Non-Employee Directors (the "New Deferred Compensation Plan") with
the intent of complying with new federal tax rules applicable to
this plan;
***
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;
***