Filed by Ashland Inc. pursuant to Rules 165 and 425 promulgated under the
Securities Act of 1933, as amended, and deemed filed pursuant to Rule 14a-12
promulgated under the Securities Exchange Act of 1934, as amended.
Subject Company: Ashland Inc.
Commission File No.: 001-02918
(Employee Q&A to be posted on Ashland Inc.'s Employee Intranet)
Q. THE TRANSFER OF ASHLAND'S INTEREST IN MAP TO MARATHON INVOLVES
VARIOUS STEPS, INCLUDING SEVERAL MERGERS. ONCE THE TRANSACTIONS
ARE COMPLETED, DOES ASHLAND BECOME A PART OF MARATHON?
A. No, the surviving Ashland Inc. will continue as a stand-alone
public company and will consist of ADC, APAC, ASC (minus the
maleic business) and Valvoline (minus the 61 VIOC centers).
Q. IS ASHLAND GOING TO ISSUE NEW STOCK AFTER THE JOINT VENTURE DEAL
CLOSES?
A. Currently, that is not part of Ashland's strategy.
Q. SOME OF THE DETAILS OF THE TRANSFER PROCESS SEEM TO INDICATE THAT
ASHLAND INC. WILL BE RENAMED "NEW ASHLAND INC." AFTER THE
COMPLETION OF THE MAP TRANSFER. IS THIS CORRECT?
A. No, although it would be a new corporation, New Ashland Inc. will
be the successor to Ashland Inc. and will change its name in the
final step of the transaction to Ashland Inc. We used "New
Ashland" to clarify the difference between the predecessor and
successor corporations.
Q. IN MOST PUBLICATIONS AND ANNOUNCEMENTS CONCERNING WHAT "NEW"
ASHLAND WILL DO WITH THE CASH OBTAINED AFTER THE REPAYMENT OF
DEBT, LARGE ACQUISITIONS HAVE BEEN DOWNPLAYED TO A CERTAIN DEGREE.
IF ASHLAND HAS NO INTENTION OF MAKING ACQUISITIONS AT THIS TIME,
WHAT IS THE LIKELIHOOD IT WILL USE THIS CASH TO RELOCATE ITS
CORPORATE OFFICES THAT REMAIN AT THE RUSSELL CAMPUS?
A. Ashland has no plans to relocate the Russell office, although
individual jobs may be transferred to other campuses.
Q. HOW WILL THE TRANSFER AFFECT THE ENVIRONMENTAL LIABILITIES AT
EXISTING OIL REFINERIES? DOES THIS STAY WITH ASHLAND OR WAS IT
TRANSFERRED TO MARATHON?
A. Ashland's continuing exposure for environmental obligations for
properties that are part of the MAP joint venture will be capped
at $50 million following consummation of the proposed transaction.
Ashland will continue to be responsible for other environmental
liabilities associated with properties that were not previously
transferred to MAP, including old service station sites, and
terminals and refineries that were not transferred to MAP.
Q. WHY CAN'T WE USE A PORTION OF THIS MONEY TO BRING OUR RETIREMENT
ACCOUNTS BACK TO WHERE THEY BELONG?
A. Ashland will most likely use part of the proceeds to improve the
funding of our pension plans. This disclosure was made in the
conference call.
Q. WHY DID ASHLAND'S DEBT RATINGS GET DOWNGRADED AFTER THE DETAILS OF
THE DEAL WERE ANNOUNCED? IT SOUNDS LIKE MANY OF THE ANALYSTS
THOUGHT IT WAS A BAD DEAL FOR ASHLAND.
A. Debt analysts gave mixed assessments. Standard & Poors had a
positive reaction to the transaction, maintaining Ashland's
current BBB long term rating and indicating a stable outlook with
an affirmative ruling from the IRS. Moody's placed our long-term
debt rating, Baa2, on "review for possible downgrade" due to their
concerns about the long term profitability of our other
businesses. Whether Moody's actually downgrades our long-term debt
ratings will be influenced in large part by the performance of
these businesses prior to closing the transaction.
Q. DOES THIS MEAN THAT WE WILL NOW FINALLY RECEIVE THE RAISES,
PROMOTIONS, ETC. THAT WERE PROMISED?
A. The decision on pay increases has not changed as a result of the
transaction. As has been previously communicated, the executive
committee will review Ashland's financial performance after the
close of the second quarter and will determine at that time
whether a pay increase will occur prior to the end of the fiscal
year.
Q. HOW DOES THIS AFFECT THE ASHLAND RESTRICTED STOCK FUND THAT MOST
OF US HOLD IN OUR 401K PLANS?
A. The Ashland Restricted Stock Fund in the Ashland Savings Plan was
eliminated effective January 1, 2003. The units that were in that
fund were transferred into the non-restricted Ashland Stock Fund.
Exchanges from the Ashland Stock Fund to other investment options
are not restricted. Therefore, while a portion of the company
match is still automatically invested in the Ashland Stock Fund,
plan members may make exchanges from the Ashland Stock Fund at any
time.
If the transaction closes, the portion of a participant's account
that is invested in the Ashland Common Stock Fund will receive the
appropriate value of the Marathon Common Stock. However, the
mechanics as to how this will be accomplished have not been fully
determined (i.e. whether the Trustee will continue to hold the
Marathon Common Stock for a period of time or whether the Trustee
will sell the shares immediately).
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements, within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These statements include those that refer to
Ashland's operating performance and expectations about the proposed
transaction, including those statements that refer to the expected benefits
of the transaction to Ashland's shareholders. Although Ashland believes its
expectations are based on reasonable assumptions, it cannot assure the
expectations reflected herein will be achieved. These forward-looking
statements are based upon internal forecasts and analyses of current and
future market conditions and trends, management plans and
strategies, weather, operating efficiencies and economic conditions, such
as prices, supply and demand, cost of raw materials, and legal proceedings
and claims (including environmental and asbestos matters) and are subject
to a number of risks, uncertainties, and assumptions that could cause
actual results to differ materially from those we describe in the
forward-looking statements. The risks, uncertainties, and assumptions
include the possibility that Ashland will be unable to fully realize the
benefits anticipated from the transaction; the possibility of failing to
receive a favorable ruling from the Internal Revenue Service; the
possibility that Ashland fails to obtain the approval of its shareholders;
the possibility that the transaction may not close or that Ashland may be
required to modify some aspect of the transaction to obtain regulatory
approvals; and other risks that are described from time to time in the
Securities and Exchange Commission reports of Ashland. Other factors and
risks affecting Ashland are contained in Ashland's Form 10-K, as amended,
for the fiscal year ended Sept. 30, 2003, filed with the Securities and
Exchange Commission (SEC) and available in Ashland's Investor Relations
website at www.Ashland.com/investors or the SEC's website at www.sec.gov.
Ashland undertakes no obligation to subsequently update or revise the
forward-looking statements made in this news release to reflect events or
circumstances after the date of this release.
ADDITIONAL INFORMATION ABOUT THIS TRANSACTION
Investors and security holders are urged to read the proxy
statement/prospectus regarding the proposed transaction when it becomes
available because it will contain important information. The proxy
statement/prospectus will be filed with the SEC by Ashland, and security
holders may obtain a free copy of the proxy statement/prospectus when it
becomes available, and other documents filed with the SEC by Ashland, at
the SEC's website at www.sec.gov. The proxy statement/prospectus, and other
documents filed with the SEC by Ashland, may also be obtained for free in
the SEC filings section on Ashland's Investor Relations website at
www.Ashland.com/investors, or by directing a request to Ashland at 50 E.
RiverCenter Blvd., Covington, KY 41012. The respective directors and
executive officers of Ashland and other persons may be deemed to be
participants in the solicitation of proxies in respect of the proposed
transaction. Information regarding Ashland's directors and executive
officers is available in its proxy statement filed with the SEC by Ashland
on December 8, 2003. Investors may obtain information regarding the
interests of participants in the solicitation of proxies in connection with
the transaction referenced in the foregoing information by reading the
proxy statement/prospectus when it becomes available.