As filed with the Securities and Exchange Commission on April 2, 2001
Registration No. 333-54762
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
Under
the Securities Act of 1933
ASHLAND INC.
(Exact name of Registrant as specified in its charter)
Kentucky 61-0122250
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
50 E. RiverCenter Boulevard
P.O. Box 391
Covington, KY 41012-0391
(859) 815-3333
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
David L. Hausrath, Esq.
Vice President and General Counsel
50 E. RiverCenter Boulevard
P.O. Box 391
Covington, KY 41012-0391
(859) 815-3333
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF
PROPOSED SALE TO PUBLIC:
From time to time after the effective date of this Registration
Statement. If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check
the following box: _
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, please check the following
box: X
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act of 1933, please
check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering: _
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act of 1933, check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering: _
If delivery of the prospectus is expected to be made pursuant to Rule
434 under the Securities Act of 1933, please check the following box. _
(continued on next page)
(continued from previous page)
CALCULATION OF REGISTRATION FEE
====================================================================================================================
Title of Each Class of Securities Amount to be Proposed Proposed Amount of
to be Registered Registered Maximum Maximum Registration
Offering Price Aggregate Fee
Per Unit(1) Offering
Price(1)
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Common Stock (par value $1.00 per share) 149,300(2) $33.0625 $4,936,231 $1,234.06
and Rights attached thereto
====================================================================================================================
(1) Estimated solely for the purposes of calculating the registration fee
in accordance with Rule 457(h)(1) of the Securities Act of 1933.
Accordingly, the price per share of the common stock offered pursuant
to the plan is based on the 149,300 shares of common stock reserved
for issuance under the plan and at an exercise price per share of
$33.0625, which is the closing price of the New York Stock Exchange
Composite Tape on September 21, 2000 per share of common stock.
(2) Number of shares issuable upon exercise of nonqualified stock options
granted to selected officers and employees of Marathon Ashland
Petroleum LLC under the Ashland Inc. Stock Option Plan for Employees
of Joint Ventures.
ASHLAND HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL ASHLAND SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A)
OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
LEGEND
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED APRIL 2, 2001
PROSPECTUS
ASHLAND INC.
50 E. RIVERCENTER BOULEVARD
COVINGTON, KENTUCKY 41011
(859) 815-3333
149,300 SHARES
COMMON STOCK
This prospectus relates to the 149,300 shares of Ashland Inc. common
stock, $1.00 par value per share, that we will issue upon exercise of the
outstanding nonqualified stock options that we granted to selected
employees and officers of Marathon Ashland Petroleum LLC, or "MAP". MAP is
a joint venture between Ashland and USX-Marathon.
Our common stock is listed on the New York Stock Exchange and the
Chicago Stock Exchange under the symbol "ASH". On March 30, 2001, the last
reported sale price of our common stock as reported by the New York Stock
Exchange was $38.40 per share.
Investing in our common stock involves risks that are described in the
"Risk Factors" section beginning on page 3 of this prospectus.
You should read this prospectus and any supplement carefully before
you invest.
EXERCISE PRICE PROCEEDS TO ASHLAND
Per share of common stock $33.0625 $33.0625
Total $4,936,231 $4,936,231
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved these securities or
determined if this prospectus is truthful or complete. Any representation
to the contrary is a criminal offense.
This prospectus is dated April ___, 2001.
TABLE OF CONTENTS
Page
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Risk Factors 3
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Ashland Inc. 4
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Use of Proceeds 4
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Description of Common Stock 4
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Where You Can Find More Information About Ashland 6
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The Plan 7
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Federal Income Tax Consequences 10
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Plan of Distribution 11
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Legal Matters 11
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RISK FACTORS
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS.
This prospectus contains forward-looking statements. These statements
relate to our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as "may," "will," "should,"
"expects," "plans," "anticipates," "believes," "estimates," "predicts,"
"potential," "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions. Actual events or
results may differ materially. In evaluating these statements, you should
specifically consider various factors, including the risks outlined in
these risk factors, any of which may cause our actual results to differ
materially from any forward-looking statements.
GOVERNMENTAL REGULATION RELATING TO PROTECTION OF THE ENVIRONMENT COULD
ADVERSELY AFFECT OUR BUSINESS.
Federal, state and local laws and regulations relating to the protection of
the environment have a significant impact on how we conduct our businesses.
These laws and their associated regulations are constantly evolving and
many of them have become more stringent. The ultimate impact of complying
with existing laws and regulations is not always clearly known or
determinable due in part to the fact that certain implementing regulations
for many laws have not yet been finalized or in certain instances are
undergoing revision. In particular, these environmental laws and
regulations, such as the 1990 Amendments to the Clean Air Act, new water
quality standards and stricter fuel regulations could result in increased
capital, operating and compliance costs for Marathon Ashland Petroleum LLC
("MAP"), our joint venture with Marathon Oil Company, and for our chemical
businesses.
DOMESTIC OR INTERNATIONAL POLITICAL, REGULATORY OR LEGAL DEVELOPMENTS MAY
ADVERSELY AFFECT OUR OPERATIONS.
Domestic and international political, legislative, regulatory and legal
changes may adversely affect our results of operations. Political actions
may include changes in the policies of the Organization of Petroleum
Exporting Countries or other developments involving or affecting
oil-producing countries, including military conflict, embargoes, internal
instability or actions or reactions of the U.S. government in anticipation
of, or in response to, such actions. Profitability of MAP depends largely
on the margin between the cost of crude oil and other feedstocks refined
and the selling prices of refined products. MAP is a purchaser of crude oil
in order to satisfy its refinery throughput requirements. As a result,
MAP's overall profitability could be adversely affected by rising crude oil
and other feedstock prices which are not recovered in the marketplace.
While we maintain reserves for anticipated liabilities and carry various
levels of insurance, we could also be affected by civil, criminal,
regulatory or administrative actions, claims or proceedings.
DOWNTURNS IN THE ECONOMY AND CHANGES IN END USER MARKET DEMANDS CAN HAVE AN
ADVERSE IMPACT ON THE VALUE OF OUR BUSINESS.
Our profitability is susceptible to downturns in the economy; specifically,
the segments of the United States economy related to the purchase and sale
of durable goods, including housing, construction, automotive, marine and
semiconductor. Demand for our products and our profit margins may decline
as a direct result of an economic recession, inflation, changes in the
prices of hydrocarbons and other raw materials (e.g., crude oil and
petroleum and chemical products), consumer confidence, interest rates or
governmental fiscal policies. In addition, we may experience significant
changes in our profitability as a result of variations in sales, changes in
product mix or pricing competition.
DEVELOPMENTS IN CLIMATE OR WEATHER MAY MATERIALLY IMPACT ASPECTS OF OUR
BUSINESS.
Changes in climate and weather can significantly affect the performance of
several of our operations. Extreme variations from normal climatic
conditions could have a significant effect on the operating results of
APAC's construction operations. Less favorable than normal weather
conditions could have a negative impact as jobs are completed less quickly
and efficiently. In addition, most of the businesses of MAP can be
adversely impacted by climate and weather conditions due to the seasonal
pattern of sales for certain of its refined products. The sales volume of
asphalt, which increases in warm weather months, and the sales volumes of
propane and home heating oil, which increase in cold weather months, could
be negatively impacted if extreme variations from normal climatic patterns
occur. MAP's operations can also be impacted by disruptions caused by
extreme weather conditions such as floods, frozen rivers or hurricanes.
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PROVISIONS OF OUR CHARTER AND BYLAWS AND KENTUCKY LAW COULD DETER TAKEOVER
ATTEMPTS THAT SOME SHAREHOLDERS MAY CONSIDER DESIRABLE, WHICH COULD
ADVERSELY AFFECT OUR STOCK PRICE.
Provisions of our certificate of incorporation, our bylaws and Kentucky law
make acquiring control of us without the support of our board of directors
difficult for a third party, even if the change of control would be
beneficial to you. The existence of these provisions may deprive you of any
opportunity to sell your shares at a premium over the prevailing market
price for our common stock. The potential inability of our shareholders to
obtain a control premium could adversely affect the market price for our
common stock. Please see "Description of Common Stock" for a description of
these and other provisions.
ASHLAND INC.
Our businesses are grouped into five industry segments: APAC, Ashland
Distribution, Ashland Specialty Chemical, Valvoline, and Refining and
Marketing.
APAC performs contract construction work, including highway paving and
repair, excavation and grading, and bridge construction, and produces
asphaltic and ready-mix concrete, crushed stone and other aggregate in the
southern and midwestern United States.
Ashland Distribution distributes industrial chemicals, solvents,
plastics, fiber reinforcements and fine ingredients in North America and
plastics in Europe. Ashland Specialty Chemical manufactures and sells a
wide variety of performance chemicals, resins, products and services and
certain petrochemicals.
Valvoline is a marketer of premium-branded, packaged motor oil and
automotive chemicals, automotive appearance products, antifreeze, filters,
rust preventives and coolants. In addition, Valvoline is engaged in the
"fast oil change" business through outlets operating under the Valvoline
Instant Oil Change(R) name.
MAP operates seven refineries with a total crude oil refining capacity
of 935,000 barrels per day. Refined products are distributed through a
network of independent and company-owned outlets in the Midwest, the upper
Great Plains and the southeastern United States. Marathon Oil Company has a
62% interest and we have a 38% interest in MAP. Ashland accounts for its
investment in MAP using the equity method.
We are a Kentucky corporation, organized on October 22, 1936, with our
principal executive offices located at 50 E. RiverCenter Boulevard,
Covington, Kentucky 41011 (Mailing Address: 50 E. RiverCenter Boulevard,
P.O. Box 391, Covington, Kentucky 41012-0391) (Telephone: (859) 815-3333).
USE OF PROCEEDS
We will use the net proceeds we receive from the sale of our common
stock to which this prospectus relates in connection with the exercise of
the options described in this prospectus for general corporate purposes.
General corporate purposes may include additions to working capital,
capital expenditures, stock redemption, repayment of debt or the financing
of possible acquisitions.
DESCRIPTION OF COMMON STOCK
COMMON STOCK
As of the date of this prospectus, we are authorized to issue up to
300,000,000 shares of common stock. As of February 28, 2001, we had
69,649,043 shares of common stock issued and outstanding and had reserved
12,516,113 additional shares of common stock for issuance under our various
stock and compensation incentive plans.
The following summary of the material provisions of the applicable
sections of Ashland's restated articles of incorporation and bylaws is not
complete and is not intended to give full effect to provisions of statutory
or common law. You should refer to the applicable provisions of the
following documents:
o the restated articles, which are incorporated by reference to
Exhibit 3.2 to our Form 10-Q for the quarter ended December 31,
1997, and
4
o the by-laws, as amended, which are incorporated by reference to
Exhibit 3 to our Form 10-Q for the quarter ended December 31,
1999.
DIVIDENDS. The holders of common stock are entitled to receive
dividends when, as and if declared by our board of directors, out of funds
legally available for their payment subject to the rights of holders of
preferred stock.
VOTING RIGHTS. The holders of common stock are entitled to one vote
per share on all matters submitted to a vote of shareholders. The holders
of common stock also possess cumulative voting rights for the election of
directors. Under cumulative voting, a shareholder may multiply the number
of shares owned by the number of directors to be elected and either cast
this total number of votes for any one nominee or distribute the total
number of votes, in any proportion, among as many nominees as the
shareholder desires.
RIGHTS UPON LIQUIDATION. In the event of our voluntary or involuntary
liquidation, dissolution or winding up, the holders of common stock will be
entitled to share equally in any of our assets available for distribution
after the payment in full of all debts and distributions and after the
holders of all series of outstanding preferred stock have received their
liquidation preferences in full.
MISCELLANEOUS. The outstanding shares of common stock are fully paid
and nonassessable. The holders of common stock are not entitled to
preemptive or redemption rights. Shares of common stock are not convertible
into shares of any other class of capital stock. National City Bank,
Cleveland, Ohio, is the transfer agent and registrar for the common stock.
PREFERRED STOCK PURCHASE RIGHTS
The board of directors has authorized the distribution of one right
for each outstanding share of our common stock. Each right entitles its
holder to buy one-one thousandth (1/1000th) of a share of Series A
Participating Cumulative Preferred Stock at a price of $140.
The rights will become exercisable upon the earlier of (a) any time we
learn that a person or group has acquired, or obtained the right to
acquire, beneficial ownership of more than 15% of our outstanding common
stock (an "acquiring person"), unless provisions intended to prevent
accidental triggering apply, and (b) any date designated by our board of
directors following the commencement of, or first public disclosure of an
intention to commence, a tender or exchange offer for our outstanding
common stock. Each right other than those held by the acquiror will entitle
its holder to purchase, at the right's exercise price, shares of our common
stock having a market value of twice the right's exercise price.
Additionally, if we are acquired in a merger or other business combination,
each right other than those held by the surviving or acquiring company will
entitle its holder to purchase, at the right's exercise price, shares of
the acquiring company's common stock (or our stock if we are the surviving
corporation) having a market value of twice the right's exercise price.
Each one-one thousandth of a share of Series A Participating Cumulative
Preferred Stock will be entitled to dividends and to vote on an equivalent
basis with one share of our common stock.
Rights may be redeemed at the option of the board of directors for
$.01 per right at any time before the earlier of any time there is an
acquiring person or the tenth anniversary of the date of the plan. The
board of directors may amend the rights at any time without shareholder
approval. The rights will expire by their terms on May 15, 2006.
CERTAIN PROVISIONS OF ASHLAND'S RESTATED ARTICLES
In the event of a proposed merger or tender offer, proxy contest or
other attempt to gain control of us and not approved by our board of
directors, it would be possible for our board of directors to authorize the
issuance of one or more series of preferred stock with voting rights or
other rights and preferences which would impede the success of the proposed
merger, tender offer, proxy contest or other attempt to gain control of us.
Applicable law, the restated articles and the applicable rules of the stock
exchanges upon which the common stock is listed may limit this authority.
The consent of the holders of common stock would not be required for any
issuance of preferred stock like this.
5
The restated articles incorporate in substance certain provisions of
the Kentucky Business Corporation Act to require certain approvals as a
condition to mergers and certain other business combinations involving us
and the 10% shareholder unless (a) the transaction is approved by a
majority of our continuing directors or (b) certain minimum price and
procedural requirements are met. Those approvals include the approval of
the holders of at least 80% of our voting stock, plus two-thirds of the
voting stock other than voting stock owned by a 10% shareholder. In
addition, the Kentucky Business Corporation Act includes a standstill
provision which precludes a business combination from occurring with a 10%
shareholder, notwithstanding any vote of shareholders or price paid, for a
period of five years after the date that 10% shareholder becomes a 10%
shareholder, unless a majority of our independent directors approves the
combination before that date.
The restated articles also provide that
o our board of directors is classified into three classes,
o a director may be removed from office without cause only by the
affirmative vote of the holders of at least 80% of the voting
power of our then outstanding voting stock,
o our board of directors may adopt by-laws concerning the conduct
of, and matters considered at, meetings of shareholders, including
special meetings,
o the by-laws and certain provisions of the restated articles may
be amended only by the affirmative vote of the holders of at least
80% of the voting power of our then outstanding voting stock and
o the by-laws may be adopted or amended by our board of directors.
However, the by-laws adopted in this fashion may be amended or
repealed by affirmative vote of the holders of at least 80% of the
voting power of our then outstanding voting stock.
WHERE YOU CAN FIND MORE INFORMATION ABOUT ASHLAND
We file annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document we file
at the SEC's public reference rooms in Washington, D.C., New York, New York
and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also
available to the public at the SEC's web site at www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus
the information we file with it, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be a part of this prospectus,
and later information filed with the SEC will update and supersede this
information. We incorporate by reference the documents listed below and any
future filings made with the SEC under Section 13(a), 13(c), 14, or 15(d)
of the Securities Exchange Act of 1934 until our offering is completed:
(a) Annual Report on Form 10-K for the year ended September 30,
2000, as amended by the Form 10-K/A filed March 30, 2001;
(b) Quarterly Report on Form 10-Q for the quarter ended December
31, 2000;
(c) Current Report on Form 8-K filed on February 22, 2001;
(d) the description of our common stock, par value $1.00 per
share, set forth in the Registration Statement on Form 10, as amended
in its entirety by the Form 8 filed with the SEC on May 1, 1983; and
(e) 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.
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You may request a copy of these filings, at no cost, by writing to or
telephoning us at the following address (or by visiting our website at
www.ashland.com):
Office of the Secretary
Ashland Inc.
50 E. RiverCenter Boulevard
P.O. Box 391
Covington, KY 41012-0391
859-815-3333
You should rely only on the information incorporated by reference or
provided in this prospectus or the prospectus supplement. We have
authorized no one to provide you with different information. We are not
making an offer of these securities in any state where the offer is not
permitted.
THE PLAN
GENERAL PLAN INFORMATION
Marathon Ashland Petroleum LLC, or MAP, is a joint venture between
Marathon Oil Company and Ashland. Our management determined that it would
be in our best interest that certain MAP officers and employees have an
ownership interest in Ashland. On September 21, 2000 our board of directors
approved the grant of 149,550 options to purchase our common stock to 254
officers and employees of MAP. Several of these employees have terminated
their employment with MAP, and as a result there are currently 149,300
options outstanding to which this prospectus relates. Throughout this
prospectus, we will refer to the stock options as the "MAP stock options"
and our Personnel and Compensation Committee as the "Committee." We granted
the MAP stock options under the terms and conditions of the notice of grant
and the Ashland Inc. Stock Option Plan for Employees of Joint Ventures, a
plan, approved by our board of directors on September 17, 1998,
specifically designated to grant options to joint ventures in which we have
an interest. The MAP stock options supplement options granted to those MAP
employees by Marathon Oil Company in amounts recommended by the MAP
Executive Committee.
This section contains a summary of all material terms and provisions
of the Ashland Inc. Stock Option Plan for Employees of Joint Ventures and
is not complete. You should refer to the documents relating to the plan
which are incorporated by reference to as exhibits to the registration
statement of which this prospectus is a part. If necessary, we will in the
future provide supplemental material to update the available information
with respect to the plan, the MAP stock options and the underlying shares
of our common stock to holders of MAP stock options.
The plan is not a qualified deferred compensation plan under Section
401(a) of the Internal Revenue Code of 1986, as amended, and is exempt from
the provisions of the Employee Retirement Income Security Act of 1974, as
amended.
Participants under the plan may obtain additional information
regarding the plan and its administration from the Office of the Secretary,
Ashland Inc., 50 E. RiverCenter Boulevard, P.O. Box 391, Covington, KY
41012-0391. The Secretary's Office may also be reached by phone at (859)
815-3333.
PURPOSE OF THE PLAN
The principal purpose of the plan is to promote our interests and
those of our shareholders by attracting and retaining management personnel
whose training, experience and abilities contribute to the success of MAP
or another joint venture in which we have an interest and which our board
of directors designates as being governed by the plan. To achieve this
purpose, we may in our discretion grant MAP stock options to selected MAP
officers and employees. A recipient of the MAP stock options will have the
right to purchase our common stock at a price and on terms to be specified
by the Committee or determined in some other manner under the plan.
ADMINISTRATION
The Committee will administer the plan. Frank C. Carlucci, James B.
Farley, Mannie L. Jackson, Patrick F. Noonan, and W.L. Rouse, Jr. presently
serve on the Committee.
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ELIGIBILITY AND GRANT OF MAP STOCK OPTIONS
The MAP Executive Committee recommends to the Committee certain
regular, full-time or part-time employees of MAP to participate in the
plan. The Committee selects the MAP employees to receive an award of MAP
stock options under the plan. The MAP stock options to which this
prospectus relates were granted to MAP employees on September 21, 2000.
Under the notice of grant, none of the rights and obligations of those MAP
employees, including under the vesting provisions or other terms of the
notice of grant or the plan, will be affected by the transfer of any of the
MAP employees from MAP to Ashland or from MAP to another unit of USX. Under
the notice of grant, by accepting the award of MAP stock options granted on
September 21, 2000, the MAP employees agree to remain at MAP for a period
of at least one year from the date of the award although this does not in
any way confer from Ashland to any MAP employee any right to continue
employment with MAP or affect any existing right of MAP to terminate any
MAP employee.
ANNUAL REPORT TO OPTIONEES
MAP employees who receive an award of MAP stock options under the plan
receive, on an annual basis, a report from Ashland as to the amount and
status of their MAP stock options.
EXERCISE PRICE
Under the plan, the exercise price for the underlying Ashland common
stock that will be issued for each MAP stock option will be fixed by the
Committee at the time the option is granted. The Committee determined that
exercise price for the options granted on September 21, 2000 to be the fair
market value per share of our common stock on the date of grant. The
Committee further determined fair market value to be the closing price per
share of our common stock on the New York Stock Exchange composite tape on
the date of grant, which was $33.0625 on September 21, 2000.
ACCEPTANCE OF AWARDS
By accepting any award of MAP stock options under the plan, each MAP
employee will be conclusively deemed to have indicated his or her
acceptance and ratification of and consent to any action that we, our board
of directors or the Committee may have taken with respect to the plan,
including any amendment of the plan by the board of directors or the
Committee. The terms of this provision will also be deemed to apply to each
personal representative or beneficiary claiming under or through the MAP
employee, as those individuals are defined under the plan.
NOTICE OF GRANT
Each MAP stock option will, at our discretion and as directed by the
Committee, be evidenced by a notice of grant between the recipient and us.
The notice of grant will contain those terms and conditions that the
Committee determines and that are consistent with the plan.
VESTING
Unless the Committee determines otherwise, each MAP stock option will
provide that its recipient may not wholly or partially exercise the option
for a period of one year after the date of the option's grant. Under the
notice of grant of the MAP stock options to which this prospectus relates,
50% of the MAP stock options granted to a MAP employee on September 21,
2000 will vest on the first anniversary of the grant date, an additional
25% will vest on the second anniversary of the grant date and the remaining
25% will vest on the third anniversary of the grant date.
EXERCISE OF MAP STOCK OPTIONS AND PAYMENT
A stock option may be exercised by written notice to us. The written
notice must be consistent with the terms of the notice of grant relating to
the MAP stock option and must be accompanied by payment of the full
exercise price for the underlying shares of our common stock which the
holder of the MAP stock option chooses to exercise. The exercise price for
any shares purchased may be paid in cash, in shares of our common stock
previously owned by the
8
holder, partly in cash and partly in our common stock or in such other
consideration as shall constitute lawful consideration for the issuance of
common stock (including, but not limited to, a "cashless exercise"), as the
Committee, in its sole discretion, may determine. There are no restrictions
on the resale of the Ashland common stock acquired as a result of the
exercise of a MAP stock option.
In order to assure compliance with the securities laws, during any
time that the registration statement of which this prospectus is a part is
not effective, the Committee may require evidence of a type and degree it
considers necessary to establish that the underlying shares of common stock
are being purchased for investment only and not with a view to, or for sale
in connection with, a distribution. As used in this context, "distribution"
is defined under the Securities Act. If this prospectus is not then part of
an effective registration statement, the Committee may further require
legends on the certificates representing the underlying shares.
As a condition to the transfer of a certificate representing those
shares, the Committee may obtain those agreements or undertakings that it
considers necessary or advisable to assure compliance with any provision of
the plan or any law or regulation.
CANCELLATION OF MAP STOCK OPTION
The Committee has the right in its sole discretion and without the
option holder's consent to cancel a MAP stock option granted under the
plan, whether vested or not, at any time. If the Committee does so, it will
cause us to pay the MAP employee holding the canceled option an amount
determined by using the Black-Scholes or some other valuation method
generally accepted and used by nationally recognized executive compensation
consulting firms. The Committee will determine whether we make the buyout
payments under this provision in cash, in shares of our common stock or
partly in cash and partly in common stock. Buyout payments will be made net
of any applicable foreign, federal (including FICA), state or local
withholding taxes.
TRANSFERABILITY
Unless our board of directors or the Committee directs otherwise, the
rights and interest of a MAP employee who has received MAP stock options
under the plan may not wholly or partially be assigned or transferred
directly, by operation of law or in some other manner, including but not
limited to the following: execution, levy, garnishment, attachment, pledge
or bankruptcy. No MAP employee's rights or interest under the plan will be
assigned or transferred because of any obligation or liability of that MAP
employee. The sole exception to this provision is that the MAP employee's
rights and interest under the plan may pass by will or the laws of descent
and distribution in the event of the MAP employee's death.
RESERVE OF COMMON STOCK
Shares of our common stock to be issued upon the exercise of MAP stock
options will be from authorized but unissued shares. If any MAP stock
option or a part of a MAP stock option expires, terminates or is canceled
or surrendered for any reason without having been fully exercised, the
shares relating to the unexercised portion of the MAP stock option may
again be subject to the grant of MAP stock options under the plan.
TERM OF THE PLAN
The plan became effective on September 17, 1998, the date of the
plan's approval by our board of directors. Each MAP stock option will have
a fixed expiration date of not later than ten years and one month from the
option's date of grant, unless the option is canceled or the plan is
terminated before the fixed expiration date. Each of the MAP stock options
granted on September 21, 2000 will expire on October 21, 2010, if not
terminated earlier as provided below.
TERMINATION OF EMPLOYMENT
The plan provides that the Committee will decide when and the terms
under which a MAP employee (or his beneficiaries or legal personal
representative, as the case may be, as those terms are defined in the plan)
who dies, becomes disabled or retires or leaves MAP employment may continue
to exercise vested MAP stock options. The
9
Committee will also decide the extent to which unvested MAP stock options
will vest for those MAP employees. Under the notice of grant, a MAP
employee who retires from or dies or becomes disabled while employed at
MAP, Ashland or from MAP to another unit of USX or his or her beneficiary
or personal representative may exercise any MAP stock option granted on
September 21, 2000 until its expiration date. That option may be exercised
for the number of shares which the MAP employee could have acquired under
the option immediately prior to the retirement, death or disability.
The plan provides that if the employment of a MAP employee who has
received MAP stock options terminates before the end of the one year
vesting period for the options or any other period determined by the
Committee, then those options will immediately terminate. Under the notice
of grant, a MAP employee, after terminating employment from MAP, Ashland or
from MAP to another unit of USX for a reason other than retirement, death
or disability, may exercise any MAP stock option granted on September 21,
2000 until the earlier of 30 days after termination or the expiration date
of the option. The MAP employee may exercise the option for the number of
shares of our common stock, which the MAP employee could have acquired
under the option immediately prior to termination.
ADJUSTMENTS
The kind of shares that we may issue under the plan and the kind of
shares underlying or the exercise price for any outstanding MAP stock
options will be automatically adjusted to maintain the proportionate
interest of any MAP employee who received MAP stock options before any of
the following types of events: a stock split, stock dividend,
recapitalization, merger, consolidation, reorganization, combination,
exchange of shares, split-up, split-off, spin-off, liquidation or any
distribution to holders of our common stock other than cash dividends. Any
adjustment under this provision will be conclusive and binding for all
purposes of the plan.
AMENDMENT
Our board of directors or the Committee may at any time terminate,
modify or amend the plan in those respects it deems advisable and as
permitted by law.
TYPE OF STOCK OPTION
The MAP stock options will be nonqualified stock options and will not
be entitled to tax treatment as incentive stock options as defined in
Section 422 of the Internal Revenue Code of 1986, as amended.
LISTING
The shares of our common stock underlying the MAP stock options have
been listed on the New York Stock Exchange and the Chicago Stock Exchange.
FEDERAL INCOME TAX CONSEQUENCES
The following brief description of the tax consequences of awards
under the plan is based on Federal tax laws currently in effect and does
not purport to be a complete description of such Federal tax consequences.
If shares are issued to the original holder of a nonqualified option
that is granted and exercised in accordance with the plan, then:
o no income will be recognized by the holder at the time of grant of the
option;
o upon exercise of the option the holder will recognize taxable ordinary
income in an amount equal to the excess of the fair market value, at
the time of exercise, of the shares acquired over the option price;
o subject to the limitation described below, we will be entitled to a
deduction at the same time and in the same amount as the holder has
income under the preceding item; and
10
o upon a sale of the shares acquired, the holder will have short-term or
long-term capital gain or loss, as the case may be, in an amount equal
to the difference between the amount realized on the sale and the tax
basis of the shares sold.
Assuming that the payment of the option price is made entirely in
cash, the tax basis of the shares will be equal to their fair market value
on the date of exercise, but not less than the option price, and their
holding period will begin on the day after the tax basis of the shares is
determined in this manner.
If the optionee uses previously owned shares to exercise an option in
whole or in part, the transaction will not be considered to be a taxable
disposition of the previously owned shares. The holder's tax basis and
holding period of the previously owned shares will be carried over to the
equivalent number of shares received on exercise. The tax basis of the
additional shares received upon exercise will be the fair market value of
the shares on the date of exercise but not less than the amount of cash
used in payment, and the holding period for the additional shares will
begin on the day after the tax basis of the shares is determined in this
manner. In order to facilitate recordkeeping by optionees, when an option
is exercised with previously owned shares, we will deliver separate stock
certificates to the optionee representing the shares surrendered and the
additional shares to which the optionee is entitled as a result of the
exercise.
In addition to the Federal income tax consequences described above,
the acquisition, ownership or disposition of a MAP stock option or shares
acquired upon the exercise of a MAP stock option may have tax consequences
under various state or foreign laws that may be applicable to certain
option holders. Since these tax consequences, as well as the Federal income
tax consequences described above, may vary from holder to holder depending
upon the particular facts and circumstances involved, each holder should
consult its own tax advisor with respect to the Federal income tax
consequences of the grant or exercise of a MAP stock option, and also with
respect to any tax consequences under applicable state or foreign law.
Ashland will not withhold more than the statutorily required amounts for
federal, state and local taxes.
PLAN OF DISTRIBUTION
We will offer the underlying shares of our common stock directly to
the MAP employees who have received MAP stock options under the terms of
the plan. We will pay all expenses relating to the offer and sale to
eligible MAP employees of the shares of our common stock underlying the MAP
stock options. Those MAP employees will not incur any commissions, fees or
other charges or expenses in connection with the offer of securities
covered by this prospectus.
LEGAL MATTERS
The validity of the common stock offered hereby has been passed upon
by David L. Hausrath, Esq., Vice President and General Counsel of Ashland.
Mr. Hausrath owns beneficially 41,275 shares of our common stock (including
common stock units held in our deferred compensation plan).
11
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered, other than underwriting compensation, are:
Filing Fee for Registration Statement $ 1,234
Accounting Fees and Expenses $ 2,000
Stock Exchange Listing Fees $ 1,500
-----------
Total $ 4,734
===========
All of the above amounts, other than the Commission filing fee, are
estimates only.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 271B.8-500 through 580 of the Kentucky Business Corporation
Act contain detailed provisions for indemnification of directors and
officers of Kentucky corporations against judgments, penalties, fines,
settlements and reasonable expenses in connection with litigation. Under
Kentucky law, the provisions of a company's articles and by-laws may govern
the indemnification of officers and directors in lieu of the
indemnification provided for by statute. We have elected to indemnify our
officers and directors pursuant to our Restated Articles, our By-laws and
by contract rather than to have such indemnification governed by the
statutory provisions.
Article X of the Restated Articles permits, but does not require, us
to indemnify our directors, officers and employees to the fullest extent
permitted by law. Our By-laws require indemnification of our officers and
employees under certain circumstances. We have entered into indemnification
contracts with each of our directors that require indemnification to the
fullest extent permitted by law, subject to certain exceptions and
limitations.
We have purchased insurance which insures (subject to certain terms
and conditions, exclusions and deductibles) us against certain costs which
we might be required to pay by way of indemnification to our directors or
officers under our Restated Articles or By-laws, indemnification agreements
or otherwise and protects individual directors and officers from certain
losses for which they might not be indemnified by us. In addition, we have
purchased insurance which provides liability coverage (subject to certain
terms and conditions, exclusions and deductibles) for amounts which we, or
the fiduciaries under our employee benefit plans, which may include our
directors, officers and employees, might be required to pay as a result of
a breach of fiduciary duty.
ITEM 16. EXHIBITS.
The following Exhibits are filed as part of this Registration Statement:
3.1 Second Restated Articles of Incorporation, as amended
effective January 30, 1998 (incorporated by reference to
Exhibit 3 to Ashland's Form 10-Q for the quarter ended
December 31, 1997).
3.2 By-laws, as amended effective January 27, 2000 (incorporated
by reference to Exhibit 3 to Ashland's Form 10-Q for the
quarter ended December 31, 1999).
*4 Form of Certificate of Common Stock, par value $1.00 per share.
*5 Opinion of David L. Hausrath, Esq.
*10.1 Ashland Inc. Stock Option Plan for Employees of Joint Ventures.
*10.2 Form of Notice of Grant of Non-Qualified Stock Option.
**23.1 Consent of Ernst & Young LLP.
**23.2 Consent of PricewaterhouseCoopers LLP.
**23.3 Consent of Ernst & Young LLP.
*23.4 Consent of David L. Hausrath, Esq. (included as part of
Exhibit 5).
*24 Power of Attorney, including resolutions of the board of
directors.
*Previously filed.
**Filed herewith.
II-1
ITEM 17. UNDERTAKINGS.
(A) Ashland hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
Provided, however, that paragraphs (A)(l)(i) and (A)(1)(ii) do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Ashland pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain
unsold at the termination of the offering.
(B) Ashland hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Ashland's
annual report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(C) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of Ashland pursuant to the foregoing provisions, or
otherwise, Ashland has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by Ashland of expenses incurred or paid by a
director, officer or controlling person of Ashland in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, Ashland will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy, as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act, Ashland certifies
that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment No.
2 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Covington,
Commonwealth of Kentucky, on April 2, 2001.
ASHLAND INC.,
By: /s/ David L. Hausrath
--------------------------------
David L. Hausrath
Vice President and General Counsel
Pursuant to the requirements of the Securities Act, this Amendment No.
2 to the Registration Statement has been signed below by the following
persons in the capacities indicated on April 2, 2001.
Signature Title
* Chairman of the Board and Chief Executive Officer
--
Paul W. Chellgren (Principal Executive Officer)
* Senior Vice President and Chief Financial Officer
--
J. Marvin Quin (Principal Financial Officer)
* Administrative Vice President and Controller
--
Kenneth L. Aulen (Principal Accounting Officer)
* Director
Samuel C. Butler
* Director
Frank C. Carlucci
* Director
Ernest H. Drew
* Director
James B. Farley
* Director
Bernadine P. Healy
* Director
Mannie L. Jackson
* Director
Patrick F. Noonan
* Director
Jane C. Pfeiffer
* Director
William L. Rouse, Jr.
* Director
Theodore L. Solso
*By /s/ David L. Hausrath
------------------------------
David L. Hausrath
Attorney-in-fact
*Original power of attorney authorizing, Paul W. Chellgren, David
L. Hausrath and Linda L. Foss and each of them to sign the
Registration Statement and amendments thereto on behalf of the
above-mentioned directors and officers of Ashland has been filed
with the Commission as Exhibit 24 to the Registration Statement.
II-3
EXHIBIT INDEX
23.1 Consent of Ernst & Young LLP.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Ernst & Young LLP.
II-4
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in Amendment No. 2 to the
Registration Statement (Form S-3 No. 333-54762) and the related Prospectus
of Ashland Inc. (Ashland) for the registration of 149,300 shares of its
common stock, of our report dated November 1, 2000, with respect to the
consolidated financial statements and schedule of Ashland included in its
Annual Report on Form 10-K (as amended by Form 10-K/A, Amendment No. 1) for
the year ended September 30, 2000, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Cincinnati, Ohio
March 29, 2001
Exhibit 23.2 - Consent of PricewaterhouseCoopers LLP
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in Amendment No. 2 to
the Registration Statement on Form S-3 (No. 333-54762) of Ashland Inc. of
our report dated February 7, 2001, relating to the financial statements of
Marathon Ashland Petroleum LLC, which appears in Ashland Inc.'s Annual
Report on Form 10-K/A Amendment No. 1 for the fiscal year ended September
30, 2000.
/s/ PricewaterhouseCoopers LLP
Pittsburgh, PA
March 30, 2001
Exhibit 23.3
Consent of Independent Auditors
We consent to the incorporation by reference in Amendment No. 2 to the
Registration Statement (Form S-3 No. 333-54762) and the related Prospectus
of Ashland Inc. (Ashland) for the registration of 149,300 shares of its
common stock, of (i) our report dated January 24, 2001, with respect to the
consolidated financial statements of Arch Coal, Inc. and (ii) our opinion
dated March 29, 2001 with respect to the financial statement schedule of
Arch Coal, Inc., included in its Annual Report on Form 10-K (as amended by
Form 10-K/A, Amendment No. 1) for the year ended September 30, 2000, filed
with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
St. Louis, Missouri
March 28, 2001